Forbes January 15, 2020
Joshua Cohen

As Democratic presidential candidates debate the state of U.S. healthcare, a common theme is the high cost of the system. Senator Bernie Sanders (I – Vermont), in particular, has made the claim that the U.S. spends twice as much on healthcare, per capita, as any other nation in the world.

According to the Organization for Economic Cooperation and Development (OECD) the U.S. spent $10,586 on healthcare per capita in 2018, about twice the average of $5,280 among peer nations. While Sanders’ claim is erroneous, he’s pointing to a serious problem.

Total healthcare spending is a function of both prices paid for and volume of healthcare services and technologies provided. Higher prices – “it’s the prices, stupid” – rather than utilization...