US Sees Highest Healthcare Spending But Worst Health Outcomes

Despite spending the most on healthcare, the United States has the worst health outcomes among high-income countries, including the lowest life expectancy at birth and the highest rate of people with multiple chronic conditions, a study from the Commonwealth Fund found.

Researchers used data from the Organisation for Economic Cooperation and Development (OECD) to analyze US healthcare spending, outcomes, status, and service use relative to other high-income countries. The analysis compared data for the US, Australia, Canada, France, Germany, Japan, the Netherlands, New Zealand, Norway, South Korea, Sweden, Switzerland, and the United Kingdom.

Healthcare spending as a share of the overall economy has been increasing in all countries for the past few decades. Healthcare spending rose particularly fast in 2020 due to the COVID-19 pandemic.

However, the US significantly outpaces other countries when it comes to healthcare spending. In 2021, the US spent 17.8 percent of gross domestic product (GDP) on healthcare, nearly twice as much as the average OECD country.

Healthcare spending per person in the US was almost two times higher than in Germany, the next closest country, and four times higher than in South Korea, which had the lowest spending. US healthcare spending includes expenditures for people in Medicaid, CHIP, Medicare, and military plans, as well as spending by those with private insurance and out-of-pocket spending.

The US is the only high-income country that does not guarantee health coverage for residents, resulting in a 2021 uninsurance rate of 8.6 percent.

While the country spends a substantial amount on healthcare, Americans see the worst health outcomes compared to other high-income countries.

Life expectancy at birth in the US was 77 years in 2020, which is three years lower than the OECD average. Additionally, racial disparities are apparent in the country’s life expectancies. The average life expectancy in 2019 was 74.8 years for non-Hispanic Black individuals and 71.8 years for non-Hispanic American Indians or Alaska Natives, compared to 78.8 years for non-Hispanic White individuals.

The US also had the highest rate of avoidable deaths in 2020, perhaps indicating a lack of timely and effective healthcare interventions. Similarly, the infant and maternal mortality rates were the highest in the US in 2020, at 5.4 infant deaths per 1,000 live births and 24 maternal deaths per 100,000 live births.

The obesity rate in the US was nearly two times higher than the OECD average and the highest among the other countries. Obesity is a key risk factor for chronic conditions like diabetes, cancer, and hypertension, the report noted.

Thirty percent of US adults said they had two or more chronic conditions—nearly twice the share of adults in France who said the same.

The COVID-19 pandemic also disproportionately impacted the US, with the country seeing more COVID-19-related deaths than any other high-income nation. For every 1 million COVID-19 cases between January 2020 and January 2023, there were more than 3,000 deaths in the US.

Despite high healthcare spending, Americans have low rates of physician visits, falling below most high-income countries and the OECD average. The US also has one of the lowest rates of practicing physicians.

Certain healthcare services were more common in the US than in other countries. For example, the US has a higher influenza vaccination rate and greater breast and colorectal cancer screening rates than most high-income countries.

According to the Commonwealth Fund, a critical step to improving health outcomes is facilitating access to health insurance. Additionally, containing rising healthcare costs and improving chronic disease management and prevention could help lead to better health outcomes.

“The findings of our international comparison demonstrate the importance of a healthcare system that supports chronic disease prevention and management, the early diagnosis and treatment of medical problems, affordable access to healthcare coverage, and cost containment — among the key functions of a high-performing system. Other countries have found ways to do these things well; the US can as well,” the report concluded.