U.S. Health System Among Least Efficient Before Obamacare

The U.S. health-care system was among the least efficient in the developed world two years before major changes from Obamacare began to go into effect.

America’s health-care system ranked 44th of 51 nations assessed by Bloomberg, in terms of per person spending, life expectancy and health-care cost as a percentage of the economy. It’s an improvement from 46th of 48 last year, yet Serbia, Turkey and China still scored better.

Singapore, with the top ranking, spent $2,426 per person and had a life expectancy of 82.1 years in 2012, the most recent year for which data are available. In comparison, the U.S. shoveled cash into health care -- $8,895 per person, per year -- and Americans are expected to live for 78.7 years.

There’s a lack of accountability among Americans, according to policy experts. “We keep protecting individuals from the health-care costs that come from the fact that we don’t have healthy lifestyles,” Cindy Gillespie, a senior managing director at the law and policy firm McKenna Long & Aldridge LLP. “We haven’t accepted that people have an element of personal responsibility around their health.”

This year the Patient Protection and Affordable Care Act, or Obamacare, required all Americans to get health coverage. A goal of the law is to cut costs while improving Americans’ health.

Price Shopping

Bloomberg’s ranking used life expectancy, health care as a percentage of gross domestic product and total expenditures. It assessed 51 countries with populations of at least 5 million, per capita gross domestic product of $5,000, and life expectancies of at least 70 years.

Experts have criticized life expectancy as a sole measure of health, since factors such as income and education level affect a person’s health as well. The ranking is meant to employ a simple approach and life expectancy is a reflection of how well a health-care system works.

About 60 percent of Americans get insurance through work, according to the Robert Wood Johnson Foundation -- leaving many with little ability to compare coverage prices on the open market. Even if people wanted to price shop, there’s little transparency about what they’re buying, since the cost of services at hospitals a few miles apart can vary by hundreds or thousands of dollars, Gillespie said.

The countries ranked the best all have some type of national health system. Singapore, Hong Kong, Italy and Japan make up the top four.

Singapore’s health-care spending grew 13 percent from 2011 to $2,426 per person. Spending as a percentage of GDP was constant, 4.5 percent in 2012 from 4.4 percent in 2011.

Singapore System

The country ranked highly because Singaporeans take on “significant cost sharing,” Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University in Fairfax, Virginia.

Singapore’s government subsidizes health care. As a person’s spending goes up, the government asks them to take on a greater share.

For example, Singapore hospital wards are classified by amenities and level of government subsidy provided, according to the book Affordable Excellence, the Singapore Healthcare Story by William Haseltine, president of the consulting group Access Health International. The wards range from A, where there are private rooms and a choice of doctors, to C, where as many as nine people share a room and doctors are assigned. People in A wards don’t get a subsidy while those in C wards get 80 of their care paid for by the government.

Cost Sharing

Americans don’t have that type of system, and tend to seek out the newest technology and best amenities. In addition, specialists in the U.S. are more highly paid than primary care doctors, Nichols said.

“Our incentives are all screwed up,” Nichols said.

Obamacare is slowly attempting to pay U.S. doctors based on health outcomes, instead of how many procedures they perform.

The pressure on the U.S. will only grow as its population ages. “A good bit of our working population is going to be fully retired in the next 20 years,” said Joseph Antos, a scholar with the American Enterprise Institute based in Washington. “We should begin to come to grips with a national discussion with not just how much do we want to spend this year but how much do we want to burden our children and grandchildren with.”

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