Why Does The U.S. Spend More On Healthcare Than Other Countries?

Many argue the United States health care system is inefficient—could having a larger proportion of its healthcare-spending coming from the private sector be the reason why?

The Washington Post recently wrote an article comparing the public share of total health expenditures to total health expenditures as a percentage of GDP of several nations. The United States appears as an outlier, having the highest total health expenditure as a percentage of the GDP and the lowest public share of total health expenditure.

Although the United States spends more on healthcare than other nations, the outcomes for its patients are not much different.

According to the article, “administrative costs account for about a quarter of U.S. health spending, twice the share in other advanced countries. The reason has to do with our multitude of insurers, plans and health-care providers, all trying to get the best deal for themselves, fighting against a large industry trying to do the same thing in reverse.” The American system is also noted for its higher cost for drugs and other procedures as well as the existence of a “fee-for-service” reimbursement system.

Reducing the cost of the American healthcare system may require increasing the public spending towards it.

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