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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. Evidence 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 puts a strain on businesses, governments, and household budgets. It also diverts resources away from wage growth, job creation, education, and other social and economic needs.

The Commonwealth Fund’s Health Care Cost Control program seeks to slow health spending by:

  1. Identifying and explaining cost-drivers.
  2. Developing and evaluating promising regulatory and market-based approaches to address the drivers of health care spending.
  3. 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 the role of government and private sector payers in lowering health care prices through public policy and market-based reforms. Medicare spending and opportunities for savings are also an area of interest.

It is hoped that 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

2023 Program Funding Priorities

  • Studying implementation and evaluation of the Inflation Reduction Act’s provisions to lower prescription drug costs

  • Providing states the necessary tools to control health care spending and price growth

  • Studying how patents limit competition in prescription drug markets

  • Studying vertical integration across health care market sectors, such as integration of insurers, pharmacy benefit managers, and care providers

Our Experts

Lovisa Gustafsson

Vice President, Controlling Health Care Costs

Paige Huffman

Program Assistant, Controlling Health Care Costs