'Health care in the United States' is provided by many separate legal entities. The U.S. spends more on health care, both as a proportion of gross domestic product (
GDP) and on a per-capita basis, than any other nation in the world. Current estimates put U.S. healthcare spending at approximately 15% of GDP, the world's highest.
[1] The health share of GDP is expected to continue its historical upward trend, reaching 19.6 percent of GDP by 2016.
[2]
In the
United States, around 84% of citizens have
health insurance, either through their employer (60%), purchased individually (9%), or provided by government programs (27%; there is some overlap in these figures).
[3] The federal government does not guarantee
universal health care to all its citizens, but certain
publicly-funded health care programs help to provide for the elderly, disabled, children, and the poor,
[4][5] and federal law ensures public access to emergency services regardless of ability to pay.
[6] In 2001, only the governments of Iceland and Norway spent more per capita on health care.
[7] U.S. government programs accounted for over 44% of health care expenditures, making the U.S. government the largest insurer in the nation. When public and private spending are added together, the U.S. spends more per capita than any other nation.
[8] Americans without health insurance coverage, currently about 16% of the population, or 47 million people,
3 are expected to pay privately for medical services. Health insurance is expensive, and medical bills are overwhelmingly the most common reason for personal bankruptcy in the United States.
[9]
The debate about U.S. health care concerns questions of access, efficiency, and quality purchased by the high sums spent. The overall performance of the United States health care system was ranked 37th by the
World Health Organization (WHO) in 2000, but the same report assessed Americans' overall health at 72nd among 191 member nations included in the study.
[10][11] However, the WHO study has been criticized by conservative commentators as biased because it marked down countries for having private or fee-paying health treatment and rated countries by comparison to their expected health care performance rather than objectively comparing quality of care.
[12] Furthermore, most Americans rate their own health as "excellent" or "very good". The National Health Interview Survey, released annually by the Centers for Disease Control's
National Center for Health Statistics reported that approximately 66% of survey respondents said they were in "excellent" or "very good" health in 2006. This percentage has been declining since 1998.
[13]
Health care providers
American health care is provided by a diverse array of individuals and legal entities. Individuals offer inpatient and outpatient services for commercial, charitable, or governmental entities. The healthcare system is not fully-
publicly funded but is a mix of public and private funding. In 2004, private insurance paid for 36% of personal health expenditures, private out-of-pocket payments were 15%, while federal, state, and local governments paid 44%.
[14]
Services
"Ambulatory care" refers to health care outside the hospital; most health care in the United States occurs in the outpatient setting.
"Home health care services" are generally nursing enterprises, but are usually ordered by physicians.
Private sector outpatient medical care is provided by personal primary care physicians (specialists in internal medicine, family medicine, and pediatric medicine), subspecialty physicians (gastroenterologists, cardiologists, or pediatric endocrinologists are examples) or non-physicians (including nurse practitioners and physician assistants). In 1996,
concierge medicine emerged, where enhanced care and services are provided by primary care physicians for a retainer fee.
Facilities
There are for-profit hospitals, which are usually operated by large private corporations and there are nonprofit hospitals, which may be operated by county governments, state governments, religious orders, or independent nonprofit organizations.
Hospitals provide some outpatient care in their emergency rooms and specialty clinics, but primarily they exist to provide inpatient care.
Hospital emergency departments and urgent care centers are sources of sporadic problem-focused care.
"Surgicenters" are examples of specialty clinics.
Hospice services for the terminally ill who are expected to live six months or less are most commonly subsidized by charities and government.
Prenatal, family planning, and "dysplasia" clinics are government-funded obstetric and gynecologic specialty clinics respectively, and are usually staffed by nurse practitioners.
Medical products, research and development
Companies provide medical products such as
pharmaceuticals and medical devices. The nation spends a substantial amount on
medical research, mostly privately-funded. As of 2000, non-profit private organizations (such as the
Howard Hughes Medical Institute) funded 7%, private industry funded 57%, and the tax-funded
National Institutes of Health funded 36% of medical research in the U.S.
[15] However, by 2003, the NIH funded only 28% of medical research funding; funding by private industry increased 102% from 1994 to 2003.
[16] The research and development for applications is primarily done in commercial research and development labs while the government and universities fund the majority of basic research. Much of this basic research is funded or performed by governmental research institutes such as the
NIH and
NIMH.
Health care payment
Most Americans, 59.7%, receive their health insurance coverage through an employer, although this percentage is declining. About 9% purchase it directly from the market.
3 Government sources cover 27% of the population (80.3 million).
3 In 2006, there were 47 million people in the U.S. (15.8% of the population) who were without health insurance for at least part of that year. Among the uninsured, nearly 38 million were employment-age adults (ages 18 to 64), and more than 27 million worked at least part time. About 37% of the uninsured live in households with an income over $50,000.
3 It has been estimated that nearly one fifth of the uninsured population is able to afford insurance, almost one quarter is eligible for public coverage, and that the remaining 56% need financial assistance (8.9% of all Americans).
[17]
Commercial
The
"fee-for-service" business model is the default legal situation where the patient must pay out-of-pocket in full for all services rendered, similar to other
service industries.
[18].
Insurance payments are a form of cost-sharing and risk management where each individual or their employer pays predictable monthly premiums. This cost-spreading mechanism often picks up much of the cost of health care, but individuals must often pay up-front a minimum part of the total cost (a ‘’deductible’’), or a small part of the cost of every single procedure (a
copayment).
Managed care includes
preferred provider organizations, in which insurers negotiate discounted rates with contracted providers,
health maintenance organizations such as
Kaiser Permanente, which run their own hospital and clinic networks to control costs, and a few employers who employ an in-house physician or even operate their own outpatient clinics. Managed care is controversial, because cost control requires that treatments be authorized by a third party, intervening between doctors and their patients. Managed care frequently denies treatment options considered too costly for their benefits. Managed care is a form of non-price "
rationing" (as distinguished from price rationing); this explicit rationing is frequently criticized as one of the drawbacks of some national health care systems.
Public
Many individuals not covered by private insurance are covered by government insurance programs such as
Medicare and
Medicaid, various state and local programs for the poor, and the
Veterans Administration, which provides care to veterans, their families, and survivors through medical centers and clinics. In 2006, Medicaid provided health care coverage for 38.3 million poor Americans and Medicare provided health care coverage for 40.3 million elderly and disabled Americans.
[19] One study estimates that about 25% of the country's uninsured, or roughly another 11 million people, are eligible for government health care programs but unenrolled. However, extending coverage to all who are eligible remains a fiscal challenge.
[20] It has been reported that the number of physicians accepting
Medicaid has decreased in recent years due to relatively high administrative costs and low reimbursements.
[21] In 1997, the federal government also created the
State Children's Health Insurance Program (SCHIP), a joint-federal state program to insure children in families who earn too much to qualify for Medicaid but cannot afford health insurance.
[22] SCHIP covered 6.6 million children in 2006,
[23] but the program is already facing funding shortfalls in many states.
[24]
Role of government in health care market
The cost impact of a mixed public-private system is subject to debate. Some commentators and economists observe that government programs bid up health care prices because they lack the financial incentives to bargain with health care providers.
[ Mandatory Health Insurance Now! It will save private medicine -- and spur medical innovation. Ronald Bailey ] On the other hand, low reimbursement rates for Medicare and Medicaid have increased cost-shifting pressures on hospitals and doctors, who charge higher rates for the same services to private payers, which eventually affects health insurance rates.
[25] Furthermore, health maintenance organizations were declining before Congress passed the
Health Maintenance Organization Act of 1973, heavily subsidizing the HMO business model.
Health care regulation and oversight
There are government institutes such as the
Centers for Disease Control and Prevention that identify threats to
public health. In addition there are regulatory bodies such as the
FDA that identify and approve drugs for medical use and sale.
Many healthcare organizations also voluntarily submit to inspection and certification by the
Joint Commission on Accreditation of Hospital Organizations, JCAHO.
System inefficiencies and inequities
Inefficiencies
Increased use of catastrophic care
Uninsured Americans are less likely to have regular health care and use preventive services. They are more likely to delay seeking needed care, resulting in more medical crises and emergency hospitalizations, which are more expensive than ongoing treatment for such conditions as diabetes and high blood pressure. Uninsured patients are twice as likely to visit hospital emergency rooms as those with insurance; burdening a system meant for true emergencies with less-urgent care needs.
[26]
Shared costs of the uninsured
The costs of treating the uninsured must often be absorbed by providers as free care, passed on to the insured via cost shifting and higher health insurance premiums, or paid by taxpayers through higher taxes.
[27]
Administrative costs
The health care system in the U.S. has a vast number of players — there are hundreds, if not thousands, of insurance companies in the U.S.
[28][29] This system has considerable administrative overhead, far greater than in nationalized, single-payer systems, such as Canada's. An oft-cited study by Harvard Medical School and the Canadian Institute for Health Information determined that some 31 percent of U.S. health care dollars, or more than $1,000 per person per year, went to health care administrative costs, nearly double the administrative overhead in Canada, on a percentage basis.
[30]
Inequities
Coverage gaps
Enrollment rules in private and governmental programs result in millions of Americans going without health care coverage, including
children. The most recent data available from the U.S. Census Bureau indicates that 47 million Americans (about 15.8% of the total population) had no health insurance coverage during 2006.
3 Most uninsured Americans are working-class persons whose employers do not provide health insurance, and who earn too much money to qualify for one of the local or state insurance programs for the poor, but do not earn enough to cover the cost of enrollment in a health insurance plan designed for individuals. As health insurance rates rise and the population ages, those seeking to purchase health insurance directly are finding it increasingly difficult to do so, because some insurers are managing their risk by denying directly purchased coverage to individuals who have pre-existing conditions, some of them minor.
[31] Some states (like
California) do offer limited insurance coverage for working-class children, but not for adults; other states do not offer such coverage at all, and so, both parent and child are caught in the notorious coverage "gap."
Although EMTALA
[2] certainly keeps alive many working-class people who are badly injured, the 1986 law neither requires the provision of preventive or rehabilitative care, nor subsidizes such care, and it certainly does nothing about the difficulties in the American mental health system.
Coverage gaps also occur among the insured population — one study by the Commonwealth Fund published in ''Health Affairs'' estimated that 16 million U.S. adults were underinsured in 2003. The study defined underinsurance as characterized by at least one of the following conditions: annual out-of-pocket medical expenses totaling 10% or more of income, or 5 percent or more among adults with incomes below 200% of the federal poverty level; or health plan deductibles equaling or exceeding 5% of income. The underinsured were significantly more likely than those with adequate insurance to forgo health care, report financial stress because of medical bills, and experience coverage gaps for such items as prescription drugs. The study found that underinsurance disproportionately affects those with lower incomes — 73% of the underinsured in the study population had annual incomes below 200% of the federal poverty level.
[32]
Health disparities among minorities
Main articles: Health disparities
In the
United States, health disparities are well documented in minority populations such as
African Americans,
Native Americans,
Asian Americans, and
Hispanics.
[33] When compared to
whites, these minority groups have higher incidence of chronic diseases, higher mortality, and poorer health outcomes. Among the disease-specific examples of racial and ethnic disparities in the United States is the cancer incidence rate among African Americans, which is 25% higher than among whites.
[34] In addition, adult blacks and Hispanics have approximately twice the risk as whites of developing diabetes. Minorities also have higher rates of
cardiovascular disease,
HIV/AIDS, and
infant mortality than whites.
[34]
Regulatory inefficiencies and inequities
Healthcare regulatory costs
The healthcare industry is likely the most heavily regulated industry in the United States.
[36] A
Cato Institute study suggests that this regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.
The study found that the majority of the cost differential arises from
medical malpractice,
FDA regulations, and facilities regulations. Part of the cost arises from regulatory requirements that prevent technicians without medical degrees from performing treatment and diagnostic procedures that carry little risk.
[37]
Mental illness and the Emergency Medical Treatment and Active Labor Act (EMTALA)
Mentally ill patients present a challenge for emergency departments and hospitals. In accordance with the
Emergency Medical Treatment and Active Labor Act, mentally ill patients who enter emergency rooms are evaluated for emergency medical conditions. Once mentally ill patients are medically stable, regional mental health agencies are contacted to evaluate them. Patients are evaluated as to whether they are a danger to themselves or others. Those meeting this criteria are admitted to a mental health facility to be further evaluated by a psychiatrist. Typically, mentally ill patients can be held for up to 72 hours, after which a court order is required. Since the late 1970's, the community-based care model has been encouraged within the U.S. rather than institutionalization.
Inequities
EMTALA is an
unfunded mandate; the federal government and the state governments have never fully compensated both public and private hospitals for the full cost of such emergency charity care. As a result, innumerable private hospitals have gone out of business since 1986. Others have raised prices on those that can pay to avoid going out of business. The hospitals do attempt to bill uninsured patients directly under the fee-for-service model, but most such people cannot pay their hospital fees, and escape into
bankruptcy when hospitals seek legal process against them.
Political issues
Prescription drug coverage
During the 1990s, the price of
prescription drugs became a major issue in American politics as the prices of many new drugs increased exponentially, and many citizens discovered that neither the government nor their insurer would cover the cost of such drugs. In absolute currency, the U.S. spends the most on pharmaceuticals per capita in the world. However, national expenditures on pharmaceuticals accounted for only 12.9% of total healthcare costs, compared to an
OECD average of 17.7% (2003 figures).
[38] Some 25% of out-of-pocket spending by individuals is for prescription drugs.
[39]
The U.S. government has taken the position (through the
Office of the United States Trade Representative) that U.S. drug prices are rising because U.S. consumers are effectively subsidizing costs which drug companies cannot recover from consumers anywhere else (because many other countries use their bulk-purchasing power to aggressively negotiate drug prices). The U.S. position is that the governments of such countries should either deregulate their markets or directly remit the difference (between what the companies would earn in an open market versus what they are earning now) to drug companies or to the U.S. government. In turn, those companies would be able to lower prices for U.S. consumers. Currently, the U.S., as a purchaser of pharmaceuticals, negotiates some drug prices but is forbidden by law from negotiating drug prices for the
Medicare program.
Approximately one in five drugs that begin testing make it through the full approval process.
[40]
Health care debate
Main articles: Universal health care
The United States along with
South Africa are the only examples of industrialized nations without universal coverage. There is currently an ongoing debate on the need to achieve universal coverage as well as the best methods for improving the U.S. health care system.
References
1. "The World Health Report 2006 - Working together for health."
2. "The Not So Short Introduction to Health Care in US", by Nainil C. Chheda, published in February 2007, ''Accessed February 26, 2007''.
3. "Income, Poverty, and Health Insurance Coverage in the United States: 2006." U.S. Census Bureau. Issued August 2007.
4. Centers for Medicare & Medicaid Services: Medicare
5. Centers for Medicare & Medicaid Services: Medicaid
6. Centers for Medicare & Medicaid Services: Emergency Medical Treatment & Labor Act
7. http://earthtrends.wri.org/datatables/index.php?theme=4
8. World Health Organization: Core Health Indicators
9. "Illness And Injury As Contributors To Bankruptcy", by David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler, published at Health Affairs journal in 2005, ''Accessed 10 May 2006''.
10. World Health Organization assess the world's health system. Press Release WHO/44 21 June 2000.
11. Health system attainment and performance in all Member States, ranked by eight measures, estimates for 1997
12. Why Isn't Government Health Care The Answer?, ''Free Market Cure'', 16 July 2007
13. Early Release of Selected Estimates Based on Data From the 2006 National Health Interview Survey Released June 25, 2007
14. Health, United States, 2006. U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics.
15. The Benefits of Medical Research and the Role of the NIH
16. Medical Research Spending Doubled Over Past Decade, Neil Osterweil, MedPage Today, September 20, 2005
17. Dubay L, Holahan J and Cook A. The Uninsured and the Affordability of Health Insurance Coverage. ''Health Affairs'' (Web Exclusive), November 2006. [1] Accessed February 4, 2007.
18. FEHB Glossary. Retrieved May 31, 2006.
19. Enrollment in Medicare is expected to reach 77 million by 2031, when the baby boom generation is fully enrolled.[ Health and Human Services Statistics 2006 ]
20. Characteristics of the Uninsured: Who is Eligible for Public Coverage and Who Needs Help Affording Coverage?
21. Cunningham P, May J. "Medicaid patients increasingly concentrated among physicians." ''Track Rep.'' 2006 Aug;(16):1-5. PMID 16918046.
22. SCHIP Overview
23. SCHIP Ever Enrolled in Year
24. President's FY 2008 Budget and the State Children's Health Insurance Program (SCHIP)
25. Confronting The Medicare Cost Shift
26. National Hospital Ambulatory Care Survey
27. The Cost of Lack of Health Insurance, American College of Physicans
28. The trade association AHIP, America's Health Insurance Plans, has some 1,300 members.
29. "The Health Care Crisis and What to Do About It"
By Paul Krugman, Robin Wells, New York Review of Books, March 23, 2006
30. Costs of Health Administration in the U.S. and Canada
Woolhandler, et al, NEJM 349(8) Sept. 21, 2003
31. The "Uninsurables"
32. Insured But Not Protected: How Many Adults Are Underinsured?, , , , Health Affairs Web Exclusive,
33. Goldberg, J., Hayes, W., and Huntley, J. "Understanding Health Disparities." Health Policy Institute of Ohio (November 2004), page 3.
34. American Public Health Association (APHA), Eliminating Health Disparities: Toolkit (2004).
35. American Public Health Association (APHA), Eliminating Health Disparities: Toolkit (2004).
36. Health Care Regulation: A 9 Billion Hidden Tax, Christopher J. Conover, , , Cato Policy Analysis, 4-10-2004
37. The Medical Monopoly: Protecting Consumers Or Limiting Competition?, Sue A. Blevins, , , Cato Policy Analysis, 15-12-1995
38. OECD Health Data, How Does the United States Compare
39. http://content.healthaffairs.org/content/vol0/issue2004/images/data/hlthaff.w4.79v1/DC1/Heffler_Feb_Ex5.gif
40. http://www.allp.com/drug_dev.htm
See also
★
School health services
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Canadian and American health care systems compared
★ ''
Sicko''
External links
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Comprehensive database of health insurance research articles
★
History of Health Insurance in the United States
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Frequently-asked questions about health insurance
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American Healthcare
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''Why the United States Has No National Health Insurance: Stakeholder Mobilization Against the Welfare State, 1945-1996''
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How Stuff Works - Health Insurance
★
Medical Bill
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healthinsuranceinfo.net - Know Your Rights. A Group of Consumer Guides from Georgetown University Health Policy Institute
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Child Insurance - Insurance information and resources for parents and caregivers.
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A comprehensive research guide from Baker at Harvard Business School
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AP: U.S. life expectancy lags behind other countries'
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Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care The Commonwealth Fund, May 2007
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