The American health care system has a history of being in disarray. Despite the introduction of the managed care, which was intended to help bring costs down, the cost of health care continues to rise. In addition to the spiraling costs of the health care system, millions of Americans still could not afford any form of health care insurance. The question is what can be done about it? The answer is neither easy nor clear cut. In 2010, the Patient Protection and Affordable Care Act (PPACA)—commonly called the Affordable Care Act (ACA) or Obamacare, after its major backer, US president Barack Obama—sought to reform a number of aspects of the US health insurance industry, as well as improve the access to and quality of health care services.

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Health Care Reform in the U.S

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Abstract

Overview

Health Care Reform in the U.S. Health care has constantly been at the forefront of American politics. Although affordable health care for everyone sounds like a positive step forward, the American health care system is bound to the insurance industry and has always been a fee-for-service system. To add to the dilemma, universal health care does not have universal support of the American people or the medical profession. In general, however, many support finding solutions to improve health care affordability and access to quality health care.

Further Insights

Managed Care. Managed care was an initiative in the private sector to address the spiraling costs of medical care, created to "manage health care costs." Managed care has become an integral part of the American health care system. It rose to some prominence during the presidency of Ronald Reagan and began as a way to control the amount of money being paid out by Medicare. Managed care was considered an excellent way of combining two important aspects of health care—funding and providing referrals. At the time, managed care was seen as a way of bringing down the costs of health care in the United States. Managed care generally will not cover services that are experimental in nature, cosmetic, or for which there is no standard of medical practice. There are also limitations to services that managed care will cover. In 2018, Congress enacted the Bipartisan Budget Act, which provided more flexibility to Medicare managed care plans by allowing the targeting of supplimental benefits for patients with multiple chronic conditions.

Fee for Service. The fee-for-service system has been difficult to overcome. Skeen (2003) writes, "Dr Alan Stone, a US doctor, says this: 'When you introduced the profit motive into health care, the whole industry became permeated with greed" (p. 523). Inherent in a fee-for-service system is that some people will be able to afford the fee but others will not. As Marmor notes, "In comparison with other industrial democracies, Americans are less insured for the costs of health care, and the care we receive is costlier. Yet, serious reform of American medicine has been enormously difficult to achieve and comprehensive reform impossible" (2006, p. 1500).

Fraud. According to Skeen (2003), one of the biggest problems of the pre-ACA system is the high rate of fraud. He blames this squarely on the structure of the fee-for-service system. Physicians and other providers are allowed to bill for their services but the ways they code (label and categorize) these services are up to them. So, some providers are accused of padding the bill by changing a patient's diagnosis to something far more serious and order tests (or say they have ordered tests) for which they're also able to bill.

Another part of the fraud and abuse problem surely lies with the insurance industry with its built-in, relatively low risk to increase costs. Skeen explains that private insurance companies also contribute to the problem.

Though insurance companies would prefer to avoid the uncertainty that rising prices create, they have generally been able to pass along the costs to their subscribers, and their profits increase with the total volume of expenditures (Skeen, 2003, p. 520).

Under managed care it is no longer the case that insurers pay all or some percentage of the usual and customary fees for a service as is done in retrospective (sometimes called "fee for service") systems. More likely they pit providers against one another to see who will bid the lowest prices for an acceptable level of service (Lawlor, 2002, p. 455).

History of Reform Efforts. Prior to the Affordable Care Act of 2010, there were notable efforts to try to change or reform the system. During his two-term presidency (1993–2001), Bill Clinton and his wife, Hillary Rodham Clinton, worked to bring universal health care to the United States. Even before this, there were significant attempts to try and reform the system.

During the first two decades of the twentieth century, labor unions attempted to reform the American health care. Since there was no requirement for employers to provide health care to their workers, workers would lose wages if they missed work due to illness and would have to pay for medical care out of pocket. This dual problem often left workers with huge debts. According to Hoffman (2003), "In 1915, progressive reformers proposed a system of compulsory health insurance to protect workers against both wage loss and medical costs during sickness" (p. 76).

In the 1960s, President Lyndon Johnson attempted reform by enacting Medicare, which is a federal program that provides health insurance coverage to qualifying low-income Americans, particularly among those over age sixty-five and children under eighteen. By creating Medicare, the most vulnerable in society would be provided for. Medicare is the program that provides people over sixty-five with medical care. It also provides support for persons with certain disabilities and people of all ages who have end-stage renal disease (kidney failure). Medicare has become far more complicated than it was in its original form. There are four sections to Medicare: A, B, C, and D. Respectively, they cover hospital insurance, medical insurance, advantage plans, and prescription drug coverage. One of the ongoing problems for the Medicare program has been to continue to provide the health insurance required by seniors and persons with disabilities at the same time as trying to contain costs. However, Medicare has become another huge bureaucratic structure that only adds to the complexity of the current problems facing the health care system.

Throughout the 1960s and 1970s, Massachusetts senator Edward Kennedy (1932–2009) was at the forefront of trying to create universal health care in the United States. He is famous for being a health care advocate, and many believe this was his greatest legacy as a politician. Yet, despite his best efforts, and his popularity in the Senate, he was unable to provide a bill that would truly reform American health care (Hoffman, 2003).

The history of health care reform would be incomplete without mentioning grassroots movements. In the 1970s, returning war veterans from Vietnam came home with permanent disabilities. They lobbied hard and long for their own needs and for health care reform. Their demonstrations and constant efforts were rewarded with the development of the Rehabilitation Act of 1974 - Bill 504. Disabled Rights Activists worked together again and pushed President George H. W. Bush to gain passage of the Americans with Disabilities Act in 1990.

Yet even before then, groups of Americans were fighting for their health care rights. For example, "The women's health movement has greatly influenced campaigns for national health care. In the early 1970s, the labor-led Committee for National Health Insurance held the first conference on women and universal health care" (Hoffman, 2003, p. 81).

In 1991, Representative Marty Russo of Illinois and Senate Majority Leader George Mitchell of Maine sponsored the Universal Health Care Act of 1991. This was a follow-up to the Pepper Commission Report on Access to Health Care and Long-Term Care for All Americans in 1990 (Scuka, 1994). The Pepper Commission and the Universal Health Care Act of 1991 differed in their approaches, but they both attempted to bring long-term reform to health care. The Russo Bill, as it was also called, went the furthest by recommending an end to co-payments, deductibles, and annual out-of-pocket payments (Scuka, 1994).

When President Bill Clinton was elected in 1992 the time seemed right for health care reform. He appointed his wife, Hillary, as the head of the Clinton Health Care Task Force. During the debates among the Democratic contenders for the 2008 presidential nomination, Senator Clinton admitted that despite her best effort, she could not bring about universal health care. According to Hoffman, "Clinton, fearful of business and insurance company opposition, proposed a dauntingly complex system of ‘health alliances’ that would preserve both employer-based coverage and the commercial insurance industry" (2003, p. 78).

No group in American history has possibly fought as long and hard for health care reform than have HIV/AIDS activists. Since the early 1980s, these activists have been organized and determined. They have advocated for research, proper care, medication trials, and insurance reform for people living with HIV and AIDS. "The activism of people with AIDS and HIV fighting for their very lives led to unprecedented changes in the health care system" (Hoffman, 2003, p. 80).

The Affordable Care Act of 2010. The Patient Protection and Affordable Care Act (PPACA) of 2010—commonly called the Affordable Care Act (ACA) or Obamacare, after its major backer, US president Barack Obama—sought to reform a number of aspects of the US health insurance industry, as well as improve the access to and quality of health care services. Since the passage of ACA, insurers have been required to cover preventive services without a deductible, copayment, or other out-of-pocket expense; extend coverage to children with existing medical conditions; cover young-adult children up to age twenty-six on their parents’ plans; spend most of their premiums on benefits to consumers rather than on administrative costs; and provide justification for rate increases. Starting in 2014, insurers were no longer allowed to set annual dollar limits on coverage, reject anyone based on preexisting medical conditions, discriminate against women, or restrict or deny coverage to those who participate in clinical trials. ACA also expands Medicare coverage through the state governments (US Department of Health & Human Services, 2013).

At the time of its passage, the Affordable Care Act was the most substantial overhaul of the US healthcare system since the passage of Medicare and Medicaid during the Johnson administration in the mid-1960s. Although it has encountered intense opposition from the general public, medical professionals, and various public officials, and had numerous problems and glitches in its start-up, the ACA promises to dramatically improve the affordability of and access to health insurance.

The Children’s Health Insurance Program (CHIP) is a health program that emerged in 1997 from the collapse of the Clinton administration's efforts at health care reform. CHIP is part of Medicaid and provides health insurance to many children below the age of nineteen. States have a great deal of leeway in deciding how to administer the program. Prior to the Affordable Care Act, very few programs besides CHIP and Medicaid provided health insurance to very poor or uninsured children. Problems arose with these programs, however, from inadequate state funding for CHIP, and children on Medicaid were reported to have to wait longer for appointments than were children with private pay insurance. Physician access for children on Medicaid was also poor (Roy, 2011; Grady, 2011). The Affordable Care Act as it was passed in 2010 proposed to expand Medicaid coverage and benefits and address the issues of substandard health care for children by increasing Medicaid payment rates to health care providers to help ensure access to primary care providers for more low-income children. Children will also no longer be denied coverage for preexisting conditions and will no longer have annual or lifetime caps placed on their health insurance. For very poor or uninsured families, ACA provides tax credits and vouchers to help with quality health insurance coverage (Children’s Defense Fund, 2012).

Difficulties in Achieving Reform. According to Tooker (2003), while there is widespread discontent with the US health care system, there is great skepticism on the part of most Americans with respect to a government-run system.

Another problem that reform has faced is the bipartisan approach in government toward health care. The Democratic party tends to approve of and support the notion of a government-funded system. The Republican Party takes the opposite approach. While it does support health care for all, Republicans tend not to support a system where the government runs health care in America.

Relman (2004) suggests that the problem of reform stems from the historical development of not only health care but also the very structure of American society. Capitalism flourishes only when a continuous profit is being made, and it relies on the existence of a free market. Thus, providers can charge what they believe the consumers will pay. So, the notion of profit becomes an integral aspect of the system (Skeen, 2003). A fee-for-service system implies profit, which can and often does turn to greed thus subverting the system. As Relman notes, "Now, when medical care becomes a business, certain things follow. Think about this: businesses must grow if they are going to succeed. Growth is imperative. That means you must get people to spend more and more money on health care" (2004, p. 437).

Issues

The State of the Uninsured. There is perhaps no issue as salient and distressing as that of the millions of Americans who are uninsured. In 2013, an estimated 41 million Americans were uninsured, including 9.8 percent of children below the poverty line and 7 percent of children above it. Black and Hispanic people were more likely to be uninsured, with 15.9 percent of black people and 24.3 percent of Hispanic people lacking insurance compared to 9.8 percent of non-Hispanic white people. Among adults aged eighteen to sixty-four, 13.1 percent of full-time workers were uninsured, as well as 24 percent of part-time workers, and over sixty percent of the uninsured in total had at least one full-time worker in the family. This strongly suggests that many employers do not provide health care insurance to their employees, especially part-time employees, although in some cases workers offered insurance by their employers cannot afford their share of the premium. Statistics released in the November 2019 indicate that the APA is reducing the number of uninsured people in the United States. By 2018, an estimated 28.56 million people in the United States were uninsured, down by 7 to 12 million in 2013, depending on the source. The percentage of uninsured was 8.5 percent in 2018, an increase from 7.9 percent in 2017 (Berchick, et al., 2019).

Smith (2008) suggests there is a strong correlation between lack of insurance and poor health: "While it is difficult to separate the consequences of being uninsured from the factors that contribute to being uninsured (e.g., lack of employment, lower income), evidence indicates a strong correlation between not having insurance and not receiving regular healthcare and thus having poor health" (p. 147).

The problem of being uninsured creates a cycle of social problems. An uninsured person tends to avoid going to the doctor because of the inability to pay. As a result, any nascent condition the individual may have will likely be far worse by the time he or she does see a doctor. This creates the necessity for complicated testing and treatment that is far more expensive than if it had been dealt with at the beginning. Thus, the patient ends up in a vicious cycle in which he or she cannot pay for insurance but ends up owing hundreds and possibly thousands of dollars for medical care. He or she may be put on a public plan, supplemented by private insurance company premiums, a pattern that ultimately contributes to rates increasing.

As mentioned earlier, one of the reasons many go uninsured is due to a decline in employers providing health care benefits. "The recent drop in ESI coverage was due partly to a decline in health benefit offers by small employers, but also to fewer workers being 'eligible' for coverage or electing to participate in employers' plans" (Smith, 2008, p. 41).

Publicly Funded Health Care. The United States will always be in a quandary about how to address these issues until the system undergoes radical change. Even though the particular health concerns for women, seniors, children, and others may vary according to their unique special needs, there is really only one overall issue: How can the United States create a system that will meet the needs of hundreds of millions of people? President Obama’s Affordable Care Act has been an attempt to put all Americans on a level playing field with insurance companies.

Health care in America continues to be a controversial subject primarily because so many people have difficulty accessing and using the system. It is a complicated system that can provide access to brilliant medical treatments, surgeries, and the most modern technologies available. However, it is also a system of great disparity. People of various ethnic minorities, the poor, and the disenfranchised experience the greatest problems accessing and using the health care system. Time will tell whether ACA is the answer to the US health care problems.

Conclusion

A 2004 report from the Agency for Healthcare Research and Quality stated that “despite the high quality of the US health care delivery system, many Americans do not get all the health care that they need" (Agency for Healthcare Research and Quality, 2005). Many in poor socioeconomic circumstances are less likely to access quality health care, or, in some cases, any health care at all. Some large cities such as Los Angeles, California, have free medical facilities, but the waiting list is very long.

Poor or near-poor women are more likely than high-income women to report fair or poor overall health and limitations of activity; they are also more likely to report anxiety, depression, arthritis, asthma, diabetes, hypertension, obesity, and osteoporosis (Agency for Healthcare Research and Quality, 2005).

DeVoe et al. (2007) also report on the dire situation for people in low socioeconomic circumstances. Many American children go without health care because their families cannot afford it. For those families who are able to secure public funding, they discover that many doctors do not accept their coverage. Even lower- and middle-income families have coverage difficulties: "Finally, there is a growing number of low- and middle-income families with private health insurance who gain access to most services, but the high deductibles and co-pays prevent them from getting necessary care" (DeVoe et al., 2007, p. 6).

Terms & Concepts

Americans with Disabilities Act: Enacted in 1990 by President George H. W. Bush after decades of work by disability-rights activists. It is a widespread piece of legislation that guarantees people with disabilities their civil and legal rights.

Fee for Service System: The term used when a system allows the provider (doctor, physical therapist) the opportunity to directly charge the consumer for their services and there is no publicly funded system in place.

Grassroots Activism: Grassroots activism consists of a group of like-minded people coming together for a cause they believe in. Grassroots activists are not usually controlled by any political party. Their issues are often directly opposed to the policies of the major political powers.

Gross Domestic Product (GDP): A measure of a country’s national income usually defined as the total market value of all goods and services produced within the country during a given period of time, usually a calendar year.

Industrial Democracy: An organizational arrangement in which workers are involved in making decisions and share responsibility and authority in the workplace.

Managed Care: Techniques intended to reduce the cost of providing health care and improve the quality of care ("managed care techniques"), or, organizations that implement such techniques or provide them as services.

Medicaid: The state administered program that provides medical support for a broad range of people.

Medicare: Often described as a social insurance program that is run by the federal government for health care services to people 65 and over and others who meet a specific set of criteria.

The Pepper Commission: The US Bipartisan Commission on Comprehensive Health Care, named the Pepper Commission after its congressional sponsor and first chairman the late Florida Democrat Claude Pepper.

The Rehabilitation Act - Bill 504: The forerunner of the Americans with Disabilities Act and the first widespread legislation to ensure civil and legal rights for people with disabilities.

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Suggested Reading

Adepoju, O. E., Preston, M. A., & Gonzales, G. (2015). Health care disparities in the post–Affordable Ccare Act era. American Journal of Public Health, 105, S665–S667. Retrieved January 26, 2016, from EBSCO Online Database SocINDEX with Full Text. http://search.ebscohost.com.lopes.idm.oclc.org/login.aspx?direct=true&db=sih&AN=110594928&site=ehost-live&scope=site

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Estes, C. (2008). Health policy: Crisis and reform in the U. S. health care delivery system . Sudbury, MA: Jones & Bartlett Publishers.

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Lee, P. R. (2015). Battling for the right health policy, then and now. Generations, 39(2), 15–20. Retrieved December 22, 2016, from EBSCO online database Sociology Source Ultimate. http://search.ebscohost.com.lopes.idm.oclc.org/login.aspx?direct=true&db=sxi&AN=109563258&site=ehost-live&scope=site

Shoven, J.B., Shultz, G.P., Gunn, M., & Goda, G. S. (2008). Putting Our House in Order: A Guide to Social Security and Health Care Reform. New York, NY: W.W.Norton & Co., Inc.

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Terry, K. (2007). RX for Health Care Reform. Nashville, TN: Vanderbilt University Press.

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Essay by Ilanna Mandel, MA

Ilanna Mandel is a writer and editor with vast experience in the health and education sectors. Her work has been utilized by corporations, nonprofit organizations, and academic institutions. She is a published author with numerous articles to her credit. She received her MA in education from the University of California, Berkeley, where she focused on sociology and education.

Copyright of Health Care Reform in the U.S. -- Research Starters Sociology is the property of Great Neck Publishing and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.

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