Why does the U.S. spend so much money in healthcare? This topic crosses our desks, screens, newspapers, magazines and talk shows daily. Sometimes I wonder if I’m obsessed, as I see it everywhere; however, I am not the only one obsessed.
Stored on my server, I have a file that contains all the major headlines that I want to discuss in future blogs. After doing a quick search, I’ve discovered that there is more than one article daily in a major publication or news source that discusses healthcare costs. Yesterday, there were four independent and unrelated articles. These come from research sites, economics sources, and many healthcare and healthcare IT sources.
As a nation, we are all obsessed with healthcare costs, and as an avid reader, I can guarantee that the issue is only going to get worse. We started this blog series with an article from The Atlantic magazine (link below) where the title immediately got my attention, “How We Spend $3,400,000,000,000 – Why more than half of America’s healthcare spending goes to five percent of patients.”
Very soon that headline will read, “How we spend $5,500,000,000,000 (USD)…” However, the problem is not only in the United States. Healthcare costs throughout the entire world are over $8 trillion (USD) today; even if the U.S. has the highest per capita cost, the problem is going vertical as the entire world population ages. The World figure is now projecting to reach $18,000,000,000 (USD) in annual healthcare expenditures in just over 20 years.
The issue is becoming a crisis today in Europe (EU). Healthcare spending in the EU is approximately 13% of GDP (vs 18% of U.S). The issue they are having is, in a mostly social nationalized program, to allow reasonable access to care, while also controlling cost, in what is a much older population than the U.S.
For decades, these national social programs have worked; however, the dropping population of working-age adults, lower birthrates, and greying populations, the historically good system of care is breaking down. I can attest that many Canadians and Europeans are coming here to the U.S. to get care, quicker than in their home countries, even if the costs are all out of pocket.
This is all happening at a time where the world is more connected and Baby Boomers (in the U.S. and abroad) are accustomed to getting their way, making more demands on time and quality of care. We are not our parents or the “Silent Generation.” EU national systems for providing care are feeling pressure from all sides.
We expect that the U.S. system will have to adapt to the explosion of cost, and the EU system will have to adapt to the problem of access. In many cases, healthcare delayed is healthcare denied.
As with the U.S., we believe that healthcare can only control the issue of cost with more use of technology, total reform of payment systems (that rewards providers not for seeing more patients or has no rewards at all), and finally with transparency in access and pricing. Universal medical records, home monitoring, better use of remote care, and telemedicine are all part of the solution in the U.S. and the EU.