Related Experiment Videos

Comparison of hospital costs in California, New York, and Canada

J Zwanziger1, G M Anderson, S G Haber

  • 1Department of Community and Preventive Medicine, University of Rochester, NY.

Insights

US hospital spending per person was one-third higher than in Canada in 1987. Higher unit costs, not output differences, primarily drove these greater healthcare expenditures.

Area of Science:

  • Health economics
  • Comparative health policy
  • Healthcare administration

Background:

  • Hospital spending represents the largest component of overall healthcare expenditures.
  • Significant and recurring differences in hospital spending exist between the United States and Canada.

Purpose of the Study:

  • To compare hospital spending between two U.S. states and two Canadian provinces.
  • To understand the primary drivers of differences in per capita hospital costs between the two countries.

Main Methods:

  • Developed a composite measure of hospital output by combining various output metrics.
  • Converted all measures into U.S. dollars for direct comparison.
  • Analyzed hospital spending data from selected U.S. states and Canadian provinces for 1987.

Main Results:

  • In 1987, per capita hospital costs were approximately 33% higher in the United States compared to Canada.
  • The analysis indicated that higher unit costs were the main reason for the disparity in U.S. spending.
  • Differences in hospital output levels did not significantly contribute to the higher costs in the U.S.

Conclusions:

  • Higher unit costs, rather than greater hospital service volume, explain the elevated hospital spending per capita in the U.S. versus Canada.
  • Findings highlight the importance of investigating cost structures within healthcare systems for policy implications.

Related Concept Videos