Healthcare in the United States

See also: Health care reform in the United States, Health care reform debate in the United States, and Health Care and Education Reconciliation Act of 2010

Health care in the United States is provided by many separate legal entities. Health care facilities are largely owned and operated by the private sector. Health insurance is primarily provided by the private sector, with the exception of programs such as Medicare, Medicaid, TRICARE, the Children's Health Insurance Program and the Veterans Health Administration.

At least 15% of the population is completely uninsured, and a substantial additional portion of the population (21%) is "underinsured", or not able to cover the costs of their medical needs. More money per person is spent on health care in the United States than in any other nation in the world, and a greater percentage of total income in the nation is spent on health care in the U.S. than in any United Nations member state except for East Timor. Despite the fact that not all citizens are covered, the United States has the third highest public healthcare expenditure per capita. A 2001 study in five states found that medical debt contributed to 62% of all personal bankruptcies. Since then, health costs and the numbers of uninsured and underinsured have increased.

Active debate about health care reform in the United States concerns questions of a right to health care, access, fairness, efficiency, cost, and quality. Many have argued that the system does not deliver equivalent value for the money spent. The US pays twice as much yet lags behind other wealthy nations in such measures as infant mortality and life expectancy, though the relation between these statistics to the system itself is debated. Currently, the U.S. has a higher infant mortality rate than most of the world's industrialized nations. The USA's life expectancy lags 42nd in the world, after most rich nations, lagging last of the G5 (Japan, France, Germany, UK, USA) and just after Chile (35th) and Cuba (37th). The USA's life expectancy is ranked 50th in the world after the European Union (40th). The World Health Organization (WHO), in 2000, ranked the U.S. health care system as the highest in cost, first in responsiveness, 37th in overall performance, and 72nd by overall level of health (among 191 member nations included in the study). A 2008 report by the Commonwealth Fund ranked the United States last in the quality of health care among the 19 compared countries.

According to the Institute of Medicine of the United States National Academies, the United States is the "only wealthy, industrialized nation that does not ensure that all citizens have coverage" (i.e. some kind of insurance). The same Institute of Medicine report notes that "Lack of health insurance causes roughly 18,000 unnecessary deaths every year in the United States." while a 2009 Harvard study published in the American Journal of Public Health found a much higher figure of more than 44,800 excess deaths annually in the United States due to Americans lacking health insurance. More broadly, the total number of people in the United States, whether insured or uninsured, who die because of lack of medical care was estimated in a 1997 analysis to be nearly 100,000 per year.

In March, 2010, the Patient Protection and Affordable Care Act was signed into law, providing for major changes in health-insurance procedures.

Health care providers

Facilities

Main article: Medical centers in the United States

In the United States, ownership of the health care system is mainly in private hands, though federal, state, county, and city governments also own certain facilities. Barack Obama has recently signed the health care bill in the united states.

The non-profit hospitals share of total hospital capacity has remained relatively stable (about 70%) for decades. There are also privately owned for-profit hospitals as well as government hospitals in some locations, mainly owned by county and city governments.

There is no nationwide system of government-owned medical facilities open to the general public but there are local government-owned medical facilities open to the general public. The federal Department of Defense operates field hospitals as well as permanent hospitals (the Military Health System), to provide military-funded care to active military personnel. The federal Veterans Health Administration operates VA hospitals open only to veterans, though veterans who seek medical care for conditions they did receive while serving in the military are charged for services. The Indian Health Service operates facilities open only to Native Americans from recognized tribes. These facilities, plus tribal facilities and privately contracted services funded by IHS to increase system capacity and capabilities, provide medical care to tribespeople beyond what can be paid for by any private insurance or other government programs.

Hospitals provide some outpatient care in their emergency rooms and specialty clinics, but primarily exist to provide inpatient care. Hospital emergency departments and urgent care centers are sources of sporadic problem-focused care. "Surgicenters" are examples of specialty clinics. Hospice services for the terminally ill who are expected to live six months or less are most commonly subsidized by charities and government. Prenatal, family planning, and "dysplasia" clinics are government-funded obstetric and gynecologic specialty clinics respectively, and are usually staffed by nurse practitioners.

Medical Products, research and development

According to data compiled and published by multiple international pharmaceutical trade groups, the US is the world leader in biomedical research and development as well as the introduction of new biomedical products; pharmaceutical trade organizations also maintain that the high cost of health care in the U.S. has encouraged substantial reinvestment in such research and development.

As in most other countries, the manufacture and production of pharmaceuticals and medical devices is carried out by private companies. The research and development of medical devices and pharmaceuticals is supported by both public and private sources of funding. In 2003, research and development expenditures were approximately $95 billion with $40 billion coming from public sources and $55 billion coming from private sources. These investments into medical research have made the United States the leader in medical innovation, measured either in terms of revenue or the number of new drugs and devices introduced. In 2006, the United States accounted for three quarters of the world’s biotechnology revenues and 82% of world R&D spending in biotechnology.. According to multiple international pharmaceutical trade groups, the high cost of patented drugs in the U.S. has encouraged substantial reinvestment in such research and development.

Health care spending

U.S. healthcare costs exceed those of other countries, relative to the size of the economy or GDP.

Total U.S. healthcare spending as a percent of U.S. GDP (gross domestic product). Click on chart for data.

Current estimates put U.S. health care spending at approximately 16% of GDP, second highest to East Timor (Timor-Leste) among all United Nations member nations. The Health and Human Services Department expects that the health share of GDP will continue its historical upward trend, reaching 19.5 percent of GDP by 2017. Of each dollar spent on health care in the United States 31% goes to hospital care, 21% goes to physician services, 10% to pharmaceuticals, 8% to nursing homes, 7% to administrative costs, and 23% to all other categories (diagnostic laboratory services, pharmacies, medical device manufacturers, etc.

The Office of the Actuary (OACT) of the Centers for Medicare and Medicaid Services publishes data on total health care spending in the United States, including both historical levels and future projections. In 2007, the U.S. spent $2.26 trillion on health care, or $7,439 per person, up from $2.1 trillion, or $7,026 per capita, the previous year. Spending in 2006 represented 16% of GDP, an increase of 6.7% over 2004 spending. Growth in spending is projected to average 6.7% annually over the period 2007 through 2017. A recently released report on the latest figures showed that the US spent $2.5 trillion, $8,047 per person, on health care in 2009 and that this amount represented 17.3% of the economy, up from 16.2% in 2008. Health insurance costs are rising faster than wages or inflation, and medical causes were cited by about half of bankruptcy filers in the United States in 2001.

The Congressional Budget Office has found that "about half of all growth in health care spending in the past several decades was associated with changes in medical care made possible by advances in technology." Other factors included higher income levels, changes in insurance coverage, and rising prices. Hospitals and physician spending take the largest share of the health care dollar, while prescription drugs take about 10 percent. The use of prescription drugs is increasing among adults who have drug coverage.

One analysis of international spending levels in the year 2000 found that while the U.S. spends more on health care than other countries in the Organisation for Economic Co-operation and Development (OECD), the use of health care services in the U.S. is below the OECD median by most measures. The authors of the study concluded that the prices paid for health care services are much higher in the U.S.

Health care spending in the United States is concentrated. An analysis of the 1996 Medical Expenditure Panel Survey found that the 1% of the population with the highest spending accounted for 27% of aggregate health care spending. The highest-spending 5% of the population accounted for more than half of all spending. These patterns were stable through the 1970s and 1980s, and some data suggest that they may have been typical of the mid-to-early 20th century as well. One study by the Agency for Healthcare Research and Quality (AHRQ) found significant persistence in the level of health care spending from year to year. Of the 1% of the population with the highest health care spending in 2002, 24.3% maintained their ranking in the top 1% in 2003. Of the 5% with the highest spending in 2002, 34% maintained that ranking in 2003. Individuals over age 45 were disproportionately represented among those who were in the top decile of spending for both years.

Health care cost rise based on total expenditure on health as % of GDP. Countries are USA, Germany, Austria, Switzerland, United Kingdom and Canada.

Seniors spend, on average, far more on health care costs than either working-age adults or children. The pattern of spending by age was stable for most ages from 1987 through 2004, with the exception of spending for seniors age 85 and over. Spending for this group grew less rapidly than that of other groups over this period.

The 2008 edition of the Dartmouth Atlas of Health Care found that providing Medicare beneficiaries with severe chronic illnesses with more intense health care in the last two years of life—increased spending, more tests, more procedures and longer hospital stays—is not associated with better patient outcomes. There are significant geographic variations in the level of care provided to chronically ill patients. Only a small portion of these spending differences (4%) is explained by differences in the number of severely ill people in an area; rather, most of the differences are explained by differences in the amount of "supply-sensitive" care available in an area. Acute hospital care accounts for over half (55%) of the spending for Medicare beneficiaries in the last two years of life, and differences in the volume of services provided is more significant than differences in price. The researchers found no evidence of "substitution" of care, where increased use of hospital care would reduce outpatient spending (or vice versa).

Increased spending on disease prevention is often suggested as a way of reducing health care spending. Research suggests, however, that in most cases prevention does not produce significant long-term costs savings. Preventive care is typically provided to many people who would never become ill, and for those who would have become ill is partially offset by the health care costs during additional years of life.

In September 2008 The Wall Street Journal reported that consumers were reducing their health care spending in response to the current economic slow-down. Both the number of prescriptions filled and the number of office visits dropped between 2007 and 2008. In one survey, 22% of consumers reported going to the doctor less often, and 11% reported buying fewer prescription drugs.

In 2009, the average private room in a nursing home cost $219 daily. Assisted living costs averaged $3,131 monthly. Home health aides averaged $21 per hour. Adult day care services averaged $67 daily.

Impact on U.S. economic productivity

On March 1, 2010, billionaire Warren Buffett (who is considered one of the world’s most savvy investors) said that the high costs paid by U.S. companies for their employees’ health care put them at a competitive disadvantage. He compared the roughly 17% of GDP spent by the U.S. on health care with the 9% of GDP spent by much of the rest of the world, noted that the U.S. has fewer doctors and nurses per person, and said, “[t]hat kind of a cost, compared with the rest of the world, is like a tapeworm eating at our economic body.”

Health care payment

Doctors and hospitals are generally funded by payments from patients and insurance plans in return for services rendered.

Around 84.7% of citizens have some form of health insurance; either through their employer or the employer of their spouse or parent (59.3%), purchased individually (8.9%), or provided by government programs (27.8%; there is some overlap in these figures). All government health care programs have restricted eligibility, and there is no government health insurance company which covers all citizens. Americans without health insurance coverage at some time during 2007 totaled about 15.3% of the population, or 45.7 million people.

Among those whose employer pays for health insurance, the employee may be required to contribute part of the cost of this insurance, while the employer usually chooses the insurance company and, for large groups, negotiates with the insurance company.

In 2004, private insurance paid for 36% of personal health expenditures, private out-of-pocket 15%, federal government 34%, state and local governments 11%, and other private funds 4%. Due to "a dishonest and inefficient system" that sometimes inflates bills to ten times the actual cost, even insured patients can be billed more than the real cost of their care.

Insurance for dental and vision care (except for visits to ophthalmologists, which are covered by regular health insurance) is usually sold separately. Prescription drugs are often handled differently than medical services, including by the government programs. Major federal laws regulating the insurance industry include COBRA and HIPAA.

Individuals with private or government insurance are limited to medical facilities which accept the particular type of medical insurance they carry. Visits to facilities outside the insurance program's "network" are usually either not covered or the patient must bear more of the cost. Hospitals negotiate with insurance programs to set reimbursement rates; some rates for government insurance programs are set by law. The sum paid to a doctor for a service rendered to an insured patient is generally less than that paid "out of pocket" by an uninsured patient. In return for this discount, the insurance company includes the doctor as part of their "network", which means more patients are eligible for lowest-cost treatment there. The negotiated rate may not cover the cost of the service, but providers (hospitals and doctors) can refuse to accept a given type of insurance, including Medicare and Medicaid. Low reimbursement rates have generated complaints from providers, and some patients with government insurance have difficulty finding nearby providers for certain types of medical services.

Charity care for those who cannot pay is sometimes available, and is usually funded by non-profit foundations, religious orders, government subsidies, or services donated by the employees. Massachusetts and New Jersey have programs where the state will pay for health care when the patient cannot afford to do so. The City of San Francisco is also implementing a citywide health care program for all uninsured residents, limited to those whose incomes and net worth are below an eligibility threshold. Some cities and counties operate or provide subsidies to private facilities open to all regardless of the ability to pay, but even here patients who can afford to pay or who have insurance are generally charged for the services they use.

The Emergency Medical Treatment and Active Labor Act requires virtually all hospitals to accept all patients, regardless of the ability to pay, for emergency room care. The act does not provide access to non-emergency room care for patients who cannot afford to pay for health care, nor does it provide the benefit of preventive care and the continuity of a primary care physician. Emergency health care is generally more expensive than an urgent care clinic or a doctor's office visit, especially if a condition has worsened due to putting off needed care. Emergency rooms are typically at, near, or over capacity. Long wait times have become a problem nationally, and in urban areas some ERs are put on "diversion" on a regular basis, meaning that ambulances are directed to bring patients elsewhere.

Private

Share by insurance coverage type, for those under 65 years of age

Most Americans (59.3%) receive their health insurance coverage through an employer (which includes both private as well as civilian public-sector employees) under group coverage, although this percentage is declining. Costs for employer-paid health insurance are rising rapidly: since 2001, premiums for family coverage have increased 78%, while wages have risen 19% and inflation has risen 17%, according to a 2007 study by the Kaiser Family Foundation. Workers with employer-sponsored insurance also contribute; in 2007, the average percentage of premium paid by covered workers is 16% for single coverage and 28% for family coverage. In addition to their premium contributions, most covered workers face additional payments when they use health care services, in the form of deductibles and copayments.

Just less than 9% of the population purchases individual health care insurance. Insurance payments are a form of cost-sharing and risk management where each individual or their employer pays predictable monthly premiums. This cost-spreading mechanism often picks up much of the cost of health care, but individuals must often pay up-front a minimum part of the total cost (a ‘’deductible’’), or a small part of the cost of every procedure (a copayment). Private insurance accounts for 35% of total health spending in the United States, by far the largest share among OECD countries. Beside the United States, Canada and France are the only two other OECD countries where private insurance represents more than 10% of total health spending.

Today, most employer-provided health coverage is provided through managed care organizations, which pay substantially lower prices for health care services than an individual patient would be charged if paying out-of-pocket. The defining characteristic of managed care, as distinct from traditional insurance, is selective contracting, meaning that the health plan has contracts with some (selected) health care providers. Selective contracting is the mechanism through which managed care organizations bring their market power to bear in negotiating price reductions from health care providers. Managed care organizations also often employ a variety of "incentive payment" schemes which shift onto the provider some of the risk if the enrollee uses a lot of health care. Capitation, in which the provider is paid a fixed sum to care for the enrollee regardless of how much care the enrollee uses, is an example of an incentive payment system. Many managed care organizations also use a "gatekeeper" model, in which an enrollee's primary care physician must provide a referral before the enrollee will be covered to receive specialist care. Both managed care organizations and traditional insurers also sometimes make use of non-payment cost control mechanisms, such as requiring prior administrative approval or second opinions before covering high-cost procedures.

Provider networks can be used to reduce costs by negotiating favorable fees from providers, selecting cost effective providers, and creating financial incentives for providers to practice more efficiently. A survey issued in 2009 by America's Health Insurance Plans found that patients going to out-of-network providers are sometimes charged extremely high fees.

Managed care organizations include both health maintenance organizations (HMOs) and preferred provider organizations (PPOs). In an HMO, health care is covered only for services delivered by providers (such as doctors or hospitals) in the network with whom the health plan has contracts. A PPO covers health care delivered by either in-network or out-of-network providers, but the enrollee's cost is higher when using out-of-network providers. Defying many analysts' expectations, PPOs have gained market share at the expense of HMOs over the past decade.

Just as the more loosely managed PPOs have edged out HMOs, HMOs themselves have also evolved towards less tightly managed models. The first HMOs in the U.S., such as Kaiser Permanente in Oakland, California, and the Health Insurance Plan (HIP) in New York, were "staff-model" HMOs, which owned their own health care facilities and employed the doctors and other health care professionals who staffed them. The name health maintenance organization stems from the idea that the HMO would make it its job to maintain the enrollee's health, rather than merely to treat illnesses. In accordance with this mission, managed care organizations typically cover preventive health care. Within the tightly integrated staff-model HMO, the HMO can develop and disseminate guidelines on cost-effective care, while the enrollee's primary care doctor can act as patient advocate and care coordinator, helping the patient negotiate the complex health care system. Despite a substantial body of research demonstrating that many staff-model HMOs deliver high-quality and cost-effective care, they have steadily lost market share. They have been replaced by more loosely managed networks of providers with whom health plans have negotiated discounted fees. It is common today for a physician or hospital to have contracts with a dozen or more health plans, each with different referral networks, contracts with different diagnostic facilities, and different practice guidelines.

Public

Government programs directly cover 27.8% of the population (83 million), including the elderly, disabled, children, veterans, and some of the poor, and federal law mandates public access to emergency services regardless of ability to pay. Public spending accounts for between 45% and 56.1% of U.S. health care spending. Per-capita spending on health care by the U.S. government placed it among the top ten highest spenders among United Nations member countries in 2004.

Government funded programs include:

• Medicare, generally covering citizens and long-term residents 65 years and older and the disabled.
• Medicaid, generally covering low income people in certain categories, including children, pregnant women, and the disabled. (Administered by the states.)
• State Children's Health Insurance Program, which provides health insurance for low-income children who do not qualify for Medicaid. (Administered by the states, with matching state funds.)
• Various programs for federal employees, including TRICARE for military personnel (for use in civilian facilities)
• The Veterans Administration, which provides care to veterans, their families, and survivors through medical centers and clinics.
• National Institutes of Health treats patients who enroll in research for free.
• Government run community clinics
• Medical Corps of various branches of the military.
• Certain county and state hospitals

The exemption of employer-sponsored health benefits from federal income and payroll taxes distorts the health care market. The U.S. government, unlike some other countries, does not treat employer funded health care benefits as a taxable benefit in kind to the employee. The value of the lost tax revenue from a benefits in kind tax is an estimated $150 billion a year. Some regard this as being disadvantageous to people who have to buy insurance in the individual market which must be paid from income received after tax.

Health insurance benefits are an attractive way for employers to increase the salary of employees as they are nontaxable. As a result, 65% of the non-elderly population and over 90% of the privately insured non-elderly population receives health insurance at the workplace. Additionally, most economists agree that this tax shelter increases individual demand for health insurance, leading some to claim that it is largely responsible for the rise in health care spending.

In addition the government allows full tax shelter at the highest marginal rate to investors in Health Savings Accounts. Some have argued that this tax incentive adds little value to national health care as a whole because the most wealthy in society tend also to be the most healthy. Furthermore there is no control over which medical expenses qualify for tax exemption, which could be used to fund non-essential care such as cosmetic dentistry and plastic surgery. Also it has been argued, HSAs segregate the insurance pools into those for the wealthy and those for the less wealthy which thereby makes equivalent insurance cheaper for the rich and more expensive for the poor.

There are also various state and local programs for the poor. In 2007, Medicaid provided health care coverage for 39.6 million low-income Americans (although Medicaid covers approximately 40% of America's poor), and Medicare provided health care coverage for 41.4 million elderly and disabled Americans. Enrollment in Medicare is expected to reach 77 million by 2031, when the baby boom generation is fully enrolled.

It has been reported that the number of physicians accepting Medicaid has decreased in recent years due to relatively high administrative costs and low reimbursements. In 1997, the federal government also created the State Children's Health Insurance Program (SCHIP), a joint federal-state program to insure children in families that earn too much to qualify for Medicaid but cannot afford health insurance. SCHIP covered 6.6 million children in 2006, but the program is already facing funding shortfalls in many states. The government has also mandated access to emergency care regardless of insurance status and ability to pay through the Emergency Medical Treatment and Labor Act (EMTALA), passed in 1986, but EMTALA is an unfunded mandate.

The uninsured

Main article: Uninsured in the United States

Some Americans do not qualify for government-provided health insurance, are not provided health insurance by an employer, and are unable to afford, cannot qualify for, or choose not to purchase, private health insurance. When charity or "uncompensated" care is not available, they sometimes simply go without needed medical treatment. This problem has become a source of considerable political controversy on a national level.

According to the US Census Bureau, in 2007, 45.7 million people in the U.S. (15.3% of the population) were without health insurance for at least part of the year. This number was down slightly from the previous year, with nearly 3 million more people receiving government coverage and a slightly lower percentage covered under private plans than the year previous. Other studies have placed the number of uninsured in the years 2007-2008 as high as 86.7 million, about 29% of the US population.

Among the uninsured population, the Census Bureau says, nearly 37 million were employment-age adults (ages 18 to 64), and more than 27 million worked at least part time. About 38% of the uninsured live in households with incomes of $50,000 or more. According to the Census Bureau, nearly 36 million of the uninsured are legal U.S citizens. Another 9.7 million are non-citizens, but the Census Bureau does not distinguish in its estimate between legal non-citizens and illegal immigrants. Nearly one fifth of the uninsured population is able to afford insurance, almost one quarter is eligible for public coverage, and the remaining 56% need financial assistance (8.9% of all Americans). Extending coverage to all who are eligible remains a fiscal challenge.

A 2003 study in Health Affairs estimated that uninsured people in the U.S. received approximately $35 billion in uncompensated care in 2001. The study noted that this amount per capita was half what the average insured person received. The study found that various levels of government finance most uncompensated care, spending about $30.6 billion on payments and programs to serve the uninsured and covering as much as 80–85 percent of uncompensated care costs through grants and other direct payments, tax appropriations, and Medicare and Medicaid payment add-ons. Most of this money comes from the federal government, followed by state and local tax appropriations for hospitals. Another study by the same authors in the same year estimated the additional annual cost of covering the uninsured (in 2001 dollars) at $34 billion (for public coverage) and $69 billion (for private coverage). These estimates represent an increase in total health care spending of 3–6 percent and would raise health care’s share of GDP by less than one percentage point, the study concluded. Another study published in the same journal in 2004 estimated that the value of health forgone each year because of uninsurance was $65–$130 billion and concluded that this figure constituted "a lower-bound estimate of economic losses resulting from the present level of uninsurance nationally."

Role of government in health care market

Numerous publicly funded health care programs help to provide for the elderly, disabled, military service families and veterans, children, and the poor, and federal law ensures public access to emergency services regardless of ability to pay; however, a system of universal health care has not been implemented nation-wide. However, as the OECD has pointed out, the total U.S. public expenditure for this limited population would, in most other OECD countries, be enough for the government to provide primary health insurance for the entire population. Although the federal Medicare program and the federal-state Medicaid programs possess some monopsonistic purchasing power, the highly fragmented buy side of the U.S. health system is relatively weak by international standards, and in some areas, some suppliers such as large hospital groups have a virtual monopoly on the supply side. In most OECD countries, there is a high degree of public ownership and public finance. The resulting economy of scale in providing health care services appears to enable a much tighter grip on costs. The U.S., as a matter of oft-stated public policy, largely does not regulate prices of services from private providers, assuming the private sector to do it better.

Massachusetts has adopted a universal health care system through the Massachusetts 2006 Health Reform Statute. It mandates that all residents who can afford to do so purchase health insurance, provides subsidized insurance plans so that nearly everyone can afford health insurance, and provides a "Health Safety Net Fund" to pay for necessary treatment for those who cannot find affordable health insurance or are not eligible.

In July 2009, Connecticut passed into law a plan called SustiNet, with the goal of achieving health-care coverage of 98% of its residents by 2014.

Health care regulation and oversight

Further information: American Board of Medical Specialties, United States Medical Licensing Examination, and National Association of Insurance Commissioners

In the federal government of the United States, the United States Department of Health and Human Services is the executive department responsible for overseeing healthcare legislation. It is managed by the Secretary of Health and Human Services, a member of the Cabinet. The agencies of the Public Health Service are the Health Administration, which regulates health care to people without health care, the Food and Drug Administration, which certifies the safety of food, effectiveness of drugs and medical products, the Centers for Disease Prevention, which prevents disease, premature death, and disability, the Agency of Health Care Research and the Agency Toxic Substances and Disease Registry, which regulates hazardous spills of toxic substances.

State governments maintain state health departments, and local governments (counties and municipalities) often have their own health departments, usually branches of the state health department. Regulations of a state board may have executive and police strength to enforce state health laws. In some states, all members of state boards must be health care professionals. Members of state boards may be assigned by the governor or elected by the state committee. Members of local boards may be elected by the mayor council.

Many health care organizations also voluntarily submit to inspection and certification by the Joint Commission on Accreditation of Hospital Organizations, JCAHO.

A report issued by Public Citizen in April 2008 found that the number of serious disciplinary actions against physicians by state medical boards declined from 2006 to 2007. This was the third yearly decline in a row. The authors concluded that additional action is needed to improve the oversight provided by state medical boards.

The Centers for Medicare and Medicaid Services (CMS) publishes an on-line searchable database of performance data on nursing homes. CMS also publishes a list of Special Focus Facilities - nursing homes with "a history of serious quality issues." The Government Accountability Office (GAO) has found that state nursing home inspections understate the number of serious nursing home problems that present a danger to residents. The GAO concluded that while CMS oversight has improved, there are still weaknesses in its oversight of nursing homes.

The U.S. has a joint federal/state system for regulating insurance, with the federal government ceding primary responsibility to the states under the McCarran-Ferguson Act. States regulate the content of health insurance policies and often require coverage of specific types of medical services or health care providers. State mandates generally do not apply to the health plans offered by large employers, due to the preemption clause of the Employee Retirement Income Security Act.

Overall system effectiveness compared to other countries

Less effective

The CIA World Factbook ranked the United States 41st in the world for lowest infant mortality rate and 46th for highest total life expectancy. A recent study found that between 1997 and 2003, preventable deaths declined more slowly in the United States than in 18 other industrialized nations. Life expectancy can be affected by factors other than health care. For example, the United States was listed as 37th for life expectancy and 41st in low birth weight. Similarly, the proportion of low birth weight babies may be affected by factors other than health care.

The Organisation for Economic Co-operation and Development (OECD) found that the United States ranked poorly in terms of Years of potential life lost (YPLL), a statistical measure of years of life lost under the age of 70 that were amenable to being saved by health care. Among OECD nations for which data are available, the United States ranked third last for the health care of women (after Mexico and Hungary) and fifth last for men (Slovakia and Poland were also worse). See the table and source at YPLL for details.

Recent studies find growing gaps in life expectancy based on income and geography. Life expectancy declined from 1983 to 1999 for women in 180 counties, and for men in 11 counties. Most of the declines occurred in the Deep South, Appalachia, along the Mississippi River, in the Southern Plains and in Texas. The life expectancy gap between counties with the highest and lowest life expectancies grew by 2 years for men and 10 months for women. The gap is growing between rich and poor and by educational level, but narrowing between men and women and by race. A study published in May 2008 found that the mortality gap between the well-educated and the poorly educated widened significantly between 1993 and 2001 for adults ages 25 through 64. Premature death is increasing for people who drop out of high-school, while death rates are dropping among college graduates. Mortality increased most rapidly for white, female drop-outs, and declined the most for African-American college graduates. While the study did not directly examine the underlying causes, the authors speculate that risk factors such as smoking, obesity and high blood pressure may lie behind these disparities.

More effective

On the other hand, the National Health Interview Survey, released annually by the Centers for Disease Control's National Center for Health Statistics reported that approximately 66% of survey respondents said they were in "excellent" or "very good" health in 2006. According to a 2006 study published by The Lancet, survival rates in the U.S. for a broad range of cancer types are the highest in the world, with five year survival rates for men surpassing those of Britain's National Health Service by an average of more than 20%.

The debate about U.S. health care concerns questions of access, efficiency, and quality purchased by the high sums spent. The World Health Organization (WHO) in 2000 ranked the U.S. health care system first in both responsiveness, but 37th in overall performance and 72nd by overall level of health (among 191 member nations included in the study). The WHO study has been criticized by the free market advocate David Gratzer because "fairness in financial contribution" was used as an assessment factor, marking down countries with high per-capita private or fee-paying health treatment. The WHO study has been criticized, in an article published in Health Affairs, for its failure to include the satisfaction ratings of the general public. The study found that there was little correlation between the WHO rankings for health systems and the stated satisfaction of citizens using those systems. Some countries, such as Italy and Spain, which were given the highest ratings by WHO were ranked poorly by their citizens while other countries, such as Denmark and Finland, were given low scores by WHO but had the highest percentages of citizens reporting satisfaction with their health care systems. WHO staff, however, say that the WHO analysis does reflect system "responsiveness" and argue that this is a superior measure to consumer satisfaction, which is influenced by expectations.

A report released in April 2008 by the Foundation for Child Development, which studied the period from 1994 through 2006, found mixed results for the health of children in the U.S. Mortality rates for children ages 1 through 4 dropped by a third, and the percentage of children with elevated blood lead levels dropped by 84 percent. The percentage of mothers who smoked during pregnancy also declined. On the other hand, both obesity and the percentage of low-birth weight babies increased. The authors note that the increase in babies born with low birth weights can be attributed to women delaying childbearing and the increased use of fertility drugs.

System efficiency and equity

Variations in the efficiency of health care delivery can cause variations in outcomes. The Dartmouth Atlas Project, for instance, reported that, for over 20 years, marked variations in how medical resources are distributed and used in the United States were accompanied by marked variations in outcomes.

Efficiency

Value for money

A study of international health care spending levels published in the health policy journal Health Affairs in the year 2000 found that the U.S. spends substantially more on health care than any other country in the Organization for Economic Co-operation and Development (OECD), and that the use of health care services in the U.S. is below the OECD median by most measures. The authors of the study conclude that the prices paid for health care services are much higher in the U.S.

Delays in seeking care and increased use of emergency care

Uninsured Americans are less likely to have regular health care and use preventive services. They are more likely to delay seeking care, resulting in more medical crises, which are more expensive than ongoing treatment for such conditions as diabetes and high blood pressure. A 2007 study published in JAMA concluded that uninsured people were less likely than the insured to receive any medical care after an accidental injury or the onset of a new chronic condition. The uninsured with an injury were also twice as likely as those with insurance to have received none of the recommended follow-up care, and a similar pattern held for those with a new chronic condition. Uninsured patients are twice as likely to visit hospital emergency rooms as those with insurance; burdening a system meant for true emergencies with less-urgent care needs.

Another recent study by researchers with the American Cancer Society found that individuals who lacked private insurance were more likely to be diagnosed with late-stage cancer than those who had such insurance. This was true of both the uninsured as well as those covered by Medicaid. “Individuals without private insurance are not receiving optimum care in terms of cancer screening or timely diagnosis and follow-up with health care providers," study authors concluded.

Shared costs of the uninsured

Main article: Uninsured in the United States

The costs of treating the uninsured must often be absorbed by providers as charity care, passed on to the insured via cost shifting and higher health insurance premiums, or paid by taxpayers through higher taxes.

A report published by the Kaiser Family Foundation in April 2008 found that economic downturns place a significant strain on state Medicaid and SCHIP programs. The authors estimated that a 1% increase in the unemployment rate would increase Medicaid and SCHIP enrollment by 1 million, and increase the number uninsured by 1.1 million. State spending on Medicaid and SCHIP would increase by $1.4 billion (total spending on these programs would increase by $3.4 billion). This increased spending would occur at the same time state government revenues were declining. During the last downturn, the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) included federal assistance to states, which helped states avoid tightening their Medicaid and SCHIP eligibility rules. The authors conclude that Congress should consider similar relief for the current economic downturn.

Variations in provider practices

The treatment given to a patient can vary significantly depending on which health care providers they use. Research suggests that some cost-effective treatments are not used as often as they should be, while other health care services are over-used. Unnecessary treatments increase costs and can cause patients unnecessary anxiety. The use of prescription drugs varies significantly by geographic region.

One study has found significant geographic variations in Medicare spending for patients in the last two years of life. These spending levels are associated with the amount of hospital capacity available in each area. Higher spending did not result in patients living longer.

Care coordination

Primary care doctors are often the point of entry for most patients needing care, but in the fragmented health care system of the U.S., many patients and their providers experience problems with care coordination. For example, a Harris Interactive survey of California physicians found that:

• Four of every ten physicians report that their patients have had problems with coordination of their care in the last 12 months.
• More than 60 percent of doctors report that their patients "sometimes" or "often" experience long wait times for diagnostic tests.
• Some 20 percent of doctors report having their patients repeat tests because of an inability to locate the results during a scheduled visit.

According to an article in The New York Times, the relationship between doctors and patients is deteriorating. A study from Johns Hopkins University found that roughly one in four patients believe their doctors have exposed them to unnecessary risks, and anecdotal evidence such as self-help books and web postings suggest increasing patient frustration. Possible factors behind the deteriorating doctor/patient relationship include the current system for training physicians and differences in how doctors and patients view the practice of medicine. Doctors may focus on diagnosis and treatment, while patients may be more interested in wellness and being listened to by their doctors.

Many primary care physicians no longer see their patients while they are in the hospital. Instead, hospitalists are used, which fragments care because hospitalists usually have had no previous relationship with the patient they are treating and do not have a personal knowledge of the patient's medical history. The use of hospitalists is sometimes mandated by health insurance companies as a cost saving measure which is resented by some primary care physicians.

Administrative costs

The health care system in the U.S. has a vast number of players. There are hundreds, if not thousands, of insurance companies in the U.S. This system has considerable administrative overhead, far greater than in nationalized, single-payer systems, such as Canada's. An oft-cited study by Harvard Medical School and the Canadian Institute for Health Information determined that some 31% of U.S. health care dollars, or more than $1,000 per person per year, went to health care administrative costs, nearly double the administrative overhead in Canada, on a percentage basis.

According to the insurance industry group America's Health Insurance Plans, administrative costs for private health insurance plans have averaged approximately 12 percent of premiums over the last 40 years. There has been a shift in the type and distribution of administrative expenses over that period. The cost of adjudicating claims has fallen, while insurers are spending more on other administrative activities, such as medical management, nurse help lines, and negotiating discounted fees with health care providers.

A 2003 study published by the Blue Cross and Blue Shield Association also found that health insurer administrative costs were approximately 11% to 12% of premiums, with Blue Cross and Blue Shield plans reporting slightly lower administrative costs, on average, than commercial insurers. For the period 1998 through 2003, average insurer administrative costs declined from 12.9% to 11.6% of premiums. The largest increases in administrative costs were in customer service and information technology, and the largest decreases were in provider services and contracting and in general administration. The McKinsey Global Institute estimated that excess spending on “health administration and insurance” accounted for as much as 21% of the estimated total excess spending ($477 billion in 2003).

According to a report published by the CBO in 2008, administrative costs for private insurance represent approximately 12% of premiums. Variations in administrative costs between private plans are largely attributable to economies of scale. Coverage for large employers has the lowest administrative costs. The percentage of premium attributable to administration increases for smaller firms, and is highest for individually purchased coverage. A 2009 study published by the Blue Cross and Blue Shield Association found that the average administrative expense cost for all commercial health insurance products was represented 9.18% of premiums in 2008. Administrative costs were 11.12% of premiums for small group products and 16.35% in the individual market.

One study of the billing and insurance-related (BIR) costs borne not only by insurers but also by physicians and hospitals found that BIR among insurers, physicians, and hospitals in California represented 20-22% of privately insured spending in California acute care settings.

Overall costs

The cost impact of the existing mixed public-private system is subject to debate. Free-market advocates claim that the health care system is "dysfunctional" because the system of third-party payments from insurers removes the patient as a major participant in the financial and medical choices that affect costs. Because government intervention has expanded insurance availability through programs such as Medicare and Medicaid, this has exacerbated the problem According to a study paid for by America's Health Insurance Plans (a Washington lobbyist for the health insurance industry) and carried out by PriceWaterhouseCoopers, increased utilization is the primary driver of rising health care costs in the U.S.. The study cites numerous causes of increased utilization, including rising consumer demand, new treatments, more intensive diagnostic testing, lifestyle factors, the movement to broader-access plans, and higher-priced technologies. The study also mentions cost-shifting from government programs to private payers. Low reimbursement rates for Medicare and Medicaid have increased cost-shifting pressures on hospitals and doctors, who charge higher rates for the same services to private payers, which eventually affects health insurance rates.

Health care costs rising far faster than inflation have been a major driver for health care reform in the United States.

Equity

Coverage

Enrollment rules in private and governmental programs result in millions of Americans going without health care coverage, including children. The U.S. Census Bureau estimates that 45.7 million Americans (about 15.3% of the total population) had no health insurance coverage at some point during 2007. Most uninsured Americans are working-class persons whose employers do not provide health insurance, and who earn too much money to qualify for one of the local or state insurance programs for the poor, but do not earn enough to cover the cost of enrollment in a health insurance plan designed for individuals. Some states (like California) do offer limited insurance coverage for working-class children, but not for adults; other states do not offer such coverage at all, and so, both parent and child are caught in the notorious coverage "gap." Although EMTALA certainly keeps alive many working-class people who are badly injured, the 1986 law neither requires the provision of preventive or rehabilitative care, nor subsidizes such care, and it does nothing about the difficulties in the American mental health system.

Coverage gaps also occur among the insured population. Johns Hopkins University professor Vicente Navarro stated in 2003, "the problem does not end here, with the uninsured. An even larger problem is the underinsured" and "The most credible estimate of the number of people in the United States who have died because of lack of medical care was provided by a study carried out by Harvard Medical School Professors Himmelstein and Woolhandler (New England Journal of Medicine 336, no. 11, 1997). They concluded that almost 100,000 people died in the United States each year because of lack of needed care..." Another study by the Commonwealth Fund published in Health Affairs estimated that 16 million U.S. adults were underinsured in 2003. The study defined underinsurance as characterized by at least one of the following conditions: annual out-of-pocket medical expenses totaling 10% or more of income, or 5 percent or more among adults with incomes below 200% of the federal poverty level; or health plan deductibles equaling or exceeding 5% of income. The underinsured were significantly more likely than those with adequate insurance to forgo health care, report financial stress because of medical bills, and experience coverage gaps for such items as prescription drugs. The study found that underinsurance disproportionately affects those with lower incomes—73% of the underinsured in the study population had annual incomes below 200% of the federal poverty level. Another study focusing on the effect of being uninsured found that individuals with private insurance were less likely to be diagnosed with late-stage cancer than either the uninsured or Medicaid beneficiaries. A study examining the effects of health insurance cost-sharing more generally found that chronically ill patients with higher co-payments sought less care for both minor and serious symptoms while no effect on self-reported health status was observed. The authors concluded that the effect of cost sharing should be carefully monitored.

Coverage gaps and affordability also surfaced in a 2007 international comparison by the Commonwealth Fund. Among adults surveyed in the U.S., 37% reported that they had foregone needed medical care in the previous year because of cost; either skipping medications, avoiding seeing a doctor when sick, or avoiding other recommended care. The rate was even higher— 42%—among those with chronic conditions. The study reported that these rates were well above those found in the other six countries surveyed: Australia, Canada, Germany, the Netherlands, New Zealand, and the UK. The study also found that 19% of U.S. adults surveyed reported serious problems paying medical bills, more than double the rate in the next highest country.

Mental health

A lack of mental health coverage for Americans bears significant ramifications to the U.S. economy and social system. A report by the U.S. Surgeon General found that mental illnesses are the second leading cause of disability in the nation and affect 20 percent of all Americans. It is estimated that less than half of all people with mental illnesses receive treatment due to factors such as stigma and lack of access to care.

The Paul Wellstone Mental Health and Addiction Equity Act of 2008 mandates that group health plans provide mental health and substance-related disorder benefits that are at least equivalent to benefits offered for medical and surgical procedures. The legislation renews and expands provisions of the Mental Health Parity Act of 1996. The law requires financial equity for annual and lifetime mental health benefits, and compels parity in treatment limits and expands all equity provisions to addiction services. Up to 2008 insurance companies used loopholes and, though providing financial equity, they often worked around the law by applying unequal co-payments or setting limits on the number of days spent in in-patient or out-patient treatment facilities.

Medical underwriting and the uninsurable

In most states in the U.S., people seeking to purchase health insurance directly must undergo medical underwriting. Insurance companies seeking to mitigate the problem of adverse selection and manage their risk pools screen applicants for pre-existing conditions. Insurers may reject some applicants or quote increased rates for those with pre-existing conditions. Diseases that can make an individual uninsurable include serious conditions, such as arthritis, cancer, and heart disease, but also such common ailments as acne, being 20 pounds over or under weight, and old sports injuries. An estimated 5 million of those without health insurance are considered "uninsurable" because of pre-existing conditions.

Proponents of medical underwriting argue that it ensures that individual health insurance premiums are kept as low as possible. Critics of medical underwriting believe that it unfairly prevents people with relatively minor and treatable pre-existing conditions from obtaining health insurance.

One large industry survey found that 13 percent of applicants for individual health insurance who went through medical underwriting were denied coverage in 2004. Declination rates increased significantly with age, rising from 5 percent for those under 18 to just under one-third for those aged 60 to 64. Among those who were offered coverage, the study found that 76% received offers at standard premium rates, and 22% were offered higher rates. The frequency of increased premiums also increased with age, so for applicants over 40, roughly half were affected by medical underwriting, either in the form of denial or increased premiums. In contrast, almost 90% of applicants in their 20s were offered coverage, and three-quarters of those were offered standard rates. Seventy percent of applicants age 60–64 were offered coverage, but almost half the time (40%) it was at an increased premium. The study did not address how many applicants who were offered coverage at increased rates chose to decline the policy. A study conducted by the Commonwealth Fund in 2001 found that, among those aged 19 to 64 who sought individual health insurance during the previous three years, the majority found it unaffordable, and less than a third ended up purchasing insurance. This study did not distinguish between consumers who were quoted increased rates due to medical underwriting and those who qualified for standard or preferred premiums. Some states have outlawed medical underwriting as a prerequisite for individually purchased health coverage. These states tend to have the highest premiums for individual health insurance.

Demographic differences

Main articles: Health disparities and Race and health

In the United States, health disparities are well documented in ethnic minorities such as African Americans, Native Americans, Asian Americans, and Hispanics. When compared to whites, these minority groups have higher incidence of chronic diseases, higher mortality, and poorer health outcomes. Among the disease-specific examples of racial and ethnic disparities in the United States is the cancer incidence rate among African Americans, which is 25% higher than among whites. In addition, adult African Americans and Hispanics have approximately twice the risk as whites of developing diabetes. Minorities also have higher rates of cardiovascular disease, HIV/AIDS, and infant mortality than whites. Caucasian Americans have much lower life expectancy than Asian Americans. A 2001 study found large racial differences exist in healthy life expectancy at lower levels of education.

Public spending is highly correlated with age; average per capita public spending for seniors was more than five times that for children ($6,921 versus $1,225). Average public spending for non-Hispanic blacks ($2,973) was slightly higher than that for whites ($2,675), while spending for Hispanics ($1,967) was significantly lower than the population average ($2,612). Total public spending is also strongly correlated with self-reported health status ($13,770 for those reporting "poor" health versus $1,279 for those reporting "excellent" health).

There is a great deal of research into inequalities in health care. In some cases these inequalities are caused by income disparities that result in lack of health insurance and other barriers to receiving services. In other cases, inequalities in health care reflect a systemic bias in the way medical procedures and treatments are prescribed for different ethnic groups. Raj Bhopal writes that the history of racism in science and medicine shows that people and institutions behave according to the ethos of their times. Nancy Krieger wrote that racism underlies unexplained inequities in health care, including treatment for heart disease, renal failure, bladder cancer, and pneumonia. Raj Bhopal writes that these inequalities have been documented in numerous studies. The consistent and repeated findings were that black Americans received less health care than white Americans —particularly when the care involved expensive new technology. One recent study has found that when minority and white patients use the same hospital, they are given the same standard of care.

Regulatory efficiency and equity

Expensive public health care

27.8 % of the citizens have public insurance (16.5 % solely, 11.3 % also have a private one), but yet the costs of public health care are significantly higher than those in Europe, where people mostly use public health care

Health care regulatory costs

The regulation by the federal and local governments have greatly increased both public and private medical costs.

The Cato Institute argues that health care is the most heavily regulated industry in the United States. A study published by the Cato Institute suggests that this regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion. The study concluded that the majority of the cost differential arises from medical malpractice, U.S. Food and Drug Administration (FDA) regulations, and facilities regulations. Part of the cost is attributed to regulatory requirements that prevent technicians without medical degrees from performing treatment and diagnostic procedures that carry little risk.

"Certificates of need" hinder competition

Many states have "Certificate of need" programs which prevent opening new hospitals etc. without a state license. Even high-quality hospitals can be hindered from competition to keep down the number of service providers. A federal report noted that the incumbents can all too easily use these certificates to prevent competitors from entering the markets, and that this raises prices by weakening direct and indirect competition.

Governmentally regulated higher compensations

Many compensations have been regulated to exceptionally high levels in the U.S., and also more expensive medicines are given than in most of the Europe. These both add to the insurance prices..

Lack of doctors due to limited education

American Medical Association (AMA) has lobbied the government to highly limit physician education since 1910, currently at 100,000 doctors per year, which has led to a shortage of doctors and physicians' wages in the U.S. are double those in the Europe, which is a major reason for the more expensive health care.

An even bigger problem may be that the doctors are paid for procedures instead of results (or brain work).

Banning midwives and other work restrictions

AMA has also aggressively lobbied for many restrictions that require doctors to carry out operations that might be carried out by cheaper workforce. For example, in 1995, 36 states banned or restricted midwifery even though it delivers equally safe care to that by doctors, according to studies. The regulation lobbied by AMA has decreased the amount and quality of health care, according to the consensus of economist: the restrictions do not add to quality, they only decrease the supply of care. Moreover, psychologists, nurses and pharmacologists are not allowed to prescript even mild medicines. Previously nurses were not even allowed to vaccinate the patients alone.

Emergency Medical Treatment and Active Labor Act (EMTALA)

Main article: Emergency Medical Treatment and Active Labor Act

EMTALA, enacted by the federal government in 1986, requires that hospital emergency departments treat emergency conditions of all patients regardless of their ability to pay and is considered a critical element in the "safety net" for the uninsured, but established no direct payment mechanism for such care. Indirect payments and reimbursements through federal and state government programs have never fully compensated public and private hospitals for the full cost of care mandated by EMTALA. In fact, more than half of all emergency care in the U.S. now goes uncompensated. According to some analyses, EMTALA is an unfunded mandate that has contributed to financial pressures on hospitals in the last 20 years, causing them to consolidate and close facilities, and contributing to emergency room overcrowding. According to the Institute of Medicine, between 1993 and 2003, emergency room visits in the U.S. grew by 26 percent, while in the same period, the number of emergency departments declined by 425. Hospitals attempt to bill uninsured patients directly under the fee-for-service model, but most such people cannot pay their hospital bills, and escape into bankruptcy when hospitals seek legal process against them.

Mentally ill patients present a unique challenge for emergency departments and hospitals. Which is obvious, of course, as Americans have persistently scored lower in IQ tests for decades in a row. Their intelligence being poorer than those of countries with better health care systems, it should be of no surprise that mental illness is a major problem in the US health care system. In accordance with EMTALA, mentally ill patients who enter emergency rooms are evaluated for emergency medical conditions. Once mentally ill patients are medically stable, regional mental health agencies are contacted to evaluate them. Patients are evaluated as to whether they are a danger to themselves or others. Those meeting this criterion are admitted to a mental health facility to be further evaluated by a psychiatrist. Typically, mentally ill patients can be held for up to 72 hours, after which a court order is required.

Drug efficacy and safety

The Food and Drug Administration (FDA) is the primary institution tasked with the safety and effectiveness of human and veterinary drugs. It also is responsible for making sure drug information is accurately and informatively presented to the public. The FDA reviews and approves products and establishes drug labeling, drug standards, and medical device manufacturing standards. It sets performance standards for radiation and ultrasonic equipment.

One of the more contentious issues related to drug safety is immunity from prosecution. In 2004, the FDA reversed a federal policy, arguing that FDA premarket approval overrides most claims for damages under state law for medical devices. On 30 June 2006, an FDA ruling went into effect extending protection from lawsuits to pharmaceutical manufacturers, even if it was found that they submitted fraudulent clinical trial data to the FDA in their quest for approval. This left consumers who experience serious health consequences from drug use with little recourse. In 2007, opposition was raised in the Congressional House to the FDA ruling, but the Senate upheld the status quo.

On 4 March 2009, an important U.S. Supreme Court decision was handed down. In Wyeth v. Levine, the court asserted that state-level rights of action could not be pre-empted by federal immunity and could provide "appropriate relief for injured consumers." In June 2009, under the Public Readiness and Emergency Preparedness Act, Secretary of Health and Human Services Kathleen Sebelius signed an order extending protection to vaccine makers and federal officials from prosecution during a declared health emergency related to the administration of the swine flu vaccine.

Political issues

Prescription drug prices

Main article: Prescription drug prices in the United States

During the 1990s, the price of prescription drugs became a major issue in American politics as the prices of many new drugs increased exponentially, and many citizens discovered that neither the government nor their insurer would cover the cost of such drugs. Per capita, the U.S. spends more on pharmaceuticals than any other country. National expenditures on pharmaceuticals accounted for 12.9% of total health care costs, compared to an OECD average of 17.7% (2003 figures). Some 25% of out-of-pocket spending by individuals is for prescription drugs.

The U.S. government has taken the position (through the Office of the United States Trade Representative) that U.S. drug prices are rising because U.S. consumers are effectively subsidizing costs which drug companies cannot recover from consumers in other countries (because many other countries use their bulk-purchasing power to aggressively negotiate drug prices). The U.S. position (consistent with the primary lobbying position of the Pharmaceutical Research and Manufacturers of America) is that the governments of such countries are free riding on the backs of U.S. consumers. Such governments should either deregulate their markets, or raise their domestic taxes in order to fairly compensate U.S. consumers by directly remitting the difference (between what the companies would earn in an open market versus what they are earning now) to drug companies or to the U.S. government. In turn, pharmaceutical companies would be able to continue to produce innovative pharmaceuticals while lowering prices for U.S. consumers. Currently, the U.S., as a purchaser of pharmaceuticals, negotiates some drug prices but is forbidden by law from negotiating drug prices for the Medicare program due to a Medicare bill passed by the Republican-controlled 109th Congress and signed into law by President George W. Bush in 2005. Democrats have charged that the purpose of this provision is merely to allow the pharmaceutical industry to profiteer off of the Medicare program, which is already in imminent danger of becoming financially insolvent.

Health care debate

Main article: Health care reform in the United States

A poll released in March 2008 by the Harvard School of Public Health and Harris Interactive found that Americans are divided in their views of the U.S. health system, and that there are significant differences by political affiliation. When asked whether the U.S. has the best health care system or if other countries have better systems, 45% said that the U.S. system was best and 39% said that other countries' systems are better. Belief that the U.S. system is best was highest among Republicans (68%), lower among independents (40%), and lowest among Democrats (32%). Over half of Democrats (56%) said they would be more likely to support a presidential candidate who advocates making the U.S. system more like those of other countries; 37% of independents and 19% of Republicans said they would be more likely to support such a candidate. 45% of Republicans said that they would be less likely to support such a candidate, compared to 17% of independents and 7% of Democrats.

According to the Institute of Medicine of the National Academy of Sciences, the United States is the only wealthy, industrialized nation that does not ensure universal coverage. There is currently an ongoing political debate centering around questions of access, efficiency, quality, and sustainability. Whether a government-mandated system of universal health care should be implemented in the U.S. remains a hotly debated political topic, with Americans divided along party lines in their views of the U.S. health system and what should be done to improve it. Those in favor of universal health care argue that the large number of uninsured Americans creates direct and hidden costs shared by all, and that extending coverage to all would lower costs and improve quality. Cato Institute Senior Fellow Alan Reynolds argues that people should be free to opt out of health insurance, citing a study by Economists Craig Perry and Harvey Rosen that found "the lack of health insurance among the self-employed does not affect their health. For virtually every subjective and objective measure of their health status, the self-employed and wage-earners are statistically indistinguishable for each other." Both sides of the political spectrum have also looked to more philosophical arguments, debating whether people have a fundamental right to have health care provided to them by their government.

An impediment to implementing any US healthcare reform that does not benefit insurance companies or the private health care industry is the power of insurance company and health care industry lobbyists. Possibly as a consequence of the power of lobbyists, key politicians such as Senator Max Baucus have taken the option of single payer health care off the table entirely. In a June 2009 NBC News/Wall Street Journal survey, 76 percent said it was either "extremely" or "quite" important to "give people a choice of both a public plan administered by the federal government and a private plan for their health insurance."

Advocates for single-payer health care often point to other countries, where national government-funded systems produce better health outcomes at lower cost. Opponents deride this type of system as "socialized medicine", and it has not been one of the favored reform options by Congress or the President in both the Clinton and Obama reform efforts. It has been pointed out that socialized medicine is a system in which the government owns the means of providing medicine. Britain is an example of socialized system, as, in America, is the Veterans Health Administration. Medicare is an example of a mostly single-payer system, as is France. Both of these systems have private insurers to choose from, but the government is the dominant purchaser.

As an example of how government intervention has had unintended consequences, in 1973, the federal government passed the Health Maintenance Organization Act, which heavily subsidized the HMO business model — a model that was in decline prior to such legislative intervention. The law was intended to create market incentives that would lower health care costs, but HMOs have never achieved their cost-reduction potential.

Piecemeal market-based reform efforts are complex. One study evaluating current popular market-based reform policy packages concluded that if market-oriented reforms are not implemented on a systematic basis with appropriate safeguards, they have the potential to cause more problems than they solve.

According to economist and former US Secretary of Labor, Robert Reich, only a "big, national, public option" can force insurance companies to cooperate, share information, and reduce costs. Scattered, localized, "insurance cooperatives" are too small to do that and are "designed to fail" by the moneyed forces opposing Democratic health care reform.

Drug company ads

Only the United States allows prescription drug ads on TV. New Zealand previously allowed ads, but stopped in 2005. Drug ads costs money, raising the overall price of drugs.

When health care legislation was being written in 2009, the drug companies were asked to support the legislation in return for not allowing importation of drugs from foreign countries.

See also

• Canadian and American health care systems compared
• Key person insurance
• Health care compared - tabular comparisons of the US, Canada, and other countries not shown above.
• Health care industry
• Health care politics
• Health care systems (including comparisons)
• Health insurance cooperative
• HIV/AIDS in the United States
• List of healthcare accreditation organizations in the United States
• Medical cannabis in the United States
• Medical centers in the United States
• Medical debt
• Medicare Rights Center
• Military Health System
• School health services
• United States National Health Care Act
• Universal Health Care Foundation of Connecticut
• Water fluoridation in the United States

Further reading

• Mahar, Maggie, Money-Driven Medicine: The Real Reason Health Care Costs So Much, Harper/Collins, 2006. ISBN 9780060765330
• Starr, Paul, The Social Transformation of American Medicine, Basic Books, 1982. ISBN 0465079342
• President Obama REMARKS BY THE PRESIDENT TO A JOINT SESSION OF CONGRESS ON HEALTH CARE September 9, 2009

External links

• National Center for Health Statistics from Centers for Disease Control and Prevention (CDC)
• National Health Expenditure Data (U.S.) from United States Department of Health and Human Services (CMS)
• United States profile from the World Health Organization (WHO)
• Template:Dmoz
• FamiliesUSA contains links to numerous studies and literature about various aspects of health care in the US].