The U.S. has the lowest health care quality ranking compared to other high-income countries. According to the Centers for Medicare and Medicaid Services (CMS), the U.S. spent approximately $4.9 trillion on health care in 2023. This means that almost one out of every five dollars spent in the U.S. goes towards health services. Despite this high spending, the U.S. consistently has a lower life expectancy compared to countries with similar GDPs.
The U.S. performs similarly to or better than comparable countries in acute treatment measures, particularly within cancer treatment. However, the U.S. shows poorer treatment outcomes in other long-term chronic diseases, as reflected in noticeable life expectancy gaps. More U.S. residents have chronic diseases like diabetes, cardiovascular disease, and arthritis, among others, compared to other countries.
According to a report from Johns Hopkins’s Bloomberg School of Public Health, an analysis revealed that the average life expectancy in the U.S. was approximately 2.7 years lower than in the U.K. Despite spending more on health care than its peers, the U.S. has an average life expectancy of 78.4 years, while other similar countries average around 82.5 years.
Additionally, an analysis of 35 countries with similar GDPs found that the U.S.’s infant mortality rate ranked 29th, close to the bottom. Infant mortality measures the death of an infant before their first birthday. The infant mortality rate is a crucial measure that reflects the overall health of a society. According to the CDC, the infant mortality rate in 2022 was 5.6 deaths per 1,000 live births. Compared to Norway, which has the lowest infant mortality rate, the U.S. has 1.6 deaths per 1,000 live births. By examining the most vulnerable members of a population, many insights into a nation’s social, economic, and environmental context can be drawn.
There are many possible explanations for why the U.S.’s health care remains expensive but consistently performs worse than that of similar high-income countries.
Prices are not higher because those living in the U.S. are utilizing the health care system more. Patients in the U.S. visit doctors less often and have fewer hospital stays compared to citizens in many other developed countries. The U.S. has some of the lowest rates of physician visits, practicing physicians, and hospital beds per capita. This statistic was exemplified during the COVID-19 pandemic, where it was found that there were only 2.8 practicing physicians for every 1,000 people. This is one of the lowest rates amongst peer countries. Overall, utilization rates are lower or comparable to those in other high-income nations.
Instead, the primary driver lies within the U.S. having higher prices, which is why the U.S. spends more on health care than any other country. Prices of labor and goods, including pharmaceuticals, as well as administrative costs, are the main factors driving the cost difference. Over the past two decades, numerous studies have shown that administrative costs account for approximately 15-25 percent of total national health care spending. This range translates to roughly $600 billion to $1 trillion annually, out of the total of $3.8 trillion in health expenditures in 2019. This trend has experienced significant growth in the past few years.
Another significant factor and topic of discussion is the fragmented system in the U.S. The intersection of different types of private and public payers, rather than replicating the single-payer system found in other countries. The U.S. operates on a multi-payer system. Other countries typically regulate or set prices for health care services and benefit from lower administrative costs. While the government can negotiate on behalf of Medicare and Medicaid, it cannot do so for private insurers, who often have weaker leverage against providers and pharmaceutical firms. The lack of centralized regulation contributes to high administrative overhead, price variation, and limited cost control across the system.
The U.S. faces a health care paradox: very high spending yet mediocre results. Despite pouring trillions into the system each year, Americans have lower life expectancy, higher infant mortality, and more chronic diseases compared to other wealthy countries. The problem is not the amount of care provided, but the way the system delivers and funds it. Redundant administrative processes, disjointed payment models, and expensive services and drugs all contribute to the inefficiency and inequality of the U.S. health care system.
Ruhi Saldanha is an undergraduate student.
