Healthcare Costs: USA Vs. The Rest Of The World - Part 1

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by: Tusk Media
Summary

Analysis of JAMA (Journal of American Medical Association) report on healthcare costs in USA vs. 10 other rich countries.

Access and utilization of healthcare abroad is generally better than in the United States.

United States spent 17.8% of GDP on healthcare compared to the average of 11.5%.

Healthcare in the United States is portrayed to be top-notch, and part of this reputation is a result of the population paying high prices for quick and efficient care. In a recent report published by JAMA (Journal of the American Medical Association), 10 other high-income countries are examined alongside the United States for medical care performance.

The results may come as a bit of a surprise. The costs of care abroad were significantly less while the care was rather similar (and in some cases better). Contrary to popular [American] belief, the United States' healthcare isn't that ahead of the curve in terms of greater access and utilization, better outcomes, or lifestyle; these myths tend to be excuses for astronomical prices.

When it comes to healthcare access, a common story is that the American system results in much faster treatments and/or diagnoses. Simply said, this is not true. In America, 51% of the patients are able to set up a next day appointment versus an average of 57% of patients in the average of the other 10 countries.

JAMA Network Report

These countries may be able to set up appointments faster because there is a higher number of physicians per 1,000 people both in rural and urban areas, however, a key difference in favor of the rumor is that in America there is a shorter wait time to see a specialist, which a lot of the times can happen in under two months compared to four abroad. As far as utilization is concerned, the number of annual physician visits favors foreign countries (6.5 visits per year) who also perform more testing and allow longer stays after major events like child deliveries and heart attacks.

The next myth to analyze is that the American healthcare system typically leads to better outcomes for patients. Again, this is not entirely true. In the US, there is a higher maternal mortality rate in live births (26.4/100,000) versus in the average of other high-income countries (8.4/100,000).

JAMA Network Report

In addition to this, the infant mortality rate is 5.8/1,000 in the States compared to 3.6/1,000 abroad. This trend continues into neonatal mortality; however, the myth gains some merit when comparing clinical outcomes. Examples in this category include 30-day stroke mortality and 30-day MI mortality. One logical explanation for the difference in these numbers is lifestyle, but not everything is as it may seem.

Despite other countries having higher life expectancies, some of the behaviors that we commonly view as unhealthy (i.e. smoking and drinking) are practiced more abroad than here. 11.4% of the American population smoke regularly in contrast with a 16.6% abroad. This statistic aligns with alcohol consumption, where 8.8 liters are consumed per person each year in the States. Comparatively, the number of liters consumed elsewhere is 9.1.

JAMA Network Report

One of the largest reasons (pun intended) for the difference in life expectancy stems from eating habits. Americans are commonly known for being on the heavier/obese side which leads to our number 1 health problem, heart disease. Overall, this is where the rumor garners some truth.

In conclusion, a great deal of the myths associated with the high costs of American healthcare are misguided, but still hold a certain degree of truth. In part two of our analysis, we will dive into the reasoning behind the higher costs in the United States and where that money actually goes.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.