Industry News

On October 4, 2023, the Commonwealth Fund released its issue brief, High U.S. Health Care Spending: Where Is It All Going? The Commonwealth Fund examined U.S. health care spending from a global perspective. The study represents a preliminary step in identifying and quantifying components of excess health care spending. According to the brief, the United States spends twice as much per person on health care as compared with other peer nations.  

Based on the data available, the findings indicated that, “More than half of excess U.S. health spending was associated with factors likely reflected in higher prices, including more spending on: administrative costs of insurance (about 15% of the excess), administrative costs borne by providers (about 15%), prescription drugs (about 10%), wages for physicians (about 10%) and registered nurses (about 5%), and medical machinery and equipment (less than 5%). Reductions in administrative burdens and drug costs could substantially reduce the difference between U.S. and peer nation health spending.”  

The brief concludes, “The findings suggest that reductions in administrative burdens, drug costs, and wages for physicians and nurses have the potential to substantially reduce the difference between U.S. and peer nation health spending.” 

The issue brief is available here.