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Measuring the United States Healthcare System

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Running head: MEASURING THE U.S. HEALTHCARE SYSTEM
1

Measuring The United States Healthcare System
Luc John Arnaud
HCM 550 ­ Quality and Performance Improvement in Healthcare
Colorado State University ­ Global Campus
Dr. Gloria Wilson
March 27, 2016

MEASURING THE U.S. HEALTHCARE SYSTEM2

The Organization for Economic Cooperation and Development (OECD) is based in Paris, France, and it is essentially an assembly that comprises over thirty members
(countries) who work with each other and who all share common commitments to democratic states and market economies. The goal of the OECD is to promote and improve economic growth, prosperity, sustainable growth, and expansion of each nation
(OECD ­ United States Mission, n.d.). The OECD “tracks and reports annually on more than 1,200 health system measures across 30 industrialized countries, ranging from population health status and non­medical determinants of health to health care resources and utilization” (Anderson, F., Squires, D., 2010, para 1). The article titled
Issues in
International Health Policy clearly exposed the fact that the United States of America fundamentally lacks behind the majority of other developed nations as it’s related to the efficiency, effectiveness, and solvency of its overall healthcare system industry. The facts and data within the article come from an analysis of health data from 2006 from the
OECD, and one of the most troubling conclusions from the article is the fact that in 2006, the United States had the highest overall health care related spending out of all OECD countries. There is no “one” reason that over 15% of the United States GDP in 2006 was healthcare related; it is because of several factors, most significantly possibly being the massive influence and impact that technology has had on health care, especially as we continue moving through the 21st century.
Exhibit 1 from the article
Issues in International Health Policy, notes that in the
US, per capita health care spending in 2006 was $6,714, nearly doubling the per capita rate of Germany. It notes that per capita spending on pharmaceuticals was also higher than

MEASURING THE U.S. HEALTHCARE SYSTEM3

any other country in the OECD. Furthermore, it states that per capita spending on outpatient care in the US is nearly four times that of the average OECD country. In 2011, the US continued to take the top spot in per capita healthcare spending, topping out just over $8,505 (Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System
Compares Internationally, n.d.). These statements are unnegotiable, and it makes one really wonder why one of the most powerful countries in the world lacks the leadership, organizational structure, and processes to have a more solvent and effective healthcare system. When comparing these stats of health care measures from 2006 to much more recent statistics, we find that in 2013, Greece, Italy, and Portugal all saw a decrease in overall healthcare spending, yet the same cannot be said for some counties outside of
Europe (OECD.org), specifically the US. According to Centers for Medicare and
Medicaid, in 2014 health care related spending grew by over 5%, reaching $3 trillion, and accounting for 17.5% of the overall US GDP. That being said, from 2006­2014, there was a 2.5% increase in the overall healthcare related GDP costs, meanwhile, as of 2013, the
United Kingdom has been able to keep their healthcare related percentage of GDP under
10%.
There is a melting pot of reasons that all add up to why the United States has exponential healthcare related costs. According to Harvard economist David Cutler, administrative costs are a significant reason as to why healthcare costs are so high. “The administrative costs of running our healthcare system are astronomical. About one quarter of healthcare costs are associated with administration, which is far higher than in any

MEASURING THE U.S. HEALTHCARE SYSTEM4

other country” (Epstein, 2015, para 4). Other reasons include high drug costs, expensive mix of treatments, and even defensive medicine. For example, in today’s “sue­happy” world, physicians and specialists often times order additional tests just to be extremely sure of their decisions to avoid being sued and enduring legal complications. It is estimated that each year, an extra $600 billion is spent on defensive medicine. “Everyone pays the bill on this with higher insurance premiums, co­pays and out­of­pocket costs, as well as taxes that go toward paying for governmental healthcare programs” (Epstein,
2015, para 7).
Another strong point that the assigned article noted is that in 2006, the United
States had relatively low numbers of overall practicing physicians. In 2006 in the US, there were only 240 practicing physicians per 100,000 people, while other OECD countries averaged a median of 330 per 100,000. Also, “the average number of physician visits per capita in the U.S. (4.0) was lower than the OECD median (6.4) and lower than all but four of the 25 countries that reported on this measure” (Anderson, F., Squires, D.,
2010, pg 2). According to a book titled “Delivering Health Care in America: A Systems
Approach,” in 1985 there were 207 physicians (both primary care and specialists) per
100,000 people, and as of 2010, that number has jumped to 272. The total number of active physicians under the age of 75 is expected to reach nearly 951,700 by the year 2020
(Singh & Shi, 2015). At face value this seems like a fairly high number, yet there are nearly 319 million people in the country, and that would equate to less than one physician for every 319 residents. When you look even closer at the numbers breakdown, you find that in the United States, geographic areas within non metropolitan (rural) areas have an

MEASURING THE U.S. HEALTHCARE SYSTEM5

average of only 59 primary care physicians per 100,000 people, while in metropolitan areas that number is nearly 35% higher, at 94 primary care physicians per 100,000 people
(Shi & Singh, 2015). This being said, it is quite clear that there is major geographic imbalance of the physician workforce within the US, and also an imbalance between the numbers of primary care physicians and specialists in general. While 80%, or the overwhelming majority of US residents live in urban or suburban areas, 1 in 5 people, or
20% of the total population still lives in rural areas, and the need for more practicing physicians serving in rural areas is becoming more real every day. This is an issue that needs to be continuously addressed, as the percentage of total physicians who practice in rural areas is a meger 9% (Singh & Shi, 2015). In my opinion, the geographic imbalance of physicians in the US is a partial reason as to why the US ranks lower than most developed countries in the average number of doctor visits per capita annually (4.0). For reference and comparison, and according to data from Statista, the average number of doctor visits per capita annually in Japan is nearly 13, Hungary is 11.7, Germany is nearly
10, Canada is 7.7, and on the other end of the spectrum, South Africa being only 2.5
(Doctor visits per capita by country 2013, n.d.).
The United States is a very rich, diverse nation. With being a wealthy nation, there is going to be more widely available technologically advanced medical services and equipment, and advanced technology typically means higher, exorbitant costs. The fact is that the US “delivers almost three times as many mammograms, two­and­a­half times the number of MRI scans, and 31 percent more C­sections” (Fuchs, 2014) as compared to the average OECD nation. In other words, the impact that technology has on healthcare

MEASURING THE U.S. HEALTHCARE SYSTEM6

spending is prolific, especially when the average cost of a mammogram is $100 and the average cost of an MRI scan is is over $2,500. Technology not only directly impacts healthcare spending through the cost of state­of­the­art medical equipment, but it is also indirectly impacted by how technology has been integrated into nearly every aspect of our lives. For example, we are able to use our smartphones to get all sorts of foods (often processed) delivered to us in a relative instant. Using this as an example, I feel that technology indirectly impacts healthcare spending since between obesity, diabetes, cardiovascular diseases, and various cancers that are associated with western diets, the US spends hundreds and hundreds of billions of dollars annually (Pollan, 2009).

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