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March 13, 2018

The Real Cost of the US Health Care System

Author Affiliations
  • 1Department of Medical Ethics and Health Policy, Perelman School of Medicine, University of Pennsylvania, Philadelphia
JAMA. 2018;319(10):983-985. doi:10.1001/jama.2018.1151

That the US health care system is excessively costly is not news. The controversy involves 3 connected questions: (1) what are the real drivers of high costs, (2) what policies have the highest probability of reducing those costs, and (3) what are the consequences of not reducing excessive health care costs?

The late Uwe Reinhardt is famous for answering the question about what drives high US health care costs with the assertion “It’s the prices, stupid.”1 In their Special Communication in this issue of JAMA, Papanicolas and colleagues essentially agree.2 In a detailed analysis of health care spending in the United States and 10 other high-income, mainly European, countries, the authors found that the United States spends approximately twice as much on medical care and that the “[p]rices of labor and goods, including pharmaceuticals, and administrative costs appeared to be the major drivers of the difference in overall cost.”2