• Some updated charts on health care spending

    UPDATE: I removed the second chart, because we’ve noticed there are problems with it. Actually, Austin did, months ago. I’m having a week…

    This morning, I received two very polite emails:

    “I’ve seen some recent arguments comparing the percent of GDP that the US and other countries spend on healthcare. Can you update your chart showing that?”

    Yes, I can. Here is health care spending as a percent of GDP, 1980-2010, based on OECD data:

    Updated Spending vs GDP

    You should have no trouble identifying the United States. It’s the one that’s not like the others.

    The second email:

    “How does the distribution of US healthcare costs compare to the rest of the world? I have found little to help me answer this question. Is everyone else spending 22% of their healthcare dollars on 1% of the population (or even 50% for 5%)?

    That’s a great question. I can’t find the same kind of data from other countries that you cite here, although we’ve covered this for the US before. I did, however, find this chart, which is interesting:

    As you can see, for lots of people (ie the not-old), our health care spending per person isn’t that different from the rest of the world. For certain groups, however, the differences are startling. This would suggest that our distribution of spending is not the same. If someone has better data, let me know!

    @aaronecarroll

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    • Do you attribute the flat line during Clinton’s presidency just as a function of GDP growing enough to keep up with health care costs, or was there something else at work?

    • The flat line during the mid -90s was due to managed care. Insurance
      companies began refusing to cover certain treatments and products.
      Unfortuantely, they often made the decision based on price rather than
      medical evidence that the treatment wouldn’t be effective for a particular patient. But sometimes insurers were right.
      Neverthless, by the end of the 1990s, an enormous media backlash caused insurers to give up trying to manage care. They began paying for most treatments that a doctor recommended, and passed the cost along
      in the form of higher premiums. Thus, premiums skyrocketed.

      Under the ACA we will once again be trying to manage care, but this time around, the empahsis is on evidence-based medicine–letting science decided what we do and don’t pay for. CMS will be leading the way, and private insurers will follow.

    • The more I look, the more I think the reason we spend so much on healthcare in the US is because “WE CAN”. We leave no one behind, and spend most of our resources on those that in other countries are not given the same opportunity. Dialysis rates are higher, ICU patients over the age of 85 at almost 7%,,,,, this is a country where an 87 yof who has expressed her wishes to not be resuscitated is involved in a media storm when the 911 operator says “are you just going to let her die?”. I am not for death panels or for government intervention to define the “standard of care” or “proper distribution of resources”, but I am for a system that uses common sense where the practitioners do not feel their hands are tied when they feel that resuscitation is not in the best interests of the patient. For those that deal with these decisions on a daily basis, this is the real problem. How one goes about quantifying the cost of our litigation in healthcare is multi-factoral and not as easily as “states that implemented tort reform” and its impact. I do know that for all the poor talk and statistics about the US healthcare system, it is still the premier place for those outside the country that need care and have means. Other than the differences in the distribution in healthcare dollars which I cannot determine from the other countries, the only other major difference is the lawyers. I am not sure what the COX-2 cost pfizer, or the silicone breast implants class action cost, but those were our healthcare dollars put to a poor use.

      • “We leave no one behind, and spend most of our resources on those that in other countries are not given the same opportunity.”

        You have this completely backwards! Last time I checked, somewhere between 40 and 90 million Americans had no medical insurance and about 50,000/year die because they don’t have access to medical care (no insurance, no money). Poverty makes up the American death panel$. In other developed countries, poor people are exactly the ones that “socialized medicine” tries to serve, because they are often the sickest (low income = poor health is not just a U.S. phenomenon). If the U.S. were providing health care to all its residents, the % of GDP would be much higher.

        • Don Miller:
          “You have this completely backwards! Last time I checked, somewhere between 40 and 90 million Americans had no medical insurance and about 50,000/year die because they don’t have access to medical care (no insurance, no money).”

          2011 figure are 47.9 million uninsured, down from 49 million.
          I am not sure where the 50,000 a year die is coming from.
          No insurance does not mean no access to medical care, just ask your ER physician. I think you will find that the demographics of the uninsured are much healthier than you think, with 80% being less than the age of 44. The reason we need them insured is not to improve their health, but to help cover the cost of everyone else. This idea of “if you don’t have insurance you will die” does not make logical sense to me. Die from what? We spend tremendous healthcare resources on individuals that would not be given the same opportunity in a non-US healthcare system. Furthermore, preventive medical services does not decrease the cost of healthcare, it increases the cost. Early death is much cheaper than preventing death, just ask France about smoking. I am just starting to look at a lot of these figures, but at this point still stand by my initial argument that the reason we spend so much on healthcare is because we can.

    • AMA news today says compliance with ICD10 will cost 83K per physican in groups smaller than 10. Compliance costs at my academic medical center for coding and to prevent audits are hundreds of thousands of dollars. Malpractice insurance and claims eat 30% of profits (we don’t have too many.) More than 75% of all doctors are sued in USA at an average cost of $250K dollars per suit, and fewer than 3% settle or are guilty. Show me the numbers on how this doesn’t add at least 5% to the per capita spending. Sure, health care fraud is at least 2% (vs 0.2% in the banking industry). And my reading of legal system in Italy is that the State pays all prosecutorial costs but it is not reported as per capita spending on healthcare since it is a legal cost for the state. And our hospital is validating the big insurance players’ data on quality. It is completely wrong 30% of the time in terms of primary care quality measures and outcomes data. Claims data do not capture everything that goes on.

    • “More than 75% of all doctors are sued in USA at an average cost of $250K dollars per suit, and fewer than 3% settle or are guilty.”

      But medical malpractice is known to kill, every year, more people than die in automobile and workplace accidents combined. So there are a lot of guilty doctors out there. (Actually, I think that systemic problems are more serious than bad individual MDs, and systemic solutions (e.g. checklists) are necessary, but that’s an aside.)

      What your facts and mine together mean is that while a given MD is likely to be sued at some point in his/her career, those suits are (a) a tiny percentage of actual malpractice, and (b) have a high random component (e.g. victims lashing out at the wrong problem (i.e. a bad outcome doesn’t mean malpractice happened)).

      In real life, the vast majority of malpractice victims receive no compensation (in the US). Any proposed “solution” to the “malpractice problem” needs to first accept that victims of malpractice should be compensated.