U.S. health system underperforms despite massive spending, while Australia and the Netherlands excel

by · News-Medical

The U.S. struggles with poor health outcomes and equity despite its highest-ever healthcare spending, while top performers like Australia and the Netherlands offer valuable lessons on access, affordability, and efficiency.

A recent report by The Commonwealth Fund compared the health system performance in 10 countries.

“Mirror, Mirror 2024” is the eighth report of the Commonwealth Fund comparing health system performance in select nations. The goal has been to highlight lessons from the experiences of these countries, with emphasis on how they may inform the improvement of the United States (U.S.) health system. Although health systems are unique by country, comparisons offer insights into policy thinking and illustrate the impact of national policy choices on a nation’s health and well-being. This edition also introduces new metrics on telehealth usage and discrimination in healthcare, further expanding its analysis.

The study and findings

Reginald D. Williams II, Vice President, International Health Policy and Practice Innovations, The Commonwealth Fund “Mirror, Mirror underscores the importance of international comparisons, offering evidence and inspiration to improve America’s health system. While other nations have successfully met their populations’ health needs, the U.S. health system continues to lag significantly. This report shows that by adopting proven strategies and making smart investments, America can enhance its health system to better meet the needs of its people. There’s no reason we can’t elevate our standing if we choose to do so.”

Australia, the Netherlands, and the United Kingdom (U.K.) were the three top-performing countries, while the U.S. ranked last. Notably, each country showed areas of lower and higher performance. Despite its high overall ranking, Australia faced challenges in access to care, while the U.S., despite its last place, excelled in the care process domain. Although healthcare spending was not a performance metric, the U.S. was an outlier, spending 16.5% of its gross domestic product (GDP) on healthcare in 2023, exceeding other nations. However, Australia and the Netherlands had the lowest healthcare spending as a share of GDP. This gap has widened since the 1980s, with U.S. spending now exceeding that of other nations by a significant margin.

Healthcare spending in other countries was closely clustered. The access to care domain focused on the availability and affordability of health services at the population level. The Netherlands, the U.K., and Germany performed best in terms of access to care. These countries also excelled in affordability measures due to minimal out-of-pocket healthcare expenses and low cost-related barriers to care. Notably, Australia performed poorly in this domain.

The care process domain assessed whether care included attributes and features essential to high-quality care. New Zealand ranked first in the care process, followed by the U.S., the Netherlands, and Canada. Sweden had the poorest performance. Strong U.S. performance in this domain was due to the provision of preventive services such as mammograms and flu vaccinations, as well as its emphasis on patient safety.

Administrative efficiency focused on challenges in dealing with medical claims or insurance issues, patients’ time spent in resolving medical bill disputes and paperwork, and requirements for providers to report data to government agencies. The U.K. and Australia excelled in administrative efficiency, while the U.S. and Switzerland were the last.

Equity reflected how people with below-average and above-average incomes differed in their access to healthcare and care experience. This edition of the report also added an equity dimension examining the rural/nonrural divide and gender-based equity alongside the traditional income-based analysis. Australia and Germany were top performers in this domain, with the smallest differences between below-average and above-average income residents. By contrast, New Zealand and the U.S. were the last.

Health outcomes were the outcomes most likely to be responsive to interventions. The study also considered the impact of the coronavirus disease 2019 (COVID-19) pandemic. Outcome measures were life expectancy at birth, deaths with treatable and preventable causes, and excess deaths due to the pandemic. Australia, Switzerland, and New Zealand were the three top-performing countries regarding health outcomes, while the U.S. was the last.

The remarkable performance of the top three countries was partly due to their success in COVID-19 management. Australia's stringent lockdowns and New Zealand's early border closures contributed to their positive outcomes, while the U.S. struggled with high levels of treatable and preventable deaths, driven in part by its ongoing substance-use crisis and gun violence. The U.K. struggled with COVID-19-related outcomes but had a slight reduction in treatable deaths.

Areas for improvement for the U.S.

The notably high U.S. performance in the care process was primarily due to vigorous value-based care or pay-for-performance efforts undertaken by public and private payers over recent years. Notwithstanding its performance in this domain, health outcomes in the U.S. were the poorest, indicating that the care process might not drive health outcomes. Further, financial barriers to care in the U.S. are substantial.

Joseph R. Betancourt, M.D., Commonwealth Fund President “The U.S. is failing one of its principal obligations as a nation: to protect the health and welfare of its people. The status quo — continually spending the most and getting the least for our health care dollars — is not sustainable. It isn’t about lack of resources — it’s clearly about how they are being spent. Too many Americans are living shorter, sicker lives because of this failure. We need to build a health system that is affordable and that works for everyone. It’s past time that we step up to this challenge.”

Despite the successful implementation of the Affordable Care Act, 26 million Americans still lack coverage. All other countries in this study have universal coverage. The healthcare delivery system also has several deficits, such as administrative inefficiency and the lack of primary care investment. To improve healthcare equity, the U.S. must reduce financial barriers to care access by extending coverage to the uninsured.

At least two reforms are needed for a more functional healthcare delivery system. First, a robust primary care system has to be built through increased investment in training primary care providers and increased compensation of primary care clinicians. Second, the U.S. has to address the uncontrolled consolidation of healthcare resources, which drives prices higher, making insurance less affordable.

To this end, the proliferation of entities that trade primary care practices like commodities warrants scrutiny for its long-term impact on the quality and cost of care. Further scrutiny is needed on the administrative inefficiencies stemming from the complexity of insurance plans and billing practices, which burden patients and providers. The complexity and variation in insurance plans should be minimized to decrease administrative burden. Further, the U.S. needs interventions that address gun violence, substance use, and the historical/ongoing effects of racism on the health and care of Black, Indigenous, and Hispanic populations.

Conclusions

The variations in health system performance across the ten countries in Mirror, Mirror 2024 suggest ample opportunities for cross-national learning. The U.S. continues to underperform in healthcare. While the nine other countries varied in performance and details of their health systems, they have found means to meet their residents’ most basic healthcare needs, including universal coverage. This report emphasizes the importance of addressing not just healthcare services but also social policies, such as those aimed at reducing poverty, substance abuse, and gun violence, as key drivers of better health outcomes.

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