(AP Photo/Michael Conroy, File)

U.S. Has Worst Health Care Despite Spending the Most On It

in Sludge
on August 5, 2021

The United States spends the most on health care only to receive by far the worst performance out of 11 high-income countries, according to a new report out this week from the research group Commonwealth Fund.

Graded across 71 performance measures, the U.S. ranked last on access to care, administrative efficiency, equity, and health care outcomes. The nations surveyed in the analysis were Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States, which has consistently ranked last in the seven comparative reports the nonprofit organization has published since 2004. 

Comparing income groups, the report found, “U.S. disparities are especially large when looking at financial barriers to accessing medical and dental care, medical bill burdens, difficulty obtaining after-hours care, and use of web portals to facilitate patient engagement.” 

Higher-income Americans have a harder time accessing care than lower-income patients in other countries that provide universal coverage, the report’s lead author, Dr. Eric Schneider, told Marketplace this week. “The U.S. is such a low performer on several of these measures that if health care were an Olympic sport, it’s not clear the U.S. would even qualify to compete,” he said.

Healthcare Spending Hits $4 Trillion Per Year

In 2020, according to the federal agency Centers for Medicare and Medicaid Services (CMS), national health expenditures reached $4.014 trillion, nearly twice as much as the average OECD country measured as a percentage of GDP. Spending is on track to rise by over 5% annually and reach $6 trillion by 2027.

Over half of last year’s total spending, $2.145 trillion, was from government sources: Medicare, Medicaid, federal, state, and local programs. Private health insurance costs were $1.357 trillion, and out of pocket costs were $405 billion, combining for nearly 44% of the total.

A 2018 study from the University of Washington found that despite shelling out by far the highest levels of spending, the United States ranks 27th in the world in its healthcare outcomes. The U.S. has the lowest life expectancy, highest chronic disease burden, and the highest suicide rates among 11 high-income countries, according to the Commonwealth Fund in a 2019 study. Previous research has found the U.S. has the highest number of preventable deaths under the age of 75 compared to other industrialized countries, of which 20-40% were deemed to be preventable, according to the CDC.

As of 2019, 28.9 million nonelderly Americans were uninsured, according to a Kaiser Family Foundation report from Nov. 2020, about 10.9 percent of the population. In 2020, an additional 41.1 million people were underinsured, according to a Commonwealth Fund biennial survey last year, making up an additional 21.3% of individuals aged 19-64.

In the first half of 2020, 43.4 percent of adults were inadequately insured, defined by Commonwealth as people who were uninsured at the time of the survey (12.5%), had experienced a coverage gap in the past year (9.5%), or had such high out-of-pocket costs or deductibles relative to their income that they were effectively underinsured (21.3%). This year, Commonwealth found exactly 50% of lower-income adults said that the cost of care was a barrier for them. One-third of U.S. adults go without recommended care because of costs, according to a 2016 survey.

Health Insurers Buy Back Stock 

Over the past decade, as health insurance premiums and deductibles have risen, the second-largest health insurer, Anthem, has bought back tens of billions of dollars worth of its own stock, according to industry whistleblower Wendell Potter, enriching investors and executives. The largest health insurance company, UnitedHealth, has beaten Wall Street estimates of adjusted net earnings for eight consecutive quarters.

A single-payer system would expand Medicare to cover everyone in the United States: private delivery of health care, with patients choosing their providers. Insurance companies would be phased out over several years (four years under the proposal of Sen. Bernie Sanders), with up to five years of assistance for industry workers in the transition, in favor of public financing through a single government agency. The administrative savings were estimated in 2017 to reach $500 billion annually, and in 2020 to reach $600 billion per year. 

All medically-necessary services would be covered, including doctor’s visits, hospitalization, preventive care, long-term care, mental health, reproductive health, dental, vision, medical supplies, and prescription drugs. The proposal from Progressive Caucus Chair Rep. Pramila Jayapal (D-Wash.), cosponsored in the previous Congress by the majority of House Democrats (118 of the 233 Democratic reps then in office), would be more generous than Canada’s comparable system. By eliminating the lock-in of insurance coverage to employment, Medicare for All could produce a net increase in jobs while supporting self-employment and boosting small business development, according to progressive economists.

In February 2020, the journal Lancet published a study finding that a single-payer system would save more than 68,000 lives and $450 billion a year. A 2018 study by the Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst found that at a cost of around $2.93 trillion per year, Medicare for All would reduce health care spending by $5.1 trillion over 10 years compared to the status quo. 

In 2019, policy analyst Matt Bruenig calculated from U.S. Census data that a single-payer system would reduce poverty by about 22 percent. “8 million of the nation’s 42.5 million poor people would not be poor if they did not have to pay medical out-of-pocket expenses like deductibles, copays, coinsurance, and self-payments,” he wrote. Economics professors Emmanuel Saez and Gabriel Zucman calculated that year that an individual with $50,000 in income would receive a net gain of $11,000 under Medicare for All.

The health services industry spent $52.7 million on federal lobbying in the first half of this year, according to OpenSecrets, with nearly two-thirds of lobbyists formerly having worked in the government.

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