Question

what are the essential reforms that must occur in the U.S. healthcare system in order to improve access, cost, and quality of care for all Americans? What does this legislation look like?

Answer 1

The Affordable Care Act is the most important health care legislation enacted in the United States since the creation of Medicare and Medicaid in 1965. The law implemented comprehensive reforms designed to improve the accessibility, affordability, and quality of health care. The U.S. health care system faces significant challenges that clearly indicate the urgent need for reform. Attention has rightly focused on the approximately 46 million Americans who are uninsured, and on the many insured Americans who face rapid increases in premiums and out-of-pocket costs. As Congress and the Obama administration consider ways to invest new funds to reduce the number of Americans without insurance coverage, we must simultaneously address shortfalls in the quality and efficiency of care that lead to higher costs and to poor health outcomes. To do otherwise casts doubt on the feasibility and sustainability of coverage expansions and also ensures that our current health care system will continue to have large gaps even for those with access to insurance coverage.

The United States needed to reform health care because the cost was so high. Medical bankruptcies affected up to 2 million people. Rising health care costs threatened to consume the entire federal budget. It made the cost of preventive care unaffordable. That sent many low-income people to the emergency room, raising costs even higher. High costs made the U.S. health care system cost twice as much per person compared to any other developed country. As a result, health care contributed $3.2 trillion or 17.8 percent to gross domestic product. That's the highest percentage in the developed world. There is broad evidence that Americans often do not get the care they need even though the United States spends more money per person on health care than any other nation in the world. Preventive care is underutilized, resulting in higher spending on complex, advanced diseases. Patients with chronic diseases such as hypertension, heart disease, and diabetes all too often do not receive proven and effective treatments such as drug therapies or selfmanagement services to help them more effectively manage their conditions. This is true for insured, uninsured, and under-insured Americans. These problems are exacerbated by a lack of coordination of care for patients with chronic diseases. The underlying fragmentation of the health care system is not surprising given that health care providers do not have the payment support or other tools they need to communicate and work together effectively to improve patient care.

There are three reasons why costs are so high. First, most of the cost comes from treating people over the first 10 days and last 10 days of their life. A lot of progress has been made in terms of medical procedures that save premature babies and extend the life expectancy of the elderly. But these innovative procedures are very expensive. Some other countries limit that high level of care. They refuse the procedure if it has a low chance of success. In the United States, such care is given even if the prognosis is poor.

The second reason for high health care costs is the rise of malpractice lawsuits. Doctors often over-test, ordering $1,000 MRIs and $1,500 colonoscopies. They do this even if they don't think they're needed. It protects them from getting sued because they didn't order a particular test.

The third reason is that there is less price competition in health care than in other industries, such as consumer electronics. Most people don't pay for their own health care. Patients only pay a set fee or co-pay, while the insurance company pays the rest. As a result, patients don't price-shop for doctors, lab tests, or procedures as they would for computers or television sets.

Policy makers should build on progress made by the Affordable Care Act by continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees, introducing a public plan option in areas lacking individual market competition, and taking actions to reduce prescription drug costs. Although partisanship and special interest opposition remain, experience with the Affordable Care Act demonstrates that positive change is achievable on some of the nation’s most complex challenges.

While many patients often do not receive medically necessary care, others receive care that may be unnecessary, or even harmful. Research has documented tremendous variation in hospital inpatient lengths of stay, visits to specialists, procedures and testing, and costs — not only by different geographic areas of the United States, but also from hospital to hospital in the same town. This variation has no apparent impact on the health of the populations being treated. Limited evidence on which treatments and procedures are most effective, limited evidence on how to inform providers about the effectiveness of different treatments, and failures to detect and reduce errors further contribute to gaps in the quality and efficiency of care. These issues are particularly relevant to lower-income Americans and to members of diverse ethnic and demographic groups who often face great disparities in health and health care.

Since health care is so expensive, most people buy insurance coverage. That's why most discussions about health care reform is centered around making insurance more available. Insurance operates by charging a monthly fee. This is also called a premium. In return, the company pays medical expenses.

Group health insurance companies are profitable when more money is received in premiums than is paid out in claims. Most people in the United States receive group health insurance from their employer, who also pays part of the premium. Companies can offer health insurance as an untaxed benefit. Federal tax policies subsidize the employer-provided group insurance system.

Those who don't have an employer-sponsored plan must buy individual health insurance. That's expensive. In the past, companies could deny you coverage if you had a pre-existing disease or condition. As an alternative, you could affiliate yourself with a group, such as the American Association of Retired Persons or COSTCO. They offered lower rates because they had a pool of healthy people.

The federal government subsidizes health care for those over 65 through Medicare. Part of Medicare, the Part A Hospital Insurance program, pays for itself from payroll taxes.

Medicare Part B, the Supplementary Medical Insurance program, and Part D, Prescription Drug program, are not 100 percent covered by premium payments. Overall, Medicare payroll taxes and premiums cover only 57 percent of current benefits. The remaining 43 percent is financed from general revenues.

The federal government also subsidizes health care for families below a certain income level through Medicaid. It is funded by federal and state general revenues. So it adds to both federal and state costs.

Health care costs affect the economy, the federal budget, and virtually every American family’s financial well-being. Health insurance enables children to excel at school, adults to work more productively, and Americans of all ages to live longer, healthier lives. When I took office, health care costs had risen rapidly for decades, and tens of millions of Americans were uninsured. Regardless of the political difficulties, I concluded comprehensive reform was necessary.

The result of that effort, the Affordable Care Act (ACA), has made substantial progress in addressing these challenges. Americans can now count on access to health coverage throughout their lives, and the federal government has an array of tools to bring the rise of health care costs under control. However, the work toward a high-quality, affordable, accessible health care system is not over.

Reforming our health care delivery system to improve the quality and value of care is essential to address escalating costs, poor quality, and increasing numbers of Americans without health insurance coverage. Reforms should improve access to the right care at the right time in the right setting. They should keep people healthy and prevent common, avoidable complications of illnesses to the greatest extent possible. Thoughtfully constructed reforms would support greater access to health-improving care — in contrast to the current system, which encourages more tests, procedures, and treatments that are at best unnecessary and at worst harmful.

Health care reform is needed for four reasons. First, health care costs have been skyrocketing. In 2011, the average cost for a family of four increased by 7.3 percent to $19,393. That's almost double of what it cost just nine years before that. By 2030, it is estimated that payroll taxes will only cover 38 percent of Medicare costs. The rest will contribute to the federal budget deficit.

Second, health care reform will improve the quality of care. Most Americans are surprised to find that their country has the worst health care in the developed world. Chronic diseases cause 70 percent of all U.S. deaths and affect 45 percent of all Americans. As the population ages, the incidence of these diseases will grow rapidly.

By 2023, cancer and diabetes will increase by 50 percent, while heart disease will rise by 40 percent. At the same time, hypertension and lung disease will be up by 30 percent and strokes will occur 25 percent more often. Each year, the cost of treatment totals $1.7 trillion, representing 75 percent of all health care dollars spent. This cost can be lowered through disease prevention and wellness programs.

Third, reform covers the almost 25 percent of Americans who had little or no health insurance. Over 101,000 Americans died each year just because they didn't have insurance. For example, the average emergency room visit cost $1,265. The average cost of chemotherapy was between $7,000 and $30,000.

These costs could wipe out people’s savings or cause them to lose their home. Even worse, many people would have to forgo treatment because they just couldn't afford it. Not only is this bad for them, it's also bad for the economy. Half of all bankruptcies result from high medical costs.

Fourth, health care reform is needed to stem the economic costs of health care fraud. Between 3-10 percent is lost to fraud each year. That amounts $60 billion to $200 billion annually. If those same percentages are applied to the $436 billion Medicare program, the cost of fraud there will range from $14 billion to $30 billion.