ECON 472 : Health Care Economics In USA

Review the attempts made over past decades to initiate health care reform. 

The introduction of Affordable Care Act has temporarily put an end to a century of conflict and controversy over the opportunity to introduce in the United States, like the major European countries, universal health coverage (National Health Insurance, NHI). The battle was hard, and the rhetorical violence of the opponents of the law was the measure of opposition that has always aroused this reform, proposed unsuccessfully four times in a century, first in 1912 by the progressives with Theodore Roosevelt, then by Presidents Truman in 1945, Clinton in 1992, and finally by Barack Obama in 2010.

Review the history of health care reform in the U.S. 

The issue of health care reform has been the subject of a permanent war between Democrats and Republicans, and her story can be described as a true saga (Jacobs & Skocpol, 2014). Here a brief step back is needed to put the question in perspective.

By 1912, the progressives, led by Theodore Roosevelt, had presented a public health insurance project, in the same spirit of humanism and economic efficiency associated with the Europeans.  This form of medical practice was born in Germany in 1883 when Chancellor Bismarck introduced the first health insurance (Jacobs & Skocpol, 2014). 

The progressive episode ended in the presidential elections of 1915, when Teddy Roosevelt was defeated by Woodrow Wilson. The issue of IHN was therefore removed from the US political agenda for many years. The other two important dates for IHN were 1935 and 1965. 1935 because it did not take place, and thirty years later, 1965 because it was partially completed (Cohen, Hoffman & Sage, 2017).

From the 1930s, two phenomena combined to bring the issue of health insurance back on the political scene. From then on, the political problem changed in nature: it was no longer a question of compensating for the loss of wages of the sick worker, it was now a question of allowing the American population as a whole to have access to care, particular to hospital care (Cohen, Hoffman & Sage, 2017). Health insurance thus became an instrument for the development of medicine and medical care.

In 1935, President Franklin Roosevelt voted for the Social Security Act, which provided old-age and death insurance to employees. He had originally wanted to add health insurance, but he had to give up the project in the face of intractable opposition from private insurance and the American Medical Association (AMA), the all-powerful professional association of American doctors.

At the end of his life, President Roosevelt, returning to the question of health insurance, spoke of introducing it when the war was over. His successor, Harry Truman, took up the torch, and in 1945 proposed to Congress a system of universal health coverage, but that did not affect the organization of care, and allowed doctors to exercise as they pleased (In Mulligan & In Castan?eda, 2017).

In 1965, two years after the assassination of President Kennedy, allowed the vote of Medicare and Medicaid, the two historic programs of American health insurance, as part of the fight against poverty of the "Great Society" wanted by President Johnson (Gray, Lowery & Benz, 2013).   

Has the Affordable Care Act fundamentally changed U.S. policy? 

Affordable Care Act, unlike President Clinton's reform proposal, reassures the majority of the American population, which is ensured by the employers: the system remains in place, the reform will not force them to change their health insurance. On the other hand, it introduces an obligation for employers (companies with more than fifty employees) to contribute to the health coverage of their employees, and an individual obligation, under penalty of a fine, to take out, as of 2014, a health insurance that covers a minimum basket of services. The state of Massachusetts has already made health insurance compulsory, but this is the first time that the federal government has succeeded in passing such a law, which for critics of the reform is contrary to the Constitution (Gray, Lowery & Benz, 2013).

Analyze one of the following non-U.S. health care economic models: 

Japan’s health care model

One of the best health and public health performances in the world, a relatively low apparent cost, a consensual image of regulation: the whole seems conducive to making the Japanese health care system an example to follow. 

Analyze the influence of politics on the economics of the non-U.S. health care model you chose. 

In Japan, there is no tension between government and the doctors. Medical practice in Japan takes three forms. The liberal cabinet is made up of 34% of the doctors, who practice the vast majority of them solo. Hospitals bring together about 62% of doctors who work as employees (Olivares-Tirado & Tamiya, n.d.). Most specialized care is provided at the hospital, which is most often managed by local or national government (city or region-prefecture) (Hellmann, 2010). Between these two classic formulas is a framework of exercise, called clinic, which one must consider as hybrid. In a context where it is forbidden for private investors, if they are not doctors, to take shares in a lucrative establishment, these very small clinics (of which individual doctors are traditionally the owners) constitute a quite complete mesh of the territory. They represent above all a natural landing point for doctors who, having built their weapons at the hospital, wish to make their reputation more profitable: in fact, the average age of physicians practicing in a clinic is 64 years, as against 45 for all doctors.

Compare the U.S. health care model with the non-U.S. health care model you chose. 

Compared to Japan’s health care model, it is clear that Japan’s health care model is best in terms of payment structure, benefits, provider interactions and even in terms of reform processes. In terms of payment structure, Japan’s health care model levy certain percentage of tax in VAT to be used to cover the universal health care. In U.S. employers are responsible for deducting some amount from employees to gather for their health care insurance. In terms of benefits, Japan’s health care has more benefits because it covers everyone without limitation. The U.S. health care covers only those who have insurance cover. Concerning provider interactions, Japan has better system which is based on negotiation. Another difference is that Japan’s health care reforms are based on negotiation whereas in U.S. the health care reforms are based on competition between different parties.

Other relevant features is that Japan’s health care model is characterized by more affordable care, reduced wait times, and more effective care facilities. Most of these features are not found in U.S. health care model.

References:

Cohen, I. G., Hoffman, A. K., & Sage, W. M. (2017). The Oxford handbook of U.S. health law.

Gray, V., Lowery, D., & Benz, J. K. (2013). Interest groups and health care reform across the United States. Washington, DC: Georgetown University Press.

Hellmann, A. (2010). Japan: Health-, Elderly- and Child- Care in comparison to the German system: based on a case study. Mu?nchen: GRIN Verlag GmbH.

In Mulligan, J. M., & In Castan?eda, H. (2017). Unequal coverage: The experience of health care reform in the United States. New York : New York University Press.

Jacobs, L. R., & Skocpol, T. (2014). Health Care Reform and American Politics: What Everyone Needs to Know, Revised and Updated Edition. Cary: Oxford University Press, USA.

Olivares-Tirado, P., & Tamiya, N. (n.d.). Trends and Factors in Japan's Long-Term Care Insurance System [recurso electrónico]: Japan's 10-year Experience.

Yamagishi, T. (2011). War and health insurance policy in Japan and the United States: World War II to postwar reconstruction. Baltimore: Johns Hopkins University Press.