Healthcare Reforms in the United States

Introduction

Among the most hotly debated issues in the American society today is the issue of provision of healthcare services; indeed, this debate has made it even to the center of the contests for the most powerful office in the world; the American presidency (Robert et al, 2008). Issues which fuel this debate include the question whether healthcare is a fundamental human right; the quality of the services offered; the costs of the services; and who foots the bill.

Today, the United States has the most expensive healthcare expenditure per person than any other country; and has the most expensive healthcare system in the world. Indeed, the mixed private-public healthcare system is not working as it should; because despite these expenditures, the health index of the American population is far from being the best in the world; and many people continue to have inadequate or no access to quality healthcare services. Among all the industrialized countries, the United States is the only one which does not have a comprehensive program to ensure that all its citizens have access to basic healthcare; and any debate on the remedies to this situation is usually derailed by partisan party and political divides.

The major divide in this debate is whether the federal government should be playing any role in ensuring access; and whether Americans should be compelled to pay for and use public health as the primary source as have many other developed countries. The people advocating for a government-sponsored universal medical cover urge that the large number of uninsured and underinsured Americans have resulted in hidden costs associated with increased and unnecessary visits to the emergency room by this group; and that such a program would make health care much more cheaper than it is today in the United States (IMNA, 2008). On the other hand, opposers mainly base their arguments on the factor of choice; that everyone should be free to choose where s/he wants to be covered by the federal government or not (Cato Institute, 2002).

Deficits of the Current System

A discussion on reforms on the American healthcare system would not be complete without highlighting aspects that precipitated the need for the reforms in the first place. Indeed, the system has not been entirely ineffective in the past; however, its current design has been rendered obsolete by the passage of time without a corresponding effort to adapt the system to the changing environment. Some of the more pertinent issues include the following.

The costs of healthcare services

In 2007, it was estimated that US$7,439 was spent on each individual; this amounts to US$2.26trillion or 16% of the GDP of the United States (CMMS, 2008 and WHO, 2006). More alarming, however, is the rise in the cost of services; which far outstrips the rise in average wages; the cost is estimated to expend 19.5% of the GDP by 2017 (CMMS, 2008). This proportion is far bigger than that of other industrialized countries; which have public health systems in place. Healthcare has also been shown to be a leading cause of personal bankrupts in the US; as such, financially stable people can find themselves in financial ruin if they or members of their families are struck by a serious ailment requiring long and/or expensive treatment.

These costs have also been contributed to by the costs of drugs in the US; which is significantly higher compared to other countries. This can be attributed to lack of government price controls; general lack of generic medication due to strict enforcement of intellectual rights; and lack of retail systems controlled by market forces (Montgomery & Murray, 2009). As such, some Americans have been opting to purchase their medication offshore to take advantage of the lower prices.

Insurance and Coverage

Rising costs of healthcare have rendered it almost impossible for an individual to pay for the services out of the pocket; and insurance is the only viable option of getting the services. However, according to the United States census bureau, in 2007, 15.3% of the American population did not have any form of health insurance coverage; this amounts to approximately 45.7 million individuals (USCB, 2007; 2008). Among the most devastating of the effect of lacking insurance is the poor health and mortality associated with the lack of access of affordable services; these deaths were estimated to be about 100,000 every year.

The United States is not however without any form of public cover arrangement. Medicare, a federal program covers the approximately 45 million people over the age of 65; and Medicaid covers persons who are poor. Additionally, the State Children’s Health Insurance Program (SCHIP) is aimed at ensuring care for children from poor families. Other special interest groups benefiting for public coverage are military veterans, Native Americans retired railway workers and merchant seamen.

The rest of the population is expected to be covered by some form of health insurance offered at the place of work. As such, while the number of uninsured people can be estimated from a single survey, the true number usually fluctuates depending on the unemployment in the job market; and a large number of people lose and regain their cover several times during the year. Additionally, children of these people, who unfortunately usually do not qualify for either Medicaid or SCHIP are a vulnerable group to lose insurance.

Additionally, the federal government is having serious doubts in its ability to pay even for the partial coverage of its population; with the costs expected to rise from the US$55billion paid in 2009 to US$930billoin by 2018. This rise in expenditure is fuelled by both the increase in the number of people qualifying for the coverage due to an aging population and the rising costs of healthcare services. During a July 22nd Whitehouse news conference, American president Barack Obama projected that such costs were well capable of breaking the federal budget.

Quality of services

Quality is among the other more pertinent issue driving the efforts of reforms in the US. The country, while spending the most money per person for healthcare every year still lags behind in parameters measuring the general health of the population. Some of these include infant mortality and life expectancy. This situation has been attributed to various factors including massive disparities in health between white majority and racial minority populations in the US; lack of universal cover; and social policies such as abortion of deformed fetuses. This has been an attempt to drive the argument from the suggestion that the relatively poor average health among Americans is due to poor services. This is in the light of the fact that Americans have among the most advanced medical professionals; and have relatively shorter waiting times for treatments by specialists.

The Debate on Reforms

There is a general consensus that reforms on the American healthcare system are necessary and urgent. However, the political temperatures created by the debate are threatening to derail the process altogether as it has done in the past (Robert & Benson, 2001). However, the system as-it-is is not sustainable; and will definitely not be able to handle the projected future workload.

Obama proposals

During the 2008 American presidential campaigns, the then presidential candidate Barack Obama and his running mate Joe Biden laid out plans to reform the system if elected. The broad basis of the proposal involved lowering the costs of healthcare services; ensuring healthcare coverage to all people; and improving efficiency in the system so that it can handle a larger number of people with a lower expenditure of resources. Among the proposals put forward include computerization of medical records to make them easier to access; cheaper to keep; more accurate; and allow an easier flow of crucial information from one level of care to the other.

The role of chronic disease has also been recognized as being a major sinkhole for money; this is especially due to their tendency to occur as co-morbidities and in the older segments of the population covered through public means; therefore, means of preventing the occurrence of these diseases were also put forward. He also recommended reforms in the insurance, health and pharmaceutical markets to make them more competitive to the benefit of the consumer.

Advantages of the public healthcare option proposed by Obama

As mentioned before, the proposals put forward by Obama have elicited a lot of debate from many circles. The general consensus however is that it would not be prudent to leave the system as it is; indeed, this would amount to national suicide (Robert et al, 2008; 4). Among the pros of the public system include the following.

Insurance cover for everyone

As mentioned before, there are over 47 million uninsured Americans at any one time; the lack of insurance has been linked to poor health and increased mortality rates. The Obama proposals give Americans an option of a public cover when they are not in a position to buy this insurance for themselves; for example when they are unemployed. This would not only greatly improve access to healthcare services to people who currently cannot afford it; it will also reduce the visits by uninsured individuals to emergency rooms associated with very high costs of services.

Cover for preexisting conditions

The backbone of the American insurance coverage is the employer-sponsored health insurance. In most of the cases, if an individual seeks to move from the current employment or loses his/her job, s/he has to find new insurance; which more often than not refuse to cover any condition which had been previously diagnosed. Some of these conditions are life threatening including cancer, heart disease, diabetes or asthma; and lack of the ability to pay for their treatment out of pocket may eventually prove fatal. The proposed public insurance system will not discriminate any person choosing to join it on the basis of a preexisting condition.

Lower costs of prescription medication

As mentioned before, the high cost of medication is a major contributing factor to the high cost of healthcare in the United States; stories have been told where poor families and the elderly have had to choose between buying medication and food. Indeed, provision of universal healthcare services would not have any impact if the patients are not able to access medication after prescription. The reform agenda envisions changes in the pharmaceutical industry which would make medication more affordable to the population.

Equal access and reduced insurance cost

Currently, insurance products are designed to separate people in regards to their economic ability; with less affluent people being covered for only those services which they can afford; and having absolutely no access to the services they can’t. This segment together with that of the have no form of insurance usually opt to go to the emergency room to get these services; thus driving the costs of insurance higher as the insured are charged higher premiums to pay for these costs. With universal insurance, not only will everyone have equal access to healthcare services, but the cost of insurance is bound to come down.

Reduction in expenditure on health

As mentioned before, the United States has the highest medical bill in the world. However, a reciprocal quality in health of the population is not experienced. Indeed, a lot of the funds spent in this system are wasted through inefficiency created by lack of access and the associated adverse outcomes. In the September 9, 2009 president Obama placed the costs of the reforms in healthcare at US$900billion; and the new system is expected to reduce the amount of deficit created by these costs by 1% each year.

Medicare

This program as currently structured is not sustainable; since in the foreseeable future, the federal government will not be able to cover the costs generated by it. As such, there have been fears especially among the senior American citizens that the program will be phased out altogether. However, the proposal put forward by Obama seeks to institute reforms in the system to make it more sustainable. Such moves include wastage of money; reduction of fraudulent claims to the system; among other abuses of the system. Similar reforms are also envisioned on other publicly funded insurance schemes for other special interest groups. It is however prudent to note that with universal coverage, the need to have special treatment for some segment of the population may be greatly diminished; and the costs which now are heavily weighing down government expenditure will be ideally reduced by removing bottlenecks in the healthcare system.

Improving competitiveness in the health insurance industry

A public health insurance option is the plan proposed by the president in the Affordable Health Act of 2009. The monopoly of private health insurance has ensured that they can hike the prices of premiums at will due to cartel-like activities; by giving these companies a competitor who is not driven by the need to make profits, in form of a public option will eventually bring down the exorbitant premiums that Americans are being forced to pay today.

Possible disadvantages of the proposed reforms

As mentioned before, the debate on the healthcare system is very passionate; usually eliciting deep emotions (Robert et al, 2008; 4). Among the most pertinent issues is that of choice; opponents to the public option often cite that Americans should always have the freedom of choice to what kind of services they want or the kind of doctor they’d like to visit. This choice will be somewhat inhibited by a public option. Another issue is regarding the right of the federal government to meddle and take over private business; entry of the government will offer stiff competition to insurance companies which will be forced to bring down their premiums thus shifting the cost of healthcare to the companies making them less profitable in the long run; or even run them out of business.

The issue of rationing is also getting much attention; by pointing out that giving uniform cover to everyone will involve the downgrading of the services provided either in terms of quality or detail; or both. Additionally, there are fears that care will be denied to people at the end stage of their life in an attempt to redistribute resources to persons with better prospects. Proponents of reforms however point out that a form of rationing is already present; whereby an individual is segregated depending on size of income, preexisting medical condition or employment. Additionally, millions of other people have absolutely no access to any form of insured healthcare.

Special interest groups currently covered by public arrangements such as Medicare and Medicaid have voiced their fear of losing their privileged positions in favor of a uniform cover for everyone. This is especially so for the elderly population covered by Medicare; who, due to their age, will be practically unable to finance healthcare if they are required to do so by a cost-sharing system. There also have been fears regarding the ability of the federal to pay for these services on a log-term basis; many of the projections that the cost of healthcare services will be reduced by improving efficiency.

There also are political implications of the proposed reforms; the American society is renowned for cherishing individuality and privacy. Government-sponsored insurance will mean that Americans will lose a little bit more of this privacy to the government. Additionally, the autonomy of the state government may be usurped by the federal involvement in a major factor of the American society; this may undermine some of the efforts that state governments have put to reform healthcare services.

There also have been doubts whether healthcare providers will accept or reject public insurance; a rejection on a large scale would doom the public option. Such a rejection may be triggered by an apparent inability of the federal government to foot the accumulated bills due either to a failure of the costs to reduce or other economic difficulties.

Conclusion

The debate on healthcare reform has today taken a central position in the American society; indeed, the president has been forced to come out and publicly deny some of the falsehoods that were being peddled by detractors. Two things however remain constant; first, the system as it is today is not working; too many people have been left without healthcare services and its effects are being seen in terms of health parameters. Secondly, if nothing is done now, then the future of American is at risk of not being able to handle the burden of ill-health. Of particular concern is the aging population and the ability of the American taxpayer to support all its ever-increasing hospital bills. Time is now ripe for the United States to take decisive action to reform its healthcare system; so that it can earn its rightful place as a world leader in all aspects.

Reference List

The Cato Institute (2002). No Health Insurance? So What? Web.

Centers for Medicare and Medicaid Services-CMMS (2008). National Health Expenditure Data: NHE Fact Sheet.

Institute of Medicine of the National Academies-IMNA (2008). Insuring America’s Health: Principles and Recommendations. Web.

Montgomery L. and Shailagh Murray (2009). Lawmakers Warned About Health Costs: CBO Chief Says Democrats’ Proposals Lack Necessary Controls on Spending. The Washington Post.

Robert J. Blendon, Drew E. Altman, Claudia Deane, John M. Benson, Mollyann Brodie, and Tami Buhr, (2008). Health Care in the 2008 Presidential Primaries. New England Journal of Medicine 358; 4

Robert J. Blendon and John M. Benson (2001). Americans’ Views on Health Policy: A Fifty-Year Historical Perspective. Health Affairs

U.S. Census Bureau-USCB (2007). Income, Poverty, and Health Insurance Coverage in the United States: 2006.

U.S. Census Bureau-USCB (2008). Income, Poverty, and Health Insurance Coverage in the United States: 2007.

The World Health Organization (2006). The World Health Report 2006 – Working together for health.