Diagnostics & Imaging Week

Not surprisingly, a new study shows that people in the U.S. spend much more on healthcare than in other countries — in 2002, 53% more, or $5,265 per capita.

But what may come as a surprise is that the study authors do not attribute this to high levels of malpractice settlements, a contention driving calls for malpractice reform by President George Bush and members of Congress.

Instead, they suggest that increases in costs are being driven by higher prices for medical products and technologies and the practice of "defensive" medicine by physicians afraid of litigation if they don't perform a wide array of diagnostic procedures.

Published in the July/August issue of Health Affairs, the study is authored by researchers affiliated with the Johns Hopkins Bloomberg School of Public Health (Baltimore) and based on healthcare spending data in 30 countries in 2002, provided by the Organization for Economic Cooperation and Development (OECD).

Another possibility considered for higher healthcare costs in the U.S. was that some countries, like the UK, limit access to healthcare with waiting lists to receive certain types of care. That, too, the authors found, was not a primary culprit.

"It is commonly believed that waiting lists in other countries and malpractice litigation in the United States are major reasons why [the U.S.] spends so much more on healthcare than other countries," said Gerard Anderson, PhD, lead author of the study. "We found that [these factors] only explain a small part of the difference."

The study said that "health spending in the 12 countries with waiting lists averaged $2,366 per capita, while in the seven countries without waiting lists, spending averaged $2,696 — both much less than U.S. spending of $5,267 per capita."

The country coming closest to U.S. healthcare spending was Switzerland, spending $1,821 less per capita than the U.S. The U.S. spends $3,074 more than the median OECD country.

"Part of the difference can be explained by higher U.S. incomes and cost of living," the researchers wrote. "However, even after adjusting for each country's per-capita gross domestic product, U.S. health spending is still $2,037 more than the predicted value."

The study said that in every OECD country, "growth in health spending outpaced overall inflation during the period 1992-2002."

The study also noted that spending on high-tech medical equipment is often "cited as the main driver of escalating health spending." But the authors said that while the U.S. tends to be a high-tech "early adopter, it does not acquire medical technology at high levels once the technology has diffused widely."

The authors offer a lot of focus on the hotly debated issue of malpractice, being pushed by physicians who say their malpractice premiums are pushing them out of their practices, and tort reform, being considered by Congress.

They note that while the Department of Health and Human Services (Washington) has reported that Americans "spend far more per person on the costs of litigation than another country in the world," the actual malpractice claims settled in countries like the UK and Canada are higher than the average payment per settlement or judgment in the U.S.

For example, the average malpractice judgment is $265,103 in the U.S.; $309,417 in Canada; and even higher in the UK at $411,171.

Still, the U.S. does have 50% more malpractice claims filed per 1,000 people than the UK and Australia, and 350% more than Canada, but "two-thirds of the U.S. claims were dropped, dismissed or found in favor of the defendant," the study said.

In fact, the study said, the "cost of defending U.S. malpractice claims in the U.S. was a mere 0.46%, or $6.5 billion, of total health spending."

Between 1996 and 2001, U.S. total malpractice payments grew at an average annual rate of 5% over inflation, the authors said; however, the growth in malpractice settlements was even higher in countries with lower overall healthcare costs, such as Australia, Canada and the UK.

Instead, some of the blame for the higher costs could possibly be placed on physicians, they said.

"Defensive medicine ... could contribute more to health spending than malpractice payments do," the authors said, noting that it is difficult to determine the amount of money spent in this effort. For example, some tests could be considered appropriate, while others could be motivated by "payment policy" or fear of being sued.

"As in previous years, it comes back to the fact that we are paying much higher prices for healthcare goods and services in the U.S. Paying more is okay if our outcomes were better than other countries," Anderson said.

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