Sunday, October 15, 2006

Health Care Expenditure

This blog post is built on my earlier post on Medical and Dental Insurance in the USA and on the comments that followed.

At about 26%, the US has one of the lowest Overall Tax Burdens in the whole OECD. The UK's is much higher than the US's (about 37%) and is about the same as the OECD average. I was interested in the question of how much the UK and US spend on health care so I thought that a fresh post on the topic was called for.

As you probably know by now, I am a bit of a google addict (a bit like the "Area Man" in this Onion article), so I decided to try and find out a bit more about health care expenditure in the UK and in the US. I took a look at the OECD website to see if I can find any international health care comparisons. I'm not an economist or a statistician, so if I've mis-interpreted anything that I've read, please feel free to enlighten me.

Graph showing percentage GDP spent on health care in UK and USA and percentage that comes from public expenditureAccording to the OECD, the UK government spends nearly double (as percentage of GDP) what the US does on health care. This is pretty much stating the blindingly obvious because the US's health care is mostly privately owned, whereas the UK's is publicly owned. The US's overall expenditure on health is greater than the UK's, even after taking into account their high expenditure on pharmaceuticals. The US expenditure per capita is about three times what it is in the UK (about $2500 in the UK; about $6100 in the US).

One might say that one can see the fruits of the greater expenditure on health care in the US. For those who can afford it, private health care in the US offers better quality of service, access to more up-to-date drugs and treatments, greater empowerment of patients and a lack of waiting lists. I am, however, left wondering how good a net the safety net of Medicare/Medicaid is when people on lower incomes still have to face large bills when they have had medical attention and I doubt that those who rely on Medicare/Medicaid get the same quality of treatment as those who are not.

In Britain, some who can afford it prefer to "go private" to circumvent the queues, so I suppose that although all are equal, some are always going to be more equal than others. However, the NHS was founded on the principle that medical provision should be a human right for all, not a privilege for a few. Even if the average healthy UK tax payer is ploughing more into the health service than they are getting a return for, to those who are on low incomes or are non-tax payers the service is indeed free. I think that this is worth paying a bit more tax for if we need to. Another thing is that if I, as a healthy individual, am to pay for health care that I haven't needed, I would prefer to give the money to a scheme that provides free health care to those who do need it, rather than lining the pockets of an insurance company.


sweet_melody51 said...

I am a Medical Coder/Biller in a Doctors office. Let me make this perfectly clear....every patient gets the same level of care from our medical community. Most doctors are not concerned with the Insurance of the patient....his job is providing the best medical care possible. It is MY job to verify and bill insurance. The Doctors agree to accept "allowable" fees from medicare and medicaid. When health insurance is no longer in the reach of the elderly or disabled, medicare allowable is all that he doctor accepts, and medicaid steps in and covers the deductable and co-pays of those patients. The Medicare patient still has one deductable of $110 annually. That is how the basics of the Medicare A & B work in the Doctors office....including the specialists. Medicaid is an individully state run program, and varies state by state.

Ren said...

It's true that the doctors know nothing about the insurance of their patients. Sometimes it even seems that they don't even understand how it works. Now, I have friends who got loaded up on prescription drug samples when they told the doctor about how expensive the drugs could be. Oh, and by the way, I heard that the US customs is no longer seizing prescription drugs brought in from Canada. It's about time.

Anonymous said...

Sweet Melody, you might well be in a doctors practise that recognizes the difficulty faced in paying for health care but not all doctors are that caring.

Viola, how apt your post has become with the week long news item concerning health care on ABC this year.

We are very forunate that we have excellent health care insurance especially as I have an under active thryroid which suprising effects so much more than your thryroid, consequently I see the doctor on a regular basis. But I am very concious of the fact we have good health coverage.

I knew someone who was self employed and given that he was 35, took the risk that as he was generally healthy, not to take out health insurance as it would swallow a good amount( nearly 25%) of his yearly income which wasn't high anyway. Of course, the day came when something happen, (he dropped something on his foot) and despite the obvious pain he refused to go the hospital because he knew he couldn't afford it.

To be honest, I think it is morally wrong that so many people go bankrupt because of a health problem, especially in a country as rich as the USA. Just this week on the ABC report, they cited a couple who had premie twins. Because they failed to disclose that the wife had a previous miscarriage, the insurance company refused to pay the year long costs of saving these babies. The couple now owe over a million dollars to the hospital and face losing their home.
enough said!

Viola said...

Jacqui -- I actually didn't know about the ABC feature on health, so thanks for mentioning it. Here's the link for anyone who's interested. For anyone who's really interested, here's a link to the Health Care Blog.

sweet_melody51 said...

If a doctor accepts the Medicare allowable, and he/she is not providing the appropriate care for those patients and Medicare audits, (which they do periodacally)....the doctor will be shut down and the priactice investigated. The cost of medical care has little to do with doctors and more to do with the free enterprise system that the Insurance Companies and Pharmaceudical Companies thrive in and the politics involved with them.

Michael said...

Viola, you make some great points with which I agree entirely. First, even allowing that there are certain advantages in the US system, they certainly don't justify the much higher amount spent per person. In other words, if the UK spent that kind of money don't you suspect that their system would make America's look second-rate?
Second, I would also gladly pay higher tax for just the system you describe. Unfortunately, the power of the interest groups (pharmaceutical, insurance, doctors, and lawyers) almost certainly guarantee that we'll never switch to a UK-type system. That being said, there are some encouraging signs with a new program in Massachusetts -
My state of Tennessee tried universal health coverage for a few years but failed pretty miserably with the bulk of it. Massachusett's plan seems to be much better. Hopefully this is a sign of important changes to come nationwide.

Viola said...

Michael -- I agree with you that the power of the interest groups in the US is too strong for nationalization of health care to happen. The US would need to find its own workable solutions to its health care issues.

The other thing is that your link to the Washington Post article doesn't seem to be showing properly in the comments, so here it is again:
Universal Health Care