The Cost of Inpatient and Outpatient Care Drives High Health Spending in the U.S. Relative to Other Countries, New Analysis Finds

A new KFF issue brief compares the main drivers of health spending in the United States and other large, wealthy countries, and finds that the cost of inpatient and outpatient care – much more so than prescription drugs or administrative costs – drives high per capita health spending in the U.S.

In 2018, the U.S. spent $10,637 on health per person – nearly twice as much as other comparably large and wealthy countries. The analysis finds that the U.S. spent $3,906 more per person on inpatient and outpatient care than the comparable country average – an amount that accounts for over three-quarters (76%) difference in total health spending between the U.S. and the comparable country average.

While American policymakers have often focused on the relatively high cost of prescription drugs in the U.S. compared to other countries when discussing policy approaches to lowering health care costs, the analysis finds that reducing drug spending alone would do little to close the gap in per person health spending between the U.S. and its peer nations.

Although not the main driver of the difference in health spending, the analysis also notes that the U.S. spends more on several other types of health services and programs, including preventive care. Another chart collection explores trends in spending on public health and prevention in the U.S., finding that while the U.S. spends more than most comparable countries on preventive care, the share of total U.S. health spending committed to preventive care has declined in recent years, and the U.S. still has a higher rate of preventable death than the comparable country average.

The analysis and the chart collection are both available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system. KFF’s Drew Altman also discusses the findings in his latest column for Axios.

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