It is common for health policy experts to argue that US health care spending is wasteful compared to its European counterparts because we are not getting better health for the larger amount of spending taking place here. There is limited evidence to support this claim, and existing evidence in the case of cancer care actually indicates Europeans under-spending rather than US over-spending. Arguments of waste in health care must be more nuanced and distinguish between waste in the public and private sectors.

The United States spends more on health care than other developed countries, about 18% of GDP, but some argue that US patients do not derive sufficient benefit from this extra spending. The high costs of cancer care in the United States are frequently cited as evidence of a poorly functioning health care system, compared to those of other developed countries, e.g. Europe. A common but misguided argument is that, since Americans are not healthier and do not live longer than Europeans, the additional spending in the US represents wasted resources. This assumes that health care is the main driver of health and longevity (which it is not) and that other factors such as genes, diet and exercise, accidents, violence, and harmful drug use are the same across countries.

Therefore, to better judge the relative productivity of health care in the US and Europe, it is necessary to examine the effects of spending in a specific disease area conditional on the same diagnosis. However, in the debate about whether higher US healthcare spending, compared to Europe, is wasteful, little reliable evidence of the comparative benefits of spending in specific disease areas has been generated. Cancer is a good case to consider because it is a leading cause of death across many developed nations. Conditional on a cancer diagnosis, it is plausible that a relationship between spending and survival exists because of differences in cancer care rather than other factors leading to the diagnosis. Nontreatment-related investments by patientsin healthy behavior such as exercise and in other types of preventive activitiesare likely to have a smaller impact on survival compared to actual treatment.

In a paper we published in Health Affairs,*we compared the value of US vs European cancer care in the 1980s and 1990s.** As shown in Figures 1 and 2, we examined survival and spending differences for cancer patients in the United States compared to a similar group of patients from ten European countries.

As the figures illustrate, our study found that US cancer patients both lived longer and spent more than European patients in every year. In addition, the absolute growth in survival gains and costs was larger in the US over the period considered from 1984 to 1999. We calculated the financial value of the additional years of survival in US in order to compare these gains to the costs of cancer care in these countries. The key finding was that, if one utilizes standard value measures for longevity, the value of survival gains in the US exceeded the higher cost growth compared to Europe. In short, the extra spending for the extra living was worth it. In fact, US cancer care generated about $600 billion of additional value compared to Europe for patients who were diagnosed with cancer during this period. The value of that additional survival gain was highest for prostate cancer patients ($627 billion) and breast cancer patients ($173 billion), partly because of their larger prevalence.

Some criticized this study, without carefully reading it, for being driven by earlier diagnosis in the US. If longevity, measured as survival from time of diagnosis, rises faster simply because patients are diagnosed relatively earlier in US, this may create lead-time bias. However, in a companion study we found that the overall gain in survival of US cancer patients was only 20% due to detection of cancers in earlier stages, and 80% due to treatment once detected.*** Quantitatively, early detection does not negate our main conclusion: US cancer patients get more value than Europeans.

To exemplify these findings at the country level, consider Slovakia, which spent $39 per capita on cancer care and averaged 5.5 years life expectancy after cancer diagnosis. Compare this to Sweden, which spent $134 per capita on cancer care and averaged 9.9 years life expectancy after diagnosis. Now consider the US, which spent $207 per capita on cancer care and saw 10.8 years of life expectancy from the point of diagnosis.

See the original post:

Are Europeans Spending Too Little on Health Care Compared to the US?