Public government‐funded payers
Charitable entities
Out‐of‐pocket payment by patients and their families
Public government health care programs such as Medicare and Medicaid, State Children's Health Insurance Program (SCHIP), Department of Veterans Affairs, and other programs (e.g., for the military, American Indians (AI), and federal prisoners) provide health care services primarily funded through a percentage of dollars collected through Federal taxes. National health care expenditures (NHE) grew 3.9% to 3.5 trillion in 2017 and accounted for 17.9% of the gross domestic product (GDP) (NHE, 2019). Many Americans are surprised that the Federal Government already funds almost half of health care services, yet verbalize reluctance to move toward a government run health care program for all citizens.
This chapter discusses a selected history of American health care. It discusses health care in various settings, disease management, and the influence of external forces on health care. The chapter reviews how health care is organized, funded, and accredited. It explores health care disparities and clinical variation, and reviews reports of the Institute of Medicine (IOM) Committee on Health Care. Finally, the chapter discusses issues regarding quality health care and the education of health care professionals. Patient Protection and Affordable Care Act (PPACA) of 2010 and the Health Care and Education Reconciliation Act (HCERA) of 2010. We will explore how health care is organized and financed in the United State, compare U.S. health care with that of other industrialized countries, identify major issues facing health care, and relate efforts for improving the quality, safety, and access to health care.
Most Americans are in good health, but many children, elderly, sick, and disabled are in need of better access to quality health care services at a reasonable cost. The need for accessible, high‐quality, safe, and reasonable priced care has driven various initiatives to improve health care in the past and present. Some of the key initiatives include the 1935 passage of the Social Security Act; the 1946 passage of the Hill‐Burton Act; and the 1965 passage of Medicare and Medicaid. The 2010 passage of both the PPACA and the HCERA was a recent attempt to improve health care access for the millions of Americans without health care coverage.
The U.S. spends 17.9% (an average of $10,224 per person) of its GDP on health care, more than any other wealthy country, all of whom provide health care insurance for all their citizens (Papanicolas, Woskie, & Jha, 2018). Many wealthy countries in the world spend less on health care, for example, Canada ($4.902), Germany ($5,728), Sweden ($5,511), and the United Kingdom ($4,246), yet provide Universal Health Care (UHC) to their citizens (Sawyer & Cox, 2018). In these countries, per capita spending on health care is considerably less than in the U.S., yet health care outcomes for such things as infant mortality, immunization rates, and life expectancy in the U.S. are poorer by comparison (Nolte & McKee, 2008). Perhaps Americans need to study what other countries have done in health care and modify it to fit. Throughout the history of the U.S., efforts to implement a UHC program have been resisted, with costly social and economic consequences.
To avoid the financial burden of health care costs, many Americans delay obtaining care. Their contact with the health care system is episodic and usually in acute care settings. Even after their symptoms have progressed and are well‐advanced, many Americans are likely to obtain only irregular, sporadic care. This means that they lack consistent care from a health care provider whom they see regularly, whether for health promotion, illness prevention, early detection, or health restoration.
Inability to pay for recommended treatments and medications also compromises adherence to health care recommendations, which in turn affects recovery. Medical debt is now the number one reason for personal bankruptcy in the U.S. The majority of people declaring bankruptcy because of medical debt are employed and have health insurance (Himmelstein, Warren, Thorne, & Woolhandler, 2005). A cascading effect occurs for patients with soaring costs, high incidence of medical bankruptcy, progressively worsening health outcomes, and a high incidence of medical malpractice claims.
Spending on health care services is concentrated in disproportionate ways, which also adds to health care costs. For example, 90% of health care costs are on chronic conditions (Centers for Disease Control and Prevention (CDC), 2019). In 2016, half of all health spending was on 5% of the population, The 5% of people who spend the most on health care spend an average of around $50,000 annually; people in the top 1% have average spending of over $109,750. The 50% of the population with the lowest spending accounted for only 3% of all total health spending; the average spending was $276 (Sawyer, Claxton, & Kaiser, 2016).
The fight to achieve quality health care for all continues. Schulte (2011) recommends the development of evidence‐based guidelines by the nursing and medical professional associations as one way to tackle the health care problem. Adherence to these guidelines then could be regularly monitored on electronic health records to note the outcomes, improve both patient care and evidence‐based guidelines, and decrease the incidence of medical malpractice.
In 2010, 47 million uninsured people in the United States did not have health care insurance. This led to many discussions of rights to health care, access, fairness, sustainability, safety, quality, and discussions of the amount of money spent by the government on health care. The PPACA (Public Law 111–148) (Kaiser Family Foundation, 2010) was signed into law by President Barack Obama on March 23, 2010. Along with the HCERA of 2010 (Public Law 111–152), signed March 30, the Acts are a product of the health care reform efforts of the 111th Congress and the Obama administration (Office of the Legislative Counsel. 111th Congress, 2d Session. May, 2010). PPACA and HCERA required most U.S. citizens and legal residents to have health insurance and introduced many insurance market reforms over the next few years. They prohibited insurers from establishing annual insurance coverage caps and provide funds for medical research. They created a new insurance marketplace with state‐based American Health Benefit Insurance Exchanges through which individuals can purchase insurance coverage, with premium‐ and cost‐sharing credits available to individuals and families with income between 133% and 400% of the federal poverty level (FPL) (the poverty level was $18,310 for a family of three in 2009).
PPACA and HCERA created separate state Insurance Exchanges through which small businesses can purchase insurance coverage. They subsidized insurance premiums for people making up to 400% of the FPL ($88,000 for a family of four in 2010), so their maximum out‐of‐pocket payment for annual premiums will be from 2% to 9.8% of income, providing incentives for businesses to provide health care benefits, prohibiting denial of coverage and denial of claims based on pre‐existing conditions, prohibiting insurers from establishing annual coverage caps, and giving support for medical research. The costs of these provisions are offset by a variety of taxes, fees, and cost‐saving measures, such as new Medicare taxes for those in high‐income brackets, taxes on indoor tanning, cuts to the Medicare Advantage program in favor of traditional Medicare, and fees on medical devices and pharmaceutical companies. There is also a tax penalty for those who do not obtain health insurance, unless they are exempt due to low income or other reasons. The Congressional Budget Office estimated that the net effect of both Acts will be a reduction in the federal deficit by $143 billion over the first decade.
PPACA included fundamental changes to Medicare, expansion of the Medicaid program, and reforms to Part D, closing the Medicare donut hole by 2020. It includes initiatives to prevent fraud and abuse; includes more health information technology (IT); and promotes disease prevention programs across the health care system. HCERA makes a number of health‐related financing and revenue changes to the PPACA of 2010. HCERA is divided into two titles, one addressing health care reform and the other addressing student loan reform. It was anticipated that PPACA and HCERA would impact health care significantly, and it was estimated that the net effect of both PPACA and HCERA would be a reduction in the federal deficit
