Usual Suspects Not to Blame for High Health Costs, Report Says

The staggering $8,000 per person that the United States spends on health care can't be explained by our aging population, our overuse of doctors and hospitals, our wealth, or our rates of smoking, according to a new report.

The study, from the left-leaning Commonwealth Fund, crunches the numbers from the Organization for Economic Cooperation and Development to evaluate the various factors that might explain our runaway health care spending.

Like the OECD itself, the Commonwealth Fund concludes that high health care prices are the major culprit. U.S. patients pay more to doctors, drug companies, and hospitals than patients in other countries. Other possible factors are our high rates of obesity and a possible tendency to overuse a few particularly expensive procedures.

The report finds that the U.S. population is not nearly as old as many of its peers, so aging doesn't explain the costs. A smaller percentage of our population smokes, which should predict better health and less need for care. We actually have fewer doctors and hospital beds per person than the average country in the OECD sample. If national wealth predicted per-capita health care spending, the U.S. price tag would be $4,849.

And we don't get better health outcomes in return for our extra dollars. The data show that the U.S. has middling results when it comes to many key health outcomes.

"Despite being more expensive, the quality of health care in the U.S. does not appear to be notably superior to other industrialized countries," according to the report, written by David Squires.

The Commonwealth report points to Japan as an interesting analogue to the U.S. system. That country has a similar reimbursement system to the one used in the U.S.--doctors and hospitals are paid fees for every procedure they perform. But regulators there aggressively constrain prices. That is not the system anywhere in the U.S., except in the state of Maryland, which has had some success. The result, the report notes, is a much cheaper system. Japan also has a much healthier population and its residents live longer than residents of any other country in the world.

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