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The newspaper of The Johns Hopkins University September 24, 2007 | Vol. 37 No. 4
United States Continues to Have Highest Level of Health Spending

By Tim Parsons
Bloomberg School of Public Health

The United States continues to spend the most on health care when compared to other Organization for Economic Cooperation and Development countries, and health care prices and higher per capita incomes are major factors, according to a study by researchers at the Johns Hopkins Bloomberg School of Public Health and Princeton University. Compared to the average OECD country in 2004, the United States has fewer health resources — physicians, nurses and hospital beds — and lower utilization of these resources. Health spending for chronic health issues, such as obesity, alcohol consumption and smoking, also contributes to high health spending in the United States. The study is published in the September/October issue of Health Affairs.

"We spend so much more money on health care in the United States than other industrialized countries [spend in theirs] primarily because our prices are so much higher," said lead author Gerard Anderson, a professor in the Department of Health Policy and Management at the Bloomberg School.

Using 2004 data, which is the most recent available, the researchers report the following key study results:

U.S. health care spending per capita was 2.5 times greater than in the median OECD country.

The United States spent 15.3 percent of its gross domestic product on health care, a figure that is substantially higher than in any other OECD country.

U.S. growth in health care spending per capita from 1994 to 2004 was similar to the OECD median.

The United States has promoted policies to reduce the number of hospital days as a way to contain costs. It is now ranked fourth highest among OECD countries for hospital spending per capita.

The United States spent 3.6 times what the median OECD country spent in 2004 for outpatient care. Most of the difference is attributable to higher spending on physician services.

The United States had fewer physicians, nurses and hospital beds per capita than the OECD median.

The United States also had lower utilization rates than the OECD median for physician visits per capita, acute care bed days and average length of inpatient stay.

The study authors examined the prevalence of chronic disease as an increasing financial burden in the United States and other countries. Five chronic diseases — diabetes, respiratory disease, cerebrovascular disease, heart disease and malignant neoplasm — cause two-thirds of deaths in the United States. Compared to other OECD countries, we have the highest mortality rate for some but not all of these chronic diseases.

The authors explain that policy-makers in the United States and elsewhere need to devote more attention to chronic disease, something that is already beginning to happen. "Policy-makers in many countries have recognized the necessity of coordinating efforts to manage chronic disease, especially for people with multiple chronic diseases," Anderson said. "It is recognized that behaviors such as diet, inactive lifestyle, and alcohol and tobacco consumption must be modified in order for chronic disease to decrease, which would in turn reduce overall health care spending."

Bianca K. Frogner, a doctoral candidate at Johns Hopkins, and Uwe E. Reinhardt, a professor at Princeton, co-authored the study, which was supported by a grant from the Commonwealth Fund.


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