8 Major Problems of the U.S. Healthcare System

No matter where you might fall politically, these 8 problems continually surface throughout most literature written on health care and health insurance in the US.

8 Major Problems of  the U.S. Healthcare System:

  1. Accessibility
  2. Cost/Affordability
  3. Lack of portability
  4. Technologically deficient
  5. Lack of data availability
  6. Fee for service model
  7. Healthcare industry consolidation
  8. Over reliance on medicine

Here’s a quick breakdown of the drivers impacting each of these areas:

Accessibility

  1. Healthcare is currently not accessible to all Americans.
    • By 2019, the uninsured population may increase to 65.7 million people, or 23.2% of the population. (5)
  1. The U.S. population is growing, which means the U.S. healthcare systems must provide for an even larger population.
    • The U.S. population is expected to increase by 325 million by 2020; the population will increase by about 20%. (1)
  1. Information is not centralized and systems are not connected.
  2. People who are not insured or unaware of their plan coverage, rely on emergency services for less acute problems, but also neglect preventative care options and wait until the problem has escalated. This results in overcrowding, lack of continuity of care, expensive treatment and a prolonged waiting period (which exascerbates any medical issue).

Cost/Affordability:

  1. Healthcare is expensive and not affordable for everyone.
    • “The United States spent approximately $2.2 trillion on health care in 2007, or $7,421 per person – nearly twice the average of other developed nations. Americans spend more on health care than on housing or food. If rapid health cost growth persists, the Congressional Budget Office estimates that by 2025, one out of every four dollars in our national economy will be tied up in the health system. ” (4)
    • Currently about 45.6M Americans uninsured. (3)
    • Due to the high costs, millions of Americans and small employers still purchase coverage in the form of individual policies. (3)
  1. Premiums are on the rise.
    • Premiums, on average, rose by 5% in 2008 (2)
  1. The US spends more money per person on health care than any other country, yet is consistently ranked at the bottom for most health indicators when compared to other wealthy nations. (7)


Lack of Portability:

  1. Due to wage freezes during WWII, employers began to offer benefits as an attraction and retention tool. Health care became a standard offering as part of employment.
  2. As the workforce has gotten more and more mobile, health records do not transfer with the employee. Since insurance is linked with employment, it is difficult for entrepreneurs, overage dependents, parents, etc to secure insurance for their needs.

Technologically Deficient:

  1. Technology for the administration of healthcare delivery is antiquated and is primarily running on platforms created in the 1960 – 1970s.
    • “Cross-industry average IT spending per employee is $7,000; the banking sector spends $17,000 per employee and healthcare spends a mere $3,000.” CIO, WellPoint
  1. Many claims are still manually submitted
    • According to a 2003 survey by the Health Insurance Association of America (HIAA), 44% of claims were submitted electronically by providers, a number that has been steadily increasing over time from 24% in 1995
  1. Provider technology is also lacking and the adoption of EMRs across the US has proceeded at a very slow pace.
    •  Only 4% of physician offices have fully functional EMR’s and 13% have basic ones. 83% are still using paper.(9)


Lack of data availability:

  1. Pricing data on services is not publically or commercially available. Consumers can not easily access quality, pricing, carrier information, community ratings, and specific plan data in one location- data is either not available or scattered across a multitude of private and state resources.

Fee for service model: 

  1. The medical reimbursement system to created on a platform that reimburses physicians on a fee for service model. The more services they order for their patients, the more money they make. The system financially rewards volume over quality.
  2. There is no incentive currently built into either employer sponsored insurance or government sponsored insurance that encourages physicians to treat the entire continuum of care for their patients.


Healthcare Industry Consolidation:

  1. There has been a significant amount of consolidation in the insurance and pharmaceutical industry since the 1980s.
    • The American Medical Association reports that one in six metropolitan areas in more than 300 U.S. markets is dominated by a single health insurer that covers at least 70 percent of patients enrolled in HMOs or PPOs.


Over reliance on medicine:

  1. Smoking and high blood pressure, which both have effective interventions, are responsible for the largest number of deaths in the US. Other dietary, lifestyle, and metabolic risk factors for chronic diseases also cause a substantial number of deaths in the US.
  2. Many individuals chose poor lifestyle habits with the expectation that there will be medicine available to treat their illness.
    • Only about 8% of research study participants met all 5 criteria for practicing a healthy lifestyle according to a 15,000 participant study conducted by Dr. Dana King of the Medical University of South Carolina.
  1. There needs to be more focus on preventative care
    • “Over a third of all illness is the result of poor diet, lack of exercise, and smoking.” (6)


Sources:

  1. “Health Risk Appraisals: How Sharp Is This Tool in Shaping Employee Behavior.” Robert Wood Johnson Foundation. Dec 2009.
  2. Grau, Jason & Giesa, Kurt. “Impact of the Patient Protection and Affordable Care Act on Costs” Blue Shield. Dec 2009.
  3. Healthcare The President’s Plan. The White House.
  4. Secretary’s Corner. HealthReform.gov. Jan 2010.
  5. Transforming and Modernizing America’s Health Care System
  6. Journal of the American Medical Association
  7. The Preventable Causes of Death in the United States: Comparative Risk Assessment of Dietary, Lifestyle, and Metabolic Risk Factors – Harvard School of Public Health
  8. Electronic Health Records in Ambulatory Care — A National Survey of Physicians, New England Journal of Medicine
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