Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.
The United States Is Slowly Gaining Ground in Health System Value
As the United States emerges from one of the most challenging economic periods in recent history, American consumers, workers and businesses face unprecedented challenges. Now, more than ever, we must focus on our nation’s ability to compete and thrive in the global economy. For that reason, the Business Roundtable (BRT) has commissioned an annual study to examine how our health system affects the competitiveness of American companies by comparing it to those of our economic competitors. This year’s Health System Value Comparability Study finds that the United States has made dramatic improvements in some critical areas, such as hospital safety, while falling further behind on others, such as obesity rates. Overall, the United States is slowly gaining ground on international competitors on health system value as of 2007, the most recent year for which data is available.
2010 Snapshot: Encouraging Progress
The Business Roundtable’s Health System Value Comparability Study is a unique measure of the U.S. health system that compares the value (cost and performance) of the U.S. health system to a group of five of our large trading partners – the “G-5” group of Canada, France, Germany, Japan and the United Kingdom. The study uses a standardized scale of ±100 to compare the United States to competitor countries on measures of GDP-adjusted per capita health spending and five of the broadest and most employer-relevant measures of health and quality of care.
This year’s study shows that we have made encouraging progress in improving the quality of health care in the United States. Over the past year, we have gained 3.4 points in overall value, and now trail the G-5 by only 1.6 points on broad measures of health care quality and health. The 2010 study shows we have made substantial progress on reducing hospital errors, and smoking rates have continued to fall. We also continue to lead our G-5 competitors on key indicators like control of systolic blood pressure.
At the same time, we continue to lag on key components of health system value, such as rising obesity levels and per capita health care spending. In fact, this year’s study reveals that almost 76 percent of Americans are overweight or obese, and that the problem is growing.
In addition to the obesity challenge, the United States also trails substantially in adult life expectancy at birth and spends far more than the G-5 countries. Overall, this year’s study finds a 20-point overall health system “value gap,” a challenge that threatens our nation’s global economic competitiveness.
However, the improvements we’ve made already – particularly in hospital safety and smoking cessation – show we can effect positive change when government and employers join together in a concerted effort. We can continue to narrow the health system value gap between the United States and the G-5 by building on this successful model and focusing our attention on the persistent challenges of obesity and health care spending. By working together, we can improve the global competitiveness of our health system outcomes for American consumers, businesses and the economy overall.
Improvements in Key Health Indicators Have Narrowed the Value Gap…
This year’s Health System Value Comparability Study finds that advances in hospital patient safety, and continued smoking rate declines have narrowed the health system value gap. In fact, the United States’ overall health system value score improved by 3.4 points (on a 100-point scale) between 2003 and 2007, the most recent year for which data is available.
Hospital Safety – A 1999 study by the Institute of Medicine reported that reducing preventable medical mistakes in hospitals could be one of the best ways to improve quality in the U.S. health care system. Concurrently, a group of large employers – the “Leapfrog Group” – came together to leverage their collective purchasing power and encourage the health system to focus on this issue. This year’s study finds that efforts of this kind have been powerful, driving down the study’s index of fatal hospital errors from 0.7 to 0.44 in 2007 – a decrease of 37 percent. Significantly, the G-5 average has actually grown over the same time period – from .42 in 2003 to .52 in 2007, a nearly 24 percent increase.
The Leapfrog Group – With funding from the Business Roundtable, the Leapfrog Group was officially launched in 2000. The organization works with its employer members to encourage transparency and easy access to health care information, and also leverages its members’ purchasing power to reward hospitals that have a proven record of high quality care. In concert with other government and health industry programs, this effort enabled a great “leap” forward. According to the most recent research, full implementation of the Leapfrog Group’s three main initiatives in urban hospitals alone, could save more than $12 billion and almost 56,000 lives each year.
Smoking Cessation – The 2010 study also finds that already-low U.S. smoking rates continue to fall. In 2003, 18 percent of Americans were daily smokers for more than 15 years; in 2007, only 15 percent were. Our G-5 competitors are also lowering their smoking rates over time; however, their 2007 smoking rates remain much higher at 23 percent. U.S. successes in this area can be largely attributed to partnerships between researchers, government, philanthropic foundations and employers that began in the 80s and 90s. By building on government programs encouraging smoking cessation, employers and others were able to further incentivize smoking cessation, leading to real decreases in national smoking rates – and subsequent gains in overall health.
Blood Pressure – Average U.S. systolic blood pressure – a broad indicator of adult health and quality of care – compares favorably to the G-5. Average blood pressure in the United States stands at 121, while the G-5 average is 126. Employers, health care providers and other parties have expanded wellness and prevention programs in recent years, which may be contributing to U.S. success in this broad measure of health. In fact, a 2007 wellness study of member companies by BRT found that, although each company tracks the return on investment differently, many BRT member companies report substantial health improvements (including blood pressure improvements) and large cost savings resulting from their proactive wellness programs.
…But Significant Challenges Persist.
The 2010 study reveals that rising obesity rates and continued cost challenges, in particular, demand renewed focus.
Obesity – This year’s study finds that the percentage of Americans who are obese or overweight has continued to rise, from 71.3 percent in 2003 to 75.8 percent in 2007. The average reported obesity rate in the G-5, remains more than 25 percentage points better that the U.S. rate – 50 percent in 2007 and 2006. U.S. obesity rates are also growing much faster than those reported by the G-5. The U.S. rate grew by four percentage points between 2003 and 2007.
Spending – The 2010 study also finds that the cost of American health care continues to be a persistent challenge. In 2007, the United States was spending more than twice as much as the G-5 average, and in the country’s most export-exposed sector, manufacturing, the United States spends far more than its competitors. The study found that after adjusting for our higher GDP, the United States spends more than $6,284 per capita on health care compared with the G-5’s $2,968 average. This means that for every dollar we spend in the United States on health care, the G-5 countries spend just 47 cents.
Although the United States still trails the G-5 by 40 points on a 100 point scale, we have narrowed the gap somewhat since 2003, when we trailed by 43 points. Focused employer action is helping to close this gap.
Private-Public Partnerships Will Drive Future Improvements
If current trends continue, the U.S. health system would not pull even with the G-5 for more than 20 years, and wouldn’t establish a meaningful lead for another 10. Much more must be done on two key fronts: driving down costs and focusing on wellness and prevention. But our recent successes, particularly in hospital safety and smoking cessation, show that – with the government and private sectors working in partnership – closing this gap is indeed possible.
The powerful impact of private-public partnerships cannot be overstated. The private sector, in particular, has a unique ability to bring the power of innovation and the free market to bear, slowing the rate of health care cost growth while demanding the highest quality care possible. Today, we have the opportunity to apply that same approach to the big issues, such as obesity, which threaten the economic competitiveness and overall health of our society.
Applying sensible approaches such as wellness and prevention programs, delivery system reforms, innovation centers, accountable care organizations, and insurance market reforms that promote competition and choice will help contain health care costs without sacrificing patient outcomes.
The U.S. can excel internationally in all dimensions of health care value. But more importantly, we must. Despite the economic challenges of the past two years, and, in fact, precisely because of them, government, employers and the entire health care system must come together to bridge the value gap.
About This Year’s Study
The Business Roundtable’s Health System Value Comparability Study was designed to clearly and objectively quantify the overall impact of the U.S. health system on U.S. competitiveness. It is the first of its kind, capturing both expenditures and their benefits to more clearly understand the return on America’s investment. By measuring the value of the U.S. health system compared to a basket of five large, wealthy trading partners, the study provides a unique look at its impact on our global economic competitiveness.
The Business Roundtable’s research partner for this study, Mercer, uses a standardized scale of ±100 to compare the United States to competitor countries on measures of GDP-adjusted per capita health spending and five of the broadest and most employer-relevant measures of health and quality of care. Mercer compared the United States’ scores with a basket of five U.S. trading partners. Mercer uses the measures most recently reported by each country to the OECD or WHO. If a country fails to report, Mercer uses the previously reported measure.
For this year’s study, Mercer expanded the range of scientific and clinical expertise represented on its national expert advisory panel and refined the index computation method. Although these refinements produced modest changes in the two component domain scores, when they were combined, the resulting index scores did not differ significantly from scores produced using the 2009 method for the same time periods.
The Health System Value Comparability Study incorporates several measures of health care spending and performance:
- Spending was measured by GDP-adjusted per capita health spending, which includes all streams of employment-relevant health spending, such as direct employer and employee spending, as well as public spending for health financed through tax payments by employers and employees. A GDP-adjusted figure ensures that no country’s health system is held accountable for higher spending associated with national prosperity.
- Performance was measured by several indicators of health and health care quality that epidemiology experts agreed reflected a balanced mix of broad, employer-relevant measures of national health systems. The measures included: success in management of highly impactful health risk behaviors (prevalence of smoking and prevalence of morbid overweight and obesity), favorable outcome on a widely applicable measure of adult ambulatory care (adult mean systolic blood pressure), quality of inpatient care (prevalence of mortal “misadventures” to patients during medical or surgical care), and overall population health outcomes (healthy life expectancy at birth).
The data in this year’s Health System Value Comparability Study pre-dates passage of the Affordable Care Act. This year’s study objectively compares year-over-year statistics ending in 2007 and in no way should be interpreted as analysis of the impact of the reform bill.