Question

Suppose you are tasked with explaining health care and the health care system in the united states to either:

a) a five year old
or
b) an anthropologist from another planet (who has access to a basic translator)

In either case, assume the individual knows that people get sick and that resources are scarce. Everything else you must explain simply. (3pts)

Your answer should include: Demand uncertainty, medical effectiveness uncertainty, Medicare, Medicaid, health insurance, hospital, doctor/provider. (7pts)

Answer 1

The U.S. health care system is not a universally accessible system – it is a publicly and privately-funded patchwork of fragmented systems and programs. Insured Americans are covered by both public and private health insurance, with a majority covered by private insurance plans through their employers. Government-funded programs, such as Medicaid and Medicare, provide health care coverage to some vulnerable population groups. The government also publicly funds coverage through Indian Health Services and the military.

Despite implementation of the Affordable Care Act (“Obamacare”), introduced in 2010, 10.4 percent of Americans (33 million) remain uninsured.

Although public financing comes secondary to private sector financing in the U.S. health care system, it is worth noting the breakdown of sources of payment as reported in 2013. Some calculations estimate that public payers (federal and state governments) account for almost half of all health care expenditures (46 percent), private third-party payer sources, 27 percent, while households pay the remaining 27 percent. Other calculations, however, estimate that public sources pay as much as 60.5 percent of total health spending, when taking into account federal tax subsidies for private insurance and government purchases of private insurance for public employees. In other words, government financing of the health care system in the U.S. is sizeable.

The U.S. spends far more public and private money combined on health care than any other OECD country – 16.4 percent of GDP in 2013 compared to the second-highest countries, the Netherlands and Switzerland at 11.1 percent of GDP. For context, Canada ranks 10th highest at an estimated 10.2 percent of GDP.

Unfortunately, this higher spending does not translate well to health outcomes.

The U.S. consistently ranks lower in some measures when compared to its peers around the world, such as in infant mortality rate and life expectancy. The lack of universal coverage for its population is the major challenge, resulting in inequality among different population groups regarding health care access, health resources and health outcomes. The fragmented financing and delivery system also lags behind other countries in the introduction of health information technology.

However, the amount spent on the system produces some positive outcomes for those well enough insured to benefit. The U.S. health care system has a large and well-trained workforce, including high-quality medical specialists, though at the expense of too few primary care generalists to meet demand. It also has excellent health care facilities and research programs.

Medicare and Medicaid

Only 30 percent of the population is covered by three publicly funded insurance programs: Medicare, Medicaid and the Children’s Health Insurance programs.

Medicare is a national social insurance program administered by the federal government, accessed primarily by seniors aged 65 and older, and by some people living with a disability. Medicaid is a state-based insurance program accessed by some poor and near-poor. The State-based Children’s Health Insurance Program (CHIP) insures children up to age 19 from families with incomes too high to qualify for Medicaid. Depending on the state, this income can be up to or above 300 percent of the Federal Poverty Level (FPL).

Medicare

Medicare consists of four “parts”, which cover different services. It is largely publicly-funded but with increasing cost sharing for end users since its inception. Medicare Part A provides hospital insurance, funded through payroll taxes. Medicare Part B provides medical insurance, for which individuals pay monthly premiums.

Medicare Part C, the Medicare Advantage Plans, is a voucher program offered through private commercial insurers who contract with Medicare to provide Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans.

Medicare Part D is an outpatient prescription drug program offered through private insurers funded by the federal government to delivery Part D benefits. In 2015, the Medicare program covered over 55 million Americans and made total benefit payments of $514 billion.

Medicaid

Although the federal government provides broad guidelines and partial funding for Medicaid, the program is managed and partially funded by individual states. It is means-tested, with states having ultimate control over eligibility. State participation in Medicaid is voluntary, but all states have been part of the program since 1982. Services covered by the states vary widely, and in 2015, 70.5 million American children and adults were covered by Medicaid.

There exists a demand uncertainty.The hospitals are sometimes not able to give proper medical care according to needs of the patient. This may be due to the lack of skilled professionals or due to high cost of effective treatment. The people who does not have health insurance cannot afford treatment. The medical effectiveness uncertainty includes uncertainty arising from both probability and ambiguity—whether pertaining to the onset of disease, the benefits and harms of medical treatment, or the practical or personal consequences of illness and its treatment.

Primary care doctors are often the point of entry for most patients needing care, but in the fragmented health care system of the U.S., many patients and their providers experience problems with care coordination. For example, a survey of California physicians found that:

Four of every ten physicians report that their patients have had problems with coordination of their care in the last 12 months.
More than 60% of doctors report that their patients "sometimes" or "often" experience long wait times for diagnostic tests.
Some 20% of doctors report having their patients repeat tests because of an inability to locate the results during a scheduled visit.
According to an article in The New York Times, the relationship between doctors and patients is deteriorating.