Outpatient services account for about 40 percent of all healthcare dollars spent in the United States, according to a new analysis that shows the U.S. spends about $650 billion more on health care than other developed countries. Two-thirds of the nation’s above-expected spending goes to outpatient services, "the largest and fastest-growing part of the U.S. health system," according to the McKinsey Global Institute.
The McKinsey report breaks down outpatient care costs by provider type:
physician office visits: $392 billion
same-day hospital care: $245 billion
dental care: $92 billion
ambulatory surgery centers and diagnostic imaging centers: $28 billion
other outpatient clinics: $93 billion
The authors also list five factors, related to both supply and demand, fueling the growth of this sector:
provider capacity growth in response to high outpatient margins;
the judgment-based nature of physician care;
technological innovation that drives prices higher rather than lower;
demand growth that appears to be due to greater availability of supply; and
relatively price-insensitive patients with limited out-of-pocket costs.
Fee-for-service reimbursement, "the primary method of payment for outpatient care," is a major driver of increased healthcare spending in the U.S., the authors contend. To help bring down U.S. health costs, they suggest that reformers "address the misaligned incentives resulting from fee-for-service reimbursement" and have Medicare and Medicaid lead the way "toward desired change in the system."
See the full report for more analysis of the economic and social factors underlying the high cost of U.S. health care.
—Irene Tsikitas
