Paper: Los Angeles Times (CA)
Title: Prices Cited in Health Cost Gap
A study finds that although the U.S. spends more for care than
elsewhere, Americans don't always get more.
Date: July 12, 2005
The large gap in per capita spending on healthcare between the United
States and other major industrialized countries cannot be explained by
differences in malpractice costs or access to care, according to a
study published today in the journal Health Affairs.

"We pay more for healthcare for the simple reason that prices for
health services are significantly higher in the United States than they
are elsewhere," said lead author Gerard Anderson, a professor of health
policy at the Johns Hopkins Bloomberg School of Public Health.

The U.S. spent $5,267 per person for prescription drugs, hospital stays
and doctor visits in 2002, compared with $3,446 in Switzerland, the
next biggest spender, followed by $3,083 in Norway, $3,065 in
Luxembourg, and $2,931 in Canada. The median cost of healthcare per
capita was $2,193 for the 30 nations that belong to the Organization
for Economic Cooperation and Development.

Healthcare spending accounted for 14.6% of the U.S. gross domestic
product that year. Only two other countries, Switzerland and Germany,
spent more than 10% of their GDP on healthcare.

But contrary to conventional wisdom, Americans are not getting more
healthcare with higher expenditures, the study found. In fact, in
several key areas, Americans had comparatively less than the other
countries.

For example, the survey found there were:

* 2.9 hospital beds per 1,000 Americans, compared with a median of 3.7
per 1,000 residents in the other countries;

* 2.4 physicians per 1,000 Americans (in 2001), compared with 3.1 per
1,000 elsewhere in 2002;

* 7.9 nurses per 1,000 Americans (in 2001), compared with 8.9 nurses
per 1,000 elsewhere in 2002;

* 12.8 CT scanners per million Americans (in 2001), compared with 13.3
per million elsewhere in 2002.

The U.S. did appear to have more magnetic resonance imaging units per
capita than many other countries. But other nations may get more use
out of the MRI machines because they typically operate them for 18
hours a day, compared with 10 hours in the U.S., Anderson said.

Malpractice, as it turns out, is not the cause of our higher medical
bills, according to the study. It found that malpractice payments --
settlements and judgments -- were a small portion of overall health
spending and were lower in the U.S. than in Canada and Britain. The
average malpractice payout in the U.S. was $265,103 in 2001, compared
with $309,417 in Canada and $411,171 in Britain.

The latest study bolsters a 2003 paper co-authored by Anderson
entitled, "It's the Prices, Stupid," which identified fee differences
as the primary cause for the gap. That report found, for instance, that
the average cost of a one-day stay in a hospital in the U.S. was $2,434
in 2002, compared with $807 in Canada.

The "U.S. does not get commensurate value for its healthcare dollar,"
said Karen Davis, president of the Commonwealth Fund, a New York-based
private, nonpartisan organization that supported the study.

Jack Lewin, chief executive of the California Medical Assn., said
malpractice costs were probably only a small reason for the healthcare
spending gap. He believes that the difference in spending has more to
do with a uniquely American expectation for a high level of care.

"We have a little twinge in our knee, we want an MRI," he said. "We
want to see a specialist immediately. We want care now. Some of that is
good in terms of getting an early diagnosis. But it's expensive."

He added: "All of us baby boomers [want] to play tennis til 90 -- [that
means] new hips, new knees. We're going to have it all. So until all of
us as a society get more realistic about healthcare, I don't know that
we're going to change this dynamic."

*

(BEGIN TEXT OF INFOBOX)

Heathcare spending

The United States has the highest per capita spending on healthcare
among countries in the Organization for Economic Cooperation and
Development, but that doesn't necessarily translate into more
resources.

Highest per capita healthcare spending and OECD median in 2002

United States: $5,267

Switzerland: $3,446

Norway: $3,083

Luxembourg: $3,065

Canada: $2,931

OECD median: $2,193

Author: Lisa Girion
Section: Business
Page: C-3