1.2 The U.S. Healthcare System
Anita Hedlund
Healthcare in the United States is complex. The United States has the third-largest population in the world after China and India (approximately 335 million people), yet it has the world’s highest healthcare expenditure. Rather than a nationalized healthcare system, in the United States, “there are multiple insurers and delivery systems that are often uncoordinated” (Rice et al., 2020, p. 29).
Most patients in the United States are either paying out-of-pocket for healthcare services or paying private healthcare insurance to assist in covering costs. Because of this model, and the high cost of healthcare, lack of insurance coverage is a major barrier to public health. About 10% of the U.S. population has no health insurance, not necessarily because of unemployment but because the cost of coverage is too high (Tolbert et al., 2022). Additionally, the Commonwealth Fund (2022) found that 43% of working adults were underinsured in 2022, meaning that they had some insurance but it was insufficient for their healthcare needs. This contrasts with countries such as the United Kingdom, Germany, Switzerland, France, and Singapore that use socialized medicine. Socialized medicine is a healthcare system in which medical and hospital care is funded by public resources, primarily through taxes. In socialized medicine, all healthcare, including the employment of healthcare workers, is run by the country’s government.
Rice et al. (2020) state that strengths of the U.S. healthcare system are a “large and well-trained health workforce and a wide range of high-quality medical specialists, as well as secondary and tertiary institutions, a robust health sector research program and . . . among the best medical outcomes in the world” (p. 333). However, it should be noted that even though some U.S. medical outcomes, such as the survival rate of certain cancers, are among the best in the world, other conditions, such as asthma, may have poorer outcomes. There is also inconsistency in managing health behaviors through public messaging, with the United States being “notably effective in reducing smoking rates but equally ineffective in grappling with nutritional health and obesity” (Rice et al., 2020, p. xxiii).
Sadly, although the United States has a well-educated workforce and high-tech equipment, its mortality rate is worse than that of other countries with similar offerings. The Population Health Forum (2019) points out that the United States is the richest yet sickest nation in the world, with the largest gap in health outcomes between the wealthy and the poor. As the healthcare system grapples with these gaps, healthcare professions will need to consider how to address health equity or, in other words, provide the necessary support to ensure all people can attain their highest level of health regardless of identity or background.
The Centers for Disease Control and Prevention (CDC, 2022b) have indicated that key lifestyle choices are major contributors to U.S. health problems. The use of tobacco, poor nutrition (such as too much deep-fried food with not enough nutrients), lack of physical activity, and excessive alcohol consumption contribute to six out of ten Americans having some type of chronic disease such as heart disease, respiratory diseases, diabetes, and substance abuse. Compared to other industrialized nations, the United States is 36th in the world when it comes to life expectancy, and the infant mortality rate is two to three times that of most other developed nations.
Lack of equitable access is another concern in the United States. Not all people have the same opportunities to access healthcare. Access can be affected by disabilities, distance to healthcare facilities, lack of transportation, cost of fuel, lack of childcare, and racial or gender inequalities. Consider a common barrier to equitable access: lacking health insurance. It is no surprise that the majority of uninsured people are in low-income families, with the cost of insurance being too high, even when at least one member of the family works (Tolbert et al., 2022). Depending on the state, there may be limited availability of coverage that disproportionately affects adults, the elderly, and those who identify as people of color (Tolbert et. al., 2022). Sadly, many people avoid needed healthcare or medication due to cost, even to the point where they experience immense impacts to their health and daily life. Even for the insured, some medications cost several hundred dollars a month for one prescription, again disproportionately affecting those with limited income.
Disease Dissection: Diabetes
If you work in healthcare, you will no doubt encounter people with diabetes. There are several types of diabetes, but this section will cover the most common form, diabetes mellitus (DM). DM has to do with the body’s regulation of sugar, in the form of glucose. Human bodies need glucose to provide energy to the cells that make up the muscles and tissues, and it is the main fuel source for the brain. In order to have the right amount of glucose available in the bloodstream, the body has to produce enough insulin. Insulin is like a ferry that transports glucose into certain cells. If the body does not produce enough insulin to carry all the glucose into the cells, the excess accumulates in the blood and is then processed by the kidneys and excreted in urine. This accumulation of glucose in the blood leads to the numerous symptoms and complications that result from this chronic disease.
Complications from diabetes, primarily heart and kidney disease, are extremely impactful to U.S. healthcare. The total estimated cost of diagnosed diabetes in 2017 was $327 billion, including $237 billion in direct medical costs and $90 billion in lost productivity. Cardiovascular disease (CVD), a condition in which the heart and blood vessels are negatively impacted by a variety of factors such as high cholesterol and high blood pressure, is the number one cause of death for people living with diabetes. Fortunately, these risks can be decreased with medications, proper diet, and exercise.
If you want to learn more about diabetes, the American Diabetes Association and the Centers for Disease Control’s Basics of Diabetes and Diabetes by the Numbers are great places to start.
How Health Costs Are Paid For
The importance of health insurance to the U.S. healthcare system cannot be overstated. It provides important financial protection in case you have a serious accident or sickness. As discussed above, people without health coverage are exposed to high costs that can sometimes lead them into deep debt or even bankruptcy.
It is easy to underestimate how much medical care can cost. For example:
- Fixing a broken leg can cost up to $7,500.
- The average cost of a three-day hospital stay is around $30,000.
- Comprehensive cancer care can cost hundreds of thousands of dollars. (Tolbert et. al., 2022)
Having health coverage can help protect you from high, unexpected costs such as these.
Options for health insurance in the United States include one of the many private insurers or, if a person qualifies, one of the two government programs for the general public, Medicare and Medicaid.
Medicare
Medicare is health coverage for people who are over the age of 65, with some exceptions for qualifying conditions. Navigating Medicare is complex, as it has multiple parts: A, B, and D. According to the Centers for Medicare & Medicaid Services (2024a), “Medicare covers most, but not all of the costs for approved healthcare services and supplies. After you meet your deductible, you pay your share of costs for services and supplies as you get them. There’s no limit on what you’ll pay out-of-pocket in a year unless you have other coverage.” If you go to a doctor or other healthcare provider that accepts the Medicare-approved amount, your share of costs may be less. If you receive a service that Medicare does not cover, you pay the full cost.
For Medicare to cover a healthcare service, it must be justified as medically necessary. However, Medicare will cover some preventive services, such as shots and screenings. Services such as long-term care or cosmetic procedures are not included in standard Medicare coverage.
Medicaid
The other federal healthcare program, in partnership with state governments, is Medicaid. “Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. Medicaid is administered by states, according to federal requirements” (Centers for Medicare & Medicaid Services, 2024b).
The Children’s Health Insurance Program (CHIP) was signed into law in 1997 and provides federal matching funds for states to provide health coverage to children in families with incomes too high to qualify for Medicaid but who cannot afford private coverage.
Through the Basic Health Program, states can provide coverage to individuals who are citizens or lawfully present non-citizens who do not qualify for Medicaid, CHIP, or other minimum essential coverage and have income between 133% and 200% of the federal poverty level (FPL). According to the U.S. Department of Health and Human Services (2023), in 2023, the FPL for a family of four was $30,000.
Private Insurance
Private insurers often contract with an employer/organization to provide health insurance to employees, which means that coverage for the vast majority of the insured is tied to employment. Typically, the employer pays most of the monthly fee as part of a benefits package. However, a percentage of the cost must be covered by the employee. For those who are self-employed, or employed without access to employee benefits, insurance coverage can be purchased directly.
U.S. Health Policy
The U.S. healthcare system cannot be discussed without acknowledging the role of politics in health policy. Health policy can be an important platform for political parties running for office, and health policy changes depending on which political party is in power, subject to the election cycle every 2 to 4 years.
Politics plays an important role in health policy because the power to enact health policy, such as regulation of pharmaceuticals and medical devices, resides partially in the federal government. However, individual states “fund and manage many public health functions, pay part of the cost of Medicaid and shape its organization within that state, and set the rules for health insurance policies that are not covered by self insured employer plans” (Rice et al., 2020, p. xxiv). This balance of power between federal and state governments allows for states to determine elements of health policy based on their own constituents, but it also results in major variations in policy from state to state.
The federal agency that oversees healthcare is the Department of Health and Human Services, which in turn oversees the Medicare and Medicaid programs through its Centers for Medicare and Medicaid Services (CMS). Other health-related federal agencies include the National Institutes of Health, the Centers for Disease Control and Prevention, the Veterans Health Administration, and the Food and Drug Administration, and each plays an important part in shaping U.S. health policy.
A Look at the Veterans Health Administration
The Veterans Health Administration is a federal agency set up to take care of people serving in or retired from the military and their families. It runs a network of hospitals and clinics throughout the country. However, these military facilities can only be used by select patients with disabilities and the highest care needs. Care is given to those who need it the most.
Once military personnel separate from service, they are offered an option to take TriCare insurance or private insurance. They can also choose to be seen either at military facilities or the same hospitals that are available to everyone.
Evaluating Healthcare
The reliance on public funds or private insurance to cover most healthcare costs creates many jobs in planning and evaluating the care provided (utilization review or case management), assigning codes (medical coder), and billing (billing specialist). Current Procedural Terminology (CPT) codes are used to track and bill medical, surgical, and diagnostic services performed. These must be used in order to get reimbursement by insurance companies (American Academy of Professional Coders [AAPC], 2023). Hospitals and providers are reimbursed by insurance on a fee-for-service basis. To improve outcomes and quality of healthcare, Medicare will no longer reimburse for certain preventable problems such as hospital-acquired infections.
The Center for Medicare Services (CMS) and other national organizations such as the Joint Commission survey healthcare facilities and audit medical records to assess the quality of care being provided. These audits involve determining whether services provided to patients were appropriate, and what, if any, medical errors were made. The surveyors ensure that state and federal laws, as well as the institution’s own policies, are being followed. These audits may also evaluate the physical environment in which care is provided, looking at everything from sanitation practices to fire safety. This is done to protect the public and to guarantee that patients are receiving the best and safest medical care.
Attributions
- Figure 1.7: image released under the Pixabay License
- Figure 1.8: image by CDC in the Public Domain
- Figure 1.9: Maryland National Guard by The National Guard is released under CC BY 2.0 DEED
The number of individuals of a specific population who die in a given year.
The measured impacts of a disease or illness on people's health, covering factors like mortality, morbidity, functional abilities, quality of life, and patient-reported experiences.
Health equity means all peoples have the ability to attain their highest level of health regardless of identity or background.
The average number of years on average people can expect to live due to their location or background.
The ability to physically get to settings where healthcare is offered and appropriate providers are available, regardless of an individual's background or circumstances.
A set of decisions and rules made by governments and organizations to improve and regulate healthcare for a population.
A test that helps diagnose what is causing an illness or symptoms, such as an ultrasound to confirm appendicitis