Skip to main content
The Keckley Report

Comparing Health System Performance: Three Observations on the Commonwealth Study

By August 9, 2021March 1st, 2023No Comments

Last Tuesday, the Commonwealth Fund released “Mirror, Mirror 2021: Reflecting Poorly: Health Care in the U.S. Compared to Other High-Income Countries.” It’s the Fourth in its Mirror, Mirror series (2010, 2014, 2017) but the findings are predictably like prior reports.

The Commonwealth research team compared the health systems in 11 high income countries (Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States) using 71 measures across 5 domains: access to care, care process, administrative efficiency, equity, and health care outcomes. They concluded:

“The top-performing countries overall are Norway, the Netherlands, and Australia. The United States ranks last overall, despite spending far more of its gross domestic product on health care. The U.S. ranks last on access to care, administrative efficiency, equity, and health care outcomes, but second on measures of care process….

Four features distinguish top performing countries from the United States: 1) they provide for universal coverage and remove cost barriers; 2) they invest in primary care systems to ensure that high-value services are equitably available in all communities to all people; 3) they reduce administrative burdens that divert time, efforts, and spending from health improvement efforts; and 4) they invest in social services, especially for children and working-age adults.”

In each version Mirror analysis, Commonwealth has adjusted its methodology, adding 16 new measures in its 2021 analysis. Outside advisors from RAND and Johns Hopkins along with representatives of the Organization for Economic Co-operation and Development (OECD) and the London School of Economics and Political Science provided independent input.


I have studied the health systems in China, India, the UK, Europe, Mexico, South America, Australia, Switzerland, Norway, Sweden, Botswana, South Africa and Canada. I have met with health officials, frontline providers and key suppliers in each. Seeing firsthand how these systems operate and hearing how key stakeholders navigate its rules, regs and opportunities provides my context for interpreting this study. My takeaways from this study are these:

1. Every Country’s Health System is Unique and Flawed

No two are alike. All have issues. None is a utopian solution to the health and wellbeing of the populations they serve. All face increasing spending for their healthcare systems and anticipate government playing a bigger role in funding.

2. The Comparison of the U.S. to the 10 Other Countries in the Commonwealth Study is Misleading

Each of the 11 countries included in the Commonwealth study participate in the Organization for Economic and Co-Operation and Development (OECD) data sharing along with 27 other developed economies. The countries with the biggest populations —China with 1.5 billion and India with 1.4 billion—are not members. Notably, the populations of the 10 countries selected are significantly smaller than the U.S. (i.e.: Australia 25 million, Norway 5 million, Netherlands 17 million and so on vs. the U.S. with 327 million). And the U.S. population is significantly more diverse than the others in the sample and more susceptible to social determinants of population health. Thus, life expectancy in the U.S. is lower than the others: 4.5 years for men and 3.1 years for women.

Ironically, the U.S. has fewer doctors and hospital beds (2.6/1000; 2.9 beds/1000) than the other 10 and invests more in R&D (2.84% of health spending) vs. the others (range 2.07% to 2.17%). So, the U.S. system’s challenges are unique in many ways.

The biggest difference in the Commonwealth analysis is spending: the U.S. exceeds the OECD average by almost 2:1. Yet, life expectancy gains in the U.S. have lagged (See table). Thus, proponents of systemic reform of the U.S. system and private investors are encouraging value-based strategies that shift resources from a “sick care” system to “integrated systems of health”.

% GDP Healthcare Spend (2019-pre pandemic)

  • US: 16.8% (16.3% in 2010)

  • OECD (37 Countries, excluding US):

    • 8.6% (8.45% in 2010)

    • 2019 Range: 4.3% (Turkey) to 11.7% (Japan)

Life Expectancy (2019)

  • US: 78.9

  • OECD: 81; 2019 Range: 75.1 (Mexico) to 84.4 (Japan)

Life Expectancy Change from 2000

  • US: +2.8%

  • OECD: +7.7%

3. Public Expectations about a Health System’s Performance are Unrelated to its Outcomes and Total Spending

Satisfaction with a health system’s performance is not based on clinical outcomes. Spending more for a health system does not increase public satisfaction: the U.S. spends more on healthcare than any other country yet satisfaction among patients is the lowest of the 11 countries in the Commonwealth study. Studies by Gallup, Pew and others show discontent growing in urban, educated, and younger populations as a result of administrative complexity, lack of transparency, high out-of-pocket costs (increasing 10% per capita per year) and growing distrust of government and big business. And notably, the U.S. spends 34% more per capita on healthcare services for seniors (Medicare) than the 27 other OECD countries but considerably less (67%) per capita for younger population health services—the population least satisfied with the status quo in U.S. healthcare.

To be fair, criticism of the U.S. system’s cost-to-value equation is warranted: why drugs, supplies, technologies, specialty services and facility costs in the U.S. cost considerably more than anywhere in the world deserves attention. The disconnect between social services and the health system mainframe needs repair and commitment of resources to the health and wellbeing of younger populations an urgent need. And the pandemic, looming Delta variant and potential Lambda variants cry out for global collaboration in disease surveillance and data sharing.

The Commonwealth study is helpful to a larger discussion about the future of the U.S. system. Notwithstanding the organization’s preference for government-sponsored universal coverage, the data should prompt stakeholders to consider all alternatives to the status quo.



“Mirror, Mirror 2021: Reflecting Poorly: Health Care in the U.S. Compared to Other High-Income Countries”; August 4, 2021; Commonwealth Fund

Tikkanen et al “Social Spending to Improve Population Health — Does the United States Spend as Wisely as Other Countries?”; March 5, 2021; New England Journal of Medicine

David Hunter; “The Complementarity of Public Health and Medicine — Achieving ‘the Highest Attainable Standard of Health’”; August 11, 2021; New England Journal of Medicine

Moucheraud et al “Trust In Governments And Health Workers Low Globally, Influencing Attitudes Toward Health Information, Vaccines”; August 2021; Health Affairs

Papanicolas I, Woskie LR, Orlander D, Orav EJ, Jha AK. “The relationship between health spending and social spending in high-income countries: how does the US compare?”; 2019; Health Affairs


Coronavirus Facts/Trends (CDC COVID Data Tracker Weekly Review, Hopkins, FDA, WHO)

  • The F.D.A. is targeting full approval of the Pfizer-BioNTech coronavirus vaccine by Labor Day.

  • New cases: 7-day case average is 89,977, a 33.7% increase from the previous week’s average of 67,274–64.6% lower than the pandemic’s highest average (254,060) recorded Jan. 10 and 682.9% higher than the lowest average (11,493) recorded June 19.

  • The Delta variant, or B.1.617.2, accounts for 93% of all U.S. COVID-19 cases. The Alpha variant, also known as B.1.1.7, is estimated to account for 2.9% of all cases, and the gamma variant, also known as P.1, comprises about 1.3% of all cases.

  • 99.99% of people fully vaccinated against Covid-19 have not had a breakthrough case that resulted in hospitalization or death. (As of 26 July, there were 6,587 known breakthrough cases, 74%, occurred in adults 65 and older.

  • The current 7-day hospitalization average is 7,707, up 40% increase from the previous week’s average.

  • The current 7-day death average is 377, up 34.8% from the previous week’s average.

  • The 7-day average for % positivity from tests is 9.5%, up 15.7% from July 23-29.

Poll: Vaccine Resistance Shrinking

The willingness of Americans to get the Covid-19 vaccine has increased slightly according to an Axios-Ipsos poll published last Tuesday. From mid-July to this past weekend, the number of people who said they were not likely to get the vaccine dropped from 24% to 22%.

4 out of 5 vaccinated people blame the unvaccinated for the rise in cases. Unvaccinated people blame people traveling to the US (37%), Americans traveling abroad (23%), mainstream media (27%), Biden (21%) and the unvaccinated (10%).

“As Delta surges, poll data suggests that unvaccinated America’s opposition to the shots is declining”; August 3, 2021; Ipsos


Bureau of Labor July Jobs Report: Good News with a Caveat

Friday’s Bureau of Labor July jobs report signaled economic resilience: employers created 943,000 jobs in July, and the unemployment rate fell from 5.8%to 5.4%. The 3-month average of 837,000 new jobs. represents an increase of 60% compared with the previous three months. The caveat: these data were based on data for the week of July 12—before the brunt of the Delta variant hit the economy.

John Cassidy “Three Big Takeaways from a Strong July Jobs Report”; August 6, 2021; New Yorker

Eric Morath; “U.S. Economy Added 943,000 Jobs in July, Unemployment Rate Fell to 5.4%”; August 6, 2021; Wall Street Journal

Kaufman Hall, Fitch: Hospital Finances Improve thru June

According to the latest monthly report from Kaufman Hall:

  • Median hospital operating margin index hit 2.8% in June, up from May’s 2.6% representing an 89.5% year-to-date increase over the first half of 2020 but a 10.3% decrease from the top of 2019.

  • The June operating margin index rose to 4.3% from May’s 3.5% translating to a 48.7% year-over-year increase and a 3.7% decrease from the first half of 2020 and 2019.

  • Adjusted discharges were up 2.1%: plus 10.1% year-to-date compared to 2020 and down 4.4% against 2019. Emergency department visits increased 4% from May and 3.2% from last year but dipped 14.8% year over year from 2019.

  • Hospitals’ gross operating revenues were up 4% in June—up year-to-date from 2020 (18.2%) and 2019 (7.9%).

  • 2021 median hospital operating margins and operating EBITDA decreased incrementally to 1.5% and 7.3%, respectively, from 2.3% and 8.7% in the prior year.

  • Days of cash on hand improved to 241.4 days, compared with 219.8 in the prior year

  • Excluding the $100 billion worth of accelerated Medicare payments during the pandemic, not-for-profit hospitals had higher liquidity in 2020. Median days cash on hand was 220 in fiscal 2019 versus 241 in fiscal 2020 without the loans. Median cash to debt was higher: 163% versus 159 in fiscal 2019.

Related: In the second quarter of 2021 for-profit hospital operators saw their volumes largely rebound as COVID-19 cases decreased and more patients sought non-COVID-19 care. Tenet, HCA, Universal Health Services and Community Health Systems all beat Wall Street expectations on earnings and revenue.

Kaufman Hall National Hospital Flash Report

“Special Report: 2021 Median Ratios: Not-for-Profit Hospitals and Healthcare Systems”; August 3, 2021; Fitch Ratings

“For-profit hospitals saw volumes rebound in Q2, but delta variant poses threat”; August 2, 2021; Healthcare Dive

Microsoft Expands Focus in Healthcare Cloud Services

“Today Microsoft Cloud for Healthcare is expanding our portfolio of interoperability data services for the health and life sciences industry… Today we’re expanding our health data services to enable the exchange of multiple data types in the FHIR format. For that reason, we’re renaming our services to the Azure Healthcare APIs.”

“Microsoft Cloud for Healthcare expands portfolio with Azure Healthcare APIs” Microsoft August 3, 2021; Microsoft

Study: Prescription Drug Utilization Management Program Costs

The Novartis-UC Berkeley researchers analyzed peer-reviewed and professional literature to assess administrative costs associated with medical management. Key finding: Payers, manufacturers, physicians, and patients together incur approximately $93.3 billion in costs annually on implementing, contesting, and navigating utilization management:

Howell et al “Quantifying The Economic Burden Of Drug Utilization Management On Payers, Manufacturers, Physicians, And Patients”; August 2021; Health Affairs

Narrow Networks in Medicare Advantage Plans Associated with Higher Star Ratings

Researchers analyzed 2019 physician networks data for Medicare Advantage Plans. Highlights:

  • The mean MA network included 41.2% of local physicians. Of 44 715 plan-counties,

  • 12 552 (28%) had narrow networks and 32 163 (72%) had non-narrow networks.

  • Among narrow network plans, 79.8% were health maintenance organizations compared with 50.7% among non-narrow plans. More narrow networks were in large metropolitan counties (40.0%) than non-narrow networks (26.7%).

  • The mean (SD) star rating for narrow network plans was 4.12 compared with 3.75 among plans with non-narrow networks.

Sen et al “Physician Network Breadth and Plan Quality Ratings in Medicare Advantage”; July 30, 2021; JAMA Health Forum

Matti Gellman “Private Equity Firm Doubles Down on Value-Based Care”; August 3, 2021; Modern Healthcare

Survey: Physicians Harmed Emotionally, Financially in Pandemic

The Physicians Foundation’s 2021 Survey of America’s Physicians conducted from May 26 to June 9, 2021, based on 2,504 physician responses. Key Findings:

  • 8 in 10 physicians were impacted as a result of COVID-19: 49% reported a reduction in income, 32% experienced a reduction in staff and 18% switched to a primary telemedicine practice

  • 61% of physicians report often experiencing feelings of burnout–a 20% increase since 2018.

  • 46% would still recommend medicine as a career option to young people

Physicians Foundation’s 2021 Survey of America’s Physicians, August 2021

Study: Medicaid Expansion Associated with Reduction in Uninsured Surgical Cases

The Duke-Memorial Sloan Kettering research team analyzed the effects of Medicaid expansion on uninsured surgical hospitalizations among nonelderly adults in terms of the share of total surgical discharges, population rate, and the risks of financially catastrophic visit charges for the period 2014-2019. Highlights:

  • More than 20% of uninsured surgical admissions were on the weekend, and 70.4% were admitted through the emergency department (versus 9.1% and 28.2% for private coverage, and 15.2% and 51.6% for Medicaid, respectively).

  • Medicaid expansion was associated with reductions in both the share (6.20%) and the population rate (7.85 per 10,000) of uninsured surgical discharges in expansion versus non-expansion states.

  • Projected to 2019, adoption of Medicaid expansion in non-expansion states could have prevented more than 50,000 incidences of catastrophic financial burden resulting from uninsured surgery.

Albright et al “Medicaid Expansion Reduced Uninsured Surgical Hospitalizations And Associated Catastrophic Financial Burden” Health Affairs August 2021


Medicare Finalizes Hospital Payment Policy for FY 2022

CMS released its annual Inpatient Prospective Payment System final rule Aug. 2, which increases Medicare payment rates 2.5% for acute care hospitals and removes some price transparency requirements. The rule applies to discharges occurring on or after Oct. 1. Among key provisions:

  • Payment rate update. Hospitals that report quality data and are meaningful users of EHRs will see about a 2.5% increase in Medicare rates in fiscal year 2022, compared to 2021. CMS expects hospital payments to increase by an aggregate $2.3 billion in fiscal 2022. CMS said the changes in the final rule will increase payments by $3.7 billion and include a $1.4 billion decrease from other adjustments.

  • Disproportionate share hospital payments. CMS will distribute $7.2 billion in uncompensated care payments for fiscal 2022–down $1.1 billion from fiscal 2021.

Center for Medicare and Medicaid Services

Court Halts New Jersey Hospital Merger

Last Tuesday, a New Jersey federal court granted the Federal Trade Commission’s bid to block the planned merger of Edison, N.J.-based Hackensack Meridian Health and Englewood (N.J.) Health announced in October 2019. The FTC, which requested a preliminary injunction against the transaction, filed an administrative complaint in December. The court’s decision allows the agency to pursue an administrative case against the deal. The trial is slated to begin Oct. 12.

“Statement of FTC Office of Public Affairs Director Lindsay Kryzak on District Court’s Decision to Grant Preliminary Injunction Halting New Jersey Hospital Merger”; August 4, 2021; FTC