Identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support analysis and conclusion.
Language Objectives:
Identify and analyze multiple and diverse perspectives as critical consumers of information.
Analyze an event, issue, problem, or phenomenon, critiquing and evaluating characteristics, influences, causes, and both short- and long-term effects.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to issues or problems; then reach an informed, defensible, supported conclusion.
Learning Target:
Students will identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support their analysis and conclusion.
In Sick Around the World, the documentary series explores healthcare delivery in the United Kingdom, Japan, Germany, Taiwan, and Switzerland. It explores the pros and cons of universal coverage, the cost of drugs, and what it’s like to practice medicine in different countries.
Germany
Bismarck model
Reid’s journey then takes him to Germany, the country that invented the concept of a national health care system. For its 80 million people, Germany offers universal health care, including medical, dental, mental health, homeopathy and spa treatment. Professor Karl Lauterbach, a member of the German parliament, describes it as “a system where the rich pay for the poor and where the ill are covered by the healthy.” As they do in Japan, medical providers must charge standard prices. This keeps costs down, but it also means physicians in Germany earn between half and two-thirds as much as their U.S. counterparts.
Germany, like Japan, uses a social insurance model. But unlike the Japanese, who get insurance from work or are assigned to a community fund, Germans are free to buy their insurance from one of more than 240 private, nonprofit sickness funds. For its 80 million people, Germany offers universal health care, including medical, dental, mental health, homeopathy and spa treatment. As in Japan, the poor receive public assistance to pay their premiums. Sickness funds are nonprofit and cannot deny coverage based on preexisting conditions; they compete with each other for members, and fund managers are paid based on the size of their enrollments. Germans can go straight to a specialist without first seeing a gatekeeper doctor, but they pay higher co-pay if they do. Like Japan, Germany is a single-payment system and medical providers must charge standard prices, but instead of the government negotiating the prices, the sickness funds bargain with doctors as a group. This keeps costs down, but it also means physicians in Germany earn between half and two-thirds as much as their U.S. counterparts. This system leaves some German doctors feeling underpaid. A family doctor in Germany makes about two-thirds as much as he or she would in America. However, German doctors pay much less for malpractice insurance, and many attend medical school for free. Germany also lets the richest 10 percent opt out of the sickness funds in favor of U.S.-style for-profit insurance. These patients are generally seen more quickly by doctors, because the for-profit insurers pay doctors more than the sickness funds.
Taiwan
National Health Insurance model
In the 1990s, Taiwan researched many health care systems before settling on one where the government collects the money and pays providers. But the delivery of health care is left to the market. Every person in Taiwan has a “smart card” containing all of his or her relevant health information, and bills are paid automatically. But the Taiwanese are spending too little to sustain their health care system, according to Princeton’s Tsung-mei Cheng, who advised the Taiwanese government. “As we speak, the government is borrowing from banks to pay what there isn’t enough to pay the providers,” she told FRONTLINE.
In the 1990s, Taiwan researched many health care systems before settling on one where the government collects the money and pays providers. But the delivery of health care is left to the market. Taiwan adopted a National Health Insurance model in 1995 after studying other countries’ systems. Like Japan and Germany, all citizens must have insurance, but there is only one government-run insurer. Working people pay premiums split with their employers; others pay flat rates with government help; and some groups, like the poor and veterans, are fully subsidized. The resulting system is similar to Canada’s and the U.S. Medicare program. Taiwan’s new health system extended insurance to the 40 percent of the population that lacked it while actually decreasing the growth of health care spending. The Taiwanese can see any doctor without a referral. Every citizen in Taiwan has a smart card, which is used to store his or her relevant health information, medical history and bills the national insurer automatically. The system also helps public health officials monitor standards and effect policy changes nationwide. Thanks to this use of technology and the country’s single insurer, Taiwan’s health care system has the lowest administrative costs in the world. But the Taiwanese are spending too little to sustain their health care system and the government is borrowing from banks to pay what there isn’t enough to pay the providers. The problem is compounded by politics, because it is up to Taiwan’s parliament to approve an increase in insurance premiums, which it has only done once since the program was enacted.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support analysis and conclusion.
Language Objectives:
Identify and analyze multiple and diverse perspectives as critical consumers of information.
Analyze an event, issue, problem, or phenomenon, critiquing and evaluating characteristics, influences, causes, and both short- and long-term effects.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to issues or problems; then reach an informed, defensible, supported conclusion.
Learning Target:
Students will identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support their analysis and conclusion.
In Sick Around the World, FRONTLINE teams up with veteran Washington Post foreign correspondent T.R. Reid to find out how five other capitalist democracies — the United Kingdom, Japan, Germany, Taiwan and Switzerland — deliver health care, and what the United States might learn from their successes and their failures.
United Kingdom
Beveridge model
Reid’s first stop is the U.K., where the government-run National Health Service (NHS) is funded through taxes. “Every single person who’s born in the U.K. will use the NHS,” says Whittington Hospital CEO David Sloman, “and none of them will be presented a bill at any point during that time.” Often dismissed in America as “socialized medicine,” the NHS is now trying some free-market tactics like “pay-for-performance,” where doctors are paid more if they get good results controlling chronic diseases like diabetes. And now patients can choose where they go for medical procedures, forcing hospitals to compete head to head.
While such initiatives have helped reduce waiting times for elective surgeries, Times of London health editor Nigel Hawkes thinks the NHS hasn’t made enough progress. “We’re now in a world in which people are much more demanding, and I think that the NHS is not very effective at delivering in that modern, market-orientated world.”
The British system is socialized medicine because the government both provides and pays for health care. The British pay taxes for health care, and the government run National Health Service or NHS distributes those funds to health care providers. Hospital doctors are paid salaries while General Practitioners are paid based on the number of patients they see. A small number of specialists work outside the NHS and see private pay patients. Because the system is funded through taxes, administrative costs are low. There are no bills to collect or claims to review. Patients have a medical home with their General Practitioners, who also serves as a gatekeeper to the rest of the system. Patients must see their General Practitioners before going to a specialist. General Practitioners are paid a bonus for keeping their patients healthy and are instrumental in preventive care. Preventive care is an area in which Britain is a world leader.
Japan
Reid reports next from Japan, which boasts the second largest economy and the best health statistics in the world. The Japanese go to the doctor three times as often as Americans, have more than twice as many MRI scans, use more drugs, and spend more days in the hospital. Yet Japan spends about half as much on health care per capita as the United States.
One secret to Japan’s success? By law, everyone must buy health insurance — either through an employer or a community plan — and, unlike in the U.S., insurers cannot turn down a patient for a pre-existing illness, nor are they allowed to make a profit.
The Japanese go to the doctor three times as often as Americans, have more than twice as many MRI scans, use more drugs, and spend more days in the hospital. Japan spends about half as much on health care per capita as the United States. Japan uses a social insurance system in which all citizens are required to have health insurance. The Japanese receive insurance either through their work or purchased from a community based plan. Those individuals who cannot afford the premiums receive public assistance. Most health insurance is private and cannot turn down a patient for a pre-existing illness, nor are they allowed to make a profit. Doctors and almost all hospitals are in the private sector. In Japan there are no gatekeepers. Having no gatekeepers means there’s no check on how often the Japanese use health care. The Japanese can go to any specialist when and as often as they like. Every two years the Ministry of Health negotiates with physicians to set the price for every procedure. This helps keeps costs down. Japan has been so successful at keeping costs down that Japan now spends too little on health care. The result is half of the hospitals in Japan are operating in the red.
Germany, like Japan, uses a social insurance model. But unlike the Japanese, who get insurance from work or are assigned to a community fund, Germans are free to buy their insurance from one of more than 240 private, nonprofit sickness funds. For its 80 million people, Germany offers universal health care, including medical, dental, mental health, homeopathy and spa treatment. As in Japan, the poor receive public assistance to pay their premiums. Sickness funds are nonprofit and cannot deny coverage based on preexisting conditions; they compete with each other for members, and fund managers are paid based on the size of their enrollments. Germans can go straight to a specialist without first seeing a gatekeeper doctor, but they pay higher co-pay if they do. Like Japan, Germany is a single-payment system and medical providers must charge standard prices, but instead of the government negotiating the prices, the sickness funds bargain with doctors as a group. This keeps costs down, but it also means physicians in Germany earn between half and two-thirds as much as their U.S. counterparts. This system leaves some German doctors feeling underpaid. A family doctor in Germany makes about two-thirds as much as he or she would in America. However, German doctors pay much less for malpractice insurance, and many attend medical school for free. Germany also lets the richest 10 percent opt out of the sickness funds in favor of U.S.-style for-profit insurance. These patients are generally seen more quickly by doctors, because the for-profit insurers pay doctors more than the sickness funds.
ce 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero. Given our remarkable medical assets, the best-educated doctors and nurses, the most advanced hospitals, and world-class research; the United States could be and should be the best in the world.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Health reform in the US refers to the overhaul of its health care system and is frequently used interchangeably with the Affordable Care Act (ACA). Health reform includes addressing the ever- increasing costs of national health care by individuals, families, and the government. It also addresses the benefits people receive and how people obtain health insurance. The goal of health reform is to reduce the number of uninsured, making healthcare more affordable and improving quality of care. In context of global health, health reform that takes place in health systems across the world vary depending upon various factors within the nation. Factors driving health reform in other countries will depend on the economy of the country, average per capita income spent on health care costs and expenditure, insurance industry structure, government support to the health care sector, and research and development.
Country
Life Expectancy
Infant Mortality Rate /1,000 live births
Health Expenditures
Physician Density /1,000 population
Hospital Bed Density /1,000 population
Unites States
80.59 years
5.17 deaths
16.8% of GDP
2.61 physicians
2.9 beds
United Kingdom
82.75 years
3.79 deaths
12.0% of GDP
3 physicians
2.5 beds
Japan
85 years
1.88 deaths
10.9% of GDP
2.48 physicians
13 beds
Germany
81.72 years
3.14 deaths
12.8% of GDP
4.44 physicians
8 beds
Taiwan
81.38 years
3.9 deaths
6.4% of GDP
2.17 physicians
5.73 beds
Switzerland
83.42 years
3.51 deaths
11.8% of GDP
4.38 physicians
4.6 beds
Canada
83.99 years
4.31 deaths
12.9% of GDP
2.44 physicians
2.5 beds
France
82.79 years
3.1 deaths
12.2% of GDP
3.27 physicians
5.9 beds
The United States spends more on health care than any other high-income country but still has the lowest life expectancy at birth and the highest rate of people with multiple chronic diseases, according to a new report from The Commonwealth Fund, an independent research group. The report also says that compared with peer nations, the US has the highest rates of deaths from avoidable or treatable causes and the highest maternal and infant death rates.
“Americans are living shorter, less healthy lives because our health system is not working as well as it could be,” the report’s lead author, Munira Gunja, senior researcher for The Commonwealth Fund’s International Program in Health Policy and Practice Innovation, said in a news release. “To catch up with other high-income countries, the administration and Congress would have to expand access to health care, act aggressively to control costs, and invest in health equity and social services we know can lead to a healthier population.”
People in the US see doctors less often than those in most other countries, which is probably related to the US having a below-average number of practicing physicians, according to the report, and the US is the only country among those studied that doesn’t have universal health coverage. In 2021 alone, 8.6% of the US population was uninsured.
“Not only is the U.S. the only country we studied that does not have universal health coverage, but its health system can seem designed to discourage people from using services,” researchers at the Commonwealth Fund, headquartered in New York, wrote in the report. “Affordability remains the top reason why some Americans do not sign up for health coverage, while high out-of-pocket costs lead nearly half of working-age adults to skip or delay getting needed care.”
The researchers analyzed health statistics from international sources, including the Organisation for Economic Cooperation and Development, or OECD, which tracks and reports on data from health systems across 38 high-income countries. Researchers examined how the United States measured against Australia, Canada, France, Germany, Japan, the Netherlands, New Zealand, Norway, South Korea, Sweden, Switzerland and the United Kingdom. They also compared the US with the OECD average for 38 high-income countries.
Globally, health care spending has been increasing since the 1980s, according to the report, driven mostly by advancements in medical technologies, the rising costs of medical care and a higher demand for services. The US has the highest rate of people with multiple chronic health conditions, the data showed, and the highest obesity rate among the countries studied.
Life expectancy at birth in the US in 2020 was 77 years – three years less than the OECD average – and early data suggests that US life expectancy dropped even further in 2021. Since the start of the Covid-19 pandemic, more people died from coronavirus infections in the US than in any other high-income country, according to the report.
Deaths caused by assaults also appeared to be highest in the US compared with all peer countries. The researchers found that deaths from physical assault, which includes gun violence, occurred at a rate of 7.4 deaths per 100,000 people in the US in 2020, significantly higher than the OECD average of 2.7 and at least seven times higher than most other high-income countries in the report.
Where the US appeared to do well was in cancer prevention and treating cancers early. Along with Sweden, it had the highest number of breast cancer screenings among women ages 50 to 69, and the US exceeded the OECD average when it came to screening rates for colorectal cancer.
The new Commonwealth Fund report “continues to demonstrate the importance of international comparisons,” Reginald D. Williams II, who leads The Commonwealth Fund’s International Program. “It offers an opportunity for the U.S. to learn from other countries and build a better health care system that delivers affordable, high-quality health care for everyone.”
Much of the data in the new report shows trends that have been seen before.
“It validates the fact that we continue to spend more than anybody else and get the worst health outcomes. So we’re not getting the best value for our health care dollar,”said Dr. Georges Benjamin, executive director of the American Public Health Association.
“The big takeaway is that Covid did not become the great equalizer among nations. It did not help our case at all,” Benjamin said. “If anything, it exposed the existing holes in our health care system.”
To help fix the holes in the US health care system, Benjamin referenced three steps the nation can take.
“We’re still the only nation that does not have universal health care or access for all of our citizens,” Benjamin said.
Second, “we don’t do as much primary care prevention as the other nations, and we still have a public health system, which is fractured,” he said.
“The third thing is, we under-invest compared to other industrialized nations in societal things. They spend their money on providing upfront support for their citizens. We spend our money on sick care.”
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Students will write their introductory paragraph and thesis statement. They will identify and provide a reasonable explanation of the significance of health care in the United States. They will introduce and define most of the critical components of the health care issue or problem (who, what, when, where, why). Finally, they will communicate the purpose of the paper by establishing or reframing a question or thesis.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support analysis and conclusion.
Language Objectives:
Identify and analyze multiple and diverse perspectives as critical consumers of information.
Analyze an event, issue, problem, or phenomenon, critiquing and evaluating characteristics, influences, causes, and both short- and long-term effects.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to issues or problems; then reach an informed, defensible, supported conclusion.
Learning Target:
Students will identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support their analysis and conclusion.
More than 2.5 million Americans lost their jobs last year, and along with their livelihood, their health insurance. As the economy continues to spiral, the new administration promises to deliver comprehensive health care reform. Sick Around America lays bare the flaws in our system and examines the critical choices Americans face in changing a system that all sides agree needs a fundamental overhaul.
Millions of Americans do not have health coverage, or have inadequate coverage. As our economic challenges multiply, the problem of health care access grows.
— “The Costs of Inaction,” Health and Human Services Department Report, 29 March 2009
As he puts it, George Halvorson, Chairman and CEO of the Kaiser Foundation Health Plan, “I personally am uninsurable.” That is, if he lost his job and had to seek out insurance in the private market, he would not find a company willing to insure him. The same is true for Karen Ignani, President of America’s Health Insurance Plans. “I have a serious condition with respect to asthma,” she says, which would disqualify her for coverage by most private companies.
Both Halvorson and Ignani are well aware of the ironies in their situations. They believe the health care system in America needs to be repaired, if not wholly rebuilt. And both voice their concerns in Frontline‘s newest chapter, Sick Around America. The show documents specific cases of things gone wrong in the “system” of health care, this time with a focus on insurance companies, where, most observers and insiders agree, the need for reform is most urgent.
Insurance companies operate with an eye to profits, meaning that the health care they are supposed to provide is usually the last priority. They regularly practice medical underwriting, that is, the systematic rejection of clients with preexisting conditions, in order to decrease the risk of payments. This is, observes narrator Will Lyman, “A good business model,” but, by definition, it makes life hard for “people with any sort of illness.” Take, for example, Paul Stevens, downsized in 2005, then unable to secure insurance because of a history of diabetes. Before this turn of events, he was “living comfortably,” in a house. Now, too rich for Medicaid and too young for Medicare, Stevens struggles to make ends meet. Following a heart attack, he has moved into his mother’s house and works odd jobs, none, of course, offering insurance plans. “I’m really rolling the dice until I’m 65 at this point,” he says, with two years more to go before he’ll be eligible for Medicare.
Stevens’ story is hardly unusual, though there are numerous ways individuals can be hurt by the health care industry. The dysfunctional system, says Karen Pollitz of Georgetown University’s Health Policy Institute, is “like having an airbag in your car that’s made out of tissue paper.” Insurers turn down applicants for all manner of reasons, including hay fever, acne, and bedwetting, she says, and even if someone is lucky enough to be able to afford and qualify for insurance that doesn’t come with a job, that policy might be subject to recision at any time, leaving patients with mounting bills during and after a medical emergency.
The rationale for recission is again economic. Private companies need to protect themselves against fraud and account for the fact that “people come in and out of that system when they need coverage.” A representative of Blue Cross of California explains, “It’s not a big part of what we do,” and further, even if they dislike the practice, they cannot be the only company that rejects it. “If we stopped doing it as a single company,” he smiles uncomfortably, “We’d go out of business.” No matter their rationales, however, many practices of the industry remain suspect. As Los Angeles Times reporter Lisa Girion uncovered in a series of recent articles, some companies encourage their agents to seek out policies to find cancel. She discovered cases where bonuses were paid “based in part on how many recissions” an employee had carried out in a given year.
Sick Around America posits one tragedy in particular as its climax, though again, the case of Nikki White is not unique. Diagnosed with lupus, while she was in college, White did her best to find jobs after graduating that would provide insurance. Her primary physician, Amylyn Crawford, recalls that White was an ideal patient, trying to “be responsible” for her condition and her coverage. Eventually, White was unable to keep such a job; those companies with good plans, like Microsoft, are decreasing in number, in part because of rising costs. She moved back in with her parents and sought out private coverage. In 2005, White received notice that she was no longer insurable, such that she was no longer able to control symptoms. An inevitable trip to the emergency room resulted in hundreds of thousands of dollars worth of intensive care, all too late. Crawford notes the absurdity of a system that won’t pay for preventative or maintenance care, then pays for crisis treatment. White died, Crawford concludes, “secondary to the complications of a failing health care system.”
Sick Around America outlines this system, and its many contradictions. If advancing technologies and the actual care offered in the U.S. are exemplary, these are only available to a select few. Unlike other developed countries, many of which offer universal health care, America sustains an illogical, costly health care system. While the show cites the reform urged by President Obama, it also notes the multiple difficulties and competing interests facing such an effort. Jeff Kang, CMO of Cigna Health Services, lists the many stakeholders in any system — doctors, hospitals, insurers, patents. “I haven’t met anybody,” he says, “who’s willing to take less.”
Watch
Chapter 4: How to Get a Fairer System How to Get a Fairer System? A start: Require everyone buy health insurance. But given the patchwork of private/public plans, some people completely fall through the cracks.
Chapter 5: Change is Coming The insurance industry is talking change, Massachusetts’ new program offers lessons, and Obama seeks universal coverage with reduced medical costs.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support analysis and conclusion.
Language Objectives:
Identify and analyze multiple and diverse perspectives as critical consumers of information.
Analyze an event, issue, problem, or phenomenon, critiquing and evaluating characteristics, influences, causes, and both short- and long-term effects.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to issues or problems; then reach an informed, defensible, supported conclusion.
Learning Target:
Students will identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support their analysis and conclusion.
FRONTLINE travels the country examining the nation’s broken health care system and explores the need for a fundamental overhaul. FRONTLINE producer Jon Palfreman dissects the private insurance system, a system that not only fails to cover 46 million Americans but also leaves millions more underinsured and at risk of bankruptcy.
This film dissects the private insurance system, a system that not only fails to cover 46 million Americans, but also leaves millions more under-insured and at risk of bankruptcy. Around the world, other developed democracies offer universal health care, requiring insurance companies to cover everyone. As the worsening economy leads to massive job losses, potentially forcing millions more Americans to go without health insurance, Frontline travels the country examining the nation’s broken health care system and explores the need for a fundamental overhaul. At its best, American health care can be very good. But not if people across the U.S. are forced into making life decisions, staying in jobs and even bad marriages, to find or keep health insurance.
At its best, American health care can be very good. For Microsoft employee Mark Murray and his wife, Melinda, their employee health plan paid for eight years of fertility treatments and covered all the costs of a very complicated pregnancy. “If it wasn’t for our health insurance,” Murray says, “we wouldn’t have a baby boy right now.” The Murrays’ medical bills totaled between $500,000 and $1 million, and their plan covered every penny.
But beyond large, high-wage employers like Microsoft, FRONTLINE learns that available, affordable, adequate insurance is becoming hard to find. Small businesses face a very bleak outlook for finding and keeping coverage. Coverage is becoming more expensive and less comprehensive, with high deductibles, co-pays and coverage limits. Georgetown University Research Professor Karen Pollitz explains that for many people, the current system is “like having an airbag in your car that’s made out of tissue paper: I’m so glad that it’s there, but if I ever get in a crash, it’s not going to protect me.”
Outside of employer-based health care plans, matters are even worse. Americans seeking insurance in the individual market must submit to “medical underwriting,” and if they have a pre-existing condition, they will likely be denied. Kaiser Permanente Chairman and CEO George Halverson says frankly: “I could not get insurance. I’ve had heart surgery, and so I am completely uninsurable in the private market. So it’s important that I keep my job.”
Across the U.S., FRONTLINE finds people making life decisions based on health insurance, stuck in jobs because of so-called job lock. One such person is 23-year-old Twin Cities, Minn., resident Matt Johnson, who put his career dreams on hold to get a job at Menards home improvement store because its benefits package covers his ulcerative colitis. Americans even stay in bad marriages, says Pollitz, “because they just can’t afford to divorce their health insurance.”
For those Americans who find health coverage in the private market, there’s no guarantee it will protect them. In 2007, Palm Desert, Calif., realtor Jennifer Thompson received a letter from Blue Cross accepting her for coverage that read: “Congratulations! You have been approved for coverage with Blue Cross of California. The immediate value of your coverage is peace of mind.” But then Thompson discovered she had a cancer that required surgery, and three days after leaving the hospital, she received a letter from Blue Cross saying that her insurance was “rescinded,” leaving her uninsured and owing more than $160,000 in medical bills. Blue Cross cited Thompson’s previous history of cancer and results from a recent doctor’s visit as the reasons for the rescission. “Our system is not working,” says Professor Pollitz. “It’s designed to cut out on you right when you need it the most.” When questioned about Thompson’s case, Sam Nussbaum, chief medical officer of WellPoint, which owns Blue Cross of California, told FRONTLINE that because of legal considerations, “I can’t speak to that circumstance, but no one likes to see a situation like this. People are buying health security.”
In the past, some states required insurance companies to cover everyone but found that many people waited to buy insurance until they fell ill, causing “adverse selection,” or a higher ratio of unhealthy to healthy people in the insurance pool. As a result, insurance companies stopped doing business in those states. Today, only five states—New York, New Jersey, Massachusetts, Maine and Vermont, guarantee everyone insurance, a “privilege” reflected in premiums. “If we look at the average premium of those states,” says WellPoint’s Nussbaum, “that premium is three times higher on average, maybe $600 to $700 versus a state where the insurance market has allowed medical underwriting.”
For some Americans, life becomes a quest to find and keep health insurance. In 1994, Nikki White, a Bristol, Tenn., native with dreams of becoming a doctor, was diagnosed with lupus, a serious but treatable autoimmune disorder. Too ill to work, she lost her health insurance for several years, but then received coverage from the state’s Medicaid program. Soon, budget cuts made her ineligible for the state program. A few months later, White was rushed to the ER with severe lupus complications and racked up nearly $1 million in medical bills. She finally secured insurance under the government HIPPA law, but her condition was too advanced, and in 2006, at the age of 32, she died. White’s primary care physician, Amylyn Crawford, tells FRONTLINE: “Nikki didn’t die from lupus. Nikki died secondary to the complications of a failing health care system.”
Around the world, other developed democracies offer universal health care, requiring insurance companies to cover everyone. People are mandated to buy it; insurance for the poor is subsidized; and governments control prices by setting the cost of everything from doctors’ salaries and hospital rooms to drugs and MRIs. But efforts to implement similar policies in the U.S. have proven unsuccessful. In 2006, Massachusetts implemented reforms mandating everyone be covered by health insurance, but there are still problems of affordability. FRONTLINE profiles the Abramses, a Massachusetts family of four earning $63,000 annually, who found that although they were too prosperous to receive a health care subsidy, they could not afford to buy a health care insurance policy at around $12,000 a year. “What we’re finding out in Massachusetts,” says veteran insurance industry executive and consultant Robert Laszewski, “you can mandate that people have health insurance, but if it costs more than they can afford, it doesn’t matter.”
As President Obama launches his plan for reforming health care, Kaiser Family Foundation President Drew Altman tells FRONTLINE: “This is the first big opportunity for health reform since … [the] early 1990s. And a question is again, pointedly, whether we will blow the opportunity again this time or [whether] we will actually get it all done or get something significant done.” But consultant Laszewski wonders if Americans have the will to make it happen. “Every doctor I meet says he’s underpaid. I’ve yet to meet a hospital executive who thinks he or she can operate on less. I have yet to meet a patient who is willing to sacrifice care. So we have this $2.2 trillion system, and I haven’t met anybody in any of the stakeholders that’s willing to take less. And until we’re willing to have that conversation, we’re just sort of nibbling around the edges.”
Watch
Chapter 1: We Were Incredibly Lucky Mark Murray’s family medical crisis was fully covered by the health plan provided by employer Microsoft. Millions of others aren’t so fortunate.
Chapter 2: Stories of a Broken System Medical bills bankrupt some. Others lose health coverage just when they need it most. And some people must seek jobs just for the health benefits.
Chapter 3: More Pitfalls Unlike many large employers’ coverage, consumer-bought plans can be inadequate, unaffordable. Even worse, a policy suddenly can be rescinded.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support analysis and conclusion.
Language Objectives:
Identify and analyze multiple and diverse perspectives as critical consumers of information.
Analyze an event, issue, problem, or phenomenon, critiquing and evaluating characteristics, influences, causes, and both short- and long-term effects.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to issues or problems; then reach an informed, defensible, supported conclusion.
Learning Target:
Students will identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support their analysis and conclusion.
Steven Brill’s “Bitter Pill: Why Medical Bills are Killing Us” provides a remarkably in depth look at our American health care system including Medicare. Using many personal case studies, Brill breaks down and describes the economic devastation being reaped by our for profit medical industrial complex.
Sean Recchi, a 42-year-old from Lancaster, Ohio, was told last March that he had non-Hodgkin’s lymphoma, his wife Stephanie knew she had to get him to MD Anderson Cancer Center in Houston. Stephanie’s father had been treated there 10 years earlier, and she and her family credited the doctors and nurses at MD Anderson with extending his life by at least eight years.
Because Stephanie and her husband had recently started their own small technology business, they were unable to buy comprehensive health insurance. For $469 a month, or about 20% of their income, they had been able to get only a policy that covered just $2,000 per day of any hospital costs. “We don’t take that kind of discount insurance,” said the woman at MD Anderson when Stephanie called to make an appointment for Sean.
Stephanie was then told by a billing clerk that the estimated cost of Sean’s visit, just to be examined for six days so a treatment plan could be devised, would be $48,900, due in advance. Stephanie got her mother to write her a check. “You do anything you can in a situation like that,” she says. The Recchis flew to Houston, leaving Stephanie’s mother to care for their two teenage children.
About a week later, Stephanie had to ask her mother for $35,000 more so Sean could begin the treatment the doctors had decided was urgent. His condition had worsened rapidly since he had arrived in Houston. He was “sweating and shaking with chills and pains,” Stephanie recalls. “He had a large mass in his chest that was growing. He was panicked.”
Nonetheless, Sean was held for about 90 minutes in a reception area, she says, because the hospital could not confirm that the check had cleared. Sean was allowed to see the doctor only after he advanced MD Anderson $7,500 from his credit card. The hospital says there was nothing unusual about how Sean was kept waiting. According to MD Anderson communications manager Julie Penne, “Asking for advance payment for services is a common, if unfortunate, situation that confronts hospitals all over the United States.”
The total cost, in advance, for Sean to get his treatment plan and initial doses of chemotherapy was $83,900. Why?
The first of the 344 lines printed out across eight pages of his hospital bill, filled with indecipherable numerical codes and acronyms — seemed innocuous. But it set the tone for all that followed. It read, “1 ACETAMINOPHE TABS 325 MG.” The charge was only $1.50, but it was for a generic version of a Tylenol pill. You can buy 100 of them on Amazon for $1.49 even without a hospital’s purchasing power.
Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.
Every time a nurse drew blood, a “ROUTINE VENIPUNCTURE” charge of $36.00 appeared, accompanied by charges of $23 to $78 for each of a dozen or more lab analyses performed on the blood sample. In all, the charges for blood and other lab tests done on Recchi amounted to more than $15,000. Had Recchi been old enough for Medicare, MD Anderson would have been paid a few hundred dollars for all those tests. By law, Medicare’s payments approximate a hospital’s cost of providing a service, including overhead, equipment and salaries.
On the second page of the bill, the markups got bolder. Recchi was charged $13,702 for “1 RITUXIMAB INJ 660 MG.” That’s an injection of 660 mg of a cancer wonder drug called Rituxan. The average price paid by all hospitals for this dose is about $4,000, but MD Anderson probably gets a volume discount that would make its cost $3,000 to $3,500. That means the nonprofit cancer center’s paid-in-advance markup on Recchi’s lifesaving shot would be about 400%.
When I asked MD Anderson to comment on the charges on Recchi’s bill, the cancer center released a written statement that said in part, “The issues related to health care finance are complex for patients, health care providers, payers and government entities alike … MD Anderson’s clinical billing and collection practices are similar to those of other major hospitals and academic medical centers.”
The hospital’s hard-nosed approach pays off. Although it is officially a nonprofit unit of the University of Texas, MD Anderson has revenue that exceeds the cost of the world-class care it provides by so much that its operating profit for the fiscal year 2010, the most recent annual report it filed with the U.S. Department of Health and Human Services, was $531 million. That’s a profit margin of 26% on revenue of $2.05 billion, an astounding result for such a service-intensive enterprise.
The president of MD Anderson is paid like someone running a prosperous business. Ronald DePinho’s total compensation last year was $1,845,000. That does not count outside earnings derived from a much publicized waiver he received from the university that, according to the Houston Chronicle, allows him to maintain unspecified “financial ties with his three principal pharmaceutical companies.”
DePinho’s salary is nearly two and a half times the $750,000 paid to Francisco Cigarroa, the chancellor of entire University of Texas system, of which MD Anderson is a part. This pay structure is emblematic of American medical economics and is reflected on campuses across the U.S., where the president of a hospital or hospital system associated with a university, whether it’s Texas, Stanford, Duke or Yale, is invariably paid much more than the person in charge of the university.
Steven Brill got the idea for this article when he was visiting Rice University last year. As he was leaving the campus, which is just outside the central business district of Houston, he noticed a group of glass skyscrapers about a mile away lighting up the evening sky. The scene looked like Dubai. He was looking at the Texas Medical Center, a nearly 1,300-acre, 280-building complex of hospitals and related medical facilities, of which MD Anderson is the lead brand name. Medicine had obviously become a huge business. In fact, of Houston’s top 10 employers, five are hospitals, including MD Anderson with 19,000 employees; three, led by ExxonMobil with 14,000 employees, are energy companies. How did that happen, Brill wondered. Where’s all that money coming from? And where is it going? Brill spent the past seven months trying to find out by analyzing a variety of bills from hospitals like MD Anderson, doctors, drug companies and every other player in the American health care ecosystem.
When you look behind the bills that Sean Recchi and other patients receive, you see nothing rational, no rhyme or reason, about the costs they faced in a marketplace they enter through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay.
Yet those who work in the health care industry and those who argue over health care policy seem inured to the shock. When we debate health care policy, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?
What are the reasons, good or bad, that cancer means a half-million- or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car? And what is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?
Recchi’s bill and six others examined line by line for this article offer a closeup window into what happens when powerless buyers, whether they are people like Recchi or big health-insurance companies, meet sellers in what is the ultimate seller’s market.
The result is a uniquely American gold rush for those who provide everything from wonder drugs to canes to high-tech implants to CT scans to hospital bill-coding and collection services. In hundreds of small and midsize cities across the country, from Stamford, Conneticut, to Marlton, New Jersey, to Oklahoma City, the American health care market has transformed tax-exempt “nonprofit” hospitals into the towns’ most profitable businesses and largest employers, often presided over by the regions’ most richly compensated executives. And in our largest cities, the system offers lavish paychecks even to midlevel hospital managers, like the 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center who are paid over $500,000 a year, including six who make over $1 million.
Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. In the U.S., people spend almost 20% of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.
According to one of a series of exhaustive studies done by the McKinsey & Co. consulting firm, we spend more on health care than the next 10 biggest spenders combined: Japan, Germany, France, China, the United Kingdom, Italy, Canada, Brazil, Spain and Australia. We may be shocked at the $60 billion price tag for cleaning up after Hurricane Sandy. We spent almost that much last week on health care. We spend more every year on artificial knees and hips than what Hollywood collects at the box office. We spend two or three times that much on durable medical devices like canes and wheelchairs, in part because a heavily lobbied Congress forces Medicare to pay 25% to 75% more for this equipment than it would cost at Walmart.
The Bureau of Labor Statistics projects that 10 of the 20 occupations that will grow the fastest in the U.S. by 2020 are related to health care. America’s largest city may be commonly thought of as the world’s financial-services capital, but of New York’s 18 largest private employers, eight are hospitals and four are banks. Employing all those people in the cause of curing the sick is, of course, not anything to be ashamed of. But the drag on our overall economy that comes with taxpayers, employers and consumers spending so much more than is spent in any other country for the same product is unsustainable. Health care is eating away at our economy and our treasury.
The health care industry seems to have the will and the means to keep it that way. According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington.
When you crunch data compiled by McKinsey and other researchers, the big picture looks like this: We’re likely to spend $2.8 trillion this year on health care. That $2.8 trillion is likely to be $750 billion, or 27%, more than we would spend if we spent the same per capita as other developed countries, even after adjusting for the relatively high per capita income in the U.S. vs. those other countries. Of the total $2.8 trillion that will be spent on health care, about $800 billion will be paid by the federal government through the Medicare insurance program for the disabled and those 65 and older and the Medicaid program, which provides care for the poor. That $800 billion, which keeps rising far faster than inflation and the gross domestic product, is what’s driving the federal deficit. The other $2 trillion will be paid mostly by private health-insurance companies and individuals who have no insurance or who will pay some portion of the bills covered by their insurance. This is what’s increasingly burdening businesses that pay for their employees’ health insurance and forcing individuals to pay so much in out-of-pocket expenses.
Here and elsewhere I define operating profit as the hospital’s excess of revenue over expenses, plus the amount it lists on its tax return for depreciation of assets, because depreciation is an accounting expense, not a cash expense. John Gunn, chief operating officer of Memorial Sloan-Kettering Cancer Center, calls this the “fairest way” of judging a hospital’s financial performance
Breaking these trillions down into real bills going to real patients cuts through the ideological debate over health care policy. By dissecting the bills that people like Sean Recchi face, we can see exactly how and why we are overspending, where the money is going and how to get it back. We just have to follow the money.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support analysis and conclusion.
Language Objectives:
Identify and analyze multiple and diverse perspectives as critical consumers of information.
Analyze an event, issue, problem, or phenomenon, critiquing and evaluating characteristics, influences, causes, and both short- and long-term effects.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to issues or problems; then reach an informed, defensible, supported conclusion.
Learning Target:
Students will identify, research, and clarify issues relating to health care by gathering, using, and evaluating researched information to support their analysis and conclusion.
America doesn’t face a Medicare crisis, we face a national health care crisis. Rather than targeting Medicare for cuts we should be using it as the model to improve out health care system nationwide. Steven Brill’s “Bitter Pill: Why Medical Bills are Killing Us” provides a in depth look at our American health care system including Medicare. Using personal case studies, Brill breaks down and describes the economic devastation being reaped by our for profit medical industrial complex.
Time’s example of Susan S. age 64, one year away from qualifying for Medicare, when she went to the hospital with chest pains. Her bill for 3 hours of tests and a false alarm was $21,000. If she had Medicare she would have paid less than $500.
Time’s survey of this same hospital found that in 2010 its total charges were 11 times its actual costs. And that’s not unusual in our current private profit and even non-profit health care system.
Not only does Medicare manage these outrages costs better than the private market, Medicare’s administrative costs are two-thirds of 1% or less than $3.80 per claim. Private Insurers administrative costs run much higher. Brill reports Aetna’s for example, run 29% or $30 for each claim.
However, Medicare isn’t immune from the skyrocketing costs that are burdening our economy. Brill points out that Congress has tied Medicare’s hands in many instances forcing the more efficient Medicare program to perform like the less efficient private market.
We spend more on health care than the next 10 biggest spenders combined, which include Japan, Germany, France, the U.K and Canada. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries. Nearly 20% of our GDP goes to health care. When we debate health care policy, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?
McKinsey research identified $750 billion in annual health care overspending. The health care industry wants to keep it that way, spends more than three times what the military-industrial complex spends lobbying Washington. The real issue isn’t whether we have a single payer or multiple payers. It’s whether whoever pays has a fair chance in a fair market. We don’t have to scrap our system, but can significantly reduce the $750 billion we overspend. The bills tell us that this is not about interfering in a free market. It’s about facing the reality that our largest consumer product—one-fifth of our economy—does not operate in a free market.
Our laws do more than prevent the government from restraining prices for drugs the way other countries do. Federal law also restricts the biggest single buyer, Medicare from even trying to negotiate drug prices. As a perpetual gift to the pharmaceutical companies and an acceptance of their argument that completely unrestrained prices and profit are necessary to fund the risk taking of research and development, Congress has continually prohibited the Centers for Medicare and Medicaid Services (CMS) of the Department of Health and Human Services from negotiating prices with drugmakers. Instead, Medicare simply has to determine that average sales price and add 6% to it.
Similarly, when Congress passed Part D of Medicare in 2003, giving seniors coverage for prescription drugs, Congress prohibited Medicare from negotiating. Nor can Medicare get involved in deciding that a drug may be a waste of money. In medical circles, this is known as the comparative-effectiveness debate, which nearly derailed the entire Obamacare effort in 2009.
The health care industrial complex spends more than three times what the military industrial complex spends for Washington lobbying. Is it any wonder why so many in Congress have chosen to ignore the true system wide health care problem in favor of targeting Medicare for benefit cuts, arbitrary caps, cost-shifting, means-testing and privatization. They know what the core problem is lopsided pricing and outsize profits in a market that doesn’t work.
In spite of this, Congress appears ready to protect that broken health care market that is wrecking our economy in favor of targeting the program that works for cuts, all in the name of deficit reduction. Cutting benefits to seniors in Medicare not only ignores the real challenges we face as a nation but it also threatens the health security of millions of Americans.
We’ve enriched the labs, drug companies, medical device makers, hospital administrators and purveyors of CT scans, MRIs, canes and wheelchairs. We’ve squeezed the doctors who don’t own their own clinics, don’t work as drug or device consultants or don’t otherwise game the system. We’ve squeezed everyone outside the system who gets stuck with the bills. Following the money shows that we’ve let the big health care moneymakers control the debate, keeping us from seeing the main issue: all the prices are too high.
The Affordable Care Act does good work around the edges of the core problem. It restricts abusive hospital bill collecting, forces insurers to explain policies in plain English, and puts the insurance umbrella over millions more Americans, a historic breakthrough. But nothing in the act addresses health care costs. Republican opposition eliminated comparative effectiveness, remember. Three of the best things about Obamacare, prohibiting exclusions for pre-existing conditions, restrictions on co-pays for preventive care and the end of annual or lifetime payout caps, will cause insurance premiums to rise. Obamacare changed the rules related to who pays for what, but hasn’t done much to change the prices we pay.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to U.S. health care system issues or problems; then reach an informed, defensible, supported conclusion.
Language Objective:
Understand, learn, and use new vocabulary that is introduced and taught directly through informational text and direct instruction.
Identify and/or summarize main ideas, facts, supporting details, and opinions in an informational and/or practical selection.
Read and synthesize information found in various parts of charts, tables, or diagrams to reach supported conclusions.
Learning Target:
Students will identify, research, and clarify an issue relating to health care by gathering, using, and evaluating researched information to support your analysis and conclusion.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Children Health Insurance Program (CHIP or SCHIP)
pre-existing condition
medical underwriting
rescission
medical bankruptcy
premium
deductible
copay
U.S. Health Care Background:
The United States has a population of over 330 million people and is supported by one of the most complex healthcare systems in the world, formed by intertwining relationships between providers, payers, and patients receiving care. The U.S. healthcare system is in a constant state of evolution.
The U.S. healthcare system does not provide universal coverage and can be defined as a mixed system, where publicly financed government Medicare and Medicaid health coverage coexists with privately financed (private health insurance plans) market coverage. Out-of-pocket payments and market provision of coverage predominate as a means of financing and providing healthcare. As of 2019, around 50% of citizens received private insurance coverage through their employer (group insurance), 6% received private insurance through health insurance marketplaces (nongroup insurance), 20% of citizens relied on Medicaid, 14% on Medicare, and 1% on other public forms of insurance (eg, Veterans Health Administration [VHA] and Military Health Service [MHS]), leaving 9% of Americans uninsured.
Eight reasons for rising healthcare costs
The average American spends a considerable amount of money on healthcare each year. Premium increases, higher deductibles and copays, and soaring prescription drug prices result in spikes in healthcare costs.
1. Medical providers are paid for quantity, not quality
Most insurers—including Medicare—pay doctors, hospitals, and other medical providers under a fee-for-service system that reimburses each test, procedure, or visit. That means the more services provided, the more fees paid.
This can encourage a high volume of redundant testing and overtreatment, including for patients with a low potential for improved health outcomes.
On top of this, the U.S. medical system isn’t integrated. The World Health Organization defines integrated health services as “the organization and management of health services so that people get the care they need, when they need it, in ways that are user friendly, achieve the desired results and provide value for money.”
So what does that have to do with cost? Integrated health means providers, management, and support teams communicate with one another on a patient’s care. In an unintegrated system, the lack of coordination can result in patients receiving duplicate tests and paying for more procedures than they truly need.
2. The U.S. population is growing more unhealthy
According to the Center for Disease Control and Prevention (CDC), more than half of the U.S. population has at least one chronic disease, such as asthma, heart disease, high blood pressure, or diabetes, which all drive up health insurance costs.
A staggering 85% of healthcare costs in the U.S. are for the care of chronic health conditions. Moreover, recent data finds that nearly 40% of adults over 20 in the U.S. are either overweight or obese, which can lead to chronic diseases and inflated healthcare spending.
As the U.S. population health issues increase, the risk of insuring the average American goes up. And in turn, the higher the risk, the higher the cost of annual health insurance premiums.
Data from the Kaiser Family Foundation (KFF) shows that between 2011 and 2021, the average premiums for family coverage rose from $15,073 to $22,221—an increase of 47.4%.
3. The newer the tech, the more expensive
Medical advances can improve our health and extend our life, but they can also lead to an increase in spending and the overutilization of expensive technology.
According to a study by the Journal of the American Medical Association (JAMA), Americans tend to associate more advanced technology and newer procedures with better care, even if there’s little to no evidence to prove that they’re more effective.
This assumption leads both patients and doctors to demand the newest, and often most expensive, treatments and technology available.
4. Many Americans don’t choose their own healthcare plan
Data from the KFF finds that roughly 49% of the U.S. population gets their insurance through their employer. That means nearly half of Americans don’t make any actual consumer decisions about the cost of their insurance because their employer already determined it.
Organizations are incentivized to purchase more expensive health insurance plans because the amount employers pay toward coverage is tax-deductible for the organization and tax-exempt to the employee. In addition, low deductibles or small office co-payments can encourage overuse of care, driving demand and cost.
5. There’s a lack of information about medical care and its costs
Despite a wealth of information at our fingertips online, there’s no uniform or quick way to understand treatment options and the cost of care. We would never buy a car without comparing models, features, gas mileage, out-of-pocket cost, and payment options—but yet, this is how we buy healthcare.
Kaiser Health News (KHN) reports that even when evidence shows a treatment isn’t effective or is potentially harmful, it takes too long for that information to become readily known, accepted, and change how doctors practice or what patients demand.
And in too many cases, even when hospitals make their service prices available, they are challenging to navigate and understand. To mitigate this lack of transparency, Congress passed the No Surprises Act in January 2022.
The Act aims to reduce surprise medical bills under private health insurance plans and create better pricing transparency to improve the patient experience and control costs of expensive health conditions.
6. Hospitals and providers are well-positioned to demand higher prices
According to the Center for Studying Health System Change, mergers and partnerships between medical providers and insurers are one of the more prominent trends in America’s healthcare system.
Increased provider consolidation has decreased individual market competition, in which lower prices, improved productivity, and innovation can occur. Without this competition, these near-monopolies have providers and insurers in a position where they can drive up their prices unopposed.
For example, a study done by the American Journal of Managed Care found that hospitals in concentrated markets could charge considerably higher prices for the same procedures offered by hospitals in competitive markets. Price increases often exceed 20% when mergers occur in concentrated markets. However, reviews found these cost increases didn’t improve healthcare quality.
7. Fear of malpractice lawsuits
Frequently called “defensive medicine,” some doctors will prescribe unnecessary tests or treatment out of fear of facing a lawsuit. The cost for these treatments increases over time—a study has shown that the average price of defensive medicine is around $100 to $180 billion yearly.
This is no surprise given that our current regulatory system is structured to support the fee-for-service healthcare delivery and payment model. The Commonwealth Fund reports that the fear that healthcare providers will withhold important clinical services to stay under budget is a more significant concern to Americans than the overutilization of services.
8. Inflation’s impact on the economy
Healthcare inflation is slowly increasing as patients are returning to doctor’s offices after avoiding them throughout the pandemic, causing many people to cancel physician services. Inflation affects the costs of operations, supplies, administration, and facilities. Additionally, healthcare facilities have taken a hit due to continued staff shortages and lower annual incomes for healthcare workers.
According to KFF, in April 2022, overall inflation prices grew by 8.3% since last year, while healthcare prices increased by only 3.2%. But even though healthcare inflation hasn’t outpaced general inflation yet,, some medical services and items saw an increase in costs.
Annual costs for hospital services—including inpatient (3.7%), outpatient (3.3%), and nursing care facilities (3.6%)—rose faster than overall medical care prices (3.2%). However, prescription drugs and physician services had lower price increases (1.7% and 1.2%, respectively).
Many individuals are worried that healthcare inflation will eventually overtake any increase in their annual income, so they’re debating whether to cancel or postpone their care—much like they did during the pandemic—until they can get their financial situation under control.
But due to the delayed effect of inflation in healthcare, patients should get their healthcare needs fulfilled sooner rather than later, especially if they have chronic conditions.
Medical Bankruptcy
There is no chapter in the Bankruptcy Code for medical bankruptcy. It doesn’t exist as a specific form of bankruptcy relief offered by the federal government. The term “medical bankruptcy” describes bankruptcy caused by medical debt. Many Americans struggle with the exorbitant costs of healthcare and are saddled with unexpectedly high medical bills. When medical bills and medical debt become overwhelming, some turn to bankruptcy as a method of relieving their debt burden.
In recent years, increased instances of individuals filing for bankruptcy due to medical debt led to popular usage of the term “medical bankruptcy.” While there is debate as to the true severity of the problem, there is little doubt that enormous medical bills can lead to bankruptcy.
Despite having health insurance, many have found themselves burdened by medical debt resulting from charges not covered by the fine print of their insurance policy. To alleviate this debt burden, some have turned to filing for bankruptcy as a solution. Individuals can discharge their medical debt through either Chapter 7 or Chapter 13 bankruptcy relief.
We don’t know how many bankruptcies are caused by medical debt. Medical debt bankruptcy numbers will fluctuate from year-to-year, influenced by factors like economic variables, political policy shifts, etc. During the debates over Obamacare, health care reform advocates suggested that more than half of all bankruptcies in the United States were caused by medical bills. Numerous studies have refuted that statistic. They argue instead that “medical debt is a modest but rising component of debt in consumer bankruptcy.” Regardless, there is little doubt that bankruptcy due to medical bills is a serious problem in the United States.
The real reason most Americans file for bankruptcy
Filing for bankruptcy is often considered a worst-case scenario. And for many Americans who do pursue that last-ditch effort to rescue their finances, it is because of one reason: health-care costs.
A new study from academic researchers found that 66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work. An estimated 530,000 families turn to bankruptcy each year because of medical issues and bills, the research found.
Other reasons include unaffordable mortgages or foreclosure, at 45 percent; followed by spending or living beyond one’s means, 44.4 percent; providing help to friends or relatives, 28.4 percent; student loans, 25.4 percent; or divorce or separation, 24.4 percent.
The data highlight a key new factor: whether the Affordable Care Act has reduced the burden of medical debt for people. “Despite gains in coverage and access to care from the ACA, our findings suggest that it did not change the proportion of bankruptcies with medical causes,” an article on the study published in the American Journal of Public Health states.
The number of debtors who cited medical issues as a contributing reason for their bankruptcy actually increased slightly after the law’s implementation — 67.5 percent in the three years following the law’s adoption versus 65.5 percent prior.
The culprit for the lack of improvement was inadequate health-care insurance, according to a co-author of the research, Dr. David U. Himmelstein, a professor at Hunter College and founder of advocacy group Physicians for a National Health Program. “Unless you’re Jeff Bezos, people don’t have very good alternatives, because the insurance that is available and affordable to people, or that most people’s employers provide them, is not adequate protection if you’re sick,” Himmelstein said.
Most families do not have enough saved for a simple emergency, let alone thousands of dollars in unexpected medical costs. A recent study from personal finance website Bankrate found that only 40 percent of Americans have enough saved to cover a $1,000 emergency expense.
Medical Bankruptcies by Country
Medical bankruptcies occur when consumers are forced to declare bankruptcy because of the cost of medical treatments. In a 2009 study of all bankruptcies in 2007, researchers classified a “medical bankruptcy” as one where persons had mortgaged a home to pay medical bills, had medical bills greater than $1,000, or had lost at least two weeks of work due to illness. According to that definition, 62.1 percent of all bankruptcies in the United States were “medical bankruptcies.” A 2015 study by the Kaiser Family Foundation found that medical bills caused 1 million U.S. adults to declare bankruptcy every year and that 26 percent of Americans age 18 to 64 struggled to pay medical bills. The most common cause of medical debt, according to this study, was an unexpected refusal by insurance companies to pay for a medical procedure.
As it turns out, medical bankruptcy is almost unheard of outside of the United States. Other developed economies (except China) have single-payer health care systems where medical costs are financed by taxes, not by premium-financed insurance. In these countries, there are no out-of-pocket costs for medical care and thus no bankruptcy caused by medical debts. In countries without single-payer systems besides the United States, there is generally no requirement that medical procedures be provided without payment, and thus procedures are paid for prior to treatment being rendered.
National Legislation
On March 23, 2010 the ACA, often referred to as “Obamacare,” was passed by Congress. This sweeping overhaul of the healthcare system represents the largest change and expansion of coverage since the passing of Medicare and Medicaid in 1965.
The ACA, in its original format, was an attempt to increase healthcare coverage for American citizens and involved the expansion of coverage provisions related to access and quality of care, summarized below.
Expansion of Public Programs
The ACA provides the expansion of Medicaid to individuals with incomes up to 138% of the federal poverty level and eliminates the limitations that prohibited most adults without dependent children from enrolling. Increased federal funding for state Medicaid programs was used as an incentive for states to expand their Medicaid access. As of November 2, 2020, 38 states and Washington, DC have expanded Medicaid access.
Establishment of the American Health Benefit Exchanges
A health insurance marketplace, also known as the “exchange” or “marketplace,” is where individuals and small employers are able to purchase private insurance. Consumers are provided information to enable them to choose among plans that meet their health and financial needs.
These Health Insurance Marketplace plans are required to meet a minimum set of coverage standards, also known as “essential health benefits.”
Essential health benefits include: ambulatory patient services; emergency services; hospitalization; pregnancy, maternity, and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; pediatric services (including oral and vision care); total birth control coverage; and breastfeeding coverage.
Premium tax credits and cost-sharing reduction subsidies (CSR) are also available to make plans available on the exchanges more affordable for those who qualify.
Changes to Private Insurance
New regulations prevent health insurers from denying coverage to people for any reason, including pre-existing health conditions and charging people more based on health status and gender.
Young adults can remain on their parents’ health insurance up to age 26.
Health insurers are prohibited from imposing lifetime limits on coverage and are prohibited from rescinding coverage.
$0 copayments are available on many preventative health services.
The Individual Mandate
All individuals were required to have health insurance, with few exceptions, beginning in 2014. Those who did not have coverage were required to pay a yearly financial penalty.
In late 2017, the federal individual mandate was repealed in a tax bill passed by Congress and signed by the Trump administration.
Employer Requirements for Health Coverage
Employers with more than 50 employees are assessed a fee of $2000 per full-time employee if they do not offer coverage and they have at least one employee who receives a premium credit through an Exchange.
Across the nation, reaction to the 2010 health care legislation that made its way through the House seemed to echo the bitter division in Washington. While people referred to the legislation as “health care,” “health reform,” “health care insurance reform,” and “health insurance reform,” the actual title of the bill is something else entirely: the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. Republicans see the new law as a government takeover produced by back room deals and rammed through Congress. Most Democrats hailed it as historic, and President Obama declared that the law will set in motion reforms that generations of Americans have fought for and marched for and hungered to see. Meanwhile, progressives who had long called for a Medicare for all system were disappointed by the legislation, which builds on the U.S.’s private, employer-based insurance system.
The American Health Care Act, backed by President Donald Trump and House Speaker Paul Ryan, would partially repeal and replace the Affordable Care Act, aka Obamacare, and could dramatically impact health insurance for tens of millions of Americans. The House GOP bill has some similarities to Obamacare. It requires insurers to take on customers regardless of any pre-existing condition. It provides subsidies to people, in the form of tax credits, to buy insurance on the individual market. And it tries to encourage people to stay insured. But the similarities end there. The bill spends less on fewer subsidies, reduces Medicaid spending by large amounts, and uses the savings to eliminate taxes on wealthier Americans and medical companies imposed by the Affordable Care Act.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
Propose, compare, and evaluate multiple responses, alternatives, or solutions to U.S. health care system issues or problems; then reach an informed, defensible, supported conclusion.
Language Objective:
Understand, learn, and use new vocabulary that is introduced and taught directly through informational text and direct instruction.
Identify and/or summarize main ideas, facts, supporting details, and opinions in an informational and/or practical selection.
Read and synthesize information found in various parts of charts, tables, or diagrams to reach supported conclusions.
Learning Target:
Students will identify, research, and clarify an issue relating to health care by gathering, using, and evaluating researched information to support your analysis and conclusion.
When medical care becomes a matter of life and death, the money demanded by the health care ecosystem reaches a wholly different order of magnitude, churning out reams of bills to people who can’t focus on them, let alone pay them. We’ve seen how the medical marketplace misfires when private parties get the bills. When the taxpayers pick up the tab, most of the dynamics of the marketplace shift dramatically.
You will propose, compare, and evaluate multiple responses, alternatives, or solutions to the U.S. health care system issues or problems; then reach an informed, defensible, supported conclusion.
Research
Presents appropriate information from various primary and secondary sources.
Uses and connects information from various sources throughout the analysis with appropriate acknowledgment (e.g. attributes, quotes, citations, references, etc.
The views and opinions expressed here are those of the students and speakers of our government classes and do not necessarily reflect the views or positions of this website, institution, or organization. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
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