Nav: Home

High prices are just one reason Americans spend more on healthcare than Europeans

March 13, 2018

PHILADELPHIA -- High drug prices as well as the excessive use of imaging and surgical procedures, and excessive administrative burdens contribute the majority to America's health care overspending compared to Europe, argues policy expert Ezekiel J. Emanuel, MD, PhD, chair of the department of Medical Ethics and Health Policy at the Perelman School of Medicine at the University of Pennsylvania, in an editorial in this week's JAMA.

Americans average a whopping $9,403 per person in annual health care spending, which is much more than the per-capita health spending in other wealthy, aging countries--Germans and Dutch, for example, average $5,182 and $5,202 respectively. But while America's higher prices tend to get most of the attention in analyses of its health care overspending, there are also big differences in the volumes of health care purchases.

"There are twice as many caesarean deliveries per capita in the United States compared to the Netherlands, for example," Emanuel said. "That difference in volume clearly is a major contributor to the overall spending discrepancy--$62 per capita for caesareans in the US vs. $9 in the Netherlands."

In the editorial, Emanuel noted that administrative costs are another big contributor, accounting for $752 per-capita of Americans' annual health care spending, versus just $208 in the Netherlands, and $232 in Germany. He argued that health care policy in America should take aim at these major drivers of excessive spending, which could free up hundreds of billions of dollars for better social uses.

The editorial referenced a new analysis from other researchers in the same issue of JAMA which included a comparison of health care expenditures in the U.S. and ten other wealthy countries, most in Europe, and showed that on a per-capita basis, the U.S. spends roughly twice as much as these peer countries. Using the data from this analysis as well as from other sources, Emanuel highlighted several key drivers of this huge spending difference.

One consists of high-price, high-volume surgical procedures such as caesareans, knee and hip replacements, coronary artery bypasses, and angioplasties. Americans per-capita spend 2 to 6 times more on these procedures than their peer country counterparts. "Just the top 25 of these high-margin, high-volume procedures, with cost differences of $20-$40 per capita, explains approximately 20 percent of the per-capita healthcare spending difference between the U.S. and other high-income countries," Emanuel said.

Administrative bloat in the U.S. is a second major spending driver, with per-capita costs that are three to five times higher than costs in peer countries.

Medical imaging procedures, meaning mostly CT scans and MRIs, are a third major driver of spending differences, and also involve both high prices and high volumes. "CT scans alone account for $220 in annual per-capita spending in the U.S., compared to $23 per-capita in the Netherlands for example," he writes.

The fourth major driver, pharmaceuticals spending, is the only one where high prices are the dominant factor. Americans spend $1,443 per capita on pharmaceuticals, versus $566 for Swedes, for example, yet this huge excess is almost entirely due to higher U.S. prices, not higher volume.

Doctors, too, cost more in America; their average salary is higher than the averages in most peer countries. Yet Americans' net per-capita spending on doctors' salaries isn't much greater than in peer countries, because there are proportionately fewer doctors in the U.S. "There are just 2.6 physicians per 1,000 citizens in the U.S., whereas in Germany the ratio is 4.1 per 1,000 and in Sweden 4.2 per 1,000," Emanuel said. "The difference in per-capita spending on doctors' salaries accounts for only 4 percent of the overall health spending gap."

Emanuel emphasized that the four largest drivers of excess U.S. spending -- high-price-high-volume procedures, administrative bloat, excessive medical imaging, and pharmaceutical spending -- account for about two-thirds of the overall per-capita spending gap, and thus should be the prime targets of cost-reduction policies.

Such policies should include government regulation to force down drug prices; mandatory shared decision-making among doctors to reduce the overuse of expensive procedures and imaging; Medicare-style reference pricing to lower per-procedure costs; and automated/electronic record-keeping to reduce administrative costs.

Even if such policies were to achieve proportionately only a modest amount of reduction, they would liberate very large sums, given the scale of the problem. "If we in the United States could lower the prices and per-capita volumes of our CT scans, MRIs, and just the top 25 high-volume-high-price surgical procedures to those of the Netherlands, for example, we would see savings of about $425 per capita, or a total of $137 billion," Emanuel said.

Of the many alternative uses that could be made of that much money, he added, probably none could be worse than its current wastage on unnecessary -- and often risky -- medical procedures.
-end-
Penn Medicine is one of the world's leading academic medical centers, dedicated to the related missions of medical education, biomedical research, and excellence in patient care. Penn Medicine consists of the Raymond and Ruth Perelman School of Medicine at the University of Pennsylvania (founded in 1765 as the nation's first medical school) and the University of Pennsylvania Health System, which together form a $6.7 billion enterprise.

The Perelman School of Medicine has been ranked among the top five medical schools in the United States for the past 20 years, according to U.S. News & World Report's survey of research-oriented medical schools. The School is consistently among the nation's top recipients of funding from the National Institutes of Health, with $392 million awarded in the 2016 fiscal year.

The University of Pennsylvania Health System's patient care facilities include: The Hospital of the University of Pennsylvania and Penn Presbyterian Medical Center -- which are recognized as one of the nation's top "Honor Roll" hospitals by U.S. News & World Report -- Chester County Hospital; Lancaster General Health; Penn Wissahickon Hospice; and Pennsylvania Hospital -- the nation's first hospital, founded in 1751. Additional affiliated inpatient care facilities and services throughout the Philadelphia region include Good Shepherd Penn Partners, a partnership between Good Shepherd Rehabilitation Network and Penn Medicine.

Penn Medicine is committed to improving lives and health through a variety of community-based programs and activities. In fiscal year 2016, Penn Medicine provided $393 million to benefit our community.

University of Pennsylvania School of Medicine

Related Science Articles:

PETA science group promotes animal-free science at society of toxicology conference
The PETA International Science Consortium Ltd. is presenting two posters on animal-free methods for testing inhalation toxicity at the 56th annual Society of Toxicology (SOT) meeting March 12 to 16, 2017, in Baltimore, Maryland.
AAAS and March for Science partner to uphold science
AAAS, the world's largest general scientific organization, announced Thursday that it will partner with the March for Science, a nonpartisan set of activities that aim to promote science education and the use of scientific evidence to inform policy.
Citizen Science in the Digital Age: Rhetoric, Science and Public Engagement
James Wynn's timely investigation highlights scientific studies grounded in publicly gathered data and probes the rhetoric these studies employ.
Science/Science Careers' survey ranks top biotech, pharma, and biopharma employers
The Science and Science Careers' 2016 annual Top Employers Survey polled employees in the biotechnology, biopharmaceutical, pharmaceutical, and related industries to determine the 20 best employers in these industries as well as their driving characteristics.
Three natural science professors win TJ Park Science Fellowship
Professor Jung-Min Kee (Department of Chemistry, UNIST), Professor Kyudong Choi (Department of Mathematical Sciences, UNIST), and Professor Kwanpyo Kim (Department of Physics, UNIST) are the recipients of the Cheong-Am (TJ Park) Science Fellowship of the year 2016.
Danforth Plant Science Center & Valent BioSciences collaborate in root science initiative
A Master Agreement will focus on improving agriculture with non-destructive imaging technology for root growth dynamics.
2016 Cool Science Image contest: Amazing pictures tell tales of science, nature
Ten images and two videos by University of Wisconsin-Madison students, faculty and staff have been named winners of the 2016 Cool Science Image contest.
National Science Foundation and Popular Science announce 2016 Vizzies winners
The National Science Foundation (NSF) and Popular Science magazine today announced the winners of the 2016 Vizzies, awards that celebrate the use of visual media to clearly and accessibly communicate scientific data and research.
Over 900 science leaders from over 100 countries gather at the World Science Forum 2015 Budapest calling for a more responsible and ethical use of science to address pressing global challenges in environment and health
At the Opening Ceremony of World Science Forum 2015 under the theme of 'The Enabling Power of Science' a panel of global thought-leaders declared renewed intent to fight poverty and promote just, equitable and inclusive social development based on the restoration, protection and sustainable use of natural resources and ecosystems.
AAAS to expand the Science family of journals by launching 2 new journals -- Science Robotics and Science Immunology
In keeping with its mission to advance scientific progress and innovation, the world's largest general scientific organization -- the American Association for the Advancement of Science -- today announced plans for two new peer-reviewed journals, Science Robotics and Science Immunology.

Related Science Reading:

Cece Loves Science
by Kimberly Derting (Author), Shelli R. Johannes (Author), Vashti Harrison (Illustrator)

Cece, a budding and inquisitive scientist, and her equally curious best friend, Isaac, conduct experiments to see whether Cece's dog, Einstein, will eat his vegetables. View Details


Science Matters: Achieving Scientific Literacy
by Robert M. Hazen (Author), James Trefil (Author)

Knowledge of the basic ideas and principles of science is fundamental to cultural literacy. But most books on science are often too obscure or too specialized to do the general reader much good.

Science Matters is a rare exception-a science book for the general reader that is informative enough to be a popular textbook for introductory courses in high school and college, and yet well-written enough to appeal to general readers uncomfortable with scientific jargon and complicated mathematics. And now, revised and expanded for the first time in nearly two decades, it is... View Details


Play On: The New Science of Elite Performance at Any Age
by Jeff Bercovici (Author)

A lively, deeply reported tour of the science and strategies helping athletes like Tom Brady, Serena Williams, Carli Lloyd, and LeBron James redefine the notion of “peak age.”

Season after season, today’s sports superstars seem to defy the limits of physical aging that inevitably sideline their competitors. How much of the difference is genetic destiny and how much can be attributed to better training, medicine and technology? Is athletic longevity a skill that can be taught, or a mental discipline that can be mastered? Can career-ending injuries be predicted and... View Details


Make It Stick: The Science of Successful Learning
by Peter C. Brown (Author), Henry L. Roediger III (Author), Mark A. McDaniel (Author)

To most of us, learning something "the hard way" implies wasted time and effort. Good teaching, we believe, should be creatively tailored to the different learning styles of students and should use strategies that make learning easier. Make It Stick turns fashionable ideas like these on their head. Drawing on recent discoveries in cognitive psychology and other disciplines, the authors offer concrete techniques for becoming more productive learners.

Memory plays a central role in our ability to carry out complex cognitive tasks, such as applying knowledge to problems never... View Details


Algorithms to Live By: The Computer Science of Human Decisions
by Brian Christian (Author), Tom Griffiths (Author)

What should we do, or leave undone, in a day or a lifetime? How much messiness should we accept? What balance of the new and familiar is the most fulfilling? These may seem like uniquely human quandaries, but they are not. Computers, like us, confront limited space and time, so computer scientists have been grappling with similar problems for decades. And the solutions they’ve found have much to teach us.

In a dazzlingly interdisciplinary work, Brian Christian and Tom Griffiths show how algorithms developed for computers also untangle very human questions. They explain how to have... View Details


Science Encyclopedia: Atom Smashing, Food Chemistry, Animals, Space, and More! (Encyclopaedia)
by National Geographic Kids (Author)

Food chemistry, atom crashing, wave power, food chemistry, and robots! These are just a few of the topics covered in this fantastic new science encyclopedia, which presents a comprehensive overview of physical and life sciences from A to Z. Super smart and kid-friendly, it’s packed with full-color photographs, weird but true facts, amazing statistics, do-it-yourself experiments, plus profiles of scientists and National Geographic's explorers who rock the world of science. Keep up with the changes happening all around us with... View Details


How Science Works: The Facts Visually Explained (How Things Work)
by DK (Author)

Explore answers to questions on 70 topics in the areas of matter, physics, energy, chemistry, life science, earth science, technology, and the universe.

How Science Works uses clear, easy-to-understand graphics to answer common questions and explain difficult concepts--not only the core science topics that eluded us at school, but also the cutting-edge science reported in the news.

Have you ever wondered how airplanes stay in the air, how holograms are made, or how ants lift things many times their size? You'll find answers to these enigmas as well as learn about... View Details


Spectrum Science, Grade 6
by Spectrum (Compiler)

Cultivate a love for science by providing standards-based practice that captures children’s attention. Spectrum Science for grade 6 provides interesting informational text and fascinating facts about thermodynamics, biological adaptation, and geological disturbances.

When children develop a solid understanding of science, they’re preparing for success. Spectrum Science for grades 3-8 improves scientific literacy and inquiry skills through an exciting exploration of natural, earth, life, and applied sciences. With the help of this best-selling series, your young scientist can discover... View Details


The Science Book (Big Ideas Simply Explained)
by DK (Author)

With over 225,000 copies in print, DK's Big Ideas series has struck a chord with readers fascinated-but also intimidated-by complex subjects like philosophy, psychology, politics, and religion.

The newest title in this successful and acclaimed series is The Science Book, an inventive visual take on astronomy, biology, chemistry, geology, and physics. With eye-catching artwork, step-by-step diagrams, and illustrations that break down complicated ideas into manageable concepts, The Science Book will have readers conversant in genetic engineering, black holes, and global... View Details


Indescribable: 100 Devotions for Kids About God and Science
by Louie Giglio (Author)

Discover the Wonders of the Universe with the Creator

It’s impossible to out-imagine God. He orchestrates time, creates light, and speaks things into existence—from the largest stars to the smallest starfish. God is a powerful, purposeful, personal, unparalleled Creator.

Psalm 19:1 says, “The heavens tell the glory of God. And the skies announce what his hands have made.”

Indescribable displays the majesty of creation with scientific findings, photography, and original illustrations. These 100 devotions encourage awe at God’s creativity with an... View Details

Best Science Podcasts 2018

We have hand picked the best science podcasts for 2018. Sit back and enjoy new science podcasts updated daily from your favorite science news services and scientists.
Now Playing: TED Radio Hour

The Person You Become
Over the course of our lives, we shed parts of our old selves, embrace new ones, and redefine who we are. This hour, TED speakers explore ideas about the experiences that shape the person we become. Guests include aerobatics pilot and public speaker Janine Shepherd, writers Roxane Gay and Taiye Selasi, activist Jackson Bird, and fashion executive Kaustav Dey.
Now Playing: Science for the People

#478 She Has Her Mother's Laugh
What does heredity really mean? Carl Zimmer would argue it's more than your genes along. In "She Has Her Mother’s Laugh: The Power, Perversions, and Potential of Heredity", Zimmer covers the history of genetics and what kinship and heredity really mean when we're discovering how to alter our own DNA, and, potentially, the DNA of our children.