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Health Care Measures in the OECD: Does Higher U.S. Spending Lead to Better Outcomes?

Issue Brief

By: Jeff Gullo and Natalie Turner

Publish Date: September  01,  2014


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The United States spent double the amount on health care than the average OECD Country.


The United States spent $2.8 trillion on health care in 2012, or $8,915 per capita. This equates to 17.2% of the country’sOECD health spending chart gross domestic product, roughly double that spent by the average Organization for Economic Cooperation and Development (OECD) country.

Higher U.S. per-capita spending has not necessarily led to better performance.A 2010 Commonwealth Fund report ranked the United States last in performance among seven other wealthy nations; Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom. Performance was measured by quality, access, efficiency, equity, and healthy lives. The same is true of outcomes. Across OECD countries, the United States ranked in the lower one quarter for life expectancy at birth in 2011 at 78.7 years, compared to an OECD average of 80.1 years.

As these comparisons have not been adjusted for differences in racial and ethnic mix, socio-economic
factors, or genetic factors, the link between U.S. spending and outcomes is unclear.

Recent figures show a slowdown in the growth of expenditure in health care in the U.S. and across the globe.

In 2012, U.S. health care spending grew only 3.7 percent, making it the fourth consecutive year of historicallyLifeExpectancy Chart
slow growth. The same is true for average OECD health expenditure growth, which was close to 5% from 2000 to

2009, but slowed to 0.5% in 2010 and 2011. It is likely that the recent global economic crisis is the major cause, as governments and individuals cut back on spending in this area. Spending is historically lower during economic recession. Some analysts argue that the trends in the U.S. go beyond historical precedents and that newly enacted policies, such as those mandated by the Aff ordable Care Act, are contributing factors; although, it is not yet clear this is the case. Any signs of reversal will be closely watched as U.S. economic recovery continues.

U.S. policymakers should initiate cost-containment measures, without compromising quality of care or denying access.

In the meantime, federal and state governments should focus on cost-containment measures that constrain growth in price, volume, and intensity of care, without compromising quality or access to care. These measures should not shift costs inappropriately to patients or other payers. By addressing the delivery of health care services, health benefits, and provider reimbursement, there is potential to improve health quality and efficiency while eliminating waste and inappropriate care.


Further Reading / Sources
OECD, Health at a Glance 2013: OECD Indicators

 

OECD, Health Statistics 2013


World Health Organization, World Health Statistics 2013


The Commonwealth Fund, “Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally 

AARP Policy Book