A 2004 survey released by the National Center for Health Statistics estimated that approximately 70% of Americans were in "excellent" or "very good" health. The overall United States health care performance was ranked 37th by the World Health Organization (WHO) in 1997, far below the average of developed nations. In the same year, health level according to the DALE index indicates the United States was ranked 72nd in the world by WHO.
Healthcare providers
American health care is provided by a diverse array of individuals and legal entities. Individuals offer inpatient and outpatient services for commercial, charitable, or governmental entities.
Services
"Ambulatory care" refers to health care outside the hospital; most health care in the United States occurs in the outpatient setting. "Home health care services" are generally nursing enterprises, but are usually ordered by physicians. Private sector outpatient medical care is provided by personal primary care physicians (specialists in internal medicine, family medicine, and pediatric medicine), subspecialty physicians (gastroenterologists, cardiologists, or pediatric endocrinologists are examples) or non-physicians (including nurse practitioners and physician assistants).
Facilities
There are for-profit hospitals, which are usually operated by large private corporations and there are nonprofit hospitals, which may be operated by county governments, state governments, religious orders, or independent nonprofit organizations. Hospitals provide some outpatient care in their emergency rooms and specialty clinics, but primarily they exist to provide inpatient care. Hospital emergency departments and urgent care centers are sources of sporadic problem-focused care. "surgicenters" are examples of specialty clinics. Hospice services for the terminally ill who are expected to live six months or less are most commonly subsidized by charities and government. Prenatal, family planning, and "dysplasia" clinics are government-funded obstetric and gynecologic specialty clinics respectively, and are usually staffed by nurse practitioners.
Medical products, research and development
New Jersey MedicalCompanies provide medical products such as Pharmaceuticals and medical devices. The research and development for applications is primarily done in commercial R&D labs while the government and universities fund the majority of basic research. Much of this basic research is funded or performed by governmental research institutes such as the NIH and NIMH.
Health care regulation and oversight
There are government institutes such as the Centers for Disease Control and Prevention that identify threats to public health. In addition there are regulatory bodies such as the FDA that identify and approve drugs for medical use and sale.
System inefficiencies and inequities
Inefficiencies
Catastrophic care vs. free preventative care
It is argued the unavailability of free preventive care and the sometimes high cost of paying out-of-pocket means that many working-class persons delay visiting a doctor or an emergency room as long as possible. In turn, such persons are more vulnerable to catastrophic diseases that could have been much more easily treated if identified early through regular checkups (like cancer and heart disease). The financial cost of treating those diseases at a late stage is also much higher.
Inequities
The coverage gap
Enrollment rules in private and governmental programs result in millions of Americans going without health care coverage, including children. The most recent data available from the U.S. Census Bureau indicates that 45.8 million Americans (about 15% of the total population) had no health insurance coverage during 2004. This constituted a rise of about 850,000 from the previous year. Most uninsured Americans are working-class persons between the ages of 2 and 65 whose employers do not provide health insurance, and who earn too much money to qualify for one of the local or state insurance programs for the poor, but do not earn enough to cover the cost of enrollment in a health insurance plan designed for individuals. Some states (like California) do offer limited insurance coverage for working-class children, but not for adults; other states do not offer such coverage at all, and so, both parent and child are caught in the notorious coverage "gap." Although EMTALA certainly keeps alive many working-class people who are badly injured, the 1986 law neither requires the provision of preventive or rehabilitative care, nor subsidizes such care, and it certainly does nothing about the difficulties in the American mental health system.
Health disparities among minorities
In the United States, health disparities are well documented in minority populations such as African Americans, Native Americans, Asian Americans, and Hispanics. When compared to whites, these minority groups have higher incidence of chronic diseases, higher mortality, and poorer health outcomes. Among the disease-specific examples of racial and ethnic disparities in the United States is the cancer incidence rate among African Americans, which is 10% higher than among whites. In addition, adult blacks and Hispanics have approximately twice the risk as whites of developing diabetes. Minorities also have higher rates of cardiovascular disease, HIV/AIDS, and infant mortality than whites.
Regulatory inefficiencies and inequities
Mental illness and the Emergency Medical Treatment and Active Labor Act (EMTALA)(1986)
In many American cities, it is common for mentally ill homeless people to "cycle" through emergency rooms. When admitted, such patients can be suffering from numerous diseases and malnutrition; hospitals clean them up and nurse them back to health, then discharge them to the street at the first legally justifiable opportunity; and then the same patients are back in the ER in three to six months after becoming critically ill again.
Healthcare regulatory costs
The healthcare industry is likely the most heavily regulated industry in the United States. A Cato Institute study by suggests that this regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion . The majority of the cost differential arises from medical malpractice, FDA regulations, and facilities regulations . Part of the cost arises from regulatory requirements that prevent technicians without medical degrees from performing treatment and diagnostic procedures that carry little risk . In addition to regulatory costs, commentators and economists observe that government programs bid up healthcare prices because they lack the financial incentives to bargain with healthcare providers .
Inequities
EMTALA , is an unfunded mandate; the federal government and the state governments have never fully compensated both public and private hospitals for the full cost of such emergency charity care. As a result, innumerable private hospitals have gone out of business since 1986. Others have raised prices on those that can pay to avoid going out of business. The hospitals do attempt to bill uninsured patients directly under the fee-for-service model, but most such people cannot pay their hospital fees, and escape into bankruptcy when hospitals seek legal process against them.
Political issues
Universal health care
Universal health care proposals have fallen flat, largely due to opposition from other physicians and analysts, libertarians, conservatives, and the corporations who manufacture most drugs and run most hospitals.
In contrast, in nearly all other major industrialized countries, higher education institutions are tax-payer subsidized and thus their physicians do not have to obtain loans to finance their educations. However, physicians in such countries have lower maximum income potential, due to the subsidization by tax-payers of healthcare systems. Similar comparative analyses have been performed on various other public health disasters.
There have also been occasional reports of incidents in which illegal immigrants from various countries (including the United Kingdom and Mexico) deliberately enter the United States to seek treatment of extremely severe or rare illnesses. When Immigration and Customs Enforcement sought to deport such persons for illegal entry or for overstaying their visas, the immigrants would throw themselves on the mercy of the American people. The argument is that deportation to their home countries would be a death sentence, because their home countries' healthcare systems are either incompetent or under funded. In early 2005, one highly publicized case involved a young girl named Rachel Andrews, whose parents fought deportation to the UK on the grounds that UK doctors did not know how to treat her rare sleep disorders properly and that the life-saving drug she needed (Provigil) was not approved for pediatric use in the UK
Prescription drug coverage
Since the 1990s, the price of prescription drugs became a major issue in American politics as the prices of many new life-saving drugs has increased exponentially and many citizens discovered that neither the government nor their insurer would cover the cost of such drugs.
The U.S. government has taken the position (through the Office of the United States Trade Representative) that U.S. drug prices are rising because U.S. consumers are effectively subsidizing costs which drug companies cannot recover from consumers anywhere else (because so many other countries regulate drug prices). The U.S. position is that the governments of those countries should either deregulate their markets or directly remit the difference (between what the companies would earn in an open market versus what they are earning now) to drug companies or to the U.S. government. In turn, those companies would be able to lower prices for U.S. consumers.
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New Jersey Healthcare as an industry
The healthcare industry is one of the world's largest and fastest-growing industries. Consuming over 10 percent of gross domestic product of most developed nations, health care can form an enormous part of a country's economy. In 2003, health care costs paid to hospitals, doctors, nursing homes, diagnostic laboratories, pharmacies, medical device manufacturers and other components of the health care system, consumed 15.3 percent of the GDP of the United States, the largest of any country in the world.
The healthcare industry includes the delivery of health services by doctors and other allied health providers. Usually such services receive payment from the patient or from the patient's insurance company; although they may be government-financed or delivered by charities or volunteers, particularly in poorer countries.
New Jersey Medical and social models of healthcare
A traditional view is that improvements in health result from advancements in medical science. The medical model of health focuses on the eradication of illness through diagnosis and effective treatment. In contrast, the social model of health places emphasis on changes that can be made in society and in people's own lifestyles to make the population healthier. It defines illness from the point of view of the individual's functioning within their society rather than by monitoring for changes in biological or physiological signs.
The term underserved is used to refer to populations which are disadvantaged with regard to health care due to their ability to pay for care, ability to access care, ability to access comprehensive health care or that suffer health disparity for reasons of race, religion, language group or social status.
See also
- Healthcare by country
- Health care delivery
- Primary health care
- Life extension
- Recent American health care privacy rules. (HIPAA)
- Electronic health care information systems (Medical informatics)
- National Health Service (UK)
- Health and Social Care
USA-specific
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History and evolution
The concept of health insurance was proposed in 1694 by Hugh the Elder Chamberlen from the Peter Chamberlen family. In the late 19th century, early health insurance was actually disability insurance, in the sense that it covered only the cost of emergency care for injuries that could lead to a disability. This payment model continued until the start of the 21st century in some jurisdictions (like California), where all laws regulating health insurance actually referred to disability insurance. Patients were expected to pay all other health care costs out of their own pockets, under what is known as the fee-for-service business model. During the middle to late 20th century, traditional disability insurance evolved into modern health insurance programs. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and emergency health care procedures, and also most prescription drugs, but this was not always the case.
Today, issues involving health insurance are very controversial and subject to much political debate as many perceive a conflict between the needs of insurance companies to remain solvent versus the needs of their customers to remain healthy.
Private health insurance
The largest difference between private sector New Jersey health insurance and New Jersey life insurance is that for life insurance, a person may purchase guaranteed renewable insurance for the whole of the insured's life at a constant premium rate, while health insurance is generally purchased year by year with generally no assurance of renewability and if renewable no guarantee that premium rates will not increase.
Before buying health insurance in NJ, a person typically fills out a comprehensive medical history form that asks whether the person smokes, how much the person weighs, and has the person ever been treated for any of a long list of diseases. Applicants can get discounts if they do not smoke and live a healthy lifestyle, which might encourage some people to quit smoking or make other improvements in their lifestyle. The medical history is also used to screen out persons with pre-existing medical conditions.
A NJ health insurance policy is a legal, binding contract between the insurance company and the customer. Many insurance companies purchase re-insurance to protect themselves from a catastrophic loss due to an unforeseen event.
Critics of private health insurance claim that this conflict of interest between the needs of insurance companies to remain solvent versus the needs of their customers to remain healthy is why state and federal regulation of health insurance companies is necessary. Some say that this conflict exists in a liberal healthcare system because of the unpredictability of how patients respond to medical treatment, but proponents of regulation argue that too many health insurance companies put their desire for profits above the welfare of the consumer or patient.
The following is a hypothetical example of a situation that might confront an insurance company: Suppose that a large number of customers of a particular insurance company contracted a rare disease and the hospital charged 10 million dollars a patient to treat them. The insurance company would then be faced with a choice of paying all claims without complaint (thus losing money and possibly going out of business) or denying the claims (thus outraging patients and their families, discouraging potential customers, and becoming a target for lawsuits and legislation).
Health insurance companies and consumer advocates agree that private health insurance faces unique problems. Health insurance companies use the term "adverse selection" to describe the tendency for sick people to be more likely to sign up for health insurance. Insurance companies say that asymmetry of information about a person's health and behavior is likely to lead to adverse selection and (ex-ante) moral hazard. Health insurance companies say, that in essence, those seeking health insurance are likely to be those with existing medical problems or those who are likely to have future medical problems, and that those who take out insurance may engage in risky behavior, such as smoking and excessive alcohol consumption, which an otherwise sane person would not do. Insurance companies say that the cost of providing health insurance to these bad risks raises the cost of insurance to the 'good' insurance risks, possibly pricing them out of the market, and could create a situation in a market where insurance was uneconomical for private insurance companies to provide.
Both public and private health insurance will also suffer from ex-post moral hazard. This phenomena is in essence the consequence of reduced prices for medical care. Since most insurance plans, whether public or private, reduce the out-of pocket cost of medical care, the behavior of individuals will be affected by those reduced prices. In the same way that people treat water with little care when it is very inexpensive, people will also tend to over-use medical care when the out-of pocket costs are small. Of course, medical care still needs to be financed, and so taxes or premiums will be higher than the optimal amount. This inflation of taxes or premiums to cover the choices made under subsidized prices is what is termed ex-post moral hazard, and is a different phenomena than the ex-ante moral hazard mentioned above.
Critics of NJ private health insurance state that those who are sick should be able to get health insurance because they need it the most and that if everyone had health insurance, adverse selection would not be a problem.
With publicly funded health insurance the good and the bad risks all receive coverage without regard to their health status, which eliminates the problem of adverse selection, although it introduces a problem of moral hazard.
Insurance companies explain the economics of insurance by saying that, in general, if many sick people buy health insurance from a private health insurance company, but few healthy people buy it, the price of the insurance rises. (Critics of private health insurance point out that few sick people are allowed to buy health insurance). Insurance companies also say that if more healthy people buy health insurance, but few sick people buy it, the price drops. In other words, the price drops if more money goes in and less is paid out.
Because of advances in medicine and medical technology, medical treatment is more expensive, and people in developed countries are living longer. The population of those countries is aging, and a larger group of senior citizens requires more medical care than a young healthier population. (A similar rise in costs is evident in Social Security in the United States.) These factors cause an increase in the price of health insurance.
Some other factors that cause an increase in NJ health insurance prices are health related: insufficient exercise; unhealthy food choices; a shortage of doctors in impoverished or rural areas; excessive alcohol use, smoking, street drugs, obesity, among some parts of the population; and the modern sedentary lifestyle of the middle classes.
In theory, people could lower health insurance prices by doing the opposite of the above; that is, by exercising, eating healthy food, avoiding addictive substances, etc. Healthier lifestyles protect the body from some, although not all, diseases, and with fewer diseases, the expenses borne by insurance companies would likely drop.
Under these circumstances, the consumer would hope to benefit from the savings; however, critics of private health insurance claim that too much of the insurance premiums are paid out in executive salaries or retained as profits by the company.
Future challenges
With the advent of DNA testing, previously unknown risk factors involving genetic makeup will become known and this is expected to lead to greater pressure on the private health insurance industry as they try to limit their exposure to high-risk individuals. As larger groups of these individuals are identified and charged higher premiums (if they can get coverage at all) the pressure on privacy laws to limit the flow of personal medical data will only increase.
Common complaints of NJ private medical insurance
Some common complaints about private health insurance include:
- Insurance companies do not announce their health insurance premiums more than a year in advance. This means that, if one becomes ill, he or she may find that their premiums have greatly increased. This largely defeats the purpose of having insurance in the eyes of many. BUPA does not penalize individuals who claim but spreads the cost across the customer base.
- If insurance companies try to charge different people different amounts based on their own personal health, people will feel they are unfairly treated. Some states require that insurance companies cover all who apply at the same cost, or that rates vary only by age of the insured; this rule has the effect that healthy people subsidize sick ones, and thus frequently only those in poor health buy insurance, making the premiums very expensive.
- When a claim is made, particularly for a sizeable amount, it may be deemed in the best interest of the insurance company to use paperwork and bureaucracy to attempt to avoid payment of the claim or, at a minimum, greatly delay it. Some percentage of insured's will simply give up, leading to lower costs for the insurance company.
- Health insurance is often only widely available at a reasonable cost through an employer-sponsored group plan. This means that unemployed individuals and self-employed individuals are at a disadvantage.
- Employers can write some or all of their employee health insurance premiums off of their taxable income whereas traditionally individuals have had to pay taxes on income used to fund health insurance. This reduces the employee's bargaining power in negotiating service with the insurance provider and also increases their dependence on the employer. In the U.S., COBRA and more recent legislation has been passed in an attempt to address the latter concern, and full tax deductibility for health insurance premiums paid by the self-employed has recently been passed by Congress as well.
- Experimental treatments are generally not covered. This practice is especially criticized by those who have already tried, and not benefited from, all "standard" medical treatments for their condition. It also leads to many insurers claiming or attempting to claim that procedures are still "experimental" well after they have become standard medical practice in many instances. (This phenomenon was especially seen after organ transplants, particularly kidney transplants, first became standard medical practice, due to the tremendous costs associated with this procedure and other organ transplantation.)
- The Health Maintenance Organization (HMO) type of health insurance plan has been criticized for excessive cost-cutting policies. The least justifiable of these efforts, according to critics, is having accountants or other administrators essentially making medical decisions for customers by deciding which types of medical treatment will be covered and which will not.
- As the health care recipient is not directly involved in payment of health care services and products, they are less likely to scrutinize or negotiate the costs of the health care received. To care providers, insured care recipients are essentially seen as customers with relatively limitless financial resources who don't look at prices. The health care company has few popular and many unpopular ways of controlling this market force. In response to this, many insurers have implemented a program of bill review in which insured's are allowed to challenge items on a bill (particularly an inpatient hospital bill) as being for goods or services not received; if this is proven to be the case, the insured is awarded with a percentage of the amount that the insurer would have otherwise paid for this disputed item or items, usually 25% or occasionally even 50%, with a ceiling so that the insured will not truly become wealthy from this procedure.
Publicly funded health insurance
Medicare
In the United States, government-funded Medicare programs help to insure the elderly and end stage renal disease patients. Some health care economists assert that (the third party payment feature) these programs have had the unintended consequence of distorting the price of medical procedures. As a result, HCFA (the Health Care Financing Administration) has set up a list of procedures and corresponding prices under the Resource-Based Relative Value Scale (RBRVS).
Starting in 2006, Medicare Part D provides a program for the elderly to buy insurance for the purchase of prescription drugs. Critics have complained that the list prices of some drugs have increased dramatically in response to the increased funding that the net after insurance cost of many drugs have not decreased markedly. But for the purpose of insurance, if the risk of catastrophic high costs is truly shifted to the insurer, then the program can be said to be legitimate insurance. Time will tell if critics are right as the program is brand new.
New Jersey Medicaid
While Medicaid was instituted for the very poor, beginning in 1972, the number of individuals in the United States who lacked any form of health insurance for any period during the year increased each year, every year with the exceptions of the years 1999 and 2000. The reductions in the number of uninsured individuals during those years was due entirely to the expansion of medical assistance under the auspices of the State Children's Health Insurance Program (SCHIP).
Common complaints of publicly funded medicine
- Price no longer influences the allocation of resources, thus removing a natural self-corrective mechanism for avoiding waste and inefficiency.
- Health care workers' pay is often not related to quality or speed of care. Thus very long waits can occur before care is received.
- Because publicly funded medicine is a form of socialism, many of the general concerns about socialism can be applied to this discussion.
- People are afraid that they cannot choose their own doctor. The state chooses for them.
- Countries which have publicly funded medicine don't do as much medical research and development as there is very low payoff to developing new drugs and medical techniques.
- By limiting the amount of money in the health care system through political mechanisms, shortages of health care resources (such as physicians, nurses, medical equipment, medical devices, pharmaceuticals, and hospitals) are more likely to occur.
Health insurance in New Jersey and the USA
According to the latest United States Census Bureau figures, approximately 85% of Americans have health insurance. Approximately 60% obtain health insurance through their place of employment or as individuals, and various government agencies provide health insurance to 25% of Americans.