The Commonwealth Fund released a report last Thursday detailing healthcare spending in the U.S. compared to 12 other industrialized countries. The report found that, despite higher costs, quality of care in the U.S. was not notably superior to less-expensive systems, and in other ways lagged behind. The higher spending could not be attributed to common indicators, such as an aging population, smoking rates or higher incomes, but is rather due to higher and less regulated prices, greater access to technology and higher obesity rates.

The report, Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices and Quality, looked at spending and quality measures in Australia, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the U.K. and the U.S. Spending in the U.S. approached $8,000 per person in 2009, while others spent anywhere from one-third to two-thirds as much. Quality indicators show that the U.S. has better than average cancer survival rates, average heart-attack and stroke mortality rates, and the worst rates for asthma and diabetes related preventable deaths and amputations.

Using a linear regression model to predict healthcare spending based on national income, the study found that the U.S. would spend $4,849 per capita or 11% of GDP, far less than the $7,960 and 17.4% spent in 2009. If the U.S. were to spend the same share of GDP on healthcare as the Netherlands (the next highest GDP spender), the U.S. would have saved $750 billion in 2009, and $1.25 trillion if it had spent the same amount as Japan (the lowest spender).

The study looked at contributing factors to higher spending in the U.S. and debunked several myths, such as an aging population, higher incomes and smoking rates. Among the 13 countries studied, the U.S. population was far younger, with 13% older than 65 compared to the OECD median of 16%, and Japan at 22.7%. The study also found the U.S. smoking rate (16% of adults) to be far below the OECD average (21.5%) and the second lowest after Sweden (14.3%). Finally, the highest-income country in the study was Norway, and its spending on GDP was $5,352 per capita and 9.6% of GDP (nearly eight percentage points lower than the U.S.).

The study next looked at what contributing factors may lead to higher spending without greater outcomes. Obesity rates indicate that one-third of the U.S. is obese, while New Zealand is the next highest at 26.5%, followed by Australia at 24.6%. Obesity costs accounted for 10% of all medical spending in 2008. The U.S. also has more access to expensive medical technology leading to higher hospital visits, with the U.S. average of $18,000 per discharge compared to less than $10,000 in Sweden, Australia, New Zealand, France and Germany. Finally, the more complex and less regulated fee system in the U.S. (aka, no price controls) leads to higher prices, with prices for 30 of the most commonly prescribed drugs one-third higher than in Canada and Germany and twice the prices in Australia, France, Netherlands, New Zealand and the U.K.

The study concluded that the U.S. could learn lessons from Japan’s fee-for-service system that allows unrestricted access to specialists and hospitals. Through transparency and price regulations, Japan’s prices are capped for procedures, whereas the U.S. has widespread variation and a lack of transparency, and that an all-payer system (also utilized in Maryland) could reduce these costs


In order to get affordable health insurance in Santa Monica and Cailfornia we need a more transparent health care system. The consumer needs to know what each health care procedure cost, only with that he has the ability to question the system and starts to control his health care cost, and with that health insurancepremium can be controlled in Santa Monica.