U.S. Healthcare Reform Debate: Cost, Access, and Policy

Introduction to the Healthcare Reform Debate

The debate regarding the reformation of healthcare in the United States has been heated for decades, with serious reform proposals put forward by several presidential administrations beginning near the close of World War II. All of these proposals were the source of near-endless debate and ranged in nature from full universal state-sponsored health coverage to massive overhauls of the existing fee-for-service private-pay model, usually including a sizable public funding component (Helms, 2006, pp. 5–6). According to Helms and many other experts on healthcare reform, this dichotomy represents the basic outline of the debate: some believe that, like most developed nations, the United States should adopt some variation of universal healthcare, while others believe the private competitive nature of the current system makes it the best in the world and prefer to reform it to better meet the nation's needs (2006, pp. 5–14).

Helms goes on to discuss how the system has already undergone reform in the form of the Medicare Modernization Act, which established a prescription drug policy for Medicare beneficiaries — mostly seniors — and allowed health care savings plans that would in theory address catastrophic health expenditures (2006, p. 8). The nature of the healthcare reform debate, though framed in fairly simple terms by Helms, is fundamentally focused on several interrelated aspects: the politics of healthcare, the cost of healthcare, the quality of healthcare, and the availability of healthcare — very much in that order.

This work serves as a review of the current literature on healthcare reform and attempts to build a comprehensive view of what research and scholarship are saying about healthcare across all of those dimensions. There is little question, by anyone, that there is a universal need for access to quality healthcare for every person and that this need cannot be separated from the concept of innate human rights (Epstein, 1999, p. 27). There is also an argument firmly rooted in the need to continue developing healthcare to its greatest possible state, as it has historically done so without ruin — a view often voiced by those who both need such care and those who have foundational investments in delivering it.

The conflict arises when the development of healthcare, especially in its life-saving allopathic rather than preventative form, creates a cost burden for consumers — or so the provider and the politician would have us believe. For most of recorded history, life was, as Hobbes famously said, "solitary, poor, nasty, brutish, and short." Modern medicine has changed some of that. Yet for many, while we live longer, our dying is accompanied by ever-longer periods of deterioration and dependency. Having only recently gained the power to ward off premature death, doctors have been reluctant to relinquish it (Saunders, 2003, p. 12). The result, according to Bix and others, has been an extremely aggressive medical care system that has created a cost-prohibitive demand for heroic measures, rather than a system that takes the whole community into account and allows consumers preventative care and reasonable end-of-life care (2004, p. 171).

Healthcare in the United States has historically been dominated by high-cost, and most claim high-quality, care. The system is fundamentally girded by employer-provided private insurance coverage. The public components are designed to supplement coverage for those who cannot access health insurance through employers and who, for the most part, cannot afford to pay for it independently (Rajan, 1998, pp. 101–102). Rajan also points out that lack of insurance is a relatively common social phenomenon in the United States that varies considerably by state and region: "The rate of uninsurance varies greatly across states, from a low of 7.2 percent in Tennessee to a high of 25.7 percent in New Mexico" (1998, p. 101).

Uninsured persons frequently avoid healthcare interventions, seeking care only when symptoms — usually intractable pain or discomfort — force their hand and require them to seek treatment in the most expensive manner possible: through an emergency room, and at a point when the patient's condition requires costly intervention rather than preventative care. As Galambos (2005) notes:

"Since the 1980s, the number of uninsured individuals in this country has continued to grow. It is estimated that over 43 million people in the United States do not have health insurance, or 15.2 percent of the total population (Mitka, 2004). Of those people without health insurance, about 53 percent of uninsured individuals were estimated to be uninsured for at least nine months (McLellan, 2003)." (p. 3)

The Uninsured and the Cost of Coverage

Among the estimated 43 million uninsured persons in the United States, the healthcare crisis is one of the most significant fears they face, as they are aware through media and anecdotal experience that medical catastrophes can — and often do — strip individuals of everything they have worked for. It must also be noted that many of these statistics originate from the mid-1990s, and the situation with employer-provided health insurance coverage has changed significantly over the intervening years — and not for the better — as more and more employers have had to opt out of insurance provision or seriously curtail coverage levels, primarily because of rising plan costs.

More than half of the decline in coverage rates experienced over the 1990s is attributable to the increase in health insurance premiums, accounting for 2.0 percentage points of the 3.1 percentage point decline. Medicaid expansions led to a 1 percentage point increase in coverage. Changes in economic and demographic factors had little net effect. The number of people uninsured could increase by 1.9 to 6.3 million in the decade ending 2010 if real per-capita medical costs increase at a rate of 1 to 3 percentage points, holding all else constant (Chernew, Cutler, & Seliger Keenan, 2005, p. 1021).

Though experts hardly agree on precisely how many people are problematically uninsured or how many will be uninsured in the near future, the overall trends of declining employer-sponsored health benefits, rising insurance premiums, and generally increasing healthcare costs will likely make things much worse before they get better. Fisher, Berwick, and Davis point out in their call-to-action article that the first step in positive reform is consensus and integration among physicians (2009, pp. 2495–2497). They explain that physicians need to recognize that achieving savings sufficient to cover the cost of expanded coverage need not impose hardship on patients or providers:

"But because of the miracle of compounding, a '1-percent solution' that reduced the growth in annual spending from 6.7% to 5.2% could save the health care system $3.1 trillion of the $40 trillion we are currently projected to spend between 2010 and 2020 … the federal government would harvest about $1.1 trillion in savings over the 11-year period … enough, perhaps, to close the deal on affordable health insurance for all." (Fisher, Berwick, & Davis, 2009, p. 2497)

The writers go on to claim that, applying the same math and cost cap, employers would save $497 billion, state and local governments would save about $529 billion, and most importantly, households would save $671 billion. One straightforward way for physicians to contribute to this goal is by reassessing and scaling back, where appropriate, their use of clinical practices listed as "overused" by the National Quality Forum's National Priorities Partnership. Ideally, providers would also agree to slow fee increases for private payers, allowing Medicare to catch up (Fisher, Berwick, & Davis, 2009, p. 2497).

The actual cost of medical care has increased exponentially over the last fifty years, far outstripping cost increases for other goods and services. A particularly significant change in the healthcare delivery system is the shift in how that system is perceived — from being viewed as a social good to being viewed as an economic good. As Kumar and Subramanian (1998) observe:

Rising Healthcare Costs and Systemic Failures

"In recent years hospitals have experienced what many observers feel are 'fundamental, turbulent and even revolutionary changes' (Fottler, Blair, Whithead, Laus, and Savage, 1989). These changes have profoundly affected the management of hospitals and have resulted in a shift from '…health care as a social good to health care as an economic good' (Shortell, Morrison and Friedman, 1990). As a result, hospital executives now must respond to an increasing number of active and powerful stakeholder groups who influence issues ranging from hospital governance to financial management to quality of patient services." (p. 31)

It would seem that stakeholders' desire to profit from the system consistently overrides the assumption that healthcare is a universal right that serves the common good by keeping people as healthy as they should be. Economists predicted that this shift in focus would improve the system by compelling overspending institutions to reduce costs. Yet the opposite occurred: costs continued to soar and the number of people going without insurance continued to increase (Kumar & Subramanian, 1998).

"In 2002 the United States also experienced the highest per-capita spending for health care services, spending an average of $5,267 per citizen. No other country came close to spending that amount per capita in 2002." (International Comparisons of Health Care, 2009)

The reality is that the American consumer, though forced to pay out of pocket for an increasing list of healthcare needs, has relatively little control over cost. Costs in the healthcare system are not determined by the consumer; for this reason, it is illogical to assume that consumer demand in a capitalistic system will drive the competition that, in capitalist ideology, causes prices to fall. Spithoven eloquently points out that even though U.S. health expenditures are far higher than in other developed nations, the United States performs very poorly on universally recognized healthcare indicators:

"The relatively high expenditure on health care implies neither that the U.S. provides more health care services than other countries do (Anderson et al. 2003) nor that the U.S. ranks high on health care indicators, such as infant, neonatal, perinatal and maternal mortality rates and life expectancy (Starfield 2000; OECD 2005a). Concerning mortality rates and life expectancy, the U.S. performs worse than, for example, Canada (OECD 2005a). It is clear that the relationship between health care expenditure and health outcomes is complex (Nixon and Ulmann 2006)." (Spithoven, 2008, p. 2)

The organizations and individuals that determine cost have profitability in mind rather than the interests of the consumer. Politicians and lobbyists arguing that competition in healthcare will keep prices low — just as in any other industry — would have consumers believe they operate in a market where an uninsured patient in dire need of care can demand a competitor's price while lying on a hospital gurney. In reality, patients receiving medical treatment have no concrete understanding of what care will cost them, and often leave having paid five times more than the same service cost a decade earlier, with no ability to negotiate (LeGrand, 2009).

Furthermore, most medical equipment and supplies are a mystery to consumers. We know, for instance, that the materials composing a syringe can be purchased at a local discount store for a fraction of a cent, yet we have no idea what the hospital paid for it, what the patient will be charged for it, or what the medication inside it costs. Nor does the person administering the injection typically know (Fisher, Berwick, & Davis, 2009). Many experts ask why there is no real accountability in medical care for supply and equipment costs, which seem to keep rising regardless of demand, even as costs in comparable consumer electronics markets have fallen sharply.