What's Actually Wrong With the U.S. Health System

A new report shows why American health care performs so poorly compared to its rivals—and suggests the Obamacare replacement proposals aren’t the way to fix it.

A man dressed in blue picks a red and yellow tulip from a field of red tulips.
Cris Toala Olivares / Reuters

On the heels of the Senate’s latest attempt at replacing the Affordable Care Act, the Commonwealth Fund has released its latest evaluation of what, exactly, ails the U.S. health-care system. Once again, the think tank found the U.S. medical system performed the worst among 11 similar countries, all while spending more.

The United States fared especially badly on measures of affordability, access, health outcomes, and equality between the rich and poor. The United Kingdom ranked first, and the other countries in the comparison were Australia, Switzerland, Sweden, the Netherlands, New Zealand, Norway, Germany, Canada, and France.

Countries ranked on overall health-system performance (Commonwealth Fund)

America does perform well, comparatively, when it comes to doctor-patient relationships, end-of-life care, and survival rates after major issues like breast cancer or strokes. However, the United States does less well on measures of population health: It had high rates of infant mortality and a low life expectancy at 60 years. It also has the highest rate of “mortality amenable to health care”—deaths that doctors and hospitals can prevent—and has experienced the smallest reduction in that measure in the past decade.

Mortality amenable to health care, 2004 and 2014 (Commonwealth Fund)

The ways to fix these issues, according to Commonwealth Fund experts, are to increase the rate of insurance coverage and access to primary care, streamline the insurance system so that there are less administrative hurdles for doctors, and funnel more money toward better nutrition and housing, rather than specialty care.

On a call with reporters, experts from the think tank said they had not yet had a chance to closely examine the revised Senate health-care bill. But it is rather similar to the past Republican repeal-and-replace proposals, especially with approach to Medicaid.

The new bill would allow insurers to sell health plans that charge sick people more, cover only some health problems, or deny coverage based on pre-existing conditions, as long as they also sell Obamacare-compliant plans. The bill would also make cuts to Medicaid, the health-insurance program for the poor. A score for this bill from the Congressional Budget Office is expected next week, but the agency’s previous estimate was that 22 million Americans would lose coverage under a plan like this.

“In general, the proposals we’ve seen would reverse the progress, especially on insurance coverage,” said Eric Schneider, senior vice president for policy and research at the Commonwealth Fund, on the call. “We suspect that alone would be taking us in a direction different from the solutions. The disparities we observe related to income would likely not get better under Medicaid cutbacks.”

As insurance coverage declines, the Commonwealth Fund authors say less access to primary care would make American health outcomes even worse. The Senate bill would also expand the use of health savings accounts—a way of paying insurance premiums before taxes are taken out—which Commonwealth Fund president David Blumenthal said only adds to the “complexity” of American insurance.

Percentage of doctors who report spending time getting patients medications (Commonwealth Fund)

Simplifying insurance, meanwhile, could make it better. For example, American doctors spend a comparatively abnormal amount of time on “getting patients needed medications or treatment because of coverage restrictions,” the Commonwealth Fund finds, and having patients who are signed up for plans that don’t cover certain conditions or procedures, or that demand high deductibles from them before care is provided, would not remedy that.

But, according to this report, a single-payer system is not necessarily the only way to go. One of the top performers in the Commonwealth Fund’s model is the Netherlands, a country where insurers are predominantly private companies who sell their plans to customers, many of whom are subsidized by the federal government. In other words, it looks like Obamacare on steroids.

In the Netherlands, insurance is considered a social service, and it’s much more heavily regulated than in the United States. People are required to buy insurance, just like under Obamacare, and so less than 1 percent of the population is uninsured. (The Senate bill would eliminate the individual mandate.) Premiums are funded in part through payroll taxes and in part through subsidies that much of the population receives, according to a 2009 paper by Washington and Lee University law professor Timothy Jost. The list of essential benefits is generous and also regulated by the government. Rather than allow insurers to pick only the healthiest customers to insure, the Dutch government redistributes the risk among insurers by making those with healthier risk pools pay into a pot of money that other, less fortunate insurers can draw from.

Dutch people all pay a deductible of around $500, and unlike in the United States, providers there aren’t allowed to balance bill if insurance doesn’t fully cover their services. What’s more, primary-care doctors provide after-hours care, which helps explain why 77 percent of Dutch people say they “saw a doctor or nurse on the same or next day the last time they needed medical care.”

Granted, the Dutch government has faced the typical health-care quandaries—like how to control costs while giving people access to the procedures they need—but at least according to this report, they are doing much better than the United States is. It serves as a counterpoint to the popular view, among some liberals, that you must have single payer for good health care.

You do, however, need to get almost all of your population insured and treat insurers more like public utilities than free-wheeling upstarts.