U.S. health care costs for the aged are sky high

U.S. outspending most nations on health care for the elderly

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It's a startling graph.

Assembled by Carnegie Mellon University professor Paul Fischbeck, the chart shows that per capita health care spending in the United States is pretty similar to that in Germany, the United Kingdom, Sweden and Japan -- until about age 60.

Then, the line for the United States takes off like a rocket booster, soaring far above spending in the other nations. By the time American patients are 85, his work shows, we are spending between $40,000 and $45,000 a year on each one of them, compared with just over $10,000 a year in Germany, the next highest nation.

Is all that extra money worth it?

Yes and no, says Dr. Fischbeck, an engineering professor who runs an Internet database called DeathRiskRankings.com, which calculates people's risk of dying from different causes at various ages.

On the one hand, he says, his calculations show how much of our health care spending comes in the later years of life, and "clearly, the status quo is not affordable."

On the other hand, Americans' risk of dying in later years is lower than that in many European nations whose health care systems are being touted by some as a model for the United States.

Looking only at deaths caused by disease, Dr. Fischbeck's analysis shows that American men have a survival advantage over men in Western Europe that increases steadily after age 65. American women gain a similar advantage starting later, at about age 80.

Putting it another way, if Americans died from diseases at the same rate as people in the Netherlands, for instance, there would be 60,000 more male deaths and 14,000 more female deaths in the United States -- all coming after age 70 -- his tables show.

A notable exception is France, which has much lower disease-related death rates than America throughout the lifespan. If Americans died at the French rate, his figures show, there would be 76,000 fewer male deaths and 242,000 fewer female deaths.

Still, Americans fare better than most Western Europeans in the latter part of the Medicare years. Dr. Fischbeck said it's important to keep that in mind as Congress winds its way toward a final health care reform bill.

"These numbers show there's something really unusual going on here," he said. "Congress is talking about reducing Medicare payments into the future, but if it's thinking about that without the possible impacts on survivability, that's only one side of the argument."

Although he is not a health care researcher by profession, Dr. Fischbeck said his work shows no evidence that Americans survive longer at older ages because they are healthier than Western Europeans when they enter retirement.

Not only do most of the European countries have lower rates of death during young adulthood and middle age, but obesity rates, which are strongly linked to Type 2 diabetes, are three times higher in America than in France, and more than twice as high as in Germany.

"I submit that our health condition at age 65 is worse than that of the Europeans, so the advantage we're getting is in overcoming our lifestyle choices earlier in life."

He believes much of that edge is coming from better screening and treatment of diseases, particularly cancer.

Dr. Fischbeck's health care spending figures were drawn from a 2005 study done by Boston University economist Lawrence Kotlikoff and his colleagues.

Dr. Kotlikoff said the Carnegie Mellon figures are accurate, but he isn't convinced that most of the money being spent on older Americans' health care is providing that much of a survival advantage.

While the figures show a correlation between greater spending and higher survival after age 65, they don't prove cause and effect, Dr. Kotlikoff said.

"What we do know," he said, "is that we are not seeing dramatically higher survival rates at any age in the U.S., notwithstanding much greater expenditures" on health care.

The problem, in his view, is that Medicare now pays for almost any services that doctors or hospitals provide.

"Basically, with Medicare, if there's a bill, we'll pay it. So it's really this system that has no real cost control and hasn't had for decades."

As an alternative, Dr. Kotlikoff advocates a system that would set an overall national health care spending cap in the United States, and then issue everyone vouchers through health insurance companies that would vary in amount depending on people's health status.

That way, he said, everyone would be covered, but there would also be an incentive to practice preventive care and avoid expensive tests and procedures.

Robert Martensen, director of the office of history at the National Institutes of Health, said Dr. Fischbeck's analysis "is amazing," but he also is skeptical of how much all that extra spending contributes to lifespan.

"What a lot of insiders know is that when one looks at Medicare funding, 40-50 percent of it is spent on people in the last year of their lives," and much of that goes toward intensive care that may not significantly increase their survival.

Europeans don't spend less on their older citizens because they are hardhearted, Dr. Martensen said.

Instead, the much lower outlay has more to do with the fact that European health care systems have more general practitioners, fewer specialists, and more centralized control over the number of hospital beds.

Jonathan Skinner, a health care economist at Dartmouth University, said the Fischbeck figures may be telling us that "the U.S. is certainly spending too much" on older people's health care, "but some countries in Europe may be doing too little."

Dr. Skinner is one of the researchers who compile the renowned Dartmouth Atlas of Health Care.

Their studies have shown that Medicare spending in America varies widely by geographic region, and that costs tend to be higher in areas with more doctors and more hospital beds, regardless of the age or health of the population.

One of the biggest challenges in controlling health care costs in America, Dr. Skinner said, is "the 80-year-old patient with a chronic illness."

"Every physician would agree that this person is pretty sick. But the problem is, do you treat every organ in the body with a different specialist?"

The United States "has no well-defined strategy for how to deal with this," he said, and that often leads to a lot of unnecessary care.

Peter Hussey, a health researcher at the RAND Corp., agrees.

"Dr. Fischbeck is right that we are getting something in return for that spending on older patients, but it's certainly a marginal return, and the question is, do we want to start looking at an acceptable level of spending?"

In a recent report on how to reduce unnecessary health care costs, Dr. Hussey's team suggested several new approaches, including a payment technique called "bundling."

Under that system, doctors and hospitals would be paid a single amount for each patient diagnosis -- for diabetes or heart failure, for instance -- and could then get additional incentive payments for meeting certain standards for quality of care.

Bundling would put much of the cost-control decision in the hands of doctors, Dr. Hussey said, "and while some physicians don't like that idea, it's a question of, do they want to make those decisions or have somebody else make them?"

Carnegie Mellon's Dr. Fischbeck thinks that's a tough assignment for any doctor.

"There is no question that on average, we are spending far too much on end-of-life care," he said, "but the problem for any doctor is that with an individual patient, how do you know ahead of time that you shouldn't spend money on that patient?

"That's not a decision most doctors can make; that's a societal decision."

Mark Roth can be reached at mroth@post-gazette.com or at 412-263-1130.


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