Healthcare in the United States


The United States is the third-largest country in the world, after Russia and Canada, and has a population of approximately 294 million inhabitants.

Q: What kind of healthcare system does the United States have?

A: The US has several types of privately and publicly funded health insurance plans that provide healthcare services. The US Census Bureau reports that in 2003, 60.4% of the population was covered by employment-based health insurance, 26.6% was covered by government-based insurance, while 15.6% had no health insurance at all. (This total is higher than 100% because of the way the survey is taken.)

The US spends more of its GDP on healthcare than any other developed nation. In 2001, the US spent 13.9% of its GDP on healthcare, compared with 7.8% for Japan, 9.4% for Canada, and 7.6% for the United Kingdom. It has been suggested that the high clerical load required to verify eligibility and follow specific rules is responsible for the high cost of care in the US.

In terms of life expectancy for its citizens, the US ranks 24th in the world at 70 years; Japan ranks first at 74.5 years.

The American Hospital Association lists over 6,000 hospitals in the US. The majority of these are not-for-profit hospitals, and treat about 75% of all hospitalized patients. For-profit hospitals and governmental hospitals each account for the remaining the hospitals and patients treated.

Q: How is the healthcare system funded?

A: In the past, the traditional model had health insurance provided in one of three ways:

• As a benefit of employment, either directly or through a union, with continued benefits available to retirees.
• Through government funded programs, such as Medicaid and Medicare, for the eligible low-income persons, those over the age of 65, and people with disabilities.
• Through private purchase of health insurance (generally for self-employed individuals).

This model has been eroded in recent years. Now, a growing number of employers either offer no health benefits to their employees, have reduced benefits, or have withdrawn benefits from retirees. In most cases, employment-based plans that were once fully funded by employers now require employee contributions and co-payments.

The publicly funded plans include: Medicare (for people over 65), which is administered by the federal government; Medicaid (for low-income earners), which is administered by the states; and the State Children’s Health Insurance Program (SCHIP), which is intended to provide insurance coverage for children whose family income is too high to qualify for Medicaid, but too low to pay for private health insurance.

Medicare is funded by a special payroll tax, under the Federal Insurance Contributions Act (FICA). Other government programs are funded out of general tax receipts. Medicaid, a program intended to provide care for the poor, is jointly funded by the federal government and the individual states. Because the states set the rules, there are differences in both eligibility and services provided, and these are subject to change.

Medicaid ranks second only to education as an expense at the state level, and is expected to grow four times faster than any other area of expense in the coming year. Because of the growing expense, states that once had generous policies are cutting back, and in some cases capping the number of people served by a program.

The State Children’s Health Insurance Program (SCHIP) was created in 1997 to help states provide insurance for children of the working poor, for people with full-time jobs which didn’t offer employment based insurance, and for those who earned too much for Medicaid but not enough to afford private insurance. Because eligibility is at the discretion of the states, different rules apply, and several have tightened eligibility or capped the program. For example, 169,000 children will be dropped from the state program in Texas by 2005, according to the Center for Public Policy Priorities, because Texas has tightened eligibility requirements for children’s health programs.

The Ryan White Act, signed into law on August 18, 1990, was designed to help states pay for medications for uninsured people with HIV/AIDS. Although an estimated 1,500 people are on waiting lists, this program too has had cutbacks.

While the number of uninsured people is high, these people do have some recourse to emergency treatment. Hospital emergency rooms are not allowed to turn away patients because of inability to pay. These costs are covered by a surcharge on insurance payments, but care is limited to emergency care only, and does not include routine care.

Q: What is the quality of care?

A: Patients who have adequate insurance, and who live in an appropriate location, can receive the best healthcare in the world. These patients have good access to tertiary-care hospitals with the most modern equipment for both diagnosis and treatment. Modern drug therapy, telemetry, and highly skilled professionals are readily available. The US is a world center for the most sophisticated surgical services, and most procedures can be performed with minimal delay. In one or two areas, such as breast and cervical cancer survival, the US is clearly the world leader.

But the system is not uniform in its quality of care, and may vary according to type of insurance and to location. Patients in rural areas where there is a shortage of all types of healthcare personnel, and patients who have no or inadequate insurance coverage, get care below the national standard. (About one-fifth of the US population lives in areas that have a shortage of primary healthcare professionals. This is particularly true in rural areas.) Uninsured patients may have access to ER care, but unless they require immediate hospitalization, may get little or no follow-up care.

Q: What are the current concerns among healthcare workers in the country?

A: As healthcare costs have risen, efforts, both by government and private entities to control costs have focused largely on professional staff. Although salaries have risen as a recruitment tool, the caseload has also increased. The use of lower cost paraprofessionals has also grown, so that an increasing share of the workload is being performed by aides and technicians, consequently professionals are doing more checking, reviewing, and supervising. One nurse recently wrote: “(T)he job isn’t what it used to be. Due to short stays, the overall level of acuity is like that of an ICU 20 years ago. The patient load, however, is 3-4 times that of an ICU. By passing physical care off to the nursing assistant, the nurse has a brief time to try to make an assessment, build a rapport with the patient, evaluate physical, emotional and educational needs, and implement a plan to meet them.”

Physicians also complain that job pressures leave them with inadequate time to treat patients properly. Among physicians working for Health Maintenance Organizations (HMOs), 61% expressed dissatisfaction with their jobs, in large part because of pressures to deal with large numbers of patients in limited time. Among pharmacists, those working in chain pharmacies (where there are corporate pressures to maintain high levels of productivity) had the lowest levels of job satisfaction, while those working in a traditional independent drug store setting had the greatest satisfaction with their jobs.

Although the US has a large number of high quality universities teaching the health professions, there are current or anticipated shortages of professionals in many areas. Besides physicians, there are shortages in most other professions. The US Bureau of Labor Statistics estimates that more than one million new and replacement nurses will be needed by 2012. There is a similar shortage of pharmacists, with 6,500 vacancies. An estimated 21% of hospital pharmacy positions are unfilled. Only 25 of the 50 states have an adequate number of dentists. In many areas, there is only one practicing dentist for 2,000 people.

Since the population of the US is aging, and the demand for healthcare is increasing, these shortages are expected to grow. The US has been encouraging health professionals from other nations to immigrate to the US.

The shortage of clinicians is also having an adverse effect on the ability of the US to train its own professionals. Staff shortages have resulted in high salaries for clinical staff, which have drawn professionals from faculty positions back into clinical practice. There are 400 unfilled faculty positions in dentistry, 379 in nursing, and 417 in pharmacy. While there is no immediate shortage of medical faculty, there are anticipated shortages, particularly in the area of gerontology, which will be a growing field as the population ages.

Q: What are the current concerns among patients?

A: While patients in the US are not yet confronted with the problems caused by lack of resources, and first-rate care is usually available on short notice, there are several areas of concern.

The cost of care is the greatest patient concern, particularly for the elderly. Medicare (the program for patients over 65 and those on disability) has limitations and does not, in its basic form, cover prescription drugs. Rising drug costs are a particular concern for most elderly people. In 2006, a Medicare drug benefit plan will go into effect, but as planned it is cumbersome, offers only limited benefits, and has not been widely accepted.

Drugs used in the US must be approved for safety and efficacy, but beyond that, there are no constraints on either therapeutic duplication or price. Any drug that obtains approval from theFood & Drug Administration may be marketed in the US, and the distributor has full discretion over the price charged. A recently enacted drug benefit – an interim measure preceding the 2006 plan that has been added to Medicare – specifically prohibits the government from negotiating prices with drug manufacturers, even though other government agencies such as the Veterans Administration Hospitals and private hospitals routinely negotiate discounts from manufacturers.

For people with good insurance or other financial resources, the US offers the best care in the world. But, for the 45 million Americans who lack insurance or the ability to pay, that world-class care is as distant as the moon. The disparity in care is an American tragedy.