American healthcare paradox: We need to spend smarter, not harder

It’s an old American story: We pay more for health care than any other country on the planet, but the outcomes lag behind other developed nations. This embarrassing fact keeps us obsessed with cutting health care costs, presumably so that the lower costs better reflect the lower value of our health care investment.

But there’s another way to get value, and that’s by changing how we spend our $4.3 trillion in annual health care costs.

Other developed countries have figured this out, and new data collected by the KFF-Peterson Health System Tracker provides a timely reminder of the urgency of changing our spending patterns by investing in non-medical drivers, or social determinants, of health.

Compared to spending patterns for the same countries based on previous data, the new data show that from 2011 to 2019, while the United States increased its investment in social spending, it continued to overinvest in health care relative to social spending, while Comparable countries have continued to do the opposite. And over the same time period, US health outcomes have continued to lag behind those of peer countries, and in some cases, the gap has widened.

Our analysis of data from the Organization for Economic Cooperation (OECD) showed that from 2011 to 2019, life expectancy in peer countries increased by an average of one year, while life expectancy in the US remained flat , still 3.8 years lower than the average for other countries. And while both peer countries and the United States reduced their infant mortality rates slightly over this eight-year period, the 5.6 US deaths per 1,000 births is still nearly double that of peer countries (3, 3 per 1,000 births).

In the case of maternal mortality, our analysis of UNICEF maternal mortality data shows that the rate in each of these peer countries decreased (an average decline of 14.3%) from 2011 to 2019, while the rate in the States increased by 30.1%. Despite our disproportionate health care spending, the United States is by far the deadliest country for new mothers, with a 2019 maternal mortality rate of 19.9 per 100,000, while peer countries had a fraction of as many deaths (6, 1 per 100,000).

Why do we keep doing it?

For decades, health care professionals have known that social, environmental, economic, and behavioral factors are more determinants of health outcomes than medical care. One of us began studying patterns of spending among developed countries more than a decade ago, identifying the paradox of the United States spending more on health than other countries without having the results to justify the spending. Similar analyzes have been done by others using data from 2009 and 2011, finding the same patterns in spending and outcomes. Now, data through 2019 confirms that while the US continues to neglect social spending on health, its results continue to slow.

We can change our spending trajectory. The seminal work of Harvard’s Michael Porter and Elizabeth Teisberg on value-based care, through the creation of the Centers for Medicare and Medicaid’s (CMS) Innovation Center as a key part of the Affordable Care Act, we have understood the mechanisms for moving dollars upstream by shifting payments from the traditional fee-based model to health outcomes-oriented payment models.

The Innovation Center has implemented more than 20 models that incorporate nonmedical drivers into the health care delivery system. The growth in popularity of Medicare Advantage plans is due in part to the inclusion of non-medical benefits such as carpet cleaning for asthmatics and nutrition and exercise programs for diabetics. CMS is approving Medicaid waivers with significant investments in non-medical drivers such as food and shelter and encouraging states to use government “in lieu of services” to support non-medical investments. Hospitals are increasingly being urged to invest in improving community health outcomes.

While the United States has historically been less inclined to make the kinds of social investments in children and families as other developed countries, we have an opportunity to redirect our oversized and underperforming health care dollars upstream to improve health outcomes — a bipartisan goal, as evidenced by the growth of such programs across Republican and Democratic administrations. And because the federal government is the largest single payer of health care costs, these programs can have a significant influence on the entire health care system.

We need to take advantage of this momentum to push more dollars upstream to improve US health outcomes. If we’re going to spend nearly 20% of GDP on health, we deserve better value.

Elena Marks, JD, MPH, is a senior fellow in health policy at Rice University’s Baker Institute for Public Policy. Elizabeth Bradley, Ph.D., is president of Vassar College and co-author of “The American Health Care Paradox: Why Spending More is Getting us Less” (with Taylor, L. 2013 Public Affairs).

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