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How Germany's Universal Health-Care System Works

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The Economics of Healthcare: Crash Course Economics #29

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Would Universal Healthcare Really Work in the U.S.?

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WHO:  Universal Health Coverage - What does it mean?

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Healthcare: is it a right or a luxury? | Tarik Sammour | TEDxAdelaide

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Health care in the United States is provided by many distinct organizations, made up of insurance companies, healthcare providers, hospital systems, and independent providers. Health care facilities are largely owned and operated by private sector businesses. 58% of community hospitals in the United States are non-profit, 21% are government-owned, and 21% are for-profit. According to the World Health Organization (WHO), the United States spent $9,403 on health care per capita, and 17.9% on health care as percentage of its GDP in 2014. Healthcare coverage is provided through a combination of private health insurance and public health coverage (e.g., Medicare, Medicaid). The United States does not have a universal healthcare program, unlike most other developed countries.

In 2013, 64% of health spending was paid for by the government, and funded via programs such as Medicare, Medicaid, the Children's Health Insurance Program, and the Veterans Health Administration. People aged under 65 acquire insurance via their or a family member's employer, by purchasing health insurance on their own, getting government and/or other assistance based on income or another condition, or are uninsured. Health insurance for public sector employees is primarily provided by the government in its role as employer. Managed care, where payers use various techniques intended to improve quality and limit cost, has become ubiquitous.

The United States life expectancy is 78.6 years at birth, up from 75.2 years in 1990; this ranks 42nd among 224 nations, and 22nd out of the 35 industrialized OECD countries, down from 20th in 1990. In 2016 and 2017 life expectancy in the United States dropped for the first time since 1993. Of 17 high-income countries studied by the National Institutes of Health, the United States in 2013 had the highest or near-highest prevalence of obesity, car accidents, infant mortality, heart and lung disease, sexually transmitted infections, adolescent pregnancies, injuries, and homicides. A 2017 survey of the healthcare systems of 11 developed countries found the US healthcare system to be the most expensive and worst-performing in terms of health access, efficiency, and equity. In a 2018 study, the USA ranked 29th in healthcare access and quality.

Prohibitively high cost is the primary reason Americans have problems accessing health care. The rate of adults uninsured for health care peaked at 18.0% in 2013 prior to the ACA mandate, fell to 10.9% in the third quarter of 2016, and stood at 13.7% in the fourth quarter of 2018, based on surveys by the Gallup organization beginning in 2008. At over 27 million, the number of people without health insurance coverage in the United States is one of the primary concerns raised by advocates of health care reform. Lack of health insurance is associated with increased mortality, about sixty thousand preventable deaths per year, depending on the study. A 2009 study done at Harvard Medical School with Cambridge Health Alliance by co-founders of Physicians for a National Health Program, a pro-single payer lobbying group, showed that nearly 45,000 annual deaths are associated with a lack of patient health insurance. The study also found that uninsured, working Americans have an approximately 40% higher mortality risk compared to privately insured working Americans.

In 2010, the Affordable Care Act (formally known as the "Patient Protection and Affordable Care Act", and commonly known as "Obamacare") became law, enacting major changes in health insurance. The Supreme Court upheld the constitutionality of most of the law in June 2012 and affirmed insurance exchange subsidies in all states in June 2015.

In the United States, dissimilar to the European nationalised health insurance plans, the market created a private employment based system. Following the Stabilisation Act of 1942, employers, unable to provide higher salaries to attract or retain employees, began to offer insurance plans, including health care packages, as a fringe benefit, thereby beginning the practice of employer-sponsored health insurance.

According to a statistical brief by the Healthcare Cost and Utilization Project (HCUP), there were 35.7 million hospitalizations in 2016, a significant decrease from the 38.6 million in 2011. For every 1,000 in the population, there was an average of 104.2 stays and each stay averaged $11,700, an increase from the $10,400 cost per stay in 2012. 7.6% of the population had overnight stays in 2017, each stay lasting an average of 4.6 days.

Unlike most developed nations, the US health system does not provide health care to the country's entire population. Instead, most citizens are covered by a combination of private insurance and various federal and state programs. As of 2017, health insurance was most commonly acquired through a group plan tied to an employer, covering 150 million people. Other major sources include Medicaid, covering 70 million, Medicare, 50 million, and health insurance marketplaces created by the Affordable Care Act (ACA) covering around 17 million. In 2017, a study found that 73% of plans on ACA marketplaces had narrow networks, limiting access and choice in providers.

Measures of accessibility and affordability tracked by national health surveys include: percent of population with insurance, having a usual source of medical care, visiting the dentist yearly, rates of preventable hospitalizations, reported difficulty seeing a specialist, delaying care due to cost, and rates of health insurance coverage. In 2004, an OECD report noted that "all OECD countries [except Mexico, Turkey, and the United States] had achieved universal or near-universal (at least 98.4% insured) coverage of their populations by 1990". The 2004 IOM report also observed that "lack of health insurance causes roughly 18,000 unnecessary deaths every year in the United States,"

The U.S. Census Bureau reported that 28.5 million people (8.8%) did not have health insurance in 2017, down from 49.9 million (16.3%) in 2010. Between 2004 and 2013 a trend of high rates of underinsurance and wage stagnation contributed to a health-care consumption decline for low-income Americans. This trend was reversed after the implementation of the major provisions of the ACA in 2014.

As of 2017, the possibility that the ACA may be repealed or replaced has intensified interest in the questions of whether and how health insurance coverage affects health and mortality. Several studies have indicated that there is an association with expansion of the ACA and factors associated with better health outcomes such as having a regular source of care and the ability to afford care. A 2016 study concluded that an approximately 60% increased ability to afford care can be attributed to Medicaid expansion provisions enacted by the Patient Protection and Affordable Care Act. Additionally, an analysis of changes in mortality post Medicaid expansion suggests that Medicaid saves lives at a relatively more cost effective rate of a societal cost of $327,000 - 867,000 per life saved compared to other public policies which cost an average of $7.6 million per life.

A 2009 study in five states found that medical debt contributed to 46.2% of all personal bankruptcies, and 62.1% of bankruptcy filers claimed high medical expenses in 2007. Since then, health costs and the numbers of uninsured and underinsured have increased. A 2013 study found that about 25% of all senior citizens declare bankruptcy due to medical expenses.

Life expectancy at birth for a child born in the United States in 2015 is 81.2 (females) or 76.3 (males) years. According to the World Health Organization, life expectancy in the United States is 31st in the world (out of 183 countries) as of 2015. The United States' average life expectancy (both sexes) is just over 79. Japan ranks first with an average life expectancy of nearly 84 years. The United States ranks lower (36th) when considering health-adjusted life expectancy (HALE) at just over 69 years. Another source, the Central Intelligence Agency, indicates life expectancy at birth in the United States is 79.8, ranking it 42nd in the world. Monaco is first on this list of 224, with an average life expectancy of 89.5.

A 2013 National Research Council study stated that, when considered as one of 17 high-income countries, the United States was at or near the top in infant mortality, heart and lung disease, sexually transmitted infections, adolescent pregnancies, injuries, homicides, and rates of disability. Together, such issues place the United States at the bottom of the list for life expectancy in high-income countries. Females born in the United States in 2015 have a life expectancy of 81.6 years, and males 76.9 years; more than 3 years less and as much as over 5 years less than people born in Switzerland (85.3 F, 81.3 M) or Japan (86.8 F, 80.5 M) in 2015.

The top three causes of death among both sexes and all ages in the United States have consistently remained cardiovascular diseases (ranked 1st), neoplasms (2nd) and neurological disorders (3rd), since the 1990s. In 2015, the total number of deaths by heart disease was 633,842, by cancer it was 595,930, and from chronic lower respiratory disease it was 155,041. In 2015, 267.18 deaths per 100,000 people were caused by cardiovascular diseases, 204.63 by neoplasms and 100.66 by neurological disorders. Diarrhea, lower respiratory and other common infections were ranked sixth overall, but had the highest rate of infectious disease mortality in the United States at 31.65 deaths per 100,000 people. There is evidence, however, that a large proportion of health outcomes and early mortality can be attributed to factors other than communicable or non-communicable disease. As a 2013 National Research Council study concluded, more than half the men who die before the age of 50 die due to murder (19%), traffic accidents (18%), and other accidents (16%). For women, the percentages are different: 53% of women who die before the age of 50 die due to disease, whereas 38% die due to accidents, homicide, and suicide. Diseases of despair (drug overdoses, alcoholic liver disease and suicide), which started increasing in the early 1990s, kill roughly 158,000 Americans a year as of 2018.

Health care providers in the United States encompass individual health care personnel, health care facilities and medical products.

In the United States, ownership of the healthcare system is mainly in private hands, though federal, state, county, and city governments also own certain facilities.

As of 2018, there were 5,534 registered hospitals in the United States. There were 4,840 community hospitals, which are defined as nonfederal, short-term general, or specialty hospitals. The non-profit hospitals share of total hospital capacity has remained relatively stable (about 70%) for decades. There are also privately owned for-profit hospitals as well as government hospitals in some locations, mainly owned by county and city governments. The Hill-Burton Act was passed in 1946, which provided federal funding for hospitals in exchange for treating poor patients. The largest hospital system in 2016 by revenue was HCA Healthcare; in 2019, Dignity Health and Catholic Health Initiatives merged into CommonSpirit Health to create the largest by revenue, spanning 21 states.

Integrated delivery systems, where the provider and the insurer share the risk in an attempt to provide value-based healthcare, have grown in popularity. Regional areas have separate healthcare markets, and in some markets competition is limited as the demand from the local population cannot support multiple hospitals.

There is no nationwide system of government-owned medical facilities open to the general public but there are local government-owned medical facilities open to the general public. The U.S. Department of Defense operates field hospitals as well as permanent hospitals via the Military Health System to provide military-funded care to active military personnel.

The federal Veterans Health Administration operates VA hospitals open only to veterans, though veterans who seek medical care for conditions they did not receive while serving in the military are charged for services. The Indian Health Service (IHS) operates facilities open only to Native Americans from recognized tribes. These facilities, plus tribal facilities and privately contracted services funded by IHS to increase system capacity and capabilities, provide medical care to tribespeople beyond what can be paid for by any private insurance or other government programs.

Hospitals provide some outpatient care in their emergency rooms and specialty clinics, but primarily 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. Services, particularly urgent-care services, may also be delivered remotely via telemedicine by providers such as Teladoc.

Besides government and private health care facilities, there are also 355 registered free clinics in the United States that provide limited medical services. They are considered to be part of the social safety net for those who lack health insurance. Their services may range from more acute care (i.e. STDs, injuries, respiratory diseases) to long term care (i.e. dentistry, counseling). Another component of the healthcare safety net would be federally funded community health centers.

Other health care facilities include long-term housing facilities which as of 2019, there were 15,600 nursing homes across the United States. With only a large portion of that number being for=profit (69.3%)

Physicians in the U.S. include those trained by the U.S. medical education system, and those that are international medical graduates who have progressed through the necessary steps to acquire a medical license to practice in a state. This includes going through the three steps of the United States Medical Licensing Examination (USMLE). The first step of the USMLE tests whether medical students both understand and are capable of applying the basic scientific foundations to medicine after the second year of medical school. The topics include: anatomy, biochemistry, microbiology, pathology, pharmacology, physiology, behavioral sciences, nutrition, genetics, and aging. The second step is designed to test whether medical students can apply their medical skills and knowledge to actual clinical practice during students' fourth year of medical school. The step 3 is done after the first year of residency. It tests whether students can apply medical knowledge to the unsupervised practice of medicine.

The American College of Physicians, uses the term "physician" to describe all medical practitioners holding a professional medical degree. In the U.S., the vast majority of physicians have a Doctor of Medicine (M.D.) degree. Those with Doctor of Osteopathic Medicine (D.O.) degrees get similar training and go through the same MLE steps as MD's and so are also allowed to use the title "physician".

As in most other countries, the manufacture and production of pharmaceuticals and medical devices is carried out by private companies. The research and development of medical devices and pharmaceuticals is supported by both public and private sources of funding. In 2003, research and development expenditures were approximately $95 billion with $40 billion coming from public sources and $55 billion coming from private sources. These investments into medical research have made the United States the leader in medical innovation, measured either in terms of revenue or the number of new drugs and devices introduced. In 2016 the research and development spending by pharmaceutical companies in the U.S. was estimated to be around 59 billion dollars. In 2006, the United States accounted for three quarters of the world's biotechnology revenues and 82% of world R&D spending in biotechnology. According to multiple international pharmaceutical trade groups, the high cost of patented drugs in the U.S. has encouraged substantial reinvestment in such research and development. Though the Affordable Care Act will force industry to sell medicine at a cheaper price. Due to this, it is possible budget cuts will be made on research and development of human health and medicine in America.

A major impending demographic shift in the United States will require the healthcare system to provide more care, as the older population is predicted to increase medical expenses by 5% or more in North America due to the "baby boomers" reaching retirement age. The overall spending on health care has increased since the late 1990s, and not just due to general price raises as the rate of spending is growing faster than the rate of inflation. Moreover, the expenditure on health services for people over 45 years old is 8.3 times the maximum of that of those under 45 years old.

Other methods of medical treatment are being practiced more frequently than before. This field is labeled Complementary and Alternative Medicine (CAM) and are defined as therapies generally not taught in medical school nor available in hospitals. They include herbs, massages, energy healing, homeopathy, faith healing, and, more recently popularized, cryotherapy, cupping, and Transcranial Magnetic Stimulation or TMS. Common reasons for seeking these alternative approaches included improving their well-being, engaging in a transformational experience, gaining more control over their own health, or finding a better way to relieve symptoms caused by chronic disease. They aim to treat not just physical illness but fix its underlying nutritional, social, emotional, and spiritual causes. In a 2008 survey, it was found that 37% of hospitals in the U.S. offer at least one form of CAM treatment, the main reason being patient demand (84% of hospitals). Costs for CAM treatments average $33.9 with two-thirds being out-of-pocket, according to a 2007 statistical analysis. Moreover, CAM treatments covered 11.2% of total out-of-pocket payments on health care. During 2002 to 2008, spending on CAM was on the rise, but usage has since plateaued to about 40% of adults in the U.S. The U.S. legally defines Christian Science practitioners as healthcare providers.

The U.S. spends more as a percentage of GDP than similar countries, and this can be explained either through higher prices for services themselves, higher costs to administer the system, or more utilization of these services, or to a combination of these elements. Health care costs rising far faster than inflation have been a major driver for health care reform in the United States. As of 2016, the US spent $3.3 trillion (17.9% of GDP), or $10,438 per person; major categories included 32% on hospital care, 20% on physician and clinical services, and 10% on prescription drugs. In comparison, the UK spent $3,749 per person.

In 2018, an analysis concluded that prices and administrative costs were largely the cause of the high costs, including prices for labor, pharmaceuticals, and diagnostics. The combination of high prices and high volume can cause particular expense; in the U.S., high-margin high-volume procedures include angioplasties, c-sections, knee replacements, and CT and MRI scans; CT and MRI scans also showed higher utilization in the United States.

According to the World Health Organization (WHO), total health care spending in the U.S. was 18% of its GDP in 2011, the highest in the world. The Health and Human Services Department expects that the health share of GDP will continue its historical upward trend, reaching 19% of GDP by 2017. Of each dollar spent on health care in the United States, 31% goes to hospital care, 21% goes to physician/clinical services, 10% to pharmaceuticals, 4% to dental, 6% to nursing homes and 3% to home health care, 3% for other retail products, 3% for government public health activities, 7% to administrative costs, 7% to investment, and 6% to other professional services (physical therapists, optometrists, etc.).

In 2017, a study estimated that nearly half of hospital-associated care resulted from emergency department visits. As of 2017, data from 2009-2011 showed that end-of-life care in the last year of life accounted for about 8.5%, and the last three years of life about 16.7%.

As of 2013, administration of health care constituted 30 percent of U.S. health-care costs.

Free-market advocates claim that the health care system is "dysfunctional" because the system of third-party payments from insurers removes the patient as a major participant in the financial and medical choices that affect costs. The Cato Institute claims that because government intervention has expanded insurance availability through programs such as Medicare and Medicaid, this has exacerbated the problem. According to a study paid for by America's Health Insurance Plans (a Washington lobbyist for the health insurance industry) and carried out by PriceWaterhouseCoopers, increased utilization is the primary driver of rising health care costs in the U.S. The study cites numerous causes of increased utilization, including rising consumer demand, new treatments, more intensive diagnostic testing, lifestyle factors, the movement to broader-access plans, and higher-priced technologies. The study also mentions cost-shifting from government programs to private payers. 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.

Healthcare is subject to extensive regulation at both the federal and the state level, much of which "arose haphazardly". Under this system, the federal government cedes primary responsibility to the states under the McCarran-Ferguson Act. Essential regulation includes the licensure of health care providers at the state level and the testing and approval of pharmaceuticals and medical devices by the U.S. Food and Drug Administration (FDA), and laboratory testing. These regulations are designed to protect consumers from ineffective or fraudulent healthcare. Additionally, states regulate the health insurance market and they often have laws which require that health insurance companies cover certain procedures, although state mandates generally do not apply to the self-funded health care plans offered by large employers, which exempt from state laws under preemption clause of the Employee Retirement Income Security Act.

In 2010, the Affordable Care Act was signed by President Barack Obama and includes various new regulations, with one of the most notable being a health insurance mandate which requires all citizens to purchase health insurance. While not regulation per se, the federal government also has a major influence on the healthcare market through its payments to providers under Medicare and Medicaid, which in some cases are used as a reference point in the negotiations between medical providers and insurance companies.

At the federal level, U.S. Department of Health and Human Services oversees the various federal agencies involved in health care. The health agencies are a part of the U.S. Public Health Service, and include the Food and Drug Administration, which certifies the safety of food, effectiveness of drugs and medical products, the Centers for Disease Prevention, which prevents disease, premature death, and disability, the Agency of Health Care Research and Quality, the Agency Toxic Substances and Disease Registry, which regulates hazardous spills of toxic substances, and the National Institutes of Health, which conducts medical research.

State governments maintain state health departments, and local governments ( counties and municipalities) often have their own health departments, usually branches of the state health department. Regulations of a state board may have executive and police strength to enforce state health laws. In some states, all members of state boards must be health care professionals. Members of state boards may be assigned by the governor or elected by the state committee. Members of local boards may be elected by the mayor council. The McCarran-Ferguson Act, which cedes regulation to the states, does not itself regulate insurance, nor does it mandate that states regulate insurance. "Acts of Congress" that do not expressly purport to regulate the "business of insurance" will not preempt state laws or regulations that regulate the "business of insurance." The Act also provides that federal anti-trust laws will not apply to the "business of insurance" as long as the state regulates in that area, but federal anti-trust laws will apply in cases of boycott, coercion, and intimidation. By contrast, most other federal laws will not apply to insurance whether the states regulate in that area or not.

Self-policing of providers by providers is a major part of oversight. Many health care organizations also voluntarily submit to inspection and certification by the Joint Commission on Accreditation of Hospital Organizations, JCAHO. Providers also undergo testing to obtain board certification attesting to their skills. A report issued by Public Citizen in April 2008 found that, for the third year in a row, the number of serious disciplinary actions against physicians by state medical boards declined from 2006 to 2007, and called for more oversight of the boards.

The federal Centers for Medicare and Medicaid Services (CMS) publishes an on-line searchable database of performance data on nursing homes.

In 2004, libertarian think tank Cato Institute published a study which concluded that regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion. The study concluded that the majority of the cost differential arises from medical malpractice, FDA regulations, and facilities regulations.

In 1978, the federal government required that all states implement Certificate of Need (CON) programs for cardiac care, meaning that hospitals had to apply and receive certificates prior to implementing the program; the intent was to reduce cost by reducing duplicate investments in facilities. It has been observed that these certificates could be used to increase costs through weakened competition. Many states removed the CON programs after the federal requirement expired in 1986, but some states still have these programs. Empirical research looking at the costs in areas where these programs have been discontinued have not found a clear effect on costs, and the CON programs could decrease costs because of reduced facility construction or increase costs due to reduced competition.

The American Medical Association (AMA) has lobbied the government to highly limit physician education since 1910, currently at 100,000 doctors per year, which has led to a shortage of doctors.

An even bigger problem may be that the doctors are paid for procedures instead of results.

The AMA has also aggressively lobbied for many restrictions that require doctors to carry out operations that might be carried out by cheaper workforce. For example, in 1995, 36 states banned or restricted midwifery even though it delivers equally safe care to that by doctors. The regulation lobbied by the AMA has decreased the amount and quality of health care, according to the consensus of economist: the restrictions do not add to quality, they decrease the supply of care. Moreover, psychologists, nurses and pharmacists are not allowed to prescribe medicines. Previously nurses were not even allowed to vaccinate the patients without direct supervision by doctors.

Emergency Medical Treatment and Active Labor Act (EMTALA)

EMTALA, enacted by the federal government in 1986, requires that hospital emergency departments treat emergency conditions of all patients regardless of their ability to pay and is considered a critical element in the "safety net" for the uninsured, but established no direct payment mechanism for such care. Indirect payments and reimbursements through federal and state government programs have never fully compensated public and private hospitals for the full cost of care mandated by EMTALA. More than half of all emergency care in the U.S. now goes uncompensated. According to some analyses, EMTALA is an unfunded mandate that has contributed to financial pressures on hospitals in the last 20 years, causing them to consolidate and close facilities, and contributing to emergency room overcrowding. According to the Institute of Medicine, between 1993 and 2003, emergency room visits in the U.S. grew by 26%, while in the same period, the number of emergency departments declined by 425.

Mentally ill patients present a unique challenge for emergency departments and hospitals. In accordance with EMTALA, 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 criterion 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.

Health care quality assurance consists of the "activities and programs intended to assure or improve the quality of care in either a defined medical setting or a program. The concept includes the assessment or evaluation of the quality of care; identification of problems or shortcomings in the delivery of care; designing activities to overcome these deficiencies; and follow-up monitoring to ensure effectiveness of corrective steps." Private companies such as Grand Rounds also release quality information and offer services to employers and plans to map quality within their networks.

One innovation in encouraging quality of health care is the public reporting of the performance of hospitals, health professionals or providers, and healthcare organizations. However, there is "no consistent evidence that the public release of performance data changes consumer behaviour or improves care."

The US health care delivery system unevenly provides medical care of varying quality to its population. In a highly effective health care system, individuals would receive reliable care that meets their needs and is based on the best scientific knowledge available. In order to monitor and evaluate system effectiveness, researchers and policy makers track system measures and trends over time. The US Department of Health and Human Services(HHS) populates a publicly available dashboard called, the Health System Measurement Project (healthmeasures.aspe.hhs.gov), to ensure a robust monitoring system. The dashboard captures the access, quality and cost of care; overall population health; and health system dynamics (e.g., workforce, innovation, health information technology). Included measures align with other system performance measuring activities including the HHS Strategic Plan, the Government Performance and Results Act, Healthy People 2020, and the National Strategies for Quality and Prevention.

However, current waits in both countries' regions may have changed since then (certainly in Canada waiting times went up later). More recently, at one Michigan hospital, the waiting time for the elective surgical operation open carpel tunnel release was an average of 27 days, most ranging from 17-37 days (an average of almost 4 weeks, ranging from about 2.4 weeks to 5.3 weeks. This appears to be short compared with Canada's waiting time, but may compare less favorably to countries like Germany, the Netherlands (where the goal was 5 weeks), and Switzerland.

It is unclear how many of the patients waiting longer have to. Some may be by choice, because they wish to go to a well-known specialist or clinic that many people wish to attend, and are willing to wait to do so. Waiting times may also vary by region. One experiment reported that uninsured patients experienced longer waits; patients with poor insurance coverage probably face a disproportionate number of long waits.

American health care tends to rely on rationing by exclusion (uninsured and underinsured), out-of-pocket costs for the insured, fixed payments per case to hospitals (resulting in very short stays), and contracts that manage demand instead.

Population health: quality, prevention, vulnerable populations

The health of the population is also viewed as a measure of the overall effectiveness of the healthcare system. The extent to which the population lives longer healthier lives signals an effective system.

While life expectancy is one measure, United States Department of Health and Human Services uses a composite health measure that estimates not only the average length of life, but also, the part of life expectancy that is expected to be "in good or better health, as well as free of activity limitations." Between 1997 and 2010, the number of expected high quality life years increased from 61.1 to 63.2 years for newborns.

The underutilization of preventative measures, rates of preventable illness and prevalence of chronic disease suggest that the US healthcare system does not sufficiently promote wellness. Over the past decade rates of teen pregnancy and low birth rates have come down significantly, but not disappeared. Rates of obesity, heart disease (high blood pressure, controlled high cholesterol), and type 2 diabetes are areas of major concern. While chronic disease and multiple co-morbidities became increasingly common among a population of elderly Americans who were living longer, the public health system has also found itself fending off a rise of chronically ill younger generation. According to the US Surgeon General "The prevalence of obesity in the U.S. more than doubled (from 15% to 34%) among adults and more than tripled (from 5% to 17%) among children and adolescents from 1980 to 2008."

A concern for the health system is that the health gains do not accrue equally to the entire population. In the United States, disparities in health care and health outcomes are widespread. Minorities are more likely to suffer from serious illnesses (e.g., type 2 diabetes, heart disease and colon cancer) and less likely to have access to quality health care, including preventative services. Efforts are underway to close the gap and to provide a more equitable system of care.

Innovation: workforce, healthcare IT, R&D

Finally, the United States tracks investment in the healthcare system in terms of a skilled healthcare workforce, meaningful use of healthcare IT, and R&D output. This aspect of the healthcare system performance dashboard is important to consider when evaluating cost of care in America. That is because in much of the policy debate around the high cost of US healthcare, proponents of highly specialized and cutting edge technologies point to innovation as a marker of an effective health care system.

A 2014 study by the private American foundation The Commonwealth Fund found that although the U.S. health care system is the most expensive in the world, it ranks last on most dimensions of performance when compared with Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland and the United Kingdom. The study found that the United States failed to achieve better outcomes than other countries, and is last or near last in terms of access, efficiency and equity. Study date came from international surveys of patients and primary care physicians, as well as information on health care outcomes from The Commonwealth Fund, the World Health Organization, and the Organisation for Economic Co-operation and Development.

As of 2017, the U.S. stands 43rd in the world with a life expectancy of 80.00 years. The CIA World Factbook ranked the United States 170th worst (out of 225) - meaning 55th best - in the world for infant mortality rate (5.80/1,000 live births). Americans also undergo cancer screenings at significantly higher rates than people in other developed countries, and access MRI and CT scans at the highest rate of any OECD nation.

A study found that between 1997 and 2003, preventable deaths declined more slowly in the United States than in 18 other industrialized nations. A 2008 study found that 101,000 people a year die in the U.S. that would not if the health care system were as effective as that of France, Japan, or Australia. A 2020 study by the economists Anne Case and Angus Deaton argues that the United States "spends huge sums of money for some of the worst health outcomes in the Western world."

The Organisation for Economic Co-operation and Development (OECD) found that the U.S. ranked poorly in terms of years of potential life lost (YPLL), a statistical measure of years of life lost under the age of 70 that were amenable to being saved by health care. Among OECD nations for which data are available, the United States ranked third last for the health care of women (after Mexico and Hungary) and fifth last for men (Slovakia and Poland also ranked worse).

Recent studies find growing gaps in life expectancy based on income and geography. In 2008, a government-sponsored study found that life expectancy declined from 1983 to 1999 for women in 180 counties, and for men in 11 counties, with most of the life expectancy declines occurring in the Deep South, Appalachia, along the Mississippi River, in the Southern Plains and in Texas. The difference is as high as three years for men, six years for women. The gap is growing between rich and poor and by educational level, but narrowing between men and women and by race. Another study found that the mortality gap between the well-educated and the poorly educated widened significantly between 1993 and 2001 for adults ages 25 through 64; the authors speculated that risk factors such as smoking, obesity and high blood pressure may lie behind these disparities. In 2011 the U.S. National Research Council forecasted that deaths attributed to smoking, on the decline in the US, will drop dramatically, improving life expectancy; it also suggested that one-fifth to one-third of the life expectancy difference can be attributed to obesity which is the worst in the world and has been increasing. In an analysis of breast cancer, colorectal cancer, and prostate cancer diagnosed during 1990-1994 in 31 countries, the U.S. had the highest five-year relative survival rate for breast cancer and prostate cancer, although survival was systematically and substantially lower in black U.S. men and women.

The debate about U.S. health care concerns questions of access, efficiency, and quality purchased by the high sums spent. The World Health Organization (WHO) in 2000 ranked the U.S. health care system first in responsiveness, but 37th in overall performance and 72nd by overall level of health (among 191 member nations included in the study). The WHO study has been criticized by the free market advocate David Gratzer because "fairness in financial contribution" was used as an assessment factor, marking down countries with high per-capita private or fee-paying health treatment. The WHO study has been criticized, in an article published in Health Affairs, for its failure to include the satisfaction ratings of the general public. The study found that there was little correlation between the WHO rankings for health systems and the stated satisfaction of citizens using those systems. Countries such as Italy and Spain, which were given the highest ratings by WHO were ranked poorly by their citizens while other countries, such as Denmark and Finland, were given low scores by WHO but had the highest percentages of citizens reporting satisfaction with their health care systems. WHO staff, however, say that the WHO analysis does reflect system "responsiveness" and argue that this is a superior measure to consumer satisfaction, which is influenced by expectations. Furthermore, the relationship between patient satisfaction and health care utilization, expenditures, clinically meaningful measures, and the evaluation of outcomes is complex, not well defined, and only beginning to be explored.

A report released in April 2008 by the Foundation for Child Development, which studied the period from 1994 through 2006, found mixed results for the health of children in the U.S. Mortality rates for children ages 1 through 4 dropped by a third, and the percentage of children with elevated blood lead levels dropped by 84%. The percentage of mothers who smoked during pregnancy also declined. On the other hand, both obesity and the percentage of low-birth weight babies increased. The authors note that the increase in babies born with low birth weights can be attributed to women delaying childbearing and the increased use of fertility drugs.

In a sample of 13 developed countries the US was third in its population weighted usage of medication in 14 classes in both 2009 and 2013. The drugs studied were selected on the basis that the conditions treated had high incidence, prevalence and/or mortality, caused significant long-term morbidity and incurred high levels of expenditure and significant developments in prevention or treatment had been made in the last 10 years. The study noted considerable difficulties in cross border comparison of medication use.

A critic of the U.S. health care system, British philanthropist Stan Brock, whose charity Remote Area Medical has served over half a million uninsured Americans, stated, "You could be blindfolded and stick a pin on a map of America and you will find people in need." The charity has over 700 clinics and 80,000 volunteer doctors and nurses around the U.S. Simon Usborne of The Independent writes that in the UK "General practitioners are amazed to hear that poor Americans should need to rely on a charity that was originally conceived to treat people in the developing world."

Variations in the efficiency of health care delivery can cause variations in outcomes. The Dartmouth Atlas Project, for instance, reported that, for over 20 years, marked variations in how medical resources are distributed and used in the United States were accompanied by marked variations in outcomes. The willingness of physicians to work in an area varies with the income of the area and the amenities it offers, a situation aggravated by a general shortage of doctors in the United States, particularly those who offer primary care. The Affordable Care Act is anticipated to produce an additional demand for services which the existing stable of primary care doctors will be unable to fill, particularly in economically depressed areas. Training additional physicians would require some years.

Lean manufacturing techniques such as value stream mapping can help identify and subsequently mitigate waste associated with costs of healthcare. Other product engineering tools such as FMEA and Fish Bone Diagrams have been used to improve efficiencies in healthcare delivery.

In 2010, coronary artery disease, lung cancer, stroke, chronic obstructive pulmonary diseases, and traffic accidents caused the most years of life lost in the US. Low back pain, depression, musculoskeletal disorders, neck pain, and anxiety caused the most years lost to disability. The most deleterious risk factors were poor diet, tobacco smoking, obesity, high blood pressure, high blood sugar, physical inactivity, and alcohol use. Alzheimer's disease, drug abuse, kidney disease and cancer, and falls caused the most additional years of life lost over their age-adjusted 1990 per-capita rates.

Between 1990 and 2010, among the 34 countries in the OECD, the US dropped from 18th to 27th in age-standardized death rate. The US dropped from 23rd to 28th for age-standardized years of life lost. It dropped from 20th to 27th in life expectancy at birth. It dropped from 14th to 26th for healthy life expectancy.

According to a 2009 study conducted at Harvard Medical School by co-founders of Physicians for a National Health Program, a pro-single payer lobbying group, and published by the American Journal of Public Health, lack of health coverage is associated with nearly 45,000 excess preventable deaths annually. Since then, as the number of uninsured has risen from about 46 million in 2009 to 49 million in 2012, the number of preventable deaths due to lack of insurance has grown to about 48,000 per year. The group's methodology has been criticized by economist John C. Goodman for not looking at cause of death or tracking insurance status changes over time, including the time of death.

A 2009 study by former Clinton policy adviser Richard Kronick published in the journal Health Services Research found no increased mortality from being uninsured after certain risk factors were controlled for.

A study of international health care spending levels published in the health policy journal Health Affairs in the year 2000 found that the United States spends substantially more on health care than any other country in the Organisation for Economic Co-operation and Development (OECD), and that the use of health care services in the U.S. is below the OECD median by most measures. The authors of the study conclude that the prices paid for health care services are much higher in the U.S. than elsewhere. While the 19 next most wealthy countries by GDP all pay less than half what the U.S. does for health care, they have all gained about six years of life expectancy more than the U.S. since 1970.

Uninsured Americans are less likely to have regular health care and use preventive services. They are more likely to delay seeking care, resulting in more medical crises, which are more expensive than ongoing treatment for such conditions as diabetes and high blood pressure. A 2007 study published in JAMA concluded that uninsured people were less likely than the insured to receive any medical care after an accidental injury or the onset of a new chronic condition. The uninsured with an injury were also twice as likely as those with insurance to have received none of the recommended follow-up care, and a similar pattern held for those with a new chronic condition. 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.

The treatment given to a patient can vary significantly depending on which health care providers they use. Research suggests that some cost-effective treatments are not used as often as they should be, while overutilization occurs with other health care services. Unnecessary treatments increase costs and can cause patients unnecessary anxiety. The use of prescription drugs varies significantly by geographic region. The overuse of medical benefits is known as moral hazard - individuals who are insured are then more inclined to consume health care. The way the health care system tries to eliminate this problem is through cost sharing tactics like co-pays and deductibles. If patients face more of the economic burden they will then only consume health care when they perceive it to be necessary. According to the RAND health insurance experiment, individuals with higher coinsurance rates consumed less health care than those with lower rates. The experiment concluded that with less consumption of care there was generally no loss in societal welfare but, for the poorer and sicker groups of people there were definitely negative effects. These patients were forced to forgo necessary preventative care measures in order to save money leading to late diagnosis of easily treated diseases and more expensive procedures later. With less preventative care, the patient is hurt financially with an increase in expensive visits to the ER. The health care costs in the US will also rise with these procedures as well. More expensive procedures lead to greater costs.

Primary care doctors are often the point of entry for most patients needing care, but in the fragmented health care system of the U.S., many patients and their providers experience problems with care coordination. For example, a Harris Interactive survey of California physicians found that:

Four of every ten physicians report that their patients have had problems with coordination of their care in the last 12 months.

More than 60% of doctors report that their patients "sometimes" or "often" experience long wait times for diagnostic tests.

Some 20% of doctors report having their patients repeat tests because of an inability to locate the results during a scheduled visit.

According to an article in The New York Times, the relationship between doctors and patients is deteriorating. A study from Johns Hopkins University found that roughly one in four patients believe their doctors have exposed them to unnecessary risks, and anecdotal evidence such as self-help books and web postings suggest increasing patient frustration. Possible factors behind the deteriorating doctor/patient relationship include the current system for training physicians and differences in how doctors and patients view the practice of medicine. Doctors may focus on diagnosis and treatment, while patients may be more interested in wellness and being listened to by their doctors.

Many primary care physicians no longer see their patients while they are in the hospital; instead, hospitalists are used. The use of hospitalists is sometimes mandated by health insurance companies as a cost-saving measure which is resented by some primary care physicians.

As of 2017, there were 907 health insurance companies in the United States, although the top 10 account for about 53% of revenue and the top 100 account for 95% of revenue. The number of insurers contributes to administrative overhead in excess of that in nationalized, single-payer systems, such as that in Canada, where administrative overhead was estimated to be about half of the US.

A 2003 study published by the Blue Cross and Blue Shield Association (BCBSA) also found that health insurer administrative costs were approximately 11% to 12% of premiums, with Blue Cross and Blue Shield plans reporting slightly lower administrative costs, on average, than commercial insurers. For the period 1998 through 2003, average insurer administrative costs declined from 13% to 12% of premiums. The largest increases in administrative costs were in customer service and information technology, and the largest decreases were in provider services and contracting and in general administration. The McKinsey Global Institute estimated that excess spending on "health administration and insurance" accounted for as much as 21% of the estimated total excess spending ($477 billion in 2003).

According to a report published by the CBO in 2008, administrative costs for private insurance represent approximately 12% of premiums. Variations in administrative costs between private plans are largely attributable to economies of scale. Coverage for large employers has the lowest administrative costs. The percentage of premium attributable to administration increases for smaller firms, and is highest for individually purchased coverage. A 2009 study published by BCBSA found that the average administrative expense cost for all commercial health insurance products was represented 9.2% of premiums in 2008. Administrative costs were 11.1% of premiums for small group products and 16.4% in the individual market.

One study of the billing and insurance-related (BIR) costs borne not only by insurers but also by physicians and hospitals found that BIR among insurers, physicians, and hospitals in California represented 20-22% of privately insured spending in California acute care settings.

Most Americans pay for medical services largely through insurance, and this can distort the incentives of consumers since the consumer pays only a portion of the ultimate cost directly. The lack of price information on medical services can also distort incentives. The insurance which pays on behalf of insureds negotiate with medical providers, sometimes using government-established prices such as Medicaid billing rates as a reference point. This reasoning has led for calls to reform the insurance system to create a consumer-driven health care system whereby consumers pay more out-of-pocket. In 2003, the Medicare Prescription Drug, Improvement, and Modernization Act was passed, which encourages consumers to have a high-deductible health plan and a health savings account. In October 2019, the state of Colorado proposed running public health care option through private insurers, which are to bear the brunt of the costs. Premiums under the public option are touted to be 9% to 18% cheaper by 2022.

Mental illness affects one out of six adults in the United States. That is about 44.7 million people, as of 2016. In 2006, mental disorders were ranked one of the top five most costly medical conditions, which expenditures of $57.5 billion. A lack of mental health coverage for Americans bears significant ramifications to the U.S. economy and social system. A report by the U.S. Surgeon General found that mental illnesses are the second leading cause of disability in the nation and affect 20% of all Americans. It is estimated that less than half of all people with mental illnesses receive treatment (or specifically, an ongoing, much needed, and managed care; where medication alone, cannot easily remove mental conditions) due to factors such as stigma and lack of access to care.

The Paul Wellstone Mental Health and Addiction Equity Act of 2008 mandates that group health plans provide mental health and substance-related disorder benefits that are at least equivalent to benefits offered for medical and surgical procedures. The legislation renews and expands provisions of the Mental Health Parity Act of 1996. The law requires financial equity for annual and lifetime mental health benefits, and compels parity in treatment limits and expands all equity provisions to addiction services. Insurance companies and third-party disability administrators (most notably, Sedgwick CMS) used loopholes and, though providing financial equity, they often worked around the law by applying unequal co-payments or setting limits on the number of days spent in inpatient or outpatient treatment facilities.

In the history of healthcare in the US, dental care was largely not recognized as part of healthcare, and thus the field and its practices developed independently. In modern policy and practice, oral health is thus considered distinct from primary health, and dental insurance is separate from health insurance. Disparities in oral healthcare accessibility mean that many populations, including those without insurance, the low-income, uninsured, racial minorities, immigrants, and rural populations, have a higher probability of poor oral health at every age. While changes have been made to address these disparities for children, the oral health disparity in adults of all previously listed populations has remained consistent or worsened.

Health disparities are well documented in the U.S. in ethnic minorities such as African Americans, Native Americans, and Hispanics. 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. In addition, adult African Americans and Hispanics have approximately twice the risk as whites of developing diabetes and have higher overall obesity rates. Minorities also have higher rates of cardiovascular disease and HIV/AIDS than whites. In the U.S., Asian Americans live the longest (87.1 years), followed by Latinos (83.3 years), whites (78.9 years), Native Americans (76.9 years), and African Americans (75.4 years). A 2001 study found large racial differences exist in healthy life expectancy at lower levels of education.

There is considerable research into inequalities in health care. In some cases these inequalities are caused by income disparities that result in lack of health insurance and other barriers to receiving services. According to the 2009 National Healthcare Disparities Report, uninsured Americans are less likely to receive preventive services in health care. For example, minorities are not regularly screened for colon cancer and the death rate for colon cancer has increased among African Americans and Hispanic people. In other cases, inequalities in health care reflect a systemic bias in the way medical procedures and treatments are prescribed for different ethnic groups. Raj Bhopal writes that the history of racism in science and medicine shows that people and institutions behave according to the ethos of their times. Nancy Krieger wrote that racism underlies unexplained inequities in health care, including treatment for heart disease, renal failure, bladder cancer, and pneumonia. Raj Bhopal writes that these inequalities have been documented in numerous studies. The consistent and repeated findings were that black Americans received less health care than white Americans - particularly when the care involved expensive new technology. One recent study has found that when minority and white patients use the same hospital, they are given the same standard of care.

The Food and Drug Administration (FDA) is the primary institution tasked with the safety and effectiveness of human and veterinary drugs. It also is responsible for making sure drug information is accurately and informatively presented to the public. The FDA reviews and approves products and establishes drug labeling, drug standards, and medical device manufacturing standards. It sets performance standards for radiation and ultrasonic equipment.

On June 30, 2006, an FDA ruling went into effect extending protection from lawsuits to pharmaceutical manufacturers, even if it was found that they submitted fraudulent clinical trial data to the FDA in their quest for approval. This left consumers who experience serious health consequences from drug use with little recourse. In 2007, the House of Representatives expressed opposition to the FDA ruling, but the Senate took no action. On March 4, 2009, an important U.S. Supreme Court decision was handed down. In Wyeth v. Levine, the court asserted that state-level rights of action could not be pre-empted by federal immunity and could provide "appropriate relief for injured consumers." In June 2009, under the Public Readiness and Emergency Preparedness Act, Secretary of Health and Human Services Kathleen Sebelius signed an order extending protection to vaccine makers and federal officials from prosecution during a declared health emergency related to the administration of the swine flu vaccine.

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. Per capita, the U.S. spends more on pharmaceuticals than any other country, although expenditures on pharmaceuticals accounts for a smaller share (13%) of total health care costs compared to an OECD average of 18% (2003 figures). Some 25% of out-of-pocket spending by individuals is for prescription drugs. Another study finds that between 1990 and 2016, prescription drug prices in the US increased by 277% while prescription drug prices increased by only 57% in the UK, 13 percent in Canada, and decreased in France and Japan.

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 in other countries (because many other countries use their bulk-purchasing power to aggressively negotiate drug prices). The U.S. position (consistent with the primary lobbying position of the Pharmaceutical Research and Manufacturers of America) is that the governments of such countries are free riding on the backs of U.S. consumers. Such governments should either deregulate their markets, or raise their domestic taxes in order to fairly compensate U.S. consumers by directly remitting 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, pharmaceutical companies would be able to continue to produce innovative pharmaceuticals while lowering 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 due to the Medicare Prescription Drug, Improvement, and Modernization Act passed in 2003. Democrats have charged that the purpose of this provision is merely to allow the pharmaceutical industry to profiteer off of the Medicare program.

The U.S., along with New Zealand, make up the only countries in the world that allows direct-to-consumer advertising of prescription drugs. In 2015, the American Medical Association called for the banning of direct-to-consumer advertising because it is linked with increased drug prices. Still, other evidence cites that there are some benefits to direct-to-consumer advertising, such as encouraging patients to see the doctor, diagnosis of rare diseases, and the removal of stigma associated with the disease.

When health care legislation was being written in 2009, the drug companies were asked to support the legislation in return for not allowing importation of drugs from foreign countries.

Much of the historical debate around healthcare reform centered around single-payer health care, and particularly pointing to the hidden costs of treating the uninsured while free-market advocates point to freedom of choice in purchasing health insurance and unintended consequences of government intervention, citing the Health Maintenance Organization Act of 1973. Ultimately, a single-payer health care, sometimes called " socialized medicine", was not adopted in the final Affordable Care Act.

The Affordable Care Act (Public Law 111-148) is a health care reform bill that was signed into law in the United States by President Barack Obama on March 23, 2010. The law includes a large number of health-related provisions, most of which took effect in 2014, including expanding Medicaid eligibility for people making up to 133% of FPL, subsidizing insurance premiums for individuals and families making up to 400% of FPL and capping expenses from 2% to 9.8% of annual income. For the first time, all health policies sold in the United States must cap an individual's (or family's) medical expenses out of pocket annually. Other provisions include providing incentives for businesses to provide health care benefits, prohibiting denial of coverage and denial of claims based on pre-existing conditions, establishing health insurance exchanges, prohibiting insurers from establishing annual spending caps and support for medical research. The costs of these provisions are offset by a variety of taxes, fees, and cost-saving measures, such as new Medicare taxes for high-income brackets, taxes on indoor tanning, cuts to the Medicare Advantage program in favor of traditional Medicare, and fees on medical devices and pharmaceutical companies; there is also a tax penalty for citizens who do not obtain health insurance (unless they are exempt due to low income or other reasons). The Congressional Budget Office estimates that the net effect (including the reconciliation act) will be a reduction in the federal deficit by $143 billion over the first decade. However, two months later, the office subsequently acknowledged that there was an additional $115 billion in funds needed that were not originally included in the estimate. Additionally, the CBO estimated that although projected premiums in 2016 would be lower by $100 per person for small and large business health insurance plans with the Affordable Care Act than without, individual plans would be higher by $1,900 with the bill.

On December 22, 2017 the Tax Cuts and Jobs Act of 2017 was signed into law by President Donald Trump. Inside the final version of the bill was a repeal of the individual mandate in the Affordable Care Act, which required individuals and companies to get healthcare for themselves and their employees. It was this mandate which kept healthcare costs down under the PPACA by promoting cost sharing over a larger pool. Economists believe the repeal of the individual mandate will lead to higher premiums and lower enrollment in the current market though they do not agree with how much. In 2017 the new Republican healthcare bill known as the American Health Care Act was passed by the House of Representatives under President Donald Trump. Although the Affordable Care Act and the American Health Care Act both propose tax cuts in order to make insurance more affordable for Americans, each of these bills affected Americans in different ways. The people most affected by President Trump's plan are young people, individuals of a higher socioeconomic status, and people who live in urban areas. Young people because individuals between the age of 20 and 30 will see drops in the premiums they pay within their plans. Individuals with higher socioeconomic status because whereas under Obamacare individuals could only make up to $50,000 dollars annually and still receive tax breaks, now under Trump's plan that number has been increase so that individuals who make up to $115,000 annually can receive tax breaks. In addition, those in urban areas can also benefit from the plan because under Obamacare tax credits were designated also by the cost of local healthcare, but the American Health Care Act does not take this into consideration although rural healthcare is generally more expensive due to the lack of hospitals and available services.

Undocumented immigrants within the United States do not have access to government funded health insurance. Although the Affordable Care Act allows immigrants to receive insurance at a discounted rate, the same does not go for those without US citizenship. While policies like the Patient Protection Act and Affordable Care Act have aimed at expanding health insurance coverage to also improve refugee health in the United States, different states have implemented their health insurance programs differently leading to healthcare access disparities between states. Undocumented immigrants in the US can seek medical help from community centers, or what is termed Safety Net Providers, and participate in fee for service medical assistance, but can only buy health insurance from private health insurers.

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Health care in the United States - Wikipedia

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Health care in the United States is provided by many distinct organizations, made up of insurance companies, healthcare providers, hospital systems, and independent providers. Health care facilities are largely owned and operated by private sector businesses. 58% of community hospitals in the United States are non-profit, 21% are government-owned, and 21% are for-profit.

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Key Takeaways

How Universal Health Care Works

Universal health care (UHC) comes in several different forms, but the basic idea is the same across the board: The government steps in with taxpayer money to ensure that every citizen has access to the medical care they need. With universal health care, no citizen is denied coverage based on their ability to pay.

The sheer cost of providing quality health care makes universal health care a large expense for governments. Medical coverage must be paid for by taxpayer-funded programs.

A substantial portion of countries around the world have UHC, including Canada, much of Europe, Asian countries such as Japan and South Korea, along with Australia and New Zealand. The U.S. has the distinction of being the only wealthy, industrialized nation without universal health care.

Note

Types of Universal Health Care Models

Universal health care can work in several different ways, depending on the exact system. There are three main universal health care models: single payer, mandatory insurance, and national health insurance.

Single-Payer Model

In a single-payer system, the government provides free health care paid for with revenue from income taxes. Services are government-owned and service providers are government employees. Every citizen has the same access to care. This is called the Beveridge Model.

When governments provide health care, they work to ensure doctors and hospitals provide quality care at a reasonable cost. To do this, government agencies must collect and analyze data and use their purchasing power to influence health care providers.

The United Kingdom helped advance the single-payer health care system with its National Health Service, in which the government not only pays for health services, but runs hospitals and employs doctors. Other single-payer-based countries include Spain, New Zealand, and Cuba. The United States offers it to veterans and military personnel with the Department of Veterans Affairs and the armed forces.

Note

Social Health Insurance Model

Countries that use a social health insurance model require everyone to buy insurance, usually through their employers. Employers deduct taxes from employee payrolls to cover the costs, and the taxes go into a government-run health insurance fund that covers everyone. Private doctors and hospitals provide services. The government controls health insurance prices. It also has a lot of clout to control the private providers' prices.

Germany developed this system, which is also known as the Bismarck model. France, Belgium, the Netherlands, Japan, and Switzerland also use it. In the U.S., meanwhile, the Affordable Care Act, also known as " Obamacare," also requires insurance, but there are many exemptions, and this rule is no longer enforced by penalties. It is also similar in that it provides subsidies to health insurance companies for low-income enrollees.

National Health Insurance

The national health insurance model uses public insurance to pay for private-practice care. Every citizen pays into the national insurance plan. Administrative costs are lower because there is one insurance company. The government also has a lot of leverage to force medical costs down.

Canada, Taiwan, and South Korea, for instance, all use this model. The U.S. Medicare, Medicaid, and TRICARE systems are based on a national health insurance approach.

Pros and Cons of Universal Health Care

Pros Explained

Lowers overall health care costs: The government controls prices through negotiation and regulation. Certain costs can also be lowered because of universal access to preventive care, which can head off problems before they become serious and much more expensive to treat. It reduces the need for expensive emergency room usage, which some patients are forced into when they have no access to preventive care. This health care inequality is a big reason for the rising cost of medical care.

May lower administrative costs: If doctors only deal with one government agency, their costs can be a lot lower. For example, a 2011 study found that U.S. doctors spent four times as much as Canadians dealing with insurance companies.

Standardizes service: In a competitive environment like the U.S., health care providers must also focus on profit. They do this by offering the newest technology. They also offer expensive services and pay doctors more, which drives up costs and can limit health care for the less wealthy. A universal system takes away the profit motive and focuses on providing equal care for all.

Prevents future social and health costs: Preventive care can prevent future health issues and improve outcomes in the most vulnerable communities.

Guides the population toward healthier choices: Better investment in health care, health infrastructure, and public education can help push the population toward healthier choices and lifestyles.

Cons Explained

Healthy people pay for the care of the sickest: Chronic diseases and mental illness make up 90% of health care costs. According to Brookings research, the half of the population that uses the least health care accounts for only 3% of total (including out-of-pocket) expenditures (excluding long-term care and some other components of spending), while the top 1% accounts for 22%. However, this is true to some extent even outside of universal health care systems, as spending on chronic diseases will raise the cost of private health insurance plans as well.

Possibly less financial incentive to stay healthy:In systems where this is no copay, people might overuse emergency rooms and doctors.

Long wait times: The government focuses on providing basic and emergency health care, so wait times for elective procedures can be much longer. Some care might have to be foregone.

Doctors incentivized to cut care to lower costs: Government cost-cutting can lead to reduced availability of care. For example, doctors reported Medicare payment cuts in 2018 would force them to close many in-house blood testing labs.

Costs may overwhelm government budgets: Health care costs make up a significant portion of government budgets. For example, on average, Canadian provinces spend almost 40% of their budgets on health care.

Government may limit services with a low probability of success. This includes drugs for rare conditions and expensive end-of-life care. In the United States, care for patients in the last year of life makes up between 13% and 25% of the Medicare budget.

Examples of 6 Developed Countries With UHC

Here is a look at the UHC systems in some of the world's developed nations, and their costs.

Australia has a mixed health plan. The government provides public health insurance, called Medicare, and runs public hospitals. Everyone receives coverage, and people must pay deductibles before government payments kick in. If you earn above a certain level of income, you must also purchase private hospital coverage or pay a tax surcharge.

Many residents are willing to pay for additional private health insurance to receive a higher quality of care. Government regulations protect seniors, people considered economically disadvantaged, children, and rural residents.

As of 2020, health care cost 10.6% of Australia's gross domestic product (GDP). The per capita cost was US$5,627, slightly above average for developed countries. Wait times for elective surgeries ranged from 17 days for a coronary bypass to 209 for knee replacement. Australia's infant mortality rate is 3.2% in 2020.

Canada has a national health insurance system. The government pays for services provided by a private delivery system. Private supplemental insurance pays for vision, dental care, and prescription drugs. Hospitals are publicly funded. They provide free care to all residents regardless of their ability to pay. The government keeps hospitals on a fixed budget to control costs, but it reimburses doctors at a fee-for-service rate.

In 2021, health care cost 11.7% of Canada's GDP. The cost per person was US$5,905. Wait times for elective surgeries ranged from six days for a coronary bypass to 122 for knee replacement. The infant mortality rate was 4.5% in 2020.

France has a social health insurance system that provides care to all legal residents. That includes hospitals, doctors, drugs, and some dental and vision care. It also pays for homeopathy, spa treatments, and nursing home care. As of 2016, payroll taxes funded 64% of the costs, income taxes paid for 16%, and 12% came from taxes on tobacco, alcohol, the pharmaceutical industry, and private voluntary health insurance.

As of 2020, health care cost 12.2% of GDP. That was US$5,468 per person. The infant mortality rate was 3.6%. These statistics are all in the middle of the pack for developed nations.

Germany has a social health insurance program. Everyone who earns less than a certain amount must have public health insurance, but people earning more can choose private insurance instead. The state-sponsored insurance covers hospitalization, except for meals and accommodation. It also covers rehab for hospital stays, mental health, addiction, and long-term care. Funding comes from premiums paid by employees and their employers.

As of 2021, health care cost 12.8% of GDP. It averaged US$7,383 per person. Both figures are the highest among industrial countries outside of the U.S. In addition, most Germans can get next-day or same-day appointments with general practitioners. The infant mortality rate was 3.1%.

Switzerland

Switzerland has a social health insurance system for all residents. Coverage is provided by competing private insurance companies. Residents pay premiums, and the government provides income-based subsidies to some. People can buy supplemental insurance to access better hospitals, doctors, and services not covered by mandatory insurance.

As of 2020, health care spending was 11.8% of GDP. It was USD $7,179 per person. In 2021, the infant mortality rate was 3.2%.

United Kingdom

The United Kingdom has single-payer health care that covers all residents. The National Health Service (NHS) runs hospitals and pays doctors as employees. As of 2016, the government paid nearly 80% of costs through income and payroll taxes. The rest was paid from copayments and people paying out-of-pocket for NHS services. The NHS pays for most medical care, including some dental and eye care, hospice care, and some long-term care. Copays are required for outpatient medications.

As of 2021, health care costs accounted for 11.9% of GDP. The cost was US$5,387 per person. Wait times ranged from 55 days for a coronary bypass to 98 days for knee replacement. The infant mortality rate was 3.6% in 2020.

Comparing Universal Health Care to the U.S. System

The United States has a mixture of government-run and private insurance.

As a result, in 2021, 66% of Americans had private health insurance, mostly from their employers. The government subsidizes private health insurance through Obamacare. Another 35.7% of Americans had public government coverage. This includes Medicaid, Medicare, Children's Health Insurance Program, and military coverage including the Veterans Administration (VA). Only 8.3% had no coverage at all.

All health care service providers, except for the VA, are private. Some democratic candidates have promoted universal health care under the title "Medicare for All."

In 2021, health care cost a staggering $12,318 per capita in the U.S., or 17.8%. These costs are the highest of those reported in 53 countries by the Organisation for Economic Cooperation and Development.

The U.S. infant mortality rate was 5.4% in 2020, significantly higher than that of countries such as Australia, Germany, and all other developed countries reported on by the OECD.

Frequently Asked Questions (FAQs)

Why are Americans against universal health care?

Is universal health care free?

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Universal health care is a system in which the government provides health care to all citizens regardless of their ability to pay. Learn the pros and cons, and how it works.

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Universal health coverage (UHC) is a vision where all people and communities have access to quality health services where and when they need them, without suffering financial hardship. It includes the full spectrum of services needed throughout life-from health promotion to prevention, treatment, rehabilitation, and palliative care-and is best based on a strong primary health care system.

Over the past decade, countries in the WHO Western Pacific Region have made significant health gains and increased commitments to advance UHC. The Regional Committee of the Western Pacific has agreed that countries should develop UHC roadmaps based on the five attributes of high-performing health systems: quality, efficiency, equity, accountability, and sustainability and resilience.

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Universal health coverage (UHC) is a vision where all people and communities have access to quality health services where and when they need them, without suffering financial hardship. It includes the full spectrum of services needed throughout life-from health promotion to prevention, treatment, rehabilitation, and palliative care-and is best based on a strong primary health care system.

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Universal healthcare (also called universal health coverage, universal coverage, or universal care) is a health care system in which all residents of a particular country or region are assured access to health care. It is generally organized around providing either all residents or only those who cannot afford on their own, with either health services or the means to acquire them, with the end goal of improving health outcomes.

Universal healthcare does not imply coverage for all cases and for all people - only that all people have access to healthcare. Some universal healthcare systems are government-funded, while others are based on a requirement that all citizens purchase private health insurance. Universal healthcare can be determined by three critical dimensions: who is covered, what services are covered, and how much of the cost is covered. It is described by the World Health Organization as a situation where citizens can access health services without incurring financial hardship. The Director General of WHO describes universal health coverage as the "single most powerful concept that public health has to offer" since it unifies "services and delivers them in a comprehensive and integrated way". One of the goals with universal healthcare is to create a system of protection which provides equality of opportunity for people to enjoy the highest possible level of health.

As part of Sustainable Development Goals, United Nations member states have agreed to work toward worldwide universal health coverage by 2030.

The first move towards a national health insurance system was launched in Germany in 1883, with the Sickness Insurance Law. Industrial employers were mandated to provide injury and illness insurance for their low-wage workers, and the system was funded and administered by employees and employers through "sick funds", which were drawn from deductions in workers' wages and from employers' contributions. Named after Prussian Chancellor Otto von Bismarck, this social health insurance model was the first form of universal care in modern times. Other countries soon began to follow suit. In the United Kingdom, the National Insurance Act 1911 provided coverage for primary care (but not specialist or hospital care) for wage earners, covering about one-third of the population. The Russian Empire established a similar system in 1912, and other industrialized countries began following suit. By the 1930s, similar systems existed in virtually all of Western and Central Europe. Japan introduced an employee health insurance law in 1927, expanding further upon it in 1935 and 1940. Following the Russian Revolution of 1917, the Soviet Union established a fully public and centralized health care system in 1920. However, it was not a truly universal system at that point, as rural residents were not covered.

In New Zealand, a universal health care system was created in a series of steps, from 1939 to 1941. In Australia, the state of Queensland introduced a free public hospital system in 1946.

Following World War II, universal health care systems began to be set up around the world. On July 5, 1948, the United Kingdom launched its universal National Health Service. Universal health care was next introduced in the Nordic countries of Sweden (1955), Iceland (1956), Norway (1956), Denmark (1961), and Finland (1964). Universal health insurance was introduced in Japan in 1961, and in Canada through stages, starting with the province of Saskatchewan in 1962, followed by the rest of Canada from 1968 to 1972. A public healthcare system was introduced in Egypt following the Egyptian revolution of 1952. Centralized public healthcare systems were set up in the Eastern bloc countries. The Soviet Union extended universal health care to its rural residents in 1969. Kuwait and Bahrain introduced their universal healthcare systems in 1950 and 1957 respectively (prior to independence). Italy introduced its Servizio Sanitario Nazionale (National Health Service) in 1978. Universal health insurance was implemented in Australia in 1975 with the Medibank, which led to universal coverage under the current Medicare system from 1984.

From the 1970s to the 2000s, Southern and Western European countries began introducing universal coverage, most of them building upon previous health insurance programs to cover the whole population. For example, France built upon its 1928 national health insurance system, with subsequent legislation covering a larger and larger percentage of the population, until the remaining 1% of the population that was uninsured received coverage in 2000. Single payer healthcare systems were introduced in Finland (1972), Portugal (1979), Cyprus (1980), and Spain (1986), and Iceland (1990). Switzerland introduced a universal healthcare system based on an insurance mandate in 1994. In addition, universal health coverage was introduced in some Asian countries, including South Korea (1989), Taiwan (1995), Singapore (1993), Israel (1995), and Thailand (2001).

Following the collapse of the Soviet Union, Russia retained and reformed its universal health care system, as did other now-independent former Soviet republics and Eastern bloc countries.

Beyond the 1990s, many countries in Latin America, the Caribbean, Africa, and the Asia-Pacific region, including developing countries, took steps to bring their populations under universal health coverage, including China which has the largest universal health care system in the world and Brazil's SUS which improved coverage up to 80% of the population. India introduced a tax-payer funded decentralised universal healthcare system that helped reduce mortality rates and malnutrition. A 2012 study examined progress being made by these countries, focusing on nine in particular: Ghana, Rwanda, Nigeria, Mali, Kenya, Indonesia, the Philippines, and Vietnam.

Currently, most industrialized countries and many developing countries operate some form of publicly funded health care with universal coverage as the goal. According to the National Academy of Medicine and others, the United States is the only wealthy, industrialized nation that does not provide universal health care.

Universal health care in most countries has been achieved by a mixed model of funding. General taxation revenue is the primary source of funding, but in many countries it is supplemented by specific charge (which may be charged to the individual or an employer) or with the option of private payments (by direct or optional insurance) for services beyond those covered by the public system. Almost all European systems are financed through a mix of public and private contributions. Most universal health care systems are funded primarily by tax revenue (as in Portugal, India, Spain, Denmark and Sweden). Some nations, such as Germany, France, and Japan, employ a multi-payer system in which health care is funded by private and public contributions. However, much of the non-government funding comes from contributions from employers and employees to regulated non-profit sickness funds. Contributions are compulsory and defined according to law. A distinction is also made between municipal and national healthcare funding. For example, one model is that the bulk of the healthcare is funded by the municipality, specialty healthcare is provided and possibly funded by a larger entity, such as a municipal co-operation board or the state, and medications are paid for by a state agency. A paper by Sherry A. Glied from Columbia University found that universal health care systems are modestly redistributive and that the progressivity of health care financing has limited implications for overall income inequality.

This is usually enforced via legislation requiring residents to purchase insurance, but sometimes the government provides the insurance. Sometimes there may be a choice of multiple public and private funds providing a standard service (as in Germany) or sometimes just a single public fund (as in the Canadian provinces). Healthcare in Switzerland is based on compulsory insurance.

In some European countries where private insurance and universal health care coexist, such as Germany, Belgium and the Netherlands, the problem of adverse selection is overcome by using a risk compensation pool to equalize, as far as possible, the risks between funds. Thus, a fund with a predominantly healthy, younger population has to pay into a compensation pool and a fund with an older and predominantly less healthy population would receive funds from the pool. In this way, sickness funds compete on price and there is no advantage in eliminating people with higher risks because they are compensated for by means of risk-adjusted capitation payments. Funds are not allowed to pick and choose their policyholders or deny coverage, but they compete mainly on price and service. In some countries, the basic coverage level is set by the government and cannot be modified.

The Republic of Ireland at one time had a "community rating" system by VHI, effectively a single-payer or common risk pool. The government later opened VHI to competition, but without a compensation pool. That resulted in foreign insurance companies entering the Irish market and offering much less expensive health insurance to relatively healthy segments of the market, which then made higher profits at VHI's expense. The government later reintroduced community rating by a pooling arrangement and at least one main major insurance company, BUPA, withdrew from the Irish market.

In Poland, people are obliged to pay a percentage of the average monthly wage to the state, even if they are covered by private insurance. People working under a employment contract pay a percentage of their wage, while entrepreneurs pay a fixed rate, based on the average national wage. Unemployed people are insured by the labor office.

Among the potential solutions posited by economists are single-payer systems as well as other methods of ensuring that health insurance is universal, such as by requiring all citizens to purchase insurance or by limiting the ability of insurance companies to deny insurance to individuals or vary price between individuals.

Single-payer health care is a system in which the government, rather than private insurers, pays for all health care costs. Single-payer systems may contract for healthcare services from private organizations, or own and employ healthcare resources and personnel (as was the case in England before the introduction of the Health and Social Care Act). In some instances, such as Italy and Spain, both these realities may exist at the same time. "Single-payer" thus describes only the funding mechanism and refers to health care financed by a single public body from a single fund and does not specify the type of delivery or for whom doctors work. Although the fund holder is usually the state, some forms of single-payer use a mixed public-private system.

In tax-based financing, individuals contribute to the provision of health services through various taxes. These are typically pooled across the whole population unless local governments raise and retain tax revenues. Some countries (notably the United Kingdom, Ireland, New Zealand, Italy, Spain, Brazil, Portugal, India and the Nordic countries) choose to fund public health care directly from taxation alone. Other countries with insurance-based systems effectively meet the cost of insuring those unable to insure themselves via social security arrangements funded from taxation, either by directly paying their medical bills or by paying for insurance premiums for those affected.

In a social health insurance system, contributions from workers, the self-employed, enterprises and governments are pooled into single or multiple funds on a compulsory basis. This is based on risk pooling. The social health insurance model is also referred to as the Bismarck Model, after Chancellor Otto von Bismarck, who introduced the first universal health care system in Germany in the 19th century. The funds typically contract with a mix of public and private providers for the provision of a specified benefit package. Preventive and public health care may be provided by these funds or responsibility kept solely by the Ministry of Health. Within social health insurance, a number of functions may be executed by parastatal or non-governmental sickness funds, or in a few cases, by private health insurance companies. Social health insurance is used in a number of Western European countries and increasingly in Eastern Europe as well as in Israel and Japan.

In private health insurance, premiums are paid directly from employers, associations, individuals and families to insurance companies, which pool risks across their membership base. Private insurance includes policies sold by commercial for-profit firms, non-profit companies and community health insurers. Generally, private insurance is voluntary in contrast to social insurance programs, which tend to be compulsory.

In some countries with universal coverage, private insurance often excludes certain health conditions that are expensive and the state health care system can provide coverage. For example, in the United Kingdom, one of the largest private health care providers is BUPA, which has a long list of general exclusions even in its highest coverage policy, most of which are routinely provided by the National Health Service. In the United States, dialysis treatment for end stage renal failure is generally paid for by government and not by the insurance industry. Those with privatized Medicare ( Medicare Advantage) are the exception and must get their dialysis paid for through their insurance company. However, those with end-stage kidney failure generally cannot buy Medicare Advantage plans. In the Netherlands, which has regulated competition for its main insurance system (but is subject to a budget cap), insurers must cover a basic package for all enrollees, but may choose which additional services they offer in supplementary plans; which most people possess[citation needed ].

The Planning Commission of India has also suggested that the country should embrace insurance to achieve universal health coverage. General tax revenue is currently used to meet the essential health requirements of all people.

A particular form of private health insurance that has often emerged, if financial risk protection mechanisms have only a limited impact, is community-based health insurance. Individual members of a specific community pay to a collective health fund which they can draw from when they need medical care. Contributions are not risk-related and there is generally a high level of community involvement in the running of these plans.

Universal health care systems vary according to the degree of government involvement in providing care or health insurance. In some countries, such as Canada, the UK, Spain, Italy, Australia, and the Nordic countries, the government has a high degree of involvement in the commissioning or delivery of health care services and access is based on residence rights, not on the purchase of insurance. Others have a much more pluralistic delivery system, based on obligatory health with contributory insurance rates related to salaries or income and usually funded by employers and beneficiaries jointly.

Sometimes, the health funds are derived from a mixture of insurance premiums, salary-related mandatory contributions by employees or employers to regulated sickness funds, and by government taxes. These insurance based systems tend to reimburse private or public medical providers, often at heavily regulated rates, through mutual or publicly owned medical insurers. A few countries, such as the Netherlands and Switzerland, operate via privately owned but heavily regulated private insurers, which are not allowed to make a profit from the mandatory element of insurance but can profit by selling supplemental insurance.

Universal health care is a broad concept that has been implemented in several ways. The common denominator for all such programs is some form of government action aimed at extending access to health care as widely as possible and setting minimum standards. Most implement universal health care through legislation, regulation, and taxation. Legislation and regulation direct what care must be provided, to whom, and on what basis. Usually, some costs are borne by the patient at the time of consumption, but the bulk of costs come from a combination of compulsory insurance and tax revenues. Some programs are paid for entirely out of tax revenues. In others, tax revenues are used either to fund insurance for the very poor or for those needing long-term chronic care.

A critical concept in the delivery of universal healthcare is that of population healthcare. This is a way of organizing the delivery, and allocating resources, of healthcare (and potentially social care) based on populations in a given geography with a common need (such as asthma, end of life, urgent care). Rather than focus on institutions such as hospitals, primary care, community care etc. the system focuses on the population with a common as a whole. This includes people currently being treated, and those that are not being treated but should be (i.e. where there is health inequity). This approach encourages integrated care and a more effective use of resources.

The United Kingdom National Audit Office in 2003 published an international comparison of ten different health care systems in ten developed countries, nine universal systems against one non-universal system (the United States), and their relative costs and key health outcomes. A wider international comparison of 16 countries, each with universal health care, was published by the World Health Organization in 2004. In some cases, government involvement also includes directly managing the health care system, but many countries use mixed public-private systems to deliver universal health care.

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Universal healthcare (also called universal health coverage, universal coverage, or universal care) is a health care system in which all residents of a particular country or region are assured access to health care.

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Goal

To ensure health care coverage for everyone in the United States through a foundation of comprehensive and longitudinal primary care.

The intent of this policy document is to give the American Academy of Family Physicians (AAFP) and its Board of Directors the needed advocacy flexibility to consider all options that might come before federal and state governments and the American people in working to achieve the goal of health care coverage for all - a goal based upon AAFP policy which recognizes that health is a basic human right for every person and that the right to health includes universal access to timely, acceptable and affordable health care of appropriate quality.

Introduction

The health care system in the United States is uncoordinated and fragmented and emphasizes intervention rather than prevention and comprehensive health management. Health care costs continue to increase at an unsustainable rate and quality is far from ideal. i,ii

Over the past two decades, policies implemented through the Children's Health Insurance Program (CHIP) and the Patient Protection and Affordable Care Act (ACA) have extended access to affordable health care coverage to millions of previously uninsured, non-Medicare eligible adults and children. The uninsured population reached a historic low of 8.8% under the implementation of these policies. iii The greatest gains in coverage have occurred among our most vulnerable populations and young adults. However, the rollback of some provisions of these policies has increased the percentage of those uninsured to 15.5%, iv close to what it was one decade ago when our uninsured rate was nearing 17%, with nearly 50 million people uninsured. v

Ensuring that all people in the United States have affordable health care coverage that provides a defined set of essential health benefits (EHB) is necessary in order to move toward a healthier and more productive society. Additionally, our health care system must begin to account for and address social determinants that have a profound impact on individual and population health outcomes and costs, such as socioeconomic status, housing and occupational conditions, food security, and the environment. As noted by the Commonwealth Fund, the design of a system to provide health care coverage to all people "will have a deep impact on its ability to make sustainable and systematic improvements in access to care, equity, quality of care, efficiency, and cost control." vi

Any successful health system reform designed to achieve health care coverage for all must re-emphasize the centrality of primary care, reinvigorate the primary care infrastructure in the United States, and redesign the manner of primary care delivery and payment. Compelling research demonstrates that the ever-increasing focus of resources on specialty care has created fragmentation, decreased quality, and increased cost. Studies confirm that if primary care practices redesign how they operate so that they are more accessible, promote prevention, proactively support patients who have chronic illnesses, and engage patients in self-management and decision-making, health care quality improves along with the cost efficiency of care. vii

Family medicine and primary care are the only entities charged with longitudinal continuity of care for the whole patient. The patient and primary care physician relationship and its comprehensiveness have the greatest effect on health care outcomes and costs over the long term. However, the current United States health care system fails to deliver comprehensive primary care because of the way primary care has been, and is currently, financed.

According to the Center for Evaluative Clinical Sciences at Dartmouth (now called the Dartmouth Institute for Health Policy and Clinical Practice), U.S. states that rely more on primary care have lower Medicare spending (inpatient reimbursements and Part B payments); lower resource inputs (hospital beds, intensive care unit [ICU] beds, total physician labor, primary care labor, and medical specialist labor); lower utilization rates (physician visits, days in the ICU, days in the hospital, and patients seeing 10 or more physicians); and better quality of care (fewer ICU deaths and a higher composite quality score). viii

The patient-centered medical home (PCMH) is one approach to providing comprehensive advanced primary care (APC) for children, youth, adults, and the elderly. It is a model of health care that facilitates a partnership between an individual patient, the patient's personal physician, and, when appropriate, the patient's family or caregiver. Each patient has an ongoing relationship with a personal primary care physician trained to provide first-contact, coordinated, continuous, and comprehensive care. The personal physician leads a team of individuals at the practice level and beyond who collectively take responsibility for the ongoing care of patients. ix

Fundamental change is required to shift the direction of the U.S. health system toward one that covers all people and emphasizes comprehensive and coordinated primary care. Current resources must be allocated differently, and new resources must be deployed to achieve these desired results. Payment policies by all payers must change to reflect a greater investment in primary care to fully support and sustain primary care transformation and delivery. Workforce policies must be addressed to ensure a strong cadre of the family physicians and other primary care physicians who are so integral to a high-functioning health care team. Congress and/or state legislatures must enact comprehensive legislation to achieve this change. If such legislation only addresses the uninsured and fails to fundamentally restructure the system to promote and pay differently and better for family medicine and primary care, any solution will not reach its full potential to achieve the Quadruple Aim of better care, better health, smarter spending, and a more efficient and satisfied physician workforce.

Key Elements of the Framework

Everyone will have affordable health care coverage providing equal access to age-appropriate and evidence-based health care services.

Everyone will have a primary care physician and a medical home.

Insurance reforms that have established consumer protections and nondiscriminatory policies will remain and will be required of any proposal or option being considered to achieve health care coverage for all. Those reforms and protections include, but are not limited to, continuation of guaranteed issue; prohibitions on insurance underwriting that uses health status, age, gender, or socioeconomic criteria; prohibitions on annual and/or lifetime caps on benefits and coverage; required coverage of defined EHB; and required coverage of designated preventive services and vaccines without patient cost sharing.

Any proposal will reflect at least a doubling of the percentage of health care spending invested in primary care.x This investment must result in a payment model for primary care that supports and sustains primary care medical home transformation and reduces the current income disparity between primary care and subspecialty care to ensure an adequate primary care physician workforce.

Federal, state, and private funding for graduate medical education will be reformed to establish and achieve a national physician workforce policy that produces a primary care physician workforce sufficient to meet the nation's health care needs. Additionally, U.S. medical schools will be held to a higher standard in regard to producing the nation's needed primary care physician workforce.

A defined set of visits and services to a primary care physician will not be subject to cost-sharing.

In any system of universal coverage, the ability of patients and physicians to voluntarily enter into direct contracts for a defined or negotiated set of services (e.g., direct primary care [DPC]) will be preserved. Additionally, individuals will always be allowed to purchase additional or supplemental private health insurance.

To achieve health care coverage for all, the AAFP supports bipartisan solutions that follow the above referenced principles, are supported by a majority of the American people, and involve one or more of the following approaches, with the understanding that each of these have their strengths and challenges:

A pluralistic health care system approach to the financing, organization, and delivery of health care is designed to achieve affordable health care coverage that involves competition based on quality, cost, and service. Such an approach involves multiple for-profit and not-for-profit private organizations and government entities in providing health insurance coverage. Such an approach to universal health insurance coverage must include a guarantee that all individuals will have access to affordable health care coverage.

A Bismarck model approach is a form of statutory health insurance involving multiple nonprofit payers that are required to cover a government-defined benefits package and to cover all legal residents. Physicians and other clinicians operate independently in a mix of public and private arrangements.

A single-payer model approach that is clearly defined in its organization, financing, and model of delivery of health care services would be publicly financed and publicly or privately administered, with the government collecting and providing the funding to pay for health care provided by physicians and other clinicians who work independently or in private health systems.

A public option approach that is a publicly administered plan directly competing for customers with private insurance plans could be national or regional in scope. Physicians and other clinicians would continue to operate independently.

A Medicare/Medicaid buy-in approach would build upon existing public programs by allowing individuals to purchase health care coverage through these programs. In such a scenario, there must be at least Medicaid-to-Medicare payment parity for the services provided to the patients of primary care physicians.

As noted in the AAFP's Discussion Paper on Health Care Coverage and Financing Models, which was commissioned by the AAFP Board of Directors in 2017, each of these options for achieving health care coverage for all has its strengths and challenges, which need and deserve to be debated by the American people and their elected officials and representatives. These include, but are not limited to, the following important issues:

Level of administrative and regulatory burden for physicians, clinicians and other health care providers, and patients/consumers

Impact on overall health care costs to government, employers, and individuals

Level of patient, consumer, physician, and clinician satisfaction

Level of tax burden

Impact on the timely delivery of health care services (wait times) and delays in scheduling elective health care services

Clarity of the financing model and levels of payment to physicians, clinicians, and other health care providers

Inclusion of family physicians on payment, delivery, and other health care decision-making boards

A description of and clarity on a core set of essential health care benefits available to all, especially primary and preventive care, management of chronic illnesses, and protections from catastrophic health care expenses

Impact on the equitable availability and delivery of health care services

Impact on quality and access

Determination of whether there are global budgets and price/payment negotiations

Need for a clear and uniform definition of a "single-payer health care system"

Comprehensive Primary Care
Advanced primary care embodies the principle that patient-centered primary care is comprehensive, continuous, coordinated, connected, and accessible for the patient's first contact with the health system. APC aims to improve clinical quality through the delivery of coordinated, longitudinal care that improves patient outcomes and reduces health care spending. The AAFP believes APC is best achieved through the medical home model of practice. We define a primary care medical home as one that is based on the Joint Principles of the Patient-Centered Medical Homeix and has adopted the five key functions of the Comprehensive Primary Care Plus (CPC+) initiative, which establishes a medical practice that provides comprehensive care and a partnership between patients and their primary care physician and other members of the health care team, as well as a payment system that recognizes the comprehensive work of providing primary care. The key functions of a primary care medical home are:

1. Access and Continuity

2. Planned Care and Population Health

3. Care Management

4. Patient and Caregiver Engagement

5. Comprehensiveness and Coordination

Benefits
All proposals or options to provide health care coverage for all will be required to cover a defined set of essential health benefits. At a minimum, these would include items and services in the following benefit categories:

1. Ambulatory patient services

2. Emergency services

3. Hospitalization

4. Maternity and newborn care

5. Mental health and substance use disorder services, including behavioral health treatment

6. Prescription drugs

7. Rehabilitative and habilitative services and devices

8. Laboratory services

9. Preventive and wellness services and chronic disease management

10. Pediatric services, including oral and vision care

In addition to requiring coverage for EHB, all proposals or options will ensure that primary care is provided through the patient's primary care medical home. To foster a longitudinal relationship with a primary care physician, all proposals or options will provide the following services independent of financial barriers (i.e., deductibles and co-pays) if the services are provided by the patient's designated primary care physician:

a. Evaluation and management services
b. Evidence-based preventive services
c. Population-based management
d. Well-child care
e. Immunizations
f. Basic mental health care
Affordability
To achieve the goal proposed in this paper: " to ensure health care coverage for everyone in the United States through a foundation of comprehensive and longitudinal primary care," it will not be sufficient to focus on health care coverage and primary care alone. There will need to be an effort aimed at identifying and reducing the costs of health care services including the administrative costs of delivering those services.

A health care system that is comprehensive and prioritizes primary care must also emphasize the cost and affordability of care. This is important not only for consumers, but also for the decision-making of physicians, clinicians, payers, and government agencies. Affordability is a critical component in efforts to reform the United States health care system.

Prevention & Public Health - there should be increased investment in preventive care, specifically those preventive services that have been proven to reduce the prevalence of preventable diseases (e.g., access to free vaccines and screening programs). A focus on reducing preventable diseases likely would reduce or, at minimum defer, future high-cost spending for preventable diseases. In addition, there should be an increased focus on identifying societal and environmental factors that contribute to increased health care spending.

Transparency - an increased investment in primary care and the medical home allows health plans to not only reduce the costs of treating high-risk patients but improve the quality of health services.xi This increased investment should be supported by aggressive efforts to establish price transparency for all health care services. Such transparency likely will contribute to reducing excessively high health care costs by informing the public about their costs of care and creating more competition in the health care industry.

Consolidation - consolidation in the health system is cause for concern when it comes to affordability. Although consolidations between health systems may allow for reductions in internal costs, such as operating expenses, they create a less competitive market which leads to higher health care costs and insurance premiums.xii

Site-Neutral Payment Policies - for many health care services, current payment policies often are highly variable depending on the site of service (payment higher for the same service performed in a hospital versus an ambulatory surgery center versus a physician's office for example) despite no significant differences in quality or outcomes of care. Such payment policies contribute to excessive spending in our current system. In addition, such payment policies incentivize consolidation, decrease competition between providers of care, and facilitate over-utilization of high-cost health care services. This issue could be addressed effectively through site-neutral payment policies and the elimination of some facility fees.

Administrative Costs - a share of the overall costs of health care in United States health care is due to high administrative costs. Much of these high administrative costs is due to complexities in billing which is exasperated by multiple payers. Countries with lump-sum budgets and fewer health care payers have seen lower costs in administrative spending.xiii Of all hospital spending in the United States, 25% is dedicated to administrative costs--- nearly $200 billion. In comparison, Canada dedicates only 12% of hospital spending to administrative costs, while England spends 16% on administrative costs. Additionally, no link has been found between higher administrative costs and higher quality care.

Pharmaceutical & Biologics - advances in pharmaceuticals and biologics have improved the health of millions of people, decreased the prevalence of preventable diseases, and allowed for chronic diseases to maintained over a prolonged period of time. These advances have extended life expectancy for millions of people, especially those with chronic diseases and some cancers. These advances should be celebrated for the positive impact they have had on millions of people. However, the escalating costs of pharmaceuticals and biologics places these interventions and treatments out of reach for far too many people. Policies should be established that allow purchasers of health care, including Medicare, to negotiate the costs of prescription drugs. Additionally, there should be greater flexibility in the design of formularies that allow for increased use of generic and bio-similar products.
Payment
The AAFP believes all primary care physicians should be compensated in a manner that is consistent with the AAFP's comprehensive payment model for family medicine and primary care, the Advanced Primary Care Alternative Payment Model (APC-APM). The AAFP believes the APC-APM is a foundational element of a greater investment in primary care that is essential to a better system of care in the United States.

The model builds on previous programs and years of research showing the benefits of movement away from fee-for-service (FFS) payment and increased support for population-based care. It better supports small and independent practices and reduces administrative burden in the health care system.
Key Components of the APC-APM
For any health care system to achieve its goals, there will be a need for greater investment in primary care. The AAFP strongly supports increased investment in primary care as part of any U.S. health care system.

Family physicians, other primary care physicians, and primary care teams provide comprehensive primary care through two distinct functions: direct patient care and non-face-to-face care, which we label as "population-based care." The AAFP has concluded that traditional FFS payment is largely incongruent with these core functions. The APC-APM, which is outlined in Figure 1, is better designed to recognize the value of these complementary, yet distinct, functions.

The APC-APM establishes a payment model built on the realization that high-quality primary care is delivered through both direct patient care and the population-based services that are provided by the primary care team. Additionally, we believe the revenue cycle for primary care must move to a prospective payment model with a retrospective evaluation for performance and quality. Therefore, our model establishes prospective payments for a direct patient care global payment, a population-based global payment, and a performance-based incentive payment.

Building on our belief that primary care should remain comprehensive, the APC-APM maintains an FFS component as a means of driving comprehensive care at the primary care level. The presence of this FFS component recognizes that a comprehensive primary care practice will provide episodes of care that are beyond the scope of the direct patient care global payment.

We believe the APC-APM will support a greater investment in primary care and will allow primary care practices of all sizes and in any location to achieve and sustain success through its simplified payment structure and dramatic reduction in administrative burden. More importantly, we believe patients will achieve better outcomes and have a more favorable experience through this model.
FIGURE 1. KEY COMPONENTS OF THE APC-APM PAYMENT

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Health Care for All: A Framework for Moving to a Primary Care-Based Health Care System in the United States

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Learn about AAFP's policy regarding health care for all & moving to a primary care-based health care system.