Introduction to US Health Policy: The Organization, Financing, and Delivery of Health Care in America

316 Pages·2016·4.438 MB·English

by  Donald A. Barr

INTRODUCTION TO US HEALTH POLICY
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Introduction to US Health
Policy
The Organization, Financing, and
Delivery of Health Care in
America
FOURTH EDITION
Donald A. Barr, MD, PhD
Department of Pediatrics
Stanford University
Stanford, California
Johns Hopkins University Press | Baltimore
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© 2007, 2011, 2016 Johns Hopkins University Press
All rights reserved. Published 2016
Printed in the United States of America on acid-free paper
First edition published in 2002 by Benjamin Cummings, Inc., California
Johns Hopkins edition published 2007, 2011, 2016
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Johns Hopkins University Press
2715 North Charles Street
Baltimore, Maryland 21218-4363
www.press.jhu.edu
Library of Congress Cataloging-in-Publication Data
Names: Barr, Donald A., author.
Title: Introduction to US health policy : the organization, financing, and delivery of health care in America / Donald A. Barr.
Other titles: Introduction to United States health policy
Description: Fourth edition. | Baltimore, Maryland : Johns Hopkins University Press, 2016. | Includes bibliographical references and
index.
Identifiers: LCCN 2015050789| ISBN 9781421420714 (hardcover : alk. paper) | ISBN 1421420716 (hardcover : alk. paper) | ISBN
9781421420721 (pbk. : alk. paper) | ISBN 1421420724 (pbk. : alk. paper) | ISBN 9781421420738 (electronic) | ISBN
1421420732 (electronic)
Subjects: | MESH: United States. Patient Protection and Affordable Care Act. | Delivery of Health Care | Health Policy | Health
Care Reform | Health Planning | Financing, Government | Economics, Medical | United States
Classification: LCC RA393 | NLM W 84 AA1 | DDC 362.10973—dc23 LC record available at http://lccn.loc.gov/2015050789
A catalog record for this book is available from the British Library.
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FOR DEBRA
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CONTENTS
Preface
1 The Affordable Care Act and the Politics of Health Care Reform
2 Health, Health Care, and the Market Economy
3 Health Care as a Reflection of Underlying Cultural Values and Institutions
4 The Health Professions and the Organization of Health Care
5 Health Insurance, HMOs, and the Managed Care Revolution
6 Medicare
7 Medicaid and the State Children’s Health Insurance Program
8 The Uninsured
9 The Increasing Role of For-Profit Health Care
10 Pharmaceutical Policy and the Rising Cost of Prescription Drugs
11 Long-Term Care
12 Factors Other Than Health Insurance That Impede Access to Health Care
13 Key Policy Issues Affecting the Direction of Health Care Reform
14 Epilogue/Prologue to Health Care Reform in America
Appendix: Summary of the Changes Contained in the Affordable Care Act
References
Index
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PREFACE
In teaching my class on American health policy, I often show the students two statements, and then ask which
is correct. The first slide states:
The United States has the best medical care system in the world.
The second states:
The United States has one of the worst health care systems among the developed countries of the world.
We spend several minutes in a discussion and debate regarding which of the statements is more accurate. The
irony of US health care, and a principal message of this book, is that both statements are simultaneously true.
From one perspective, we have the best health care available anywhere. From another, equally valid
perspective, we are close to worst among developed countries in the way we structure our health care system.
Which perspective one adopts depends on the measure of quality one selects.
This seeming paradox is illustrated by the way health care is provided in the communities adjoining the
office in which this book was written. Approximately five hundred yards to the north is Stanford University
Medical Center, a world leader in technological sophistication in medical care. Physicians there, who are
among the best in the world, are able to perform remarkable feats, such as a life-saving organ transplantation
or the reattachment of a severed hand. The physician-scientists at the Lucile Packard Children’s Hospital are
able to save amazingly tiny, premature babies weighing less than this book. Specialist physicians in the
emergency room are able to reverse heart attacks and strokes after they have already happened. Nowhere in
the world is a higher level of advanced medical care available.
Approximately two miles to the east of this office is the community of East Palo Alto. The population of
East Palo Alto is predominantly low income, mainly nonwhite, and largely without health insurance. Many of
the people there have no regular source of medical care. When they or their children become ill, the only
source of care available to them is often the emergency room at Stanford Hospital, where physicians-in-
training will see and treat them between treating patients with heart attacks or major traumatic injuries. If
patients from East Palo Alto need to be hospitalized, those without a life-threatening condition who have no
insurance and no means of paying for care out of pocket are not allowed treatment in Stanford Hospital.
Rather, they are referred to a county hospital, several miles away. East Palo Alto has a high rate of premature
babies; violence is a major health problem; diseases such as diabetes and high blood pressure often go
untreated; and children can go without needed checkups and immunizations.
We are simultaneously the best and one of the worst. This is the dilemma of health care in the United
States.
This book is about the US health care system. It introduces the various organizations and institutions that
make our system work (or not work, as the case may be). It identifies historical forces that have brought us to
our current state of health care and examines the way in which the need of the American people for health
care services is sometimes met and sometimes not.
As this book describes, the United States spends more on health care, both overall and per capita, than any
other country in the world. Yet the health of our society, measured by indices such as infant mortality and life
expectancy, and our access to care are worse than those of nearly all other industrialized countries.
Two broad forces contribute to the relatively poor state of health in the United States: (1) socioeconomic
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factors, such as education, poverty, and lifestyle, and (2) the quality of our health care system. It may be that
socioeconomic factors have more to do with the overall health of our society than does our system of health
care. This book, however, looks at only the latter—our health care system.
It has been health care, not health, that has focused national attention and stirred national discourse for the
past several years. During the intense debate that led to the passage of the Patient Protection and Affordable
Care Act (ACA) of 2010 and that has continued since its passage, we have had a graphic illustration of how
our health care system is made up of various organizations and groups that often can’t agree on how the
system should be structured. This was not the first time we tried to initiate broad reform of the health care
system in this country. In the 1930s, a national health care plan was considered as part of Social Security. It
was seen as too far-reaching and was dropped from Social Security to assure passage. In the years following
World War II, President Harry Truman proposed a national system of health insurance but was defeated by
the forces of organized medicine. In the 1960s, Congress adopted major policy reforms in the financing of
health care for elderly and poor people but stopped short of comprehensive national reform. In the 1970s,
facing for the first time the rapidly rising cost of health care that characterized the last part of the twentieth
century, Congress came close to adopting comprehensive national reform, only to back away in the wake of
the Watergate scandal. Again, in the 1990s, we came very close to enacting comprehensive health care reform,
only to see the Clinton reform proposals defeated and abandoned following a midterm election that shifted
the center of power within Congress.
As health care costs continued to rise and more and more people were left without health insurance, the
beginning of the twenty-first century required that we deal with the same problems we confronted at the end
of the twentieth century. Congress came close to inaction but in the end did approve ACA and a companion
reconciliation bill, the combination of which offered access to affordable health insurance to as many as 30
million Americans who previously were uninsured. ACA has not solved all the problems inherent in our
system of health care, however. While access to health insurance has expanded substantially, the rise in health
care costs is predicted to continue. At some point in the future, Congress will again need to deal with the
continuing problems of health care in America.
How much can we as a country afford to spend on health care? Can we both constrain the growth of health
care expenditures and improve access to care? Whether as a health care professional who participates in the
system, as an academician who studies the system, as a business manager who must arrange health coverage
for your workers, or as a patient who turns to the system for care, you, the reader of this book, will doubtless
confront these questions again. It is my hope that, by reading this book, you will be in a stronger position to
help find an answer to them.
Who will be the leaders in finding the answers and making the difficult choices? Physicians, health care
administrators, and those responsible for the public sector will all play an important role in this process. Many
physicians and other health care professionals, however, do not receive adequate training in the knowledge
and skills necessary to make informed choices about health care delivery. In 1995, Drs. Ira Nash and Richard
Pasternak reported their experience in interviewing applicants for one of the most competitive and prestigious
fellowship training programs in the country. They found that nearly all the applicants had consistently high
clinical qualifications. They then asked these young physicians, the future leaders of the medical profession,
what they thought about the issue of health care reform.
We were shocked when we barely got a response. A few residents offered some brief insight into the
scope of the challenge to reform. Fewer enunciated some broad goal of reform such as universal
insurance coverage. None had any well-formed ideas about how to actually address these challenges or
realize these goals, or could even render a reasoned opinion about somebody else’s well-formed idea.…
How can it be that the apparent “best and brightest” of internal medicine are on the intellectual sidelines
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of the debate over health system reform?
If, as is now the case, we find time in medical school and residency training to teach things that most
physicians will never need to know, we should find the teachers and the time to teach what nearly every
physician will soon need to know to help address the health care needs of the nation. (Nash and
Pasternak 1995, p. 1534)
Medical science has been expanding steadily since the beginning of the twentieth century. Initially,
physicians had a fairly small core of knowledge they needed to acquire. As scientists learned about bacteria
and other microorganisms, physicians needed to expand their base of knowledge to include microbiology.
When X-ray technology began to expand, physicians needed also to learn the basics of radiology. In the 1960s
and 1970s, as a phenomenal number of new drugs were discovered, physicians needed to learn more about
pharmacology. Every time a new development has occurred in medical practice, physicians have needed to
expand their base of knowledge to include the new area.
Another new area has developed, with at least as much significance for the practice of medicine as others
that came before it. This development is the tremendous change we are seeing in the financing and
organization of health care and the profound consequences this change will have on health care delivery. Just
as physicians expanded the knowledge required for the practice of medicine in the face of technological
advances, many now suggest that health care professionals of all types need to expand their knowledge to
include a familiarity with the health care delivery system and the effects of alternative delivery and financing
methods on the outcomes of care. Whether acquired as part of an undergraduate education or as part of the
curriculum of health professions schools, an understanding of health policy will be an important part of
professional knowledge in the twenty-first century.
The purpose of this book is to provide the reader with just such knowledge. Developed from a course I
have taught at Stanford University for more than two decades, it describes the historical, social, political, and
economic forces that have shaped our health care system and created the policy dilemmas we face. The
information offered in this book has proven to be of interest to undergraduates, medical students, and
practicing professionals alike, all of whom have participated in the course.
WHAT IS HEALTH POLICY?
This book introduces health policy in the United States. The growing problems that have surrounded health
care over the past several decades have created the field of health policy. Forty years ago, few if any universities
or professional schools had teaching or research programs in health policy. Today, nearly every major
university includes active programs in health policy. Academic journals specializing in health policy are
increasingly numerous and well respected. The advent of the Internet has made an extensive library of health
policy data and information immediately available to all with basic computer access.
As with any new academic discipline, there is not universal agreement as to what precisely constitutes the
field of health policy. Overlapping interests among those in fields such as public health, health economics, and
health services research have made agreement on a precise definition of health policy sometimes difficult to
attain. This book hopes to address this issue by approaching health policy as the study of the way health care
is organized, financed, and delivered. It does this by drawing on theories from fields such as economics,
sociology, and organizational behavior to offer a view of the broad social forces that coalesce to create the
structure of our system of health care and the problems inherent to it.
In its broadest sense, health policy includes all those factors and forces that affect the health of the public.
This book, however, focuses its study of health policy more on the structure of health care than on the health
of a community or society.
Health policy overlaps with health economics but broadens its scope to include social and political
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processes affecting health care. Health policy and health services research have much in common; however,
the latter tends to look more at specific clinical issues, such as the optimal way to treat coronary artery disease,
whereas health policy looks at questions such as the optimal way to structure care overall.
WHO MAKES HEALTH POLICY?
The organizing, financing, and delivery of health care in the United States is affected by a broad range of
forces, public as well as private, national as well as local. Congress and the federal health agencies within the
executive branch have major roles in developing health policy. Federal laws such as Medicare and Medicaid
that affect the financing of care have reshaped health care organization and delivery in a number of ways.
Rules established by the US Department of Health and Human Services govern much of the health care that
is provided in this country. As we have experienced during the ongoing debate over ACA, the congressional
system of committees and subcommittees plays a continuous role in monitoring the delivery of health care
throughout the country and initiating reform when necessary.
States also play a major role in the organization and financing of health care. Most laws governing
professional licensure and medical practice come from the states. Financing care for the poor has become
largely the responsibility of the states.
Health policy, however, includes more than just the creation of governmental policies pertaining to health
care. As discussed later in this book, private businesses play a major role, both as purchasers of health
insurance and as providers of health insurance, in driving recent changes in the way health care is organized,
financed, and delivered. The shift to a market-based system of managed care was largely the result of the need
to control costs. The effect this shift has had on the delivery of care at every level is profound.
The providers of care also play a large role in developing health policy. The American Medical Association
(AMA), the private organization representing physicians, has been one of the most powerful forces behind the
creation of the private practice, fee-for-service model of delivering health care that came to dominate the
health care system for much of the twentieth century. Other providers, competing with the AMA, formed
cooperative associations of physicians and hospitals as an alternative to fee-for-service care. These alternative,
prepaid systems created the model on which the concept of the health maintenance organization (HMO) was
based. They have also provided a basis for the development and expansion of accountable care organizations
(ACOs).
Local communities also play a role in creating health policy. Community hospitals, community clinics, and
local government health departments continue to play a major role in the organization and delivery of care at
the local level.
So the creation of health policy is more than simply passing laws. It is the coalescence of forces on multiple
levels, representing multiple interests and constituencies, to organize and finance a system to deliver health
care to the American people.
THE STRUCTURE OF THE BOOK
The fourteen chapters of this book present the dilemma of US health care, describe its basic structure, and
identify recent changes and trends in the system. For each chapter, I identify key concepts that summarize the
way social, economic, and political factors have acted to shape the delivery of health care in this country, either
historically or currently. By fully understanding these concepts, the reader will have a comprehensive grasp of
our system of care.
Chapter 1 offers an introduction to ACA, how it was passed, what it was intended to do, and how it has
fared in the years following its enactment. In noting the extreme social and political polarization that has
emerged as part of the debate over ACA, I also provide a historical perspective on other attempts to pass
health care reform and the polarization of opinion they engendered.
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