Abstract The United States spends considerably more on medical care than any country in the world but is the only resource-rich country where a substantial portion of its residents lack health insurance coverage. Moreover, the US continues to rank low on most measures of health outcome compared to other developed countries. Therefore, there was considerable incredulity by those unfamiliar with the US as to why a revamping of this obviously broken system was not widely embraced by the American public when in 2009 a popularly elected president made healthcare reform his top priority. This commentary examines this phenomenon and discusses why a meaningful transformation of the US healthcare system has proven so elusive. Among the factors discussed here are political institutions and economic forces, a powerful medical establishment, the dominant private insurance industry, an extensive liability system and a public that is highly suspicious of any government involvement in healthcare.

Keywords Affordable Care Act, cost containment, healthcare reform, US healthcare system

Introduction

In this commentary, I address the question I often hear regarding the difficulties that faced the Obama administration in its recent quest to reform the American healthcare system as well as for all past, less extensive attempts to transform the healthcare system: that is, why don’t Americans want meaningful change of an obviously broken system? With out-of-control costs, highly inequitable coverage and comparatively low health

Corresponding author: Robert H Blank, 5218 Lake Arrowhead Trail, Sarasota, FL 34231, USA. Email: [email protected]

438327CSI0010.1177/0011392112438327BlankCurrent Sociology 2012

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outcomes, the US healthcare system has failed to provide efficient, dependable coverage for the population as a whole as compared to most European and developed Asian sys- tems (see Blank and Burau, 2010; Lamm and Blank, 2007; Wendt and Minhas, 2010). Cost shifting, especially when the uninsured in effect must subsidize those with private or social (Medicare/Medicaid) insurance because they lack the leverage to bargain for cut rates, further exacerbates the inequality between those who have premium insurance plans and those who do not. Moreover, the many entrenched interests in a healthcare market that constitutes at least one-sixth of the US economy have been able to impede momentous change, as evidenced by the largely emasculated ‘reforms’ of 2010.

The result is a system with its own momentum towards heightened spending on the newest healthcare technologies but with less concern for its cost for society or for equality of access to healthcare. Not surprisingly, to date numerous attempts to rein in spending and set limits to healthcare have met with intense opposition from many quarters. Among the factors that contribute to this situation that are discussed here are political and economic forces, a powerful medical establishment, the dominant private insurance industry, an extensive medical liability system and, in many ways the most crucial factor, a public that highly values individual rights over communal interests, has unmitigated faith in the technological fix and is highly suspicious of any govern- ment involvement in healthcare.

The Patient Protection and Affordable Care Act (ACA)

After a year-long, contentious battle over health reform, the Patient Protection and Affordable Care Act (ACA) was signed into law by President Obama on 23 March 2010. This Act along with the Healthcare and Education Reconciliation Act of 2010 (signed into law on 30 March 2010) constituted the healthcare overhaul of 2010 (PPACA, 2010). At its core, the ACA was an ambitious attempt to provide some measure of equality in what has become the most unequal healthcare system in the developed world. Although the Act will not be fully implemented until 2014, the ACA frontloaded some of what were thought to be the more popular aspects to take effect immediately. As illustrated in Table 1, the changes initiated by the ACA are significant, although they fall well short of the transformation originally envisioned by those who favoured a ‘public option’ that would compete with private insurers. Moreover, this ‘patchwork’ reform faces severe challenges before it is fully implemented in 2014 (Marmor and Oberlander, 2011).

Although the ACA does offer benefits for many poorer Americans and is predicted to reduce the number of uninsured by some 15 million, among the biggest winners are the pharmaceutical companies and the private insurance industry. Early in the process, the President made a secret deal with the drug companies (Light, 2011). In exchange for their active support of the reforms, they were assured the reforms would not allow wholesale price negotiations or unauthorized importation of drugs that would significantly reduce corporate revenues. According to Donald Light, this move transformed a powerful sector from an enemy to an ally of the reforms, but it also triggered considerable congressional and public outrage (Light, 2011). Likewise, in order to garner support of the insurance companies, the increased costs of covering people with pre-existing conditions, minimal standards and removal of coverage caps was offset by the promise of the mandated

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infusion of tens of millions of younger, healthier individuals into the private insurance pool. Under the ACA, by 2014 all persons will be forced to buy health insurance, primar- ily from private insurers. However, if all companies continue to raise premiums, there is no escape in the form of a public option, particularly since the Act does not give the federal government much regulatory power to prevent such increases.

Despite assurances from the President that persons with insurance would not lose any benefits or pay more, early public support for reform quickly turned to opposition. A poll after passage reported that 55% of likely voters favoured repealing the bill. Similarly, a December 2010 poll by the television network CNN found that 37% of the public opposed the bill for being too liberal, 13% opposed it on the grounds of being not liberal enough and 43% supported the bill (Opinion Research Corporation, 2010). By clear majorities, respondents said that the bill ‘gives the government too much involvement in healthcare’, believed the bill ‘increases the amount of money they personally spend on healthcare’ and believed it would lead to higher deficits. By early 2011, polls showed opposition ranging between 50 and 70%. The large increase in insurance premiums for 2011, for some persons nearly 50%, solidified this opposition. Moreover, a survey of big employers found that overall they expected their healthcare costs to rise nearly 9% and planned to share some of that burden with employees via higher premiums and out-of- pocket limits (Hobson, 2011). Many workers, therefore, are facing not only higher pre- miums but also increased co-insurance and higher deductibles, and possible new surcharges (Andrews, 2010).

An unanticipated consequence of the Act is that many companies are reviewing the costs of continuing to provide employee healthcare benefits and are considering pay- ing the fine and dropping coverage because it hurts them competitively. As a result, it is estimated that by 2014 there will be a net 10% reduction in access to employer- sponsored health benefits affecting potentially 10 million people (Tully, 2010). While

Table 1. Key provisions of the Affordable Care Act of 2010.

• Implements guaranteed issue and community rating nationally so that insurers must offer the same premium to all applicants of the same age, sex and geographical location regardless of pre-existing conditions.

• Introduces minimum standards for health insurance policies and removes all annual and lifetime coverage caps.

• Mandates that some healthcare insurance benefits will be ‘essential’ coverage for which there will be no co-pays.

• Requires all non-exempt individuals to purchase health insurance or pay a fine to broaden the insurance pool and deter healthy individuals from buying insurance only after they become ill.

• Expands Medicaid eligibility across all states to include all individuals and families with incomes up to 133% of the poverty level.

• Provides subsidies on a sliding scale for low-income persons and families above the Medicaid level and up to 400% of the poverty level if they purchase insurance via an exchange.

• Provides improved benefits for Medicare prescription drug coverage. • Creates health insurance exchanges in each state to offer a marketplace where individuals

and small businesses can compare policies and premiums and buy insurance. • Fines companies that employ 50 or more people that do not offer health insurance if the

government has to subsidize an employee’s healthcare.

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some large employers initially supported the plan to create a public scheme to relieve them of the exceedingly high private insurance benefits they face, this support quickly waned when it was clear that they would likely not benefit and the Chamber of Commerce became vocally opposed to the proposed legislation. However, many firms, both large and small, see the availability of coverage to employees through exchanges as giving them the opportunity to leave the health benefits arena without leaving their employees unprotected as they had been before the ACA. Moreover, there are strong forces that are driving employers to hire part-time or individual contractor workforces to avoid the escalating costs of providing healthcare benefits.

Although the ACA promises to produce a more equitable healthcare system, it is much less likely to constrain the escalating costs. In fact, it is quite likely to increase costs primarily since the major thrust of the Act, as reflected in its title, was to expand access to healthcare, not to limit healthcare. In part, this emphasis was an understanding on the part of the Obama administration that any mention of cutting benefits for the insured to fund the uninsured would be seen as rationing and strongly opposed by the public. Despite their attempts, however, projected savings in Medicare were viewed by the elderly as a threat and potential ‘take back’, thus explaining the very low support among the elderly for the overhaul. This strong aversion to having limits set on individ- ual choice can only be explained by an understanding of the US political system, its culture and the power of interest groups.

Federal system, the Constitution and the legal system

After independence, the 18th-century framers of the Constitution, fearing centralized power, deliberately created a highly fragmented political system. Moreover, because it was the 13 separate states that called the Convention, they created a strong federal system that protected their interests. The result is a separation of powers where, among other things, the health and well-being of the citizens is a state, not national, responsi- bility. Also, unlike parliamentary systems, there is a further division of power among the executive and legislative branches, and a separate, independent judiciary with pow- ers of judicial review. Moreover, Congress is a bicameral institution with many inbuilt veto points, resulting in slow, deliberative and reactive policy-making. For instance, by tradition the US Senate permits unlimited debate under the filibuster rule that requires 60 votes to cut off debate, thus, in effect, requiring an extra-ordinary majority to move controversial legislation through that body. Furthermore, the winner-take-all electoral system has favoured the two parties and a highly pluralistic interest group dominated political process.

Shortly after President Obama signed the ACA into law, opponents of the law filed a series of over 20 legal challenges in federal court, the first by attorneys general or governors of 26 states on constitutional grounds (Masucci, 2011). Among other objec- tives, these suits seek to strike down the Act’s individual mandate that requires most American citizens and residents to buy health insurance as defined in the Act or pay a monetary penalty. Specifically, the cases centre on whether the individual mandate set forth in §1501 of the Act violates the Commerce Clause in the Constitution. As of 31 January 2010, federal district courts have issued four decisions, two upholding the Act

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and two invalidating the individual mandate as unconstitutional. None of the decisions invalidates the Medicaid provisions as being coercive to the states, but one of the deci- sions (State of Florida, 2011) strikes down the entire Act, including the Medicaid pro- visions, based on a ruling that the individual mandate is unconstitutional and not severable from the rest of the Act (for more details, see Hayes and Rosenbaum, 2010).

America’s value system

The US is the prototype of an individualistic society. Although individual rights are emphasized in all western countries, in the US rights have been elevated to a status of supremacy over collective interests. Moreover, by rights Americans mean negative rights, and, as a result, they are hesitant to sacrifice perceived individual needs for the common good. Thus, there is no guaranteed universal coverage, but also no limits on what healthcare individuals can buy if they can afford it. This cultural tenet goes a long way to explain why the US expends so much more of its GDP on healthcare than other developed countries without providing universal access. Earlier cost containment meas- ures such as Health Maintenance Organizations (HMOs) that attempted to set limits on individual care were widely attacked as counter to patient rights and led to calls for a ‘Patients’ Bill of Rights’, a concept that the ACA highlighted in its title (while downplay- ing any limits it might impose in the future).

In the US, when individual rights and the common good conflict the individual’s claims take precedence. ‘Our premium on individual rights and our emphasis on the dif- ferences between us is a far cry from the social beliefs that back the health systems of Europe, Canada, and Japan, in which more homogenous societies band together for the common good’ (Kassler, 1994: 130). Moreover, in the US there is a strong aversion by the medical community to serve as gatekeepers, and professional codes of ethics refuse to acknowledge the existence of scarcity of resources. The idea that limits on medical expenditures for an individual patient can be set in order to benefit the wider community contradicts the traditional patient-oriented customs of medicine. Although Americans complain about high costs and high taxes, when their health or life is at stake, they expect that no expense will be spared and that medicine should not have a price tag.

The US culture is also predisposed towards progress through technological means. The result is an unrealistic dependence on technology to fix health problems at the expense of non-technological solutions. High-quality medicine is equated with high- technology medicine and the best healthcare is that which uses the most sophisticated new techniques. This demand for medical technology is reinforced by the dominance of medical specialists who quickly extend the indications for use of new innovations, thus leading to a very aggressive form of medicine and wide use of technologically based diagnostics as compared to other developed countries (Blank and Burau, 2010).

This proliferation of new medical technologies and pharmaceuticals over the past several decades has been one of (if not the most) important drivers of healthcare spend- ing growth in the US (Bodenheimer, 2005; Skinner et al., 2006). Inherent in medicine has been the continuous expansion of categories of disease for a broader range of conditions deemed unhealthy. Baker et al. (2003) found that increases in the supply of technology tend to be related to both higher utilization and spending on the service in question.

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Thorpe et al. (2004) found that a small number of medical conditions were associated with much of the increase in healthcare spending between 1987 and 2000 in the US, with the top 15 conditions accounting for approximately half of the overall growth in spend- ing. While not every technological advance leads to increased expenditure, the net effect has tended to raise costs due to extensions in the range and intensity of care. The combi- nation of faith in technology to provide health, a powerful medical research industry and an incentive structure that rewards individualized medicine and innovation assures dom- inance of the supply state and the medical model in the US.

Although there is no doubt that medical care can be decisive in individual cases, there is extensive evidence that it is a relatively minor determinant of the health of popula- tions. The limited contribution of medical care to health improvement was reported by McKeown (1976) a quarter century ago and widely confirmed since then (Ford et al., 2007). Medical care has a limited health effect, estimated to account for 10–15% among the determinants of a nation’s health (Isaacs and Schroeder, 2004):

. . . at the population level, more intensive use of supply-sensitive care – more frequent physician visits, hospitalizations, and stays in intensive care among the chronically ill – does not result in better health outcomes. (Center for the Evaluative Clinical Sciences, 2006: 3)

Health inequalities are associated more with the fundamental causes of health determi- nants such as the distribution of income and access to health promoting resources (Rainham, 2007), thus the largest potential for improvement in population health lies in behavioural risk factors, especially smoking and obesity (Schroeder, 2007).

Although all resource-rich nations feel the impact of new technologies, many limit the diffusion of expensive new drugs and equipment by instituting controls and requiring physicians and hospitals to work within fixed budgets. In a study of 16 countries from around the world McClellan and Kessler, for example, found ‘enormous differences in how quickly and widely treatments diffused into medical practice’ (1999: 253), espe- cially high-technology treatments with high fixed costs or high variable costs per use. They also found more modest differences in the times it takes new drugs, procedures or devices to become available. In all areas, the US exhibited the fastest and widest diffu- sion with few inbuilt limits on their reimbursement. This diffusion of often unproven interventions consumes ever-larger proportions of healthcare resources, thus diverting resources from universal access to beneficial treatments, primary care and prevention.

Why is genuine transformation of healthcare so problematic in the United States?

With all the evidence pointing towards the need to moderate the medical model and set limits, what factors explain the failure of Americans to face this issue? Forces in opposi- tion include politicians who over promise; drug companies, big medicine and a medical research community whose lifeblood is continual expansion of profit-making medical technologies; physicians who will not say no to patients and are paid more to provide more care; tort lawyers who argue negligence when not all that is possible is done for their client; and patients and their families who demand everything that might help be

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done because cost should be of no concern if a third party is paying for it. Every element of US healthcare drives it to deliver more and more. Each of these forces is mutually reinforcing, and all point back to the prevailing individualistic values of Americans. In combination, they constitute a formidable force for the status quo and a powerful obstruc- tion in the way of genuine healthcare reform that includes setting sustainable limits.

Politics

It is natural for politicians to want to please their constituents and be re-elected. As such, they are beholden to those interests with political power and to the demands of their constituents. In the US, this means that politicians of both parties are likely to place high priority on protecting individual rights (including wide freedom of choice), free enter- prise and the private marketplace, and to favour minimal government intrusion in these areas. Moreover, an expansive view of healthcare with emphasis on the medical model often is nurtured by politicians who place heavy emphasis on the rights of individuals to healthcare with few limits. Any officials who dare propose establishing boundaries or take backs of existing benefits are attacked as instituting socialized medicine or ration- ing. Reinforcing the hesitancy to challenge entrenched interests, politicians are particu- larly attuned to the interests of the elderly, who have considerable political influence and feel most fervently about healthcare. Also, as noted earlier, the US political system has been deliberately conceived to be highly fragmented with multiple institutional veto points that favour the status quo, especially on a controversial issue like healthcare.

Economic forces

The primary forces behind technological medicine come from a healthcare industry that instils a demand in the public. Healthcare is big business with huge financial stakes and the healthcare industry is a powerful shaper of perceived needs. Thus, as noted earlier, in the absence of public controls, the high economic stakes in the healthcare market ensure rapid diffusion of new technologies and are likely to lead to inappropriate, and wasteful, care. Furthermore, the fee-for-service, retrospective reimbursement system further dis- torts the market because it fails to provide effective mechanisms to constrain these mar- ket forces and creates an incentive structure that rewards overuse of technologies and invasive procedures. Although the ACA has the potential to effectuate change in this regard, the administration has largely avoided discussion of this sensitive topic.

The medical profession

Health professionals are trained in the technological imperative, which holds that a tech- nology should be used despite its cost if it offers any possibility of benefit and this has produced a do-everything approach. Although the medical profession is far from mono- lithic when it comes to setting limits, most clinicians in the US object to interference from government or other payers. In other words, they refuse to act as gatekeepers or participate in rationing of scarce resources (Alexander et al., 2004). This denial of scar- city serves as a barrier to containing costs as well as developing fair allocation systems.

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It can also contribute to the willingness of physicians to lie to obtain marginal benefits for their patients through practices such as ‘diagnostic creep’ and ‘gaming’ the system in response to cost containment efforts of payers (Alexander et al., 2003).

The legal system

Given its emphasis on individual rights, it is no surprise that the US has the world’s most extensive medical liability system. While the medical community claims medical mal- practice suits represent a crisis needing reform, trial lawyers and consumer groups argue that any attempt to limit awards will undermine the rights of individuals to redress wrongs in a court of law. In addition to the cost of malpractice insurance, which averages over US$100,000 per year for some specialties, and maintaining legal council in medical facilities, virtually every medical decision is made within a legal milieu (Hettrich et al., 2010). This leads to defensive medicine, where doctors order diagnostic tests and thera- peutic measures that are of marginal or no benefit simply to avoid potential litigation. Although there is considerable debate over the full costs of defensive medicine, it adds significantly to health spending in the US. Moreover, attempts to limit medical services, such as the refusal of insurance companies to cover organ transplants and other expen- sive interventions, are met with threats of legal action.

The public

The expectations and demands of the US public regarding healthcare are potentially insatiable and are fuelled by a medical industry that has much to gain by the continual expansion of the scope of medicine. Healthcare costs have increased partly because citi- zens expect and often demand heightened levels of medical intervention, levels undreamt of several decades ago. Not surprisingly, any attempt to place limits on access to the newest technologies risks condemnation from practitioners, their patients and the public. The pressure to use medical technologies past the point where they have no marginal value is very strong and as a result the long-term spending growth trend is inevitable (Altman et al., 2003). These public expectations and perceptions of medicine have resulted in an overutilization of and reliance on technology (Ubel, 2001). Moreover, patients have become less deferential and more informed as to their options through the Internet and the media. The long-term effect, within the context of ever more sophisti- cated technological options, is that setting limits has become progressively more difficult politically as the population takes healthcare entitlements for granted.

A survey by the Opinion Research Corporation (2004) of 1020 adults in 2004 found that 67% of the respondents thought that healthcare coverage should be a ‘guarantee’, with 78% agreeing that healthcare is a necessity. The study’s authors concluded that Americans are ready for reform, but the notion of limits was firmly rejected: 71% disagreed with the idea that patients who have HMO coverage should have fewer rights to care, and 83% thought patients denied coverage for ‘medically necessary’ treatment should have the right to sue for damages. Americans also deeply value their choice of providers and immediate access to specialists and high-technology diagnostics and reject any cost control measures that are perceived as interfering with that choice. Ironically, although actual choice in the

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US might be less than in some European countries, opponents to change often exploit this fear that change will result in less choice. As reflected in these polls, it is clear that for the American public, the crisis in healthcare can be resolved only by personally less expensive healthcare coverage, not less expensive healthcare.

The mass media

Public expectations are also elevated because of a tendency to oversell medical innova- tion and overestimate the capacities of new medical technologies for resolving health problems. At the centre are the mass media that are predisposed to unrealistically opti- mistic and oversimplified coverage of medical technology. Popular health-oriented mag- azines and television shows extol the virtues of medical innovations. Frequently, the initial response of the media, often encouraged by medical spokespersons, is to report innovations as medical ‘breakthroughs’. By and large, then, media coverage solidifies public trust in the technological fix and ‘stimulates their appetite for new, expensive, high technology procedures’ (Kassler, 1994: 126). Moreover, the media seem to relish uncovering and sensationalizing cases where treatment is denied.

The future of US healthcare

In the US, as opposed to other western nations, the individual always trumps the com- munity. Americans expect to take as much or more out of a health plan as they put into it. Interestingly, many of the proponents of a single-payer system are the strongest oppo- nents of setting limits; in fact, they argue that only moves to such a system will allow us to escape rationing. This is unrealistic because universal coverage is workable only when restraints on the intensity of treatment are imposed. Single-payer countries are more suc- cessful in providing universal coverage with lower per capita costs than the US only because they constrain the availability of high-technology medicine. Once they broaden basic care to include unlimited access to intensive curative regimes, they lose this advan- tage. The reality is that no nation can afford to do everything for everybody. Therefore, national health systems rely heavily on setting supply-side controls through global budg- ets and national fee structures while social insurance systems use contractual arrange- ments to limit what individuals get. Because these countries have more communitarian- and solidarity-based value systems (probably explaining why they have universal coverage in the first place), their populations are much more willing to live (or die) with what Americans would see as an unfair system, in other words, one that set limits on medical care for those with coverage.

One will have to wait and see how the ACA plays out in the next few years before it is scheduled to take full effect in 2014. At present it faces court challenges, repeal efforts, potential revision and weakening and, most importantly, a very sceptical public. A lot will depend on the degree to which its more immediate changes work to satisfy the pub- lic and meet its stated objective of producing a more equitable playing ground. Whatever happens, however, the difficult choices regarding cost containment and setting limits and the acceptance of the need for explicit rationing are yet to come in a system that not only is unsustainable but also inequitable.

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Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

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Author biography

Robert H Blank, PhD, is a Research Scholar at the New College in Florida, USA, and a Professor at the University of Canterbury in Christchurch, New Zealand. He is also a frequent Guest Professor at Aarhus University in Denmark. Among the many books and journal articles he has written or co-authored are Rationing Medicine, Comparative Health Policy and End of Life Decision Making: A Comparative Study. His current research interests are: comparative health policy, technology assessment and neuroscience policy.

Résumé Les États-Unis dépensent beaucoup plus en soins médicaux que tout pays dans le monde, mais c’est le seul pays riche en ressources où une part substantielle de la population ne dispose d’aucune assurance santé. De plus, les États-Unis sont toujours parmi les derniers pour la plupart des mesures de résultats cliniques par rapport aux autres pays développés. C’est pourquoi le fait que la refonte de ce système manifestement en perdition n’ait pas rencontré la forte approbation du peuple américain, lorsqu’en 2009 un président démocratiquement élu fit de la réforme du système de santé sa principale priorité, a suscité une véritable incrédulité chez les personnes qui ne connaissent pas bien ce pays. Cet article étudie ce phénomène et discute des raisons pour lesquelles une transformation importante du système de santé américain s’est avérée si difficile. Parmi les aspects abordés ici se trouvent les institutions politiques et les forces économiques, un lobby médical puissant, l’industrie de l’assurance privée toute puissante, un système de responsabilité étendu et une opinion publique qui voit d’un très mauvais œil toute implication gouvernementale dans la santé.

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Mots-clés Contrôle des coûts, Loi sur les soins abordables (Affordable Care Act), réforme de la santé, système de santé aux États-Unis

Resumen Los Estados Unidos gasta considerablemente más en atención médica que cualquier otro país del mundo, y aún así, es el único país rico en recursos en el que una parte importante de sus residentes no posee cobertura de seguro médico. Asimismo, los EE.UU. continúa ocupando un puesto muy bajo en la mayor parte de las evaluaciones de resultados sanitarios en comparación con otros países desarrollados. Por esa razón, hay una considerable incredulidad entre aquellos que no están familiarizados con los EE.UU. sobre cuál es la razón por la que la modernización de un sistema evidentemente disfuncional, no fuera ampliamente aceptada por el público norteamericano cuando en 2009 la reforma del sistema sanitario se convirtió en la prioridad más importante del presidente elegido por los ciudadanos. Este comentario examina este fenómeno y trata con detalle las razones por las que la transformación significativa del sistema sanitario de los EE.UU. está resultando ser tan elusiva. Entre los factores tratados se encuentran las instituciones políticas y las fuerzas económicas, un importante sistema médico, el sector dominante de los seguros privados, un amplio sistema de responsabilidad civil y un público que desconfía en gran medida de cualquier participación del gobierno en el sistema sanitario.

Palabras clave Contención de costes, Ley del cuidado de salud asequible, reforma de la atención sanitaria, sistema de atención sanitaria de los EE.UU.

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