This paper uses the latest data from the Organization for Economic Cooperation and Development (OECD) to compare the health systems of the thirty member countries in 2000. Total health spending--the distribution of public and private health spending in the OECD countries--is presented and discussed. U.S. public spending as a percentage of GDP (5.8 percent) is virtually identical to public spending in the United Kingdom, Italy, and Japan (5.9 percent each) and not much smaller than in Canada (6.5 percent). The paper also compares pharmaceutical spending, health system capacity, and use of medical services. The data show that the United States spends more on health care than any other country. However, on most measures of health services use, the United States is below the OECD median. These facts suggest that the difference in spending is caused mostly by higher prices for health care goods and services in the United States.

Although Americans and foreigners alike tend to think of the U.S. health care system as being a "market-driven" system, the prices actually paid for health care goods and services in that system have remained remarkably opaque. This paper describes how U.S. hospitals now price their services to the various third-party payers and self-paying patients, and how that system would have to be changed to accommodate the increasingly popular concept of "consumer-directed health care." [Health Affairs 25, no. 1 (2006): 57-69]

Using the most recent data on health spending published by the Organization for Economic Cooperation and Development (OECD), we explore reasons why U.S. health spending towers over that of other countries with much older populations. Prominent among the reasons are higher U.S. per capita gross domestic product (GDP) as well as a highly complex and fragmented payment system that weakens the demand side of the health sector and entails high administrative costs. We examine the economic burden that health spending places on the U.S. economy. We comment on attempts by U.S. policymakers to increase the prices foreign health systems pay for U.S. prescription drugs.F o r a b r i e f m o m e n t i n t h e e a r ly 19 9 0 s it seemed that the combination of "managed care" embedded in "managed competition" would allow the United States to keep its annual growth of health care spending roughly in step with the annual growth of gross domestic product (GDP). It was a shortlived illusion. By the turn of the millennium the annual growth in U.S. health spending once again began to exceed the annual growth in the rest of the GDP by ever-larger margins.In the United States the impact on health spending of managed care and managed competition had been controversial from the start. Skeptics argued that these tools might yield a one-time savings, spread over a few years, but that by themselves they would be unlikely to slow the long-term growth in health spending thereafter.1 It now appears that these analysts were right. In retrospect, and taking a longer-run view, the cost control of the early and mid-1990s merely represents an abnormal period in the history of U.S. health care.Data for 2001, released by the Organization for Economic Cooperation and Development (OECD), show that over the period 1990-2001 the United States succeeded only in matching the median growth in inflation-adjusted health spending per capita in the other twenty-nine countries included in the OECD database (Exhibit 1).2 Viewed in that context, the United States can hardly claim to have found 1 0 M a y / J u n e 2 0 0 4