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OECD Analyst: Your Hospital Stays Are Short

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The U.S. health care system can be very efficient by world standards when payment systems give patients and providers an incentive to control costs, an international health expert says.

Mark Pearson, head of the social policy division at the Organisation for Co-operation and Development, Pearson, gave that verdict Wednesday at a Senate Special Committee on Aging hearing on the cost and quality of health care.

Pearson, who gives OECD member countries advice about how to combine income transfer programs with social and welfare services, said at the hearing that the United States has an expensive health care system that does not provide universal coverage.

“But it is notable that where there are payment structures that encourage cost-consciousness, the United States has a very efficient system,” Pearson said, according to a written version of his remarks posted on the Aging Committee website. “There are few physicians and hospital beds, and average length of stay in hospital is low. This is a sign that the structure of the health system determines expenditures “

Other countries tend to have more methods for regulating the quantity or price of health care services, or both, Pearson said.

Some countries work harder to control use of new technologies, and others require patients to spend more on certain types of services out of pocket, Pearson said.

In the United States, Pearson said, patients must pay a relatively high proportion of long term care costs out of pocket.

“No doubt as a result, total spending” on long term care is relatively low in the United States, Pearson said.

Existing international health price comparisons tend to be of poor quality, Pearson said.

“Nevertheless, all evidence suggests that prices of health goods and services are significantly higher in the United States than in most OECD countries, and that this is the main cause of high overall health spending,” Pearson said.

U.S. residents make heavy use of health services that are funded on a fee-for-service basis, such as some advanced diagnostic techniques and types of elective surgery, Pearson said.

Michael Tanner, a senior fellow at the CATO Institute, Washington, warned against taking the existing international comparisons of health care system cost and quality at face value.

The World Health Organization, for example, ranked the U.S. health care system 37th in terms of quality partly because it does not have a sufficiently progressive tax system, and partly because the WHO graders penalized the United States for adopting a health savings account system, Tanner says.

And the authors of that same WHO report ranked the United States first in the world in terms of indicators such as responsiveness to patients’ needs in choice of provider, timely care and confidentiality, Tanner said.

Moreover, many of the countries that already have national health care systems are moving away from centralized government control and introducing more market-oriented features, Tanner said.

Copies of the written versions of the witnesses’ testimony and other hearing documents are available here.


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