American Health Care May Be "Uniquely Inefficient"

The U.S. health care system may be uniquely inefficient compared to other countries, according to a National Bureau of Economic Research study. NBER researchers compared the diffusion of drugs of high and low quality (defined by relative therapeutic benefit) in the U.S. versus their diffusion in Australia, Canada, Switzerland, and the United Kingdom.

Low quality drugs, they find, are adopted more quickly in the United States. This finding supports the theory that health care in the U.S. is inefficient relative to health care in other countries. "The U.S. health care system may be 'uniquely inefficient' in the sense of fueling the rapid adoption and diffusion of medical technologies with small or unknown benefits," the researchers conclude.

Source: National Bureau of Economic Research, Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs, NBER Working Paper #23068