Releasing a study yesterday, the powerful Business Roundtable added fuel to the argument pressed by President Barack Obama—that rapidly growing medical expenditures pose a major threat to the long-term economic health of the United States. Adding a new international dimension to the estimated impact of rising health expenditures, the Business Roundtable report found that the United States consumes a much larger share of national income to achieve health and quality of care that are no better, and are in some cases worse, than other countries.
The Business Roundtable (BT), whose members are CEOs of America’s largest corporations, is a prestigious body that wields considerable weight in public policy circles. Its new report—entitled “The Business Roundtable Health Care Value Comparability Study”—is authored by two consultants of the Mercer Health and Benefits Company, Arnold Milstein and Carrie Hoverman Colla. A national expert advisory panel helped to design the study.
The BT study supplements another recent report that arrived at similar conclusions and—more importantly—has had profound influence on the thinking of Obama’s White House staff of economists and analysts. This earlier study, conducted by the McKinsey Global Institute, estimated that the United States spends $643 billion more every year on health care than its peer industrialized countries, after adjustment for wealth. Two former McKinsey principals who worked on the study—Diana Farrell and Robert Kocher—recently joined the staff of the National Economic Council in the White House.
In commissioning the researchers to conduct the study, the Business Roundtable sought to develop a systematic and ongoing method for measuring the impact of health care spending—and the return on that investment—on U.S. global economic competitiveness. After gathering a large amount of data on various measures, the researchers and their panel of national experts developed a measure of the “value” (cost and performance) of the U.S. health care system relative to those systems of other countries, and the resulting impact on U.S. global economic competitiveness.
The BR report concludes that, after combining 19 internationally reported measures in a weighted scale that takes into account both the spending on, and performance of, our health care system, “the United States stands at a 23% disadvantage relative to five leading economic competitors: Canada, France, Japan, Germany, and the United Kingdom (the so-called G-5 group); and a 46% disadvantage relative to the emerging competitors of Brazil, India and China (BIC).”
The report adds: “As a group, workers and employers in G-5 countries spend approximately 63 cents for every dollar we (U.S.) spend on health care. The gap is even wider when we look at the BIC (Brazil, India, China) group; they spend just 15 cents for every dollar we spend on health care. These health spending gaps persist after adjustment for our higher per capita GDP (Gross Domestic Product).”
The 19 measures upon which the findings were based included two spending measures: (1) employer-paid health benefits per hour in manufacturing (the U.S. industry most exposed to exports); and (2) a broader measure of GDP-adjusted per capital health spending. The 17 other measures included indicators of national health in the participant countries, including adult mortality rates; healthy life expectancy after birth; tobacco consumption; mean blood pressure; mean cholesterol; medical errors and adverse effects from medicines.
The Business Roundtable plans to conduct future studies using the same measures to determine whether the competitiveness of the U.S. has improved or declined over previous findings.