Photo Credit: Shutterstock.com/Ricardo Reitmeyer
December 6, 2013
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Joe
is a twenty-eight-year-old man with type 1 diabetes, living in the
United States. He lacks permanent housing and has been staying in a
friend’s condemned, boarded-up house. To avoid being seen there, Joe
enters through the marshlands behind the house. His shoes are full of
holes, but he cannot afford to replace them. Joe’s diet has similarly
suffered from his lack of income; he some- times goes several days
without fresh food, which negatively af- fects his diabetes. Also, after
a lifetime of poor insulin control, he is starting to lose circulation
in his feet. Last year, Joe had two toes removed on his right foot to
save his life (hospital cost: $7,132). Still, neuropathy continues to
cause him decreased sensitivity in and increased risk of trauma to his
feet. The doctor he last saw emphasized the importance of keeping his
feet dry, getting proper nutrition, and taking his costly insulin as
prescribed, all of which Joe is eager to do. Since that appointment, Joe
has been diligent in taking his insulin, but dry feet and proper
nutrition remain dif- ficult to achieve due to his living conditions and
unemployment. His doctor has already raised the issue of having to have
more toes removed on his left foot (cost: $14,430), and without
immediate changes, Joe will need to have a below-the-knee amputation in
the years ahead (cost: $17,347) and will likely need a wheelchair (cost:
$1,042). The estimated cost of his medical expenses will top $30,000,
paid by a state medical assistance program that is funded by taxpayers.
Amid a system marked by the most advanced medical treatment in the
world, Joe is dying a slow, painful, and expensive death. A decent pair
of shoes costs $50.
We begin with the true story of a young man
living in the United States.While that story may sound like the basis of a Hollywood plot, we encountered similar stories throughout our research on the American health care system. It goes without saying that Joe needs more than a good pair of shoes to improve his health; he also needs accessible shelter and nutritious food. But the cost of these interventions still pale compared with $30,000 in medical treatment he is currently on track to accrue in the coming years. Furthermore, shelter, food, and shoes might enable him to return to work and not suffer a lifetime dependent on a wheelchair. Joe, and many others like him, illustrate how inadequate attention to social services and supports can lead to exorbitant health care expenses. We confront the consequences of this imbalance experienced by people across the income spectrum. Joe’s is one story, which, replicated across the country, begins to unravel the paradox that has perplexed policymakers for decades: How is it that the United States spends more per capita than any other nation on health care, while Americans fare worse in many measures of health?
According to the 2013 Institute of Medicine report Shorter Lives, Poorer Health,
Americans have lower life expectancy and higher rates of infant
mortality, low birth weight, injuries and homicides, adolescent
pregnancy and sexually transmitted diseases, HIV/AIDS, drug-related
deaths, obesity, diabetes, heart disease, chronic lung disease, and
disability than people in other industrialized countries. Furthermore,
racial and economic disparities fail to explain this national health
disadvantage in the United States. Americans who are white, insured,
college educated, and upper income have poorer health than do their
counterparts in other industrialized countries. Although the Institute
of Medicine report was circulated as news, the “spend more, get less”
paradox it documented has been recognized for decades. As early as 1971,
Nathan Glazer, a sociologist at Harvard University who worked on
President Lyndon Johnson’s Model Cities Program, used the term paradoxto describe American health care. In his article published in The Public Interest,
Glazer pointed out that while the American population increased 17
percent between 1955 and 1965, medical personnel increased 63 percent
with no improvement in general health of the population. More recently,
Dartmouth economist Jonathan Skinner used the term to demonstrate that
between 1986 and 2005, the geographic regions with the largest increases
in Medicare spending were not the ones with the largest survival gains.
We propose a different explanation, based on compelling data gathered over years of research. Inadequate attention to and investment in services that address the broader determinants of health is the unnamed culprit behind why the United States spends so much on health care but continues to lag behind in health outcomes.
The idea that Americans spend more and get less when it comes to health care is frustrating to a populace long steeped in the virtues and benefits of capitalism. The American spirit resists the thought that the nation may not be getting value for money. The situation is upsetting not only because it connotes waste in the system, but because it provides evidence of the United States’ falling behind its peer, industrialized countries—spending more but not being any healthier for it. The United States ranks top out of thirty-four nations in national spending on health care as a percentage of GDP. Data from countries in the Organisation for Economic Co-operation and Development (OECD) from 2009 puts US health care spending at $7,960 per person, while most others spend less than $4,000 per capita (see Figure 1.1) and rank above the United States in multiple measures of health.
[Source: OECD, Health at a Glance 2011 (Paris, France: OECD Publishing, 2011).]
Most of the health care spending finances hospitals, physicians, and clinics. According to 2010 data from the Centers for Medicare & Medicaid Services, it is allocated as follows: approximately 31 percent is for hospital care; 20 percent, for physician and clinic services; 10 percent, for prescription drugs; 7 percent, for dental and other professionals; 7 percent, for government administration; 6 percent is for investment (structures, equipment, and noncommercial research); 6 percent is for nursing home and other long-term care; and 14 percent is for other medical costs including home health care (3 percent), government public health activities (3 percent), other medical products (3 percent), and other health, residential, and personal care (5 percent).
This piece was published with permission from Perseus Books.
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