- Special Reports
The American Health Care Paradox: Why Spending More Is Getting Us Less
We started the book by identifying what many see as a paradox. How could the United States devote so much money to health care and yet rank so poorly relative to other industrialized countries in key indicators of the nation’s health? Per capita, the United States spends nearly double what some of its peers spend, but Americans lag behind in terms of life expectancy, infant mortality, low birth weight, injuries and homicides, adolescent pregnancy and sexually transmitted diseases, HIV/AIDS, drug-related deaths, obesity, diabetes, heart disease, chronic lung disease, and disability rates. (1) Some have argued that Americans’ comparatively poor health is due to the larger proportion of people living in poverty in the United States than in the more generous welfare states of Scandinavia and Western Europe, but this thinking fails to explain why this poorer health ranking holds for Americans who are white, educated, employed, and high-income. (2) We have suggested that previous calculations have omitted an aspect of spending that is critically important for national health outcomes. This is spending on social services, an area in which the United States spends far less relative to its GDP than its peer countries. The new math unraveled the paradox. If we add together what countries spend on health care and what they spend on social services, the United States’ place in the ranking of industrialized countries shifts considerably. This sum of spending is what might be called the national investment in health. In looking at the sum, no longer does the United States appear to be a massively big spender. Americans’ spending on social services is far less per capita than that of counterpart countries. Taking both health care and social service spending into account, the United States spends a fairly average sum compared with its peer countries and, we argue, has fairly average health outcomes as a result.
This finding is consistent with what experts in public health have argued for decades: health is determined by far more than good genes and medicine. The scientific literature estimates that at least 60 percent of premature deaths, for instance, are caused by nonmedical factors. (3) Researchers have estimated that the health returns on education increase the value of educational investments by between 15 and 55 percent. (4) In light of the mountains of other findings like these, it stands to reason that to design an effective system – one that actually delivers health and not merely health care – requires a strategy for addressing social, environmental, and behavioral factors.
Such a strategy would necessitate a more balanced investment formula, allocating funding more equally between medical and nonmedical influences on health. Examples of such models are alive and well around the world. Perhaps the most successful model is that of Scandinavia, where health is viewed more holistically and budget responsibility for both health care and social services is centralized in local government. Of course, Scandinavians still fervently debate health care and social services allocation decisions; however, the discourse regarding these decisions occurs openly in the public sphere. Once consensus is reached in Parliament, local governments can move investments fluidly between sectors to achieve the greatest health value.
A comparative analysis of Scandinavian and American values, however, reveals the depths of the United States’ challenges in casting a health care model to improve its population’s health. Although Scandinavians and Americans shared similar views about personal freedom, competition, political action, and investment in technology, conceptions of health differ markedly. Consistent with the ideology of individualism, the American notion of health emphasizes the illness of the individual, which is to be addressed by medical care delivered through one-to-one doctor-patient encounters. Similarly, health behaviors known to cause harm, such as smoking, drug use, and poor nutrition, are largely viewed in the United States as individual choices and failings, whereas the Scandinavian approach reflects a broader view of health that is predicated upon shared responsibility for the larger community. This conception also recognizes the nonmedical determinants of health, which are best addressed through collective action. Moreover, Americans lack the trust in each other and in government enjoyed in Scandinavia. This distrust may explain the American resistance to shared accountability for health needed to address the social, environmental, and behavioral determinants of ill health.
Recognizing that Americans’ divergent values and history prevent the United States’ outright adoption of the Scandinavian approach, we sought out domestic innovators who were building models of health care delivery based on a new conception of health.
We found exemplars in organizations serving Americans spanning the socioeconomic gradient and in varying states of health. The success of these organizations in providing exceptional care gave us hope that committed providers and managers can find practical means by which to embrace a more holistic view of health, improving health within the populations they serve without adding to the cost – and in some cases, reducing costs. Nevertheless, their work is contained within small microcosms; their long-term viability and the geographic scale-up of the models they have pioneered will be difficult to achieve given existing incentive structures and cultural norms.
We have argued that a paradigm shift in how Americans view health is required for these and other small-scale innovations to grow and have larger impact. Such a shift would be characterized by Americans’ willingness to think broadly about the root causes of ill health and to accept the limits of medicine. Only then could large-scale innovations involving coordination among health care and social service providers be developed, valued, and sustained. New paradigms mean little if not accompanied by concrete action. The United States could benefit from building greater accountability into the financial incentives and rewards governing health care provider organizations. In this area, the United States’ inventiveness and freedom to experiment locally will serve it well. Experimentation with and evaluation of models that reward individuals and providers for addressing deeper determinants of health and joining forces in the pursuit of health are essential to finding an American way to address the spend more, get less paradox….
In the years we have spent conceiving of and writing this book, we have had ample time to consider the criticisms its ideas may face. We have wrestled with our own, similar doubts from time to time. We have wondered if the scope of the work is too large, the goals too lofty, or the implications too dire. At the same time, we have wondered whether we paid adequate attention to certain flashpoint issues, such as mental health and chronic illness, which represent obvious intersections of health and social services. Reconciling and, at times, adapting our views in light of these concerns has been a meaningful exercise that strengthened the logic of our thinking. No doubt, the challenges that lay ahead are considerable, but confronting the deep roots of the spend more, get less paradox is a productive step toward effective reform. At this stage, we thought it wise to include discussion of some of the most pressing and enduring issues, which could not be fully addressed here, to prompt among readers a more authentic analysis of and continued discourse about core challenges.
We have prioritized several potential sources of apprehension concerning the analysis and implications of our work. First, we suspect some readers may be unconvinced by the data presented to support our thesis. Second, we anticipate that American readers in particular may dismiss the arguments in this book as pertinent only to people who face financial hardship and rely on safety net services. Third, we imagine some readers may be paralyzed by the complexity inherent in the relationships among health, social services, and health outcomes, and thus may consider strategic action all but impossible. Fourth, we worry that some readers will become impatient with the lack of a quick fix, and hence withdraw from the national dialogue surrounding national health investment strategy. Last, we are concerned that readers will recognize the advantages of a more holistic approach to health but find the economic reordering that might ensue unpalatable, despite the promise of sustained benefits.
We present here what we believe are strong rebuttals to these apprehensions. We do so in the hopes of overcoming, at least partly, the tendency to disengage with material that elicits psychological discomfort. This discussion aims to hold readers’ feet to the fire, so that each may recognize the roles of the individual and the collective in both creating and addressing the problems of high health care spending and poor health outcomes. Some readers will be loath to accept our arguments without more data. Although the scientific literature provides robust evidence regarding the influence of social, environmental, and behavioral factors on people’s health, (5) comprehensive evaluations that quantify the precise costs and health impacts of broad-based, nonmedical health interventions are less available. Solid housing, a nutritious diet, stable home life, a reasonable amount of sleep, and a steady job have all been linked to improved health so many times6 that the studies are becoming uninteresting for new researchers to pursue.
The evidence concerning the health impact of employment, education, and housing is particularly considerable. Unemployed and underemployed segments of the population have been shown to die younger and be in worse health throughout their lives than are those more gainfully employed, and this finding is persistent across countries and times. Some of this effect is attributable to the poverty that accompanies unemployment; however, even among people who were employed but lose their jobs unexpectedly, the health effects are marked. In a series of studies, researchers have documented that involuntary job loss in middle age is linked with poorer health, including increased depressive symptoms and two to three times’ increased risk of heart attack and stroke over ten years. Health effects of education are similarly impressive. Education has been shown to be associated with longevity, and some of this effect is due to its influence on employment and income. Recent evidence, however, is also revealing the independent effect of education on health and length of life; even after accounting for socioeconomic status, occupation, and race, the effect of education is robust. Many studies have shown that the number of years of completed schooling is strongly predictive of good health.
More relevant for our purposes, studies are beginning to show that increased education can lower health care spending….
(1) S. H. Woolf and L. Aron, eds. U.S. Health in International Perspective: Shorter Lives,Poorer Health (Washington, DC: National Academies Press, 2013).
(3) J. M. McGinnis, P. Williams-Russo, and J. R. Knickman, “The Case for More Active Policy Attention to Health Promotion,” Health Affairs 21, no. 2 (2002): 78–93; B. D.Smedley and S. L. Syme, Promoting Health: Intervention Strategies from Social and Behavioral Research (Washington, DC: National Academies Press, 2000); D. R. Williams, M. B. McClellan, and A. M. Rivlin, “Beyond the Affordable Care Act: Achieving Real Improvements in Americans’ Health,” Health Affairs 29, no. 8 (2010): 1481–88.
(4) D. M. Cutler and A. Lleras-Muney, Education and Health: Evaluating Theories and Evidence(Cambridge, MA: National Bureau of Economic Research, 2006); for extensive review of the academic literature on the influence of education, housing, welfare, income transfers, and civil rights on health, see R. F. Schoeni et al., Making Americans Healthier: Social and Economic Policy As Health Policy (New York: Russell Sage Foundation, 2010).
(5) The literature in this area is broad and deep; for more detail, see Smedley and Syme, Promoting Health; D. R. Williams and P. B. Jackson, “Social Sources of Racial Disparities in Health,” Health Affairs 24, no. 2 (2005): 325–34; M. Marmot, “Social Determinants of Health Inequalities,” Lancet 365, no. 9464 (2005): 1099–1104; A. L. B. Pavão et al., “Social Determinants of the Use of Health Services Among Public University Workers,” Revista De Saúde Pública 46, no. 1 (2012): 98–103; Schoeni et al., Making Americans Healthier; S. H. Woolf and P. Braveman, “Where Health Disparities Begin: The Role of Social and Economic Determinants - and Why Current Policies May Make Matters Worse,” Health Affairs 30, no. 10 (2011): 1852–59.