Why is U.S. healthcare so expensive as compared to Europe?-Keenan Cromshaw

Keenan Cromshaw

Why is U.S. healthcare so expensive as compared to Europe?

  1. “ObamaCare Insurance Premiums.” Obamacare Facts. Web. 25 Jan. 2016. <http://obamacarefacts.com/obamacare-health-insurance-premiums/>.

In this article about Obama Care, we see that AVERAGE healthcare premiums across the U.S. are rising steadily since the year Obama Care has been passed. We see that lower income families and small businesses may see a decrease in premium costs, but higher income families and businesses have a large increase in healthcare costs. Average premiums also vary greatly from state to state.

2.  “Economic Costs.” Obesity Prevention Source. 2012. Web. 25 Jan. 2016. <http://www.hsph.harvard.edu/obesity-prevention-source/obesity-consequences/economic/#references>.

This article explains that obesity costs in the U.S. as a percentage of healthcare spending are higher than every other developed nation, which amounts to over $190B (2005 data) per year in healthcare costs. This is a primary cause in the higher cost of healthcare due to diseases related to obesity, such as diabetes, cancer, and hypertension. For example, people who suffer from these diseases must receive certain expensive treatments and medications to reduce their specific condition, such as insulin pumps for diabetics.

3. The Global Obesity Picture » The Downey Obesity Report.” The Downey Obesity Report RSS. Web. 25 Jan. 2016. Published June 24th, 2012. Morgan Downey. <http://www.downeyobesityreport.com/2012/06/the-global-obesity-picture/>.

This article presents data that shows the U.S. has a higher obesity rate than any other developed nation, supporting the claim that obesity rates are extremely high in the U.S. as compared to Europe and thus raise healthcare costs.

4. “Diabetes Prevalence – Country Rankings.” Diabetes Prevalence – Country Rankings. N.p., 2010. Web. 27 Jan. 2016.

This information sheet shows the prevalence of diabetes among every nation in the world. The data indicates that the U.S. has a significantly higher rate of diabetes than any other European nation, driving up medical costs due to costs associated with diabetes, such as doctor appointments, insulin pumps, etc. This trend in diabetes is likely due to the high rate of obesity in the U.S.

5. Tursman, Judy Packer. “The Defensive Medicine Balancing Act.” Medical Economics. 09 Jan. 2015. Web. 25 Jan. 2016.

This article explains that “defensive medicine” in the U.S. may cost anywhere between $54 and $650 billion. This is mainly caused by an increased number of unnecessary tests and procedures motivated by a variety of factors. Some of the main factors for this increase in defensive medicine are the increased amount of doctors who fear malpractice lawsuits, the sheer uncertainty of a condition, and the lack of patient-physician communication.

6. Herrick, Devon M. “Unnecessary Regulations That Increase Prescription Drug Costs.” Unnecessary Regulations That Increase Prescription Drug Costs. N.p., 07 Mar. 2013. Web. 25 Jan. 2016.

This article explains that increased government regulation has decreased competition and consumers’ buying power, raising costs of pharmaceuticals dramatically through a variety of methods. Though the government has good intentions, many of its policies have decreased the competition between companies and thus has raised the cost of pharmaceuticals.

7. “U.S. Pharmaceutical Industry – Statista Dossier | Statista.” Statista. July 2015. Web. 27 Jan. 2016. <http://www.statista.com/study/10708/us-pharmaceutical-industry-statista-dossier/>. link to the PDF of graphs are found in the website (linked by the url)

In this data sheet by Statista, we see multiple graphs of statistics about the pharmaceutical industry in the U.S. and in the rest of the world. The data shows that the U.S. owns approximately 40% of the pharmaceutical market value, sells almost twice as much pharmaceuticals ($365 billion) as all of Europe COMBINED (216 billion), and spends approximately $67 billion (about %17.9 of total pharmaceutical revenue) annually in pharmaceutical research alone. The U.S pharmaceutical market also contributes the most to pharmaceutical market growth (40%), showing that the U.S. has more robust research, development, and opportunity for pharmaceutical companies. Furthermore, the top 20 most used drugs in the U.S. are owned primarily by brand name pharmaceutical companies, which typically have much higher prescription drug costs for the same drug. Lastly, the U.S. pharmaceutical industry has a very large number of cancer related medicines (which are typically more expensive) in development, which would drive up costs.Based on http://www.census.gov/popclock/ population data (approximately 323 million people), the U.S. spends $1130/person in pharmaceutical costs, while Europeans spend $290/capita.

8. “Analyzing Brand-name and Generic Drug Costs in the U.S. and Eight Other Countries – Knowledge@Wharton.” KnowledgeWharton Analyzing Brandname and Generic Drug Costs in the US and Eight Other Countries Comments. 19 Nov. 2003. Web. 28 Jan. 2016. <http://knowledge.wharton.upenn.edu/article/analyzing-brand-name-and-generic-drug-costs-in-the-u-s-and-eight-other-countries/>.

This study explains discrepancies in average costs of U.S. generic prescription drugs vs. average costs of generic European prescription drugs. The study shows that U.S. generic drug prices are MUCH lower than brand name prescription drug prices and that the U.S. prescribes a higher percentage of these drugs than other European nations. Furthermore, generic drug prices are even lower than European nations’ prices. The cost of high prescription costs in the U.S. can partially be attributed to the fact that the majority of the most popular drugs in the U.S. are sold by brand name pharmaceutical companies and not generic drug companies.

9. Squires, David A. “Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality.” Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality (2012): n. pag. May 2012. Web. 27 Jan. 2016.

This article explains that higher costs in medical care can partially be attributed to a higher number of advanced medical diagnostic technologies (MRIs, CT scanners, PET scanners, and mammograms) per capita than any other European nation and also a greater UTILIZATION of these technologies in the U.S. than any other European nation. The U.S. does have better cancer survival rates (due to higher cancer treatment costs) but overall life expectancy is lower than many of these European nations.

10. Lafortune, Gaetan, Gaelle Balestat, and Anne Durande. “Comparing Activities and Performance of the Hospital Sector in Europe: How Many Surgical Procedures Performed as Inpatient and Day Cases?” Comparing Activities and Performance of the Hospital Sector in Europe: How Many Surgical Procedures Performed as Inpatient and Day Cases? (n.d.): 18. Dec. 2012. Web. 28 Jan. 2016.

This factsheet shows data about certain surgeries performed in many European nations. The factsheet also verifies and helps to adjust for discrepancies in the way surgeries are measured. Compared to U.S. statistics, the average number surgery procedures per 100,000 people is much higher, thus driving up costs.

11. “Inpatient Surgery.” Centers for Disease Control and Prevention. Centers for Disease Control and Prevention, 2010. Web. 28 Jan. 2016. <http://www.cdc.gov/nchs/fastats/inpatient-surgery.htm>.

This CDC factsheet shows that Americans, on average, have more surgical procedures done per capita than European nations especially for spinal fusion and knee replacement. This drives up healthcare costs significantly.

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