There is an aphorism that all budding entrepreneurs and grizzled veterans alike come to intimately understand: the market never lies.
Americans have among the lowest life expectancy of high-income countries, 78.6 years versus Switzerland for example at 83.6 years. The adult chronic disease burden stands at 28% of the population, compared to an average of 18% across these same countries. Obesity defined as a BMI of 30 or more is at a staggering 40% here, compared to an average of 21% in the group. And yet, over a million people travel to the United States every year for their medical care including heads-of-state, the wealthy and elite who presumably could have received care in their home country, or anywhere else in the world for that matter.
These numbers don’t even include the millions that are cared for by the international satellite campuses of the Mayo Clinic, Cornell, Harvard, and Johns Hopkins systems to name just a few, that have been established to bring American healthcare to the rest of the world.
Over 100,000 Canadians, whose nationalized health system is rated above the United States, cross the border each year for medical care. These medical tourists recognize that on the whole, healthcare in the United States is the best in the world.
The United States leads the world as a juggernaut of medical research and innovation. More Americans have received the Nobel Prize in medicine than Europe, Canada, Japan, and Australia combined, who have double the aggregate population of the United States. Half of the top 10 diagnostic or therapeutic innovations in the past 50 years have come in whole or in part from the US, along with 75% of the top 30.
When it comes to pharmaceuticals, half of the top 30 blockbusters have come from the United States alone. The advanced medical milieu that Americans therefore enjoy has led to the world’s best cancer survival rates, a life expectancy for those over 80 that is actually greater than anywhere else, and lower mortality rates for heart attacks and strokes than in comparable countries.
There are many reasons that have been put forth to explain this dominance, but the most basic and powerful is very likely money. The free market healthcare economy of the United States, along with lower regulatory and tax burdens, strongly incentivizes corporations to focus their business in America.
At a fundamental level, greater financial compensation also provides individuals and their families the potential for a better quality of life, while greater autonomy spurs innovation. This is why the United States is routinely listed as the best country in the world to practice medicine.
One-quarter of all doctors in America are foreign-trained. Licensure is a daunting process that nearly always requires “starting over” for the immigrant physician, who is often fully licensed and practicing in their home country but must now sit for the USMLEs and spend years redoing all of residency and fellowship. Despite this challenge, estimates suggest that over $2 billion is lost annually from physicians leaving sub-Saharan Africa alone to set up shop in the United States.
This so-called brain drain is rampant in India, Mexico and Central America, and is not limited to physicians. In 2014, about 14,000 Filipino nurses left the country while only 5000 graduated nursing school. The United States represents 5% of the world’s population, accounts for around 5% of the world’s disease burden, but employs 20% of the global health workforce.
Contrast this environment with the nationalized health systems of two countries that each year rank higher than the United States: England and Canada. When resources are controlled by a single-payer, queues form and wait times for care invariably lengthen substantially. The NHS itself in England reported that one-quarter of all cancer patients didn’t start treatment on time despite an urgent referral from their physician. Wait times for medically necessary treatments in Canada average three months, which the treating physicians documented as one month longer than clinically reasonable.
Universal healthcare also leads to an increased tax burden. The United States tax rate of 26%/GDP is among the lowest of 34 advanced nations, whereas Canada sits at 32%, England at 34%, and France the second-highest in the world at 45%. Some estimate that a single-payer conversion in America would potentially increase taxes by up to 20%.
For those with the means to pay, there is a booming secondary private insurance industry in most socialized healthcare economies, which has essentially created a two-tier system of “haves” and everyone else.
Self-pay for healthcare in England rises annually by 10% leading to a 50% increase over the last half decade, and this excludes cosmetics or costs paid by the NHS. One result is that nearly all general practices are private now in England, contracting their services out to the government while providing direct-pay services for the affluent.
Another outcome is that 43% of all physicians in England are part time, which usually coincides with the switch to private practice. In Canada, one-third of all healthcare funding is private despite multiple legal challenges to forbid a two-tier system and resultant line-jumping.
All of this is not to say that the American healthcare system is flawless, or that lessons cannot be learned from countries with nationalized care.
Between 1975 and 2010, the number of physicians grew by 150%, while the number of administrators exploded by 3,200%: there are now 10 administrators for every physician in the United States. Administrative costs account for 25% of total hospital expenditures here, while the average among other affluent countries is closer to 10%.
America is also a very litigious society, at great cost to the system. The amount equals 2.5% of total healthcare spending or $60 billion a year, $45 billion of which is “defensive medicine” to avoid lawsuits. One-third of all American physicians have been sued in their lifetime, while that number is 1% for Canadian doctors.
The average malpractice lawsuit in Canada settles for $95,000, compared with close to $500,000 in the United States. And while the adjusted number of uninsured Americans is not the oft-quoted 10% (adjusted meaning those who were not eligible for any aid/coverage, and not offered insurance by any entity) but closer to 1% or around three million, this still should be unacceptable as healthcare is a basic human right.
For generations, the United States has been a shining beacon of healthcare hope, paving the way to healthier, longer living and whose entrepreneurial milieu has led to innovations enjoyed worldwide.
While greater scrutiny over the past few decades have highlighted areas for improvement, the market never lies and recognizes that America is still the best place in the world for healthcare.
Khaled A. Dajani, MD, FASA is an Assistant Professor at Eastern Virginia Medical School, and Educational Co-Director, Pediatric Anesthesiology, Children’s Hospital of the King’s Daughters
Shawn Y. Wang, BS is an MD Candidate, year 4, at Eastern Virginia Medical School
Abhijith Atkuru, BS, MS is an MD Candidate, year 2, at Eastern Virginia Medical School