The state of US health care [part 1]

[The following is excerpted from the first part of a project I did for my Ethics of Life & Death class in Winter 2009. The project is entitled “Initiating a Christian Conversation About Health Care Reform.”]

1. The Current State of U.S. Health Care
We start with an introduction to the current condition of the U.S. health care system, which offers the worst return for highest cost in the developed world. I hesitate to begin with statistics because they tend to be remarkably impersonal, thereby contributing to an already-malignant bent toward depersonalization and distance; additionally, a statistics bombardment can leave one shell-shocked and overwhelmed. However, they also serve a purpose in setting the stage onto which the gospel must make its impression.

a. Overview of the health care system
First, though, an overview: insurance in the U.S. is provided through a “five-part patchwork system that covers most serious problems for most people most of the time, but still allows many people to fall through the cracks.”[1] The five parts are:

  1. Employment-based coverage and private medical plans;
  2. Medicare, which covers 80% of medical expenses for Americans over 65, and also people with disabilities under 65;
  3. Medicaid, which provides coverage for the poor, including people on public assistance, children of poor parents, poor seniors, people with disabilities, and adults with mental illness;
  4. CHAMPUS (Civilian Health and Medical Program of the Uniformed Services), TRICARE (the U.S. government-sponsored health insurance plan for active military members, their families and retirees) and the Veterans Administration Hospital System, provide health care for military personnel, their families and for veterans;
  5. Health care in emergency rooms: the Emergency Medical Treatment and Active Labor Act 1986 forbids emergency rooms from turning away anyone who is medically unstable. As a result, emergency rooms serve as a national safety net for all kinds of medical problems of the uninsured and for illegal immigrants.
Those who fall into this fifth category (or those who obtain health care through private service organizations, including faith-based clinics) are not generally considered to have reliable access to health care since emergency rooms and private service organizations are not designed to function as a safety net and therefore not equipped to deal with the vast amounts of people who turn up for treatment. These include undocumented immigrants; homeless people (who have no fixed address and thus are ineligible for state-based Medicaid); and people with problems including substance addiction which are not recognized as disabilities. As Sondra Ely Wheeler notes, the health care that is provided through overburdened emergency rooms and private service organizations is often “both more costly and less effective than prompt primary care would have been; sometimes, it comes altogether too late. These people suffer and die of treatable or preventable illnesses at a much higher rate than those with stable access to care.”[2]

Clearly, such a patchwork health care system is not conducive to promoting preventive medical services and better control of chronic illnesses such as hypertension and diabetes. Such chronic illnesses, if left unchecked, and even minor problems, if not treated, will deteriorate, leading to bigger health issues and higher costs of treatment, perpetuating a vicious cycle that is seeing health care spending as a percentage of the U.S. budget rise at a much faster rate than all other spending.

b. Health care spending

Nobel Prize-winning economist Paul Krugman writes, “the opposition to universal health care depends on the claim that doing the morally right thing isn’t possible, or at least that the cost—in taxpayer dollars, in reduced quality of care for those doing okay under our current system would be too high.”[3] The facts tell a different story.[4]

On the whole, Americans spend more on health care in order to get the same or worse treatment than the rest of the developed world. Of course this is not to suggest we ought to simply transfer the health care systems of other advanced nations onto the American framework; there are advantages that Americans benefit from over the rest of the world, such as more cancer screening or quicker access to specialists and elective surgery, and these other systems have their own drawbacks. But as things stand, the wealthiest nation in the world has the highest population of uninsured in the developed world.

According to the U.S. Census Bureau, in 2007, forty-six million people were without health insurance in the wealthiest nation in the world, in the nation that spends the most per person on health care; and this number has undoubtedly risen in the last two years of economic recession. (There is the additional issue of the underinsured, who may spend their own income on out-of-pocket health care but will be unprepared and unable to face health catastrophes. Karen Tumulty estimates this number at around 25 million, and these too ought to be factored into what one considers the health care crisis.)[5]

Returning to uninsurance, we can also see that there are glaring disparities when we look at its distribution, both in terms of race and in terms of economic status: the percentages given are percentages of that particular ethnic population and that particular economic bracket. For example, we can see that while only 10% of all non-Hispanic Whites are uninsured, a staggering 32% of Hispanics are uninsured.

From the McKinsey publication alluded to previously, we also learn that 11% of children are uninsured, and this number increases to 17.6% when we consider children living below the federal poverty line. Here too, uninsurance is unevenly distributed across racial and ethnic categories:

Ron Sider summarized the American health care situation thus:

  1. the uninsured are four times as likely as the insured to report that they needed medical care but did not get it;
  2. they are three times more likely to report problems in paying medical bills;
  3. and the uninsured get substantially poorer medical care even when they do see a doctor. Studies show that the uninsured enter hospitals sicker than the insured, receive fewer tests, and leave the hospital sooner. Hospitals receive the greatest number of uninsured patients, and incurred 60 percent of the $40.7 billion uncompensated care costs in 2004.[6]
Bioethicist Laurie Zoloth-Dorfman frames our current condition in stark practical terms:

To travel on the freeway across Los Angeles … is to share in the risk that an accident could bring you to the doors of the nearest emergency rooms, the ones that serve as outpatient clinics to the poorest and the uninsured. They might well be closed, full beyond capacity, or inadequately staffed, no matter how exquisite your car, or provident your health care coverage.[7]

Because emergency rooms are not being used in the capacity for which they were meant—that is, as emergency rooms—they are overtaxed and understaffed and therefore unable to properly treat emergencies.

The picture does not improve when one considers the fact that, foundationally, the system upon which the health care system is built is not a value-free system but “one laden with values that favor profit and economic gain over other priorities—such as sustainability and economic justice.”[8] As such, the system which contributes to almost half of personal bankruptcies, according to a 2005 Harvard study, is allowed and encouraged to perpetuate:[9]

  • Medical costs are going up rapidly as medical technology improves and doctors are able to treat more (though at higher prices); thus employer-based insurance is in decline as employers seek to maximize profits and cut benefits or declare more employees ineligible for health care coverage or the cost is shifted onto employees through high-deductible health plans.
  • This has knock-on effects galore, including eventual lack of health care coverage for many workers, particularly low-wage workers, leaving them to seek unaffordable health care treatment or to go without insurance.
It might be interesting to note that the government subsidizes employer-provided health insurance at about $130b for 2006 in tax breaks, which far exceeds the benefits the poor receive through TANF and food stamps combined ($57b); most of these tax breaks end up going to those who make more than $75,000.

c. An insurance-driven system

The United States is perhaps the only developed nation whose health care system is driven by the insurance industry. Paul Krugman explains the process of insurance:

  1. Insurers screen applicants for any indications that they might need expensive care—family history, nature of employment, and, above all, preexisting conditions. Any indication that an applicant is more likely than average to have high medical costs, and any chance of affordable insurance goes out the window.
  2. If someone who makes it through this first process nonetheless needs care, insurers will look for ways not to pay, picking through the patient’s medical history to see if they can claim an undisclosed preexisting condition; this would invalidate the insurance. More important in most cases, they challenge the claims submitted by doctors and hospitals, trying to find reasons why the treatment offered wasn’t their responsibility.[10]
Naturally, all of this lends itself to much bureaucracy and administrative costs. Krugman notes that Medicare, the government-run health care, which does not (need to) haggle, spends only about 2% of its funds on administration, a figure which stands at about 15% for private insurers.[11]

d. Conclusion

Considering the situation now with the economy in recession:

  • if the economy is struggling, more people are losing jobs;
  • more people are losing health insurance;
  • more people are unable to afford to be healthy, and wait until problems become critical before being treated;
  • more people pay higher prices for treatment, which they cannot afford;
  • and the vicious cycle continues …
Princeton economist Uwe Reinhardt predicts that if nothing change:
  1. Health-spending per capita in the United States will continue to rise 2 to 2.5 percentage points faster than the rest of per-capita gross domestic product, as it has done for the last four decades. Health care then will absorb about 40 percent of G.D.P. by 2040.
  2. More and more middle- and lower-income American families will find themselves priced out of needed health care, as the cost outpaces the growth in the wage base that supports the families. They will experience harsh rationing of health care, not by government, but by price and their ability to pay.
  3. The waste most experts impute to our health system would continue unabated, as it thrives on the opaqueness of a heavily paper-based, fragmented health system that shuns comparative effectiveness analysis.[12]
The current state of the U.S. health care system is decidedly unhealthy, and it’s about time something was done about it.

[Part 2 to follow]

[1] Gregory E. Pence, Classic Cases in Medical Ethics: Accounts of the Cases and Issues that Define Medical Ethics, New York, NY: McGraw-Hill (2008, 5th ed.), 348.

[2] Sondry Ely Wheeler, Stewards of Life: Bioethics and Pastoral Care, Nashville, TN: Abingdon Press (1996), 63.

[3] Paul R. Krugman, The Conscience of a Liberal, New York, NY: W.W. Norton & Company (2007), 215.

[4] McKinsey Global Institute, “Accounting for the cost of U.S. health care: A new look at why Americans spend more,” (November 2008), accessed from (March 14, 2009); and Organisation for Economic Co-operation and Development, “OECD Health Data 2008, 26 June 2008,” Organisation for Economic Co-operation and Development; accessed from,3343,en_2649_34631_40902299_1_1_1_1,00.html (March 16, 2009).

[5] Karen Tumulty, “The Health-Care Crisis Hits Home,” Time Magazine (March 5, 2009); accessed from,8599,1883149,00.html (March 14, 2009).

[6] Ronald J. Sider, Just Generosity: A New Vision for Overcoming Poverty in America, Grand Rapids, MI: 2007 (2nd ed.), 175.

[7] Laurie Zoloth-Dorfman, “First, Make Meaning: An Ethics of Encounter for Health Care Reform,” Tikkun, 8 (July-August 1993), 23.

[8] Rebecca Todd Peters, “Economic Justice Requires More than the Kindness of Strangers,” in Douglas A. Hicks & Mark Valeri (eds.), Global Neighbors: Christian Faith and Moral Obligation in Today’s Economy, Grand Rapids, MI: William B. Eerdmans Publishing Company (2008), 106-107.

[9] David U. Himmelstein, et al, “MarketWatch: Illness and Injury As Contributors to Bankruptcy,” Health Affairs (February 2, 2005); accessed from (March 14, 2009).

[10] Krugman, Conscience, 220-221.

[11] Krugman, Conscience, 223-224.

[12] Uwe E. Reinhardt, “Economic Trends in U.S. Health Care: Implications for Investors,” presented to An Investors’ Health Care Conference (January 2009); accessed from (March 14, 2009).


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