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Of all the oddities of the U.S. health care system, one stands out: we spend far more on health care per person than other industrialized nations yet have no better health outcomes.

Understanding why isnt easy. A 2012 paper by the Commonwealth Fund found that, among 13 industrialized countries studied, the U.S. has the highest rate of obesity, which is usually a factor higher health care costs.

Yet, the U.S. ranks far behind many other countries in our rates of citizens who smoke or are over 55, two other strong indicators of increased spending.

So why is our health care spending more than 17 percent of our gross domestic product, far more than any other country?

In the recent debate over health care reform, two often cited culprits were fear of malpractice lawsuits and our complex health care payment structure. Doctors and hospitals practice defensive medicine, critics charge, ordering extraneous tests and procedures to protect themselves in the event of malpractice claims. This leads to over-use of the health care system.

(MORE: And Now, The Selling of Obamacare)

Likewise, fee-for-service medicine, in which hospitals and doctors are paid separately for every treatment, procedure or test they perform, also encourages over-use. And yet, the same Commonwealth Fund study found that, while we may be consuming more health care than we need, we arent nearly as guilty of this as, for example, Japan. There, patients consult with doctors, on average, more than 13 times a year, compared to the U.S., where patients have about four doctor consultations annually. Or how about Canada, where patients receiving acute care stay in the hospital an average of 7.7 days, compared to our 5.4?

A central reason U.S. health care spending is so high is because hospitals and doctors charge more for their services and theres little transparencyabout why. There is no uniformity to the system, in which public and private insurers have separate, unrelated contracts with hospitals and doctors. The result is a tangled, confusing and largely secretive collection of forces driving health care prices higher and higher.

This isnt possible in many other countries either because governments set prices for health care services or broker negotiations between coalitions ofinsurers and providers. Known as all-payer rate setting, insurers in these systems band together to negotiate as groups. In contrast, U.S. insurers closely guard the secrecy of their contracted prices with health care providers and negotiate individually. This is why a hospital hosting five patients for knee replacements might get paid five different amounts for the surgeries.

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America's Health Care Pricing Problem