National Healthcare Spending in the U.S. and Japan: National Economic Policy and Implications for Neurosurgery

Abstract

Growth of national healthcare spending is a problem confronting national governments of all industrially advanced countries. Healthcare spending in the U.S. reached 13.9% of the Gross Domestic Product (GDP) in 2003, compared to only 8% in Japan. In the U.S., health insurance is voluntary, with 15% of the population uninsured. In Japan, health insurance is mandatory and virtually universal, with growth in national health costs about half the rate of growth in the U.S. U.S. healthcare costs are projected to reach 18.4% of GDP 2013. The predicted growth in health care costs is expected to cause strain on the federal budget and a growing inability of employers and employees to pay for private insurance. Different national policies are the reason for different national health care costs in the U.S. and Japan. The U.S. has higher healthcare prices for salaries, equipment, supplies, and pharmaceuticals as compared to Japan. Higher prices, higher service intensity and volume during hospitalization create higher total cost in the U.S. Price controls in Japan kept medical inflation low at 0.46%/yr from 1980-2000. Market-pricing mechanisms in the U.S. have proven ineffective in controlling national healthcare costs, while Japan's national fee and price control policies have kept national costs among the lowest within the Organization for Economic Cooperation and Development. To guide insurance coverage policy, neurosurgery and other highly technical specialties should better define the comparative health benefit of high price technical services by prospective outcome studies.