Why the US spends more on healthcare than other countries



pills dollarsDisparities in health expenditure across OECD countries: Why does the United States spend so much more than other countries? This is the title of Mark Pearson’s before a US Senate Committee on Aging in September this year. Pearson is the head of the health division at the Organization for Economic Cooperation and Development (OECD). In his testimony, he provided information and insights on how the US health care system compares to those of other OECD members. OECD has currently 30 member countries, mostly developed. These countries are committed to “democracy and market economy2 and their governments come together “to compare policy experiences, seek answers to common problems, identify good practice and coordinate domestic and international policies”. In previous post, I highlighted the fact that the US is in the frontline of cancer treatment but lags behind in other chronic diseases.

According to Pearson (source MarketWatch Blog):

“What you’ve got in the U.S. is a very large range of care. When people say U.S. care is the best in the world, if you’re talking about the really good hospitals, yes it is. But when you’re talking about the average the population faces, it’s middle-of-the-pack on lots of things but very, very good on cancer.”

Pearson presented the following statistics:

  • The US spent the most (15% to its GDP) on health care in 2007. OECD average was 8.9%.

  • US life expectancy (78.1 years) is lower than the OECD average of 79.1.

  • Japan seems to be getting the most out of its money –spending 8% of its GDP on health care to have a life expectancy of 82.6 years.

  • As a point of comparison, the US spent in 2007 $7290 per person for healthcare. France, which has a universal health system, spent $5365 per person in the same year.

So why does the US spend so much but get little in return? Pearson gives the following reasons:

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NOTE: The contents in this blog are for informational purposes only, and should not be construed as medical advice, diagnosis, treatment or a substitute for professional care. Always seek the advice of your physician or other qualified health professional before making changes to any existing treatment or program. Some of the information presented in this blog may already be out of date.
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