By Aaron Siter-Cohen, Brandon Hill and Charlie Ambler
Click here for the data user guide for this story.
The data for this story can be downloaded from each of the embedded data visualizations. For questions about the data or methodology, read the data user guide linked above or contact Brandon Hill at brandon.hill@centralsauce.com.
The U.S. medical infrastructure is vast and superior to the globalized world. Hospitals have state-of-the-art technology and medical care. However, what medical advancements that the country prides itself on are near impossible to afford for the average American without suffocating from crippling debt.
Universal healthcare is a major strategic goal for the World Health Organization, which makes specific mention of access as a question of cost and governments’ unique and specific responsibility in robust funding structures. A majority of Americans agree, with a plurality calling for a single-payer healthcare system, despite widespread disinformation about more public systems abroad. The CORONA virus has put a strain on many countries’ healthcare systems but the US has been uniquely hit with doctor, nursing, and bedding shortages across the nation.
And despite all of this, America far outspends its national peers and performs far worse on key health indicators. Americans spend more on medicine too.
There are three key indications on the following visualization. Color in life expectancy, size in terms of the country’s GDP, and its placement on the chart.
There was a clear line of consistency. The higher GDP per capita, the more a country spends on healthcare. However, there were two main outliers. Ireland and the United States. The U.S. had spent the most of any country on healthcare, however, the average life expectancy was comparable to much poorer countries.
Defining Healthcare Expenditure and Health Outcomes
Since 2000, the Organisation for Economic Co-operation and Development, (OECD) has used its System of Health Accounts (SHA) to measure health expenditures across diverse healthcare systems. This includes a wide set of expenditures including disease prevention, health promotion, treatment, rehabilitation and long-term care. The US has a comparable methodology for which the OECD provides a general overview and comparison here. By focusing on the “functionality” of the spending, rather than the nature of the service provider, the OECD tries to set comparable international standards. For example, the SHA includes long-term nursing care in its calculations, even though some of its member countries traditionally measure this as a social service.
The U.S., through the Center for Disease Control (CDC) and OECD, also tracks key indicators for health outcomes. Two of the most widely cited are life expectancy at birth and infant mortality. Life expectancy at birth is based on annual mortality rates. Given the observed mortality rate for 2019, life expectancy is how long an infant born in that year could expect to live, if that mortality rate stayed the same throughout their hypothetical lifetime. These rates fluctuate year to year, and although the CDC has not made firm data available for 2020, their calculations so far indicate that COVID-19 took an estimated 1.5 years off American life expectancy that year.
US Infant Mortality/life expectancy
Internationally, life expectancy is a main indicator of “development,” driving international policy and intervention. The OECD, for example, tracks life expectancy among its member countries to draw broad conclusions about rising living standards, improved lifestyles, better education, and health policy. The charts below draw on this data from the OECD’s 38 member countries including the United States. These countries share data and information to establish norms and agreements “on public policies and international standard-setting.” You can find this and other data here.
World Life Expectancy
Here, the US shows middling performance among member countries, and trails wildly behind world leaders. The indicators grow more alarming when mapped out over the past decade. The line graph shows a clear divide between top and bottom performers, with relative increases from almost all countries except the U.S., Chile and Costa Rica — who started out with a similar life expectancy to the US in 2010 of around 79 years, managed to increase the health of their population steadily by about a year over the past decade, while the US remains stagnant.
As health outcomes for US citizens continue to flatline, prices for lifesaving drugs and treatments increase year over year. This leaves less income for Americans to spend on education and lifestyle, both of which impact lifetime health.
The High Cost of Life-Saving Treatments
“I have spent the last 5 years of my life as a journalist writing about the irrational costs and prices across the US healthcare system. But if there is one fact that should cause national embarrassment it is the high price tag we affix to living with type 1 diabetes,” Elisabeth Rosenthal MD said of her experience reporting on U.S. healthcare.
Rosenthal’s statement surrounding U.S. medical care and its treatments of Type 1 Diabetes echoes heavily throughout this portion of the project. Something as serious and life-threatening as diabetes can be treatable. However, Insulin, EpiPens, and ER visits are becoming less financially attainable for the average American household, while the price of healthcare increases at a rapid pace. The following bar graphs show the U.S. as the single outlier for the cost of these treatments.
The primary usage for Insulin is to help balance a person’s glucose levels. Insulin was created in order to properly treat Type 1 and 2 Diabetes. However, the cost of Insulin in the U.S. has become one of the greatest embarrassments of the American health system.
The visualization shows that the average price per standard unit of Insulin cost $98.70 in 2018. While the average cost for an accumulation of the other 32 countries cost only $9.41.
Despite the exuberant amount of spending on healthcare, Insulin in America has also increased in cost. Yet, this is not the case in 32 other countries that are similar in development, wealth and political structure.
EpiPen is a brand that delivers an auto injection of Epinephrine (adrenaline). There are few brands that can supply this medicine via injector. EpiPen has capitalized on being the leading brand in terms of sales and product placement. The price of an American EpiPen is roughly nine times higher than in other wealthy countries.
According to Public Citizen and Corporate Crime Reporter, in 2016, EpiPen sold for $608.61 while the closest country that trailed behind was Germany at $210.21. The prices seen above are based on two EpiPens due to them being sold in two-packs. The average price for an EpiPen between all nine countries, excluding the U.S. as a massive outlier, was $129.52.
Many of the data and the visualization at face value, parallel what was seen when looking at Insulin costs in the United States.
NOTE: The focus of this portion was on the accumulation of 46 million ER services. The data was based around ER services that are billed as facility-based charges for evaluation and management (E and M) by a medical practitioner. A common type of ER bill, these E and M services are interpreted as the price of entering an ER.
The visualizations above were made from data extracted from both Health Care Cost Institute and HCCI’s leading medical and pharmacy claims dataset. The ER is a crucial source of health care for humans. However, as seen in the visuals, ER spending is rapidly increasing and so is the average American’s out-of-pocket spending. According to the Agency for Healthcare Research and Quality, American emergency room visits had a total estimated cost of $76.3 billion in 2017.
In the figure above, rising prices have a direct and heavy impact on the patient and their out-of-pocket spending for ER and E and M services. In 2012, a patient paid an average of $148 on out-of-pocket spending for an ER visit. In 2019 it increased 85 percent. All for the same service.
On the contrary, the distribution of current health care expenditure in Ireland in 2019 is drastically different. The government covers a large portion of health care expenditure in Ireland, while only 12 percent is covered via out-of-pocket spending. The Irish Government covers 74 percent and voluntary health care payments cover 14 percent.
Income Disparities in U.S. Healthcare
The extortionate over-charging for life-saving treatments in the U.S., combined with their vital purpose, sets the perfect storm for the healthcare industry to affix a price tag to life. A 2016 study conducted for The National Library of Medicine determined that, “the gap in life expectancy between the richest 1 percent and poorest 1 percent of individuals [in the U.S.] was 14.6 years for men and 10.1 years for women,” from the time period of 2010 to 2014.
While the price tag on life in the U.S. is clear to observe, it’s difficult to measure with precision.
In a 2017 study, The American Diabetes Association determined that the U.S. spent $237 billion on direct medical costs associated with diabetes — in addition to another $90 billion in productivity loss associated with the disease. For one individual living with diabetes, that same study determined the price tag for living with diabetes to be an average of $16,752 a year on medical expenditures. This high cost could be not only financially crippling for many Americans, but potentially unaffordable — necessitating some form of healthcare coverage other than out-of-pocket spending.
Diabetes is a death sentence for the uninsured.
However, the crucial need for healthcare coverage in order to survive in the U.S. is not affixed to only those with chronic illnesses. Similarly extortionate costs associated with emergency services mean that a sudden sickness or injury could force families and individuals to decide between treatment and debt. The healthcare research nonprofit, KFF (Kaiser Family Foundation) estimated that Americans were in at least $195 billion of healthcare debt in 2019.
Healthcare coverage is not shared equitably in the United States.
The data for the chart above comes from a 2018 sample survey collected by the Agency for Healthcare Research and Quality (AHRQ) Medical Expenditure Panel Survey (MEPS). The AHRQ surveys a representative sample of more than 30,000 individuals on over a thousand healthcare variables. Due to the growing wealth gap in the United States, the bottom two 20 percent quintiles and a significant portion of the third quintile actually fall below the U.S. poverty line for 2018. Just like the likelihood of private health insurance is skewed heavily toward the highest quintile, so too is the concentration of wealth in this representative sample.
In the U.S., 9 to 12 percent of low-income persons being uninsured is equatable with 29 million to 39 million individuals. Compared to other similar wealthy and developed countries, where an average of 99.8 percent of populations have coverage, this gap is damning for the wealthiest country in the world.
In the U.S., the benefit of attaining a wealth level that includes private insurance coverage is clearly indicated by the cost breakdown of healthcare expenditure by category of payer.
Those in the lowest three income quintiles who are under the age of 65 — the age that government coverage kicks in through Medicare — have limited options for their coverage. The 40 hours a week benchmark for full-time employment, where private insurance coverage is mandated, is easily avoided by low-paying employers with an hourly wage. This leaves coverage options to the purchasing of insurance through the private marketplace or applying for a public program like Medicaid or other state-funded programs.
In the lower quartiles, even for those who purchase private insurance or qualify for public insurance, out-of-pocket costs and deductibles are likely to contribute to significant expenses. According to data collected by the U.S. Bureau of Labor Statistics, in 2018, healthcare expenditures comprised between 9 percent and 10 percent of all household expenditures for the lowest three income quintiles — compared to only 6.6 percent of all expenditures for the highest quintile.
As income levels increase, there is a stark inverse relationship between public and private healthcare expenditure. However, despite a 717 percent increase in the income ceiling from the third quintile to the highest quintile, the average annual out-of-pocket expenditure only rises by 105 percent.
These out-of-pocket expenditures also only constitute the money spent on healthcare services such as treatment and medication. Even for the wealthiest, the high cost associated with having the insurance coverage necessary to make it to 65 is a major contributor to the U.S.’s outlier status in money spent on healthcare.
While wealthy and middle-class individuals spending exorbitant amounts of money on insurance premiums contribute to the U.S.’s outlier status on healthcare expenditure, the inaccessibility of healthcare for the country’s poorest individuals drags down the country’s healthcare outcomes.
Conclusion
The high cost and poor outcome of healthcare in the U.S. is cause for alarm as it stands now, but it’s getting worse. The cost of life saving medications and emergency services continues to rise, along with wealth inequality and the resulting disparities in healthcare outcomes. A 2021 report from the Congressional Research Service on “The Growing Gap in Life Expectancy” describes how as lifetime earnings increase, so too does the lifetime. This relationship can be exponential.
If you’re a man in the U.S., your life expectancy can fluctuate by an average of 12 years based on your income. For women, 6.4 years. Since 1920, when the report began tracking the growth of this gap, a hundred years later the COVID-19 pandemic has lead to what CNBC’s “Mad Money” host, Jim Cramer, has referred to as “one of the greatest wealth transfers in history.”
Since life expectancy measurably increases with income, and longer lives mean more time under government-funded programs like Medicare and Social Security, the upward transfer of wealth is likely to continue to increase this gap in life expectancy. The Congressional report concludes:
“The evidence clearly indicates that this growing gap in life expectancy has important implications for Social Security. Specifically, recent evidence shows that higher earners, with their higher-than-average gains in life expectancy, can expect to collect Social Security benefits over increasingly longer periods of time than the lowest-earning groups, who have experienced little to no gains in additional years lived.”
