The study, led by Harvard Global Health Professor Ashish Jha was published in JAMA and compared data on health spending and health outcomes in the U.S to that of ten other wealthy nations.
Some of those countries, like the United Kingdom and Canada, have single-payer health systems. Others, such as Switzerland and the Netherlands, have systems that include a private health insurance market.
The other countries included in the study were Australia, Germany, France, Japan, Sweden and Denmark. All provide virtually universal health care, with none reporting an uninsured or uncovered rate of lower than 99 percent. All have longer life expectancies than the U.S.
No matter what their systems look like, all of the other countries get much more for the money they spend. Health care accounted for 17.8 percent of U.S. GDP in 2016, far ahead of all of the others. In a distant second place was Switzerland, at 12.4 percent. In Australia, health care takes up less than 10 percent of spending.
Jha tells the New York Times that he expected the study to confirm the wide assumption that overspending in the U.S. is largely driven by overutilization of services. But the results show that overutilization is a big problem in other countries as well.
The big difference in spending comes from the price of the care itself. Prescription drugs are priced much higher than in other countries, where governments have put in place strict price controls or have forced drug companies to lower prices by negotiating lower prices. In addition, the complexity of America’s system leads to greater administrative costs.
“There’s no doubt that administrative complexity and higher drug prices both matter – as do higher prices for pretty much everything in U.S. healthcare,” Irene Papanicolas of the Harvard T.H. Chan School of Public Health, one of the lead study authors, tells Reuters.
That’s not to say that Jha believes overutilization isn’t something the U.S. should deal with. “It’s not that we’re buying more pizzas, we’re just paying more for each pie,” he tells the New York Times. “But that doesn’t mean that you can’t still buy fewer pizzas.”