What drives health spending in the U.S. compared to other countries?

What drives health spending in the U.S. compared to other countries?
Peterson-KFF Health System Tracker; By Emma Wager Twitter, Shameek Rakshit, Cynthia Cox; 8/2/24
The United States spends significantly more on healthcare than comparable countries do, and yet has worse health outcomes. Much of the national conversation has focused on spending on retail prescription drugs and insurer profits and administrative costs as key drivers of health spending in the United States. The Inflation Reduction Act, signed into law by President Biden in 2022, includes several provisions aimed at lowering the cost of these prescription drugs. While it is true that many brand-name retail prescription drugs are priced higher in the U.S. than in peer countries, health spending data indicates that other spending categories – particularly hospital and physician payments – are primary drivers of the U.S.’s higher health spending. This brief examines the drivers of health spending and differences between the U.S. and its peers – other Organisation for Economic Co-operation and Development (OECD) nations that are similarly large and wealthy. In 2021, the U.S. spent nearly twice as much per capita on health as these comparable countries did. Most of the additional dollars the U.S. spends on health go to providers for inpatient and outpatient care. The U.S. also spends more on administrative costs, and significantly less on long-term care. [Long-term care spending includes health and social services provided in long-term care institutions such as nursing homes as well as home- and community-based settings.] ... In 2021, the U.S. spent nearly twice as much on health per person as comparable countries ($12,197 compared to $6,514 per person, on average).