Globalist Perspective

Health Care and Productivity

Productivity means better health care costs less, not more!

Credit: Paul Matthew Photography-Shutterstock.com

Takeaways


  • The practice of medicine is cultural. The same diseases get managed differently across nations.
  • Among the 34 OECD member countries, the United States has the lowest health care productivity.
  • The United States has the highest productivity in the world for managing breast cancer, but the lowest productivity in diabetes.
  • Countries with the highest health care productivity invest in prevention, early diagnosis and treatment.
  • Countries that offer the highest quality typically spend less, not more!

Arguably, the United States has the highest share of world-class hospitals. Ask health care professionals about the best hospitals in the world and you will hear names such as John Hopkins, MD Anderson Cancer Center, Harvard Medical School and the Cleveland Clinic.

With $800 billion spent annually on U.S. hospitals, the United States has the best-funded hospital infrastructure in the world.

Why, then, does the United States only manage to have the same life expectancy as Cuba, an economically underdeveloped nation? Is the U.S. health care system doing its job right? To put the question more broadly, how can we judge the performance of a health care system?

Health care systems have one primary purpose – to keep people healthy and to do this cost-effectively. In 1996, McKinsey introduced a metric called “health care productivity” to quantify this.

This metric measures the reduction of disease burden achieved for every dollar spent in health care. Simply put, a good health care system will have a high level of health care productivity.

High-income countries’ duality in productivity

Stunningly, among the 34 OECD member countries, the United States has the lowest health care productivity. At first glance, this could lead one to conclude that the U.S. health care system is a total failure.

But if we measure productivity by disease condition, a slightly different and more nuanced picture emerges. The United States has the highest productivity in the world for managing breast cancer, but the lowest productivity in diabetes!

We see this duality in almost all high-income countries. Switzerland is the most productive country in the world for treating strokes, while being very poor at breast cancer. Canada is most productive in managing high blood pressure, but very poor in schizophrenia. The UK is world leader in managing diabetes, but does a poor job at handling asthma.

I am not arguing that the United States health care system does not have systemic issues. Issues such as defensive medicine (in response to a highly litigious legal environment) and lack of care coordination are well recognized.

In fact, all health care systems around the world have systemic issues. The point here is that, even within these constraints, they can do well in managing some diseases. The question then becomes, why do some countries succeed, while others do not?

The common thread: prevention

The reasons are multifactorial, complex and they vary from one disease to another. However, we see that there is a common element in all success stories – preventing a disease or keeping it in the mildest form possible.

Prevention through healthy diet, exercise, vaccination and reducing exposure to alcohol/ tobacco has high impact across diseases. An unhealthy diet is the biggest risk factor in the majority of countries. When prevention fails, early diagnosis and treatment are critical.

Two examples

Breast cancer: The United States is one of the highest adopters of mammography. Sixty-seven percent of women above 40 years of age had a mammogram in the past two years. This effort for early diagnosis and access to innovative therapies was critical for this success of the U.S. health care system.

Chronic obstructive pulmonary disease (COPD): If not appropriately treated, COPD progresses to severe stages that inflict suffering and hospitalization. Flu infections also deteriorate the health of COPD patients and many end up in emergency rooms. France is the world leader in managing COPD because it has a high utilization of spirometry and flu vaccination. Eighty-five percent of French patients receive flu vaccines compared to 45% in the United States. COPD is now the 4th leading cause of premature mortality in the United States.

What do we learn from all this?

  • The practice of medicine is cultural. The same diseases get managed differently across nations.
  • This leads to significant differences in quality and cost of care.
  • No country is good at managing all diseases.
  • Countries that offer the highest quality typically spend less, not more!
  • Countries with the highest health care productivity invest in prevention, early diagnosis and treatment.

Health care is at a crossroads. Demand for healthcare will significantly increase due to aging populations, rising obesity levels and high smoking rates. Already burdened with rising healthcare costs, policy makers are wondering how to finance healthcare in the future.

Most people think that we will need to make trade-offs on quality and costs. Our research points in a different direction – good quality health care coexists with lower costs. The way to reduce health care costs is to improve quality, not reduce it.

In order to succeed, however, we need to change our definition of health care. Health care does not start in hospitals. It starts at home, in health clubs and in our office space.

While we tend to invest in late stage care, many high-income countries do not invest enough in prevention and early interventions. Only 3-5% of total health care spending is directed to primary prevention and screening in the OECD group of nations.

This needs to change. Then the rest, including better quality and lower costs, will follow.

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Responses to “Health Care and Productivity”

Archived Comments.

  1. On October 9, 2013 at 1:44 pm Richard responded with... #

    Very nice article. Prevention it is. We have been too many hospitals, who by defentition thrives on people getting sick and getting expensive treatments.

  2. On October 9, 2013 at 3:02 pm Anselmo Heidrich responded with... #

    Firstly , the data used for comparisons between countries , provided by the UN , have as a primary source , research services of the countries in the case of Cuba , are not critically evaluated by an independent media , because it is a dictatorship . You rely on data supplied by dictators ?

    Second, the U.S. is the country that receives immigrants in the world and , among them , people who come from societies miserable , subject to conditions that are unable to private health plans and often already have their health compromised tending a short life expectancy. On the other hand, as in Cuba there is a significant rate of emigration and falling birth rate , the number of older people tends to increase in proportional terms , ie, life expectancy increases not because new generations have access to better health services , but because a significant portion of individuals that country runs away , the other is not born in the past and more like the older ones are becoming a group higher percentage .

    There are many ways to tell a lie, one of them is real small plots highlighting the general context .

  3. On October 9, 2013 at 6:32 pm Carlos Valderama responded with... #

    I agree with author and disagree with Anselmo. Anselmo challenges the data that is verified by Institute of Health Metrics and Evaluation, a Washington based agency that is conducting the disease burden study across the world.

    http://www.healthmetricsandevaluation.org/sites/default/files/country-profiles/GBD%20Country%20Report%20-%20Cuba.pdf

    This data is also used by World Bank, Gapminder foundation and other respectable organizations. And what does Anselmo provide as an alternative? Qualitative assessments with no backing!

    Dictators cannot simply fake data – if that was the case Cubans could have had the high per capita GDP too, which is not the case. When Sadam Hussein said he had no weapons of mass destruction, we disbelieved him too and killed a hundreds of thousands of people. We need to change our mind set and relinquish the moral high ground.

  4. On October 19, 2013 at 8:12 pm wadih fayad responded with... #

    i think that a good health care system is not only the one that use prevention including numerous programs to have a good diet, but a program that take all diseases, prevention of bad medicaments, reorientation for medicine students, taxes, costs, …, i don’t think that if it takes the health care as producing in a farm, more healthy patients less treasury costs this is a good idea, because it can lead to some deviance !