Health Care Reform in the United States

Abstract

In spite of improvements, on various measures of health outcomes the United States appears to rank relatively poorly among OECD countries. Health expenditures, in contrast, are significantly higher than in any other OECD country. While there are factors beyond the health-care system itself that contribute to this gap in performance, there is also likely to be scope to improve the health of Americans while reducing, or at least not increasing spending. This paper focuses on two factors that contribute to this discrepancy between health outcomes and health expenditures in the United States: inequitable access to medical services and subsidized private insurance policies; and inefficiencies in public health insurance. It then suggests two sets of reforms likely to improve the US health-care system. The first is a package of reforms to achieve close to universal health insurance coverage. The second set of reforms relates to payment methods and coverage decisions within the Medicare programme to realign incentives and increase the extent of economic evaluation of different medical procedures.JEL classification: H51; I12; O57; C23.

Cyclical vs structural effects on health care expenditure trends in OECD countries

“…As a result, while spending growth may accelerate somewhat as economies continue to recover from the financial crisis, the policy changes that contributed to the broader spending slowdown are likely to continue to constrain spending growth in the future. Of the countries examined, the US has by far the highest per-capita total and public health care expenditure and share of GDP spent on health-care (Carey et al, 2009). One feature of the US system that stands out from international comparisons is that the publicly financed share of health care expenditure-though increasing over time-is the lowest of the high-spending countries and covers only a third of the population.…”