Health system in USA


André J. Fabre            February _1992 

We must in first place be aware the complexity of the North-American  health care system: all structures, federal, regional, public and private are interlinked with each other

What's more situation is moving very fast in that field demonstrating the amazing capacity of the United States to find without delay innovative and  pragmatic solutions.

In contrast, all information available on this subject in France will be seen as somewhat rudimentary, especially when it comes to "coordinated care networks", "acreditation", "patient access to the computer", even if, we all know, all that will cross, sooner or la ter the Atlantic… that we must prepare to mee, sooner or later, on our Atlantic  side...

The objective of this study is to provide,; in this yr 1992,  some recent data which can help  understand the mutation expected in the North American system health.


 The United States is a federation of 50 states, arriving third in the world for the population (225.000.000 inhabitants), and, in 1992, still leading country in terms of  economic activity.

USA are traditionally seen as "champion" of "free enterprise" and we will see the very complex relations binding the federal government and the private sector.


The number of North-American physicians is impressive: 630,000 doctors all practicing mostly in a speciality (89%).

It should be noted that there are almost as many general practitioners in France than in  the USA (59,000 vs. 72,000), but the number of specialists is far higher (580,000 vs. 59,000 in France).

Note, however, that family medicine is in the USA, a specialty.

In fact, the U.S. ratio of one doctor 1/ 404 inhabitants is comparable to European countries (1/403 in France).

Most doctors are registered in an accredited hospital : this gives  them facilities to obtain admission for their patients and, also, to participate closely to their care in the ward on condition, of a very strict control of quality care.

Physicians are syndicated in the powerful AMA ("American Medical Association") required partner in  every government negotiation.

Main feature: the medical profession is totally of the country's complex system of information, assessment and accreditation


 The hospital system in  1995 summed up 6500 establishments :  21% of public short-stay, 3390 and 727 PSPH purely profit organizations, with a total of 1,360,000 beds or 1/365 inhabitants.

Basically,  teaching hospitals, cornerstone of the whole field of medical  research, are, for the most private nonprofit institutions (thus placed outside the public sector).

It would be noted  that much of the research is funded by federal authorities through a system of "grants" (fellowships). However, the last years, "grants" have been somewhat  restricted

A word about hospital structure: the Board of Directions assumes managerial responsibilities with a Medical Director, whose role is to act as "interface" between administration and physicians, regardless of the Medical Committee (equivalent of the French Commissions Medicales d'Etablissement (CME) regrouping all senior representatives of the medical profession.

In non-university hospitals that infrastructure is "horizontal" (as opposed to the traditional pyramid structure of University Hospitals) organized in Departments of collegial kind.


 The assessment procedures and accreditation in North American hospitals are of uppermost importance , as well as the AHA ("American Hospital Association") and the JCAH ( "Joint Committee of Accreditation of Hospitals)

One must also note the recent development of "outpatient care " in hospitals and "home hospitalizations"" ("after-care") and HMOs ("managed care") as a direct consequence of the growth in health care spending.


 At the top of the pyramid, the Department of Health and Human Resources (current 1992 Minister Donna Edna Shalala), managing the 203 health regions in the United States.

Main structures are

   Health Care Financing Administration (HCFA)


   FDA ("Food and Drug Administration,"

   Public Health and Social Security: Old Age , Survivors and Disability Insurance (OASDI) and Health Institute (HI).

In the USA, "Social Security"  means not only health insurance, but all problems of retirement, unemployment, disability and, more broadly, social protection. This could be seen as a remain of the famous "Social Security Act" of the Roosevelt administration (1935).

Most importnt is the fact that funding is based on the principle of mandatory payroll taxes and not on taxes, as in Canada).


 N-A Health industry  is a real economic "empire" in a broad variety of fields :

            Administrative-organisms (for example: the number of employees in the medical administration of the State of New York has increased from 100,000 in 1980, 300,000 in 1995!)

            Health industry (now 1/7 th of the U.S. economy), especially medical equipment or IT and medicine.

-In this area of the pharmaceutical industry, as in many others, the changes are dramatic with the development of:

. Generic drugs (substitution by the pharmacist of a trademark by another whose cost is lower). This phenomenon takes on a special significance in the context of the HMO as we shall see now, with, as a corollary, a "consolidation" of major pharmaceutical companies.

. Development of "Mail Pharmacy" (postal sales)

. "Over the Counter" sales ("OTC")  growing very fast each


 Medical research, largely funded by the "grants" of the federal government, occupies a particularly important place with spectacular results in terms of efficiency and cost .Some examples :

Gaucher disease whose prognosis has been transformed by injections of Ceredase

Immune deficits whose therapeutic replacement by adenosine deaminase, has freed the child from his bubble.


 Allthough all major advances of the last years, U.S. is only world 16th in term of life expectancy, 23 th for infantile mortality.

Such disappointing data underline the huge disparity in access to health care of the north-American population.

Prevention is flagship for US Health system (best references are : hypercholesterolemia, lung cancer prevetion) but again, with inequalities in social or ethnic groups.


Spectacular growth in the last ten years, since 1983 to 1993, spending rose from $ 400 to $ 884 billion with a growth rate somewhat slowed lately, around 7.8%.

The relative share of health expenditure in GDP was only 4% of GDP in 1940 (like Greece at the moment ...), but since 1993 is around 14% with predictions about 20% of GDP in 2000 ...

The distribution of health expenditure is as follows (1993):

   hospitals 40%

   fees med. 19%

    long staying.Old age institutions. 8%

    drugs 7.7%

    medical equipment 7.7%

    dentists 5%

    home care 2.5%

   Research 1.5%


 Scientific factors : continuing medical progress, which by definition can not have limits

Technological evolution : availability of equipment and techniques become more sophisticated but also more expensive as a "feed back" tireless

sociological: increased demand for medical welfare, aging, commercial interests of certain financial groups.


 Main feature is  focused on the private sector, but the responsibility of the public sector in the financing of the system is far from minor:


 The 2 most important federal programs date back to 1965

 . MEDICARE is entirely dedicated to the elderly with two different aspects:

          SECTOR A for home care, use of specialized nurses and + cover hospital costs. The use of Medicare is governed by a rigorous program where hospitals are required to comply with a set of commitments such as various measures of evaluation and control of the quality of care. The refund is "prospective" taking a lump sum the costs of each hospital hospitalisation.Chaque can thus be in a position to benefit or deficit according to the type of care charge.Les issues are important because at present nearly half of hospital revenues depend directly MEDICARE.

          SECTOR B is for doctors, hospital visits, laboratory and technical equipment.

 Medicare funding (70% insured by the federal budget) is not without problems: in 1995, the growth of spending in Medicare rate was significantly stronger than all other health spending. This is true for the area A (where the majority of Medicare beneficiaries has contracted a private complementary insurance which puts efforts reduction in hospital costs), even in the B area where an increase of 50% was observed in the year last ...!


 . Medicaid is intended to support the poorest subjects that are "less than the actual poverty line" (about 30 to 40 million people with access to the system is random).

. MATERNAL AND CHILD CARE welfare program "Mother and Child"

In total, these programs have in common their management difficulties (bureaucracy, problems of coordination between the different sectors), but more importantly, the magnitude of budgetary problems.

In the context of a doubling of costs every 5 years, the outlook for the less threatening and MEDICARE may be insolvent in 2002.

So far, funding was provided for the most part (more than half) by the federal government, the rest being provided after negotiation by the states concernés.En made the government more likely to turn to the regional authority to require greater participation, which may "medigap", "split" in social protection.

In fact, public opinion and, more importantly, the medical profession, remains committed to the principle of these federal programs but no political party disputes the necessity of réforme.Le problem is to define the terms and we shall see, is to HMOs ("coordinated care networks") plus a radical change of policy seems to focus, at present, the federal government. 


 The financing of health expenditure to half the load privé.Les sector health insurance groups are the most popular Blue Cross (hospital) and Blue Shield (home care), but a multitude of organizations or mutual-type unions (Aetna Life and Casualty, Cigna, Metropolitan Life, Prudential, Travelers) offer their services with a wide range of "planes" (terms of contract).

Major difference with European systems of health insurance, the risk is not income is calculated as the amount of contributions.

The system is inseparable from the labor market and the company since 2/3 are provided by the intermediary of the employer and accounts for 75% of the overall cost of insurance.

Note that the employer's share is much smaller than in France: the Clinton project aroused aroused quite a stir by suggesting the participation of employers up to 80%.

The individual use of private insurance for a much smaller population (10% of the population)

Finally, there is the principle of compulsory participation (on the model of co-moderator), about one fifth of health spending, or 1,000 to $ 1,500 on average per year per family.

In total, it is the private system, even if it provides only 34% of total benefits, which supports the major part (over 70%) of care to the population under 65 years.


It should be understood that, as a whole, the system is widely supported by public opinion, and we have seen, the medical profession: the satisfaction shown by a recent survey is generally positive (68%) with conviction affirmed that no competing systems has proven its effectiveness.

On all sides, however, critics are increasing the cost and operation of this system:

Administrative costs-increasingly heavy ($ 130 million in 1995)

Constant-the heavier bureaucratic tasks (more than 450 types of forms identified, overstaffing salaried employees)

Major a "two-tier medicine" which gradually increases the number of "outsiders"-problem: 37 million, perhaps 4O million in 1996 ...

It is certainly difficult to provide accurate statistics given the status "temporary" or membership "intermittent" the various federal programs, the situation is less dramatic step for many Americans.

In total, for many observers, the "U.S. model" would be "50 years ahead for research and 50 years overdue for social protection" is this the truth and nothing but the truth?

The answer will be more "nuanced" than the solutions implemented in the 80s in the United States to face a "explosive" conditions are likely to be, sooner or later exported far beyond the USA with a few years of delay and ... appellations ... (Or political systems ...) different!


 Among the 1992 trends of evolution of the North-American Health system, Five main fields have to be mentioned :

Information and computer-communication systems

Coordinated care networks and "managed care"

Development of "ambulatory care"

Assessment and accreditation systems-

Post-graduate training


Current problems, as we saw, are many but the capacities of the United States to adjust to all changes in society is well established.

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