Health Care Costs Put U.S. at Significant Disadvantage Compared with Global Competitors

According to the Business Roundtable Health Care Value Index™, a new measure of the "value" (cost and performance) of the U.S. health care system relative to our competitors' systems on a 100-point scale, the United States faces at a 23-point "value gap" relative to five leading economic competitors - Canada, Japan, Germany, the United Kingdom and France (the"G-5 Group") - and a 46-point "value gap" compared to emerging competitors Brazil, India and China ("The BIC group"). What does this "value gap" mean for our ability to compete in the international marketplace?

As a group, employers and workers in G-5 countries spend 63 cents for every dollar we spend on health care. The gap is even wider when we look at the BIC group; they spend just 15 cents for every dollar that we spend on health care.

The health care "value gap" between America and the G-5 countries widened slightly during 2004-2006, the last three years over which international measures have been reported.

As chart 3 shows, in 2006, U.S. employers paid $0.73 per hour more for health benefits compared with the G-5 group - a disparity that has grown by nearly 50 percent since 2004. (Not all data for this category is available for BIC group countries).

As chart 4 indicates, in 2006 the United States - including employers, employees, retirees and the government - spent far more on health care per capita than did either group of competitors: $828 more per capita than G-5 counties and $1,654 more per capita than BIC countries. Both gaps have expanded significantly since 2004.

Looking Toward the Future

Now that the Business Roundtable Health Care Value Index baseline has been established, tracking annual changes between the United States and the G-5 and BIC groups will clearly indicate whether U.S. competitiveness is rising or falling due to changes in the cost and performance of our health care system. The Index provides valuable insights for anyone who is concerned with reforming our health care systemin order to deliver the best value – performance relative to spending – of any in the world. Ultimately, that’s every one of us who receives care, pays a medical bill, pays taxes or provides care to others. When our health care system fails to deliver value, it does not just affect individual companies and their workers; it harms our nation’s ability to compete in the global economy by raising the cost of our products and services and diverting resources from needed investments. To improve U.S. competitiveness, we must make fundamental changes in our health care system to get more value. As leaders of companies that provide health care coverage to nearly 35 million Americans, Business Roundtable members are committed to playing a constructive role in the health care reform process – by encouraging high value care as purchasers and by making strong policy recommendations. Business Roundtable has proposed policy reforms that will make our health care system more efficient and transparent, deliver greater value to consumers and provide more marketplace options for employers and individuals to obtain coverage. Our proposal builds upon the employer-based health insurance system and seeks to improve quality of care while expanding access for all Americans.