Analysis shows current national health spending is unbalanced, often wasteful
Nationally, too much money is being spent on certain aspects of health care, and not enough on other factors that are vital to maintaining health and well-being, according to a recent commentary from researchers at the University of Wisconsin–Madison and ReThink Health.
David Kindig, MD, PhD, professor of population health sciences at the UW School of Medicine and Public Health, and Bobby Milstein, PhD, MPH, director of system strategy for ReThink Health at The Rippel Foundation, examined health care spending at the national level, in addition to how much is being spent on other factors like behavioral, social, economic and environmental conditions that impact human health.
ReThink Health, a collaborative initiative to reimagine and transform health across the United States, is an initiative of the Fannie E. Rippel Foundation, which was founded in 1953 to seed innovations in health.
The commentary appeared in the April issue of the journal Health Affairs.
The United States spends about $3.3 trillion each year on health care, according to the latest national expenditure report, and a large portion of that amount is spent on treatment and diagnosis of diseases, with comparatively little spent on addressing the factors that produce health and well-being in the first place.
“The limitations of this partial view of cost accounting are becoming increasingly clear, as decades of research have shown that health is shaped far more by behavioral, socioeconomic and environmental factors than by clinical care alone,” according to the paper.
The authors said while certain aspects of health care are necessary, a great deal of money is spent on health care that is not effective, necessary or preventable.
The National Academies of Science, Engineering and Medicine, in Washington, concluded in 2012 that the U.S. spends at least $750 billion annually on care that either doesn’t work or is actually harmful, according to the report.
Additionally, the U.S. is a global outlier for inefficient health care spending, the paper states.
“In 2015 the U.S. spent 17.2 percent of its gross domestic product on health care – more than eight percentage points more than the Organization for Economic Cooperation (OECD) average. In the same year, U.S. life expectancy was 78.8 years – two years less than the OECD average,” the reports said.
To remedy the spending imbalance, the solution is not a singular policy decision or directive. Rather, leaders across multiple sectors could invest in a blend of solutions to develop a balanced distribution of money to care for urgent needs, as well as to prevent illness and assure the conditions that we all depend on to be healthy and well.
“There is both an art and a science to making judgments about portfolio design,” the authors said in the paper.
Historically, the health system has shown that balanced investment and cooperation between different entities across the health landscape can deliver important outcomes.
“Landmark achievements in the health arena have demonstrated a similar capacity to channel resources into a portfolio of combined actions – for example, in the cases of smallpox eradication, comprehensive tobacco control, and HIV community planning,” the report said.
Balanced investment in health and well-being must be supported and negotiated politically, according to the paper. It can’t be the responsibility of any one party but instead requires more interdependent partnerships, the authors contend.
“The field of population health cannot reach its full potential if it is actually or perceived to be dominated by liberals; therefore, it is necessary to find common ground by understanding and honoring those values that conservatives consider important,” the report said.