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Controlling Health Care Costs

The United States spends far more per person on its health care system compared to the rest of the world. Eighteen percent of the nation’s economy is devoted to health care — 50 percent higher than Switzerland, the country that spends the next-highest share, and nearly double what many other high-income countries spend.

Despite all this spending, Americans’ health outcomes are often worse than those in other advanced nations, and there is ample evidence of waste and inefficiency. Research also shows that U.S. prices are out of line with what people elsewhere pay for the same medical services, devices, and pharmaceuticals. This is true even for products made in the U.S. and sold on global markets.

This level of spending not only puts a strain on businesses, governments, and household budgets but also makes care increasingly unaffordable for patients, even to the point where they forgo needed care. It also diverts resources away from wage growth, job creation, education, and other social and economic needs. And overpayment on some products and services may crowd out other high-value but underreimbursed care.

The Commonwealth Fund’s Controlling Health Care Costs program seeks to slow health spending by:

  • Identifying and explaining cost-drivers.
  • Developing and evaluating promising regulatory and market-based approaches to address the drivers of health care spending.
  • Increasing adoption of evidence-based approaches by federal and state governments, employers, and insurers.

Pharmaceutical spending and commercial health services prices are specific areas of research and policy development. Additional projects investigate emerging market dynamics that drive or curb spending, as well as the role of government and private sector payers in lowering health care prices through public policy and market-based reforms.

We hope findings from these and other analyses will inform new approaches to controlling costs that yield far better value for our health care dollars.

Program Contact:

Lovisa Gustafsson, Vice President, Controlling Health Care Costs

2024 Program Funding Priorities

  • Studying the effects of corporatization and financialization on health care costs, quality, and equity
  • Providing states the necessary tools to control health care spending and price growth
  • Studying the impact of the current reimbursement system, particularly within the commercial market, on safety-net health care providers
  • Studying the implementation and evaluation of the Inflation Reduction Act’s provisions to lower prescription drug costs
  • Studying how patents limit competition and increase spending in prescription drug markets
  • Studying the pricing and financing of extremely high-cost treatments and ways to achieve equitable access to them

Our Experts

Lovisa Gustafsson

Vice President, Controlling Health Care Costs

Paige Huffman

Program Assistant, Controlling Health Care Costs