Why US health care costs more, but isn't better than other countries: Study

Americans pay more for health care and get fewer results, according to a new analysis.

The U.S. spends more money than any other country on health care, yet life expectancy is shorter, obesity is higher, and the rate of maternal and infant death is higher as well. The study published in JAMA on Tuesday takes a closer look at how health dollars are spent, and some of the findings might be surprising.

Where is the health care money going?

Researchers at Harvard University analyzed data from international organizations on types of spending and performance outcomes between the U.S. and other high-income countries: Canada, Germany, Australia, Japan, Sweden, France, Denmark, The Netherlands and Switzerland.

By comparison, one of the main drivers of the high health care costs in the U.S.: brand name prescription drugs.

In the U.S. people spend, per person, nearly double the on pharmaceutical drugs -- $1,443 -- compared to the average of other countries, $749.

For example, long-acting insulin for diabetes has a monthly cost of $186 in the U.S., but costs a third of that in Canada. Crestor, a common cholesterol-lowering medication, will cost patients $86 in the U.S., but less than half in Germany.

Authors found the total spending on generic drugs in the U.S. is less than 30 percent of the total dollars spent on pharmaceuticals, suggesting that brand name medications are a major driver of costs for the U.S. health care system.

The U.S. spends more, but fewer people are covered

In 2016, while only about 90 percent of the population had health care coverage, the U.S. spent about 18 percent of its GDP on health care. Other countries spent much less of their GDP on health care, ranging from 9 percent in Australia to 12 percent in Switzerland -- while they had more than 99 percent of the populations with health care coverage.

Contrary to popular belief, health care utilization, or how many go to the doctor, and social spending, or how much government spent to improve health, did not differ in the U.S. compared to these countries.

Two-thirds of the difference in health care costs between the U.S. and other countries were rolled up into medication costs, expensive tests and procedures and administrative costs.

"As the U.S. continues to struggle with high health care spending, it is critical that we make progress on curtailing these costs. International comparisons are very valuable - they allow for reflection on national performance and serve to promote accountability," said first author Irene Papanicolas, visiting assistant professor in the Department of Health Policy and Management at Harvard Chan School.

The U.S. suffers from high prices and the same time it also deals with high volumes.

When it comes to testing, the U.S. performs more CT scans than any other country -- 1.3 million per year. Each scan costs 10 times more than in The Netherlands, for example. Even procedures like a cesarean delivery cost, on average, seven times more in U.S. than in The Netherlands.

Many have questioned: Are physician salaries also to blame? Yes and no. Salaries paid to doctors and nurses in the U.S. were more than twice as much as other countries. However, researchers say "the number of physicians in the U.S. is comparatively low, offsetting the effect of high salaries."

For example, despite Germany having almost twice as many doctors as in the United States -- 4.1 doctors per 1,000 people, versus 2.6 in the U.S. -- the amount spent on their salaries is essentially the same.

Dr. Hector M. Florimon is a third-year resident in pediatrics at New York Presbyterian-Columbia University Medical Center, working in the ABC News Medical Unit. This story originally ran March 13, 2018.