Healthcare Spending in the United States

“The issue is particularly acute in the United States, which not only spends much more per capita on health care, but also has had one of the highest spending growth rates.”

By now, it should not be a shock to you that the United States spends much more per capita on healthcare compared to other countries and the fact that it has had one of the highest growth spending rates. The two biggest problems we face today are the already inflated cost and the uncontrolled, unchecked, unbalanced, runaway rate of increase to that cost.

In addition to higher health spending, the United States is increasing its spending faster than other countries. As you can see from the graph, the United States has a significantly accelerated growth rate compared to many other countries. The combination of a high level of per capita healthcare spending in the 1980’s and a high growth rate between the 1980’s and 2008 resulted in the high level of per capita spending that we now see in the United States.

The difference between the spending in the United States and other countries should encourage people to take a further look into what people are getting for their healthcare dollar. In the United States, it isn’t clearly seen. While in other countries, the results of what they pay for their healthcare can be clearly seen across the country.
We have done research that we will be sharing with you over the next 50 posts. We’re laying the groundwork for our white paper that proposes real solutions that are not being talked about.

Identifying Waste in Healthcare

“In an increasingly global economy, the inefficiency of the U.S. health system ranks poorly. The U.S. spends nearly twice as much per-capita on health than other industrialized nations without a corresponding gain in outcomes, according to the Screen Shot 2015-07-28 at 11.06.55 AMOECD.”

In April 2008, PwC hosted the 180° Health Forum in Washington D.C. and brought together representatives of government, regulatory bodies and the nation’s largest hospitals and health systems, health insurers, and pharmaceutical and life science companies to seek new approaches to solving some of the health system’s most difficult problems.

Through their research, they found that wasteful spending in the health system has been calculated at up to $1.2 trillion of the $2.2 trillion spent in the United States. They also found that some of the biggest areas of excess are defensive medicine, inefficient healthcare administration, and conditions that are preventable with lifestyle changes.

PwC also found three key “wastebaskets” that are driving up the costs of healthcare:

  • Behavioral- where individual behaviors are shown to lead to health problems
  • Clinical- where medical care itself is considered inappropriate
  • Operational- where administrative or other business processes appear to add costs without creating value

If the $1.2 trillion of wasteful spending were eliminated, that would be over half of the health care costs eliminated. Compared to other countries, the United States is spending nearly two times as much with no clear outcomes. Make sure you are aware if your healthcare costs are going into one of those three wastebaskets, and if they are, contact us today and let us help you make the most of your healthcare plan.

2011 US Health Care Spending More than Twice the Average for Developed Countries

The United StatScreen Shot 2015-07-28 at 10.59.44 AMes spends $8,508 per person on health care costs. That is two and a half times more than the average of $3,322 for OECD countries. America also spends about 50 percent more than Norway, the next largest per capita spender. At George Mason University, the Mercatus Center found that healthcare spending will consume about a fifth of the US economy by 2021.

What are the consumers getting in return for this? Results cannot be seen that all of this spending is being put to use in a way that will benefit the people. The healthcare industry should be about the consumer and wanting to do what’s best for them, not large corporations making huge profits at the expense of the consumer. The US Government and the healthcare industry must start separating which part of these costs are actually buying the consumers better health outcomes and which part of these costs are government intervention in the health care market.

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