Why is the U.S. pursuing health care reform?

Barack Obama speaks to town hall about health care reform
Barack Obama made health care reform the defining issue of the first year of his presidency. Why? See more Barack Obama pictures.
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On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act, thus making laws of a host of health care reforms The signing ceremony capped a contentious few months, with U.S. citizens and legislators alike arguing about the merits and drawbacks of reforming the health care system. The issue has proved to be a divisive one for the United States, which may lead an outsider to wonder, why go to all this trouble?

If you have a personal story about butting heads with your insurance company to get a surgery or coverage for a prescription drug , you probably understand why the United States pursued health care reform. If you're one of the 47 million people who lack health insurance, then you may also understand, particularly if you've experienced an illness or injury you couldn't afford to get checked out. And if you didn't get a raise this past year despite a great performance, then you might have the rising costs of your employer's health insurance plan to thank for that, and you, too, might be ready for some changes.


But many people are content with the current health care system and don't see the need for reform. In fact, one CNN poll showed that 8 in 10 Americans are happy with their health insurance [source: Steinhauser]. If things work well, why change them? And when the proposed change is likened to a government takeover of health insurance, then those who believe the government's role in the lives of its citizens should be very limited become agitated. You may think that it's everyone's personal responsibility to secure health coverage. You see the sob stories on the news about people forced into bankruptcy and feel concerned, but ultimately, you wonder, did these people splurge on flat-screen televisions instead of practicing fiscal discipline? And if so, why is it the government's responsibility to help them out?

To some extent, a lack of individual responsibility for one's health could be seen as a culprit in our exorbitant health care costs. There's no doubt we love our supersized fast food meals here in the United States, and one study posited that 27 percent of the rise of health care costs is due to obesity; another 7 percent of the costs is due to smoking [source: Clifton]. The Rollins School of Public Health at Emory University has determined that costly, largely preventable conditions like diabetes and heart disease may put an extra $100 billion to $150 billion on our country's tab each year, compared to health care costs in European countries [source: Girion].

But to say that everyone is fat, smoking like a chimney and buying flat-screen televisions instead of healthy fruits and vegetables is a gross oversimplification. If we step back and take a look at the big picture, however, it becomes apparent that the health care system isn't working as well as it should, and it's costing all of us. Insured or uninsured, conservative or liberal, the current health care system is simply not the best value for the money that we pay. Some sobering statistics are on the next page.


How U.S. Health Care Costs Compare to Other Countries

According to the World Health Organization (WHO), the United States spends a higher portion of its gross domestic product on health care every year than any other country. Yet, the United States ranks 37th out of 191 countries in the WHO's ranking of health care systems. It's difficult to imagine any consumer spending that much more money on a product only to be handed something that ranks 37th in quality. To see how other countries provide health care, see 10 Health Care Systems Around the World.

When compared with other developed countries, the U.S. performs worse on life expectancy and infant mortality [source: Carey et al.]. It also tops the list of deaths deemed "preventable" with adequate early care and diagnosis [source: Harrell]. The typical U.S. citizen has far fewer doctor appointments each year than citizens of other countries, yet pays more for the privilege. When an American citizen spends the night in the hospital, it costs 5.6 times more than it would cost a person in Japan [source: Clifton]. And to top it all off, the U.S. spends $2,797 more per person every year than other industrialized countries, even though 47 million of those people are uninsured [source: Clifton].


So the U.S. spends more -- is that just the price we pay for having free choice of providers and leading the way in medical technology? Not necessarily; at least 30 percent of all delivered health care services are thought to be unnecessary because they don't make sick people any healthier source: Clifton]. As an example, let's consider Medicare spending. One study compared patients with similar ailments in high-spending Medicare regions and low-spending Medicare regions. Those patients in the high-spending areas, who saw their doctor more often and spent more days in the hospital, had an increased risk of dying when compared with patients in the lower-spending areas who had the same illness [sources: Gawande; Clifton]. It's almost as if going to the doctor in this country can make a person even sicker, perhaps because a patient runs the risk of undergoing unnecessary procedures that exact a high toll in terms of side effects.

President Obama has vowed that this unnecessary spending must be cut out of the system, both in governmental and private spending. On the next page, we'll see how rising health care costs affect private insurance.


Problems with Private Insurance

group of surgeons
Did someone say health care reform?
Jochen Sands/Digital Vision/Getty Images

Most people in the U.S. have health insurance through their employer, which means they may not know how much the costs of private insurance plans have been rising. From 1988 to 2006, health insurance premiums grew at three times the rate of inflation; workers' wages grew at the same rate as inflation [source: Clifton]. While workers may pay the price in terms of lower raises, that extra money is, of course, someone's bottom line. American insurance companies are the only ones in the industrialized world that are allowed to operate at a profit for providing basic care [source: Reid].

Perhaps for that reason, many of the reforms in the Patient Protection and Affordable Care Act are aimed at private insurance companies. These changes include a set of consumer protections that ensure providers can't deny coverage or charge higher premiums to people based on pre-existing conditions or stop covering paying customers once they get sick.


The new law also includes a mandate that every person procure insurance coverage, and every business (small businesses exempted) must provide coverage to their employees. Those who are unable to pay will be eligible for subsidies from the government, while some people may find themselves newly eligible for Medicaid. Covering the uninsured could have benefits for those already covered: One think tank estimated that families pay an extra $1,100 in premiums and individuals pay an extra $410 each year because providers shift the costs of treating the uninsured to the insured [source: Kingsbury].

These expenditures will only increase, and many analysts claim that the cost of ignoring problems within the health care system would only have meant more spending down the line. While the law will add up to $938 billion over 10 years, it will also cut the deficit by more than $100 billion over the same period, largely because the law makes the effort to curb runaway spending in this sector. Without changes to the insurance system, all Americans would have eventually seen their premiums rise, their services cut and their bottom line affected [source: Abelson]. While the Patient Protection and Affordable Care Act may be far from ideal for both liberals and conservatives, the president has deemed it a necessary first step.

For more on what the Patient Protection and Affordable Care Act includes, see the links on the next page.


Lots More Information

Related HowStuffWorks Articles

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