Brief History of the Healthcare System
The history of the American healthcare system is uniquely different from most other developed nations. There was little government regulation on public health organizations during the early colonial period. The first medical society was founded in 1735 in Boston, and the first general hospital was opened in the city of Philadelphia in 1750 (Schulte, 2012). One of the major events that affected the American healthcare system was the civil war of the mid- 1800s, which ushered a wave of progress in medical research, innovation in nursing methods, the creation of nursing institutions, and the invention of surgical techniques (Schulte, 2012). These developments helped shape the healthcare system through increased government investments in public health. Another major event was the industrial revolution, which led to the rise of health insurance owing to increased workplace injuries associated with dangerous work environments (Schulte, 2012). The First and Second World Wars also shaped the US healthcare system since they led to high healthcare costs, resulting in the creation of healthcare payment programs.
Several policies have been instrumental in shaping the US healthcare system. In the 1930s, the great depression was also a major event that influenced the US healthcare system. One of the major policies created during this era was the Social Security Act of 1935, which supported the retired and the elderly (Skocpol, 1994). States were also allowed to formulate provisions for unemployed and disabled persons under this policy. The Social Security Act of 1965 is another major policy that laid the groundwork for Medicare and Medicaid (Skocpol, 1994). The Health Maintenance Organization Act of 1973 is another major policy designed to promote HMOs by reducing restrictions imposed on them. In addition, the Patient Protection and Affordable Care Act of 2010 (Obamacare) sought to expand healthcare insurance coverage by individual and employer-provided plans (Hall, 2014).
Structure of the Healthcare System
Unlike most developed countries, the US healthcare system is pluralistic. Essentially, it is more dependent on the free market and characterized by many payers and large public programs that are not universal. Most US citizens are covered by private healthcare insurance companies or by their employers (Hall, 2014). Those who are unemployed or unable to afford private insurance live without any coverage. There are many players in the US healthcare industry, including insurance companies, hospital systems, and healthcare providers (Hall, 2014). Most of the healthcare provider organizations are privately owned business entities. However, it is important to note that while the US government does not provide universal healthcare, it spends billions of dollars to fund programs such as Medicaid, Medicare, Tricare, the Veterans Health Administration, and the Children’s Health Insurance Program.
People in the US access medical care either primarily through health insurance, which they purchased privately, or through their employer. However, one in ten people in the US do not have healthcare insurance and are unlikely to have a primary care provider (Hall, 2014). They also do not have access to specialized healthcare, such as cancer screening, which is expensive and is only manageable through insurance for many. The US healthcare system faces challenges such as rising healthcare costs, increasing wage gap between the rich and the poor, and relatively lower spending on social services (Hall, 2014). Unlike other countries with universal coverage, people in the US access healthcare depending on their financial capabilities.
Economics
In 2020, the national health expenditure increased by 9.7%, which translates to $4.1 trillion, or $12,530 for every person (CMS, 2022). The amount of money spent by the government to fund healthcare amounted to 19.7% of the country’s Gross Domestic Product (GDP) (CMS, 2022). Notably, the COVID-19 pandemic increased government spending on healthcare in 2020, with the federal government spending more by 36%. Households spent 26.1% of the total health spending, while private business entities catered for 16.7% of the spending (CMS, 2022). State and local governments accounted for 14.3%, while other private revenues catered for the remainder (CMS, 2022). Healthcare in the US is funded by government programs such as Medicare and Medicaid, private insurance, and personal or out-of-pocket funds. The government funds its healthcare program by collecting tax revenue imposed on business transactions, businesses, and employees. In 2020, the government spent $829.5 and $671 billion on Medicare and Medicaid (CMS, 2022). For-profit and non-profit companies provide private insurance to taxable employees, who share the costs with their employers. This approach is the most common type of healthcare funding in the US because the government subsidizes it to make it more affordable and further regulates it to prevent malpractice. In addition, employees may also buy private insurance using their funds. This type of funding is not popular because it is expensive and out of the reach of many ordinary Americans.
Health Sector Issues
The most common causes of death in the US today are largely chronic illnesses. They include heart disease, cancer, stroke, chronic lower respiratory diseases, Diabetes, Alzheimer’s disease, and Kidney disease. Of these, heart disease and cancer are the leading causes, accounting for 690,882 and 598,832 deaths, respectively, in 2020 alone (Ahmad & Anderson, 2021). In 2020, the COVID-19 virus, an infectious disease, became the third leading cause of death in the US, accounting for 345,323 deaths. Influenza and Pneumonia are also infectious diseases that caused 53,495 deaths in 2020 (Ahmad & Anderson, 2021). Some leading causes of death are not a result of illness, such as Unintentional injuries and suicide. Unintentional injuries include home and road accidents, workplace accidents, drug overdoses, drowning, and many more, which are responsible for thousands of deaths annually.
One of the US’s main health sector issues and concerns is access and equity. Healthcare costs are increasing annually, and government spending on public healthcare is predicted to outpace the GDP growth. Individuals from low-income households are unlikely to access important healthcare services, such as cancer screening and preventive care. Another important concern is human resources as it pertains to labor availability and preventable medical errors. The COVID- 19 pandemics revealed the shortcomings of the healthcare sector since it demonstrated the labor shortage, particularly in the nursing sector (Ahmad & Anderson, 2021). Many healthcare practitioners are overworked, which leads to a higher likelihood of preventable errors that could lead to loss of life. In addition, another growing concern is the lack of transparency in the US healthcare system, particularly amongst healthcare providers and insurance providers. Policyholders are often left suffering as these two players compete to maximize their profits since they have little control over the pricing mechanism or operational strategies. In this light, there is a need for tighter regulations in this industry.
References
Ahmad, F. B., & Anderson, R. N. (2021). The leading causes of death in the US for2020. Jama, 325(18), 1829-1830.
Centers for Medicare and Medicaid Services (CMS). (2022). NHE fact sheet. Retrieved February 08, 2022, from https://www.cms.gov/Research-Statistics-Dataand-Systems/ Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-FactSheet
Hall, M. A., & Lord, R. (2014). Obamacare: what the Affordable Care Act means for patients and physicians. BMJ, 349.
Schulte, M. F. (2012). Healthcare delivery in the USA: An introduction. CRC Press.
Skocpol, T. (1994). From social security to health security? Opinion and rhetoric in US social policy making. PS: Political Science & Politics, 27(1), 21-25.
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