Answer: “It’s the prices, stupid,” which is the title of a 2003 paper in Health Affairs by Princeton University health economist Uwe Reinhardt.  This 2003 study found that “people in the United States typically use about the same amount of health care as people in other wealthy countries do, but pay a lot more for it.”

From 1996-2013, American personal health spending grew from $1.2 trillion to $2.1 trillion (adjusted for inflation).

The health sector grew by 4% annually, while the overall economy grew by 2.4% each year.

Demographics such as increasing population and ageing population accounted for less than half of spending growth.

Increasing sickness did not account for spending growth, researchers found.

Health care visits and hospital stays (and care intensity) and the prices of those services and procedures account for spending growth.

A JAMA study by scholars from the Institute for Health Metrics and Evaluation in Seattle and the U.C.L.A. David Geffen School of Medicine found that more is done for patients during hospital stays and doctor visits, they’re charged more per service, or both.

Various other studies place more emphasis on prices versus more being done for patients during physician visits.


What are solutions?  Price regulation, for one, where all insurers and public programs pay the same amount, or single-payer systems.  There is also an argument that high prices spur innovation in health care, which benefits consumers.  What do you think?



Austin Frakt, Aaron E. Carroll, “Why the U.S. Spends So Much More than Other Nations on Health Care,” The New York Times, 2 January 2018,

Related posts