The U.S. Health Care System

by Alexander Beard, on Jul 24, 2017 10:35:00 AM

  • The U.S. health care system is unique among advanced industrialized countries. The U.S. does not have a uniform health system, has no universal health care coverage, and only recently enacted legislation, the Affordable Health Care Act (ACA) informally known as “Obama Care” mandating healthcare coverage for almost everyone. Rather than operating a national health service, a single-payer national health insurance system, or a multi-payer universal health insurance fund, the U.S. health care system can best be described as a hybrid system.
  • The current U.S. system leans heavily on private and public sector employers providing health care benefits for roughly 80% of the U.S. population. With the rising cost in health care, employers and insurers are continually looking for ways to manage health care spending. In 2014, nearly 32.9 million people in the U.S. had no health insurance.
  • The range of potential solutions includes a national single-payer system where the taxpayers carry a large responsibility with increased taxation to fund health care for those who can’t afford it, similar to the UK or Canadian system to a more laissez faire system where the consumer is responsible, but not mandated, to obtain health care protection through private insurance.

On a per capita basis, the U.S. spends more than double the $3,453 average of all Organization Economic Co-operation Development (OECD) countries (see chart below) Health Expenditure per capita, 2013 (or nearest year).

*Click chart to zoom

The reason for high health care spending in the U.S. is at least in part due to high medical costs with more, expensive specialty prescription drugs coming to the market and new medical technologies having the biggest impact. U.S. health care specialists are among the best in the world.

However, access to appropriate medical care as well as primary or preventive services is not uniform often resulting in those who cannot afford to pay for insurance or health care expenses, foregoing treatment or accessing care in expensive emergency facilities for non-life-threatening conditions.

The end result of the U.S. approach to health care creates a costlier and inefficient system in comparison to other advanced industrialized nations.

According to the Commonwealth Fund Commission, in a 2014 comparison with Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the U.K., the U.S. ranked last overall.

In terms of quality of care, the U.S. ranked fifth, but came in last place in efficiency, equity, and healthiness of citizens’ lives.

The fact is health cost expenses charged by the providers are increasing.

Between 2000 and 2011, health care expenditures nearly doubled, growing from $1.2 trillion to $2.3 trillion [CDC Health, United States, 2013].

However, evidence suggests the rate of growth has slowed in recent years.

The U.S. health care system needs change, but health insurance is available for those who can afford it, individually and through group plans. The poor currently have access to medical services, at least at some level, through government assistance.

There's no question this debate, controversy, and on going negotiation between the parties to solve America’s health care issue is years away.

Scott Schwartz
Co-Founder & Managing Director: USA - Alexander Beard (U.S.A.) LLC