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Does the U.S. Get Value for Its Health Care Dollars?


It’s hardly a secret that the U.S. is spending close to 18 percent of its GDP (or $8,362 per person) on health care — more than any other country. So it’s fair to ask exactly what we’re getting for our money.

All the big payers of our health care bills, like insurance companies, employers, Medicare and Medicaid, are increasingly joining the “value-based purchasing” movement. To get more value for their money, payers are defining desired health outcomes and building rewards and penalties into their payment contracts with providers. Hospitals and doctors who do a better job of taking care of patients by following procedures, such as giving antibiotics before surgery or providing clear discharge instructions when patients leave the hospital, are receiving bonuses. Providers who don’t reach goals are getting dinged.

As useful as some of those efforts may eventually be in improving health care, it’s also fair to ask: will they be enough? The answer seems to be “no.” Earlier this month, the Institute of Medicine (IOM) and the National Research Council released an important study showing that many other factors make a population healthy—the so-called social determinants of health.

The study found that younger Americans — those under age 50 — die earlier and live in poorer health than younger people in other developed countries like France and Canada. The U.S. ranked near or at the bottom of almost every health indicator the group studied, such as drug-related deaths, obesity and infant mortality.

In 2007, life expectancy at birth for American men was dead last in a ranking of 17 countries. For women, the U.S. was second to last.

The chair of the IOM panel, Dr. Steven Woolf, told the New York Times,“Something fundamental is going wrong. This is not the product of a particular administration or political party. Something at the core is causing the U.S. to slip behind these other high-income countries.” He says it’s getting worse.

Many of the conditions the IOM studied disproportionately affect children and adolescents, and they reduce the chances that Americans will live to age 50. For those who do reach that age, these conditions could mean poorer health in later life. And of course, that comes at a greater cost to the health care system. It also means premature death. Americans had the lowest probability of surviving to age 50.

What’s behind these dismal statistics?  It’s not just the lack of health insurance that became the rallying cry for health reform. While having a way to pay for medical care and access to doctors is important, it doesn’t completely explain why the U.S. does so poorly.

Health behaviors — drinking too much, eating too much, smoking, failing to use seat belts — are major culprits. But so are poverty and education. The report noted that America has higher levels of poverty, income inequality, and lower rates of social mobility than many other countries, and its citizens benefit less from safety net programs.

Was there any good news? Adults in the U.S. had better control over their cholesterol and high blood pressure. Access to screening tests has helped give the U.S. lower death rates from some cancers. That was about it. Perhaps those good stats are the result of a two-decades long effort by health plans and the government to focus on those interventions.

The IOM noted that the public health community had begun to identify some strategies for improving the U.S. health position in the world and has “adopted detailed health objectives.” But addressing what it called “the U.S. health disadvantage” will need more than a list of goals. It will need a societal commitment and resources to meet them.

That hasn’t happened yet, and the political discussion continues to swirl around that old canard — Americans have the best health care in the world. The real issue may not be what is the value of our health care spending, but instead, what is the value of our health?

More Blog Posts by Trudy Lieberman

author bio

Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website,, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.

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