Executive summary

America is in a healthcare crisis keeping many of our citizens out of reach. This summary explains some of the major reasons for healthcare spending, such as an older population, administrative costs, and lack of transparency in pricing. This brief recommends policy options to make healthcare more affordable and accessible throughout the country.

Overview

Despite the steps towards health reform, healthcare in the United States is out of financial reach for many. This is mainly due to the COVID-19 pandemic, inflation, and a lack of regulation. This directly caused jacked-up prices which had driven up costs. Furthermore, this situation has been made worse by the increasing demand for healthcare while availability has become more limited, driving up costs. While we can’t change the past, the federal government has enough authority and resources to reform health care to an area where healthcare is more affordable and accessible to the average American.

Pointed Summary

High healthcare costs in the U.S. are driven by factors such as the COVID-19 pandemic, inflation, and lack of regulation that inflate pricing.

• High healthcare costs in the U.S. are driven by factors such as the COVID-19 pandemic, inflation, and lack of regulation that inflate pricing.
• The relationship between supply and demand for healthcare creates cost problems. As prices rise, access diminishes for many Americans. The federal government can change US healthcare policy reform by lowering costs and fixing access.
• The federal government has significant potential to reform the healthcare system through targeted policy changes, improving affordability and accessibility, and ensuring that all Americans can access necessary medical care without financial burden.

Relevance

Besides domestic economic issues, high healthcare costs are tied to social stability and public trust in the government. Soaring medical costs have caused dissatisfaction, fueled social inequalities, and showed  the current state of healthcare. According to a CBS news report about 94% of Americans claim they are paying too much for healthcare. Especially in rural areas where access to health care is very limited. Absent reform there could be even greater political instability and more social inequalities. Healthcare reforms are key to creating better health outcomes and are also essential to creating stability between the government and its people. 

Current Stances

As the healthcare crisis in this country escalates, several strategies and proposals have been put forth. It is "time for some action" to address healthcare prices. A report from the National Library of Medicine in 2022 stated that initiatives to require clear prices have been advocated to allow for consumer choice and competition, which may lower costs. In addition, the federal government has launched efforts to increase access to care through improvements in the Affordable Care Act (ACA). According to the KFF foundation in 2024, that leaves 1.5 million people living vulnerable in 10 states which had not adopted Medicaid expansion. That is why increasing ACA subsidies and expanding Medicaid in the states where it has not been adopted will address many health problems of the population directly. 

Tried Policy

U.S. efforts to decrease healthcare expenditures over the last decade, have been shown in the Affordable Care Act (ACA) and Medicare Modernization Act. Since then, the ACA has expanded Medicaid and provided subsidies for purchasing insurance, but it is unevenly applied across states and faces many challenges in Congress. The ACA also established Accountable Care Organizations (ACOs) to improve care coordination and incentivize preventive care. While some of the solutions have been implemented into policy changes, the ongoing issue with the ever-increasing cost of healthcare remains needing a solution.

Stakeholders

The Office of Management and Budget and the federal agencies are among the major stakeholders in U.S. healthcare reform, with critical challenges in implementing the necessary changes in policy. Meaningful health care reform would mean 

reassessment and reallocation of federal funds to ensure that the states have adequate resources for enforcing new health care policies. This is not only limited to the administration and allocation of federal funds but also extends to assisting state governments in the development of legislation that would provide for a statement of particular regulations necessary for enforcement.

The U.S., at an economic level, benefits from those reforms insofar as such policies are cost-effective to reduce healthcare costs. After all, high healthcare costs are integrally linked with reduced economic productivity and consumer spending power, thus making such policy solutions so important. Such a policy would have broader economic dividends: increasing Americans' disposable incomes should boost overall economic activity.

The most direct stakeholders that are affected by these policy challenges are American citizens, especially in underserved and rural areas, who face the highest healthcare costs and the least access to services. Therefore, by creating more robust healthcare policies, the government can improve access to healthcare, support better health outcomes, and enhance the quality of life for millions. Although highly difficult, it can be done with combined effort and strategic thinking to break the cycle of high costs and limited access toward a healthier national future.

Risks of Indifference

Ignoring the U.S. healthcare crisis poses severe risks, intensifying economic and public health disparities. During COVID-19, this brought up systemic vulnerability, and the outsized impact fell on underserved communities. For example the Bureau of Labor Statistics in 2023 quantifies healthcare costs rose by 5% from 2019-2021. Consequences include rising mortality rates, increased chronic diseases, and reduced life expectancy, further burdening the health care system.It also tends to result in crippling economic losses through low work productivity and increased disability claims, thus driving up healthcare costs and overburdening social security systems. Socially, the dearth of attention towards healthcare reform undermines public trust and perhaps has linked to dissatisfaction that could manifest as a form of public unrest and political turmoil. The reason for addressing the issue of the healthcare crisis is not only vital for public health but also for stability and prosperity on a nationwide scale.

Nonpartisan Reasoning

Healthcare reform in the United States is essentially a matter of health equity, extending beyond partisan interests. Healthcare reform is key to ensuring that all Americans, regardless of their social class or geographic region, have access to health services that are affordable for everyone. This especially resonates in rural areas, whose residents experience poor health disparities with limited access to health services compared to metropolitan areas. According to the National Institute of Health, increasing healthcare access would save over 68,000 lives and 1.73 million life-years every year. Healthcare reform is not solely a public health matter but also one of economic stability, productivity, and wellbeing affecting communities in every corner of the country. Non-partisanship in health care reform will enable the government to take up the burning issue and provide equal health care to all Americans without letting chasms deepen.

Policy Options

A. Enhance and Integrate Healthcare Services 

Streamlining and integrating health care services would greatly improve inefficiencies in health care access. It is important that expansion policies are directed towards community-based health centers and programs for preventive care, management of chronic diseases, mental health, and acute care. Reducing the reliance on very costly hospital care and emergency services drastically reduces healthcare costs. Besides, an organized care model assures better patient outcomes in the form of continuity and comprehensiveness. Integration of behavioral health with primary care, expanded roles of nurse practitioners and physician assistants, and enriched home health services could also prove to be certain key components in the strategy.

B. Implement Universal Coverage Initiatives

 Universal health coverage would provide all Americans with access to an essential package of health services without incurring unaffordable costs. Options to get there include Medicare for all ages, a public option competing with private insurers, and improvements to the Affordable Care Act subsidies to reduce health insurance premiums. An article published by the National Institute of Health quantifies that a universal healthcare system would lead to 13% in savings which is equivalent to over $450 billion annually. These steps might achieve improved coverage and lower overall health care costs through governmental bargaining power. Expanding the insured population typically reduces per capita spending on health care. Lower uncompensated care would result in less financial loss for hospitals and lower prices for those patients with insurance.

 C. Regulate Pharmaceutical Prices 

Universal health coverage would provide all Americans with access to an essential package of health services without incurring unaffordable costs. Options to get there include Medicare for all ages, a public option competing with private insurers, and improvements to the Affordable Care Act subsidies to reduce health insurance premiums. For example, the Centers for Medicare and Medicaid estimates $6 billion in savings through regulated drug prices. These steps might achieve improved coverage and lower overall health care costs through governmental bargaining power. Expanding the insured population typically reduces per capita spending on health care. Lower uncompensated care would result in less financial loss for hospitals and lower prices for those patients with insurance.

D. Promote Telehealth Services 

The expansion of telehealth will have significant consequences in improving access to health services, especially in rural and underserved areas. Policies to be drawn on the infrastructural development of telehealth must also aim at ensuring equitable use of digital devices among poor and low-income populations rather than looking merely at improvements in broadband connectivity. For example, during the pandemic the Centers for Disease Control and Prevention explains that we saw the use of telemedicine increase from 15.4% to 86.5%. Other supportive measures include reimbursement for telemedicine services comparable to in-person visits, providing incentives for providers to adopt telehealth solutions, and revision of regulations which can also enable cross-state licensure for telehealth services. Such initiatives might provide a better footprint on healthcare delivery models, allowing convenience, cost-effectiveness, and timeliness of healthcare access.

E. Incentivize Healthy Lifestyles 

All this will, therefore, go a long way in encouraging preventive care and healthier lifestyles that greatly contribute to keeping the healthcare costs down over the long term. Such policy measures could include things like tax incentives for gym membership and fitness equipment, subsidization of healthy food options through food stamps or tax breaks, national public health campaigns on physical activity and balanced diets, and funding of local initiatives that promote active living, such as community gardens and public recreation areas. The additional things that could be done in lieu of would be in the form of partnership with employers to create wellness programs entailing health screenings, smoking cessation programs, and stress management.

 F. Reform Malpractice Laws 

The lessening of the malpractice litigation burden reduces the pressure of healthcare costs, especially through a practice called defensive medicine, wherein doctors carry out unnecessary procedures as protective measures from lawsuits. Reforms could include caps on noneconomic damages, changes to how claims are adjudicated to ensure that only legitimate cases go forward, and establishing pre-trial panels to assess the validity of claims. Ultimately, such reforms may help the malpractice system to be used in a way that reinforces quality of care, instead of acting as a disincentive to practice.

G. Foster Innovation in Healthcare Technology 

Supporting innovation in health technology would lead to better efficiency and patient outcomes. This may include finance, regulation support for health tech startups, investing in artificial intelligence in diagnostics and treatment planning, and infrastructure for the wider application of electronic health records. Encourage technology companies, research institutions, and healthcare providers to engage in collaborative grants and innovation hubs. This would also involve the creation of new technologies that could lead to less invasive, more effective treatments for chronic conditions which are a  major cost drivers in healthcare.

Conclusions and Recommendations

The health crisis in America requires immediate attention and action. While these numerous steps taken, especially through the Affordable Care Act, have been instrumental in expanding coverage and aiming at cost reduction, the system is still not good enough to handle issues like inefficiencies and disparities related to access to healthcare, especially for underserved communities or rural areas. The U.S. government must implement reforms that guarantee all citizens with access to necessary care   and support.

First, the government needs to continue with the integration of health services for better coordination, thereby reducing redundancy and wasteful expenditures. Community health centers are crucial, as well as comprehensive care programs that deal with chronic diseases, and have to be extended to include mental health support.

Second, far more should be done to expand access to healthcare. This can be through a public option, expansion of Medicare, or even increases in subsidies under the current laws so that insurance can become affordable in every way. Further, high drug costs must be lowered. The federal government must take hold of drug prices, possibly by allowing Medicare to negotiate with pharmaceutical manufacturers directly and by facilitating the importation of less expensive medications from countries with comparable safety standards.

Other key investments involve telehealth, which really opens the door for more access to health, particularly in these remote areas. The government should support telehealth by improvement of infrastructure, equal access to technology, and equal reimbursement policies.

Second, incentivizing Americans to lead healthier lifestyles could reduce demand for intensive medical services in the future. Tax incentives, subsidies toward healthy food and fitness programs, and a well-run national campaign of public health awareness are all ways to pursue this end.

Reforming malpractice laws to reduce the practice of defensive medicine will also work toward bringing down costs and creating a more trusting environment between patients and healthcare providers.

Finally, the incentives for innovation in health through grants, partnerships, and direct investments in AI, diagnostics, and patient care platforms could further catalyze efficiency and patient outcomes.

In conclusion, while challenges are significant, committed action and strategic policy reform can facilitate movement in the U.S. toward an efficient, equitable, and high-performing healthcare system.

Acknowledgment

The Institute for Youth in Policy wishes to acknowledge Paul Kramer, Carlos Bindert, Gwen Singer, and other contributors for developing and maintaining the Programming Department within the Institute.

Work Cited

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