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The United States continues to outpace other developed nations in healthcare spending, yet it does not correspondingly lead in population health outcomes. In 2021, the U.S. spent approximately17.8% of its GDPon healthcare, nearly double the average of9.6%among high-income countries(Papanicolas, Woskie, & Jha, 2018). A key comparison can be made withCanada, which has a universal healthcare system and significantly lower per capita spending. One of the most notable contributors to higher healthcare costs in the U.S. isadministrative inefficiency. Morra et al. (2011) found that U.S. physician practices spendnearly four times morethan Canadian practices interacting with insurers. This includes time spent on billing, prior authorizations, and compliance with multiple payer requirements. These administrative burdens not only increase costs but also detract from clinical productivity and patient-centered care.

Pozen and Cutler (2010) further explored differences in spending between the U.S. and Canada, concluding that the primary driver is not utilization since Canadians actually use slightly more healthcare services, but ratherprices. Services, procedures, and pharmaceuticals all cost significantly more in the U.S., in part because of limited regulation on pricing and the influence of market-driven incentives. Canada's single-payer model allows it to negotiate lower prices and maintain cost control while still delivering quality care. Drug pricingremains a major differentiator. Anderson et al. (2019) and Tseng et al. (2020) emphasize that U.S. prescription drug prices are substantially higher than those in countries with centralized negotiation mechanisms. This directly impacts affordability and access, particularly among uninsured or underinsured Americans.

Although the U.S. healthcare system boasts technological advancement and specialty care options, these benefits are undercut bygaps in access, equity, and efficiency. In contrast, Canada's universal healthcare framework ensures equitable access and contains costs more effectively.

References

Anderson GF, Hussey P, Petrosyan V. It's Still The Prices, Stupid: Why The US Spends So Much On Health Care, And A Tribute To Uwe Reinhardt. Health Aff (Millwood). 2019 Jan;38(1):87-95. doi: 10.1377/hlthaff.2018.05144. PMID: 30615520.

Morra, D., Nicholson, S., Levinson, W., Gans, D., Hammons, T., & Casalino, L. (2011). US physician practices versus Canadians: Spending nearly four times as much money interacting with payers.Health Affairs, 30(8), 1-8.https://doi.org/10.1377/hlthaff.2010.0893

Papanicolas I, Woskie LR, Jha AK. Health Care Spending in the United States and Other High-Income Countries. JAMA. 2018 Mar 13;319(10):1024-1039. doi: 10.1001/jama.2018.1150. Erratum in: JAMA. 2018 May 1;319(17):1824. doi: 10.1001/jama.2018.4940. PMID: 29536101.

Pozen, A., & Cutler, D. (2010). Medical spending differences in the United States and Canada.Inquiry, 47(2), 124-134. Retrieved fromhttp://www.ncbi.nlm.nih.gov/pmc/articles/PMC3024588/Links to an external site.

Tseng P, Kaplan RS, Richman BD, Shah MA, Schulman KA. Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care System. JAMA. 2018 Feb 20;319(7):691-697. doi: 10.1001/jama.2017.19148. PMID: 29466590; PMCID: PMC5839285.