Mar 14, 2018

Why the U.S. spends so much on health care

Inside a doctor's office. Photo: Roberto Machado Noa / LightRocket via Getty Images

A new study published in the Journal of the American Medical Association reiterates 3 important things that health care wonks already know, but which our political system can't seem to internalize: (1) The U.S. spends wildly more than other countries, including other rich countries, on health care. (2) The U.S. does not have better health outcomes — all that money isn't buying us better health. (3) The U.S. doesn't use that much more health care than other countries. We just pay much higher prices for what we do use.

Why it matters: As we've said before, if you want to spend less money on health care, somebody in the health care system has to get less money, which is what makes it so difficult. And there's certainly an argument for spending a lot on health care — but you'd hope to be healthier as a result.

By the numbers: Compared with 10 other high-income countries, a smaller proportion of the U.S. population has health care coverage. We have about the same number of doctors and, per capita, we used about the same amount of several key services.

  • But administrative spending accounted for about 8% of our health care dollars, compared with 1%–3% abroad.
  • Our per capita spending on prescription drugs is $1,443 per person; other countries' ranged from $466 to $939. Salaries for doctors and nurses are also higher here.

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