The U.S. spends a lot on healthcare, but gets comparatively poor returns.
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The United States spends a lot on healthcare — both in terms of total and per capita expenditures and patient out-of-pocket costs — but gets comparatively poor returns on its investment. While this isn’t a new phenomenon, the widening gap in life expectancy between the U.S. and its peers and the current affordability crisis for American patients throws it into sharp relief.
The independent, non-profit health organization KFF says that roughly half of U.S. adults don’t have “cost security” regarding their health. Rising out-of-pocket expenses force millions of Americans to skip needed medical appointments and medications. Indeed, among 20 nations evaluated in a recent report released by the Commonwealth Fund, a private foundation dedicated to healthcare analyses, Americans are the most likely to skip medications, treatments, tests, and consultations due to costs.
Out-of-pocket expenses have gotten to be a worse problem for people in the past year, a survey revealed. Affordability looks to be a key issue in this year’s mid-terms, as polling from Axios-Ipsos shows.
Here, affordability relates to patients’ out-of-pocket costs in the form of premiums and co-payments. And these keep rising. More than half of voters have had to take steps to mitigate high health costs, including avoiding doctors’ visits or taking on debt to afford treatment.
The Commonwealth Fund report concludes, “Americans pay more for health care, get less in return, and remain far more exposed to illness, debt, and insecurity than their peers.”
Apart from the problem of affordability for patients, there’s the issue of all the dollars spent on healthcare and whether the nation is getting value for money.
U.S. health spending hit a record $5.7 trillion in 2025, which translates to approximately 18% of the gross domestic product. Hospital care takes up the biggest share of healthcare expenditures. High labor costs and administrative overhead caused in part by an extraordinarily complex insurance billing system are a notable issue. And one of the key factors driving the uptick in spending is utilization of high-cost medications, particularly among Medicare beneficiaries and those with commercial insurance. Average annual growth for spending on prescription drugs was 11% in 2025 an increase of more than 3% in one year.
Despite the staggering amount spent in the healthcare sector, Americans have the lowest life expectancy, 79, and the second-highest avoidable mortality rate among comparable nations. These are deaths caused by conditions that can be prevented with primary care or treated with timely medical interventions.
While gains in employment are heavily concentrated in the healthcare sector, making it a crucial part of the economy, all the spending isn’t making America as healthy as its peers. Moreover, the subpar health outcomes aren’t evenly distributed. Rural areas suffer more than urban; blacks and other minorities have worse outcomes than whites.
No matter which reform solutions are ultimately chosen to systematically bend the cost curve, there’s a consensus among experts that resources must be better allocated. Specifically, policymakers cite the importance of more preventive care in addition to lifestyle modifications such as a better diet and more exercise that improve health independent of healthcare provision.
Conspicuously, however, the U.S. has by far the fewest per capita number of primary care providers of all countries. Primary care is often where disease prevention starts. And poor diet and sedentary living continue to be the leading causes of preventable chronic conditions, including obesity, type 2 diabetes and cardiovascular disease.