Despite cutting-edge technology and government overspending, the U.S. approach to healthcare falls short when compared with other countries.
In the wake of COVID-19 and a needed reckoning over racial inequities in the United States, the past year has been a time of reflection and analysis of the cultural flaws and barriers that persist in this country.
One area of American society that has certainly received its fair share of scrutiny has been our approach to healthcare.
During a time when a pandemic has led to the deaths of more than 600,000 people in the United States to date — disproportionately affecting People of Color and people of lower socioeconomic status — we find ourselves at an inflection point where our healthcare system is put under a clarifying microscope.
How does the U.S. approach to healthcare and the health insurance system for its citizens stack up against the rest of the world?
New research shows that we hold a dubious place when examined alongside some of the globe’s other leading developed nations.
In the United States, fewer people are insured, costs stand astronomically high, and ultimate health outcomes remain relatively poor.
Thomas Rice, PhD, UCLA Fielding School of Public Health distinguished professor of health policy and management, delves into the question of where the United States fares in comparison with other countries in the first edition of his new book, “Health Insurance Systems: An International Comparison.”
Recently published by Academic Press, an imprint of Elsevier Inc., Rice’s work offers a comprehensive analysis of the costs and health outcomes of the U.S. approach to its health insurance system, positioning it alongside those of nine other nations: Australia, Canada, France, Germany, Japan, the Netherlands, Sweden, Switzerland, and the United Kingdom.
Rice told Healthline that he was long familiar with the bleak realities of the high costs and relatively low health outcomes associated with the U.S. health system.
He said that what surprised him was how consistent these other peer developed nations “used certain mechanisms to create a more efficient, more effective, more equitable healthcare system.”
“I studied these countries because I felt they provided different models against which the U.S. could reform its healthcare system,” Rice said. “There are certain things about the countries, they all pretty much do what we don’t do.”
When asked what the main difference is, Rice automatically pointed to the fact that each of these other nations all embrace systems that ultimately achieve — through different methods — a baseline level of universal health insurance coverage for its citizens.
Beyond this, he said all of them are “actively involved” in “planning the supply of healthcare resources and constraining prices.”
Rice explained that the “unit price levels” of healthcare services in the United States are far higher than these other countries.
This isn’t due to the fact that we use more services than other countries.
“Even though other countries have very different healthcare systems, they all use similar processes to make sure that they don’t overspend on healthcare, certainly compared to us,” he added.
In his book, Rice notes that the United States devotes nearly 60 percent more of its gross domestic product (or the total value of goods produced and services offered in a given year) to people’s health than these nine other countries.
Additionally, healthcare spending per person is double these other nations’ healthcare spending per person.
Another stark fact is the death rate from preventable causes per population of 100,000 people.
In the United States, the death rate from treatable causes is 88 deaths per 100,000 people. By comparison, in Canada that figure is 59 deaths from treatable causes per 100,000 people.
Mortality amenable to healthcare, which means deaths that should be prevented by medical care administered in a timely way, is higher here than in all the other countries Rice studied. For example, this number is more than double that in Switzerland, Rice found.
When examining our healthcare costs, Rice said it’s important to note that cost differences between the United States and its peers is not due to the fact that Americans use more services, but due to the country’s sky-high prices.
In his book, Rice cites that the cost of one dose of Herceptin — a drug used for early stage breast cancer — is $48 in Germany. In the United States, that same Herceptin dose costs $211.
What about a dose of antibody immunoglobulin? In the United States, it would be $97. Across the pond in the United Kingdom, it would be $27.
Cost differentials in medical procedures are also stark. The cost to deliver a baby, without complications, stands at $11,167 in the United States versus $3,638 in the Netherlands.
Also, a routine colonoscopy would cost $582 in Switzerland, but in the United States it would cost $2,874.
Reflecting the sharp socioeconomic divides in this country, Rice writes that just less than one-tenth of the total population lacks coverage of any kind.
More are underinsured.
When zooming out to view the big picture, you’ll see that one-third of all people in the United States report they’ve had cost barriers to getting medical care in the past year.
That number is twice as high as any of the other nations Rice profiled.
Rice said a big part of the problem is the fact that the United States is reluctant to “get government involved in healthcare.”
He mentioned the inception of the Social Security Act Amendments, which instituted Medicare in the United States. Rice paraphrased that the legislation opens with the line that “nothing in this act should interfere with the way medicine is practiced.”
In other words, this idea that government must stay away from healthcare decisions is baked directly into the legislation that establishes a government-sanctioned healthcare service.
“Historically, there has been a reluctance for government in this country to be involved in this. This has its consequences. The markets do not appear to do a good job of controlling fees, not a good job at all. It’s not surprising that in other countries, governments have tremendous market power to negotiate and set prices,” Rice said.
“When you divide it up among a myriad private insurance companies as we do here, you don’t have the same market power and the providers have more power in negotiations, and fees tend to be much higher.
“I think the main aspect of ‘American exceptionalism’ here is a deep skepticism involving government involvement of any kind,” he said.
Additionally, for-profit insurers play an outsized role in the U.S. system. Rice said that none of the other countries he studied use for-profit insurers “to any significant extent” in “covering services that are part of the public health insurance program.”
He said the Dutch, for instance, allow private insurers, but there are very few in existence. Rice said private insurance companies function as “supplemental” providers for the public health program of many of these other countries.
In these other countries, everyone still has the same base insurance, the same benefits, the same cost sharing requirements. In other words, “no patient is more valuable to a provider than another based on their insurance company.”
That isn’t the case in the United States.
“If you have Medicaid, you are not as attractive as people with other kinds of insurance,” Rice said.
Once again, this establishes potent divisions in quality of care depending on socioeconomic status.
Feeding these inequities further are the additional barriers defined by race, geography, and employment, creating chasms in care between people.
Leighton Ku, PhD, MPH, professor and director of the Center for Health Policy Research at the Milken Institute School of Public Health at George Washington University in Washington, D.C., told Healthline that Rice’s work falls in a long line of research examining the high costs and poor outcomes of the United States compared with its global peers.
Ku, who is not affiliated with Rice’s research, said the dynamics of our system create a range of differences from these other countries. One is the fact that “about two-thirds of the doctors in the U.S. are specialists and about one-third are generalists.”
“In other developed countries, it tends to be the other way around: There are either more generalists or it’s 50-50. Because of that there has been, shall we say, at least to my mind, less attention to many basic aspects of healthcare in the U.S. that make sure people have fundamental aspects of their care,” Ku said.
While this is a deficiency compared to other countries, he said the high level of specialization among our country’s healthcare professionals and an emphasis on innovation and research sees this country being very attentive to “high-tech medicine, which is where the U.S. is well ahead of other countries.”
“Whether we are talking about molecular medicine or robotic surgery, all those sorts of things are better developed in the U.S. Other countries tend to lag behind the U.S., but on the other hand, these other countries do a better job in terms of other basic functions of helping people control their blood pressure, control their diabetes. From a public health perspective, they have better health outcomes in these areas,” Ku added.
Ku also echoed Rice in pinpointing the bleak inequities in care that come from such a high number of uninsured and underinsured people.
Where has there been progress? Ku said the creation of the Affordable Care Act (ACA), colloquially called “Obamacare,” is a major development that resulted in “tens of millions more people getting health insurance.”
Of course, with that has come the minefield of modern American politics.
From its inception, the ACA became mired in partisanship, and Ku said current proposals from the Biden administration — as well as the campaign promise of building upon the ACA with a “public option” — face a divided, radioactive Congress.
However, the recent Supreme Court ruling against Texas and other Republican-led states seeking to strike down the ACA appears to offer some hope for improvement. The 7-2 decision reversed an appeals court ruling that had struck down the law’s individual mandate provision.
Still, Ku remains convinced a complete revamp of the American healthcare system is what’s needed to make real, lasting change.
“A lot of current reforms have been designed to build upon the current system in an incremental fashion. There has not been a massive effort to say, ‘We need to build a whole new system,’” Ku explained.
“Efforts to try to find ways to contain healthcare costs, where people talk about payment-based models that will pay healthcare providers for when they do a better job of managing people’s health, things like that have not been wonderful successes so far, and other changes that are smaller, they tend to be marginal,” he added.
Ku believes we have a system that “tends to rely too much on specialty care, on high-tech care” and isn’t making “basic, primary preventive services” a priority.
Ku said a big part of the battle is “vested interests,” such as partisan political figures, private insurance companies, and drug companies, that stand as routine roadblocks to any kind of reform.
He explained that a lot of the countries Rice profiled are ahead of us in quality and cost because they got over the “first bump of ‘can you cover everybody?’ decades ago.”
The hard work of getting to society-wide health coverage has been done.
“Now, the government in most of those cases is responsible for a much larger share of the healthcare costs and, over time, has focused much more of its attention on ‘how do we rein in healthcare costs, how do we do a better job of covering primary and preventive healthcare services?’ So at that point, there is more leverage for the government to try to rein in some of those things,” Ku said.
The United States, by comparison, has to play catch-up, and he said there’s a chance “we might never get there.”
However, Ku said recent legislation to curb “surprise medical billings” was a promising move forward.
The anger over high prescription prices seems like a natural next hurdle to attack, but he said it remains how much political support from Republicans in Congress exists to essentially stand in opposition to large pharmaceutical companies, for instance.
“I don’t think there is enough outrage to generate the political will to completely revamp the U.S. healthcare system,” Rice explained. “I think the incremental changes are much more politically likely to occur here.”
When thinking back on his research, Rice said there’s no one sole country that serves as a model, above and beyond others, for the United States. He said there are many aspects of peer nations’ systems that we could emulate.
For example, take a look at the idea of a “managed competition” system like ours, with competing private insurance companies. Rice said the Netherlands has competing insurers, but their prices are significantly lower.
In Germany, Japan, and France, there’s an “all-payer system,” which has competing private insurers, but all insurers “must offer the exact same insurance to their subscribers and, as I said before, it means no one has better insurance than the others.”
In Australia, Canada, the United Kingdom, and Sweden, there’s a single-payer system, which creates a standardized system that’s much better able to control costs, but “the one problem is that these countries have consistently longer wait times for services.”
“If you taxed finance, the government has to use the tax money for all the things it does, not just healthcare. Healthcare then has to compete with everything else. That leads to longer waiting lists,” he said.
“I don’t think there is one model out of any other, what I’ve learned is the different models can be made to work. Again, what they all have in common is a willingness to have the government be more involved than we do,” Rice added.
Looking ahead, Rice said it’s impossible to know whether meaningful reform will take place.
It all depends on the political headwinds of the time.
However, Rice again pointed to the fact that the Biden administration is keen on building on the ACA’s past success.
He said the administration is aiming to increase subsidies to purchase health insurance through the ACA’s marketplace exchange. If people can get larger subsidies, they will be able to buy policies that have lower deductibles.
This is one example of incremental change that can build on our current system and get more people insured.
Rice cited Washington state, which has “been dabbling with a public option.” He said he believes the state is giving providers payments that are about 60 percent higher than the Medicare rates.
“It’s not clear how much money you would be saving through that. I think controlling these prices will be a major problem outside of prescription drugs. I think prescription drugs are a relatively small part of the total healthcare spending, and I think we need to be looking at trying to lower prices for hospital services as well,” Rice said.
He added, “The other countries have been able to do this, but they’ve been much more aggressive in using government to negotiate fees than we have been doing here.”
Ku said the combination of the COVID-19 pandemic and the racial justice awakening in the wake of the murders of George Floyd and Breonna Taylor, among others, have “exposed a number of inequities in the healthcare system as well as just the whole system.”
Witnessing inequities in care and support for people in poverty and People of Color while “billionaires got a lot richer during the pandemic” created a clear picture for anyone who might have been unclear about what the flaws might be in our system, he said.
The big question, Ku said, is what will the country do next? Will it go back to the way things have always been done, or will it learn from the past year and make needed structural reforms?
He pointed out that if the United States genuinely hopes to improve its healthcare system, it has no shortage of good examples.