The U.S. Health-Care Model

As discussed earlier, other Western nations have national systems of health care and health insurance. In stark contrast to these nations, the United States relies on a direct-fee system, in which patients are expected to pay for medical costs themselves, aided by private health insurance, usually through one’s employer. Table 18.4 “Health Insurance Coverage in the United States, 2008” shows the percentages of Americans who have health insurance from different sources or who are not insured at all. (All figures are from the period before the major health-care reform package was passed by the federal government in early 2010.) Adding together the top two figures in the table, 57% of Americans have private insurance, either through their employers or from their own resources. Almost 28% have some form of public insurance (Medicaid, Medicare, other public), and 15.4% are uninsured. This final percentage amounts to about 46 million Americans, including 8 million children, who lack health insurance. Their lack of health insurance has deadly consequences because they are less likely to receive preventive health care and care for various conditions and illnesses. It is estimated that 45,000 people die each year because they do not have health insurance (Wilper et al., 2009).

Although almost 28% of Americans do have public insurance, this percentage and the coverage provided by this insurance do not begin to match the coverage enjoyed by the rest of the industrial world. Although Medicare pays some medical costs for the elderly, we saw in Chapter 12 “Aging and the Elderly” that its coverage is hardly adequate, as many people must pay hundreds or even thousands of dollars in premiums, deductibles, coinsurance, and copayments. The other government program, Medicaid, pays some health-care costs for the poor, but many low-income families are not poor enough to receive Medicaid. Eligibility standards for Medicaid vary from one state to another, and a family poor enough in one state to receive Medicaid might not be considered poor enough in another state. The State Children’s Health Insurance Program (SCHIP), begun in 1997 for children from low-income families, has helped somewhat, but it, too, fails to cover many low-income children. Largely for these reasons, about two-thirds of uninsured Americans come from low-income families.

Not surprisingly, the 15.4% uninsured rate varies by race and ethnicity (see Figure 18.7 “Race, Ethnicity, and Lack of Health Insurance, 2008 (Percentage With No Insurance)”). Among people under 65 and thus not eligible for Medicare, the uninsured rate rises to almost 21% of the African American population and 32% of the Latino population. Moreover, 45.3% of adults under 65 who live in official poverty lack health insurance, compared to only about 6% of high-income adults (those with incomes higher than 4 times the poverty level). Almost one-fifth of poor children have no health insurance, compared to only 3.5% of children in higher-income families (Kaiser Family Foundation, 2010). As discussed earlier, the lack of health insurance among the poor and people of color is a significant reason for their poorer health.

Managed Care and HMOs

To many critics, a disturbing development in the U.S. health-care system has been the establishment of health maintenance organizations, or HMOs, which typically enroll their subscribers through their workplaces. HMOs are prepaid health plans with designated providers, meaning that patients must visit a physician employed by the HMO or included on the HMO’s approved list of physicians. If their physician is not approved by the HMO, they either have to see an approved physician or see their own without insurance coverage. Popular with employers because they are less expensive than traditional private insurance, HMOs have grown rapidly in the last three decades and now enroll more than 70 million Americans (see Figure 18.8 “Growth of Health Maintenance Organizations (HMOs), 1980–2007 (Millions of Enrollees)”).

Although HMOs have become popular, their managed care is also very controversial for at least two reasons (Kronick, 2009). The first is the HMOs’ restrictions just noted on the choice of physicians and other health-care providers. Families who have long seen a family physician but whose employer now enrolls them in an HMO sometimes find they have to see another physician or risk going without coverage. In some HMOs, patients have no guarantee that they can see the same physician at every visit. Instead, they see whichever physician is assigned to them at each visit. Critics of HMOs argue that this practice prevents physicians and patients from getting to know each other, reduces patients’ trust in their physician, and may for these reasons impair patient health.

The second reason for the managed-care controversy is perhaps more important. HMOs often restrict the types of medical exams and procedures patients may undergo, a problem called denial of care, and limit their choice of prescription drugs to those approved by the HMO, even if their physicians think that another, typically more expensive drug would be more effective. HMOs claim that these restrictions are necessary to keep medical costs down and do not harm patients.

Several examples of the impact of managed care’s denials of coverage and/or care exist. In one case, a woman with a bone spur on her hip had successful arthroscopic surgery instead of open hip surgery, the more common and far more expensive procedure for this condition. When her insurance company denied coverage for her arthroscopic surgery, the patient had to pay doctor and hospital fees of more than $21,000. After a lengthy appeal process, the insurance company finally agreed to pay for her procedure (Konrad, 2010). In a more serious case a decade ago, a 22-year-old woman died after going to a physician several times in the preceding week with chest pain and shortness of breath. She was diagnosed with a respiratory infection and “panic attacks” but in fact had pneumonia and a blood clot in her left lung. Her physician wanted her to have lab tests that would have diagnosed these problems, but her HMO’s restrictions prevented her from getting the tests. A columnist who wrote about this case said that “an unconscionable obsession with the bottom line has resulted in widespread abuses in the managed-care industry. Simply stated, there is big money to be made by denying care” (Herbert, 1999, p. A25).

Racial and Gender Bias in Health Care

Another problem in the U.S. medical practice is apparent racial and gender bias in health care. Racial bias seems fairly common; as Chapter 10 “Race and Ethnicity” discussed, African Americans are less likely than whites with the same health problems to receive various medical procedures (Smedley, Stith, & Nelson, 2003). In 2017, the Agency for Healthcare Research and Quality issued its 15th yearly report on health care quality and disparities, comparing disparities to those measured in 2002. The most recent data available showed that 40 percent of the quality measures were still worse for blacks than whites. Other groups fared worse as well. Measures were worse for 20 percent of Asian-Americans, 30 percent of Native Americans, and one third of Pacific Islanders and Hispanics. Recent studies focused on implicit racial bias in the pediatric setting. Two studies found that implicit racial bias was associated with racial disparities in pain management. Children were offered more pain medicine if they were white compared to those of color.

Gender bias also appears to affect the quality of health care (Read & Gorman, 2010). Research that examines either actual cases or hypothetical cases posed to physicians finds that women are less likely than men with similar health problems to be recommended for various procedures, medications, and diagnostic tests, including cardiac catheterization, lipid-lowering medication, kidney dialysis or transplant, and knee replacement for osteoarthritis (Borkhoff et al., 2008).

Other Problems in the Quality of Care

Other problems in the quality of medical care also put patients unnecessarily at risk. These include:

• Sleep deprivation among health-care professionals. As you might know, many physicians get very little sleep. Studies have found that the performance of surgeons and medical residents who go without sleep is seriously impaired (Institute of Medicine, 2008). One study found that surgeons who go without sleep for 24 hours have their performance impaired as much as a drunk driver. Surgeons who stayed awake all night made 20% more errors in simulated surgery than those who slept normally and took 14% longer to complete the surgery (Wen, 1998).

• Shortage of physicians and nurses. Another problem is a shortage of physicians and nurses (Shirey, McDaniel, Ebright, Fisher, & Doebbeling, 2010; Fuhrmans, 2009). This is a general problem around the country, but even more of a problem for two different settings. The first such setting is hospital emergency rooms, Because emergency room work is difficult and relatively low-paying, many specialist physicians do not volunteer for it. Many emergency rooms thus lack an adequate number of specialists, resulting in potentially inadequate emergency care for many patients.

  Rural areas are the second setting in which a shortage of physicians and nurses is a severe problem. The National Rural Health Association (2010) points out that although one-fourth of the U.S. population is rural, only one-tenth of physicians practice in rural areas. Compounding this shortage is the long distances that patients and emergency medical vehicles must travel and the general lack of high-quality care and equipment at small rural hospitals. Partly for these reasons, rural residents are more at risk than urban residents for health problems, including mortality. For example, only one-third of all motor vehicle accidents happen in rural areas, but two-thirds of all deaths from such accidents occur in rural areas. Rural areas are also much more likely than urban areas to lack mental health services.

• Mistakes by hospitals. Partly because of sleep deprivation and the shortage of health-care professionals, hundreds of thousands of hospital patients each year suffer from mistakes made by hospital personnel. They receive the wrong diagnosis, are given the wrong drug, have a procedure done on them that was really intended for someone else, or incur a bacterial infection. These and other mistakes are thought to kill almost 200,000 patients per year, or almost 2 million every decade (Crowley & Nalder, 2009).

Complementary and Alternative Medicine (CAM)

As the medical establishment grew in the 19th and 20th centuries, it helped formulate many standards for medical care and training, including licensing restrictions that prevent anyone without a degree from a recognized medical school from practicing medicine. As noted earlier, some of its effort stemmed from well-intentioned beliefs in the soundness of a scientific approach to medical care, but some of it also stemmed from physicians’ desire to “corner the market” on health care, and thus raise their profits, by keeping other health practitioners such as midwives out of the market.

There is increased recognition today that physical health depends at least partly on psychological well-being. As the old saying goes, your mind can play tricks on you, and a growing amount of evidence suggests the importance of a sound mind for a sound body. Many studies have found that stress reduction can improve many kinds of physical conditions and that high levels of stress can contribute to health problems (B. W. Smith et al., 2010).

Evidence of a mind-body connection has fueled the growing interest in complementary and alternative medicine (CAM) that takes into account a person’s emotional health and can often involve alternative treatments such as acupuncture and hypnosis. In the last two decades, several major medical centers at the nation’s top universities established alternative medicine clinics. Despite the growing popularity of alternative medicine, much of the medical establishment remains skeptical of its effectiveness. Even so, about 40% of Americans use an alternative medicine product or service each year, and they spend about $34 billion per year on the various kinds of products and services that constitute alternative medicine (Wilson, 2009) (see Figure 18.9 “Use of Selected Forms of Complementary and Alternative Medicine (CAM), 2007 (Percentage of U.S. Adults Using Each Form During Past Year)”).

Medical Ethics and Medical Fraud

A final set of issues in U.S. medicine concerns questions of medical ethics and outright medical fraud. Many types of health-care providers, including physicians, dentists, medical equipment companies, and nursing homes, engage in many types of health-care fraud. In a common type of fraud, they sometimes bill Medicare, Medicaid, and private insurance companies for exams or tests that were never done and even make up “ghost patients” who never existed or bill for patients who were dead by the time they were allegedly treated. In just one example, a group of New York physicians billed their state’s Medicaid program for over $1.3 million for 50,000 psychotherapy sessions that never occurred. All types of health-care fraud combined are estimated to cost about $100 billion per year (Kavilanz, 2010).

Other practices are legal but ethically questionable. Sometimes physicians refer their patients for tests to a laboratory that they own or in which they have invested. They are more likely to refer patients for tests when they have a financial interest in the lab to which the patients are sent. This practice, called self-referral, is legal but does raise questions of whether the tests are in the patient’s best interests or instead in the physician’s best interests (Romano, 2009).

In another practice, physicians are asking hundreds of thousands of their patients to take part in drug trials. The physicians may receive more than $1,000 for each patient they sign up, but the patients are not told about these payments. Characterizing these trials, two reporters said that “patients have become commodities, bought and traded by testing companies and physicians” and said that it “injects the interests of a giant industry into the delicate physician-patient relationship, usually without the patient realizing it” (Galewitz, 2009; Eichenwald and Kolata, 1999). These trials raise obvious conflicts of interest for the physicians, who may recommend their patients do something that might not be good for them but would be good for the physicians’ finances.