US health care still lags affordability

By Jack Bernard

Many years ago, I had lunch with Dr. Uwe Reinhardt, a prominent health economist, who was a speaker at a national conference for hospital CEOs hosted by the organization that employs me.

In a playful way, he made me realize that the United States didn’t have the best health care in the world, no matter what our politicians liked to say.

Clearly, the troubled state of our healthcare system did not begin with the Covid-19 pandemic, an upheaval as extraordinary as this. Before Covid, there were many excellent studies and reports regarding the excessive costs plaguing the American system.

Bernard

A Journal of the American Medical Association (JAMA) article, written before the pandemic, said the United States “spends about twice as much as other high-income countries on medical care, but utilization rates in the states United States were broadly similar to those of other countries”. nation”.

The article also indicated that administrative costs were a major factor. In addition, US prices were significantly higher for medical devices and goods, labor and pharmaceuticals.

How bad are we at spending compared to the other 10 richest nations? For example, we spent 18% of our GDP on health care compared to 10% in Australia in 2016. And virtually everyone in Australia has health cover, while in our country – still more than a decade after adoption of the Affordable Care Act – there are still 28 million uninsured people, or about 9% of the population.

Additionally, our life expectancy was the worst among the 11 nations surveyed, while our infant mortality rate was also the worst.

Another article written last year found the same cost issues (https://jamanetwork.com/reviews/jama/fullarticle/2785479). Physician insurance, billing, coding and administration fees were all cited as key factors. If there were standardization of billing and claim forms, for example, much of this waste could be reduced. Additionally, standardizing EMRs (electronic medical records) would improve patient care, while reducing costs.

A 2019 report from Reinhardt’s colleagues (https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05144 ) used international data to show that higher prices are the reason the United States is much more expensive than other developed countries. He went on to say that we have fewer doctors, nurses and hospital beds per capita. We just pay more.

Another report reported similar findings regarding the performance of our overspending system relative to other high-income countries (https://www.commonwealthfund.org/publications/fund-reports/2021/august/mirror-mirror-2021-thinking badly). The United States ranked last while Norway, the Netherlands and Australia were ranked best. There were four areas where we were found to be deficient. Specifically, we found that we had poor access to care; inequitable primary care; high administrative costs; and inadequate social services.

A 2019 report also looked at the cost issue in detail (https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/ ), citing “unnecessary administrative complexity”.

Again, the study cites health insurance inefficiencies (claims submission, reconciliation, processing) and marketing overhead as significant factors. He points to a 1999 study showing that 31% of healthcare expenditure was devoted to administrative costs, a much higher percentage than in other countries. The report also references a 2010 study by the National Academy of Medicine, which determined that 50% of provider costs and 66% of private insurer costs were “excess”.

If we can reduce health care costs, by reducing Medicare, Medicaid and VA spending, federal and state governments will have more money to spend on other priorities, such as education, energy clean and infrastructure. In turn, American individuals will end up with more money, which they can use to improve their lives as they see fit.

Standardization is an established fact in other developed countries, which makes their financing and delivery of health care more efficient than in the United States. Normalization can be accomplished here, if we make a sincere, objective and bipartisan effort to change our current inefficient system.

Jack Bernard, a former director of health planning in Georgia, is a retired senior vice president of a national health care company and a member of the Fayette County Board of Health.

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