THE UNITED STATES’ HEALTHCARE SYSTEM

Image via Suneel Dhand

Healthcare in the United states is vastly outspent by any other country, both in terms of per capita spending and as a proportion of GDP. Despite this, the country has much lower healthcare results when compared to comparable nations. The United States is the only developed nation without a universal healthcare system, with a major part of its people lacking health insurance, which contributes significantly to the country’s excess mortality. In the United States, 58% of community hospitals are non-profit, 21% are government-owned, and 21% are for-profit.

The United States had the highest or near-highest prevalence of obesity, vehicle accidents, infant mortality, heart and lung disease, sexually transmitted diseases, adult pregnancies, injuries, and homicides among 17 high-income countries assessed by the National Institutes of Health in 2013. According to a 2018 research, the United States rated 29th in terms of healthcare access and quality.

A 2009 study conducted at Harvard Medical School in collaboration with the Cambridge Health Alliance by cofounders of Physicians for a National Health Program, a pro-single payer lobbying group, indicated that a lack of patient health insurance is responsible for roughly 45,000 fatalities each year.

Hospitalizations

Image via macrovector. 

According to a National Institutes of Health study, the lifetime per capita expenditure at birth in 2000 dollars showed a significant difference between the healthcare expenditures of girls ($361,192, corresponding to $568,345 in 2021) and boys ($268,679, equivalent to $422,774 in 2021). Even after adjusting for age (assuming males live as long as women), there is still a 20% disparity in lifetime healthcare expenditures.

The 2004 IOM research also stated that “lack of health insurance causes around 18,000 avoidable deaths every year in the US”. Prior to the Affordable Care Act’s passage in 2014, 39% of low-income Americans reported not seeing a doctor for a medical concern (compared to 7% of low-income Canadians and 1% of low-income British nationals).

The top things you should know about healthcare in the United States: 

• Healthcare is prohibitively pricey. A $7,500 charge is possible if you break your leg, according to a US government website. If you need to stay in the hospital for three days, the cost is likely to be around $30,000.
• The majority of people in the United States have health insurance. Health insurance protects you from owing a large sum of money to doctors or hospitals if you become ill or injured. To obtain health insurance, you must make regular payments (known as “premiums”) to a health insurance organization. In exchange, the firm promises to pay some or all of your medical expenditures.
• Getting medical care usually necessitates an appointment. If you wish to see your PCP, you must make an appointment with his or her office. You must explain why you require the appointment when you call. If you are ill or injured, you will be seen as soon as possible. If you simply require a normal physical examination, you may have to wait several weeks or even a month.
• There is no such thing as universal health insurance. The government of the United States does not give health benefits to its residents or visitors. Someone has to pay for your medical care whenever you receive it.

Health Insurance Providers

Image via Mark Rosanes

Private:

The great majority of the population, almost 74%, is covered by private health insurance (Figure 1). Those under the age of 65 and their dependents acquire private health insurance through their jobs (61 percent of the population) or through direct non-group health insurance purchasing (13 percent of the population).

A tiny minority of the population, 13%, has dual health insurance coverage2 (e.g., both private and state health insurance), while 14% have no insurance.

In recent years, most large businesses have chosen to “self-insure,” or fund health-care costs as they arise, rather than purchase insurance from a firm, because doing so exempts them from State insurance regulations, as discussed further below.

Employers who provide health benefits to their employees are not liable to either the personal income tax or the Social Security tax. If such earnings had been taxed as income in 1990, federal revenues would have grown by an estimated $56 billion (U.S. Department of the Treasury, 1990).

Steel and automobile industries, for example, have the most comprehensive benefit packages. Service industries (for example, restaurants) may give minimal or no coverage.

Medicare:

Medicare is a standardized national health-care programme for the elderly and disabled. Medicare is a standardized national health care programme for the elderly and disabled. It is the country’s main health insurer, administered by the federal government, covering over 13% of the population, including practically all of the elderly 65 and older (31 million people) and some people with impairments or kidney failure (3 million people) (Board of Trustees of the Federal Hospital Insurance Trust Fund, 1992).

Medicare is geared toward acute care and does not cover services such as long-term nursing home care, basic eye care, or outpatient prescription medicines. Furthermore, Medicare patients must pay coinsurance and deductibles.

Image via Medicare Logo PNG 

Medicaid:

Medicaid is a health-care programme for low-income people. It includes preventative, acute, and long-term care services for 25 million individuals, or 10% of the population.

Medicaid is funded collaboratively by the federal and state governments. The federal government matches state Medicaid expenditures at different percentages depending on the state’s personal income level: The federal government’s part of overall spending ranges from 50 to 83 percent, with poorer states receiving a greater match.

A person must be poor, elderly, blind, handicapped, pregnant, or the parent of a dependent child to be eligible for Medicaid. Mothers and dependent children make up approximately 68 percent of Medicaid recipients, followed by the elderly (13%), the blind and crippled (15%), and others (4%).

Individuals with assets beyond State-defined criteria, as well as childless, non-disabled adults under 65 years old, are not eligible, regardless of how low or exorbitant their medical bills are.

Skilled nursing and intermediate care institutions account for around 43% of Medicaid expenses.

Image via Medicare Made Clear®

Other:

Uninsured people receive less health-care services than insured people with comparable health condition.

Preventive health initiatives such as immunizations, cancer screening programmes, and well-child care are supported by public health spending. The services are frequently provided to anyone, though a fee based on income may be levied.

The Affordable Care Act (ACA):

The passage of the Patient Protection and Affordable Care Act, or ACA, in 2010 was the most significant increase of the government’s role in financing and regulating health care to that point. The following were components of the law’s significant coverage increases, which were enacted in 2014:

• Requiring the vast majority of Americans to buy health insurance or face a fine (the penalty was later removed).
• Extending coverage for children by enabling them to stay on their parents private policies until the age of 26.
• creating health insurance markets, or exchanges, that provide premium subsidies to low- and middle-income people.
• Medicaid eligibility is being expanded with the support of government subsidies (in states that chose this option).
• The Affordable Care Act resulted in an estimated 20 million people receiving coverage, lowering the percentage of uninsured adults aged 19 to 64 from 20% in 2010 to 12% in 2018.

Image vai Natalie Timoshin

The Government’s Role

The federal government is responsible for the following:

• Managing and funding the Medicare programme.
• Enacting legislation and developing national strategy.
• Co-funding the Medicaid programme and establishing fundamental rules and regulations.
• CHIP financing.
• Financing health insurance for federal employees, active and retired military personnel, and their families.
• Governing pharmaceuticals and medical gadgets.
• Administration of federal marketplaces for private health insurance.
• Providing premium assistance for private marketplace coverage.

The Affordable Care Act (ACA) established a federal marketplace, HealthCare.gov, enabling the purchase of individual primary health insurance or dental coverage through private plans. States may also establish their own marketplaces.

In 2019, more than one-third of Medicare beneficiaries choose to receive their coverage through a private Medicare Advantage health plan.

Medicaid recipients may obtain their benefits through a private managed care organization, which is paid by state Medicaid departments on a capitated, often risk-adjusted basis. Over two-thirds of Medicaid recipients are enrolled in managed care.

The ACA mandates individual marketplace and small-group market plans (for businesses with 50 or less employees) to cover ten categories of “essential health benefits”:

• hospitalisation
• pregnancy and neonatal care
• Treatment for substance use disorders and mental health services
• prescription medications
• services for ambulatory patients (doctor visits)
• emergency assistance
• services and equipment for rehabilitation
• services provided by laboratories
• Services for prevention and wellness, as well as chronic disease management
• Pediatric services, such as dental and vision care, are available.

Doctor visit copayments are often paid at the time of service or billed to the patient later. Some insurance plans and products (such as health savings accounts) require patients to file claims in order to be reimbursed.

Providers bill insurance companies by classifying the services they provide. Because there are thousands of codes, this process can take a long time; providers usually hire coding and billing specialists.

A tiny proportion of providers do not accept insurance due to administrative barriers. Instead, they only take cash payments or annual or monthly retainer payments to physicians for “concierge medicine,” which provides greater access to services.

Hospitals

In 2018, 58% of the 5,198 short-term acute care hospitals in the United States were non-profit, 24% for-profit, and 19% were public (state or local government–owned). 27 In addition, the federal government operated 209 hospitals.

Hospitals are free to accept whichever insurance they want, while the majority accept Medicare and Medicaid. Hospitals are paid in several ways.

• Medicaid pays hospitals on a DRG, per diem, or cost-reimbursement basis, and states have a lot of leeway in deciding how much to pay hospitals.
• Private insurers frequently pay hospitals on a per diem basis, which is normally negotiated on an annual basis between each hospital and its insurers.

Medicare reimburses hospitals based on anticipated diagnosis-related group (DRG) rates that exclude physician payments.

Image via Agrandir Original (jpeg, 20k)

The primary strategies for ensuring care quality

The ACA mandated the U.S. Department of Health and Human Services to develop a National Quality Strategy, a set of national goals and priorities to drive local, state, and national quality improvement activities, supported by partnerships with public and private stakeholders. The strategy includes annual reporting on a subset of quality measures.

Certain providers are required by federal law to provide statistics on the quality of their care, and the centers for Medicare and Medicaid Services is required to publicly publish performance on quality indicators. Hospital Compare, for example, is an online public resource that summarizes the performance of over 4,000 hospitals on indicators of care processes, outcomes, and patient experiences. Nursing Home Compare and Physician Compare are related quality-reporting platforms.

One of the most extensively utilized techniques for assessing provider quality is the Healthcare Effectiveness Data and Information Set. It is used by health plans to assess the quality of providers. The data set contains cancer screening rates, chronic condition medication management, follow-up visits, and other indicators. The National Quality Forum, a non-profit organization, fosters consensus on national performance assessment and priorities, including the submission of recommendations for Medicare measurements.

Certain federal agencies are responsible for decreasing inequities in specific ways:

• The Health Resources and Services Administration is responsible for awarding grants to states, local governments, and community-based organisations for low-income, uninsured, or other vulnerable populations, including specific programmes for people living with HIV/AIDS, mothers and children (via the Maternal and Child Health Bureau), and rural or remote populations. 36 The Office of Health Equity, which aims to minimize health inequities, is also housed within the agency.
• The Office of Minority Health is in charge of designing policies and programmes to eliminate racial and ethnic inequities.
• In 37 states, the Indian Health Service serves 2.6 million American Indians and Alaska Natives from more than 500 federally recognized tribes. The federal government fully funds the service.

The ACA established a legal requirement for non-profit hospitals, which are exempt from paying certain taxes due to their charitable status, to conduct community health needs assessments in collaboration with community stakeholders in order to identify and address unmet health needs in their communities. The Internal Revenue Service enforces this obligation, and reporting must be made public.

How are costs kept in check?

Annual per capita health expenditures in the United States are the highest in the world (USD $11,172 on average in 2018), with health-care expenses increasing  at a rate ranging from 4.2 to 5.8 percent per year during the last five years.

To limit costs, private insurers have used a number of demand-side levers, such as tiered provider pricing and greater patient cost-sharing (for example, through the recent proliferation of high-deductible health plans). Price negotiations, selective provider contracting, risk-sharing payments, and usage limits are some more levers.

Image via Jamie Bell

      The federal government keeps costs in check by doing the following:

• yearly out-of-pocket expenses for Medicare Advantage recipients and persons enrolled in marketplace/exchange plans.
• negotiating medicine prices for the Veterans Health Administration.
• determining provider rates for Medicare and the Veterans Health Administration.
• capitation payments to Medicaid and Medicare managed care organisations.