Chapter 1

HEALTH CARE SYSTEMS IN THE UNITED STATES AND THE UNITED KINGDOM

A Lifetime of Change

In the United States, a woman who is delivering a baby will face different choices depending on her health insurance status. Around half of births are covered by Medicaid, the government-run health insurance program for the poor (Markus et al. 2013). Other births are covered by private health insurance, which is usually employer-sponsored but may also be purchased individually. In all these cases, the insurer or the state administering Medicaid benefits determines what kind of labor and delivery services are available. Home births and midwife-assisted births are not always covered. Depending on the insurance plan, the expectant mother may or may not have had a choice of hospitals and doctors. Insurers also vary widely in the length of hospital stay they will cover. Although expectant mothers do have some choices, they are constrained by the insurer rather than by the professional discretion of doctors and midwives. After a birth, families will receive a bill for the costs not covered by their insurance (co-pays and deductibles for both mother and infant). For those with insurance, out-of-pocket costs for childbirth (excluding pre- and postpartum care) average more than $3,000 (Rosenthal 2013).
When a British woman is pregnant, she meets her midwife, usually through her local family doctor. She chooses where to give birth: at home with a midwife, at a birthing center, or in a hospital, depending on her specific needs and where she is most comfortable. The expectant parents can take antenatal classes, usually at a local hospital or clinic. After the birth, the new mother is discharged when she and her doctor and midwife decide both mother and baby are ready. There are then a series of home visits, first by a midwife and then a health visitor, to ensure that both the mother and infant are progressing appropriately. All of this happens without the intervention of insurance companies or billing departments. The entire pre-, intra-, and post-natal experience costs the new mother nothing, and costs the National Health Service an average of under ÂŁ3,000 (around US $4,500) per delivery.
The contrasts between the organizational and financial structures of the health care systems in the United States and the United Kingdom could not be stronger. Yet the pressure that change initiatives bring to bear on both systems affects them similarly. This chapter contextualizes each country’s health care system and illustrates their ongoing evolution through constant attempts to change. It is crucial to understand the structure of each health care system to understand how and when change works.

How the Systems Work

In the United States
In the United States, about 18.5 million people work in the health care sector (US Bureau of Labor Statistics 2015). Of these, about 4 million are registered nurses (RNs), and around 900,000 are physicians (Henry J. Kaiser Family Foundation 2015b). Although the US health care infrastructure is ostensibly privately controlled, it is not a truly private system. In fact, the government has its tentacles in almost every aspect of health care. Although exact numbers are hard to pin down, the government purchases health insurance for about 110 million Americans, including public employees, active military and veterans, and Medicare and Medicaid recipients (whose ranks are growing since the implementation of the 2014 provisions of the Affordable Care Act of 2010) as well as those eligible for smaller government programs such as prison health care and the Indian Health Service (Henry J. Kaiser Family Foundation 2015a; Pew Charitable Trusts, and MacArthur Foundation 2014; US Office of Personnel Management 2014). Government reimbursement programs, especially Medicare and Medicaid, determine many protocols for health care delivery. Because it is unrealistic for most hospitals to follow one set of procedures for these patients and another for privately insured patients, the government-mandated procedures often prevail for all patients. Similarly, the government (federal and state) plays a crucial regulatory role, from the US Food and Drug Administration’s drug approval processes to the licensing and credentialing of health care professionals and the facilities in which they work.
The Patient Protection and Affordability Act of 2010 (commonly called the Affordable Care Act, ACA, or Obamacare) incrementally builds on the existing fragmented system of payment and service provision. The new law attempts to insure the majority of the uninsured—through Medicaid, through subsidies for purchasing private insurance, or through restricting the ability of insurers to reject patients. In this sense, the law does not dramatically change the system but rather simply expands it. The key elements of this act shift uninsured Americans into an existing form of health coverage. In most states, the income cap for Medicaid expansion was raised by the ACA, so many more people are receiving government-purchased health care; this is officially controlled by the states but with a great deal of regulatory control from both the Centers for Medicare and Medicaid Services (CMS) and the Joint Commission (as discussed later). The so-called exchanges created by the ACA also provide a mechanism for individuals to purchase health care insurance through private for-profit and not-for-profit insurers. Overall, the major provisions of Obamacare change who can access health care (especially nonemergency care) and how this care is purchased, but they do not change the provision of care or the work of health care providers on the front line.
This fragmented network of payers, including the government, insurers, and individuals, purchases the actual health care from a fragmented set of health care providers. Some organizations, such as Kaiser Permanente, function as both the insurer and the health care provider—these forms of health care insurance are often considered prepaid health care plans. The private health care providers include hospitals, clinics, and nursing homes—of which hospitals provide the most labor- and resource-intensive care. Hospitals may be either publicly owned or owned by a health care conglomerate, which may be either nonprofit or for profit. Hospitals provide health care services to patients, and the services are usually at least partially reimbursed either by a for-profit insurance company or a government program such as Medicare or Medicaid.
The ownership of US hospitals is dispersed and fragmented, but the regulation of hospitals is highly consistent and centralized. The key regulatory body is not a government agency but a voluntary, nonprofit organization, the Joint Commission (formerly the Joint Commission for the Accreditation of Health Care Organizations or JCAHO). When Medicare and Medicaid were introduced, JCAHO accreditation was the requirement for hospitals to be eligible for participation. This simple decision made it, in practice, almost mandatory for hospitals to seek accreditation—for without accreditation, the hospital would not be able to provide services to a high proportion of potential patients. The de facto unified system of regulation creates parallels with the British system, where procedures and protocols are determined by national agencies such as the National Institute for Clinical Excellence. The crucial role of the Joint Commission belies the contention that the US system is driven by market incentives or competition.
In addition to the Joint Commission, the key government agency that effectively regulates hospitals is the CMS. The CMS selects the accreditation required for health care providers to be eligible for reimbursement when providing services to Medicare or Medicaid patients. In practice, the CMS has given the Joint Commission the accrediting authority for almost every type of covered service. Although neither the Joint Commission nor the CMS are fully mandatory regulatory agencies (although many states use their standards as their accreditation standards), in practice they are universal. As such, there is national regulation of hospitals, even within the complex web of payment and ownership.
In addition to the role conferred on the Joint Commission by the CMS, many states use Joint Commission accreditation as a legal requirement for health care providers. Similarly, many health insurers will cover only services from Joint Commission–accredited providers. This means that health care providers, for all their fragmentation, are conforming to a fixed, centralized set of protocols and requirements emanating from a single entity. As one hospital administrator (a physician) put it, “I would say that by and large what is required by CMS and by the Joint Commission are the major drivers here.”
This means that almost all health care facilities seek Joint Commission accreditation and conform to the standards prescribed by the Joint Commission. This is the key aspect of the de facto centralized regulation of the US health care system. These health care facilities are not owned or managed by a single entity, but this regulatory system, which is hardly voluntary, creates a single set of standards, procedures, and protocols for all health care facilities. More than 95 percent of hospital beds in the United States are in hospitals accredited by the Joint Commission (Schyve 2000).
The approximate British counterpart of the Joint Commission is the Care Quality Commission (formerly known as both the Commission for Health Care Improvement and the Health Care Commission), which monitors performance in National Health Service (NHS) facilities. Because health care provision in the United Kingdom is automatically funded by the government, the Care Quality Commission’s monitoring does not make a facility eligible for payment or reimbursement but rather simply allows it to provide services. Hospitals in both countries operate within a strict system of surveillance and monitoring. In the United Kingdom the monitor is explicitly a government agency; in the United States the monitor is an independent nonprofit organization, and cooperation is nominally voluntary.
There are also various national associations that advocate for the health care industry, and their role is to lobby for their members. These organizations include America’s Health Insurance Plans, whose member companies provide health insurance to more than 200 million Americans, which is the vast majority of Americans with employer-sponsored private insurance plans (America’s Health Insurance Plans 2010). Similarly, most hospitals are members of the American Hospital Association (AHA), a trade group that lobbies on their behalf. The AHA describes itself as performing the functions of both a trade association and an advocate of the public interest, but many health care unions and other activists for reform have cast the AHA as rather obstructionist.

In the United Kingdom

For patients in the NHS, all care is focused around a local family doctor (the general practitioner or GP). The GPs are responsible for the overall health of their patients and take charge of most routine care and screening. They are the key point of dissemination for public health initiatives, such as smoking cessation programs. The GPs are also responsible for referring patients to specialists, and the new NHS Constitution requires that patients be given a choice of specialists and hospitals for these referrals. Since the Health and Social Care Act of 2012, GPs have also been responsible for “purchasing” the health care needed by their patients on the internal market of the NHS through the process known as commissioning.
For the typical NHS employee, the system is similarly integrated. Almost a third of NHS staff are RNs. The typical nurse works in an acute care hospital, although there are also nurses based in the community and in local family practices. Although the top executives of the hospital have a good deal of operational autonomy, the nurse’s pay and terms and conditions of employment are determined nationally. Health care is nationalized, so there is no need for health insurance as part of the benefits package, and nurses receive a defined benefit pension, also determined nationally. The nurse is likely to be a member of a union, either the Royal College of Nursing or UNISON, which she joined while still a student. The nurse is managed by a nurse manager, who works in close coordination with other professional and nonprofessional members of the hospital team. For the nurse, the structure of her day-to-day work is much like that of nurses in other countries. There is a fairly strict hierarchy both among nurses and between nurses and other professionals, especially doctors.

How the Systems Came to Be

Evolution of the US System
The US health care economy has a long, complex history that has been extensively documented and analyzed elsewhere. Many historical accounts of the US health care system have focused on organized interests at the national level, such as unions and business (see Gottschalk 2000) and the medical profession (see Starr 1982). These accounts argue that the dominance of employment-based health insurance served the mutual interests of organized labor, employers, and doctors. Indeed, the combined interests of doctors, business, and labor defeated attempts to introduce compulsory health insurance early in the twentieth century (Starr 1982, 252–57). Even at this early stage in the evolution of health care institutions, however, the foundations were in place for the complex workplace relationships between professionals and other employees, and between the payers and the providers of health care.
Employment-based health insurance rose to dominance during and after World War II, following the failure of several attempts to create a national health care system. When wage controls imposed by the National War Labor Board prevented employers from competing for employees on the basis of wages, benefits became the main area of competition, and employers began offering comprehensive health insurance (Jacoby 1997, 216; Starr 1994, 60; Swenson and Greer 2002, 618). The tax system, which allowed employers to pay for health insurance without incurring payroll taxes, also encouraged employers to provide insurance and pay the premiums, as they were competing for scarce labor during the war. As the incentives of Obamacare continue to evolve, some scholars have argued that fewer employers will offer health insurance and will instead opt to encourage their employees to purchase affordable insurance on an individual basis (Emanuel 2014).
With the introduction of Medicare and Medicaid, the number of people receiving publicly funded health care rose dramatically. When the programs became law in 1965, Paul Starr noted that “some physicians initially swore they would organize a boycott, until cooler heads prevailed in the AMA [American Medical Association] and, after it went into effect a year later, the profession not only accepted Medicare but discovered it was a bonanza” (Starr 1982, 369–70), but Medicaid has remained detested by the medical profession.
Medicare and Medicaid provided access for health care for those over sixty-five years of age and for the poorest Americans, but the programs did not initially alter the system of health care provision for the majority of citizens. The seeds for the next transition were planted in the early 1970s, although that transition proved to be very gradual. Dr. Sidney Garfield, cofounder with Henry Kaiser of Kaiser Permanente, reflected on the stress on the health care system in the 1970s: “The US system of high-quality but expensive and poorly distributed medical care is in trouble. Dramatic advances in medical knowledge and new techniques, combined with soaring demands … are swamping the system by which medical care is delivered. As the disparity between the capabilities of medical care and its availability increases, and as costs rise beyond the ability of most Americans to pay them, pressures build up for action. High on the list of suggested remedies are national health insurance and a new medical care delivery system” (Debley 2009, 120). These thoughts addressing the problems of access, cost, and quality apply equally well to the crisis in health care that led to the Affordable Care Act of 2010. Ultimately the rise to dominance of managed care altered access to medical care for tens of millions of Americans. The key aspect of managed care, as opposed to conventional insurance, is its repositioning of decision-making power. Rather than patients or doctors determining who has access to which services, the discretion lies with the Health Maintenance Organization (HMO). Although this dramatically affected access to care, the affect on the delivery of care has been a little more complex.
With the failure of the Clinton-attempted health care reform of the 1990s, new vehicles emerged through which insurers hoped to deter “patients rights” bills that would increase the power of patients to require expenditures by their HMOs. In particular, the rise of the Preferred Provider Organization (PPO) gave the appearance of offering greater patient choice while actually offering employers flexibility to reduce choice and costs with plans “less subject to regulatory strictures” than HMOs (Hurley, Strunk, and White 2004, 56).
The HMOs have existed since...