The ongoing paradox of the US health care system is that US per capita spending on health care is much higher than any other country, but the results in terms of gains to US health don’t seem to stack up. Lawson Mansell describes the problem and offers some solutions in “Health Care Abundance: A Supply-Side Agenda” (Milken Institute Review, Third Quarter 2025, pp. 36-47).
To illustrate the problem, consider the category of “treatable deaths,” a statistic compiled by reseachers at the OECD. The idea is to leave out all deaths that happen over the age of 75, and focuses only on deaths from causes that could have been treated” with more effective and timely healthcare interventions. To be clear, this is a separate category from “preventable” deaths. The OECD writes:
The main treatable cause of mortality in 2021 was circulatory diseases (mainly heart attack and stroke), which accounted for 37% of premature deaths amenable to treatment. Effective, timely treatment for cancer, such as colorectal and breast cancers, could have averted a further 23% of all deaths from treatable causes. Respiratory diseases such as pneumonia and asthma (11%), as well as diabetes and other diseases of the endocrine system (10%) are other major causes of premature death that are amenable to treatment.
Mansell presents a graph with health care spending as a share of GDP on the horizontal axis, where it’s no surprise to see the US way above other countries. The vertical axis measures the treatable death rate, and given the high US levels of health care spending, it’s disconcerting to see that the US is an extreme outlier in this category.
Mansell offers a bunch of suggestions to hold down US health care costs. Some I like better than others, but here are two of the suggestions that seem worth attention. The first involves how Medicare pays more for the same health care if its delivered in a hospital than in a doctor’s office. Mansell writes:
Medicare is the source of a doozy of a perverse incentive blandly labeled site-based billing. Specifically, Medicare offers different reimbursement rates for different types of facilities providing the same service. In some cases, Medicare pays hospitals nearly double what they would pay a freestanding physician’s office. Even for routine services like X-rays, rates are up to four times higher for Medicare in hospital outpatient departments. Site-based payment discrimination has led hospital systems to acquire independent physician offices where they can collect more simply by labeling an off-campus facility as a hospital outpatient department. Indeed, all told, Medicare could save an estimated $127 billion over 10 years if site-neutral payments for routine services were extended to all hospital outpatient departments.
Lawson also emphasizes the importance of having more primary-care physicians. A cross-country comparison shows that the high-spending US health care system is also heavy on specialist doctors:
Lawson emphasizes that the US system for educating future doctors tends to drive them toward specialized career choices.
Becoming a doctor in the U.S. requires anywhere from 11 to 19 years of postsecondary education and training. U.S. doctors subsequently graduate with an average of over $200,000 in debt with no guarantee of a residency that’s well matched to their skills, locational preferences or interests. In contrast, medical students in Europe go through a dedicated six-year training program.
My own sense is that, in the US system for educating doctors, the idea of shifting back to a system that emphasizes primary care is a horse that left the barn several decades ago. Instead, I’d like to see substantial growth of the primary care health care services that can be provided by nurse practitioners and physician assistants. Overall, refocusing a share of the very high levels of US health care spending on reducing deaths from treatable (and preventable) causes doesn’t seem like an unreasonable ask.
