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U.S. SYSTEM OF HEALTH CARE IS BUILT FOR WASTEFULNESS

Until recently, America mostly ignored lessons learned elsewhere in the world about health care. We had assumed that, cost apart, our system was the best. Now its high cost and unpopularity are forcing us to look abroad.

Our system is different because of its unusually high costs and inability to provide universal access to physicians' services, hospitals and long-term care. When compared not just with the Canadian system (the media favorite) but with those in Western Europe and Japan, it is very unusual in many other ways, most of which contribute to the high costs.

Capital spending. Everywhere but in the United States, governments exercise strong control over capital outlays, whether for new hospitals or new equipment; this greatly reduces duplication.

Costs and fees. Hospital costs and physicians' fees are higher and have grown faster in the United States than in countries where governments negotiate fees and set caps on expenditures.

Bureaucratic expenses. The cost of the administrative and bureaucratic support system is much higher in the United States than elsewhere. One study shows that more than $130 billion -- 23 percent of U.S. health care spending -- goes to managers, administrators, insurers, marketers, lawyers and other paper-pushers, compared with only 13 percent in Canada.

Insurance. Nowhere else is the cost of malpractice insurance, and the costs of unnecessary defensive medicine aimed at frustrating lawsuits, nearly as high as here.

Drug prices. Governments of other countries, such as France and West Germany, use their bargaining power to negotiate much lower drug prices. They also use generic drugs and lists of approved and preferred drugs much more aggressively.

Preventive care. Most other affluent, developed countries do a better job than we in low-cost preventive medicine, including free prenatal care, free infant care and free exams for the middle-aged and elderly.

Intensity of care. Hospital patients everywhere else undergo many fewer tests and procedures, use fewer nurses, fewer drugs and (for good and bad reasons) less complex technology. In the United States we use more tests, perform many more surgical procedures and generally treat patients much more intensively. There is a growing body of evidence that many of these expensive procedures and therapies are not just marginal but are harmful to patients.

Specialists. The United States trains and employs a much higher ratio of very expensive specialists and relatively fewer primary-care physicians than any other country. The same jobs are performed adequately, and much less expensively, by primary-care doctors in other countries.

Terminally ill patients. In the United States, the amount of costly high-tech care delivered to people in the last 30 days of their lives is much greater. Many argue that this is not only inefficient and wasteful but also inhumane.

Hospital beds. We have more underused hospitals, kept open with direct or indirect subsidies. Dr. Robert Blendon of the Harvard School of Public Health said, "We probably have 1,000 unnecessary hospitals."

State mandates. Only in the United States are there hundreds of state mandates that require health insurance policies to pay for a plethora of treatments and procedures (from substance abuse to in-vitro fertilization), all adding to the cost of care.

What does it come to? In Japan, Canada and many European countries, people live longer and infant mortality rates are lower. We not only spend far more on care, we apparently get less for it; we come at the bottom of the list on cost-effectiveness.

Until we understand and address these characteristics of our system -- some individuals would change none of them -- the crisis in our system can only worsen. We will continue to have the most expensive, least cost-effective, most inequitable and unpopular health care system of all.

HUMPHREY TAYLOR is president of Louis Harris and Associates Inc., a polling organization.

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