While government spending on health care could decline, that will not result in lower health care costs. Based on data published by the Organization for Economic Co-operation and Development on global health issues, 24/7 Wall St. identified the countries where health care costs are the highest per person.
One of the main criticisms of consumer-driven health care is that, today, consumers have no way of figuring out how much a particular health care service costs. Indeed, one of the reasons that health care is so expensive in America is because people have no idea what they’re paying for it. Hence, it’s important for reformers to encourage hospitals and doctors to become more transparent about the prices they charge for these services. But an Arizona bill to do just that was killed—by the state’s Republican legislature.
Chad Terhune of the Los Angeles Times told the story of Jo Ann Synder, a woman who was charged $6,707 for a CT scan, after she had undergone colon surgery. Her insurance plan, Blue Shield of California, billed her for $2,336, and paid for the rest. But Snyder was shocked to discover that, if she had paid for the scan herself, out-of-pocket, she would have only had to pay $1,054.
“I couldn’t believe it,” she told the Times. “I was really upset that I got charged so much and Blue Shield allowed that. You expect them to work harder for you and negotiate a better deal.”
Los Alamitos Medical Center, Terhune found, charges $4,423 for an abdominal CT scan. Blue Shield’s negotiated rate is about $2,400. But Los Alamitos told Terhune that its cash price for the scan would be $250.
John Pittas’ mother entered a nursing home for rehabilitation following a car crash. After she left the nursing home, she moved out of the country. His mother’s $93,000 bill at the home was left unpaid. The mom had applied for Medicaid, which would normally pay the bill if she couldn’t.
The mom’s Medicaid application did not get approved in enough time to satisfy the nursing home, and it sued her son for the bill. The state of Pennsylvania, like 29 others in our country, has something called a “filial responsibility law”. Those laws require that spouses, children and even parents of needy adults support the indigent. These laws were rarely ever enforced. The nursing home decided to enforce it rather than have Medicaid do what it was designed to do.
The trial court found for the nursing home. Mr. Pittas appealed. He argued that the court should have considered Medicaid or going after his mother’s husband and her two other adult children. Astonishingly, the appeals court not only agreed that the nursing home didn’t have to wait until the Medicaid claim was resolved, it also found that the nursing home could choose any family member it wanted to when seeking payment for the bill.
Couples Need $240,000 For Healthcare in Retirement
The latest estimate of an average American couple’s retirement health care costs is $240,000. The calculation, from Fidelity Investments, is based on a 65-year-old couple with Medicare coverage, and factors in things like premiums, co-pays, deductibles and out-of-pocket prescription drug costs. It doesn’t factor in things like long-term care, dental services, over-the-counter meds or hearing aids.
It’s also based on average life expectancy—82 for men, 85 for women—which means this number could be much higher if you plan on living longer than that.
Annual increases in projected retiree health costs have averaged 6 percent since Fidelity made its initial $160,000 calculation in 2002. This year’s estimate is up 4.3 percent from last year.
Retiree health costs add up in part due to what’s not covered by Medicare, of course. But Medicare premiums and copays also contribute—a couple can spend about $2,400 a year on Medicare Part B (the part that covers doctors and other services not covered by Part A, for hospital service, or Part D, for prescription drugs) alone. The chart to the left shows a breakdown of projected costs, with 23 percent going to out-of-pocket prescription drug expenses, 45 percent going toward other out-of-pocket expenses and 32 percent going toward Medicare Part B and Part D premiums.
These are the countries that spend the most on health care.
> Total expenditure on health per capita: $3,978
> Expenditure as % of GDP: 11.8% (3rd most)
> Annual growth of total health expenditure: +2.7% (18th most)
> Life expectancy: 81.5 years (8th highest)
Health care in France ends up costing about $4,000 per person each year, which is 11.8% of its GDP — the third-highest percentage among OECD nations. The government and insurance providers pay nearly the entire bill as the French’s out-of-pocket expense is rather small. Residents only pay $290 per person a year, or 7.3% of the total health care expenses — the third-least among all 34 OECD nations.
> Total expenditure on health per capita: $4,218
> Expenditure as % of GDP: 11.6% (4th most)
> Annual growth of total health expenditure: +4% (15th most)
> Life expectancy: 80.3 years (18th highest)
Much like France, Germany’s expenditure on health care as a percentage of GDP is high among developed nations. The country’s spending habits result in many health benefits that exceed those in other countries. For instance, Germany has among the highest doctors and hospital beds per person in the OECD. The country also has the sixth-highest number of doctor consultations per capita on an annual basis at 8.2, and the fifth-longest average length of hospital stay at 7.5 days.
> Total expenditure on health per capita: $4,298
> Expenditure as % of GDP: 11% (8th most)
> Annual growth of total health expenditure: +2.2%
> Life expectancy: 80.4 years (16th highest)
In Austria, nearly $4,300 is spent per person on each year health care. This is the equivalent of 11% of the country’s GDP. Some 77 percent of the country’s expenses are covered by the public health care system, and so out-of-pocket expenses come to less than $600 per year, nearly $400 less than what the average American spends.
> Total expenditure on health per capita: $4,348
> Expenditure as % of GDP: 11.5% (6th most)
> Annual growth of total health expenditure: +6% (11th most)
> Life expectancy: 79.0 years (25th highest)
Each year health care costs Denmark $4,348 per capita — the seventh most among developed countries. This large amount is largely covered by the government. In Denmark, 85% of total health expenditure is public, making it the least-privatized health care system in the OECD. While the country has average doctor consultations per capita, it has relatively low rates of hospital beds per capita and the lowest average length of hospital stays.
> Total expenditure on health per capita: $4,478
> Expenditure as % of GDP: 11.3% (7th most)
> Annual growth of total health expenditure: +7.4% (7th most)
> Life expectancy: 80.7 years (tied for 12th highest)
Canada’s health care system costs $4,500 per person each year, the sixth-most among the 34 OECD countries. Between 2008 and 2009, costs increased 7.4%, the seventh-most among developed nations. One of the biggest expenses for the country are hospital stays. The average length of an acute care hospital visit is 7.7 days. Drugs are extremely expensive in the country. Each year, costs of pharmaceuticals come to $743 per person, the second most in the developed world.
> Total expenditure on health per capita: $4,808
> Expenditure as % of GDP: 7.8% (7th least)
> Annual growth of total health expenditure: +8% (6th most)
> Life expectancy: 80.7 years (tied for 12th highest)
Health care expenditure in Luxembourg is $4,808 a year, or 7.8% of national GDP. This is the greatest decrease among OECD countries. Of that, public expenditures account for 84% of the total, the eighth-highest rate among OECD countries. The country’s system faces some difficult challenges in offsetting unhealthy lifestyle choices. For instance, Luxembourg has the highest annual rate of alcohol consumption at 15.5 liters per capita.
> Total expenditure on health per capita: $4,914
> Expenditure as % of GDP: 12% (2nd most)
> Annual growth of total health expenditure: +16.4% (the most)
> Life expectancy: 80.6 years (14th highest)
Health care costs in the Netherlands amount to $4,914 per person each year. The Dutch health expenditure is equivalent to 12% of the nation’s GDP — the second greatest relative health expenditure of every nation in the OECD except the U.S. Total expenses jumped by 16.4% between 2008 and 2009, the most among OECD nations. Despite this increase, total out-of-pocket expenses per capita are just $227 per person, the fourth-lowest in the OECD.
> Total expenditure on health per capita: $5,344
> Expenditure as % of GDP: 11.6% (5th most)
> Annual growth of total health expenditure: +2.8% (17th most)
> Life expectancy: 82.3 years (2nd highest)
Switzerland currently spends the third most on health care per capita, or the equivalent of 11.6% of the country’s GDP. Switzerland has one of the most privatized health care systems in the world, with 30.9% of expenses coming out of pocket. Because of the wealth of country, this comes to $1,650 per person, more than double every country in the developed world except the U.S.
> Total expenditure on health per capita: $5,352
> Expenditure as % of GDP: 9.6% (16th most)
> Annual growth of total health expenditure: +8.4% (4th most)
> Life expectancy: 81.0 years (10th highest)
After its neighbor, Denmark, Norway has the most nationalized health care system in the developed world. Of the country’s $5,352 expenditures per person, 84.1% are covered by the public sector. Access to health care in the country is high. There are approximately four physicians per 1,000 people, the third most in the OECD. Despite the high percentage of total costs covered by the public, the nation’s residents still pay more than $800 per person on health care.
1. United States
> Total expenditure on health per capita: $7,960
> Expenditure as % of GDP: 17.4% (the most)
> Annual growth of total health expenditure: +2.2% (14th least)
> Life expectancy: 78.2 years (27th highest)
The U.S. has, by far, the highest total expenditure on health care per capita. America spends approximately $2,600 more per person annually than Norway, the second-highest spender. Only 47.7% of this amount is public expenditure — the third-smallest percentage among developed countries. However, the actual amount of public spending, $3,795, is among the highest. The U.S. also spends the largest amount on pharmaceuticals and other medical nondurables. The country has fairly low rates of doctors and hospital beds relative to its population. It also has the eighth-lowest life expectancy, at 78.2 years.