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US Healthcare: Most Expensive and Worst Performing

July 02, 2014                    
Story at-a-glance
  • Compared to 11 other nations studied in a new Commonwealth Fund report, the US ranks last in health care
  • American health care is the most expensive in the world, with 17.7 percent of gross domestic product (GDP) spent on health care (Australia, for comparison, spends only 8.9 percent)
  • Per capita health expenditures in the US were more than $8,500 in 2011… more than double the $3,405 per capita spent in the UK, which ranked first in the report
  • The US ranks last overall on measures of healthy lives, with poor scores on mortality amenable to medical care, infant mortality, and healthy life expectancy at age 60
  • Despite its high cost, the report concluded “The claim that the United States has ‘the best health care system in the world’ is clearly not true”

By Dr. Mercola

American health care is the most expensive in the world, with 17.7 percent of gross domestic product (GDP) spent on healthcare. This is significantly more than other developed countries. Australia, for comparison, which spends the least, spends only 8.9 percent.

For the costs involved, you might assume Americans enjoy the best health care in the world, but this would be a mistaken assumption. According to a new report released by the Commonwealth Fund, the US ranks last or near-last in all aspects of health care, from access and equity to efficiency.1

How Does the US Health Care System Compare Internationally?

Compared to the 11 other nations studied in the Commonwealth Fund report, the US ranks last. Despite spending significantly more, the US underperforms relative to other countries "on most dimensions of performance," according to the report. Countries that beat out the US in terms of health care quality (and affordability) include:

The United Kingdom (UK) Switzerland Australia
Canada France Germany
The Netherlands New Zealand Norway


Perhaps most glaring, per capita health expenditures in the US were more than $8,500 in 2011… more than double the $3,405 per capita spent in the UK, which ranked first in the report.

As you can see in the Commonwealth Fund chart below, the US scored best on effective care (with a ranking of 3), but that failed to make up for its other dismal results, especially in the realm of preventive care. The Atlantic reported:2

"Particularly laudable were our preventative care efforts, which included things like physicians asking patients to eat healthy and exercise, and doctors' offices sending patients appointment reminders.

The U.S. fared poorly, meanwhile, when it came to managing administrative hassles for both doctors and patients, avoiding emergency room use, and reducing duplicative medical testing, all part of the score for 'efficient care.'"

Source: Calculated by The Commonwealth Fund based on 2011 International Health Policy Survey of Sicker Adults; 2012 International Health Policy Survey of Primary Care Physicians; 2013 International Health Policy Survey; Commonwealth Fund National Scorecard 2011; World Health Organization; and Organization for Economic Cooperation and Development, OECD Health Data, 2013 (Paris: OECD, Nov. 2013)

Key Findings About US Health Care: Worst Among Developed Nations

The report mirrors findings from years prior, which also found US health care lagging behind other nations. The Commonwealth Fund noted:

"The claim that the United States has 'the best health care system in the world' is clearly not true. To reduce cost and improve outcomes, the U.S. must adopt and adapt lessons from effective health care systems both at home and around the world."

Key findings from the report show that Americans are receiving little actual value despite their substantial investment in health care:3

People in the US go without needed health care because of cost more often than people do in other countries Americans were the most likely to say they had access problems related to cost
While US patients report rapid access to specialized health care services, they are less likely to report rapid access to primary care than people in the leading countries The US ranks last among the 11 countries on indicators of efficiency
The US has poor performance on measures of national health expenditures and administrative costs, as well as on measures of administrative hassles, avoidable emergency room use, and duplicative medical testing One-third or more lower-income adults in the US said they went without needed care because of costs in the past year
The US ranks last overall on measures of healthy lives, with poor scores on mortality amenable to medical care, infant mortality, and healthy life expectancy at age 60 The US had much higher death rates from conditions amenable to medical care than some other countries (up to 50 percent higher than Australia and Sweden)

Why Are US Health Care Costs So High?

It's a complex issue but one that can really be summed up in one word: greed. From drug companies to hospital billing, costs are out of control and reflect little of the actual value of the procedure or care received. Last year, the New York Times released an investigation on the costs of a simple intravenous bag of sterile saltwater, often used in emergency medicine.4 The average cost to manufacture this medical staple?

About 44 cents to $1 per bag, yet some US patients' were being charged 100 to 200 times that amount by hospitals, and that didn't include the separate charges for IV administration. Other patients were simply charged for an ambiguous "IV therapy" at nearly 1,000 times the cost of the solution. The New York Times reported:5

"At every step from manufacturer to patient, there are confidential deals among the major players, including drug companies, purchasing organizations and distributors, and insurers. These deals so obscure prices and profits that even participants cannot say what the simplest component of care actually costs, let alone what it should cost… And that leaves taxpayers and patients alike with an inflated bottom line and little or no way to challenge it."

Consider this: if the US health care system was a country, it would be the 6th largest economy on the entire planet!6 Much of this is due to waste. A review of US healthcare expenses by the Institutes of Medicine (IOM) revealed that 30 cents of every dollar spent on medical care is wasted, adding up to $750 billion annually.7 For perspective, the defense budget proposed by the Pentagon for 2014 was just under $527 billion.8 The IOM report identifies six major areas of medical waste:

Unnecessary services Inefficient delivery of care Excess administrative costs
Inflated prices Prevention failures Fraud

Four Disturbing Reasons for the Exorbitant Cost of US Health Care

The documentary film The True Cost of Health Care by Dr. David Belk, MD (featured above) also reveals a number of shocking details that help explain the exorbitant cost of American health care.9 For example:

  • Generic medications can cost 100 times less than their brand-name equivalent, and usually cost less than most insurance co-pays. This means you might actually pay LESS by purchasing a generic medication out of pocket, compared to using your insurance if you have a co-pay. In essence, going through your insurance amounts to paying extra for the privilege of being overcharged…
  • Hospitals routinely bill 10 or more times what they expect to be paid for any given service. As I discussed in a previous article, most hospitals end up receiving just 35 percent of what they bill, yet they still manage to make tens of millions of dollars in operating profits each year. Some hospitals, including Sloan-Kettering and MD Anderson, who are tougher in their negotiations with insurance companies, end up getting around 50 percent of their total billings.
  • Most diagnostic tests and procedures are inexpensive to perform. However, the charges for these tests and procedures typically have no relation to the actual cost. Each hospital has an internal price list called a chargemaster, which contains every single item you may be given or come in contact with during your hospital stay. The problem is, no one quite knows how the prices in the chargemaster are created. What is clear is that there's absolutely no market feedback to regulate and control the prices that are charged.
  • Health insurance companies deliberately manipulate these costs to maintain their profits. As explained by "Health insurance companies can manipulate a patient's out of pocket payments to make it appear as though health care is more expensive than it really is. Insurance companies sell security against financial risk. If no one really understands what that risk is (because all prices are hidden or deceptive) then the price of the security (insurance) can be grossly inflated."

The US Medical System Could Very Well Kill You

Over a decade ago, Professor Bruce Pomerance of the University of Toronto concluded that properly prescribed and correctly taken pharmaceutical drugs were the fourth leading cause of death in the US! In 2000, the IOM also reported that medical errors were the eighth leading cause of death in the US, killing between 44,000 and 98,000 people each year.

This was followed by a 2003 article aptly titled "Death by Medicine", authored in two parts by Carolyn Dean, MD, ND, which described in excruciating detail how the modern conventional American medical system has bumbled its way into becoming the leading cause of death and injury in the US, claiming the lives of nearly 784,000 people annually!

These iatrogenic deaths (meaning deaths resulting from the activity of physicians) include everything from adverse drug reactions to medical errors, to hospital-acquired infections and surgeries gone bad—including 37,000 deaths from unnecessary medical procedures alone.

The authors took statistics straight from the most respected medical and scientific journals and investigative reports by the IOM, showing that on the whole, American medicine often causes more harm than good. In 2010, two additional reports published in New England Journal of Medicine11 and the Journal of General Internal Medicine12 respectively, showed just how little things have changed since 2003. For example:

  • Out of 62 million death certificates dated between 1976-2006, almost a quarter-million deaths were coded as having occurred in a hospital setting due to medication errors.13
  • An estimated 450,000 preventable medication-related adverse events occur in the US every year.
  • The costs of adverse drug reactions to society are more than $136 billion annually -- greater than the total cost of cardiovascular or diabetic care.14

The Solution? Take Control of Your Health in 8 Simple Steps

The more you take responsibility for your own health – in the form of nurturing your body to prevent disease – the less you need to rely on the "disease care" that passes for health care in the US. In the majority of cases, you'll likely find that you can prevent or resolve common health conditions by following these basic tenets of optimal health:

  1. Eat a healthy diet focused on fresh, whole foods (ideally organic and/or locally grown). Try to eat a large portion of your food raw. You want to pay careful attention to keeping your insulin levels down, which means avoiding sugars and grains of all kinds, and replacing the lost carbs with healthful fats. Also be mindful of your protein sources, making sure they're of high quality (ideally organically-raised and pasture-fed). A high-fat, moderate-protein, low-carb diet is likely to improve the health of most people. My optimized Nutrition Plan can guide you, whether you're at a beginner's or advanced level.
  2. Consume healthy fat. The science is loud and clear on this point: omega-3 fats are essential for optimal health, as are other fats, like natural saturated fats from foods like butter. Unfortunately, most fish commercially available today are polluted with mercury, PCBs, and other toxic substances, which is why I recommend you take a supplement like krill oil instead of getting it from your food. Other healthy fats include coconut oil, avocados, olives, olive oil, and macadamia nuts. All these fats are low in protein and carbs and will not impair insulin, leptin, or mTOR.
  3. Make clean, pure water your primary beverage, and steer clear of all sweetened and/or flavored beverages, including those that contain artificial sweeteners.
  4. Manage your stress.
  5. Exercise regularly. Ideally, you want a comprehensive fitness regimen that includes stretching, high-intensity interval training, core strengthening exercises, and strength training.
  6. Get plenty of appropriate sun exposure to optimize your vitamin D levels naturally. UV exposure also has additional health benefits beyond vitamin D production. A robust and growing body of research clearly shows that vitamin D is absolutely critical for your health. The D*Action project has been initiated by GrassrootsHealth along with 42 leading vitamin D researchers to demonstrate how health can be achieved right now with what's known about vitamin D with a combination of vitamin D measurement and health outcome tracking. I encourage you to participate in the D*Action Project, which has multiple concurrent vitamin D programs going on.

Not only will you be able to take control of your own health by participating, you'll also become part of one of the most profound public health projects of the 21st Century. As a participant, you agree to test your vitamin D levels twice a year during a five-year program, and share your health status to demonstrate the public health impact of this nutrient. There is a $65 fee each 6 months for your sponsorship of the project, which includes a test kit to be used at home, and electronic reports on your ongoing progress. You will get a follow up email every six months reminding you "it's time for your next test and health survey."

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  1. Limit your exposure to toxins of all kinds. The number of toxic chemicals and their sources is so large, addressing them all could easily require an entire library, but I believe you can help you keep your toxic load as low as possible by becoming an informed and vigilant consumer. This includes tossing out your toxic household cleaners, soaps, personal hygiene products, air fresheners, bug sprays, lawn pesticides, and insecticides, just to name a few, and replacing them with non-toxic alternatives.
  2. Get plenty of quality sleep. Scientists have discovered that your circadian rhythms regulate the energy levels in your cells. In addition, the proteins involved with your circadian rhythm and metabolism are intrinsically linked and dependent upon each other. Therefore, when your circadian rhythm is disrupted, it can have a profound influence on your physical health. For example, research has linked disrupted sleep cycles to serious health problems like depression, coronary heart diseases, and even cancer.

If you have any kind of sleep problem, whether you're having trouble falling asleep or staying asleep, my article "33 Secrets to a Good Night's Sleep" is packed with great tips to help you finally get some good rest. For even more inspiration and guidance on how to avoid falling victim to conventional health care in the US, check out the following eight "forgotten wisdoms" your grandparents adhered to that could quite literally save your life:

Grow your own food Get back in the kitchen and learn to cook real food from scratch
Make your own cleaning products Learn some home remedies
Discover the power of bone broth Ferment your own foods
Nurture your social network and close friendships Spend time outside/Go barefoot

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Tags: Expensive, Healthcare:, Most, Performing, US, Worst, and


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