By Gerard F. Anderson, Bianca K. Frogner and Uwe E. Reinhardt
Health Affairs
September/October 2007
In 2004, U.S. health care spending per capita was 2.5 times greater than health spending in the median Organization for Economic Cooperation and Development (OECD) country and much higher than health spending in any other OECD country. The United States had fewer physicians, nurses, hospital beds, doctor visits, and hospital days per capita than the median OECD country. Health care prices and higher per capita incomes continued to be the major reasons for the higher U.S. health spending.
http://content.healthaffairs.org/cgi/content/full/26/5/1481
Comment:
By Don McCanne, MD
(This report is an update of the 2003 Health Affairs article by Anderson, et al, “It’s the Prices, Stupid.”)
So we pay far more for health care, but we are not receiving any more care than is delivered in other nations. In fact, this article states, “the availability of health care resources and the actual use of services in the United States were below those of most industrialized countries.”
So does that mean that we need to quit paying greedy doctors, hospitals and pharmaceutical firms too much for the care and products that they deliver? To answer that, we need to look at what is built into our high prices.
In the United States, we have allowed our primary care infrastructure to deteriorate at a relatively rapid pace. Care provided by family physicians, nurse practitioners and general internists in other countries is often provided by specialists in the United States. Specialists charge higher routine fees and often provide additional high-priced diagnostic and therapeutic services for which they are personally compensated. Thus, without increasing the number of practitioners, but merely increasing the ratio of specialists to generalists, health care prices are increased for clinical problems that are presented to specialists, as opposed to the same problems being cared for by generalists.
Specialists who are offended by this observation will frequently respond with studies such as those that demonstrate that care provided by a cardiologist in a coronary care unit is less expensive than that provided by a generalist, primarily because of more judicious use of diagnostic and therapeutic interventions. But one obvious conclusion of this is that specialists should be utilized when specialized services are clinically warranted.
The advantage of having a strong primary care infrastructure is not only that care for routine problems is delivered more economically (lower prices), but also that the primary care practitioner is trained to identify those problems that are more appropriately managed by a specialist. Thus the over-utilization of higher-priced services is diminished.
Another problem is the maldistribution of high-tech services and facilities. Without changing total capacity and utilization, regional concentration of high-tech services results in excess capacity and over-utilization of specialized services. This comes at a cost of reducing primary care services, especially in rural and low-income urban areas where they are especially needed. Wennberg, Fisher and their colleagues at Dartmouth have demonstrated that this concentration increases spending without improving quality.
The profound administrative waste of our fragmented system of financing health care also adds significantly to prices without increasing health care utilization. This alone is enough to warrant changing to a national health insurance program, though the gain from realigning generalist/specialist incentives would also go a long way toward improving health care pricing.
And that question about greedy providers? Prices correlate strongly with a nation’s GDP. The providers are not paid too much overall, but they are being paid too much for useless administrative services and for high-tech excesses, and they are not being paid enough for primary care services. That’s not their greed. That’s our stupidity for continuing to support this wasteful, illogical system of financing health care.
