U.S. Health Care in Comparative Perspective

Donald W. Light

Fellow, Edmond J. Safra Center for Ethics, Harvard UniversityProfessor, University of Medicine & Dentistry of New Jersey

Senior Fellow, Center for Bioethics, University of Pennsylvania

WWW.PHARMAMYTHS.NET

PNHP Conference San Francisco 27 Oct 2012

(May contain inaccuracies. Subject to revision)

0 10 20 30 40 50 60 70 80 90 100$0

$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

$100,000$110,000$120,000$130,000$140,000$150,000$160,000$170,000$180,000$190,000$200,000$210,000$220,000$230,000$240,000$250,000$260,000$270,000$280,000$290,000$300,000$310,000$320,000$330,000$340,000$350,000$360,000$370,000$380,000$390,000$400,000$410,000

Distribution of Costs: "Risk Distribution"

% of a Large Population

Ann

ual M

edic

al C

osts

per

Per

son

(in D

olla

rs)

10% of the population uses 72% of costs

2% of the population uses 41% of costs

$25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Australia

Austria

Belgium Canada

France

Germany

ItalyJapan

Netherlands

Norway

SpainSweden

Switzerland

U.K.

USA

Total Health Expenditure per Capita and GDP per Capita,

US and Selected Countries, 2008

GDP Per Capita

Per

Capi

ta H

ealt

h Sp

endi

ng

Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates.

Austral

ia

Austria

Belgium

Canad

a

Fran

ce

German

y Ita

ly Ja

pan

Netherl

ands

Norway

Spain

Swed

en

Switze

rland U.K.

U.S.A.

Averag

e $-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Total Health Expenditure Per Capita, U.S. and Selected Countries, 1970, 1980,

1990, 2000, 2008

19701980199020002008

Per C

apita

Spe

ndin

g - P

PP A

djus

ted

Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).Notes: Data from Australia and Japan are 2007 data. 2008 figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. 2000 figured for Belgium are OECD estimates. Numbers are PPP adjusted. Break in Series AUS (1998); AUSTRIA(1990); BEL(2003, 2005); CAN(1995); FRA(1995); GER(1992); JAP(1995); NET(1998, 2003); NOR(1999); SPA(1999, 2003); SWE(1993, 2001); SWI(1995); UK (1997. Starting in 1993 Belgium used a different methodology.

Australia Austria Canada France Japan Norway Spain Sweden U.K. U.S.A.-0.7%

-0.2%

0.3%

0.8%

1.3%

1.8%

2.3%

2.8%

3.3%

3.8%

4.3%

1.9

3.0

2.0

3.1

1.9

1.3

2.3

-0.5

2.2

3.7

0.5

0.1

1.41.1

-0.4

0.3

1.4

1.0 0.9

3.2

Percentage Point Change in Public and Private Health Expenditure as a Share of

GDP, U.S. and Selected Countries, 1980 to

2008

Public SpendingPrivate Spending

Perc

ent

of G

DP

Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).Notes: Break in Series AUS (1998); AUSTRIA(1990); CAN(1995); FRA(1995); JAP(1995); NOR(1999); SPA(1999, 2003); SWE(1993, 2001); UK (1997) Data from Australia and Japan are 2007 data. Figures for Canada, and Norway, are OECD estimates. Italy, the Netherlands, Belgium, and Switzerland were excluded because of missing data. Numbers are PPP adjusted .

Swed

en

Norway

Japan

Austral

ia

Netherl

ands

Austria U.K.

Switze

rland

Canad

aSp

ainFra

nce

Belgium U.S.

A.

Averag

e-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

-0.70.6

-0.50.6 0.6 0.9

0.30.9

1.91.2 1.4 0.9

3.2

0.91.2

0.1 0.4 0.51.9

0.61.7

0.51.6 1.8

1.1 2.1

2.6

1.2

0.8 1.71.3

1.6

1.1

2.0

-0.1

0.7

1.71.8

1.2

1.1

Percentage Point Change in Total Health Expenditure as a Share of GDP,

U.S. and Selected Countries, by Decade.

2000 to 20081990 to 20001980 to 1990

Perc

enta

ge C

hang

e

Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD esti-mates. Break in Series AUS (1998); AUSTRIA(1990); BEL(2003, 2005); CAN(1995); FRA(1995); GER(1992); JAP(1995); NET(1998, 2003); NOR(1999); SPA(1999, 2003); SWE(1993, 2001); SWI(1995); UK (1997). Starting in 1993 Belgium used a different methodology. Numbers are PPP adjusted. Germany is not reported because of reunification and Italy has missing data.

Japan

Austral

ia

Norway U.K.

Spain Ita

ly

Swed

en

Canad

aAust

ria

German

y

Switze

rland

France U.S.

A.0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

6.6% 5.7%7.2% 7.2% 6.5% 7.0% 7.7% 7.3% 8.1% 8.1%

6.3%8.7%

7.4%

1.5% 2.8%1.3% 1.5% 2.5% 2.1% 1.7% 3.1% 2.4% 2.5%

4.4%

2.5%

8.5%

Public and Private Health Expenditures as a Percentage of GDP,

U.S. and Selected Countries, 2008

Private Expendi-turePublic Expendi-ture

Perc

enta

ge o

f GDP

Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).Notes: Data from Australia and Japan are 2007 data. Figures for Canada, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.

Health systems entail 4 functions:• Stewardship• Financing (collection, pooling, distribution) • Service provision• Resource generation (train, build, innovate) • …

Revenue collectionCompulsory insurance? …or taxes?

Community rated premiums? Risk rated? Risk blind? Guaranteed renewal? Flat tax, flat % or progressive % tax?

User fees? Co-payments? (dis-insurance) Goals? -restrain use, or collect revenue?

Voluntary insurance as supplement? Or substitute? Or both? Usually risk rated (but not VHI in Ire), tight coverage limits

What should be the philosophy of risk sharing?

Measures of performance (Murray & Frenk)• Fair financial contribution (input measure)

Both average and equity of distribution ALL payments from households (risk protection)

(like?...)(“…and the sick get poorer.”)

• “Responsiveness” (process measure) Respect for persons (Dignity, confidentiality, autonomy) Client orientation (prompt attention, quality)

• Health Improvement throughout life-course (outcome measure)

Average and equity of distribution

Overall system performance (2000)• 1 France• 10 Japan• 18 UK• 25 Germany• 30 Canada• 37 USA (with very hi score in responsiveness) • (Costa Rica, Cuba 36 & 39) (Italy 2, Spain 7)

• Hue and cry.

• Health level (DALE) relative to capacity: USA 72nd

Thank you