Why U.S. Health Care Costs Are Twice As High As Other High-Income Countries

March 14, 2018, 5:04 PM UTC

All of the money spent on healthcare in the United States—nearly twice as much as 10 high-income countries—isn’t paying off.

The U.S. has the highest percentage of obese adults, the lowest life expectancy, and the highest infant mortality compared to 10 high-income countries, including Australia, Canada, Denmark, France, Germany, Japan, Sweden, the Netherlands and Switzerland, according to a study published Tuesday in the Journal of the American Medical Association. And yet, the U.S. physician workforce and utilization rates are similar to the countries.

What’s driving up costs? The Harvard University researchers analyzed data from international organizations on types of spending and performance outcomes between the U.S. and other high-income countries. What they discovered is a country with low health care performance and high costs primarily driven by prescription drug prices, administration costs, and physician pay.

For example, the cost of planning, regulating, and managing health systems and services accounted for 8% in the U.S. compared to a range of 1% to 3% in the other countries, the researchers found.

Pharmaceutical costs in the U.S. eclipsed other countries. Spending per capita was $1,443 in the U.S. compared to range of $466 to $939 in other countries. Salaries of physicians and nurses were higher in the U.S. as well. For instance, generalist physicians salaries were $218, 173 in the U.S. compared with a range of $86, 607 to $154, 126 in the other countries.