Jeffrey Selberg is a Senior Advisor with the Peterson Center on Healthcare. Bradley Sawyer, Cynthia Cox, Marco Ramirez, Gary Claxton, and Larry Levitt are with the Kaiser Family Foundation.

Measuring the value of the U.S. healthcare system – and particularly assessing whether it has improved or worsened – is not a straightforward task. The evaluation would be reasonably easy if there were better outcomes at the same or less cost, or, vice versa, if we are paying more and generating the same or worse outcomes. The complexity arises when better outcomes are generated at a much higher level of spend, as is the case in this evaluation. As a result, at what point is the increase in spending not justified by the improvement in outcomes?

The Peterson-Kaiser Health System Tracker includes a “Dashboard” of indicators that can be used to describe, evaluate and compare changes in the value of U.S. healthcare over time. With many measures spanning 25 years, or approximately a generation, the Dashboard can help answer the following questions:

Is the U.S. generating better value now than in the past?
Has the value of U.S. healthcare improved relative to other advanced OECD countries?
How do factors other than healthcare affect how health outcomes vary across countries?

In this analysis, we use the information presented on the Dashboard to assess whether the value of the U.S. health system has improved or worsened from 1991 – 2016, or the most recent year of available data.

The Results

Our approach was to measure the level of improvement in health outcomes, and the incremental costs the healthcare system incurred at the same time. Between 1991 and 2016, life expectancy increased by 3.1 years to 78.6, representing a 4% improvement. In the same time, disease burden (as measured by the total number of disability adjusted life years, or DALYs) improved by 12%.

Disease burden is comprised of two factors: years of life lost to premature death, which improved by 22%, and years living with disability, which worsened by 2%. The improvement in overall years of life lost was driven by a remarkable 36% reduction in years lost due to premature death from diseases of the circulatory system.

At the same time, the worsening of years living in disability was led largely by an increase in substance use disorders. Moreover, substance use is one of the primary contributors to the slight decline in life expectancy in 2015 and 2016, the first time life expectancy has dropped two years in a row in several decades. Another critical outlier where outcomes have worsened in the U.S. (and not other comparable countries) is maternal mortality, which has gone up significantly from 14 deaths per 100,000 live births in 1991 to nearly 31 in 2016.

Despite some noteworthy exceptions, health outcomes have generally improved in the U.S. over the past 25 years as measured by life expectancy and disease burden. However, since value is a function of outcomes and cost, one must also take into account the increase in the spend within the same time frame. In 1991, the GDP attributable to healthcare was 12.8% or $788 billion. In 2016, healthcare consumed 17.9% of GDP or $3.3 Trillion. Is the 4% improvement in life expectancy and 12% reduction in disease burden enough to warrant a 40% increase in GDP consumption over the past 25 years? What does this portend for future access and affordability? Read more..