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Higher Prices, Drive Up Health-Care Costs, Study Says

Posted on: Monday, 19 September 2005, 03:00 CDT

Higher prices for health services, such as prescription drugs, hospital stays and doctor visits - not malpractice claims or greater access to health-care services - is the major reason why Americans spend far more for health care than citizens in other industrialized countries, according to a new study in the current issue of the journal Health Affairs.

"There is a popular misconception that we pay much more for health care in the United States compared to European and other industrialized countries because malpractice claims drive up costs and there are waiting fists in most other countries," says lead author Gerard Anderson, a professor in the department of health policy and management at the Johns Hopkins Bloomberg School of Public Health.

"But what we found is that we pay more for health care for the simple reason that prices for health services are significantly higher in the United States than they are elsewhere. "We have less access to most health services and higher costs associated with malpractice insurance have only a marginal effect on overall health spending," he adds.

Anderson and his colleagues looked at health-care spending per capita in 2002 for the 30 nations that belong to the Organization for Economic Cooperation and Development (OECD). They found that the United States spent $5,267 per capita for health care, $1,821 more than the next-highest spender, Switzerland, and $3,074, or 140 percent, more than the median level for all OECD countries.

U.S. health spending accounted for 14.6 percent of U.S. gross domestic product in 2002. Only two other countries, Switzerland and Germany, spent more than 10 percent of their GDP on health care that year.

An analysis of costs associated with malpractice claims in the United States showed that they explain only a small portion of the difference in health spending. Malpractice awards in the United States amounted to only $16 per capita in 2001, compared with $12 in Britain and $10 in Australia. Surprisingly, the average award was lower in the United States than in Canada and the United Kingdom. In 2001, the average U.S. payment was $265,103 - 14 percent higher in Canada and 36 percent higher in Britain.

Copyright Westfair Communications Aug 15, 2005

Source: Fairfield County Business Journal

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