John Dalton presents a look into the paradox that is American healthcare: The United States leads the world with the best equipped hospitals and the most thoroughly trained physicians. But, does that produce value for American consumers? John explores data from the Organization for Economic Cooperation and Development (OECD) and World Health Organization (WHO) and looks at how the United States fares against the 34 countries that are part of the OECD. The preliminary conclusions are interesting, one of which is that American healthcare is the worst value in the developed world. About the author: John Dalton joined BESLER as Senior Advisor in November 2005 after retiring from NCO Financial Systems where he was Vice-President, Sales and Marketing. He worked closely with Kathy Ruggieri in launching the Transfer DRG and IME products, as well as broadening our geographic footprint, breaking into several states where BESLER had not gone before. John retired at the end of 2010, but has continued to be active, serving on the Board of Trustees of the St. Joseph’s Healthcare System where he chairs the Strategic Planning Committee and as Honorary Trustee at Children’s Specialized Hospital, serving on the Audit & Compliance Committee. He’s also been active at Stevens Tech, where he recently wrote and produced two 20 minute videos, “Stevens & Sons: America’s First Family of Engineers,” and “Tales from Castle Stevens.” He was the 2013 recipient of the Stevens Alumni Award. John is a former New Jersey Chapter President and National Board member. He received HFMA’s 2001 Morgan Award for lifetime achievement, recognizing his work in professionalizing revenue cycle management. John is the only New Jersey Chapter leader to receive that honor. He is a frequent contributor to Garden State FOCUS, and serves as Master of Ceremonies at the Chapter’s Annual Institute. John has a bachelor’s degree in mechanical engineering from Stevens Institute of Technology and an MBA degree with a major in finance from the Stuart School of Management at Illinois Institute of Technology. In his leisure time, John enjoys grandkids, golf, travel, and running.

1. American Healthcare:
Worst Value in the
Developed World?
Part 1: Let’s Look at the Relevant Data
John J. Dalton, FHFMA
Senior Advisor Emeritus

2. Disclaimer
• The opinions expressed in this presentation and on the following
slides are solely those of the author based on nearly fifty years of
involvement in healthcare as consumer, consultant, regulator,
employer and hospital trustee. They do not necessarily reflect the
views of BESLER Consulting, the St. Joseph’s Healthcare System or the
Healthcare Financial Management Association, and neither
organization guarantees the accuracy or reliability of the information
provided herein.
• Rather, the presenter hopes to stimulate debate and discourse
directed towards broadening America’s goals from “healthcare” to
“health,” and reducing the value gap with the rest of the developed
world.

3. Here’s Where It All Began!
• In September 2008, Cheryl
Cohen, John Dalton and Janet
Turso were part of an HFMA
delegation to Russia, 23 from
the US and 5 from the UK.
• We spent four days meeting with
our Russian colleagues, touring
hospitals and clinics, and
discussing delivery models and
funding mechanisms.

4. Here’s Where It All Began!
• The Russians admired America’s
use of advanced technology by
skilled clinicians in well-equipped
hospitals.
• However, they found our system
expensive and expressed a
preference for the National Health
System’s cost-efficient delivery of
high quality care.
• For me, the American paradox
became an area of continued study
and interest.
“U.S. Health Quality Indicators” at the National
Research Institute of Public Health, Moscow

5. American Healthcare: Worst Value in the Developed World?
The American Paradox
• The United States leads the
world with the best-equipped
hospitals and the most
thoroughly trained physicians.
• Does that produce value for
American consumers? Let’s
look at the facts.

6. American Healthcare: Worst Value in the Developed World?
• In its February 8, 2016 issue “By the Numbers” (p. 34), Modern Healthcare (MH) tabulated
healthcare’s share of GDP in 2000 and 2013 for the U.S. and 21 other developed countries, and
classified those countries by type of universal healthcare system as follows:
• Two-Tier: Government provides or mandates catastrophic or minimum coverage for all, while
allowing supplemental voluntary insurance or fee-for-service care when desired. Five countries,
including France, Israel and the Netherlands.
• Insurance Mandate: Government mandates that all citizens purchase insurance, whether from
private, public or not-for-profit insurers. Five countries including Austria, Germany and
Switzerland.
• Single Payer: Government provides insurance for all. Pays all expenses except for
copays/coinsurance. Eleven countries including Canada, Italy, Japan, and the United Kingdom.

7. American Healthcare: Worst Value in the Developed World?
Data Sources:
• The Organization for Economic Cooperation and
Development (0ECD) has 34 member countries
that comprise the developed world. Data for
healthcare expenditures as a percentage of GDP
for 2000 and 2013 were available for 22 of the
countries.
• The World Health Organization (WHO) is the
authoritative source for key health indicators (life
expectancy, mortality rates, etc.). Data were
available for 1990 and 2012 for life expectancy at
birth; infant mortality rates (the probability of
dying between birth and 1 year of age); under-five
mortality rates (the probability of dying between 1
year of age and before 5 years of age) and adult
mortality rates (the probability of dying between
15 and 60 years of age).

8. American Healthcare: Worst Value in the Developed World?
• While 21 OECD nations increased
spending as a % of GDP by only 22.0%
from 7.9% to 9.5% over the 13 years, the
U.S. increased by 31.2%, from 12.5% to
16.4%. No OECD Nation spends more
than 11.1% of its GDP on healthcare.
• Japan leads the OECD nations in life
expectancy at birth at 84 years; the U.S.
lags the rest of the OECD at 79 years.
• Data Sources:
• Modern Healthcare, February 8, 2016, "By
the Numbers," p. 34
• OECD Health Statistics, 2015, FOCUS on
Health Spending, July 2015
• World Health Statistics, 2014, PART III,
Global Health Indicators, WHO
Healthcare
% of GDP -
2000
Healthcare
% of GDP -
2013
%
Change Country
Type of Universal
Health Care (1)
Life
Expectancy
@ Birth, 1990
Life
Expectancy
@ Birth, 2012
Change,
Years
9.2 10.1 9.8% Austria Insurance Mandate 76 81 5
8.0 10.2 27.5% Belgium Insurance Mandate 76 80 4
8.3 10.2 22.9% Canada Single Payer 77 82 5
8.1 10.4 28.4% Denmark Two-Tier 75 80 5
6.7 8.6 28.4% Finland Single Payer 75 81 6
9.5 10.9 14.7% France Two-Tier 78 82 4
9.8 11.0 12.2% Germany Insurance Mandate 76 81 5
7.2 9.2 27.8% Greece Insurance Mandate 77 81 4
9.0 8.7 -3.3% Iceland Single Payer 78 82 4
6.8 7.5 10.3% Israel Two-Tier 77 82 5
7.6 8.8 15.8% Italy Single Payer 77 83 6
7.4 10.2 37.8% Japan Single Payer 79 84 5
7.0 11.1 58.6% Netherlands Two-Tier 77 81 4
7.5 9.5 26.7% New Zealand Two-Tier 76 82 6
7.7 8.9 15.6% Norway Single Payer 77 82 5
8.3 9.1 9.6% Portugal Single Payer 74 81 7
8.1 8.7 7.4% Slovenia Single Payer 74 80 6
6.8 8.8 29.4% Spain Single Payer 77 82 5
7.4 11.0 48.6% Sweden Single Payer 78 82 4
9.3 11.1 19.4% Switzerland Insurance Mandate 78 83 5
6.3 8.5 34.9% United Kingdom Single Payer 76 81 5
12.5 16.4 31.2% United States None 75 79 4
7.9 9.6 22.0% 21 OECD Nations Various 76.6 81.6 5.0

9. American Healthcare: Worst Value in the Developed World?
Changes in Healthcare Share of GDP and Life Expectancy, OECD Nations by Type of Universal Coverage
Healthcare %
of GDP - 2000
(2)
Healthcare %
of GDP - 2013
(2) % Change Country
Type of Universal
Health Care (1)
Life
Expectancy @
Birth, 1990 (3)
Life
Expectancy @
Birth, 2012 (3)
Change,
Years
8.7 10.3 18.4% Five Countries
Insurance
Mandate 76.6 81.2 4.6
7.6 9.2 21.1% Eleven Countries Single Payer 76.5 81.8 5.3
7.5 9.5 26.7% Five Countries Two-Tier 76.6 81.8 5.2
12.5 16.4 31.2% United States None 75.0 79.0 4.0
7.9 9.6 22.0% 21 OECD Nations Various 76.6 81.6 5.0
Data Sources:
1. Modern Healthcare, February 8, 2016, "By the Numbers," p. 34
2. OECD Health Statistics, 2015, FOCUS on Health Spending, July 2015
3. World Health Statistics, 2014, PART III, Global Health Indicators, WHO
• The eleven countries with Single
Payer systems had the lowest
percentage of GDP devoted to
health care, increasing 21.1% from
7.6% in 2000 to 9.2% in 2012, less
than the percentage of GDP
consumed by countries with
Insurance Mandate (10.3%) or
Two-Tier systems (9.5%).
• Moreover, their citizens enjoy an
average life expectancy of 81.8
years, the same as or better than
countries with other systems.

10. American Healthcare: Worst Value in the Developed World?
• The U.S. lags the OECD on both infant
and child mortality rates. Between
1990 and 2012, the 21 OECD countries
reduced infant mortality rates by
57.7%, from 7.8/1,000 to 3.3/1,000,
and child mortality rates by 56.8%,
from 9.5/1,000 to 4.1/1,000. The U.S.
only reduced infant mortality rates by
33.3%, from 9.0/1,000 to 6.0/1,000,
and child mortality rates 36.4%, from
11.0/1,000 to 7.0/1,000.
• Countries with Single Payer Systems
had the lowest average mortality rates.
Changes in Infant & Child Mortality Rates 1990-2012, OECD Nations by Type of Universal Health
Coverage
Infant
Mortality
Rate, 1990
Infant
Mortality
Rate, 2012 % Change Country
Type of Universal
Health Care
Child
Mortality
Rate, 1990
Child
Mortality
Rate, 2012 % Change
8.2 3.4 -58.5% Five Countries
Insurance
Mandate 10.0 4.2 -58.0%
7.5 2.9 -61.3% Eleven Countries Single Payer 8.9 3.6 -59.6%
8.0 3.4 -57.5% Five Countries Two-Tier 9.8 4.4 -55.1%
9.0 6.0 -33.3% United States None 11.0 7.0 -36.4%
7.8 3.3 -57.7%
21 OECD
Nations Various 9.5 4.1 -56.8%

11. American Healthcare: Worst Value in the Developed World?
• The U.S. lags the rest of the OECD countries
by a substantial margin in its efforts to
reduce adult mortality rates for both men
and women. While other OECD countries
reduced adult male mortality rates by
36.4%, from 141.4/1,000 to 88.9/1,000, the
U.S. attained only a 24.9% reduction, from
173.0/1,000 to 130.0/1,000.
• For women, the 21 OECD countries
reduced adult mortality rates by 32.0%,
from 72.1/1,000 to 49.0/1,000, while the
U.S. lagged, achieving only a 15.4%
reduction, from 91.0/1,000 to 77.0/1,000.
Changes in Adult Mortality Rates 1990-2012, OECD Nations by Type of Universal Health
Coverage
Adult
Mortality
Rate, Male,
1990
Adult
Mortality
Rate, Male,
2012 % Change Country
Type of
Universal Health
Care
Adult
Mortality
Rate,
Female,
1990
Adult
Mortality
Rate,
Female,
2012 % Change
138.6 91.2 -34.2% Five Countries
Insurance
Mandate 68.8 48.0 -30.2%
142.3 86.8 -39.0% Eleven Countries Single Payer 68.5 45.6 -33.4%
136.0 87.2 -35.9% Five Countries Two-Tier 79.4 51.8 -34.8%
173.0 130.0 -24.9% United States None 91.0 77.0 -15.4%
141.4 89.9 -36.4%
21 OECD
Nations Various 72.1 49.0 -32.0%

12. American Healthcare: Worst Value in the Developed World?
Preliminary Conclusions:
• Despite its massive expenditures, the U.S. healthcare system fails to deliver reasonable value for
the money, and the gap between the U.S. and other OECD countries on key health indicators is
widening.
• The eleven countries with Single Payer systems consume the lowest percentage of GDP on
healthcare while achieving the best results on each of the four key health indicators.
• The U.S. also lags OECD countries in studies by the WHO and the Commonwealth Fund (see
following slides).
• It’s little comfort, but compared with many emerging market countries (e.g., Brazil, Russia, India,
China, Mexico, etc.), the U.S. attains better results on the four key health indicators.
• American healthcare is the worst value in the developed world.
• It will take a huge paradigm shift to close the gap with other OECD countries on the key health
indicators.

13. American Healthcare: Worst Value in the Developed World?
Other comparisons of healthcare systems:
• The WHO’s “World Health Report 2000”
ranked the health systems of its 191 member
states based on an index of five factors
including financial contribution, disability-
adjusted life expectancy, speed of service,
protection of privacy, and quality of
amenities. France ranked #1, followed by
Italy. The U.S. ranked #37, behind Costa Rica
and just ahead of Slovenia, Cuba and New
Zealand. The methodology used provoked so
much criticism that WHO has not updated
the study.

14. American Healthcare: Worst Value in the Developed World?
Other comparisons of health care
systems:
• The Commonwealth Fund periodically
compares the U.S. health care system
with those of other developed countries.
In its 2014 update (“Mirror, Mirror on
the Wall, How the U.S. Health Care
System Compares Internationally”), the
U.S. is last or near last among the 11
nations studied in the report on
dimensions of access, efficiency, and
equity. The United Kingdom ranks first,
followed closely by Switzerland.

15. American Healthcare: Worst Value in the Developed World?
• The countries are listed in
alphabetical order from left to
right. Data are from 2011.
• With per capita health
spending of $3,405, the UK
ranks #1 on 9 of the 12 factors
measured.
• The US ranks last on 4 of 12
factors despite spending
$8,508 per capita, $2,839
more than Norway and nearly
$5K more than the UK.
• Clearly, US consumers are not
getting value for their money.

16. American Healthcare: Worst Value in the Developed World?
• The Commonwealth Fund
Report concluded that the
US delivers “High cost care
of mediocre quality,” with
per capita expenditures
$3,100 higher than the
average of the other ten
developed countries in the
study.

17. American Healthcare: Worst Value in the Developed World?
Contact Information:
John J. Dalton, FHFMA
Senior Advisor Emeritus
BESLER Consulting
Email: jjdalton1@verizon.net
Tel. No.: 732-310-8782