Richard Cooper, M.D., in his new book, Poverty and the Myths of Health Care Reform, writes that instead of focusing on waste and overuse to reduce spending, American healthcare leaders should start with a larger cause of inefficient healthcare use – poverty.
However, the Lown Institute writes, while “Cooper is right that poverty and other socioeconomic factors are powerful determinants of health outcomes, there is less evidence for his claim that a healthier country would necessarily lead to lower healthcare spending.
“There’s a growing body of evidence that social spending is related to health outcomes. Countries that spend more on social services (such as pensions, job training, and food assistance) relative to healthcare spending have higher life expectancy and lower infant mortality rates. This effect holds when looking at long-term health outcomes, comparing the U.S. to other high-income democratic countries, and even comparing states within the U.S.
“But the converse is not necessarily true: that higher social spending will automatically lead to lower health care spending. This relationship is especially tenuous in the U.S. healthcare system, where much of the care that is delivered is unnecessary and driven more by the supply of resources (such as hospital beds and physicians) and less by the needs of patients. Harmful and unnecessary care is rampant, and perhaps surprisingly, it afflicts low-income as well as high-income patients.
“To reduce spending we need to take a multi-pronged approach, working to reduce overuse in healthcare while fighting for more investments in social services. We spend at least $200 billion each year on unnecessary and harmful care. Imagine if we could extract that waste out of the healthcare system and spend the money on public goods that can help all Americans have an opportunity to live a healthier life.”
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