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“The System Remains Fragmented"

US-Health Care Reform: “The system remains fragmented"


Photo: Christoph Strünck

Professor Christoph Strünck; © private

The American health care system includes latest and state-of-the-art methods of treatment - as well as the highest health care costs per capita worldwide. In December 2009 the US-Senate passed officially President Obama's most important domestically aim: the health care reform.

Christoph Strünck is Professor for Politics at the University Siegen in Germany and expert for comparing health care systems internationally. spoke with him about the American health care system and its necessity of reforms. Mr. Strünck, it took a long time, but Barack Obama‘s health care reform has been accepted by the US Congress. Can Americans finally breathe a sign of relief?

Christoph Strünck: Yes, since it can be assumed that about 46 million people in the US currently have no health insurance. However, in the future about 94% of the population will have health insurance by the year 2019 and only about 6% will continue to remain without insurance. Thus, the main issue of many Americans not having any health insurance will be almost solved. What exactly did this reform achieve for these people?

Strünck: This reform broadened compulsory health care insurance and unlike before, many people in the US now can no longer be rejected by an insurance company. This particularly applies to people with a poor health status. If you are underinsured, because you cannot afford expensive premiums, you will now receive financial assistance. Soon, smaller businesses will also be able to afford health insurance for their employees. They will also receive tax breaks, if they offer their employees health insurance. Alternatively, people can also obtain health insurance through their respective US state. People or businesses in the US, who will not obtain insurance or will not offer insurance coverage respectively, can expect penalties in the future. Another point: Through this reform, competition in the health care sector is stimulated, since it is not as strong among private insurance providers in the US as is often suggested. Overall, a lot has been achieved with this reform. President Obama had to pay a heavy price to get the majority of congress delegates to endorse the health care reform, since the original plans have been considerably scaled down. What exactly did Obama have to forego?

Strünck: Instead of a uniform statutory health insurance, there will now be a more strongly regulated health insurance under private law. The core of the American system still remains, since there always have been two health insurance systems. Either you are insured through your employer by private health insurance or through a special system for senior citizens or the poor. However, now the state checks whether those private offers are legal. Fundamentally, the American health insurance system remains fragmented. It is not and is not going to be a uniform system, there will just be some uniform regulations. Every US state for example has its own health insurance. The individual insurance carriers are very diverse and cannot be compared to the relatively uniform system in Germany. What is more, there are for example countless individual health care programs, which Americans can enroll in. Now of course, their freedom of choice is significantly limited.

Photo: American flag

America: Health care reform evokes cost explosion; © Hauk/ Barack Obama also paid a heavy price in another sense: The bill predicts that this reform will cost the national budget $940 billion over the next few years – all this in the midst of an economic crisis. Is this even feasible?

Strünck: What would have happened in the long run, if this reform would not have been carried out? Costs would probably have increased even more. In the long term, this would be far too expensive. With this reform, Barack Obama did not just want to contribute to all Americans having insurance coverage, but to a greater degree, he wanted the health care system to not produce such high costs anymore. According to studies by the OECD (Organization for Economic Cooperation and Development) as well as the World Health Organization, the American health care system still is the most expensive system in the world, but certainly not the best. In the long run, this reform will lead to savings for the US government and also for businesses. All in all it is more favorable to push these reforms through versus preserving the old system. Critics say that this reform will ultimately lead to skyrocketing costs or to cuts in medical care.

Strünck: There are several new changes, which are geared toward saving costs without cutting or worsening benefits. One example: The US is now introducing stronger budgeting. As a general rule, hospitals will now no longer be compensated for individual services, but will agree on a budget for a specific package. Established physicians will have the results of their treatment evaluated. The result will affect the compensation, and not simply just the service as such anymore. Quite often, unnecessary individual services are being prescribed. The whole care system is set to become more efficient that way. Ultimately, the confusing structure of the US health care system has led to costs getting out of control: Physicians and the pharmaceutical industry used the limited competition to make excessive amounts of money. Another gap in the system has been closed as the American system will allow for more real competition in the future. It remains to be seen, whether these changes will contribute to cost reduction. Until now, in the US the model of a private, competition-oriented health care system has not delivered what economists normally expect from it: to increase quality and reduce costs.

The interview was conducted by Diana Posth and translated by Elena O’Meara


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