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Health care check-up: Whose system is least efficient?

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(Bloomberg) — Here’s a bitter pill for Americans to swallow: U.S. residents pay an average of $9,146 a year on health care. This per-capita price tag makes the U.S. health care system the third most expensive country for medical care in the world, according to an analysis by Bloomberg News Data’s Wei Lu.

Health care costs in the United States are surpassed only by costs in Norway ($9,715 per person) and Switzerland ($9,276 per person), the data show. Thailand, Algeria and the Dominican Republic have the lowest health care costs per capita. The 55 countries and regions examined in the study all have populations of at least 5 million, gross domestic product (GDP) per capita of at least $5,000 and life expectancy of at least 70 years.

With Americans paying one of the highest prices worldwide for health care, U.S. patients must be getting some of the best health coverage in the world, right?

Unfortunately, that optimism is unfounded.

Although annual U.S. health care costs are almost $10,000 per capita, American patients are getting less in return. By looking at three weighted metrics — life expectancy, health care costs per capita and costs as a percentage of GDP — Bloomberg was able to assign each of the 55 countries and regions a health care efficiency score.

Holding the No. 1 spot for most efficient health care system is Hong Kong, followed by Singapore and Israel.

See also: Drugs, China, and the curious case of Dragon Pharmacy knock-offs

The U.S. places 50th out of 55 countries, with only Azerbaijan, Algeria, Serbia, Russia and Brazil less efficient in terms of bang for your buck.

More on this topic

See also: 13 countries with better retirement systems than the U.S.

Jason McGorman, a health care analyst with Bloomberg Intelligence, said there are several reasons why the United States is viewed as being inefficient relative to the rest of the world. One reason is lifestyle, especially given the high U.S. obesity rate. “Most other countries eat much healthier and are much more active than the U.S. population. In Europe people walk many more places and portions of food are much smaller,” McGorman said in an email to Bloomberg Brief.

Contributing to U.S. inefficiency is duplicative care and doctors being extra cautious, he said. “Also keep in mind that the U.S. pays per-procedure rather than episode of care and that companies make most of their money on drugs/devices, etc. in the United States. Prices are much higher in the U.S. than in other countries, no doubt aided by lawsuits and malpractice insurance,” he said.

When looking at the data a different way — each country’s total health expenditure as a percentage of its GDP — America is no longer almost the worst. When measuring in terms of relative cost, the United States comes in dead last in terms of health care efficiency. Saudi Arabia and the United Arab Emirates have the lowest relative costs in terms of costs versus GDP, the Bloomberg data show.

Although patients may not like how much they’re paying a year in health care costs, the data does suggest at least one benefit: The more a country’s residents pay a year for their medical needs, the higher their life expectancy is, in most cases.

Of course, this correlation is probably due to the fact that higher-income countries simply tend to spend more on health care, resulting in longer lives for its residents, but the apparent link is nonetheless interesting.

High-cost Norway and Switzerland have some of the highest life expectancy rates of the world, perhaps because many of those medical bills are spent on preventive care. In the U.S., unfortunately, the average life expectancy is still mid-range despite the bills piling up from the doctor’s office.