Every so often here at AgingOptions we encounter information that causes us to scratch our heads in amazement, and here’s the most recent example: in the United States, we seem to have perfected the art of paying more for our health care – and getting less to show for it – than any other industrialized country on earth. That’s not a statistic to be proud of, and to us it is emblematic of much that is wrong with our whole approach to retirement planning. (More on that in a moment.)

This information about the woefully inefficient state of American healthcare came to light in the most recently released Global Competitive Index from the World Economic Forum (click on the link if you love statistical analysis). This index ranks many of the world’s nations from first to worst on a wide range of criteria, from access to clean water to tax rates to the number of children in primary education. The particular statistic that jumped out at us was #37. That’s where the U.S. ranks in life expectancy compared with the rest of the world. That puts us in the neighborhood of Albania and Uruguay, and embarrassingly below other more comparable nations like Canada (#13), Australia (#10), or Spain (#4). (In case you’re curious, the top three nations for life expectancy are Hong Kong, Japan and Italy, each at about 84 years. We’re closer to 78 years of life expectancy.)

Sadly, in another measure of healthcare quality – infant mortality – we come in even worse: #40, by far the worst-performing Western nation. We’re in the same ballpark as Hungary and the United Arab Emirates.

To find out what’s going on here, and why we as a nation we spend so much on healthcare and get so little in return, we turned to  this very recent article from the Chicago Tribune. It describes a Harvard University study just published in the Journal of the American Medical Association that examined healthcare expenditures in the U.S. compared with ten other industrialized nations. According to the study, which confirmed that our per capita spending on medical care is almost twice as high as any of our industrialized peers, the real culprit is a pattern of across-the-board high prices for medical goods and services. We pay more for practically everything we buy when it comes to the drugs we take, the tests we endure, the doctors we see and the surgeries we undergo – not to mention the staggering cost of healthcare overhead and administration to “manage” our cumbersome, lumbering, and woefully inefficient healthcare delivery system.

“For years,” says the Chicago Tribune article, “it has been clear that Americans are not getting a good bang for their buck on health care. The United States spends more than any other country and gets much less, at least as measured by life expectancy or infant mortality.” According to the article, analysts used to think that Americans were utilizing healthcare services far more than people in other comparable nations and that our system was “uniquely set up to incentivize wasteful imaging scans, oodles of unnecessary prescriptions and procedures that could have been prevented.” But that, says the Harvard study, isn’t the core problem.  “Americans are using health care at similar rates to other rich countries, and the real difference is the prices of procedures and treatments. The finding doesn’t mean Americans aren’t overusing health care; it just means that we aren’t alone in doing so.”

The Chicago Tribune article backs this up with a few specifics. For instance, non-specialist doctors here earn an average of $220,000 annually, double the average salary in the other countries. This salary gap also applies to other healthcare professionals including nurses and specialists.  Spending per capita on pharmaceuticals averages nearly $1,450 in the U.S. compared with the next-most-costly country, Switzerland, at $939. But here’s the statistic that we find incomprehensible: the United States spends eight percent of our GDP on healthcare administrative costs! The comparable figure for other nations in the study is between one and three percent. That’s a huge cost triggered by our system’s gross inefficiency.

Unfortunately, given the state of our politics, there seems to be little will to solve the problem. The Harvard analysis says either we have to put price controls in place or else we need to make the system more competitive in order to drive down costs. But Congress won’t give Medicare, which spends more than $500 billion per year, the power to negotiate more aggressively on prices.  This is a worst-case scenario. As one author put it, “Combine a weak price-setter with inefficient markets, and you have the American healthcare system.”

According to Rajiv Nagaich of AgingOptions, the problems associated with our healthcare system reflect an even more widespread problem when it comes to retirement. “The challenge is, every time you ask a specialist for answers, you get answers that serve that person’s industry instead of serving you. Healthcare is a good example.” Instead of focusing on preventative care, he says, our overpriced system concentrates on “curing illnesses, prescribing pills, conducting surgeries, installing mechanical hips and knees, and the like. This doesn’t solve the underlying health concern of the average retiree.”  This disconnect parallels other industries important to people in retirement, Rajiv adds, such as financial planners (“more interested in investing and buying policies, not about sound financial health”) and even lawyers (“all about preparing documents, but not focusing on the details that go into them”).

“We are the richest country in the world,” Rajiv laments, “but we have gotten into this mess because we have let so-called experts develop false solutions based entirely on their own self-interests, and then we consume those ‘solutions’ as though they were  sage advice.” It’s time, he adds, for a radically different approach. At AgingOptions, says Rajiv, “we help you develop the retirement goals you want to achieve, and then show you how to hold your professional advisors accountable to deliver on those goals. That is how you will get the right answers.”

If this sounds like a refreshing and objective approach, it is! We invite you to find out more by joining Rajiv Nagaich at an upcoming LifePlanning Seminar where you’ll discover the power of retirement planning that is driven by your needs, not the self-interest of a doctor, lawyer or financial planner with a service or policy to sell. We offer free LifePlanning Seminars throughout the Puget Sound region. For details, click here for dates, times and locations, and then register online or call us for assistance.

We might not be able to make the entire U.S. healthcare system more efficient and more effective, but we can help you accomplish that goal for your own retirement. Age on!

(originally reported at www.chicagotribune.com)

(Photo attribution: Alpha Stock Images – http://alphastockimages.com/)