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Health Care System in the USA

Free Essays about Health

US Health Care System

The health of any nation in the world is a reflection of the effectiveness of its health care system. The World Health Organization ranks the US health care system at the 37th position in the world (Murray & Frenk, 2010). The ranking has steered many reforms to make this system more vibrant than before. Despite it being a developed nation, the USA is the only high-income nation in the entire world that lacks a universal health-care coverage (Rice et al., 2014). Such a thing shows how the US health care system is far much worse than that of many other nations. However, it has attempted to increase the accessibility to health care among the citizens through the formulation of laws and policies such as Medicaid and Medicare. Both Medicare and Medicaid provide health coverage for the vulnerable groups in the population such as the poor, pregnant women, children, homeless people, and individuals with disabilities (Rice et al., 2014). The attempt to help the vulnerable population aims at increasing equitability in the provision of health care services to all the US citizens.

Despite all these efforts, the USA has not fulfilled its role of covering most of its population with health care insurance. For example, Medicaid had only insured 60 million people, although the renowned Affordable Care Act (ACA) has added a huge impact to the Medicaid eligibility since then (Sommers, Baicker, & Epstein, 2012). The efforts to increase accessibility to health care have shown immense benefits for the population of the country. The expansion of the renowned Medicaid program has resulted in a significant reduction in all mortality causes. For example, its expansion resulted in a 6.1% reduction in mortality rate in 2012 (Sommers, Baicker, & Epstein, 2012). Furthermore, current reforms in the health industry focus on the extension of insurance coverage, the reduction of health care costs, and the expansion of both prevention and wellness programs (Wilper et al., 2009). This essay looks forward to discussing the US health care system and health care accessibility through the insurance coverage of all citizens.

The US health care system is complicated with many health service providers. Many distinct organizations are endowed with the responsibility of providing the health care services. According to Sommers, Baicker, and Epstein (2012), the majority of the health care facilities are owned by the private sector businesses, with 58% of the community hospitals being non-profit, while the government owns 21% for profit and 21% for non-profit hospitals. Various organizations offer different kinds of services in the system geared towards the improvement of the US health status. Individuals and organizations range from research, educational, and hospital institutions, insurers, medical suppliers, payers, and health care providers such as physicians and nurses. The health care providing facilities are numerous, and they can be found in all corners of the country. Shi and Singh (2015) explain that the USA has about 5,686 hospitals, 2,900 inpatient mental health institutions, and 15,663 nursing homes among many others that have resulted in the employment of more than 18.4 million people. In the view of this number of employees and organizations, it becomes hard to have a universal management to run the health care industry.

Furthermore, the health care industry is faced with huge challenges regarding staff shortages. Despite the high expenditure in the US health care system, the country has fewer health care professionals. For instance, it had only 2.6 practicing physicians for every 1,000 people, which was less than OECD (Organization for Economic Co-operation and Development) average of 3.3 (Department of Professional Employees, 2016). At the same time, it is estimated that the country will require more than 52,000 physicians by 2025 to provide primary care services to meet the demand (Department of Professional Employees, 2016). If the situation is not approached quickly, the USA will expect the worst because the demand for health care services will rise due to the extension of insurance coverage through the Affordable Care Act.

Financing the US Healthcare System

The funding of this system is huge. In 2012, the USA spent over $2.8 trillion on health care, a figure more than 17% of the gross GDP and more than the GDP of Northern Ireland and the United Kingdom (Rice et al., 2014). In 2013, the USA spent about $8,700 per person, which took more than 16.4% of GDP, on health care (Department of Professional Employees, 2016). Such a thing shows that the USA is among the top spenders on health care, yet it does not have universal coverage. The USA is far much ahead in health care expenditure as compared to Canada, which spends only 10.2% of its GDP on health care, while that of North America consumes only 11.1% (OECD, 2015). However, its entire population can justify this move. OECD explains that this expenditure was about 50% more than that of Norway (Rice et al., 2014). Therefore, the US health care system consumes a significant amount of funds, claiming a huge portion of the overall GDP.

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Most of this money that finances the health care system comes from the taxpayers. Veteran Administration, Medicare, and Medicaid accounted for 47.8% of the overall health care expenditure, and taxpayers paid more than 64.3% the US health care costs (Himmelstein & Woolhandler, 2016). This figure is far much bigger than for the countries with universal health care systems. Shi and Singh (2015) explain that funds to the system mainly come from health insurance programs, including Medicare, Medicaid, direct individual payment for health care services, and through private insurance programs. In 2013, the government outlaid tax subsidies to health care amounting to $294.9 billion and employee private insurance coverage of $188 billion, all of which accounted for 10.1% and 6.4% of the total respectively (Himmelstein & Woolhandler, 2016). Moreover, the expenditure from the taxpayers is likely to increase in the future. With the conception of the Affordable Care Act, the US health spending is expected to increase to 67.3% by 2024 (Himmelstein & Woolhandler, 2016). This will happen because many people are likely to access health care services.

There are many reasons why this health care system consumes huge amounts of funds. One of the core reasons is the high costs incurred on prescription drugs and technology. The Department of Professional Employees (2016) explains that analysts have ascertained that expensive drugs and technologies fuel spending in the health care industry since they demand costly services. In 2013, as OECD (2015) reiterated, the USA spent more than $1,000 per capita on both pharmaceuticals as well as other important medical care, which was far more expensive than twice what OECD had set. Furthermore, the rise in the chronic disease burden such as hypertension, diabetes, and obesity also fuels health care expenditures. Patient suffering from chronic disease conditions account for 32% of Medicare spending, with most of the money catering for hospital and physician fees that are linked to frequent hospitalizations (Department of Professional Employees, 2016). Finally, the USA spends huge amounts of money on administrative services. The number of health care facilities is enormous, and running them is costly. All these costs are the reason why the US health care system consumes huge amounts of funds as compared to other developed nations, including those with a universal health care system.

Health Insurance Coverage

Other than increased health care costs impacting the US health care system, it is also significantly impacted by health insurance coverage. Some of the people in the country are covered while others are not. Although most people are insured, a substantial proportion is yet to acquire any form of coverage. In 2014, approximately 283.2 million Americans needed health care coverage through insurance, and only 89.6% of this population had some form of insurance, with 66% of them being covered by private insurance plans (Department of Professional Employees, 2016). Among the insured, 115.4 million people (36.5%) received health insurance coverage through Medicaid, Medicare, and/or Veteran Administration. However, a substantial population of the American people is not insured. The Department of Professional Employees (2016) reiterates that in 2014, 32.9 million people did not have any health insurance, something that limited their access to health care services. Such people have to pay for their services directly from their pockets, which is a huge challenge for the US government in its initiative to maintain and promote equal health services among all its citizens.

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Although the number of people enrolled in insurance plans increases to ensure coverage of most Americans, premiums escalate. Such a thing may have contributed to the high proportion of the American people not enrolling in the insurance plans, which affects the overall economy of the country. Long et al. (2016) said that annually, the average premiums increased by 11% from 1999 to 2005, before leveling from 2005 to 2015, whereby the increase was 5% per year. Furthermore, deductibles grow at an alarmingly higher rate. The Department of Professional Employees (2016) ascertained that deductibles for single coverage insurance grew by 67% between 2010 and 2015, figures that outpaced not only the earnings workers received but also the rate of economic inflation. Thus, the absence of insurance among the American people significantly influences the US economy. The absence of this insurance was a huge cost to society that lost from $124 billion to $248 billion every year (Department of Professional Employees, 2016). Although the cost of the lack of health insurance affects the lifespan of people, it largely influences the economic production of the USA due to the reduced productivity because of the diminished health of the populations without insurance. In the USA, health insurance coverage shows disparities, and the most underserved group comprise of the poor individuals. Additionally, 40 million employees (40% of the total employed people) lack paid sick leaves (Long et al., 2016). Such a thing shows that people may be compelled to work sometimes when they are sick. Subsequently, this can prolong and worsen pandemics in addition to reducing economic productivity as well as driving up the costs of health care.

At the same time, insurance coverage among employees varies depending on many factors. One of the key factors that play a huge role is the amount of pay. Firms that have many low-wage employees are unlikely to offer insurance plans to their workers as compared to those with few low-wage workers (Department of Professional Employees, 2016). Such a thing means that the employees, who receive better pay, are likely to receive access to health care services through insurance plans arranged by their employers. However, the number of full-time employees not receiving health insurance coverage is enormous. For instance, about 11.2% of all full-time workers did not have this coverage in 2014, despite it being a smaller proportion than that of part-time employees by 6.5% (Department of Professional Employees, 2016). The execution of the ACA has played a significant role in the reduction of the number of workers without insurance. With further implementation of this law, more workers are likely to get this coverage.

Types of Health Insurance Plans

A majority of the US citizens are insured through Children’s Health Insurance Program (CHIP), Medicaid, and Medicare. Medicare is the national social insurance program that is administered by the US federal government and mainly accessed by the individuals aged 65 years and above or those who live with different forms of disability (Tunstall, 2015).

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Medicare has four unique parts that cover different services. Mainly, it is funded from public finances. Medicare Part A is at the helm of providing hospital insurance that is funded through payroll taxes (Shi & Singh, 2015). Part B provides the insurance, in which individual people pay installments per month. Part C of this plan also called Medicare Advantage Plans, is offered through private insurers who enter a contract with Medicare to provide both Part A and B with benefits. Finally, Part D of this plan is an outpatient drug prescription program that is offered through private insurers funded by the US federal government. Tunstall (2015) explains that in 2015, Medicare covered more than 55 million people, making a total benefit of $514 billion in payments. This indicates how both the country and its citizens benefit from this coverage program.

On the other hand, Medicaid and CHIP are not as intense as Medicare for the federal government. Medicaid is partially funded and managed by the individual state governments despite the provision of guidelines and partial funds from the federal government (Shi & Singh, 2015). The states assume the ultimate control over its eligibility. Furthermore, CHIP is administered at the level of the state and regulated by the federal government (Tunstall, 2015). Children from poor background benefit from this program.


The US health care system lacks a universal coverage plan that contributes to its low global rankings among other developed countries. The USA has many institutions that provide health care services, including public and private hospitals as well as nursing homes. Nurses and physicians are among some of the professionals that provide health care services in these facilities. The US health care system is the most expensive in the entire world. Taxpayers contribute most of the money that sustains this health care system. Medicare, Medicaid, and individual payments for health services significantly contribute to the success of this expensive system. This health care system is expensive because of several reasons. They include high costs of technologies and prescription drugs, an increase in the burden of chronic diseases, and high administrative costs. Insurance coverage is one of the major health concerns in the USA apart from high health care costs. Despite the increase in insurance coverage, many Americans are not insured. However, the ACA execution has helped increase the population with insurance. Those who remain uninsured are mainly the disadvantaged populations, including the poor. Many people are covered by CHIP, Medicaid, and Medicare.


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