An earlier post highlighted who benefits from our nation’s dysfunctional healthcare system. Our system costs twice the average of the 12 countries that belong to Organization for Economic Cooperation and Development (OECD). In 2022 our cost was $12,555 per capita compared to the average of $6,414 according to The Peterson Foundation. In the second highest nation – Switzerland – cost was $8,049. The blog post demonstrated that we do not get better population health outcomes from the higher prices we pay. In this post, let’s look at four root causes of higher spending on healthcare in the U.S. Any hope of finding a solution requires an understanding of these factors. Our system First, we have a highly fragmented system for paying healthcare providers. Medicare, Medicaid, self-insured employers, insurance companies (paying the healthcare bills for insured individuals), and individuals without insurance each require different…
The opportunity cost of our healthcare system failures
The Disruptive Health Care 2014 Conference, hosted by WTN Media, exposed attendees to a range of observations about today’s healthcare system, its gaps and future trends. This blog the first of four related to the conference. “Why Does the US Have So Much Waste In Its Healthcare System?” “Healthcare Incentive and Landscape Changes: Trends Underway,” and “Healthcare Data: The Currently Weak Link” will follow. First, let’s look at the context for the conference speakers’ insistence that system disruptions are needed. I for one cringe when I look at comparative healthcare costs and outcomes across developed nations. According to data published by the Organization for Economic Cooperation and Development (OECD), which represents 34 democracies with market economies, in 2011, the US spent on average $8,508 per person on healthcare compared to an OECD average of $3,332. But, you might say, the USA is a…
Healthcare Industry Disruption
If you are in the healthcare industry, or are curious about where it is headed, be sure not to miss WTN’s June 24-25 upcoming conference focused on the industry’s disruption. Mike Klein was one of the early voices predicting dramatic change; once again he brings a stellar set of speakers to help participants anticipate the future. As a nation we pay more for healthcare than other nations yet achieve worse health outcomes. The three to six extra GDP percentage points we pay in healthcare costs are needed for infrastructure, education, federal R&D investments and our pocketbooks. We pay more because payers exert too little pressure on providers relative to other nations; and we’ve historically paid providers to do procedures versus improve health. In addition, many consumers are sheltered from cost and do not know the relative cost or quality of providers. Capitalism’s competitive…