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We've been getting a lot of requests to talk about the health care systems of different countries. It's really hard to compress the complexities of each into an episode, but we're going to try. First up is the United States. Others will follow, including next week.

Make sure you subscribe above so you don't miss any upcoming episodes!

Here are references for all the stuff I talk about:
John's video on health care costs: http://www.youtube.com/watch?v=qSjGouBmo0M
Aaron's series on costs: http://theincidentaleconomist.com/wordpress/what-makes-the-us-health-care-system-so-expensive-introduction/
Aaron's series on quality: http://theincidentaleconomist.com/wordpress/how-do-we-rate-the-quality-of-the-us-health-care-system-introduction/

John Green -- Executive Producer
Stan Muller -- Director, Producer
Aaron Carroll -- Writer
Mark Olsen -- Graphics

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 Introduction


Whenever I talk about health policy, especially as we try to reform it here in the United States, I get a lot of requests to talk about how exactly health care works in different countries. Lots of countries. It's not that I don't think these are great questions, I do! It's that summarizing a health care system in just a few minutes isn't easy. But we don't shirk from difficult tasks here so we're gonna start tackling countries one by one starting with the United States, here on Healthcare Triage.

(Intro music plays)    


 How the system is paid for (0:30)


(Star Spangled Banner plays)

The United States health care system is similar to that of many other countries in that it's a mixture of both private and public components. Lets start with the easy stuff. Almost all care is provided for by the private sector, although some hospitals are run by the government, most are run by private organizations. About 70 percent of hospitals are non-profit, leaving the rest in for-profit hands. Most physicians therefore also work for private organizations and are not employed by the public sector.

Other components of the health care system are also in the private sector, including pharmaceutical and medical device companies. Research is paid for by both private and public sources, with a little bit more coming from the private side. Added together however, US spending on medical research counts for the vast majority of R&D spending in the world.   

 How the system works (1:16)   


But where countries differ the most is in how they give citizens access to their systems. In this area, the United States is somewhat of an anachronism. Until recently, about 15 percent of people in the United States were uninsured. This meant that if they needed care, they'd have to pay for it out of their own pocket, and unless you've been living under a rock, you should know that health care in the United States is really, really expensive.

So that's a problem - it means that a lot of people don't get the care they need, and it means that we're failing a large number of people who live in the United States. About 60 percent of US citizens get health insurance from their employer. These plans usually don't charge people different amounts based upon factors such as age, gender or past medical history. They range in benefits, but for the most part they cover preventive care, care if you get sick, and prescription drugs.

Plans vary in terms of how much people have to pay out of pocket for them... but we already did a video on how private insurance works, and you really should have watched that already.

 Medicare (2:07)   


About 15 percent of Americans are covered by Medicare, and most of them are elderly people. Medicare is a national social insurance program, run and administered by the federal government. It's the closest thing we have to what most people refer to as a single-payer system, where all people are covered by one type of insurance.

But Medicare's pretty complicated:

First, there's Medicare Part A, which covers you if you're hospitalized. It's pretty much free to most people over the age of 65, and almost no one doesn't get it.

Medicare Part B covers outpatient services, and is sometimes deferred by people who are still getting insurance from their jobs. It has a pretty low deductible, and then has co-insurance of 20%. It covers tons of stuff, including pretty much all tests and procedures you might get outside the hospital, as well as lots of medical equipment that you might use.

There are private, supplemental Medigap policies that are offered by private companies, that often cover the co-pays or co-insurance, or add in extra benefits. Almost everyone buys one of these, too, so that elderly individuals wind up paying much less for their health care than you'd expect.

Medicare Part C, or Medicare Advantage, is an opportunity for private companies to offer Medicare-like benefits better than the government can. If they do, and they do it for less money, they keep to keep the extra in profit. Medicare beneficiaries can opt into Medicare Advantage plans instead of traditional Medicare. They sometimes have different benefit that appeal to them, and about a quarter of them choose such a plan now.

And Medicare Part D contains the prescription drug plans. They're actually designed and run by private insurance companies, but they're approved and paid for by the federal government. Individual Medicare beneficiaries pick the Part D plan they like, depending on what drugs they think they might need.

That's Medicare. Costs us about $536 billion last year.

 Medicaid and other government programs (3:46)   


The other big government program is Medicaid. Unlike Medicare, Medicaid is a state-based program. Basically, it's supposed to provide health care coverage for the poorest among us. There are some minimal federal guidelines that are set for Medicaid, and then each state gets to implement it as it sees fit.

Some states are more generous, and some, less so. Generally, Medicaid is meant to cover those at the low end of the socioeconomic spectrum. The government defines "poor" this way. While you look at that, remember this amazing fact: A single parent with a child who makes minimum wage earns more than the poverty level. That's how low the line is.

Regardless, traditional Medicaid must cover:
  • Kids under 6 years of age to 133% of the poverty line, and kids 6 to 18, to 100% of the poverty line.
  • The States Children's Health Insurance Plan, or SCHIP, ups this to about 300% of the poverty line in most states.
  • Medicaid also covers pregnant women, up to 133% of the poverty line,
  • and parents fo 1996 welfare levels.
  • Finally, it covers the elderly and those with disabilities, who receive supplemental security income.
The first important thing to note is that adults without children aren't mentioned at all! And in most states, they can't get Medicaid. Let me say that again: in most states, even the poorest adults without children - even those who make nothing at all - don't get Medicaid!

And it gets worse: those 1996 welfare levels can be super-low. So low that, for instance, in Arkansas, a couple with two children making $3,820 a year is too rich for Medicaid. Granted, some states are more generous, but in many of them, parents have to be very, very poor in order to get Medicaid.

The Medicaid expansion in the Affordable Care Act was supposed to fix this. It was supposed to give Medicaid to everyone who makes less than 138% of the poverty line, regardless of whether or not they have kids. It would have finally made Medicaid the universal program for the poor, that many already believe it to be.

But because of the Supreme Court decision that made the Medicaid expansion optional, lots of states are refusing it, leaving an addition 5 million people with low incomes with no insurance this year.

In 2009, Medicaid covered more than 60 million Americans, about 1 in 3 children are covered by Medicaid, and 1 in 3 births is covered by Medicaid. A lot of Americans are in poverty. In 2011, Medicaid cost us about $414 billion.

There's also the Veteran's Health Administration, which is totally a government-run system, that provides care to veterans, and Tri-Care the military health insurance program that applies to some veterans, military personnel and retirees, and dependents. Tri-Care works more like a private insurance.

Think that sounds complicated? It is!

 Costs (6:17)   


Interestingly, while about two-thirds or so of people get insurance from private companies, only about one-third of spending comes from the private sector. In other words, the government has to cover about one-third of people in the United States, but has to pay about two-thirds of the bill. Tell me again how the government isn't getting the short end of the stick.

The money involved in health care in the United States is simply unbelievable! You may remember this video of John's, which talks about how out-of-control our spending is. Go watch it again. It's based in part in a series I did on my blog, and the link for that is in the video info section below.

I've also added a link to a series on quality in our system, which is, well, not what you'd hope for, given all that spending.

 Obamacare - Conclusion (6:57)   


Obamacare will change some of what I said, but not by much. Basically, we hope to get some people who didn't get insurance through their jobs, Medicaid, or community-rated, guaranteed-issue insurance like employed people get.

With respect to the Affordable Care Act, we're only talking about 30 million people or so, or about 10% of our population. And for more info on that, go watch our first episode.

So that's the U.S. health care system, as neatly packaged as I can make it in under 10 minutes. It's private insurance for most, Medicare and Medicaid for some, and VA or Tri-Care for a few.

How does this compare to other countries? Keep watching future episodes to find out.