We all are aware that our level of spending of healthcare in the United States in greater than any comparable country without a corresponding improvement in results. Either as individual payers or being participants within our present tax system, including tax relief of employer-sponsored health insurance, collectively we are responsible for the cost of our healthcare. A recent article in JAMA, Health Care Spending in the United States and Other High-Income Countries by Papanicolas, et al., pointed out that even though the United States spent approximately twice as much as other high-income countries on medical care, the results were with similar utilization rates to the other nations. They discovered that prices of labor and goods, including pharmaceuticals and administrative cost, appeared to be the dominant driver of the difference. They also found pockets of services where higher price and higher utilization occurred, which has a compounding impact on cost.
What does this imply? Higher labor and goods costs generate revenue that is spent in our economy creating jobs and allowing profits to occur which results in growth in our economy. Perhaps this is a benefit to spending so much more on healthcare. Another way to view the situation is to ask what is the actual cost of our health system? Since we have a finite pool of dollars to spend on all our social needs and services, the real cost is identifying the areas of investment we are not able to recognize because of what is spent on healthcare. Unfortunately, we have solved this problem by borrowing more money. Not being an economist, I will not comment on whether that is positive or negative. I only raise the point because we can choose where we spend our dollars and selecting everything and paying top dollar for it is not likely beneficial long term. Consequently, we have seen the rationing of care in public health programs and the lack of funds for expansion of other social programs that would have long-term benefits.
As a society that wants to have as much as we can, we will need to decide where we shrink the dollar spent on healthcare. Are we prepared to force unit costs for healthcare goods, including drugs, down? Are the administrative costs too high even though that money feeds the economy? Can we continue to treat healthcare as a for-profit model when in fact it falls within the social fabric of our communities? No matter what we do, dollars will be removed from a sector of the industry.
Our goal must be how we optimize all our dollars spent, regardless of the situation. As individuals, we think that way in most of our purchasing decisions and tend to forget that our increased healthcare costs affect the typical American family by thousands of dollars each year. We must have that same financial diligence as a community of individuals. To deliver on social justice, understanding what we give up when we overspend is an essential component. Should we defend our borders less? Is education a primary focus? Let us fully comprehend the importance of reducing the cost of care. Creating a situation where our dollar goes further towards caring for those in need of healthcare services is the solution of our aspirations. There will be winners and losers within the healthcare ecosystem, but the real winner will be our society and communities.