Nation & World

Health Care Prices drives U.S. spending

This country spends twice as much as other wealthy countries

Pills on a table. (file photo)
Pills on a table. (file photo)

A sweeping new study of health care expenditures found that the United States spends almost twice as much on health care as 10 other wealthy countries.

That difference is driven by high prices — including doctors’ and nurses’ salaries, hospital charges, pharmaceuticals and administrative overhead.

For years, 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.

Policy fixes have tended to focus on the idea that medicine is being overused. The thinking goes that the American health care system is uniquely set up to incentivize wasteful imaging scans, oodles of unnecessary prescriptions and procedures that could have been prevented.

The new study, published in the Journal of the American Medical Association, suggests instead that 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 narrative that has come up, that has developed, is that America spends so much more because Americans demand more health care,” said Ashish Jha, a professor of health policy at the Harvard T.H. Chan School of Public Health.

“We have done, through the Affordable Care Act and other policy efforts, almost nothing about prices. To me, that has been the big missed opportunity.”

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The study compared the United States to the United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, the Netherlands, Switzerland and Denmark from 2013 to 2016 on nearly 100 different measures of care.

It found that the United States spent about twice as much per person on health care, an investment that produced the shortest life spans and the highest rate of infant deaths.

The United States used more imaging scans than most countries, but spent much less on inpatient hospital care. Its utilization patterns were overall similar to other wealthy countries — leading the researchers to focus on other drivers of difference.

Non-specialist doctors in the United States, for example, are paid on average $220,000 per year — double the average salary in the other countries. Nurses and specialists were also compensated better

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