Monday, March 01, 2010

We don't spend more

Many in the United States bemoan the fact that we spend such a large share of our GDP on health care. We argue that we could do it better and for less, and we point to other industrialized countries as proof. But we overlook the fact that those countries spend more on improving the social determinants of public health. It appears that the combined total of these two categories may be relatively constant across countries.

The Blue Ridge Academic Health Group has published a report entitled, The Role of Academic Health Centers in Addressing the Social Determinants of Health. (Go to this site and look for Report 14.) It contains a startling set of statistics.

Country -- % of GDP on Social Programs/% of GDP on Sick Care/Total % GDP
United States -- 2.3%/16%/18.3%
Canada -- 5.8%/10%/15.8%
Netherlands -- 9.6%/9%/19.6%
Sweden -- 11.6%/9%/20.6%

The report summarizes the situation as follow:

Our current health care system is costly and ineffective to an increasing degree each year because it has too limited a focus – sick care delivery – and pays inadequate attention to health promotion. Moreover, the health promotion programs that are in place rarely focus on social determinants of health such as jobs, housing, education, etc. Instead, the focus largely remains on the health problems and concerns of individuals, rather than on the problems endemic to a population.... That’s why the Blue Ridge Group believes that the U.S. health care delivery system, as currently constructed and funded, is the not the optimal foundation – even with more direct financial investment and dramatic changes in incentives and regulations – to improve the health status of Americans and thereby achieve greater societal happiness and progress. Similarly, we are concerned that current health reform activities are focused too narrowly on insurance reform without setting in play genuine reforms that also reflect the factors relating to social determinants of health.

Thanks to my friend and colleague Dr. Fred Sanfilippo, Executive Vice President for Health Affairs at Emory University, and Chairman of Emory Healthcare, for leading me to this report.


Matthew Holt said...


It's totally accepted that things like stable employment, lower income inequality, strong public health, more effective education systems, lower crime rates, better eating habits, etc, etc, etc improve health outcomes irrespective of spending on sick care.

But if you health care reform was hard....changing that lot is beyond impossible!

Anonymous said...

Gee Matthew; you're almost as polite as Nate! (:
Speaking of other countries and health, there is an article in the NEJM stating that government regulation/education to reduce dietary salt by 3g/day (ave. U.S. man consumes 10.4g/day) could save 10-24 billion annually in health care costs and gain 194K to 392K QALYS/yr. This could be achieved largely by simply regulating the amount of salt allowed in processed foods which account for 80% of U.S. salt consumption. This is done in countries such as Japan, U.K., Finland and Portugal.
We are overlooking the simple things too......
NEJM 362:590-599, 2010.


Anonymous said...

...and furthermore, the U.S. has always been heavily focused on individual rights (witness the furor over seatbelt laws, helmet laws, gun control, etc. etc.) - but we fail to appreciate the costs of that focus, as opposed to foregoing some individual rights for the benefit of the population. In a way this is the foundation of our country, but, being American, we want to have our cake and eat it too -e.g. not experience any downside to this attitude.Thus our wasteful/profligate profile compared to the rest of the world. The consequences of that attitude are now upon us in many ways, not just health.


Unknown said...

Shouldn't the Netherlands' total be 18.6?

Brenda RN said...

It seems so obvious from these statistics (and from common sense) that if we invest in things that keep people healthy, we will spend less on treating them when they are sick. But this of course involves a rethinking of our priorities. Specialists, pharmaceutical and other medical equipment manufacturers and providers stand to make less money if people are healthier. The public would have to be willing to spend more on providing those "social determinants of health" and in our "me first" society, this is always difficult to do.

It is sad that we seem so willing to Invest in businesses to ensure they stay viable and create jobs (an essential thing to do!) yet as a society we are unwilling to invest in our people, our infrastructure, our schools and our healthcare. We know we will suffer in retirement if we don't invest in it now, why can't we understand that we will all suffer if we don't invest in each other as well.

Engineer on Medicare said...

"Our current health care system is costly and ineffective to an increasing degree each year because it has too limited a focus – sick care delivery – and pays inadequate attention to health promotion."

The cited report seems to suggest that the responsibilities of the "health care system" should be expanded to include more than health care. That kind of "requirements creep" causes bloat and inefficiency.

The health care industry has some way to go to provide the most efficient and best quality health care that is possible. When people come to see that as exemplary of outstanding performance, then they can look at expanding their responsibility.

Anonymous said...

And Sweden 20.6?

John Freedman MD said...

This is interesting but not so surprising given the comparison countries chosen, which are mostly smaller, social-welfare-oriented states. I would be interested in knowing what the figures would be for the larger economies like UK, France, Germany, Italy, Japan.

Also, the report is quite vague as to what expenses go into that bucket, so it's hard for me to infer much.

Amy said...

It's always refreshing to see hard data to state the obvious. Having worked for an insurance company years ago and seeing how financial decisions are made there, I've always been curious as to how the emphasis on sick care is paramount to preventative care and health promotion. There's an economic logic to this that seems counter-intuitive, since you'd think it would be more profitable to keep people healthy. Are there any reports out there to this effect?

Wefirst said...

Statistics are wonderful - they can be used to tell whatever story you want to tell.
From my perspective, we need a total overhaul of our entire delivery system not just insurance. Salaried millenial physicians to treat Medicare is just a start.

Engineer on Medicare said...

In a capitalistic society such as the US, organizations and their leadership generally operate in what they perceive to be the best interests of the organization. Unless the best interests of the society they serve coincide with the interests of the organization, the organization comes out ahead of the society.

Where there is true competition and transparency, and the customers can effectively make informed choices, competition can drive organizations to serve their customers.

Many problems with the existing health care system arise out of the fact that there is not strong transparency and competition. I believe the only way to get the strong competition and transparency is if one or more strong buyers impose requirements so that multiple providers in every market are can compete for the business.

Frank Ch. Eigler said...

Even granting for the sake of argument that 'social determinants of health' are legitimate governmental spending alternatives to normal health care, there are risks in having the health research/provision industry inject itself into deep political controversies.

Anonymous said...

Paul, your premise that "We don't spend more" is incorrect. You are assuming that those 4 countries cited in the report spend the same % of GDP in social programs + healthcare and get similar outcomes. This is clearly not true since the other countries have universal access to healthcare and much lower poverty rates than the US. Thus we may spend the same in % GDP, but our ROI is much less, and that is what really counts.

Anonymous said...

Really? "The same"? You stated the U.S. spends 18.3% of GDP on social programs + sick care, whereas Canada spends 15.8%. And you say those are the same. A difference of 2.5% GDP. The same. GDP in the U.S. in 2008 was $14.2 trillion. If we could decrease health spending from 18.3% to 15.8%, that would save us about $350 billion. Every year. $350 billion a year. "The same."

Frank Ch. Eigler said...

"If we could decrease health spending ..."

While for some purposes, the exact identity of that second person singular may be irrelevant, it is not here, when we're discussing the costs of services. $1 of government spending is not interchangeable with $1 of private spending.