What do international comparisons of health care expenditures really show?

There is much interest in international comparisons of health care expenditures, in particular their relation to national income. They have been widely used to judge countries' performance in cost-containment, and in the United Kingdom have been widely quoted in debates about the funding of the National Health Service. This paper challenges conclusions drawn from simple analyses of this topic, which have used dubious and inappropriate data, questionable methods and assumptions, and simplistic ad-hoc reasoning. It looks particularly at price differences between countries, which have usually been hidden by using exchange rates to standardize national figures. When more appropriate conversion factors called purchasing power parities are used, many of the simple and conventionally-accepted conclusions no longer appear so obvious. The attempt to create apparent scientific facts for policy debates has been based on a misuse of international comparisons.