Health-Care Check-Up: Whose System Is Least Efficient?
Here's a bitter pill for Americans to swallow: U.S. residents pay an average of $9,146 a year on health care. This per-capita price tag makes the U.S. health-care system the third most expensive country for medical care in the world, according to an analysis by Bloomberg News Data's Wei Lu. Health-care costs in the U.S. are surpassed only by Norway's ($9,715 per person) and Switzerland's ($9,276 per person), the data show. Thailand, Algeria, and the Dominican Republic have the lowest health-care costs per capita. The 55 countries and regions examined in the study all have populations of at least 5 million, GDP per capita of at least $5,000, and life expectancy of at least 70 years. Click here to see the full data set.
With Americans paying one of the highest prices worldwide for health care, U.S. patients must be getting some of the best health coverage in the world, right? Unfortunately, that optimism is unfounded. Although annual U.S. health-care costs are almost $10,000 per capita, American patients are getting less in return. By looking at three weighted metrics—life expectancy, health-care costs per capita, and costs as a percentage of GDP—Bloomberg was able to assign each of the 55 countries and regions a health-care efficiency score. Holding the No. 1 spot for most efficient health-care system is Hong Kong, followed by Singapore and Israel. The U.S. places No. 50 out of 55 countries, with only Azerbaijan, Algeria, Serbia, Russia, and Brazil less efficient in bang for your buck.
Jason McGorman, a health-care analyst with Bloomberg Intelligence, said there are several reasons why the U.S. is viewed as being inefficient relative to the rest of the world. One reason is lifestyle, especially given the U.S.'s high obesity rate. (See a related StoryChart from Bloomberg Brief here.) "Most other countries eat much healthier and are much more active than the U.S. population. In Europe, people walk many more places, and portions of food are much smaller," McGorman said in an e-mail to Bloomberg Brief.
Contributing to U.S. inefficiency is duplicative care and doctors being extra cautious, he said. "Also, keep in mind that the U.S. pays per-procedure rather than episode of care and that companies make most of their money on drugs/devices, etc. in the United States. Prices are much higher in the U.S. than in other countries, no doubt aided by lawsuits and malpractice insurance," he said.
When looking at the data a different way—each country's total health expenditure as a percentage of its GDP—America is no longer almost the worst. When measuring relative cost, the U.S. comes in dead last in health-care efficiency. Saudi Arabia and the United Arab Emirates have the lowest relative costs vs. GDP, the Bloomberg data show.
Although patients may not like how much they're paying a year in health-care costs, the data do suggest at least one benefit: The more a country's residents pay a year for their medical needs, the higher their life expectancy is, in most cases. Of course, this correlation is probably due to the fact that higher-income countries simply tend to spend more on health care, resulting in longer lives for their residents, but the apparent link is nonetheless interesting. High-cost Norway and Switzerland have some of the highest life expectancy rates of the world, perhaps because many of those medical bills are spent on preventive care. In the U.S., unfortunately, the average life expectancy is still midrange, despite the bills piling up from the doctor's office.