The American health system: a contentious environment in the 21st century

Physician Executive, Jan, 1996 by Thomas P. Weil

While a surplus of resources tied to acute medicine will become more evident in the next quarter century, there will be increased demand for senior citizen programs, for continuing care facilities for the aging (i.e., apartments, independent living, and skilled nursing beds), and for comprehensive treatment programs for the addicted. These health-related programs traditionally have faced one key issue-they are not usually covered by private insurance and therefore need to be heavily supported by public funding.

Difficult to evaluate is the impact of mandating universal access during the 21st Century, providing coverage to the more than 41 million uninsured Americans. Of significant concern is that western industrialized nations with universal, comprehensive national health insurance often have more physicians per 100,000 persons and certainly experience significantly greater hospital and physician use rates per capita than does the United States.[8]

Impact of the Current Competitive Theme

How to improve integration and coordination of health resources, and curtail health expenditures--specifically the future cost of entitlements--has become a major debate in Washington and in many states. Congress has pressed for cost reductions for entitlements as a crucial element in lowering the federal deficit, reducing taxes, and balancing the budget by the year 2002. Health providers realize that future increases in Medicare and Medicaid reimbursement will be far less than they experienced in the past decade. A key question is whether managed care plans in the 21st Century can provide, at an affordable cost, universal comprehensive health insurance benefits of reasonable quality to 260 million or more Americans?[9] As the competitive theme matures in the first quarter of the 21st Century, the United States could experience the following trends:

* Congress over the next several decades will provide less Medicaid funding by continuing to seduce the states into block grants that contain virtually no federal guidelines.

* Medicare will be continually modified to lower its costs by raising deductibles and coinsurance and indexing benefits to personal income.

* Providers, whether fee-for-service or capitated, will be delivering services for subscribers enrolled in private or publicly sponsored plans at a reduced reimbursement per unit of service.

* Elected officials will be reluctant to reduce benefits or increase taxes to pay for entitlements.

* A majority of insured employees will be covered by managed care plans that provide more flexibility than the traditional group- or staff-HMO approach. An increasing percentage of their premiums will cross-subsidize those either uninsured or covered by the public sector.

Competition, as it "shakes out excess revenues," could conceivably result in a temporary deflation within the 5 to 15 percent range of America's GDP for health expenditures. These cutbacks in health expenditures will cause an additional number of persons to become uninsured, less comfort and greater inconvenience for patients, and a reduction in the health industry`s labor force by 1.2 to 1.7 million workers. A universal comprehensive national health insurance plan will be enacted sometime in the 21st Century that causes an inflationary period for the health field, simply because of the increased demand for services by those currently uninsured, similar to what occurred after the passage of Medicare and Medicaid.