Paying for health care in the USA.

Abstract

Health care expenditures in the USA, calculated as a proportion of its gross national product (GNP), exceed those of all industrialized countries but without apparent better patient outcomes. Considerable debate occurs about the cause of this discrepancy. Some of the difference may be attributed to excessive use of expensive technology. However, much of the apparent excess expenditure seems to be concerned with the extraordinarily complicated system of reimbursing hospitals and physicians for the care of their patients. Here we try to explain some of the issues that add to the expense of US health care without necessarily improving its quality. Between 1967 and 1994 health care spending in the USA increased from 6·3% to 13·6% of its GNP. The latter level has been maintained since 1994, but recent trends suggest that it may start to climb again. In comparison, Canada spent 10·2% of its GNP on health in 1992, but since then the proportion has steadily declined to an estimated 9·2% in 1997. Germany is the only other country whose national expenditure on health has exceeded 10%; in 1994 it spent 10·8% of its GNP in this way. For many years the costs of health care in the USA have increased at a rate faster than the cost for other goods and services. By 1996 the country's total health care costs were $1·035 x 1012, i.e., a per capita cost of $3759, more than a l5-fold increase from the $247 spent in 1967. In 1995 the Health Care Finance Administration (HCFA), which administers the government-run Medicare and Medicaid programmes for the elderly and poor respectively, alone accounted for 16·4% of the federal budget.