Which Country Has the Most Expensive Health Care System?

Medical costs can vary tremendously across different countries. Some nations provide universal health coverage to all citizens, while others have privatized models. When looking worldwide, which country has the most expensive health care system?

The United States Has the Highest Health Expenditures

The United States spends more on health care than any other country.

According to data from the Organisation for Economic Co-operation and Development (OECD), the U.S. spends over $10,000 per person annually on health care. This is nearly double the OECD country average of around $5,000.

High spending is driven by a combination of factors:

• Expensive services and procedures: Doctor visits, hospital stays, surgeries, and prescription drugs come at a steep price in the U.S.

• Heavy reliance on specialists: Americans visit specialists more often than primary care doctors, which costs more.

• Liberal diagnostic testing: Doctors frequently order scans, tests, and procedures to thoroughly evaluate symptoms.

• High admin costs: Billing and insurance-related functions within the U.S. system are bureaucratic and expensive.

• High salaries for nurses and doctors: Clinicians in the U.S. are among the highest paid globally.

• Lack of price regulation: The government does little to control health care prices, allowing costs to rise unchecked.

As a result, Americans spend far more per person on health care than any other country.

Switzerland Has the Second Highest Expenditures

After the United States, Switzerland has the next most expensive health care system.

In 2019, average annual health spending per person in Switzerland was around $7,317. This is nearly 25% higher than in countries like Germany, Sweden, and France that ranked after Switzerland.

Factors making Swiss care so costly include:

• Mandatory private insurance: All Swiss residents must purchase private health plans with high premiums and out-of-pocket fees. There is no public option.

• State-of-the-art facilities and technology: Hospitals and clinics offer advanced, cutting-edge equipment and amenities that drive up operational expenses.

• High service prices: Doctors, hospitals, dental visits, and medications come at a steep price for patients. For example, a routine doctor visit can cost $200 or more out-of-pocket in Switzerland.

• Generous coverage mandates: Required minimum benefits of insurance plans are robust, increasing premiums.

• Ageing population: With rising numbers of elderly patients, demand for expensive services is climbing.

Switzerland is recognized for outstanding quality of care. But the privatized system means patients pay top dollar for the prestigious services.

Norway, Germany, and Sweden Also Rank Among the Most Costly

Rounding out the top five most expensive health systems are Norway, Germany, and Sweden.

In Norway, per capita health spending approached $7,000 annually in 2019. The country relies heavily on public financing, but the collective model has not constrained costs as expected. Norway’s expansive rural geography makes providing health services costlier. Salaries for nurses and specialists are also higher than average.

Germany’s health expenditures exceeded $6,300 per person in 2019. Generous public coverage means minimal out-of-pocket costs for residents. But the system relies heavily on public subsidies to fund the comprehensive benefits. Costs are now climbing rapidly as Germany’s population ages.

Finally, Sweden spends over $6,000 per capita on health care. While Sweden is admired for efficient and affordable universal coverage, costs are rising quickly. An influx of asylum seekers and refugees has increased demands on the system. Sweden also faces shortages of nurses and primary care doctors that inflate salaries for clinicians.

The mixture of public financing with increasingly expensive private providers has led costs to balloon in these three otherwise-efficient countries.

Why the U.S. System Is So Costly

There are fundamental reasons why the United States far outpaces others on health expenditures:

• Fragmented insurance system – Mixing private plans, public programs, and uninsured creates huge administrative burdens and cost-shifting.

• Expensive new drugs/technology – Pharmaceutical and device makers innovate and patent cutting-edge, high-priced products.

• Liberal use of healthcare – Americans use health services more often than other countries.

• Defensive medicine – Providers order excessive testing and procedures to protect against liability.

• Chronic illnesses – High obesity has led to more heart disease, diabetes, and arthritis requiring expensive treatment.

• Aging population – Longer lifespans mean more seniors needing intensive services.

• High physician salaries – U.S. doctors earn over $250,000 annually on average, twice as much as in other countries.

• Lack of price regulations – No limits exist on what providers can charge for drugs, devices, services, or premiums.

Reining in American health costs will require fundamentally changing how care is paid for and delivered. Other nations keep expenditures lower through unified public financing, controlled prices, and limiting access to expensive services.

Out-of-Pocket Spending Also Highest in the U.S.

High U.S. health costs hit patients directly through steep out-of-pocket spending.

In addition to paying thousands in insurance premiums, Americans also spend over $1,200 per person on deductibles, copays, and coinsurance costs annually. This is the highest level globally.

Switzerland and Norway rank next for high patient out-of-pocket costs. In Switzerland, patients pay nearly $900 per year on average above mandatory monthly insurance premiums. Norwegians also spend around $650 out-of-pocket on copays and coinsurance annually.

But most other nations successfully shield patients from direct costs through centralized public funding. Countries like the UK, Sweden, and Denmark all have minimal out-of-pocket health expenses for residents.

So the United States is an anomaly in both total expenditures and costs shouldered by patients. Most other developed countries make health services far more affordable by spreading risks across the population.

Private Insurance Model Drives Up Costs

One clear takeaway when examining different countries is that private health insurance is far more expensive.

Looking at European systems shows the cost impact of privatized versus government-run coverage:

• The UK’s centralized National Health Service keeps per capita spending under $5,000.

• Meanwhile, Switzerland’s mandatory private insurance system has the continent’s highest costs.

• Sweden and Germany’s mix of public and private insurance lands them somewhere in the middle.

Nations that rely predominantly on private health plans, like the U.S. and Switzerland, surrender the cost-control benefits of centralized public financing. Private insurers have financial incentives to deny claims and redirect sicker patients elsewhere. They also cannot negotiate medical pricing at the scale of government programs.

In short, privatized health models drive higher per-patient costs across the board.

The U.S. Spends More But Has Worse Health Outcomes

The irony is that while the United States spends vastly more on medical care, health outcomes are poorer than in countries that pay much less.

Some key examples:

• The U.S. has the lowest life expectancy and highest infant mortality rate among developed nations.

• Deaths from preventable causes are higher than peer countries.

• Hospital admissions for chronic conditions like diabetes and asthma are more frequent in America.

• Heart disease and stroke kill more Americans annually than citizens of other wealthy countries.

High spending does not directly correlate with excellent health outcomes for the U.S. In fact, the opposite is true – countries spending much less per capita enjoy longer lifespans and lower disease rates.

Good population health requires affordable access more than just high-cost treatments. And in the U.S., large coverage gaps due to the costs make health care out of reach for many.

The Bottom Line

It’s clear when comparing globally that the United States has the world’s most expensive health system by a large margin. Just a few other countries like Switzerland and Norway come close to matching U.S. spending levels.

But America’s privatized multi-payer model drives inefficiencies, administrative costs, and uncontrolled prices that other nations avoid through centralized public insurance. The U.S. system funnels more money into health care but produces worse outcomes.

Reining in runaway costs requires a shift to a simplified financing structure and tight controls on what hospitals, drug companies, and doctors can charge. Until major reforms happen, the U.S. will continue driving up health expenditures worldwide while failing to make citizens meaningfully healthier in return.