Healthcare reform

DEFINITION: Changes in major governmental policies regarding healthcare access, services, cost, fairness, and delivery

Organization and Function

The function of healthcare is to provide preventive, diagnostic treatment and emergency care for the citizens of a country. The physical organization of the healthcare system in the United States consists of hospitals, outpatient clinics, pharmacies, home healthcare services, long-term care facilities, public health clinics, and other supportive services such as occupational therapy. There are many layers of staff, including physicians, nurses, physician assistants, other medical support staff, office staff, and administrative staff. These organizations are regulated by state and federal agencies. Naturopathic, dental, optometric, and other services are sometimes excluded from health insurance or healthcare plans, or these services sometimes offer separate insurance policies and programs.

Healthcare in the United States

There are many misconceptions about the existing healthcare systems in North America and around the world. In the United States, access to healthcare services and direct costs to patients depends on the patient's insurance plan or lack of insurance plan. The United States does not have universal healthcare, which covers every individual in a nation regardless of income level. Rather, in the US health insurance system, many employers pay part or all of the health insurance costs for their employees. Working individuals whose employers do not pay health insurance costs buy insurance out-of-pocket. People who are unemployed or who cannot afford to purchase health insurance are sometimes eligible for free or low-cost insurance through various government programs such as Medicare and Medicaid.

Depending on the insurance plan offered, copayments may be due at the time of service, and certain services may not be offered or covered by the insurance. For the millions of people who have no insurance, the healthcare system is a purely fee-for-service system like that found in developing countries. Some are able to navigate and take advantage of a patchwork of government services, such as state-run plans or county hospitals that may pay for emergency care. The United States is one of the few developed countries without universal access to healthcare, and since access to healthcare is inextricably tied to access to affordable health insurance, many see the system as failing the American people. Historically, there have been disparities in the availability of healthcare for people from various income levels, and the care that is available is not of consistent quality. Immigrants, the poor, and the homeless seem to be most affected by inaccessibility to healthcare, and seniors and children are also vulnerable. Many feel that the United States has had one system for those who can afford health insurance, and thus quality healthcare, and another system, often of lesser quality, for those without insurance. After years of political debate about this issue, the Affordable Care Act was signed into law in 2010 in an attempt to make quality healthcare accessible to all US citizens.

The Affordable Care Act

The Patient Protection and Affordable Care Act (PPACA) of 2010—commonly called the Affordable Care Act (ACA) or Obamacare, after its major backer, President Barack Obama—sought to reform a number of aspects of the US health insurance industry, as well as improve access to and quality of healthcare services. Since the passage of the ACA, insurers have been required to cover preventive services without a deductible, copayment, or other out-of-pocket expense; extend coverage to children with existing medical conditions; cover young adult children up to age twenty-six on their parents’ plans; spend most of their premiums on benefits to consumers rather than on administrative costs; and provide justification for rate increases. Starting in 2014, insurers were no longer allowed to set annual dollar limits on coverage, reject anyone based on preexisting medical conditions, discriminate against women, or restrict or deny coverage to those who participate in clinical trials. The ACA also expanded Medicare coverage and benefits through state governments, and issues of substandard health care for children are to be addressed by increasing Medicaid payment rates to healthcare providers to help ensure access to primary care providers for more low-income children. Children may also no longer be denied coverage for preexisting conditions and may no longer have annual or lifetime caps placed on their health insurance. For very poor or uninsured families, the ACA provides tax credits and vouchers to help with quality health insurance coverage.

At the time of its passage, the Affordable Care Act was the most substantial overhaul of the US healthcare system since the passage of the Medicare and Medicaid amendments during the Johnson administration in the mid-1960s. Despite facing intense opposition from the general public, medical professionals, and various public officials, and numerous problems and glitches in its start-up, many still had hope that the ACA would dramatically improve the affordability of and access to health insurance and quality healthcare. The ACA, however, will always be immersed in American politics, and challenges continued to plague the legislation into the late 2010s. Between 2014 and 2023, the ACA was brought before the Supreme Court three times; each time the Supreme court upheld the ACA. Under the administration of President Donald Trump, attempts were made to challenge and end the ACA. When the administration shifted to that of President Joe Biden in 2020, the ACA no longer faced political obstruction from the executive office.

Services and Cost

There is a balance between the services provided by any system, the cost per service, and the reimbursement of the provider. The provision of healthcare varies from simple procedures, such as suturing a wound, to very complex care, such as diagnosing a rare neurological disorder. Cost will also increase with the time a provider spends with a patient. In systems that have a fixed costs per service, the provider will have a financial incentive to see as many patients as quickly as possible. Malpractice insurance costs and claims also may affect cost and services. In some cases, tests or treatments may be recommended to reduce the chances of malpractice claims. Some providers will discontinue high-risk procedures because of malpractice insurance costs.

It is a complex equation to determine this balance of service to patients; cost to patients via insurance, taxes, or cash; and reimbursement to providers. Geography and ethnic diversity will also complicate the equation. In 2024, the population of the United States was more than 341.9 million, Canada was about 38.7 million, and Sweden was approximately 10.5 million. The United States covers about 3.8 million square miles, Canada about 3.8 million square miles, and Sweden about 176,000 square miles. These factors influence the feasibility of providing services in some cases. For example, in sparsely populated areas of any country, it is difficult to provide the same services that may be available in a more densely populated metropolitan area or in major cities.

Cost is also influenced by insurance company profits, healthcare provider reimbursement, technology, and preventive care. Some healthcare systems attempt to limit overall costs by providing preventive education and care. Immunization programs are an example of preventive healthcare that can reduce illness and therefore reduce costs to the system. Other systems use government control, such as rationing, to control costs.

Rationing, or "prioritizing," healthcare invariably involves financial considerations, but it can also involve scheduling, medicinal, and technological factors. Countries that feature universal healthcare frequently ration technological resources and attempt to secure bargaining arrangements with drug suppliers in order to purchase bulk amounts at a lower rate. In the United States, medical resources are more commonly rationed through administrative managed care organizations such as HMOs (health maintenance organizations); this form is sometimes termed "explicit rationing." The general theory behind rationing is that reducing less-necessary treatment allows individuals suffering from more serious conditions to receive treatment. The "implicit rationing" practiced in Britain is less formally defined and is intended to balance cost and medical need. Rationing may also lead to long waiting lists for services. Insurance companies generally try not to ration resources but rather screen high-risk candidates for policies and impose high deductibles to discourage the use of policies for less-serious treatment.

The balance between services and cost is at the core of any healthcare reform debate. This balance is influenced by decisions such as preventive care provisions, what is considered to be elective care versus necessary care, individual needs versus the needs of the population, long-term care provision, and a host of other factors.

Perspective and Prospects

People with steady employment with healthcare benefits will not necessarily perceive that there is any problem with the existing system. A portion of the millions of uninsured Americans may also not perceive a problem if they have not had a need to access services. However, those uninsured with serious health issues or those who become unemployed and lose their insurance may feel there is a need for reform.

In spite of leading in healthcare expenditure, the United States places low in many rankings of health indicators. Some use these statistics to point to the need for healthcare reform in the United States. According to the United Nations, the average life expectancy at birth for Americans was 80.9 years in 2024, ranking below forty-eight other industrialized countries, including Japan, Spain, and South Korea. Life expectancy may be affected by factors other than illness, such as accidents and homicide, so some believe this is not a true indicator of the quality of healthcare. Other indicators are similarly complex.

Healthcare reform in the United States is a particularly difficult task due to the large population, the variety of healthcare delivery systems that exist, and political gridlock around the issue. Chronic diseases such as heart disease, mental illness, substance use disorder, asthma, and diabetes account for a large amount of healthcare spending. Some politicians and healthcare professionals believe that early intervention in these cases would ultimately save money. Reform that includes more access to care, preventive care, and early intervention for people with these chronic diseases may improve health quality while decreasing health costs.

There are several things to consider regarding healthcare reform in the United States. It comes down to the collective philosophy of the citizens, the financial assessment of the benefit of investing in care for the underserved populations, the cost to the citizens through taxation, the cost to citizens for poor health in a segment of the population, and the cost to businesses for employee insurance.

Points under debate include whether providing insurance and preventive care to the currently uninsured might save money, as such individuals might otherwise access costly emergency care when untreated preexisting conditions lead to more serious illness. Lack of affordable insurance may discourage people from becoming self-employed or may cause small businesses to hire only part-time employees to avoid having to pay for expensive employee insurance plans.

Philosophical issues abound as to whether healthcare is to be considered a fundamental right, and if so, what level of services should be considered and whether wealthier citizens be allowed to purchase faster and more extensive services. The question of whether citizens have a responsibility to have insurance and the role of low-cost insurance as a stimulus to small businesses and self-employed people are other factors to consider. Profit versus nonprofit provision of care, as well as reimbursement for providers, also affects the debate.

Bibliography

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