Introduction to the US Healthcare System

Healthcare is a complicated topic. Policies are often difficult to implement and there are many stakeholders to consider. Recently, the U.S. saw the passage of the historic Affordable Care Act (ACA) which was the most significant piece of health policy legislation in fifty years. To understand the impact of the Affordable Care Act, we must first understand the US healthcare system.

introduction to the us healthcare system

Introduction to the US healthcare system

There’s a saying about healthcare systems. There are three major factors that are essential to the any healthcare system but you can only pick any two:

1. Quality

This is the level of how effective services are. It is about “doing the right thing and doing it right”. Quality is measure of how good the medical care is.

2. Cost (aka financing)

These are the sources and uses of money that pay for healthcare services. It includes money to pay providers, drugs, medical buildings, etc.

3. Access

This includes the affordability, availability, accommodation (provider is organized to meet client’s preferences), accessibility (you have insurance and coverage but no provider) and  acceptability (extent to which patient is comfortable with provider) of healthcare system. If you meet all 5 As then you have access to healthcare services.

It is a question of whether people have the ability to see providers and get the services they need.

There are a few rare policies that have an impact on all three factors. For example, essential childhood immunization policies. By having a mandatory childhood immunization policy, we can improve quality of healthcare, it lowers the long term cost of care and improves access to healthcare.

The five major branches to the US healthcare system

introduction to the us healthcare system
1. Providers

These are the people who deliver the care. They form a large subset of the different types of providers such as hospitals, device makers, physicians, etc.

2. Payers

These are people who directly pay for medical services (such as insurance companies), but it could be individuals in certain cases.

3. Purchasers

These are the people who buy health insurance (such as businesses and individuals).

4. Patients

The actual consumers of healthcare services.

5. Policymakers

These are the people who work in various government agencies such as the Center for Medical Services (CMS) and they directly shape healthcare policy.

branches of the healthcare system

© 2017 Intelligent Economist. All rights reserved.