U.S. Health Care Spending: Comparison with Other OECD Countries

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 those visits). 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 spending." Source: Congressional Research Service

Download full pdf report | Link to online Summary