It is Not Just the Prices! The Role of Chronic Disease in Accounting for Higher Health Care Spending in the United States - Abstract
Objective: To determine the impact of chronic disease prevalence on per capita health care spending in the United States and Europe. Prior studies have focused on higher reimbursement rates --the prices-- in the United States compared to other countries. However, other factors also account for the higher per capita health care spending in the United States. This paper examines another source, the substantially higher rates of chronic diseases such as cancer, diabetes, and cardiovascular disease as a factor accounting for the difference.
Methods: We compare the prevalence of the most common and expensive chronic conditions in the United States and nine European countries. A regression model was developed to predict the marginal impact of chronic disease on per capita spending. Using European chronic disease prevalence rates, we estimate a counterfactual per capita level of spending.
Results: The U.S. had significantly higher rates of obesity and chronic conditions than Europe. Obesity was 16.4 percent higher in the U.S. than in Europe, arthritis was 25.5 percent higher, cardiovascular disease was 10.7 percent higher, and cancer was 9.4 percent higher. Applying the lower European rates of chronic diseases, spending would be 17 percent lower in the United States for those 50 and older.
Conclusion: While higher prices contribute to the higher per capita spending in the United States, the higher prevalence of chronic disease is also a significant contributing factor.