Health Care Revisited

The need to reform the health care delivery and financing systems in the United States took center stage in the 1992 presidential election. Widespread dissatisfaction with the current health care system, and the desire to put a high priority on reform were instrumental in the election of Bill Clinton over the incumbent George H. Bush. The Rising concern about the health care sector centers on three observations: first, the U.S. spends more on health care than any of the developed countries, both in absolute terms and relative to the rest of its economy. Despite the highest spending shared, simple measures do not show that the U.S. is any healthier than other countries. In contrast to other developed countries, a large number of U.S. citizens are not covered by any health insurance.
In simple terms, it would be easy to conclude that the U.S. health care system is inefficient compared to systems in other countries, and that there are significant disparities in access to health care across income and age groups. Inconsistently, it is generally acknowledged that U.S. health care is the most technically advanced in the world, and that the benefits of "high tech" medicine are available to a large portion of the population. No issue looms larger in U.S. politics than health-care reform. When elected in 1992, President Clinton listed health reform as his number-one priority. In October of 1993, he sent to Congress a bill that sought to restructure completely the nation’s health-care system. But by the end of 1994, the 103rd Congress declared the Clinton health-reform proposal lifeless, even though it had come closer to making meaningful reforms than any previous Congress had. In 1998, worries about the Medicare program for the elderly were a central theme in the congressional election.

One of the key drivers of the rising cost of healthcare is hospital care. Between 2001 and 2002, the cost of outpatient services was the fastest growing part of healthcare, increasing by about 15 percent. Inpatient hospital costs, which make up the largest single component of healthcare costs, rose by six percent (Chandra, Durand & Dickens 2009). Most researchers agree that the primary reason the cost for outpatient care has increased is because the cost of using the out patient setting for medical procedures is no longer less expensive than having procedures done during hospital admissions. Inpatient hospital cost increases are due to the increase in the use of more expensive technology, higher labor costs because of the growing shortage of nurses, hospital consolidation and increasing costs for hospital admissions even though the length of hospital stays has decreased.