Health care spending in the United States reached $3.2 trillion in 2013, which accounted for 17% of U.S. GDP. This is almost twice as much as the OECD average of 9%, yet health outcomes in the U.S. are not twice as good as in these other countries. In fact, many outcomes are worse. For example, life expectancy at birth in the U.S. is 78.8 years, which falls short of the OECD average of 80.5 years.
Health care spending also varies substantially within the United States. Many studies have documented enormous geographic variation in spending, finding no clear relationship with quality of care and health outcomes. While some differences in spending and patient outcomes are due to factors outside the health care system, this evidence suggests that there is considerable waste in U.S. health care spending. Many have concluded that at least 20% of spending could be reduced without harming patients.
By Yusuke Tsugawa & Anupam B. Jena | Harvard Business Review
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