Mr Smug Git at work left a note on my desk this morning containing the following information:
(2002) US health expenditure: $5267 per capita, 14.6% GNP
(2005) UK health expenditure: $2598 per capita, 8.2% GNP
(2006) US life expectancy: 75.4 (male), 80.7 (female)
(2005) UK life expectancy: 77 (male), 81 (female)
It would seem that Americans spend more on healthcare for less result than the UK, thus making the UK system ‘more efficient.’
I’m going to assume these figures are genuine, although I don’t know where they come from and I haven’t the time at the moment to verify them; but I’m puzzled. Does the US per capita figure include spending on health insurance? And if so, how much of that actually gets spent on healthcare provision?
Points to ponder…
UPDATE: A bit of interwebs-wandering has led me to a 1999 study published in the New England Journal of Medicine. Amongst other things, the study itemises administrative healthcare spending. About insurance overhead, it has this to say:
In 1999 U.S. private insurers retained $46.9 billion of the $401.2 billion they collected in premiums. Their average overhead (11.7 percent) exceeded that of Medicare (3.6 percent) and Medicaid (6.8 percent). Overall, public and private insurance overhead totaled $72.0 billion — 5.9 percent of the total health care expenditures in the United States, or $259 per capita (Table 1).
Presumably the $46.9 billion the private insurers ‘retained’ in 1999 represents (a) the cost of operating the company and (b) profit. I see no problem with this; insurance companies are meant to generate a profit. If they didn’t, they wouldn’t exist.
There is also this 2008 paper from the US Congressional Budget Office, which analyses the relationship between new technology and healthcare expenditure. It defines new technology as:
changes in clinical practice that enhance the ability of providers to diagnose, treat, or prevent health problems. Technological advances take many forms. Examples include new drugs, devices, or services, as well as new clinical applications of existing technologies (providing a particular service to a broader set of patients, for example). Other technological changes are newly developed techniques or additions to knowledge.
The paper goes on to examine a handful of new treatments: revascularization for coronary artery disease, renal replacement therapy for kidney failure, bone marrow transplantation, joint replacement, diagnostic imaging, and neonatal intensive care.
But here is the key paragraph:
Advances in medical science during the past several decades have greatly increased the set of available medical services, allowing practitioners to treat patients in ways that were not previously possible. Most health policy analysts agree that the long-term increase in health care spending is principally the result of the health care system’s incorporation of these new services into clinical practice.
So, part of that massive difference between US and UK health expenditure is, first, the involvement of profit-making insurance companies in the US, and second, the development of and increased access to new treatment technologies in the US. Do those things count as ‘inefficiency’?
And as for the delightful NHS – if it is so efficient, why does this piece exist? And this?