Will Americans Ever Control as Many of Their Own Health Dollars as Others?

May 4, 2012

Americans control a smaller share of their health spending than do residents of most other developed countries.  The gradual sidelining of out-of-pocket spending by American health care consumers reduces the potency of market forces in aligning supply and demand, and contributes to inflated health care prices, says John R. Graham, director of health care studies at the Pacific Research Institute.

In 2008, the United States had one of the lowest percentages of total health care spending that was directly controlled by consumers among developed countries.

  • Switzerland leads the pack for individual control over health care spending: since 1997, roughly one third of all spending on health care has been out of pocket.
  • In all other countries, out-of-pocket spending has clustered around 15 percent of total health spending.
  • Among these, the United States has fallen to the bottom of the pack, with only 12 to 13 percent of its spending being controlled by individuals.

Perhaps more disheartening are the trends in individual control, which show that out-of-pocket spending has decreased rapidly over the past 20 years.  This signifies a growing hostility among the governments of developed countries toward individual control of health care consumption.

  • In the late 1980s, the United States allowed patients to control more health spending than any other country, except Switzerland, only to be among the worst 20 years later.
  • The share of U.S. health spending controlled directly by patients has dropped by almost half in 20 years.
  • No other country comes remotely close to this failure of consumer direction.
  • Indeed, only three of the nine countries have experienced a drop in patient control over that period, and these decreases were either moderate or occurred in countries that had high patient control in the first place.

Attempts to reverse this trend with tools such as Health Reimbursement Arrangements, Flexible Spending Arrangements, Medical Savings Accounts and Health Savings Accounts have not resulted in systemic change.

Source: John R. Graham, "Chart Focus: Will Americans Ever Control As Many of Our Own Health Dollars as the Swiss, the Swedes, or the Canadians?" John Goodman's Health Blog, April 2012.

For text:

http://healthblog.ncpa.org/what-is-unique-about-u-s-health-care-lack-of-patient-control-of-spending/

 

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