8.11: Health Care Systems

Health Care Systems

The ability to pay for health care is another important question that medical geographers try to solve. The health profile of people around the globe is worth examining because, despite American’s troubling sense of exceptionalism, which leads us to believe that what happens in other countries is of no value to us, we indeed can learn much from other countries. Except for the United States, citizens of other developed countries access universal health care, which is generally run by the government and funded largely through taxes, with varying levels of individual, or employer payment options. A few countries, like the United Kingdom and Canada have wholly government-run or single-payer programs.

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An Insurance Advocacy Organization with data and mapping tools for analyzing patterns of health insurance.

The United States has a peculiar system of healthcare compared to most of the world. In the US, health care is largely run by companies from the private sector. By some measures, Mexico and Turkey are the only other countries in the world without universal health coverage. In the U.S. about 80% of the hospitals are not-for-profit businesses, but most physicians’ offices function as for-profit enterprises. About two-thirds of those who have insurance in the United States get it through their employer. The US government provides health insurance for about one-quarter of Americans. Medicare is the popular single-payer system (tax-supported), system for the elderly in the US. The poor and/or disabled who are under the age of 65 may qualify for Medicaid, an insurance program jointly funded by states and the US government. Together, the government pays about half of all medical costs incurred in the US each year.

The Affordable Health Care Act - Obamacare

Figure US County Map – “Obamacare” has significantly decreased the number of uninsured persons around the United States, including many locations, like Arkansas and Kentucky, where resistance to the program was intense. Source: New York Times / Enroll America

In 2010, the US Congress passed the Affordable Health Care Act (Obamacare) in an attempt to correct some of the problems with the US health care system. The law requires all citizens to have some kind of health care insurance. The ACA subsidizes the cost of insurance for the poorest of the poor and had a number of provisions designed to reduce health care costs for everyone. When it went into effect, about 16% of the US population was uninsured, but in 2016, only about 8.8 percent had no insurance.

Obamacare offered some help by extending coverage to more people, especially in the 23 states that accepted an expansion of Medicaid funding. States with significant Republican majorities, largely in the South, on the Great Plains, and Mountain West, declined to expand Medicaid, keeping it difficult for some poor citizens to get health care coverage.

Risk Pools:

A very important feature of the Affordable Care Act was the creation of state-wide health care exchanges, which offered insurance to those who were not eligible for neither Medicare nor Medicaid and could not get employer-provided health insurance. The idea was to create large risk pools of insurance customers who all contribute to a common fund from which individuals in the pool can withdraw money to pay for medical expenses. These risk pools are of interest to geographers because risk pools are defined by state borders, health risks vary greatly not only by individuals but by state of residence.

The key to successful health care exchanges (risk pools) is having a very good ratio of healthy people to sick people. Because chronically ill people most of the pool funds, sustainable insurance pools require that a large majority of participants in the risk pool be very healthy. An abundance of chronically ill people in an insurance pool drives up the cost of insurance for healthy people in the pool, which in turns causes healthy people to drop their insurance or seek it elsewhere, creating a situation in which chronically ill people rapidly deplete the common fund in a process known as an insurance death spiral. Prior to 2010, insurance companies tried to avoid creating unstable risk pools by denying enrollment in a plan to those with a known chronic disease or injury, called a pre-existing condition.

Those without insurance tend to have poor health, live fewer years and occasionally contribute to the proliferation of contagious diseases. Uninsured people can be very expensive for everyone else as well. Under the law, uninsured people still have a right to some health care, but this right only applies in specific instances, usually in an emergency situation, when a medical condition has become expensive to treat. Therefore, uninsured people tend to rely on emergency room care, rather than preventative care. Often, those who wait until they are extremely ill to seek emergency care, find themselves bankrupted by the costs and/or unable to work. Either way, the costs are passed onto taxpayers and to people with health insurance

How to fix the expensive and unfair American health care system is an exceedingly complex issue. Health care has become the main political issue in the US in the last two decades, and it’s sometimes unclear who favors what solution and why. Libertarians (see politics chapter) argue that nobody should be forced to join an insurance pool and that health care costs should be paid by individuals, and health care costs should be determined by the actual cost of care incurred by individuals, not the risk behaviors of a group. If people choose not to pay, then they get should get no treatment. Other conservatives believe that the government must force everyone to pay for health insurance because virtually everyone eventually gets sick and needs medical care. To them, buying health insurance is matter of individual responsibility, that should not be shouldered by the government or taxpayers. Ironically, these views are held most fervently in many of the states with relatively high percentages of voters using government-sponsored Medicaid and Medicare, such as Alabama, Kentucky, and West Virginia.

Progressive politicians favor more government involvement. They point to the lower costs and better health care outcomes for people living in countries with government-run health care systems. They believe every citizen in the country should be automatically placed in an insurance risk pool of some sort. Clearly, it can be done, but in order to keep taxes low, governments (or insurers) must work hard to keep people healthy to prevent them from costing fellow risk pool members too much in health care costs. In order for it to work, government or insurers must encourage healthy diets, exercise, and regular checkups as part of a healthcare strategy known as preventative healthcare. Progressives point out that the economic logic of our current privatized health care incentivizes unhealthy lifestyles because there are enormous profits to be made by treating, but not curing, chronically ill people. The opioid crisis may indeed be a partial outgrowth of providing long-term treatments for pain, without providing a cure for chronic pain. Meanwhile, there are few monetary rewards for risk pool participants who stay healthy, nor for those who work to prevent people from getting sick.

Progressive economists also estimate that over the long run, the external costs of our privatized health care system are far greater than what American taxpayers would pay if we adopted a more socialized medical system. For example, they point to the cost of an automobile produced in the United States. A mid-sized sedan built by Ford or General Motors in the United States costs around $2000 more than similar cars built elsewhere, because of the extra costs American manufacturers pay when they provide expensive medical insurance for their workers and retirees. Manufacturers in countries where health care is provided by the government do not bear this cost directly, so the costs of medical care passed on to car buyers are smaller. Some American companies move jobs to places where health care is cheaper, and this results in yet another loss of tax money from both payroll and corporate taxes that would otherwise go to the US Treasury.

Figure : US map of states by the ratification of the ERA. The states of the Confederacy and the Libertarian West refused to ratify the ERA.