Universal Healthcare in America: Costs, Access, and Reform

Introduction: The U.S. Healthcare Debate

In Europe, debates over universal healthcare were settled decades ago; all that remains is a polite argument over the best way to fund such systems. In the United States, however, the idea that government should have any role in the relationship between doctor and patient remains deeply contentious. Town hall meetings convened to discuss healthcare reorganization have devolved into confrontations, at least one congressman has received death threats, and posters opposing reform have proliferated. Bill Clinton's effort to reorganize U.S. healthcare failed entirely, and President Obama's attempt has faced serious obstacles (Ahking et al., 2009).

Doubts about the cost of reform at a time when many believe the Obama administration has been reckless in its economic policies have combined with longstanding opposition to "socialized medicine" and distrust of expansive government to create a powerful political obstacle (Simonet, 2009). Yet the case for universal healthcare — grounded in the realities of medical bankruptcy, inadequate public health outcomes, and runaway spending — remains compelling.

Fewer than 20 percent of Americans believe their healthcare system is in crisis — a figure that has not changed in 20 years. Derived from private health insurance, supplemented by Medicare for those over 65 and Medicaid for low-income individuals, the system at its best delivers high-quality care. However, premiums are rising rapidly, and deductibles are also increasing. For approximately 18 percent of those covered, deductibles exceed $700 (Taylor & Hillestad, 2006).

The State of American Healthcare Coverage

A large number of people — 50 million out of a population of 280 million — have no insurance at all, meaning they must pay for healthcare entirely out of pocket. Medical costs accounted for 55 percent of U.S. personal bankruptcies in 2008, and this figure includes many people who were insured at some point. Because insurance is frequently tied to employment, it can disappear if illness is itself the cause of job loss (Flier & Goldhill, 2010).

Nearly all Americans evaluate healthcare reform from a personal standpoint: 85 percent are insured and report satisfaction with their current care. They fear that government involvement would make things worse, not better. While approximately 75 percent believe healthcare costs too much, roughly half believe a reformed system would be even more expensive (Ahking et al., 2009). This tension reflects a complicated political reality (Forman, 2007).

At its best, American medicine is exceptional. But when evaluated on quality, accessibility, efficiency, equity, and healthy lives, U.S. medicine trails the United Kingdom, Australia, Canada, Germany, and Norway, according to a report by the Commonwealth Fund. The U.S. ranks well on speed of access to elective treatment — second only to Germany — and on preventive care, where it leads all comparison countries, largely because managed care plans attempt to reduce costs by keeping patients out of hospitals. Both the UK and the U.S. rank near the bottom for mortality from conditions amenable to healthcare intervention (Simonet, 2009).

Many Americans do not place the same priority on equity, access, and administrative efficiency as the Commonwealth Fund does in its assessment criteria, and some argue that such rankings are designed to make the U.S. system look bad. What is less defensible is the widespread unawareness that a system as costly as America's does not translate that expense into proportionally better outcomes. President Obama pushed Congress to advance proposals meeting three requirements: reducing costs, ensuring that all Americans have the freedom to choose their own health plan (including a public option to compete with private insurers), and guaranteeing superior, affordable healthcare for all (Simonet, 2009).

Comparing U.S. Healthcare to Other Nations

Insurance, rather than direct taxation as in the UK, may remain the foundation of any reformed plan. This need not be a barrier — countries such as France and Sweden operate universal insurance-based systems that function well. In 2008, the United States spent $2.3 trillion on healthcare, compared to the United Kingdom's £120 billion. The UK's expenditure was 8.5 percent of GDP; the U.S.'s was 16.5 percent. Because wages and salaries account for approximately 55 percent of healthcare costs, large reductions are difficult to achieve. As challenging as it is to slow cost growth, it is far easier than cutting costs once they have already reached extreme levels (Taylor & Hillestad, 2006).

The proposed restructuring addresses not only public healthcare programs — Medicare and Medicaid — but also the private health insurance system. That system, as is well known, leaves approximately 45 million Americans without coverage. The reform would end existing fee-for-service Medicare and Medicaid plans and enroll all Americans in a universal health-insurance program called the Medical Universal Security (MUS) (Flier & Goldhill, 2010).

Each October, the MUS would issue every American an individual voucher to be applied toward health insurance coverage for the following calendar year. The value of the voucher would be proportional to the recipient's anticipated annual health expenditures. A 76-year-old patient with colon cancer, for example, might receive a voucher worth $200,000, while a healthy 35-year-old might receive one worth $4,000 (Simonet, 2009).

The MUS would have access to all medical records for each American and would set voucher amounts annually based on that information. Those concerned about privacy should note that the federal government already has comprehensive knowledge of the health conditions of millions of Medicare and Medicaid recipients, because it pays their medical bills — and those records have never been improperly disclosed (Ahking et al., 2009).