US Healthcare vs. The World: How Does Our System Stack Up?
There’s no point in burying the lede. The United States has one of the worst (if not the worst) healthcare systems out there. We pay the most and get the least in our health outcomes. Study after study has confirmed that compared to health systems around the world, we come in last. There, I’ve said it.
To start, let’s review the type of health care system we have here in the United States. In the U.S., we don’t have a single nationwide health care system. Instead, we have the option to purchase health insurance through the private marketplace, or to be provided coverage by the government based on income qualifications.
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Prior to the Affordable Care Act, most health insurance was employer-sponsored due to the history behind employment benefits outside of wage increases and associated cost savings. However, thanks to the federal exchanges, individuals can now purchase insurance independent of an employer, either from for-profit or non-profit insurers.
The large majority of health insurance plans offered in the U.S. fall under the categorization of managed care organizations, or MCOs. MCOs are systems designed to deliver appropriate health services to covered individuals through the pre-arranged curation of contracted providers. The two types of MCOs are health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
Individuals under MCOs are incentivized to receive care from providers within their specific plan’s designated network. This is why you sometimes can only go see the doctor at the opposite end of your city – womp, womp.
Of course, we do have tax-funded healthcare as well – we just don’t call it that. Read on to find out more…
Publicly Funded Healthcare
We also have two different pathways to publicly funded health insurance programs through our government.
- Medicaid, which covers around 12% of the population, is the health insurance program for the low-income. Financed by the federal and state governments together, Medicaid is administered by the states under federal baseline guidelines.
- Medicare is the health insurance program for the aged and disabled. It is administered by the federal government, taking care of about 13% of the population. There are two subsets of Medicare, part A for inpatient care, and part B for long-term hospital services.
84% of the population in the United States is insured through public or private insurance, leaving 16% (give or take) uninsured at any point in time, although there are still access points to care available to them on some mystery entity’s dime.
In other words, it’s complicated.
Show Me the Money
In a study done by the Commonwealth Fund in 2014, prior to Affordable Care Act data being available, it was found that the U.S. beat 10 of our western industrialized peers in health expenditures per capita, making our health care system the most expensive in the world.
We topped out at spending $8,508 per capita, while the second most expensive health care system in Norway only cashes in at $5,669 per capita. The United States not only has the most expensive, but we have the most expensive by A LONG RUN. Number one ranked UK only spends $3,405 per capita, and they have health results to be proud of, but we’ll get into that later.
To break it down another way, we can turn to data found by the World Health Organization (WHO) in ranking healthcare systems internationally, published in the World Health Statistics 2013 report. Similarly to the Commonwealth Fund, the WHO found that based on 2010 data, our health expenditure per capita totaled out at $8,233. They found that the U.S. spends more than 2.5X more on healthcare, per person, than most developed nations in the world.
These costs totaled up to 17.6% of the entire U.S. GDP, just for health care. Basically, almost 20 cents out of every dollar is going to health care.
The average cost of a hospital stay among all Organization for Economic Co-operation and Development (OECD) countries is $6,200. The average cost of a hospital stay in the United States is $18,000. We cost more, so we spend more.
But why is our healthcare so much more expensive than everyone else’s? Find out on the next page.