Health Care Spending Flattens as U.S. Results Stagger

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A new study from research firm IMS shows that new and better treatments for disease and a dip in physician visits steadied health care spending in the United States last year. It should be considered good news for a country in which the costs of health care have run wild for years. “The Use of Medicines in the United States: Review of 2011” reports, among other things, that “physician office visits and non-emergency room hospital admissions dropped.” The trend may not matter much, except financially. The U.S. continues to be the nation that spends the most per capita for medical treatment only to get mediocre results.

IMS reports that “Total healthcare system spending on medicines reached $320 billion in 2011, up 0.5 percent on a real per capita basis, or 3.7 percent in nominal terms.” The extremely small rise was attributed in part to a rough economy. That means a recovery could cause costs to rise again.

The Commonwealth Fund issued research in 2011 that showed that, in 2008, Americans spent at least twice as much as all other developed nations on a per capita basis. And Americans got poor results compared to most of the nations. Studies by the Organisation for Economic Co-operation and Development and the Council on Foreign Relations found about the same. The OECD study reported that, among its 34 members, Americans spent $8,000 a year in 2010 on health care, the most of any nation by far. Life expectancy, however, was the eighth worse.

The IMS study explains that new medications and a trend toward fewer physician visits could be a key to health care spending, which may eventually stabilize on a per capita basis in the U.S. The research does not discuss that these costs are still extremely high compared to the rest of the developed world. Most data demonstrate that U.S. health care spending has little relationship to patient health, so a cessation in its increase is only good economic news. The trend almost certainly will not alter results.

Douglas A. McIntyre