Question

Anyone involved with American health care probably knows that our spending is out of control. We experience far greater medical spending than any other nation. Just how much do we spend on health care in America, and what are we spending all of that money on? Provide specific examples of the types of healthcare spending and amounts of spending based on the most current data in your textbook.

Answer 1

The U.S. health care system is unique among advanced industrialized countries. The U.S. does not have a uniform health system, has no universal health care coverage, and only recently enacted legislation mandating healthcare coverage for almost everyone. Rather than operating a national health service, a single-payer national health insurance system, or a multi-payer universal health insurance fund, the U.S. health care system can best be described as a hybrid system.

The authors said the huge spending gap—17.8% of GDP in the U.S. versus an average of 10.8% in the other 10 countries—was not primarily driven by the factors that often get the blame. Those commonly cited culprits include excessive utilization caused by the U.S. fee-for-service payment system, defensive medicine prompted by liability worries, underinvestment in social programs, and a low mix of primary care to specialty care.

The JAMA study findings reinforce doubts about whether the current U.S. policy mantra of shifting from fee-for-service to value-based payment, plus adopting high-deductible health plans to squeeze out unnecessary care will be the silver bullet to reduce spending. Instead, the authors suggest the need for measures aimed directly at bringing down the prices of drugs and medical services.

"We do have some overutilization, and value-based programs can help," said Dr. Ashish Jha, a professor of global health at Harvard and a co-author of the article, which was based on data from the Organisation for Economic Co-operation and Development. "We completely have a price problem. MRIs cost twice as much in Kansas as in London, and that makes no sense."