In health care, cost does not equal quality

Cost and quality are not the same in health care. Many health-care providers charge high prices because they can. However, there are physicians and organizations that deliver high-quality care at 20 percent below the average price. If everyone could do the same, the percentage of GDP devoted to health care would decline from 17 to 13 percent – an annual savings of about $640 billion.

Most Americans have two perspectives on health-care quality and costs: the nation’s and their own. About 80 percent say they are dissatisfied with the cost of health-care nationally, and more than half are dissatisfied with overall quality. However, nearly 9 out of 10 are satisfied with their own insurance coverage and the quality of care they receive. More than half are satisfied with their own health-care costs.

Those who are dissatisfied with national costs point to several culprits. About half blame what they believe are excessive profits for drug and insurance companies. About a third blames fraud and waste, physician and hospital profits and medical-malpractice lawsuits for rising costs. About 30 percent say unnecessary treatments and Americans’ unhealthy lifestyles are boosting costs. Only 28 percent agree with health-policy experts who say expensive technology is the main culprit. One in 8 says higher costs are yielding better care.

The U.S ranks poorly in international comparisons of health systems.  A 2000 World Health Organization report ranked the U.S. 37th in the world. The report measured the extent to which investments in public health and medical care improved health, reduced disparities and protected citizens from medical impoverishment.

The Commonwealth Fund ranked seven industrialized nations in 2010 on quality, efficiency, access to care, equity and the ability to live long, healthy and productive lives. The U.S. was last.

In these rankings, the glaring conclusion is that the U.S. does not create value in proportion to what it spends. While there are certainly inefficiencies in other U.S. economic sectors – such as education, transportation and energy – health care stands as an egregious outlier. However, health-care providers are paid for quantity, not quality, of care. We get what we pay for.