Health care is one of the largest and most important industries in any country. It consumes between 3 and 18 percent of GDP, depending on the country. It employs a large number of skilled and unskilled workers and is vital to the economic survival of many small communities. It is often the primary source of income for families with children and can be a source of prestige, social cohesion and a sense of community well-being.
It is also a highly complex industry. Unlike other goods and services, health care is ill-defined and difficult to measure, its outcomes are sometimes uncertain, and its providers face conflicts of interest that must be managed effectively. The delivery of health care involves the use of a variety of tools, including education, research and technology. The system is complicated by the fact that many people rely on multiple providers to maintain their health and to treat acute and chronic illness. The delivery of health care is influenced by the availability and accessibility of doctors, hospitals, medical supplies and pharmacies. The delivery of health care is impacted by a range of public and private insurers, and individuals must make decisions about their coverage options and benefits.
The most important factor influencing health-care costs is the quality of treatment, measured by mortality and morbidity rates. Substantial gains have been made in preventing and treating such diseases as heart attacks, strokes, cancer, and low-birth-weight births, with a quarter of all deaths in the United States now attributable to such improvements. But these gains have come at a high cost. Researchers have estimated that the United States spends far more on health care per person than peer countries do. The reasons for this are varied, but much of the difference may be due to unnecessary spending and pricing practices.
For example, the United States spends more than twice as much per capita on administration (paperwork and billing) as peer nations do. And the price of health services is higher, which exacerbates administrative expenses. A 2023 Peterson Foundation study found that “scattershot” pricing seeds at least $230 billion in waste every year in the U.S. Health-care costs are inflated, too, because consumers are required to pay a larger share of the cost than is the case in other countries.
Other factors contribute to differences in health-care costs and performance between the United States and its peers. The COVID-19 pandemic, for example, caused some people to avoid medical settings and miss or delay preventive health visits. This could lead to pent-up demand, worsened health conditions and more costly treatments going forward.
Regardless of their overall rankings, all of the OECD’s top-ranked systems have weaknesses in some areas. For example, the Netherlands and Germany rank best on access to health-care services, but Australia and the United States perform poorly when it comes to affordability and care process. Moreover, no country ranks at the very top or bottom on all measures of performance.