The U.S. spends twice as much as comparable countries on health, driven mostly by higher payments to hospitals and physicians, NOT drugs!

Even though voters care a lot about drug prices, they’re NOT the main reason the U.S. spends so much on health care. The primary culprits are the twice as much per person spent on hospital and physician payments than comparable wealthy nations. And yet, according to a new Peterson-Kaiser Tracker analysis, the U.S. has worse health outcomes!

The U.S. spent $10,637 per capita on health care in 2018 vs. $5,527 spent by comparable countries. 76% of the difference came from spending on inpatient and outpatient care — not drugs, which get more attention but represent just 10% of the difference.

Cutting hospital spending is hard to do without causing real pain, and that has made it politically risky, as well.

  • A public option, like that proposed by Joe Biden, would put pressure on hospital prices. The intensity of that pressure would depend on the plan’s payment level and how many people it covers, which would affect its purchasing power.
  • A single-payer health plan would have even more leverage, though universal coverage — not price controls — is usually its supporters’ primary focus.
  • The hospital industry led the lobbying effort that killed a public option in the Affordable Care Act, and spent millions in the Democratic primaries this year advertising against Medicare for All.

President Trump has set out new price transparency rules for hospitals, though is unclear how they will impact hospital costs and the industry has challenged it in court.


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