IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v25y2011i2p3-25.html
   My bibliography  Save this article

The (Paper)Work of Medicine: Understanding International Medical Costs

Author

Listed:
  • David M. Cutler
  • Dan P. Ly

Abstract

This paper draws on international evidence on medical spending to examine what the United States can learn about making its healthcare system more efficient. We focus primarily on understanding contemporaneous differences in the level of spending, generally from the 2000s. Medical spending differs across countries either because the price of services differs (for example, a coronary bypass surgery operation may cost more in the United States than in other countries) or because people receive more services in some countries than in others (for example, more bypass surgery operations). Within the price category, there are two further issues: whether factors earn different returns across countries and whether more clinical or administrative personnel are required to deliver the same care in different countries. We first present the results of a decomposition of healthcare spending along these lines in the United States and in Canada. We then delve into each component in more detail—administrative costs, factor prices, and the provision of care received—bringing in a broader range of international evidence when possible. Finally, we touch upon the organization of primary and chronic disease care and discuss possible gains in that area.

Suggested Citation

  • David M. Cutler & Dan P. Ly, 2011. "The (Paper)Work of Medicine: Understanding International Medical Costs," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 3-25, Spring.
  • Handle: RePEc:aea:jecper:v:25:y:2011:i:2:p:3-25
    Note: DOI: 10.1257/jep.25.2.3
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.2.3
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Samuel H. Preston & Jessica Y. Ho, 2009. "Low Life Expectancy in the United States: Is the Health Care System at Fault?," NBER Working Papers 15213, National Bureau of Economic Research, Inc.
    2. Mark McClellan, 1997. "Hospital Reimbursement Incentives: An Empirical Analysis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 91-128, March.
    3. Getzen, Thomas E., 2000. "Health care is an individual necessity and a national luxury: applying multilevel decision models to the analysis of health care expenditures," Journal of Health Economics, Elsevier, vol. 19(2), pages 259-270, March.
    4. David A. Wise, 2005. "Analyses in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise05-1, October.
    5. Anthony Atkinson & Thomas Piketty, 2007. "Top incomes over the twentieth century: A contrast between continental european and english-speaking countries," Post-Print halshs-00754859, HAL.
    6. Cutler, David M, 1995. "The Incidence of Adverse Medical Outcomes under Prospective Payment," Econometrica, Econometric Society, vol. 63(1), pages 29-50, January.
    7. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    8. Atkinson, A. B. & Piketty, Thomas (ed.), 2007. "Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries," OUP Catalogue, Oxford University Press, number 9780199286881.
    9. Cutler, David M. & Pozen, Alexis, 2010. "Medical Spending Differences in the United States and Canada: The Role of Prices, Procedures, and Administrative Expenses," Scholarly Articles 5343032, Harvard University Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rodrigo R. Soares & Rudi Rocha & Michel Szklo, 2021. "American Delusion: Life Expectancy and Welfare in the US from an International Perspective," Working Papers 13, Instituto de Estudos para Políticas de Saúde.
    2. Daron Acemoglu & Amy Finkelstein, 2008. "Input and Technology Choices in Regulated Industries: Evidence from the Health Care Sector," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 837-880, October.
    3. repec:dau:papers:123456789/7972 is not listed on IDEAS
    4. Vislie, Jon, 2009. "Incentive Contracts for Public Health Care Provision under Adverse Selection and Moral Hazard," HERO Online Working Paper Series 2001:6, University of Oslo, Health Economics Research Programme.
    5. Jeffrey Clemens, 2012. "The Effect of U.S. Health Insurance Expansions on Medical Innovation," Discussion Papers 11-016, Stanford Institute for Economic Policy Research.
    6. Stefan Schiman, 2013. "Langfristige Perspektiven der öffentlichen Finanzen in Österreich. Projektionen des Staatshaushalts bis 2050," WIFO Studies, WIFO, number 46670, February.
    7. Thomas Blanchet & Lucas Chancel & Amory Gethin, 2019. "How Unequal is Europe? Evidence from Distributional National Accounts, 1980-2017," World Inequality Lab Working Papers hal-02877000, HAL.
    8. Lucas Chancel & Thomas Piketty, 2019. "Indian Income Inequality, 1922‐2015: From British Raj to Billionaire Raj?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(S1), pages 33-62, November.
    9. Foellmi, Reto & Martínez, Isabel Z., 2014. "Volatile Top Income Shares in Switzerland? Reassessing the Evolution Between 1981 and 2009," CEPR Discussion Papers 10006, C.E.P.R. Discussion Papers.
    10. Piketty, Thomas & Bozio, Antoine & Garbinti, Bertrand & Goupille-Lebret, Jonathan & Guillot, Malka, 2020. "Predistribution vs. Redistribution: Evidence from France and the U.S," CEPR Discussion Papers 15415, C.E.P.R. Discussion Papers.
    11. Kevin Pineda‐Hernández & François Rycx & Mélanie Volral, 2022. "How collective bargaining shapes poverty: New evidence for developed countries," British Journal of Industrial Relations, London School of Economics, vol. 60(4), pages 895-928, December.
    12. Thomas Blanchet & Juliette Fournier & Thomas Piketty, 2022. "Generalized Pareto Curves: Theory and Applications," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 263-288, March.
    13. Paul Makdissi & Myra Yazbeck, 2012. "On the Measurement of Indignation," Working Papers 1213E, University of Ottawa, Department of Economics.
    14. Pablo García S. & Camilo Pérez N., 2017. "Desigualdad, inflación, ciclos y crisis en Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 44(2 Year 20), pages 185-221, December.
    15. Giesecke, Matthias & Jäger, Philipp, 2021. "Pension incentives and labor supply: Evidence from the introduction of universal old-age assistance in the UK," Journal of Public Economics, Elsevier, vol. 203(C).
    16. Zhang, Eagle & Andrew, Jane, 2016. "Rethinking China: Discourse, convergence and fair value accounting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 36(C), pages 1-21.
    17. Yannic Rehm & Lucas Chancel, 2022. "Measuring the Carbon Content of Wealth Evidence from France and Germany," PSE Working Papers halshs-03828939, HAL.
    18. Walter Bossert & Conchita D’Ambrosio & Kohei Kamaga, 2021. "Extreme Values, Means, and Inequality Measurement," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(3), pages 564-590, September.
    19. Advani, Arun, 2021. "Missing Incomes in the UK : Evidence and Policy Implications," The Warwick Economics Research Paper Series (TWERPS) 1364, University of Warwick, Department of Economics.
    20. Andrew Seltzer & Martin Shanahan & Claire Wright, 2022. "The Rise and Fall and Rise (?) of Economic History in Australia," CEH Discussion Papers 05, Centre for Economic History, Research School of Economics, Australian National University.
    21. Felipa de Mello-Sampayo & Sofia de Sousa-Vale, 2014. "Financing Health Care Expenditure in the OECD Countries: Evidence from a Heterogeneous, Cross-Sectional Dependent Panel," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(2), pages 207-225, March.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:25:y:2011:i:2:p:3-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.