US healthcare system among least cost-effective in reducing mortality

August 26, 2011

The United States healthcare system is one of the least cost-effective in reducing mortality rates; while the United Kingdom is among the most cost-effective, according to a recent study published in the July issue of Journal of the Royal Society of Medicine Short Reports.

The US healthcare system is one of the least cost-effective in reducing mortality rates; while the United Kingdom is among the most cost-effective, according to a recent study published in the July issue of Journal of the Royal Society of Medicine Short Reports.

The study compared the United States, United Kingdom, and 17 Western countries' efficiency and effectiveness in reducing mortality over a 25-year period.

To determine cost-effectiveness, each nation's GDP health expenditure (GDPHE) was used as the economic input. Clinical outputs were ‘adult’ (15 to 74 years) and ‘older’ (55 to 74 years) mortality rates based upon 3-year average mortality rates for 1979 to 1981 vs 2003 to 2005. A cost-effective ratio was calculated by dividing average GDPHE into reduced mortality rates over the period.

For output, the investigators found that the majority of other countries had significantly greater mortality rate reductions than the United States in relation to both ‘adult’ and ‘older’ people. Every country's mortality rate fell substantially; but 15 countries reduced their mortality rates significantly more than the United States, and United Kingdom ‘adult’ and ‘older’ mortality rates fell significantly more than 12 other countries.

The input data showed that the United States had the highest current and average GDPHE (15.3% and 12.2%, respectively); the UK had the 10th highest current GDPHE of 19 countries (9.3%), but ranked 16th with Finland and Ireland for average GDPHE at 7.1%, which was still below the rest of the Western countries' average of 7.4%.

The greatest cost-effectiveness, indicated by the biggest ratios, was found for Ireland, United Kingdom, and New Zealand at 1:1,817, 1:1,490 and 1:1,451, respectively. The smallest ratios, indicating least cost effective, were found for Portugal, Switzerland, and the United States at 1:347, 1:434 and 1:515, respectively.

“The UK results appear to be at odds with the recent high-profile debate about cancer survival rates, yet in terms of actual cancer mortality rates <74, rather than the more ambiguous ‘survival’ rates, the UK had better results than the USA, which appears to be linked by major additional funds going to cancer care,” the authors wrote.

The study also noted that the majority of the other countries are mainly ‘public’ health systems which are likely to have less productive inefficiency, because it avoids the inherent market failures related to profit-making, which is necessary in the ‘private’ insurance system. Although, in theory, a ‘private’ system relies on competition to reduce costs, the authors added inherent market failures of ‘asymmetric information’ and ‘adverse selection’ factors will always be inherent market weaknesses within the whole system, and may partially explain the differences in the observed cost-effectiveness results of the United States and the United Kingdom.