America’s Healthcare System – Part 1
A Preview of Civic Way’s Essays on Reimagining American Healthcare
This is the first essay in Civic Way’s series on the US healthcare system. Earlier, we recommended several strategies for rebuilding the public health system (structural and other). In this essay, we introduce our upcoming series on a related system that should be far more integrated with public health—the healthcare system. The author, Bob Melville, is the founder of Civic Way, a nonprofit dedicated to good government, and a management consultant with over 45 years of experience improving public agencies.
Highlights:
The reform that our healthcare system desperately needs will be hard—but not impossible—to achieve
Since Medicare and Medicaid began nearly 60 years ago, change has been incremental and hard won
For most Americans—and most illnesses—our healthcare system is like a rotting house with a designer kitchen—dazzling facilities obscuring a crumbling foundation
While the prospects for reforming the US healthcare system seem remote (if not entirely beyond our reach), there are disruptive forces at work that could provide a window for generational changes
Introduction
The US has a long, seemingly endless list of problems to solve, many of them made virtually immune to change by our dysfunctional politics. Our broken healthcare system may or may not be the most complicated problem we face, but, given the obstacles to change, it is probably the toughest of these problems to solve.
Others have learned this very lesson—the hard way. Our history, at least since the early 20th Century, is strewn with scores of failed healthcare reforms. FDR’s decision to exclude healthcare from the New Deal Social Security Act. Harry Truman’s failed National Health Insurance proposal. President Nixon’s and Senator Kennedy’s competing (and futile) national health insurance proposals. President Clinton's doomed Health Security Act.
The most consequential healthcare reform enacted by Congress since Medicare and Medicaid—the Patient Protection and Affordable Care Act (Obamacare)—also highlights the daunting challenges of reform. Even though the ACA was the progeny of conservative thinktanks and a Republican governor’s signature initiative, its torturous enactment left the Obama presidency politically weakened and may discourage other politicians from risking their careers on fixing healthcare (or any other issue for that matter).
Ironically, by conflating health insurance with healthcare, the ACA was more incremental than transformational. By focusing so much on health insurance, it left the healthcare system’s other fundamentals intact.
High-Level Assessment
The American healthcare system has many virtues. It is renowned for its market-driven agility and innovation (at least in some areas). It is highly regarded for impressive outcomes in several specialties such as cancer screening and treatment. Americans, for example, have very low prostate cancer death and breast-cancer mortality rates. Its medical schools continue to produce the world’s finest (and best paid) specialists.
But, for too many Americans and ailments, the healthcare system falls short—costly, inaccessible, disorganized and sometimes indifferent. Replete with contradictions, it offers sleek, modern hospital facilities near overrun, barely functional clinics. Like a rusty old car with shiny new accessories. Like a neglected house with a designer kitchen. A global outlier with poor accessibility, efficiency, prevention and affordability ratings. A disheartening last resort for too many sick Americans, especially those with limited resources.
The US spends far too much for the health outcomes it gets. Despite spending more on healthcare than other wealthy nations, it has one of the world’s lowest rated healthcare systems. Putting it differently, other wealthy countries spend (on average) less than half what the US spends on healthcare (as a share of gross domestic product). And, at the same time, they have better overall health outcomes than the US.
Why is the US healthcare system so deficient? There are several reasons, including the following:
Neglected prevention – The estrangement of healthcare from public health forces far more spending on treating serious ailments than preventing them with community-based primary care and social services (it is no coincidence that US healthcare spending ballooned as public health spending fell).
Uneven service – Inconsistent healthcare quality, unsatisfactory customer service and inequitable access, a system with a long history of underserving many people (e.g., minorities) and areas (e.g., rural).
Fragmented resources – Poorly organized, deployed and coordinated healthcare resources, exacerbated by federalism and archaic reimbursement rules, make healthcare too inconvenient and costly for many.
Biased, unsustainable financing – The health insurance system, with its coverage gaps, cost variations and profit biases, distorts healthcare quality, access and costs, and fosters the illusion that someone else pays our healthcare bills (an illusion that detaches patients from their own care).
Skewed innovation – US healthcare can be highly innovative where a solid financial return is likely, such as in many lucrative specialties, but it is too often outdated in practice areas where it could benefit far more people (e.g., primary care clinics).
Unaffordable care – The system’s many inefficiencies--administrative and otherwise—are both a function and accelerant of the other problems plaguing the system.
The Covid-19 pandemic severely strained our healthcare system, but our national health outcomes compared poorly to similar countries even before the pandemic. Still, the pandemic did magnify some of the system’s most glaring flaws. Its isolation from public health. Its indifference to underlying socio-economic determinants. Its slapdash deployment of resources. Its inequities. Its staggering costs.
Even as the pandemic’s most tragic impacts recede, the healthcare system remains in all its imperfection. And its costs will be increasingly unsustainable. The system’s collapse may or may not be inevitable, but its smothering effect on our nation’s global competitiveness and social vitality can no longer be ignored.
Future Reform Prospects
Regrettably, the prognosis for sweeping change is not promising. Healthcare is the American economy’s single largest sector. Not surprisingly, there are huge economic interests in maintaining the status quo. Some powerful forces—insurers, hospitals, physicians and pharmaceutical firms—have huge arsenals with which to defend the status quo. And our politicians seem utterly unable (or unwilling) to take on these powerful interests.
It is not that we don’t see the problems or potential solutions. The nation’s vast landscape of healthcare foundations, thinktanks, institutes and experts offer many pragmatic ideas for fine-tuning the system. From time to time, their ideas win favor and incremental changes are realized. But, unlike many other nations, the US finds structural (and enduring) reforms elusive.
Despite the formidable barriers to change, there is some cause for hope.
First, as demonstrated by our stunning strides in cancer treatment, we can do great things as a nation when we pursue tangible ends. If the public and private sectors work together, and synchronize their investments, the US could dramatically improve its health outcomes.
Second, the organizational and technological innovations already underway in the healthcare sector could prove so disruptive that reforms once considered unrealistic could become feasible. The restructuring of hospitals, physicians and insurers, for example, could momentarily open doors to fundamental changes. The digitization and integration of health records could make new business models more feasible.
Third, the status quo could become so intolerable—despite any improvements realized under ACA—that transformational change becomes essential. In that case, our nation’s interests would be best served by having a blueprint available to dust off, update and implement. That is the goal of this series.
Future Essays
In Civic Way’s upcoming series on healthcare, we plan essays that we hope will provide a useful primer on our healthcare system. A brief history of how we got here. A profile of the system’s many actors. An overview of the frayed health insurance market. A concise analysis of the system’s most serious flaws.
And finally, we offer some ideas for designing and building an entirely new system from the ashes of the old. We try to answer the question that few ask: If we had the opportunity to design a new healthcare system de novo, what would that system look like?