Overview of U.S. Health Care System - Research Paper Example

?Relevant Problems within the U.S. Health Care System Table of Contents Introduction 3 Brief Overview of U.S. Health Care System 4 Factors Affecting the U.S. Health Care System 5 Uninsured Americans 7 Strategy 9 Increasing Cost 10 Strategy 12 Government Regulation System 13 Strategy 15 Conclusion 16 Referencing 17 Introduction Governments across the globe need to deal with a number of factors in order to bring improvements within a country. Government has to manage security related issues and make necessary economic policies that strive to maintain growth, prosperity and peace. Moreover, a government also needs to maintain the social bonding and cultural diversity of a country. In this respect, people or population is a major factor. An efficient government must support its population by providing a developed social and environmental structure for leading a better life. People’s health related issues are one of the most important concerns for policy makers and regulators as people are the prime essence of an economy. Man power is a very crucial resource for economic development and hence, a healthy man power is inevitable. Therefore, most of the economies aim to establish flawless health care systems. In recent years, there have been significant improvements in social structures and lifestyle of the people. Globalization, technological advancements and economic enhancement are three prime reasons for these changes. However, with these changes, some major issues have also been noticed like unhealthy lifestyles and increasing environmental pollutions like global warming. This has led to increase in the necessity of better health care system within an economy. Therefore, the demand of health care systems has multiplied and entrepreneurs have found better and profitable business opportunities. Hence, health care sector has become an emerging industry which has great economic importance. The governments are also trying to encourage this industry for offering better and healthier lifestyles to people by regulating and controlling this sector as well as the entire system. However, at present, many countries’ health care system is suffering from few major issues. This paper will attempt to discuss the U.S. health care system and its major prevailing issues. Currently, there are three major issues in U.S. health care system i.e. large number of uninsured Americans, increasing cost of health services and inefficient government regulation. The primary aim of this paper is to offer plausible strategies or solutions for overcoming these issues. At first, a brief overview of U.S. health care system and major factors affecting it will be presented. Finally, the entire discussion will be summed in the conclusion, pointing out major findings of this paper. Brief Overview of U.S. Health Care System U.S. is one of the most developed countries in the world and it belongs to the category of the first world country. Industrialization in the U.S. is the key success factor for such rapid growth and it is considered to be one of the strongest economies in the world. This country has brought several improvements in multiple areas like economic, social, technology, health care etc. The U.S. health care system is controlled and regulated by different units of government. U.S. Department of Health & Human Services (HHS) is the apex regulatory body responsible for maintaining the country’s health related issues. It is the principal agency of U.S. government “for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves” (U.S. Department of Health & Human Services, n.d.). Along with U.S. government, this chief regulatory body formulates and implements growth-oriented health care plans and polices within the nation. In order to offer support and guidance to U.S. health care system, a number of departments play a key role. The following figure shows the organization structure of U.S. health care department. Figure 1: Organizational Chart of U.S. Health Care System (Source: Centers for Disease Control and Prevention-a, 2010) Factors Affecting the U.S. Health Care System Health related concern is directly interrelated with people and hence, entire macroeconomic aspects are major drivers of health care systems. Economic condition, political condition, legal framework, technology, social structures and environments are major factors that affect the entire U.S. health care system. Due to strong economic condition, the country is able to invest significant amount of money to bring improvements in the health care systems. GDP as per purchasing power parity was nearly $14.72 trillion in 2010 which is the second highest in the world. Per capita GDP is also quite high i.e. $47,400 (CIA, 2011). The country also has the third highest population in the world i.e. 313,232,044 but population growth rate is quite lower i.e. 0.963%. Birth rate and death rate in this country are 13.83 births and 8.38 deaths per 1000 population respectively. Infant mortality rate is 6.06 deaths per 1000 population and average life expectancy is 78.37 years. During 2009, nearly 1.2 million people were suffering from HIV or AIDS and 17,000 people died due to this disease in the same year (CIA, 2011). Multiple health care related plans are also major factors that affect the health care system. These plans determine the quality of health care systems. A report published by HHS, Centers for Disease Control and Prevention (CDC) and National Center for Health Statistics has disclosed various key factors that increase and decrease health services utilization. The following chart lists these factors. Chart 1: Forces that affect overall health care utilization (Source: Centers for Disease Control and Prevention-b, 2004) Uninsured Americans America is a nation with large number of population that increases the health related risks in the society. America has gained an upper hand in the world and hence, in needs to maintain this image by offering constant support, growth and development. However, in case of health care, a large portion of the American people remains uninsured. According to an article published in The Wall Street Journal, nearly 50.7 million people were uninsured in 2009 compared to 4.4 million in 1987. After the rapid industrialization in America, governments had taken necessary steps for encouraging the general insurances such as car insurance, home insurance etc. However, the government has failed to implement any effective strategy for making health insurance coverage mandatory. The following figure shows the increasing number of uninsured people in U.S. Figure 2: Rising Insured People (Source: Johnson, 2010) In U.S., private as well as government health insurance services are available. During 2010, nearly 63.9% of U.S. people were insured by private insurance and 30.6% of people were covered by the government health insurance plans. However, the percentage of private insurance was the lowest since 2010, whereas, the percentage of government health insurance coverage plan was the highest. 50.7 million i.e. 16.7% of the total American people are uninsured that figures out major weakness of U.S. health care system (Johnson, 2010). There are several reasons for such high rate of uninsured people. Firstly, many consider that few sections of the uninsured people are able to afford the cost of health insurance, but due to lack of awareness, they do not choose to avail the health insurance services. Secondly, in U.S. many people used to enjoy health insurance coverage by their employers. However, during financial crisis of 2007-2008, the unemployment rate in U.S. reached to 9.7%. Moreover, due to economic downturn, U.S. companies cut down their costs by reducing the employee benefit plans that also includes health insurance coverage. In this respect, the most vital issue for America is that the number of uninsured children in 2009 rose to 7.5 million from 7.3 million in 2008 (Johnson, 2010). Strategy The above discussion has presented one of the most critical issues in U.S. health care system. The increasing number of uninsured people may lead to fatal consequences for the entire nation. However, in order to resolve this serious issue, government along with general people and companies must take certain corrective measures. The primary responsibility for such issue is on the U.S. government and it must develop the public health insurance plans. As per the stated data given in the above section, public health insurance plans are getting more popular among the Americans. Therefore, better health insurance coverage plans will help to encourage people to insure themselves. In this respect, Arthur Garson has proposed the government to implement the ‘universal coverage’ plan. As per this universal coverage plan, health insurance will be mandatory for the Americans like car insurance (Garson, 2000). Secondly, employers must realize their social responsibility and should cover their employees and their families. This employee benefit plans should be made compulsory. Thirdly, U.S. people must identify the necessity of health insurance for a safe and healthy future. Moreover, it will help to avoid the increasing cost of medical services. In this respect, government must execute proper promotional programs for enhancing health awareness. Increasing Cost Due to technological advancements, there have been significant improvements in health services and medical technologies. The world economies and organizations like World Health Organization are trying to bring further development by conducting research and development programs. U.S. is one of the most advanced countries in terms of medical technology. Considering this, the cost of medical and health related issues in U.S. is higher than any other country in the world. The following figure compares U.S. health cost with other countries. Figure 3: U.S. Health Cost (Source: Rodberg and NY Metro Chapter-a, 2008) As per the above figure, U.S. health services are 70% more expensive than the median health cost of other countries. U.S. has also ranked first in term of investment made for the health care in terms of its GDP percentage. However, on the other hand, the U.S. family income does not seem to be sufficient to meet the high cost medical expenditure. During 2003, U.S. spent $5,635 per capita on its health care system compared to OECD’s $2,307 (Farrell, 2009). The following figure depicts the structure of U.S. health expenditure during 2008. Figure 4: National Health Expenditures, 2008 (Source: Kaiser Family Foundation, 2010) As per the above figure, U.S. is likely to spend more on hospital care and physical or clinical services. In spite of such huge investment, many low income group families in U.S. are not able to afford high health care services. However, many critics have analyzed that U.S. people have higher per capita income and they are ready to spend more on health related services. Therefore, as long as their purchasing power is enough for buying high cost health care services, there is no harm. This fact may be true for most of the American people but in the long run, it may lead to economic misbalance. “There would be less and less money for other things, like education, environmental protection, scientific research and national security, that may be equally or more important to the well-being of society” (The New York Times, 2007). Therefore, U.S. must realize the severity of these issues for its future benefit. There are four major factors that drive the health care cost in U.S. Firstly, use of the latest machineries and life-saving drugs in the health care system became a trend, and also became very important due to the increasing demand. Therefore, health care expenses are bound to go up (Congress of the United States and Congressional Budget Office, 2008). Secondly, due to unhealthy lifestyles and polluted environment, U.S. people are experiencing greater chronic diseases that have lead to increase in the demand of long-term treatments. Therefore, U.S. people have to more spend on medical treatments (Centers for Disease Control and Prevention-c, 2010). Thirdly, as there has been improvement in health care services and multiple life-saving drugs have been invented, life expectancy of the U.S. people has increased and it has lead to an increase in the number of aging people who require more frequent medical treatments (Orszag, 2008). Finally, U.S. health care system is highly organized and hence, administrative costs have also risen for better maintenance (Altman and Levitt, 2003). Strategy Increasing cost of health care system is a major flaw for a first world country like U.S. Instead of investing on health care system, it must identify key areas that causes hike in health care expenditure. Some of the major recommendations are given below for reducing health care costs. U.S. should invest on R&D for innovating low cost technology for medical treatments. U.S. should more focus on prevention of chronic disease than investing better medical treatments for these diseases. U.S. can implement disease management policies, and children and aging people should be taken care in an organized manner. U.S. should aim to bring efficient and better quality services that will produce better outcome. It will avoid unnecessary and long term treatment costs. Government Regulation System The U.S. government system is stable and efficient. It has also established apex body for governing health care system. It is responsible for designing and executing health care related plans for the American people. During the first year of President Barack Obama’s presidential operation, U.S. government aimed to focus on reducing the number of uninsured people. However, the government policies have not worked effectively and there has hardly been any improvement. The following figure provides an evidence of this fact. Figure 5: Percentage of Health Care Coverage (Source: Rodberg, L. and NY Metro Chapter-b, 2009) As per the above figure, government coverage has increased slightly i.e. from 23.3% to 29%, but the overall rate of uninsured people has grown by 1.5%. Another fact is that, most of the health care expenditures are coming from the government but the number of coverage from private sectors is higher. The following figure shows this. Figure 6: Private Sector Coverage (Source: Rodberg, L. and NY Metro Chapter-b, 2009) However, in spite of greater health coverage from private sector, the competition among the private health care companies is low. Competition is necessary as competitors will try to compete with each other on the basis of quality and cost. As the government is regulating this segment, the level of competition is not high among the private health care companies. Strategy Arthur Garson has identified that “pure government system” as a major issue which is “not acceptable” (Garson, 2000). The above discussion has disclosed that private health care companies are enjoying greater market share and hence, government must involve private health care organization for developing health care plans. Moreover, government must focus on establishing public-private partnership for involving the private health care sector. It can offer partial liberalization to this sector. It will help to bring greater competitiveness among private health care companies and they will compete on quality and cost. However, government should control and regulate the quality related issues. Conclusion U.S. has established regulatory authorities for regulating and controlling the health care system in U.S. Health care system has become an emerging industry where private and public sectors are playing a very crucial role. Moreover, U.S. government is ranked top in terms of health care expenditure and this county is also very advanced in medical technology and innovation. However, in spite of this, U.S. health care system is suffering from multiple issues and the financial crisis of 2007-2008 has made these issues worse. This paper has pointed out three major issues relating to U.S. health care i.e. uninsured people, high cost and government inefficiency. Universal coverage plan is an effective remedy for reducing the number of uninsured people. High cost medical expenses are major drawback of U.S. economy and U.S. should identify forces that drives the health services cost higher. Finally, U.S. government must encourage competitiveness among the private health care companies by liberalizing and by establishing public-private partnership. Referencing Altman, D. and L. Levitt. (February 23, 2003). The Sad History of Health Care Cost Containment As Told in One Chart. Retrieved March 07, 2011. http://content.healthaffairs.org/content/early/2002/02/23/hlthaff.w2.83.short. Centers for Disease Control and Prevention-a. (June 11, 2010). Department of Health and Service Center for Disease Control and Prevention (CDC). Retrieved March 07, 2011. http://www.cdc.gov/maso/pdf/CDC_Chart_wNames.pdf. Centers for Disease Control and Prevention-b. (January 13, 2004). Health Care in America: Trend in Utilization. Retrieved March 07, 2011. http://www.cdc.gov/nchs/data/misc/healthcare.pdf. Centers for Disease Control and Prevention-c. (July 7, 2010). Chronic Diseases and Health Promotion. Retrieved March 07, 2011. http://www.cdc.gov/chronicdisease/overview/index.htm. CIA. (March 1, 2011). The World Factbook: United States. Retrieved March 07, 2011. https://www.cia.gov/library/publications/the-world-factbook/geos/us.html. Congress of the United States, Congressional Budget Office. (January, 2008). Technological Change and the Growth of Health Care Spending. Retrieved March 07, 2011. http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf. Farrell, R. R. 2009. (February 10, 2009). America’s Healthcare Crisis. Retrieved March 07, 2011. http://www.realtruth.org/articles/090203-005-health.html. Garson, A. (2000). President’s page: the U.S. healthcare system 2010: problems, principles, and potential solutions. Retrieved March 07, 2011. http://content.onlinejacc.org/cgi/content/full/35/4/1048. Johnson, A. (September 17, 2010). Recession Swells Number of Uninsured to 50.7 Million. Retrieved March 07, 2011. http://online.wsj.com/article/SB10001424052748704394704575496093363948142.html. Kaiser Family Foundation. (March 2010). U.S. Health Care Costs. Retrieved March 07, 2011. http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx. Orszag, P. (January 31, 2008). Growth in Health Care Costs. Retrieved March 07, 2011. http://www.cbo.gov/ftpdocs/89xx/doc8948/01-31-HealthTestimony.pdf. Rodberg, L. and NY Metro Chapter-a. (September 25, 2008). Proposals for health care reform: what is “realistic”?. Retrieved March 07, 2011. http://www.pnhp.org/pnhp-ny/Proposals-for-Health-Care-Reform.ppt. Rodberg, L. and NY Metro Chapter-b. (November 14, 2009). Health Care in Obama’s 1st Year: More of the Same is not Reform – It’s a Placebo. Retrieved March 07, 2011. http://www.pnhp.org/pnhp-ny/more-of-same-not-reform_11-14-09.ppt. The New York Times. (November 25, 2007). The High Cost of Health Care. Retrieved March 07, 2011. http://www.nytimes.com/2007/11/25/opinion/25sun1.html?pagewanted=1&_r=1. U.S. Department of Health & Human Services. (No date). About HHS. Retrieved March 07, 2011. http://www.hhs.gov/about/. Read More