US Health Care System

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The United States (US) has traditionally been considered as having the best healthcare system in the world, both in terms of technical advances, healthcare quality, and overall health outcomes. The US currently spends more per capita on health care than any other developed country in the world. With increasing globalization and information sharing, many have begun to question the US leadership role in health care by challenging the value (outcomes/price) of the health care that is delivered. Shocking awareness of patient safety, clinical efficiency, and overall quality of the US healthcare system, along with concerns about spiraling costs, increasing uninsured population, and the questionable sustainability of the overall system have created a vigorous healthcare debate within the US.

Currently within the US 6,000 and 7,000 physicians.

The US is alone among developed nations with the notable absence of a universal healthcare system. The US system is primarily one of private insurance, with governmental insurance provided for citizens on the healthcare fringe. Insurance is provided by large risk bearing corporate entities, who organize health care delivery by negotiating pricing and services with provider (physicians and hospitals) organizations. Beginning with World War II, most insurance was paid for by employers who offer health care benefits as a form of compensation to attract employees. However, with excessive inflation of healthcare costs (sometimes 2-3X consumer pricing index), many employers are being forced to reduce the health care related benefits. This has led to employees having to bear an increasing percentage of healthcare costs on their own. This has been a significant contributing factor in the rise of the people without health insurance in the US, currently estimated at 45 million or nearly 17% of the population. This has perpetuated a situation where those least able to pay actually pay more for their healthcare, thus perpetuating a vicious cycle of zero-sum cost shifting.

In addition to private health care, the US system has several public funded components:

  • Medicare is a federally funded government program providing coverage for the elderly and disabled with a historical work record. Originally created in 1965 as part of the Social Security Act, the Medicare program consists of four parts, which provides for hospital, medical, and prescription drug benefits. The program is under heavy scrutiny, and heavily influencing the pricing of the private healthcare insurance program in the US.
  • Medicaid is a joint federal and state program providing tax-financed coverage to low-income and disabled persons (indigents). The care in both Medicare and Medicaid is generally provided by privately owned hospitals or physicians in private practice, but public hospitals are common in older cities.
  • Workers Compensation is a government mandated form of insurance to cover work related injuries. Wage replacement benefits vary considerably state-to-state and employers bear the cost of this insurance. Businesses with considerable risks, such as bridge-building, mining, or meat processing face far higher worker compensation insurance costs than do office based clerical businesses. This can create disequities and inefficiencies in the market place, with the ultimate cost of this program passed along to the consumer in the form of higher prices.
  • The Department of Veterans Affairs directly provides health care to injured U.S. military veterans and current servicemen and women through a nationwide network of government hospitals (non-injured veterans are often not covered). Using tax payer dollars, the US government built out the largest integrated network of hospitals and clinics in the country. The VA was also one of the first healthcare organizations to fully deploy an electronic health record system wide, complete with computerized physician order entry and bar code medications. These innovations have enabled the VA to become the leading provider of high quality care in the United States.
  • The Indian Health Service provides public funded care for Native Americans as part of the various settlements achieved in the early 20th century. With over 40 hospitals, and more 500 clinics conveniently located on or near reservations, the IHS serves a populations of nearly 3 million people. IHS is recognized throughout the healthcare industry as having developed some of the most innovative population based measurement and monitoring software that has improved health care outcomes.

Many believe that the US private health system is on the verge of collapse. Data to support this can be found in the patient safety, clinical efficiency, spiraling costs, and healthcare quality issues that plague the system. A few alarming statistics:

  • Nearly 100,000 people die each year from preventable medical disease.
  • 1 in 5 lab tests requested because prior results not available
  • 1 in 6 hospitalizations complicated by medication errors
  • 1 in 7 admissions because prior health history not accessible
  • 1 in 8 physician orders not executed as written
  • 1 in 20 outpatient prescriptions improperly processed
  • Nearly every encounter exhibits variations from best practices
  • Providers rewarded for reactive care not outcome-based care
  • Patients, providers, and payers are increasingly dissatisfied

The cost of medicines is frequently not covered by insurances and it is common for U.S. citizens to travel to Canada and Mexico for drug purchases at prices far below those in their home areas. The U. S. legal system, which has the highest number of attorneys per 100,000 population of any country in the world, is available to assist in proving liability and collecting the money for medical bills from such insurances.

There have been multiple reform proposals put forth in response to these challenges. Proposals for universal health coverage (mandated insurance for all), a single payer solution (all healthcare government financed), increased consumerism (consumers take a more active role in making healthcare decisions), and value-based competition on results (demanding increased transparency of pricing, quality, and outcome) have all been put forth as concepts to improve the current system. Several states have taken the lead by putting together comprehensive healthcare legislation that incorporates many of these ideas. The Massachusetts 2006 Health Reform Statute and the California 2007 Health Care Reform are leading examples of comprehensive attempts to address cost, quality, and access issues. The Presidential election of 2008 will feature health care as a central issue for continuing to have our economy prosper.