U.S. Health Care from a Global Perspective, 2019: Higher Spending, Worse Outcomes?

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A 2015 Commonwealth Fund brief showed that — before the major provisions of the Affordable Care Act were introduced — the United States had worse outcomes and spent more on health care, largely because of greater use of medical technology and higher prices, compared to other high-income countries.¹ By benchmarking the performance of the U.S. health care system against other countries — and updating with new data as they become available — we can gain important insights into our strengths and weaknesses and help policymakers and delivery system leaders identify areas for improvement.

This analysis is the latest in a series of Commonwealth Fund cross-national comparisons that uses health data from the Organisation for Economic Co-operation and Development (OECD) to assess U.S. health care system spending, outcomes, risk factors and prevention, utilization, and quality, relative to 10 other high-income countries: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. We also compare U.S. performance to that of the OECD average, comprising 36 high-income member countries.

Highlights

• The U.S. spends more on health care as a share of the economy — nearly twice as much as the average OECD country — yet has the lowest life expectancy and highest suicide rates among the 11 nations.
• The U.S. has the highest chronic disease burden and an obesity rate that is two times higher than the OECD average.
• Americans had fewer physician visits than peers in most countries, which may be related to a low supply of physicians in the U.S.
• Americans use some expensive technologies, such as MRIs, and specialized procedures, such as hip replacements, more often than our peers.
• The U.S. outperforms its peers in terms of preventive measures — it has the one of the highest rates of breast cancer screening among women ages 50 to 69 and the second-highest rate (after the U.K.) of flu vaccinations among people age 65 and older.
• Compared to peer nations, the U.S. has among the highest number of hospitalizations from preventable causes and the highest rate of avoidable deaths.

In 2018, the U.S. spent 16.9 percent of gross domestic product (GDP) on health care, nearly twice as much as the average OECD country. The second-highest ranking country, Switzerland, spent 12.2 percent. At the other end of the spectrum, New Zealand and Australia devote only 9.3 percent, approximately half as much as the U.S. does. The share of the economy spent on health care has been steadily increasing since the 1980s for all countries because health spending growth has outpaced economic growth,² in part because of advances in medical technologies, rising prices in the health sector, and increased demand for services.³

Per capita health spending in the U.S. exceeded $10,000, more than two times higher than in Australia, France, Canada, New Zealand, and the U.K. Public spending, including governmental spending, social health insurance, and compulsory private insurance, is comparable in the U.S. and many of the other nations and constitutes the largest source of health care spending.

In the U.S., per-capita spending from private sources, for instance, voluntary spending on private health insurance premiums, including employer-sponsored health insurance coverage, is higher than in any of the countries compared here. At $4,092 per capita, U.S. private spending is more than five times higher than Canada, the second-highest spender. In Sweden and Norway, private spending made up less than $100 per capita. As a share of total spending, private spending is much larger in the U.S. (40%) than in any other country (0.3%–15%).

The average U.S. resident paid $1,122 out-of-pocket for health care, which includes expenses like copayments for doctor’s visits and prescription drugs or health insurance deductibles. Only the Swiss pay more; residents of France and New Zealand pay less than half of what Americans spend.

Despite the highest spending, Americans experience worse health outcomes than their international peers. For example, life expectancy at birth in the U.S. was 78.6 years in 2017 — more than two years lower than the OECD average and five years lower than Switzerland, which has the longest lifespan. In the U.S., life expectancy masks racial and ethnic disparities. Average life expectancy among non-Hispanic black Americans (75.3 years) is 3.5 years lower than for non-Hispanic whites (78.8 years).⁴ Life expectancy for Hispanic Americans (81.8 years) is higher than for whites, and similar to that in Netherlands, New Zealand and Canada.

Reflecting shorter life expectancy, the U.S. has the highest suicide rate of these countries, with France a close second. Meanwhile, the U.K. has the lowest rate — half that of the U.S. Elevated suicide rates may indicate a high burden of mental illness; socioeconomic variables are also a factor.⁵ The U.S. has seen an uptick in “deaths of despair” in recent years, which include suicides and deaths related to substance use, including overdoses.⁶

Worse health outcomes and shorter life expectancy appear related to risk factors and disease burden. More than one-quarter of U.S. adults report they have ever been diagnosed with two or more chronic conditions such as asthma, diabetes, heart disease, or hypertension during their lifetime compared to 22 percent or less in all other countries. This rate is twice as high as in the Netherlands and the U.K.

Obesity is a key risk factor for chronic conditions such as diabetes, hypertension and other cardiovascular diseases, and cancer. The U.S. has the highest obesity rate among the countries studied — two times higher than the OECD average and approximately four times higher than in Switzerland and Norway. Overall, obesity rates were highest in English-speaking countries, all with rates of one-quarter or more of the total population. Issues that contribute to obesity include unhealthy living environments, less-regulated food and agriculture industries, and socioeconomic and behavioral factors.⁷

Despite having the highest level of health care spending, Americans had fewer physician visits than their peers in most countries. At four visits per capita per year, Americans visit the doctor at half the rate as do Germans and the Dutch. The U.S. rate was comparable to that in New Zealand, Switzerland, and Norway, but higher than in Sweden.

Less-frequent physician visits may be related to the low supply of physicians in the U.S. compared with the other countries. The U.S. has slightly more than half as many physicians as Norway, which has the highest supply.

The average length of a hospital stay in the U.S. in 2017 was 5.5 days, far lower than the OECD average and comparable to that in Sweden, Switzerland, and France. Canadians and Germans had the longest lengths of stay, while Australians had the shortest.

U.S. utilization for specialized scans is higher than in most countries, nearly twice as high as the OECD average but comparable to France. Germany had an even higher magnetic resonance imaging (MRI) rate, while New Zealand’s was low. Previous analyses suggest that countries with a high supply of MRI scanners also tend to have higher rates of scan utilization.⁸

The U.S. performs some elective surgeries at a higher rate than other countries. The U.S. rate of hip replacements per 1,000 persons age 65 and older was higher than the OECD average but similar to the rate in Norway and Switzerland. Canada, the U.K., and New Zealand had the lowest rates, with rates close to the OECD average.

The U.S. outperforms peer nations in terms of preventive measures. In the U.S., more than two-thirds of adults 65 and older had a flu vaccine in 2016, considerably more than in the average OECD country. Only the U.K. had a higher rate than the U.S. At the lower end of the spectrum, one-third of older adults in Germany and Norway received the vaccine.

The U.S. also had one of the highest rates of women ages 50 to 69 being screened for breast cancer. The U.S. rate is considerably higher than the OECD average. In contrast, in Switzerland, France, and Germany, only half of women this age had been screened.

The five-year survival rate for breast cancer is the highest in the U.S. among the 11 countries — it is more than 5 percentage points higher than the OECD average. Breast cancer survival rates in all 11 countries compared here are higher than the OECD average. This is not true for other types of cancer. For example, five-year survival for cervical cancer among U.S. women is lower than in the 10 other countries and below the OECD average.

Hospitalizations for diabetes and hypertension — which are considered ambulatory care–sensitive conditions, meaning they are considered preventable with access to better primary care⁹ — were approximately 50 percent higher in the U.S. than the OECD average. Only Germany had higher rates for both conditions. The U.S. rate of hypertension-related hospitalizations was more than eightfold higher than the best-performing countries, the Netherlands, the U.K., and Canada. For diabetes hospitalizations, the U.S. rate (204/100,000) was more than threefold higher than the Netherlands, the best-performing country.

Premature deaths from conditions that are considered preventable with timely access to effective and quality health care,¹⁰ including diabetes, hypertensive diseases, and certain cancers, are termed “mortality amenable to health care.” This indicator is used by several countries to measure health system performance.¹¹ The U.S. has the highest rates of amenable mortality among the 11 countries with 112 deaths for every 100,000. It is notable that the amenable mortality rate has dropped considerably since 2000 for every country in our analysis, though less proportionately in the U.S. The U.S. rate was two times higher than in Switzerland, France, Norway, and Australia. This poor performance suggests the U.S. has worse access to primary care, prevention, and chronic disease management compared to peer nations.

Conclusions and Policy Implications

While the United States spends more on health care than any other country, we are not achieving comparable performance. We have poor health outcomes, including low life expectancy and high suicide rates, compared to our peer nations. A relatively higher chronic disease burden and incidence of obesity contribute to the problem, but the U.S. health care system is also not doing its part. Our analysis shows that the U.S. has the highest rates of avoidable mortality because of people not receiving timely, high-quality care. The findings from this analysis point to key policy implications, as well as opportunities to learn from other countries.

First, greater attention should be placed on reducing health care costs. The U.S. could look to approaches taken by other industrialized nations to contain costs,¹² including budgeting practices and using value-based pricing of new medical technologies. Approaches that aim to lower health care prices are likely to have the greatest impact, since previous research has indicated that higher prices are the primary reason why the U.S. spends more on health care than any other country.¹³

Second, our findings call for addressing risk factors for, and better management of, chronic conditions. We can start by strengthening access to care and primary care systems. Our findings show that the U.S. has a relatively lower rate of physician visits compared to other nations. This is surprising given U.S. adults’ seemingly greater health needs. We do know from previous Commonwealth Fund surveys that adults in the U.S. experience greater affordability barriers to accessing physician visits, tests, and treatments.¹⁴ Increasing access to affordable health care and strengthening primary care systems are two of the most important challenges for the U.S. health care system.¹⁵

Third, the U.S. should promote incentives to use effective care and disincentives to discourage less-effective care. For example, a recent analysis estimated that as much as one-quarter of total health care spending in the U.S. — between $760 billion and $935 billion annually — is wasteful.¹⁶ Overtreatment or low-value care — medications, tests, treatments, and procedures that provide no or minimal benefit or potential harm — accounts for approximately one-tenth of this spending. The U.S. can learn from other countries; for example, our comparably high use of MRI scans and surgeries for hip replacement suggests we should assess when these interventions bring the greatest value. The global Choosing Wisely campaign promotes conversations around evidence-based care between physicians and their patients to help evaluate which tests and treatments are truly necessary and free from harm.¹⁷

In sum, the U.S. health care system is the most expensive in the world, but Americans continue to live relatively unhealthier and shorter lives than peers in other high-income countries. Efforts to rein in costs, improve affordability and access to needed care, coupled with greater efforts to address risk factors, are required to alleviate the problem.