First of all, the state of the current U.S. healthcare system was affected by such demographic factor as population aging. The increase in life expectancy in the United States affected not only older people, but also the bulk of the workforce aged 20 to 65 years (Webster, 2020). According to various estimates, life expectancy in the United States will increase to 85 years by 2060 (Webster, 2020). From 2000 to 2060, the share of life spent in retirement will increase from 20 to 27% (Shrank et al., 2019). This demographic factor has changed the U.S. health care system, contributing to the cost of medical care under the Medicare program which increased significantly.
Due to the raise in life expectancy, significantly more funds are required for the treatment of one old person. Changes in mortality rates depending on income and education had an impact on the degree of progressiveness of the social insurance and medical care system. These trends have significantly affected the overall cost of implementing the Medicare program, since the level of payments is higher in absolute terms for individuals in the upper quarter of the income scale than in the lower.
The next significant factor was the legal one, namely the publication of the law on patient protection and affordable care, which was one of the main achievements of the Obama administration (Blumenthal et al., 2020). Within its framework, registration of people within the scope of a special state-regulated health insurance market has become mandatory. This factor changed the U.S. healthcare system by making it possible to purchase health insurance policies within a special state-regulated market. 35% of the total number of people who took advantage of the new initiative were under 40 years old (Shrank et al., 2019). The point of this mechanism is that people who are not poor enough for Medicaid and not old enough for Medicare can purchase health insurance policies with the help of special state subsidies.
The next significant factor that has contributed to the state of the current U.S. health care system is a political one. It is connected with the coming to power of Donald Trump, one of whose main election promises was to repeal Obamacare (Shrank et al., 2019). Trump’s plan was not to completely eliminate the entire reform, but to repeal a number of provisions and amend its paragraphs. This factor changed the U.S. healthcare system through radical changes in the accepted healthcare structure. Firstly, compulsory insurance by employers of their employees and the personal obligation of citizens to buy insurance was abolished. Secondly, since 2020, the federal support of the states for the medical assistance program for low-income citizens has been reduced (Shrank et al., 2019). Thirdly, the state authorities were empowered at their discretion to exclude payment for pregnancy and contraceptives from mandatory insurance plans.
Current Differences in Spending Patterns
Germany is the closest industrialized country to the US in terms of GDP. In the USA, medical expenses of citizens increase by an average of 6% per year (Shrank et al., 2019). At the same time, the average annual GDP growth rate is about 5% (Blumenthal et al., 2020). In 2018, medical expenses in the country accounted for 18% of GDP, and by 2020 the figure had increased to almost 19% (Blumenthal et al., 2020). More than 400 billion euros are spent annually on healthcare in Germany (Blumenthal et al., 2020). In fact, more than a tenth of Germany’s GDP is accounted for by medicine, which is half as much as in the United States.
In the USA, the infant mortality rate is quite high, in Germany this indicator is much lower. Children in the United States are 70% more likely to not live to their 20th birthday than children from other industrialized democratic countries (Blumenthal et al., 2020). In Germany, infant mortality has been steadily decreasing since 2000, but in the United States, the indicator has not changed (Webster, 2020). At the same time, America spends more money on combating child mortality per capita than Germany.
Change in Reimbursement Trends
Historically, in the late 1970s, private group health insurance covered about 90% of employees in the private sector of the economy (Blumenthal et al., 2020). Greater coverage was observed in industry compared to agriculture and in large companies compared to small ones. Private insurance in case of hospitalization was more widespread than insurance in case of access to the services of doctors, dentist, as well as the purchase of medicines, which is common at the moment. Modern health insurance in the USA is organized in the similar way. The insurance company collects the fund; from it, subject to the occurrence of an insured event, payments are made to the client. Coverage of medical services is carried out according to the terms of the contract. If some manipulation is not included in the list, then it is paid out of the patient’s pocket.
Historically, insurance provided payment for 80% of medical expenses during the year, and 20% was paid by the patients themselves (Shrank et al., 2019). If their expenses exceeded $ 1,200 per year, the insurance covered 100% of medical expenses until the end of the year (Webster, 2020). Nowadays covering expenses is also consistent with the contract. If the policy is concluded in the amount of $ 15,000, and $20,000 is spent, then the difference is paid by the patient (Webster, 2020).
Before Obama took office as president, the state participated in paying for insurance for socially unprotected citizens very little. Mediation in paying for the treatment of elderly people and patients with serious illnesses was carried out by non-profit insurance companies, such as Blue Cross (Webster, 2020). Nowadays, state aid in America is provided for pensioners and poor categories of the population. To get under the program, you need to fit certain conditions. It is offered to people aged 65 and older, or citizens under 65 with a diagnosis of a certain serious illness (Webster, 2020). However, no one is entitled to regular maintenance, and the program pays for a specific illness. A long stay in the clinic is paid for by the patients themselves.
There is also free insurance for the poor called Medicaid. The state provides financial assistance to people with a small income. Medicaid depends on the status of stay in America, pregnancy, disability. If the birth took place under the Medicaid program, then up to 1 year old the child automatically receives free medical insurance (Blumenthal et al., 2020). Adoptive parents of children can also count on the help from government. Therefore, reimbursement trends have changed from a historical perspective. The changes mainly concern insurance for socially vulnerable segments of the population, which almost did not exist before Obama, the aging of the population, and the associated tightening of insurance tariffs for the wealthy part of the population.
Impact of Health Care Reform Initiatives
The key reform initiative for US healthcare was the passage of Affordable Care Act. This is the first large-scale reform in the healthcare sector since 1965, involving universal health insurance (Webster, 2020). One of the health care providers impacted by the reform were physicians. In addition to the fact that Affordable Care Act insurance is becoming more expensive, fewer doctors have started accepting it (Webster, 2020). This insurance offers lower payments for doctors in the treatment of patients than conventional health insurance.
Operational planning in hospitals has undergone significant changes since the adoption of the Patient Protection and Affordable Care Act. Healthcare institutions had to seriously reconsider the allocation of the budget for a set of measures for the organization of medical care, including the salaries of physicians. Due to a decrease in the number of cases of private insurance, doctors’ salaries were reduced. In this regard, there has been a series of voluntary dismissals, and the provision of the health care system with human resources has become insufficient (Shrank et al., 2019). Thus, operational planning for physicians after the adoption of the Patient Protection and Affordable Care Act included adaptation to work in conditions of lower pay and greater workload. This reform initiative impacted the decision making of health care providers. Gradually, many doctors and clinics began to refuse to accept insurance, as it is unprofitable (Webster, 2020). This is due to the fact that Affordable Care Act is mainly beneficial to those people who are sick a lot, but earn little, and for medical institutions it is unprofitable.
Media Piece Review
In the situation proposed for consideration, I would choose the first response. A multi-level approach would create a hierarchy of tasks to increase the number of providers why participate in the Medicaid Managed Care Programs. As a result of the hierarchical decomposition, the relative independence of the levels of administration of the Nokomis County Public Health Department will be achieved, which means that their autonomous development and modification will be possible to solve the problem from several aspects simultaneously.
References
Blumenthal, D., Fowler, E. J., Abrams, M., & Collins, S. R. (2020). COVID-19: Implications for the health care system. The New England Journal of Medicine, 383(8), 1483–1488.
Shrank, W., Rogstad, T. L., & Parekh, N. (2019). Waste in the US health care system: Estimated costs and potential for savings. The Journal of the American Medical Association, 322(15), 1501–1509.
Webster, P. (2020). Virtual health care in the era of COVID-19. Lancet, 395(10231), 1180–1181.