Fact and Fiction: Debunking Myths in the US Healthcare System

Umut Sarpel, MD; Bruce C. Vladeck, PhD; Celia M. Divino, MD; Paul E. Klotman, MD


Annals of Surgery. 2008;247(4):563-569. 

In This Article

Myth 5: We Just Cannot Afford to Cover Everyone

This myth is founded on the belief that you have to pay more to get more; because the United States already spends too much on healthcare expenditures, the nation cannot afford to cover even more of its citizens. But clearly this logic cannot be entirely sound: every other industrialized nation in the world offers universal coverage, and all accomplish it with lower national health expenditures than the United States. Much of our nation's healthcare money is spent on costs that arise directly from a multipayer system with limited coverage. It is vital to identify these spending sinks to find the funds that will provide for universal coverage. Painless cost control measures reduce costs without a resultant decrease in quality of care. Established targets for painless cost control include providing preventive care, training more generalists, controlling drug prices, decreasing unnecessary procedures, and reducing administrative costs in health insurance.

On average, Americans pay more for the same medications than do patients in other countries.[44,45] This disparity has been defended by the assertion that the United States supports the world by developing more new pharmaceuticals, and therefore these research costs result in higher drug prices. This altruistic rationalization is unfounded: combined, the European nations produce on average the same number of new pharmaceuticals per year as the United States.[1] Drug prices can be lowered by preventing pharmaceutical companies from advertising directly to the public, by increasing use of generic drugs, and by collective bargaining though a centralized healthcare system.

End-of-life extreme care is another area of financial inefficiency. Thirteen percent of Medicare's total funds are spent on healthcare provided during the final 60 days of life. Although we pride ourselves on providing cutting-edge technology to our patients, there is clearly a point where technology no longer provides the best care for our patients' needs. Lower-cost measures that increase the quality of remaining life should take precedence over high-cost measures that only extend quantity not quality of life.

Another potential method of cost-control lies in reducing the number of unnecessary medical procedures performed in the United States. The rate of coronary angioplasty in the United States is 300% the rate in Canada, with no associated increase in life expectancy. In 2002, 26% of all births in the United States were by cesarean section.[46] This rate is twice that seen in the next highest country.

Despite these figures, the cost problem in the United States is not solely a matter of overutilization. Other countries with far lower healthcare expenditures have longer hospital stays, perform more imaging, and prescribe more medications than the United States.[44,45] And so even more significant than overuse is overpricing. The United States spends more on healthcare without providing more services than other countries do. This suggests that the difference in spending is largely attributable to higher prices of goods and services: hospitals are more expensive and patients are treated more intensively.[9]

Higher prices for medical goods and services are generated by the incredible complexity of the US system. Whereas in other countries governments bargain directly with suppliers, in the US health system money flows from patients to providers through a vast network of middlemen. This highly fragmented system weakens buying power and results in overall higher prices of goods.

Real-life lessons on cost control can be gleaned from Taiwan's experience. In 1995 Taiwan transitioned from a US-style system to a single-payer system with universal coverage, similar to the Canadian system. Before the switch in 1995, less than 60% of the population was insured. By 2001, 97% of the population had health coverage.[47] What is remarkable is that this marked expansion in coverage was accomplished with essentially no change in national healthcare expenditures.[47]

It is important to recognize that, in one form or another, we already pay for the health costs of the uninsured. The Institute of Medicine estimates that the value of covering the uninsured is $65 to $130 billion per year.[48] A substantial portion of the cost of universal coverage, approximately half, is already in the system and is being spent by the government on the healthcare costs of the uninsured.[49] It is a matter of redirecting funds to create the greatest good for the most people.


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