Skip to main content

OECD data reveals shortcomings of privatized US health care

Here's the Organization for Economic Cooperation and Development's (OECD's) latest report on U.S. health care funding.
The United States spent 17.4% of GDP on health in 2009, much more than the OECD average of 9.6%.
Details: Spending per person is two-and-a-half times higher than the OECD average. Total health spending accounted for 17.4% of GDP in the United States in 2009, by far the highest share in the OECD. Following the United States were the Netherlands, France and Germany, which allocated respectively 12.0%, 11.8% and 11.6% of their GDP to health. The OECD average was 9.6%.  
The United States also ranks far ahead of other OECD countries in health spending per capita, with spending of 7,960 USD in 2009, two-and-a-half times greater than the OECD average of 3,233 USD (adjusted for purchasing power parity).
With less than half of health care funded by the public sector in the USA (compared to 72% for the 34 developed countries in the OECD) and with for-profit corporations playing a large role in U.S. health care, the US is the leading model of  privatization.  If 'leading' is the right word.

The OECD has a special report on high US health care spending.  It notes:
  • Hospital spending is higher than in five other OECD countries which spend a lot on health care (Germany, Switzerland, France, Japan, and Canada).
  • Spending on Ambulatory care providers – that is, physicians and specialists as well as dentists -- is much higher than in the other high spending OECD countries
  •  Spending on Pharmaceuticals and medical goods is higher in the US than in any other country.
  •  Spending on Public Health and Administration is particularly high – more than two-and-a-half times the average. Administration of the US health system alone accounts for about 7% share of total spending. In comparison, Canada and Japan devote around 4% of health spending on administration. (The high US administrative costs are driven, no doubt, by its inefficient, multi-payer, privatized insurance system.)
Prices in the privatized US system are high:  "the evidence suggests that prices for health services and goods are substantially higher in the United States than elsewhere."

Mark Pearson, the head of the OECD Health Division told Reuters that one reason prices are higher in the United States is that the healthcare system lacks what other countries have: an effective government mechanism that acts to keep prices down. "That's simply not there in the U.S. system. So it's a structural defect," he said.

Kaiser asks: "So what are Americans getting for their money? The U.S. has the best five-year survival rate for breast cancer and comes in second, behind Japan, in terms of colorectal cancer survival.  But the U.S. ranks 27th in life expectancy at birth, 31st in premature mortality, and 25th in the rate of cardiovascular mortality. The U.S. has the second worst rate of adult diabetes, behind Mexico, and has the highest rate of adult obesity, at 34 percent."



Labels:

Comments

Post a Comment

Popular posts from this blog

Huge cuts in public sector wages predicted

The Ontario Financial Accountability Office (FAO)   says  that, with inflation, real wages in the public sector will decline 11.3% over the three year period  2021/2 - 2023/4 .  This would radically deepen the trend towards lower wages during the last ten years.   The FAO reports that since 2011, the average annual salary for the Ontario public sector employees (defined here as employees of schools, colleges, provincial government, provincial agencies, and hospitals) has increased by $10,385   -- or 1.6 per cent on average annually.  This is the lowest increase of all the sectors and lower than inflation, which averaged 1.8 per cent per year. Over the ten years that would be about a 2% pay cut.   The FAO reports that wage settlements were the lowest in the provincial public sector over the last decade:   Hospital Wages Especially Challenged: The FAO predicts hospital wages will increase even less than in the public sector  -- just ...
Post a Comment
Read more

Too many public sector workers in Ontario?

Opponents of public services often try to portray the public sector as having grown disproportionately.  In fact, since 1976, the number of public sector employees has not quite kept pace with the population. In 1976, the number of public sector employees in Ontario  as reported by Statistics Canada averaged 830,800.  By 2012, the number had increased to 1,330,700 -- a 60.2% increase.  That sounds like significant growth -- true. But the population has increased  from 8,413,779 in 1976 to 13,505,900 in 2012, a 60.5% increase.   In other words, population growth has run slightly ahead of the growth in public sector employment.     In 1976, close to 10% of the population worked in the public sector.  It stayed pretty much this way until the Mike Harris government came to power when it dipped below 9%.  It returned close to the historical range in the last six years or so, declining in 2012 to below the 1976 averag...
16 comments
Read more

Are health care administrative expenses out of control in Ontario?

The Progressive Conservative government has justified its health restructuring plans with the claim that administrative expenses are much higher in Ontario than in Canada.  When introducing the reforms, health minister Christine Elliott  claimed , “Over the last five years, Ontario has spent 30% more than the Canadian average in administrative expenses on its health care system.”   Elliott did not indicate her source of information. Presumably, however, the Progressive Conservatives are referring to the CIHI simplified and user friendly “ Your Health System ” graphs. Those graphs show “administrative expenses” in Ontario at 5.8% in Ontario while it is 4.5% in Canada.   This CIHI measure is actually fairly narrowly defined. It is the percentage of “the legal entity’s” total expenses associated with the administrative, finance, human resources and communications functional centres. However “the legal entity” used for this estimate is [1] only...
Post a Comment
Read more