American spent over
$6,000 on health care
in 2004; the average
in the rest of the
was just over $2,500.
The American Spark
US Health Care Far More Costly Than Other Democracies
By Cliff Montgomery - Sept. 21st, 2009
If anyone doubts that American health care costs are needlessly spiraling out of control, a fascinating
international cost comparison of 30 democracies discussed by the Congressional Research Service (CRS)
provides the needed proof.
Though the CRS study was released in 2007, its statements are just as valid today.
An extra note: As you read the full CRS report, keep in mind that America is the only wealthy country--and
hence just about the only nation considered in this study--that does not insure all of its citizens through a
government-run health care system.
The American Spark below prints the report's summary:
"The United States spends more money on health care than any other country in the Organization for
Economic Cooperation and Development (OECD). The OECD consists of 30 democracies, most of which are
considered the most economically advanced countries in the world.
"According to OECD data, the United States spent $6,102 per capita on health care in 2004 — more than
double the OECD average and 19.9% more than Luxembourg, the second-highest spending country. In 2004,
15.3% of the U.S. economy was devoted to health care, compared with 8.9% in the average OECD country
and 11.6% in second-placed Switzerland.
"Why does the United States spend this amount on health care? Economists break health care spending into
two parts: price and quantity (which includes the number of visits to health care providers and the intensity of
"In terms of quantity, OECD data indicate that the United States has far fewer doctor visits per person
compared with the OECD average; for hospitalizations, the United States ranks well below the OECD and is
roughly comparable in terms of length of hospital stays.
"The intensity of service delivery is a different story: the United States uses more of the newest medical
technologies and performs several invasive procedures (such as coronary bypasses and angioplasties) more
frequently than the average OECD country.
"In terms of price, the OECD has stated that 'there is no doubt that U.S. prices for medical care commodities
and services are significantly higher than in other countries and serve as a key determinant of higher overall
"What does the United States get for the money it spends? Said slightly differently, does the United States
get corresponding value from the money it spends on health care? The available data often do not provide
"For example, among OECD countries in 2004, the United States had shorter-than-average life expectancy
and higher-than-average mortality rates.
"Does this mean that the U.S. system is inefficient in light of how much is spent on health care? Or does this
reflect the greater prevalence of certain diseases in the United States (the United States has the highest
incidence of cancer and AIDS in the OECD) and less healthy lifestyles (the United States has the highest
obesity rates in the OECD)? These are some of the issues that confound international comparisons.
However, research comparing the quality of care has not found the United States to be superior overall. Nor
does the U.S. population have substantially better access to health care resources, even putting aside the
issue of the uninsured.
"Although the United States does not have long wait times for non-emergency [i.e., elective] surgeries, unlike
some OECD countries, Americans found it more difficult to make same-day doctor’s appointments when sick
and had the most difficulty getting care on nights and weekends. They were also most likely to delay or forgo
treatment because of cost."
Currently Americans also appear to spend far more for their health insurance than most other democracies.
"Spending on health administration and insurance cost $465 per person in the United States in 2004, which
was seven times that of the OECD median." stated the study.
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