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Doctors salaries contribute to high US healthcare costs

Americans spend nearly twice as much on health care than other high-income countries, yet they have the lowest life expectancy, a new study reveals.

While the average for wealthy nations spend a little more $5,000 on health care services like Germany, people in the US shell out $9,403 a year.

While it’s been said that Americans use more medical services than peer countries, leading to higher costs, the study found salaries of physicians, as well as higher pharmaceutical prices play a significant roles in health care costs.

The study, conducted by researchers at Harvard University, debunks many of the common beliefs people have about why the US spend so much money on healthcare.

Americans spend more on health care  than any other wealthy country, new research reveals

Senior author Dr Ashish Jha, professor of Global Health at Harvard University, said it’s well known that the US spend way more than peer nations to deliver care, but the common beliefs as to why these costs are so high – too many doctor visits, hospitalizations and procedures – aren’t accurate.

‘We already knew the US spends more on health care than other high income countries,’ Dr Jha told Daily Mail Online. ‘However, there are many different beliefs as to why this is the case.’

‘The reasons for these substantially higher costs have been misunderstood: These data suggest that many of the policy efforts in the  US have not been truly evidence-based,’ Dr Jha said.

For the study, Dr Jha and her colleagues examined international data collected between 2013 and 2016 to compare the US with 10 other high-income countries, including Canada, Germany, Australia, Japan, Sweden, Denmark, The UK, Switzerland and the Netherlands on key metrics that contribute to healthcare costs.

They found that the main drivers of these prices are higher salaries for physicians and nurse, with US medical doctors making around $218,173 compared with a range of $86,607 to $154,126 in the other countries.

The US also spend more money on drugs, with each American spending more than $1,443 a year on pharmaceuticals, while others nations spend between $466 and $939.

Despite America’s higher spending, citizens have worse health outcomes.

Researchers found life expectancy in the US was the lowest of 11 countries at 78.8 years old, while people in other wealthy nations are expected to live between 80 and 83.9 years.  

They also found that the utilization of these medical services were about the same did not differ substantially from their peer countries, despite having higher costs. 

‘There is a belief that the US population uses a lot more health care services than other countries, thus driving costs. Yet, we found that the US has comparable rates of utilization overall, with lower numbers of physician visits and hospitalizations,’ Dr Jha said.

Researchers debunked another belief that claims the US doesn’t spend enough money on social services that benefit health and helps prevent illness, thus contributing to higher health care costs.

Although this is true – US spends a little less on social services than their peers –  investigators claim that this is not responsible for the rising health care costs.

‘While the US does spend a bit less on social services, it is not an outlier, spending more than countries like Canada,’ Dr Jha said.

The researchers conclude that it all comes down to prices.

‘The data suggest two main factors drive higher healthcare spending in the US: higher prices across a wide range of health care services,and administrative costs.,’ Dr Jha added.

Policy expert Dr Ezekiel J. Emanuel, of the University of Pennsylvania, wrote an editorial review that claims high drug prices, administrative costs, as well as the excessive use of scans and surgical procedures are a few of the main reasons why American’s spend more on health care than their peer’s in Europe.

Researchers of the current study say they hope their findings help inform policy decisions and lead to lower health care costs.

‘Our findings illustrate the important differences in the prices and quality of healthcare services across countries,’ Dr Jha said. ‘We expect the paper to generate a discussion around the role of the high price of healthcare services in the US and about ways to lower those prices while maintaining or even improving quality.’