It's the Prices, Stupid: Why The United States Is So Different From Other Countries

Gerard F. Anderson, Uwe E. Reinhardt, Peter S. Hussey, Varduhi Petrosyan

Health Affairs. 2003;22(3) 

In This Article


In Fall 1986 Health Affairs published the first of nearly two decades' worth of reports summarizing the state of health care spending in industrialized countries that are members of the Organization for Economic Cooperation and Development (OECD). In that first report, featuring 1984 data, the United States led the way in per capita health care spending at $1,637, nearly double the OECD mean of $871 (in purchasing power parities based on the U.S. dollar). In the latest offering, featuring data from 2000, the situation is much the same, although the absolute numbers are much higher (U.S. per capita spending of $4,631, compared with an OECD median of $1,983).

Over the years the OECD has refined its methodology to improve the comparability of data from vastly different health care systems. The analysis published in Health Affairs has greatly expanded from those early reports to examine underlying trends in spending differentials and to examine what the different countries get for their health care dollar in terms of population health indicators. In the current report, the authors look in depth at factors contributing to higher health care prices in the United States, which they contend are responsible for much of the difference between the U.S. spending levels and those of the other countries.

Lead author Gerard Anderson has been on the faculty of the Johns Hopkins University since 1983. He is a professor in the Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, and serves as that department's associate chair. He holds a doctorate in public policy analysis from the University of Pennsylvania. Uwe Reinhardt is the James Madison Professor of Political Economy at the Woodrow Wilson School, Princeton University. He holds a doctorate in economics from Yale. Peter Hussey is a doctoral candidate in the Department of Health Policy and Management. He serves as a consultant to the OECD Social Policy Division/Health Policy Unit. Research assistant Varduhi Petrosyan is also a doctoral candidate at Hopkins. She will become an assistant professor at American University of Armenia in May 2003.