Procedures and Prices: Both Contribute to Health Care Spending Increases

For very good reason, there has been lots of attention on healthcare prices in the United States lately. We spend more on healthcare in this country than anywhere else in the world, and we also charge higher prices for the healthcare we offer. Physicians in the United States make much more than their counterparts elsewhere in the world. Pharmaceutical companies know that the US market is where they are going to make a good share of their profits, because they can’t charge the same high prices elsewhere that they do in the United States.

But keep in mind: we spend more on health care from year to year not just because of high prices, but also because we provide more healthcare services to more people. The relative contribution of prices and procedures is nicely summarized in this figure, reproduced from an article in the Annals of Internal Medicine:

If we want to get healthcare costs under control, we can’t focus on price alone.

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