In 2003, several of us wrote a paper titled “It's the Prices, Stupid: Why the United States Is So Different from Other Countries” (Anderson et al. 2003). The paper compared the “real” resources used to deliver health care in the United States with those in other industrialized countries and found that the United States had fewer hospital beds, nurses, and physicians per capita than most other industrialized countries. We concluded the higher spending must be attributable to the higher prices in the United States.
The article by Tal Gross and Miriam J. Laugesen in this special issue examines many of the explanations that have been offered to explain why United States has higher prices than the other countries. With the possible exception of rent-seeking behavior (discussed below), the authors are correct that these are not viable explanations. This raises the question, what other factors could explain the higher prices...
