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Private Health Insurance and American Health Setup

Numerous diverse organizations are always providing health treatment. Private enterprise enterprises own and run the majority of health care facilities ( Kruk et al., 2018). While government programs pay directly for specific medical professionals and institutions, the majority of health care expenditures are protected by private health insurance, paid out of pocket, or a combination of the two. Typically, private insurance businesses are established as not-for-profit mutual corporations or as for-profit stock companies. Personal insurance is a form of coverage in which an insurer covers a single person or group of people rather than the entire public. The article discusses the advantages, progress, and drawbacks of private insurance, as well as why the United States falls behind medically and in terms of benefits. Private health insurance is the major source of health coverage, covering hospitalization and other medical expenditures not covered by Medicare, as well as the deductibles, coinsurance, and copayments associated with Medicare.

It originated in the early twentieth century with the proposal of national insurance to pay medical expenses by the Australian Labor Party. Employee payments, employer contributions, and government subsidies on premiums all contribute to the cost of private insurance. Cissé et al. (2017) assert that the public/private “solution” introduces a slew of complications. The most evident is its long-term viability. Private health insurers have been accused of advocating for policies that benefit its members but not necessarily the larger community or other segments of society, such as low-income earners who may not be members but may be obliged to pay.

According to the World Health Organization (2018), it encourages practitioners to provide more treatments than required since they will be compensated anyway. Second, it encourages physicians to spend less time with patients and more time with other patients in order to maximize their compensation. Finally, it enables health practitioners to exert considerable control over their work environment and personnel, particularly in private institutions that are not subject to government supervision or oversight of their administration or clinical practice. Capitation and salary models are predicated on the premise that medical practitioners should be paid a flat rate for each patient they treat, regardless of the services provided. However, there is evidence that this paradigm might encourage “defensive medicine,” in which practitioners order more tests and treatments than are medically required since they are rewarded on a per-patient basis rather than per-service basis. According to Cissé et al. (2017), there is substantial evidence that private health insurance has resulted in a decline in the quality of public hospital services and a general rise in customers’ out-of-pocket spending for both public and private hospital care.

The United States’ health care finance system is fragmented and inequitable, resulting in a patchwork of public and private providers and insurers that often lack effective accountability mechanisms or integrated management of care delivery and financial choices (IOM 2002). The health care system in the United States is characterized by an excessive dependence on the private sector, a high degree of service fragmentation and redundancy, and a sizable uninsured population (IOM 2002). ( Kruk et al., 2018). While it is difficult to compare health systems across countries owing to variations in statistical methodology, the Commonwealth Fund has issued rankings for 12 quality-of-care metrics for persons aged 65 and older (World Health Organization, 2018). The United States placed bottom or near last on five categories, including medical care quality, access to care, effective coordination of care, patient-centeredness, and equality in access to care for diverse populations (World Health Organization, 2018).

In conclusion, the United States’ health care system needs considerable reform: it has many benefits, but significant shortcomings as a result of its heavy dependence on the private sector, lack of universal coverage, fragmentation, and duplication of services. Despite this, the United States spends far more per capita on health care than any other country! However, the country’s life expectancy and infant mortality rates are among the lowest in the world (Commonwealth Fund 2001).


M. Cissé, S. Yalçnda, Y. Kergosien, E. Ahin, C. Lenté, and A. Matta (2017). OR issues pertaining to Home Health Care: An examination of pertinent routing and scheduling issues. Health Care Operations Research, 13, pp. 1-22.

M. E. Kruk, A. D. Gage, N. T. Joseph, G. Danaei, S. Garca-Saisó, and J. A. Salomon (2018). Mortality attributable to low-quality health systems in the era of universal health coverage: a comprehensive examination of 137 nations’ amenable mortality. Lancet, 392(10160), pp. 2203–2212.

Organization mondiale de la santé (2018). Primary health care in the twenty-first century: Toward universal health coverage and the Sustainable Development Goals (WHO/HIS/SDS/2018.15). Organization mondiale de la santé.


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