This analysis of the 2024 OECD healthcare expenditure data for the US and peer nations was published in an internal CMS newsletter. It was limited to 400 words and intended as descriptive work for a broader scope of audience.
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The paradox at the center of the American healthcare system: despite spending significantly more overall and per capita on healthcare expenditures, we live shorter lives and have greater rates of chronic illnesses than counterparts in comparable countries.
By conducting an analysis of the most recent data from the Organization for Economic Cooperation and Development (OECD), an analysis of peer nations (as designated by World Bank income categorization and population) reinforces the relative inefficiency of the American healthcare model.
Breaking down the per capita spend, OECD data shows that the US spends significantly more on administrative and pharmaceutical costs than peer nations. At the same time, Americans have the highest rates of ischemic heart disease and diabetes mortality despite spending 56% more per capita ($12,555) than Germany, the next highest spender ($8,049).
At the same time, Germany is the only country that spends more per capita on preventive care than the US, but we still see worse health outcomes across key indicators like life expectancy and chronic disease mortality. Take Australia for instance: the ~$390 Australians spend per capita on healthcare translates to a life expectancy of 83.2 years at birth, significantly higher than ours at 76.4 years.
This remains true across the board- of the peer nations analyzed, the US ranks last out of 14 for life expectancy (76.4) as well as ischemic heart disease mortality (114.3) and diabetes mortality (31.1). While spend is just one of many factors that impact healthcare outcomes on a macroeconomic basis, this illustrates the shortcomings inherent to our inefficient system.
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The American healthcare system is characterized by this high spending in contrast to comparatively poor outcomes. While we pay more for healthcare, both per person and overall, we do not live longer or healthier lives than our counterparts around the world.
Improving quality outcomes is one of the levers we can pull to improve the effectiveness of our health system. Although iQIIG is Medicare-funded and is of course beneficiary-focused, improving quality outcomes is a rising tide that lifts all boats as it impacts anyone who interacts with our healthcare system. Investments into efforts to reduce readmissions and healthcare-associated infections across settings can help US all to achieve better outcomes.