The 2010 World Report by the WHO advised international governments on ways to finance healthcare. Improved financing in healthcare is essential to providing more access to care and higher quality care. Spending money more efficiently is an essential component for sustained improvement.[i]
Healthcare spending has been on the rise for decades and each year has been growing faster than the GDP. The chart below from the Commonwealth Foundation illustrates this growth per capita. The WHO’s World Report states that 20-40% of global health spending is wasted. Billions of dollars are lost due to inefficiencies in the health systems. These same inefficiencies result in lower quality care and poorer outcomes. [ii] In other words, money is being thrown away and people are dying unnecessarily. Improving efficiency of the health systems is necessary to decrease waste and improve outcomes.
Single payer systems due to their design are naturally more efficient than multiple payer systems. This efficiency in one factor that has contributed to reduced spending in single payer systems. One example of the differences in cost between these two different health systems is the difference between the United States and Canada. Between 1970 and 2004 US healthcare costs increased from 7% of GDP to 15.3% of GDP. During the same time Canada shifted from a multiple payer system to a single payer system and healthcare cost in Canada rose to just 9.9% of GDP in 2004 from 7% in 1970. [iii]
Last week I attended the Studer Group’s “What’s Right in Healthcare?” conference in Atlanta, GA. During this conference the President of Orlikoff & Associates, Inc, James Orlikoff, gave the keynote, “Seeing Beyond Reform: A Leadership Guide to Creating the Virtuous Cycle in Healthcare” during which he described this very issue of wasted money and inefficiency in the United States’ multiple payer healthcare system.[iv] Orlikoff, or Dr. Doom as he referred to himself, created the sense of urgency necessary to drive change and described how transparency and accountability will lead to efficiency. Below is a video interview with similar ideas I saw Orlikoff present in Atlanta. The video is from Marty Stempniak’s Hospitals and Health Networks article.
[iii] Birn, A., Pillay, Y., and Holtz, T. (2009) Textbook of International Health. Third Edition. Chapter 12, p. 614.