Reference Materials

Healthcare Reform without Tears: 3 Questions, 9 answers

Author: Samuel Metz

Date: 04/25/2012

What makes health care reform so controversial is its complexity. Nearly one of every five dollars in our wallets will be spent on health care. Health care obeys almost none of our conventional rules of economics; for instance, as health care costs go up, health care needs do not go down. And it is a sword of Damocles hanging over all our heads – most American families are one hospitalization away from financial catastrophe.

This essay rearranges what most of us already know in a fashion that may make understanding health care reform easier. The format is three questions with three answers each, each answer accompanied by appropriate documentation. The goal is not to justify a specific solution, but increase appreciation of the nature of the problem so any proposed solution can be evaluated.

1. Why do we need health care reform?

This is not rhetorical. Many elected officials state unequivocally that the US enjoys the “best health care in the world (1-8).” It is difficult to substantiate this belief.

a. The US pays twice as much annually for health care as the average industrialized nation. This is true on a per capita basis and percent of gross domestic product (GDP) (9,10). Correcting for smoking, obesity, traffic fatalities, race, and homicides makes no perceptible difference (11). We spend more on health care than any other nation in the world.

b. If US citizens were twice as healthy, we could accept twice the spending. But on most measures of public health, we rank at or near the bottom of industrialized countries. In such basic health care measures [mm1] as maternal mortality (12,13), lives lost to preventable and treatable disease (14-16), and even foot amputations per 100,000 diabetics (17), our record is dismal.

c. The medical, financial, and social consequences of our expensive, ineffective health care system are devastating. We are the only industrialized country which allows families to lose homes, limbs, or lives when they lack money for health care (18,19). Medically-related bankruptcy, which accounts for most personal bankruptcies in the US (20), is nearly absent in other industrialized countries.

2. What are the goals of health care reform?

Many reform proposals define success with intermediate variables that fail to reflect meaningful and measurable endpoints. Examples of such intermediate endpoints are percentage of citizens with insurance policies, reductions in federal spending, decreased use of physician services. But ultimately, reform must achieve three goals.

a. Access to health care when we need it. [mm1] A plan caring for citizens who are young, healthy, and employed but expels them when they become old, sick, poor, or jobless is not reform. Most Americans purchase health insurance through their employers (21). As the average worker changes jobs nearly a dozen times before reaching 40 years old (22) and changes insurance companies on average every six years (23), there are many vulnerable periods in which insurance (and access to health care) can be lost. This lost access does not happen in other industrialized countries (17-19). It should not happen here.

b. Reduced costs. Reduced costs does not mean redistributed costs. Solutions that shift spending among patients, insurance companies, employers, and employees are not reform. Annual per capita spending and percent of gross domestic product dedicated to health care are the ultimate measures of cost.

c. Improved public health. We want more than lower costs. We want better health.

3. How do successful health care systems provide better care to more people for less money?

The health care programs of our industrialized neighbors in North America, Europe, the Pacific Rim, and East Asia all provide better care to more people for less money (9,10,12,14,15). Although they bear little resemblance to each other (17,18), they share three common characteristics missing from the American private health insurance system.

a. Health care access includes everyone regardless of health. Unlike the US, other industrialized countries provide lifetime access to all citizens regardless of age, health, employment, or economic status (24). The US is alone in fragmenting its population and then discriminating against the sick, either by restricting access or charging higher prices. We are the only country that considers it acceptable that some citizens have no access to health care. Even our publically subsidized health care programs exclude some citizens whose lack of income prevents access to health care (25). Other countries allow all citizens access to needed care regardless of circumstances.

b. Little or no cost sharing. Other industrialized nations encourage inexpensive primary and preventative care to decrease subsequent need for expensive emergent or intensive [mm1] care. We are unique in using high deductibles, large co-pays, and excluded conditions to discourage citizens from seeking health care (26).

c. Financing by publically accountable, transparent, not for profit agencies. We are the only country in which private insurance companies use medical underwriting to fragment populations into risk pools, and then base benefits and premiums on the likelihood of needing care (17). In other industrialized countries, such discrimination is outlawed. Financing agencies remain beholden to the health care interests of patients, not to the financial needs of owners, and must make their policies, benefits, and payments open to public inspection.

Variations of such publically accountable, transparent, not-for-profit systems are mandated insurance, two tier private and/or public insurance, and single payer (27). Single payer is a system of universal care with low cost sharing that uses one publically accountable, transparent, not for profit financing agency (28). [mm1] Single payer nations include Japan, Canada, Iceland, the United Kingdom, Sweden, Norway, Finland, Italy, Portugal, and Spain. Domestic examples of single payer or variants of single payer are multi-employer health plans, the Veterans Health Administration, TriCare for uniformed services, Medicare, and Medicaid.


This essay attempts to eliminate factors which distract or polarize health care discussions. Many debaters use health care reform as a tool to advance other platforms such as human rights or smaller government. While such platforms may be important in the public arena, they fracture health care discussions with issues largely unrelated to the urgency, goals, or options for health care reform.

Answers to the third question have several important implications.

  1. There is no common role for government. In some nations the government provides nearly all medical care; in others, government provides no care. However, in all nations, government ensures all citizens have access and all providers are paid appropriately.
  1. A second point is the variety of methods to pay providers and deliver care. All of the methods of provider payment used in the US (e.g., fee-for-service, salaried physicians, capitated funding) are in use by nations that provide better care at lower cost to all citizens. If our attempts to follow these successful examples fail, it is not primarily due to our delivery system.
  1. The third point is perhaps most important. All three factors common to successful systems relate to health care financing and access, not to health care delivery. Other studies support this concept, that our greatest (though not only) obstacle to a successful health care system is not the poor quality of our hospitals, doctors, nurses, or the treatment they provide, but rather a financing system that impedes access to health care (14,15,25,29-32).

For a reform proposal to succeed, it must first address the root cause of our dysfunctional health care system that consumes too much money while providing too little care. That root cause is our method of financing care that impedes access to health care rather than promoting access. American health care reform must begin by improving financing before attempting to improve delivery.


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