The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations

By David A. Squires
The Commonwealth Fund, July 2011

This analysis concentrated on 2010 OECD health data for Australia, Canada, Denmark, France, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States.

What is driving higher health care spending in the U.S.?

Spending on health care in the U.S. in 2008 far exceeded that seen in other countries. In both dollar figures and as a percentage of GDP, no country came within 70 percent of U.S. spending ($7,538 per capita, 16% GDP). This higher spending does not seem to simply reflect higher income.

There are many forces driving health care spending. An annual series of Commonwealth Fund-sponsored analyses of OECD health data dating back to 1999 has explored a number of potential factors, including: administrative complexity, the aging of the population, the practice of “defensive medicine” under threat of malpractice litigation, chronic disease burden, health care supply and utilization rates, access to care, resource allocation, and the use of technologically advanced equipment and procedures. These and other studies have found, contrary to often-cited explanations, the U.S. has a relatively young population, average or below-average rates of chronic conditions, and comparatively few doctor visits and hospitalizations compared with other industrialized countries. Instead, these studies suggest major reasons for higher spending include substantially higher prices and more fragmented care delivery that leads to duplication of resources and extensive use of poorly coordinated specialists.

A 2010 cross-national study conducted by The Commonwealth Fund ranked the U.S. sixth of seven countries in terms of quality, with average performance on effectiveness and patient-centeredness and low performance on safety and coordination.

These findings suggest that the U.S. health system is not delivering superior results despite being more expensive, indicating opportunities for cross-national learning to improve health system performance.

With chronic disease on the rise amidst an aging demographic and accounting for ever more health care spending, more effective treatment and management in primary care settings may have the potential to simultaneously improve patient care while preventing the unnecessary use of scarce and expensive resources.


By Don McCanne, MD

This Commonwealth Fund report confirms, once again, that we spend far more than other nations for health care while receiving only mediocrity from a fragmented system. There is much that we can do to improve quality and value, but it needs to begin with a rational system of financing health care.

We don’t have such a system now and will not have it under the provisions of the Patient Protection and Affordable Care Act – a model of reform that is the most expensive and falls far short on goals of reform. We already have learned much from the other eleven nations discussed in this report, but we have failed to act on what we know. Clearly, a single payer national health program with reinforcement of our primary care infrastructure is the redirection that we need.

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