Public Health Care System
The American health care system consists of two components. The public health and personal health care system. Public health care system focus on population and emphasis is on prevention and health promotion of community. The activities involved in public health care system are Vaccination, Motor vehicle safety, Safer workplaces, Control of infectious diseases, decline in deaths from coronary heart disease and stroke , Safer, healthier food, Healthier mothers and babies, Family planning, Fluoridation of drinking water, Recognition of tobacco as a hazard etc.
Total spending in American health care system is 17.7 Percent of GDP of which 52.2 Percent is private spending and 47.8 Percent is General Government spending. Of total spending on health, only six percent is spent on public health and rest ninety four percent is spent on personal health care system. Most of the spending in public health system is done by the state government and only 15% of the spending is done by federal government. The private spending in public health is almost same as government spending ie, 3 percent each. Bulk of the private spending is done by not for profit organizations.
The personal health care system is mainly occupied by three types of players ie. Not for profit, profit and government. Almost 70% of the market in this segment is occupied by not for profit organizations and rest 30% are equally distributed between government and private …show more content…
organizations. Per capita health expenditure is $ 8925 per annum in 2013 ( as per OECD data) which is highest in world and it is way above the average per capita expenditure of other developed and OECD countries. Both in relative terms and absolute term, the private as well as government spending is highest in world. Most of the expenditure on health by individuals is through insurance or through out of pocket expenditure. The government expenditure are mostly in providing health benefits to the elderly, poor, children and disabled through various scheme such as Medicare, Medicaid, S-CHIP etc. 32% of the national health expenditure is on private health insurance, 21% is on medicare, 16% on Medicaid and S- CHIP, 12% on other public spending, 11% on out of pocket payment and balance 7 % on other private spending. 84% of the population is insured by one way or other ie. either by employer, government, or self insurance. Only 16% of the population is uninsured which contains mainly youth segment. The distribution of spending on health by the type of service is 32% in hospital care, 20% in physician/ clinical service, 10 % in prescription drugs, 5.5 % in nursing and continuing care retirement communities, 2.7 % in home health care, 15% in other personal health care consisting of dental and other professional health services, durable medical equipment etc. and 16% on other health spending consisting of administration and net cost of private health insurance, public health activity, research, and structures and equipment, etc. If the performance of the health sector in America is compared to other developed country and OECD countries, it is observed that US rank eleventh in overall performance. Although UK is spending much lesser amount of $ 3405 per capita as compared to $ 8508 in US, it ranks first in overall performance. In almost all the indicators of health performance, it is above US. Moreover most of the OECD countries rank above US although their per capita spending is much less.
Then why does the US health sector lagging behind even after spending disproportionately higher amount. If we look at the government spending as compared to total spending in OECD countries it is observed that in most of the countries government spending is more than 75% and in some cases upto 90%. These countries have most of the healthcare infrastructure under government such as hospitals and clinics and very few private hospitals exist. In contrast, US has only 15% infrastructural medical facility under government control and rest are under private control hence the health sector is market driven. Even the funds which are spent by government on popular schemes such as Medicare, Medicaid etc. the services are provided through the private service provider only. Hence these private service providers mostly control the Healthcare system in USA. Since the government has chosen to keep out as health services, it has to control the sector through legislations and policy initiative. As is evident all over the world, in democratic societies, the legislation and policy initiative are influence by the interest groups. In the market based economy, the interest group try to protect their interest by influencing the government in making policy decisions which suits their interest and other stakeholders are at disadvantageous position.
The main interest groups in health sector are the American Medical association which is the association of Doctors and the Health Insurance Association which is the association of Health Insurance companies. The American Medical association tries to influence the policy making to their advantage through media campaign and political influence and lobbying. Through policy initiative they are successful in limiting the supply of doctors in the system which has led to abnormally high wage rate for them. They have limited the supply by having laws which requires large number of years in extensive study and internship in medical colleges of USA. The study for Medical degree is very expensive in USA and to continuously study for say ten years after undergraduate study is very difficult to sustain for even the high wealthy individuals let alone the average American. Due to this most parents and students does not consider medical profession as their carrier decisions beforehand. Hence very few peruse the carrier in medical profession and very limited numbers could successfully entre the market. Even for the Immigrants doctors, the procedure and level are set at very high standard. In the market economy since there is demand and supply gap hence their wages are artificially high. The public at large has been convinced through various campaigns that if standards are lowed it will have disastrous effect on public health. The final result is that the public is paying abnormally high charges for the services rendered by the doctors and they have no option. For the same services rendered in other OECD countries the charges are less thus even other OECD countries spend less they are higher in ranking than USA.
Similarly Health Insurance association also have vested interest in having high services charged by doctors and hospitals.
As individuals try to shield themselves from unwarranted high charges towards medical expenses they try to hedge their expense through Insurance hence they get more business. Moreover many discriminatory public policies such as refusal of policy to high health risk individuals, disclosure norms, high out of pocket payment, limited number of services available etc, got implemented through active lobbing by the
association.
Recently, Patient Protection and Affordable Care Act popularly known as Obama care has been implemented with the aim of Protecting Families’ Financial Health, Make Health Coverage Affordable, Provide Portability of Coverage, Guarantee Choice, Invest in Prevention and Wellness, Improve Patient Safety and Quality Care. Due to this act Insurance company interest was severely affected and it has opposed the act tooth and nail. However it got implemented due to strong political will and it will take years before the effect and full impact of the law could be known. If it could help in protecting the interest of the general public and allow market mechanism to work in free and fair manner then over the years, the spending in medical services of the public will go down and society at large will benefit.
Total spending in American health care system is 17.7 Percent of GDP of which 52.2 Percent is private spending and 47.8 Percent is General Government spending. Of total spending on health, only six percent is spent on public health and rest ninety four percent is spent on personal health care system. Most of the spending in public health system is done by the state government and only 15% of the spending is done by federal government. The private spending in public health is almost same as government spending ie, 3 percent each. Bulk of the private spending is done by not for profit organizations.
The personal health care system is mainly occupied by three types of players ie. Not for profit, profit and government. Almost 70% of the market in this segment is occupied by not for profit organizations and rest 30% are equally distributed between government and private …show more content…
organizations. Per capita health expenditure is $ 8925 per annum in 2013 ( as per OECD data) which is highest in world and it is way above the average per capita expenditure of other developed and OECD countries. Both in relative terms and absolute term, the private as well as government spending is highest in world. Most of the expenditure on health by individuals is through insurance or through out of pocket expenditure. The government expenditure are mostly in providing health benefits to the elderly, poor, children and disabled through various scheme such as Medicare, Medicaid, S-CHIP etc. 32% of the national health expenditure is on private health insurance, 21% is on medicare, 16% on Medicaid and S- CHIP, 12% on other public spending, 11% on out of pocket payment and balance 7 % on other private spending. 84% of the population is insured by one way or other ie. either by employer, government, or self insurance. Only 16% of the population is uninsured which contains mainly youth segment. The distribution of spending on health by the type of service is 32% in hospital care, 20% in physician/ clinical service, 10 % in prescription drugs, 5.5 % in nursing and continuing care retirement communities, 2.7 % in home health care, 15% in other personal health care consisting of dental and other professional health services, durable medical equipment etc. and 16% on other health spending consisting of administration and net cost of private health insurance, public health activity, research, and structures and equipment, etc. If the performance of the health sector in America is compared to other developed country and OECD countries, it is observed that US rank eleventh in overall performance. Although UK is spending much lesser amount of $ 3405 per capita as compared to $ 8508 in US, it ranks first in overall performance. In almost all the indicators of health performance, it is above US. Moreover most of the OECD countries rank above US although their per capita spending is much less.
Then why does the US health sector lagging behind even after spending disproportionately higher amount. If we look at the government spending as compared to total spending in OECD countries it is observed that in most of the countries government spending is more than 75% and in some cases upto 90%. These countries have most of the healthcare infrastructure under government such as hospitals and clinics and very few private hospitals exist. In contrast, US has only 15% infrastructural medical facility under government control and rest are under private control hence the health sector is market driven. Even the funds which are spent by government on popular schemes such as Medicare, Medicaid etc. the services are provided through the private service provider only. Hence these private service providers mostly control the Healthcare system in USA. Since the government has chosen to keep out as health services, it has to control the sector through legislations and policy initiative. As is evident all over the world, in democratic societies, the legislation and policy initiative are influence by the interest groups. In the market based economy, the interest group try to protect their interest by influencing the government in making policy decisions which suits their interest and other stakeholders are at disadvantageous position.
The main interest groups in health sector are the American Medical association which is the association of Doctors and the Health Insurance Association which is the association of Health Insurance companies. The American Medical association tries to influence the policy making to their advantage through media campaign and political influence and lobbying. Through policy initiative they are successful in limiting the supply of doctors in the system which has led to abnormally high wage rate for them. They have limited the supply by having laws which requires large number of years in extensive study and internship in medical colleges of USA. The study for Medical degree is very expensive in USA and to continuously study for say ten years after undergraduate study is very difficult to sustain for even the high wealthy individuals let alone the average American. Due to this most parents and students does not consider medical profession as their carrier decisions beforehand. Hence very few peruse the carrier in medical profession and very limited numbers could successfully entre the market. Even for the Immigrants doctors, the procedure and level are set at very high standard. In the market economy since there is demand and supply gap hence their wages are artificially high. The public at large has been convinced through various campaigns that if standards are lowed it will have disastrous effect on public health. The final result is that the public is paying abnormally high charges for the services rendered by the doctors and they have no option. For the same services rendered in other OECD countries the charges are less thus even other OECD countries spend less they are higher in ranking than USA.
Similarly Health Insurance association also have vested interest in having high services charged by doctors and hospitals.
As individuals try to shield themselves from unwarranted high charges towards medical expenses they try to hedge their expense through Insurance hence they get more business. Moreover many discriminatory public policies such as refusal of policy to high health risk individuals, disclosure norms, high out of pocket payment, limited number of services available etc, got implemented through active lobbing by the
association.
Recently, Patient Protection and Affordable Care Act popularly known as Obama care has been implemented with the aim of Protecting Families’ Financial Health, Make Health Coverage Affordable, Provide Portability of Coverage, Guarantee Choice, Invest in Prevention and Wellness, Improve Patient Safety and Quality Care. Due to this act Insurance company interest was severely affected and it has opposed the act tooth and nail. However it got implemented due to strong political will and it will take years before the effect and full impact of the law could be known. If it could help in protecting the interest of the general public and allow market mechanism to work in free and fair manner then over the years, the spending in medical services of the public will go down and society at large will benefit.