Amongst OECD countries, the U.S. has the highest percentage of uninsured; as of 2010, 50 million Americans are uninsured (Lorenzoni 85). In addition, amongst all countries, the U.S. has the highest expenditure on healthcare, an estimated $7,212 per person in 2012 (Lorenzoni 85). Despite having high healthcare expenditure, the U.S. has one of the highest uninsured rates for healthcare, and one of the lowest life expectancies amongst developed countries. On the contrary, Cuba, a developing country, has the same life expectancy as the U.S., 79 years. Furthermore, the Cuban state provides universal healthcare for all Cuban citizens. The main issues of the U.S. healthcare system include the high cost and low penetrability of healthcare for many citizens; an effective healthcare system composes of a system of universal healthcare for all regulated by the government, which has high penetrability and affordability.
In the U.S., there is a prevalence of social disparities which influence health outcomes. These include neighborhood, working conditions, education, and race. Firstly, neighborhood influences air and water quality that a resident breathes in and drinks. Many poor neighborhoods are located in close proximity to an industrial plant. As a result, many residents inhale polluted air. Furthermore, proximity to medical and health facilities is critical. For example, if a neighborhood only has one hospital serving thousands of people, medical attention may be delayed for those who have life-threatening injuries. Generally speaking, wealthier people reside in neighborhoods that have better air quality and facilities than those who are less wealthy.
Besides neighborhoods, social disparities are present in working conditions. For instance, some blue-collar workers work in dangerous working conditions which pose hazards to their safety. Roofers and construction workers are often required to stand at high elevation and work with dangerous equipment. However, sedentary positions may also pose risks such as “increased risk of obesity and chronic diseases such as diabetes and heart disease” (Braveman, et. al 385). In addition to disparities in working conditions, educational disparities are prevalent. Research has shown that educated individuals are more “likely to have jobs with healthier physical and psychosocial working conditions, better health-related benefits, and higher compensation” (Braveman, et. al 386). However, many economically disadvantaged people cannot achieve their capabilities in education due to lack of resources and funding for education. Many of these people go into careers which pose physical threats to their health. Lastly, race is another social disparity which influences people’s health. Segregation of races in neighborhoods perpetuates social inequalities in health. For instance, many African-Americans and Latinos reside in disadvantaged neighborhoods which have poor educational and health facilities (Braveman, et. al 388). This can result in a detrimental impact on their health outcomes.
One of the main issues of the U.S. healthcare system is the prevalence of a fee-for-service system which often results in high costs and low quality services for consumers. The U.S. healthcare primarily operates on a fee-for-service system where doctors are paid according to the number of services they provide to patients. This system encourages some doctors to prioritize quantity rather than quality of care. Furthermore, under the fee-for-service system, doctors are free to charge any amount for their services. Some doctors take advantage of this, and charge exorbitant amounts for procedures.
This partly contributes to the U.S. having a high annual expenditure on healthcare. Another problem with the fee-for-service system is presence of asymmetrical information between doctor and patient. Put simply, since the doctor knows more about the patients’ condition than the patient, some doctors take advantage of that extra knowledge for economic gain. For instance, a doctor may recommend a costlier but less-effective procedure in which he gets compensated more than a less-costly but more effective procedure. Although the presence of asymmetrical information between doctor and patient is true for all countries, in Cuba and Nordic countries where universal healthcare is provided for all citizens, these countries do not operate on a fee-for-service system. Therefore, this is little incentive for physicians to prioritize quantity over quality of health-care.
Besides the fee-for-service system, another major issue prevalent in the U.S. healthcare system are the high costs and low ratio of doctors per capita compared to Nordic countries. The average American spends $8,233 per person every year on healthcare. Healthcare now accounts for 17.6 percent of U.S. GDP (Kane 2). In contrast, the average Norwegian pays less than $3,000 on per-capita healthcare (Kane 4). Put simply, the average American spends more than 174% more than the average Norwegian on annual healthcare expenditures. Furthermore, the U.S. has fewer physicians per person, 2.1, than the average of the OECD countries, which is 3.1 (Kane 3). Sweden has the highest rate of physicians per capita, of 3.3% (Overview of Health Care 4). Sweden’s higher ratio allows patients to have more convenient and accessible access to health professionals. A large part of high health expenditure in the U.S. can be attributed to the high costs of procedures and medicines rather than larger quantity of services the U.S. performs compared to other countries. For example, the average hip replacement costs $11,568 in Sweden, compared to $17,406 in the U.S. (Kane 9). Put simply, the same procedure would cost 50.46% more in the U.S. compared to Sweden. Besides procedures, the U.S. also has a higher expenditure of pharmaceuticals compared to OECD countries. One of the reasons for this is because there are few barriers to market entry and price regulation once a drug is approved by the FDA (Lorenzoni, et. al 86).
In addition to high costs, another issue of the U.S. healthcare is the low penetrability of health insurance in the country. Put simply, there are too many people that do not have access to healthcare. This is partly due to high costs and low affordability of insurance to many. It is estimated that “45 percent of adults under 65 who live in official poverty lack health insurance, compared to only 6 percent of higher-income adults” (Problems of Health Care 1). In other words, most uninsured are the poor and impoverished. Most health insurance comes through employers, Medicaid, and Medicare. For those who meet none of the requirements for the programs above, many are faced with difficulties obtaining affordable health insurance.
Furthermore, some employees are not provided with health insurance options by their provider. Although it is mandatory that in companies which employ more than 50 people, employers are supposed to pay for medical insurance for employees who work more than 30 hours, there are many loopholes to the system. Some employers may split a company that has more than 50 people into two separate companies to avoid paying for their employees’ health insurance. Moreover, lack of knowledge and public awareness is another contributing reason why the uninsured remains so high in the U.S. According to a recent study of Americans aged 19 to 64 who might have been eligible for subsidized health insurance, 36% of respondents responded that they did not try to obtain health insurance because they did not think they were eligible (Gunja, Collins 1). In other words, some of the uninsured were not aware of their eligibility status for subsidized health insurance.
One element of effective health policy is implementing affordable universal healthcare regulated by the government. An effective healthcare system is one in which the government regulates costs of procedures and medications to maintain affordable prices for consumers. The U.S. government allows the prices of pharmaceuticals to be determined by the market. This often leads to price gouging, which results in a growing number of Americans who are uninsured due to lack of affordability. In contrast, in Sweden, the “reference price for a drug is set at 10 percent above the price of the least expensive generic equivalent” (Gross, et. al 1). For example, the average cost per gram of Gamunex-c, an immune globulin injection, for the average Swede is set to $1.80, whereas Americans pay an average cost of $67 per gram (Comparison of U.S. and International Prices 13). The lower prices of medicine result in less health care expenditure and financial burden for the average Swede. In the U.S., many people hesitate to visit a doctor because of fear of high costs. Older people are a group that is especially vulnerable to this; it is estimated that 23% of older people have trouble getting care because of concerns over cost (Osborn, et. al. 1). In contrast, only 3% of older adults in Sweden report having trouble getting care over cost concerns (Osborn, et. al. 1). Simply put, older adults in the U.S. are more likely to avoid care due to costs than older adults in Sweden. In Cuba, healthcare is considered a universal right and is provided for free to all citizens. Furthermore, the Cuban state is responsible for instituting a healthcare system which provides accessibility to all (Castell-Florit Serrate 1). Put simply, in Cuba, the state regulates and administers healthcare for all. The U.S. government should impose regulations on pharmaceutical and procedural costs in order to establish an affordable healthcare system which achieves higher penetrability.
Another element of effective health policy is establishment of rules which ensure access to healthcare is not uneven across different socioeconomic classes and races; furthermore, higher education should be subsidized for people who choose to serve in the public domain. As aforementioned, in the U.S., many people live in disadvantaged neighborhoods with limited access to healthcare facilities. Furthermore, in the U.S., there is inequality amongst socioeconomic classes in healthcare. Many poor who do not meet the requirements for Medicare or Medicaid struggle to afford the mounting costs of healthcare. Furthermore, in the U.S., there is a lack of economic incentives for people to become doctors. In 2011, the average medical student graduated with $162,000 of debt (Trends in Cost and Debt 1). This puts a heavy strain on a medical graduate, and also deters many people from pursuing a medical degree. However, all Nordic countries provide education free for their citizens. This provides an incentive for people to go to medical school. In order to incentivize more people to pursue a medical degree, the U.S. should provide subsidized education for medical majors who wish to go into the public medical sector after graduation.
Last but not least, two features of an effective healthcare system include government involvement in ensuring accountability and deliverability of quality healthcare services which are accessible to the population. This can be implemented in many ways. For example, many Nordic countries have multiple levels of healthcare sectors, which all work to ensure deliverability of services. In Denmark, the state delivers legislation and supervision, while municipalities provide services (Overview of Health Care 1). Put simply, the government holds accountability by dividing healthcare into multiple sectors, each of which provides different functions. In Denmark, service is provided as close to the client as possible by the municipalities. Another way for governance to ensure accountability is for government to formulate health goals which may include improving accessibility and reduce inequalities in healthcare, and work with health officials to ensure to implement policies which work towards those goals. For instance, the U.S. can work on implementing policies which reduce racial and gender bias in the healthcare field.
In conclusion, the main issues of the U.S. healthcare system include high costs, low penetrability, fee-for-service system, and lack of government regulation on medical costs. The features of an effective healthcare system include universal healthcare which is regulated by the government, insurance affordability, and high penetrability. For an effective health care policy to be implemented, some challenges of imposing more effective health policy are lack of bipartisan support, implementational challenges, and opposition from pharmaceutical companies, insurance giants, and organizations representing doctors who will have economic stakes at risk. First and foremost, gaining bipartisan support will be the first hurdle that the U.S. will have to face in order to implement a new healthcare regime. This is tied to the interests of pharmaceutical and insurance giants because both industries often lobby in support of interests that support their continued dominance in the healthcare industry.
The interest groups and lobbyists will campaign against policies that threaten their economic interests. They might find sponsors and politicians, who might choose to vote against any measures which allow for universal healthcare. Implementational challenges may include prevention of leakage between the transition from the old healthcare system to a more effective one. Despite the share of challenges, a universal healthcare system which is government-regulated will improve the livelihoods of U.S. citizens and afford them more health and economic security to reach their capabilities.
