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Are Americans getting the best bang for their health care buck?

According to a recent study from the Commonwealth Fund, the answer is a decisive No.  

The report, "Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally," includes 80 indicators, grouped into five dimensions of performance: quality, access, effi­ciency, equity and healthy lives.

While there is room for improvement in every country, the U.S. stands out for its poor return on investment in the health care sector. U.S. health care payers—individuals, Medicaid, Medicare, private insurers, etc.—do not get good value for their health care dollars, ranking last or close to last across the board despite spending $8,508 per capita on health care in 2011, according to the study. 

On indicators of efficiency, the U.S. ranks last among the 11 countries in the study, with the United Kingdom and Switzerland ranking first and second, respectively. For example, the U.S. has poor performance on measures of national health costs, such as the health expenditures as percent of gross domestic product (GDP). Other inefficiencies cited included administrative hassles, avoidable emergency room use and duplicative medical testing.

Not all the news is bad. The U.S. fared better when looking at quality of care. Compared with the other 10 countries, the U.S. performed comparatively well on provision and receipt of preventive and patient-centered care. While there has been some improvement in recent years, low scores on safe and coordinated care pull the overall U.S. quality score down.

The U.K.’s top billing has raised some eyebrows, according to Yevgeniy Feyman from the Manhattan Institute, a market-based think tank. Whether a centralized U.K. system truly ranks higher than a more market-based system like high ranking Switzerland is subjective. What the study clearly shows, however, is that the U.S. system ranks last in too many areas, he says.

“The U.S. health system is fragmented. It looks as if it was designed by accident. Medicaid, Medicare and private insurance operate like completely different systems with different outcomes and varying quality,” he adds.

Lead study author Karen Davis agrees: “It is disappointing, but not surprising, that despite our significant investment in health care, the U.S. has continued to lag behind other countries.”

The report was also produced in 2004, 2006, 2007, and 2010, with the U.S. ranking last in each of those years. Four countries were added to this year’s report: Switzerland and Sweden, which followed the U.K. at the top of the rankings, and Norway and France. Australia, Germany, the Netherlands, New Zealand and Norway were in the middle of the pack, while Canada scored just above the U.S. at the bottom.

As in previous years, Feyman thinks it is very important to remember what this report is examining. “This study looks at the health system, not the research and development indicators, such as medical patents and new technologies. Policymakers have to decide IF, and it is a big IF, there is a trade-off between an equitable health care system and a more robust medical research and development environment.”

However, Commonwealth Fund President Dr. David Blumenthal sees the chance for improvement in both equity and R&D with passage of the Affordable Care Act.

 “Now that millions more Americans have good coverage, we have to invest in our health care delivery system to be sure all patients—and especially those with the greatest need and whose care is the most costly—can get the high-quality, well-coordinated health care they need. Those kinds of improvements will go a long way toward improving people’s health while making efficient use of our precious health care dollars,” said Blumenthal.

Melissa Hansen is a program principal in NCSL's Health Program.

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Posted in: Public Policy
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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.