This chapter provides economic explanations of the level of total national health expenditures in the US and of population health outcomes. It helps managers explain the role of wage differences with other countries and the impact of income inequality and racism on spending and outcomes. Wages of healthcare workers are much higher in the US than abroad. The healthcare GDP share has stabilized after growing for many years, but beneficial yet costly new technology still matters for cost and health growth. Metrics of relative health spending are distorted by exchange rate mismeasurement. Evidence on the fraction of total spending that is wasteful is very uncertain because no managerial or policy actions as yet have been proven to reduce waste in ways that do more good than harm. Changes in insurance and pricing policy have the highest promise for improvement.