Cost per person depends on services per person and the price of each of those services, so costs can be reduced in two ways. One way is to reduce service use. The other way is to reduce the price per service. Both of these ways require changes in behavior, and these changes in behavior require changes in incentives.
Prices are high in the United States and appear to be the main driver of the nation’s higher costs. For example, the average amount paid for a magnetic resonance imaging scan was $1,119 in the United States, $503 in Switzerland, and $215 in Australia. Likewise, the average amount paid for a hospital day was $5,220 in the United States, $4,781 in Switzerland, and $765 in Australia .
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These price differences are large enough to explain why spending per person is higher in the United States. Average spending per person was $9,036 in the United States in 2014, $7,536 in Switzerland, and $4,289 in Australia. Although the intensity of treatment may be higher in the United States, physician visits and hospital discharges per thousand are lower.