U.S. Health Care in Comparative

Perspective

Donald W. Light

Fellow, Edmond J. Safra Center for Ethics, Harvard University

Professor, 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

An

nu

al

Me

dic

al

Co

sts

pe

r P

ers

on

(in

Do

lla

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

BelgiumCanada

France

Germany

Italy

Japan

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

Capit

a H

ealt

h S

pendin

g

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.

Aus

tralia

Aus

tria

Bel

gium

Can

ada

Fra

nce

Ger

man

y It

aly

Japa

n

Net

herla

nds

Nor

way

Spa

in

Swed

en

Switz

erla

nd U

.K.

U.S

.A.

Avera

ge $-

$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

Cap

ita S

pen

din

g -

PPP A

dju

sted

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

1.4

1.1

-0.4

0.3

1.4

1.00.9

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 Spending

Private Spending

Perc

en

t o

f 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

Japa

n

Austra

lia

Nethe

rland

s

Austri

aU.K

.

Switz

erland

Canad

a

Spain

Fran

ce

Belgium

U.S.A

.

Avera

ge-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

-0.7

0.6

-0.5

0.6 0.6 0.90.3

0.9

1.91.2 1.4

0.9

3.2

0.91.2

0.1 0.40.5

1.9

0.6

1.7

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

en

tag

e C

han

ge

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.

Japa

n

Austra

lia

Norway U.K

.

Spain

Italy

Swed

en

Canad

a

Austri

a

Germ

any

Switz

erland

Fran

ce

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-ture

Public Expendi-ture

Perc

en

tag

e o

f 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: 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