The United States stands alone in the world of healthcare, but not necessarily in a way that inspires envy. It occupies a paradoxical position: the country that spends more on healthcare than any other nation still ranks near the bottom among developed countries for health outcomes and patient satisfaction. Understanding this paradox means looking at how the U.S. system differs from those of its peers, and why countries like Taiwan and South Korea consistently top global rankings for best healthcare.
The American Anomaly: A System Designed Differently
When other wealthy nations built their healthcare systems in the decades following World War II, they largely embraced the principle that healthcare is a right, not a privilege. The United States chose a different path. Rather than creating a national health insurance program, the U.S. developed a patchwork of private and public coverage that remains uniquely fragmented.
Today, the U.S. is one of only two countries in the OECD, along with Mexico, where a substantial portion of the population lacks health insurance entirely. Approximately 8 percent of Americans, or about 27 million people, remain uninsured, with rates even higher among Hispanic, Black, and Native American populations. The Affordable Care Act of 201 made real progress, cutting the uninsured rate from around 16 percent to under 9 percent, but it still fell short of universal coverage. In virtually every other wealthy nation, universal coverage is a settled matter.
This fragmented approach to coverage is made worse by an exceptionally complex insurance system. As one health policy expert at the BMJ observed after experiencing the U.S. system firsthand, using health insurance in America is “a bewildering maze of bureaucracy and barriers, with an incoherent rule book.” She noted that even a nurse with a PhD in health policy finds her own healthcare navigation difficult, a damning indictment of system complexity.
The consequences of this model are stark. Americans are far more likely to skip needed care because of costs—avoiding prescriptions, diagnostic tests, or follow-up treatment—than patients in any other comparable country. This cost-driven avoidance helps explain why the U.S. performs so poorly on metrics like avoidable mortality, despite its enormous spending.
The Price Problem: Why American Healthcare Costs So Much
The spending gap between the U.S. and other nations is staggering. In 2024, the U.S. devoted 18 percent of its gross domestic product to healthcare, nearly twice the average of other OECD countries and about 1.5 times the next-highest spender, Switzerland. Per capita spending reached $12,649 in the U.S., compared to about $6,284 on average across other wealthy nations, and more than ten times higher than Mexico.
Where does all that money go? The answer, according to decades of research, is not that Americans use more healthcare—they actually visit doctors less often and have shorter hospital stays than patients in many other countries. Instead, the problem is prices.
“It’s the prices, stupid,” says Peter Hussey, director of RAND Health Care, echoing the title of a paper he co-authored more than twenty years ago. “Every interaction we have with our health care system is more expensive than in other countries.” The same medications, procedures, and hospital stays cost dramatically more in the U.S. than elsewhere. A single treatment of the weight-loss drug Ozempic, for instance, costs multiple times more in America than in other countries.
Prescription drug prices show this disparity clearly. Americans spend more than $400 per person annually on out-of-pocket pharmaceutical costs, compared to less than $100 in France. The U.S. spends $1,765 per capita on prescription drugs and other medical goods, with much of that driven by higher prices rather than higher utilization.
Administrative costs add another layer. The U.S. spends $1,078 per capita on health administration, including the overhead of running government programs and private insurance systems. The complexity of the American system, with its multiple payers, constantly shifting networks, and Byzantine billing processes, creates enormous administrative burdens that other countries avoid through simpler, more streamlined systems. Taiwan’s National Health Insurance, for example, achieves remarkably low administrative costs through a single-payer model that uses smart health cards to integrate records across clinics, hospitals, and pharmacies.
The Performance Paradox: Poorer Health Outcomes at Higher Cost
For all its spending, the U.S. delivers health outcomes that lag behind its peers on nearly every meaningful measure. The 2024 Commonwealth Fund Mirror, Mirror report ranked the U.S. last among comparable nations on overall health system performance, using metrics including access, equity, and outcomes.
Life expectancy is perhaps the most jarring indicator. In 2024, U.S. life expectancy reached 79 years, two years below the OECD average and third-lowest among OECD countries. The gap is even larger when compared to the highest-performing nations: life expectancy at birth is 84.3 years in Switzerland, 84.1 in Japan, and 84. in Spain. These numbers represent more than just statistics; they show that Americans live shorter lives, on average, than their counterparts in nearly every other wealthy country.
The gap has widened dramatically over time. In 198, life expectancy in the U.S. was similar to that in most wealthy countries. But while other nations continued to see steady improvements, U.S. progress stagnated. By 2019, the average American could expect to live almost four fewer years than residents of comparable nations. The COVID-19 pandemic made this worse: the U.S. experienced a stunning life expectancy drop of nearly two years between 2019 and 202, while peer nations saw less than half a year of decline.
Avoidable mortality—deaths that could be prevented through effective public health measures or timely healthcare—also exposes U.S. weaknesses. The U.S. rate of avoidable mortality is second-highest among OECD countries, trailing only Mexico. Men are far more likely than women to die from avoidable causes, and the U.S. has one of the widest gender gaps in mortality among wealthy nations. Maternal mortality tells an even more troubling story: U.S. Black women experience the highest maternal death rates among all groups in the analysis.
These poor outcomes are driven in part by factors outside the healthcare system. The U.S. has significantly higher rates of drug overdoses, gun violence, and obesity than peer nations. Accidental poisoning, a category that includes drug overdoses, is a leading cause of years of life lost in the U.S., contributing to the nation’s unusually high rates of premature death. While these reflect broader social problems, they also point to failures in preventive care and public health.
Who Has the Best Healthcare? Ranking the World’s Systems
If the U.S. system consistently underperforms relative to its spending, which countries get it right? Multiple independent rankings consistently point to a handful of nations—Taiwan, South Korea, and Australia—as global leaders.
Taiwan has claimed the top spot in the CEOWORLD Health Care Index for multiple years, with an impressive score of 78.72 in 2025. Its National Health Insurance (NHI) system is a compulsory, single-payer model that guarantees universal coverage for all citizens and residents. Funded through payroll-based contributions and government subsidies, the NHI emphasizes preventive medicine and technology. Citizens use smart health cards that track medical records and integrate services across clinics, hospitals, and pharmacies. The result is high-quality, affordable care with low administrative costs and, notably, no waiting times for appointments despite universal coverage.
South Korea consistently ranks second, with a score of 77.70 in the 2025 index. Its system combines public and private insurance but mandates coverage for all residents regardless of plan type. Like Taiwan, South Korea benefits from low insurance administrative costs and efficient system design.
Australia rounds out the top three, scoring 74.11. Its system offers a universal mix of public and private insurance, complemented by a Pharmaceutical Benefits Scheme that makes essential medications affordable. The U.S., by contrast, ranks 15th in the CEOWORLD index with a score of 56.71.
Other systems deserve recognition. Canada, which ranks fourth in the CEOWORLD index, operates a universal publicly funded system called Medicare, though it has limitations: outpatient prescription drugs, vision care, and dental care are not covered, leading about 70 percent of Canadians to carry private insurance. Sweden, fifth in the ranking, offers universal care with capped copayments, about $130 per 12-month period for both visits and prescriptions, contributing to high life expectancy, strong cancer survival rates, and low avoidable mortality.
The Legatum Prosperity Index 2023, which takes a different methodological approach focusing on the overall health of societies and accessibility of tools to maintain health, ranks Singapore first, Japan second, and South Korea third, with the U.S. coming in at a much lower 69th place. This ranking gap shows how different methods can yield different results, but the consistent theme across virtually all assessments is that the U.S. lags far behind its peers.
What Other Countries Do Differently
The top-performing health systems share several common features that distinguish them from the U.S. model:
Universal or near-universal coverage is the norm. Most of the best-performing countries ensure that all residents have access to healthcare, regardless of employment or income. The U.S. remains the outlier, with coverage still tied largely to employment and millions uninsured.
Simplicity reduces costs. Single-payer systems like Taiwan’s or highly regulated multi-payer systems like Germany’s keep administrative overhead low. The U.S. system’s complexity, with its constantly changing networks, prior authorization requirements, and multiple payers, generates enormous administrative costs that add no medical value.
Preventive care receives emphasis. Taiwan’s NHI system explicitly promotes preventive medicine, while Sweden’s focus on primary care helps catch problems early. The U.S., by contrast, has one of the lowest rates of primary care physicians per 1,000 people among OECD countries.
Government plays a stronger role in cost control. Other countries are more willing to regulate prices, whether through negotiation, price controls, or other mechanisms. The U.S., by contrast, largely allows market forces to determine prices, which in healthcare has meant ever-higher costs rather than market efficiencies.
Health is treated as a public good, not a market commodity. As one political science professor observed after reviewing international healthcare systems, “It is inexcusably stupid to approach healthcare in business terms. The so-called ‘free market’ approach cannot work in healthcare by default since its purpose is not to include people but to exclude.”
What the U.S. Could Learn
The evidence is overwhelming that the U.S. healthcare system, despite its enormous spending, world-class research institutions, and some of the best hospitals in the world, delivers worse outcomes for more people at higher costs than virtually any other wealthy nation. As Princeton economist Uwe Reinhardt asked nearly 30 years ago, “Should the child of a poor American family have the same chance of avoiding preventable illness, or of being cured from a given illness, as does the child of a rich American family?” In most other wealthy nations, the answer is a clear yes. In the U.S., the debate continues.
Reform remains politically fraught, as the repeated attempts to repeal the Affordable Care Act show. Even some conservative lawmakers have become uneasy about proposals that would cause millions of their constituents to lose coverage. But the evidence from around the world is clear: universal coverage, simpler administrative structures, stronger cost controls, and a focus on primary and preventive care produce better health outcomes at lower cost.
The U.S. is capable of extraordinary care—cutting-edge cancer treatments, innovative research, and specialized hospitals that attract patients from around the world. The problem is not a lack of capability but a lack of access. The American healthcare system remains a system of excellence for those who can navigate it, and a system of frustration, bureaucracy, and even tragedy for those who cannot. As the experiences of countries like Taiwan, South Korea, and Australia show, it doesn’t have to be this way.
by ANNIE SHAW