U.S. Continues to Spend Much More on Health Care than Other Countries, Driven by Prices of Physician and Hospital Services, Pharmaceuticals

Bottom Line: The United States spent nearly twice as much as other high-income countries on medical care but did less well on many population health outcomes despite similar utilization.  Spending differences were driven primarily by prices for labor and goods, including pharmaceuticals, devices and administrative costs.

Why The Research Is Interesting: It is well known that the United States spends more on health care than other countries but less is understood about what explains those differences.

What and When: Analysis of data from 2013-2016 comparing differences in health care spending, performance and structural features between the United States and 10 high-income countries (United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, the Netherlands, Switzerland, and Denmark).

Authors: Irene Papanicolas, Ph.D., Harvard T.H.Chan School of Public Health, Boston and coauthors


The United States:

— Spent 17.8% of its gross domestic product on health in 2016, other countries ranged from 9.6% to 12.4%

— Had the lowest life expectancy and highest infant mortality rate

— Spent more to plan, regulate and manage health systems and services

— Had higher per capita pharmaceutical costs

— Paid higher salaries to physicians and nurses

Study Limitations: While the data were generally comparable, there were modest differences in approaches to collecting and standardizing data across countries.

Study Conclusions: Efforts targeting health care usage alone are unlikely to reduce growth in health care spending in the United States, and a more concerted effort to reduce prices and administrative costs is likely needed.

Featured Image:

What The Image Shows: The difference between the U.S. and other high-income countries in health spending as a percentage of gross domestic product. (Click on the image for a full-size version. Right click to “save image as” to download.)