US Healthcare: It’s Complicated

Cross-posted at TheRazor

Quora is a multi-national forum where people can ask questions and post answers about almost anything. Most of the users are Americans but there is also a strong Chinese presence, and quite a few people ask questions about American life, culture and politics. While I tend to ignore political questions, occasionally I’ll find a question about other topics that interests me, and today one came up about the American healthcare system.

Regarding Universal Healthcare, why is it not in America’s national interest to have a healthy population, even if it means they will pay less to have it?

I don’t think anyone is arguing that Americans don’t want better healthcare at a lower cost for everyone. What we are arguing about is what system we want and more importantly, how to get there from here.


What non-Americans and many Americans don’t realize is just how screwed up our system is. Most don’t realize it’s not a single system. We have Medicaid for the poor, Medicare for the elderly*, VA health system for veterans, the Indian Health System on native American reservations and private group insurance for everyone else. Then each state has a say in how Medicaid and Medicare are administered with significant differences between each of them.

Then we have the stakeholders.

  • Employers which have an interest because private group insurance is tied to employment unlike most countries in the world.
  • State governments whose priorities are different than the federal government because unlike the feds the states must balance their budgets.
  • Federal government with its own priorities and oversight of the entire structure with specific control of the VA and IHS.
  • For profit and non-profit insurance companies which have to keep the lights on by taking in more in premiums than paying out in reimbursements.
  • Medical providers like doctors and nurses who have to balance care for their patients with paying their bills.
  • Medical device manufacturers whose profits depend on purchase of their output.
  • Pharmaceutical companies whose bottom line depends on the consumption of drugs in the US and the subsidy of US drugs abroad.
  • Malpractice attorneys who reap billions in fees in lawsuits against medical providers, device manufacturers and pharmaceutical companies.
  • For profit health systems whose bottom lines depend on maximizing payments from the insurance companies and minimizing expenses from the medical providers, device manufacturers and drug companies.
  • Healthy individuals who don’t see why they need to pay for services they don’t need.
  • Sick and elderly individuals who are consuming health care services.

That’s about all I can come up with. I’m sure there are more. Each one of these groups has a lobbying group that argues on their behalf to the other stakeholders, especially state and federal governments.

So pick any system you want and ask yourself, “How do I get to this system from the current one?” Any system you pick will require impacting one of the above stakeholders, and they are going to fight it, change it and make a hash of it to the point where your original ideas are all gone.

And that’s where we are today.

*Just to add to the complexity, note that the elderly will switch from Medicare to Medicaid once their benefits are exhausted. This commonly happens after seniors have been placed into nursing homes. The cost of these facilities is staggering – more than the cost of most 5 star hotels – and quickly exhaust an average senior’s Medicare benefits. At that point they have to switch to Medicaid. The problem is that many skilled nursing facilities have limited slots for Medicaid seniors, and there are usually waiting lists – meaning that most seniors have to return to the care of their loved ones who often lack the skills and resources necessary to care for them.

No one is happy about this system. But we feel as if we are trapped without hope for true change.

Photo by lkonstanski

1 Comment

  1. Good post, Scott. It’s not just the breadth, it’s the depth as it were. Not only is our system complicated; it’s huge. The United States administers the world’s largest single-payer system (Medicare). It administers the world’s largest fully nationalized health care system (the VA system). On top of those it administers more than dozen other plans with differing requirements, structures, etc.

    For years I supported a single-payer plan for the United States. Ultimately, the expenses of our system convinced me that such a system was impractical. For those who are convinced we an save substantially by centralizing health care administration via a national single-payer system, I have a question. If doing that will reduce administrative expenses, why are U. S. educational administrative expenses the highest in the world? In effect we have a single-payer system for education here already.

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