Healthcare in the United States: Strengths, Weaknesses & the Way Forward


Plenary Address from CBHD's 15th Annual Conference: Healthcare and the Common Good.

One of the great strengths of American healthcare system is its strong private sector orientation, which facilitates ready access to all manner of services for those with stable coverage and strongly encourages on-going medical innovation by product manufacturers. The rapid advance of medical technology over the past half century has unquestionably improved the health status for millions of American citizens.

Employer-sponsored insurance has played a crucial role in retaining this strong private sector presence in the U.S. health sector. In general, employer-based insurance is flexible and can adjust quickly to changing patterns of accepted medical practice.

But employer-based coverage is also the Achilles’ heel of American healthcare. A main failing is that it is not portable or owned by the worker. It therefore leaves large gaps in coverage for those loosely attached to stable jobs. Moreover, because many millions of workers change jobs and insurance frequently, there is little incentive for prevention—the financial rewards of improved health do not accrue to those making the investment. Finally, today’s open-ended federal tax exemption for employer-paid premiums encourages overly expansive coverage, which is the fuel for rapid cost escalation.

Disrupting current insurance arrangements abruptly would likely bring swift political opposition. What’s needed is a plan for incremental movement toward a market-based system which rewards greater efficiency in how healthcare is delivered. This can be achieved with targeted but crucial reforms to the federal tax law and Medicare which effectively create vouchers instead of open-ended arrangements. States should be given wide latitude to establish regulatory regimes which move in the direction of portable, individually-owned insurance.

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