There's no denying that the U.S. healthcare system is quite costly. Americans are shelling out a lot of cash on doctor visits, diagnostic tests, and treatments so they can live long, healthy lives. But it turns out that the amount of dollars the country funnels into the healthcare system blows other countries out of the water. In fact, new research shows that the United States is spending an outrageous amount on healthcare, and that has a big impact on families.
A new study published this week in The Journal of the American Medical Association revealed that United States spends twice as much on healthcare as 10 other high-income countries, according to The New York Times. In particular, the country spends nearly 18 percent of its gross domestic product on healthcare, compared to Australia, which spends 9.6 percent of its GDP, and Switzerland, which spends 12.4 percent, the study found.
The kicker: How much of the healthcare system is utilized is on par with the other countries, The Times reported. It's what the United States is spending its money on that's driving the disparity. And that's what's affecting families, especially middle-income parents, the most when it comes to their medical bills.
So why does the nation dump so much cash into healthcare? As The New York Times noted, the common narrative is that the healthcare system is "wasteful." The basic assumptions are that patients render too many services, have too many specialist visits, and don't spend enough on social programs, the Times reported.
But researchers behind the JAMA study were able to debunk many of those narratives. They found that the United States ranks below average when it comes to the number of doctor and hospital visits. On the other hand, though, the country is near the top when it comes to dishing out for costly medical services and surgeries such as expensive imaging tests, C-sections, and knee replacements, according to The Los Angeles Times. And when it comes to social programs, the U.S. private sector actually outspends the public sector, The LA Times reported. Yet life expectancy in the United States in low, while infant mortality is the highest, the JAMA study showed.
Where's the money going? Administration and services. People are spending far more on administrative and service costs in the United States than any of the 10 other countries featured in the JAMA study, according to The Los Angeles Times. Take, for example, the average cost of a coronary artery bypass graft surgery: In 2013, the procedure was $75,342 in the United States, but only $15,742 in the Netherlands, The Los Angeles Times reported. That's more than a $60,000 difference.
So although families, middle-income parents in particular, are not using a lot of medical services, they are paying extremely high costs just to keep the system running — and that would be the case even if the Affordable Care Act didn't exist, according to Bloomberg Businessweek.
Don't expect this to change anytime soon, though. As Bloomberg Businessweek noted, healthcare costs continue to rise, with no end in sight. That means middle-income families with employer plans will both see their paychecks shrink, and their out-of-pocket expenses rise. Parents with private non-employer insurance will also see their incomes drained because of the healthcare system, Bloomberg Businessweek reported.
It doesn't seem the amount of cash the United States shells out for healthcare is going to dip in the next decade. In February, the U.S. Centers for Medicare and Medicaid Services projected that healthcare spending would rise 5.3 percent this year, a dramatic increase from 2017, which saw a 4.6 percent hike, according to Reuters. The agency estimates that health spending would reach $5.7 trillion by the year 2026, Reuters reported.
What's the solution? It's simple: Policy change. The cost of U.S. healthcare will not lower unless lawmakers and health officials make real efforts to change the system.
Not only does that mean passing laws that rein in insurance companies and hospital administrators, but cutting out the extra tests and surgeries that tend to be far more common in the United States than in any other wealthy country.
As Dr. Ashish Jha, lead researcher of the JAMA study, told The New York Times:
It’s not that we’re buying more pizzas, we’re just paying more for each pie. But that doesn’t mean that you can’t still buy fewer pizzas.
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