Health Care Economics in USA

This article reviews the attempts made over past decades to initiate health care reform in the U.S. and the history of health care reform in the country. It also analyzes the Affordable Care Act and compares the U.S. health care model with Japan's health care model. The article provides insights into the influence of politics on the economics of the non-U.S. health care model chosen.

Running Head: HEALTH CARE ECONOMICS IN U.S.
Health Care Economics in USA
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Review the attempts made over past decades to initiate health care reform.
The introduction of Affordable Care Act has temporarily put an end to a century of
conflict and controversy over the opportunity to introduce in the United States, like the major
European countries, universal health coverage (National Health Insurance, NHI). The battle was
hard, and the rhetorical violence of the opponents of the law was the measure of opposition that
has always aroused this reform, proposed unsuccessfully four times in a century, first in 1912 by
the progressives with Theodore Roosevelt, then by Presidents Truman in 1945, Clinton in 1992,
and finally by Barack Obama in 2010.
Review the history of health care reform in the U.S.
The issue of health care reform has been the subject of a permanent war between
Democrats and Republicans, and her story can be described as a true saga (Jacobs & Skocpol,
2014). Here a brief step back is needed to put the question in perspective.
By 1912, the progressives, led by Theodore Roosevelt, had presented a public health
insurance project, in the same spirit of humanism and economic efficiency associated with the
Europeans. This form of medical practice was born in Germany in 1883 when Chancellor
Bismarck introduced the first health insurance (Jacobs & Skocpol, 2014).
The progressive episode ended in the presidential elections of 1915, when Teddy
Roosevelt was defeated by Woodrow Wilson. The issue of IHN was therefore removed from the
US political agenda for many years. The other two important dates for IHN were 1935 and 1965.
1935 because it did not take place, and thirty years later, 1965 because it was partially completed
(Cohen, Hoffman & Sage, 2017).
From the 1930s, two phenomena combined to bring the issue of health insurance back on
the political scene. From then on, the political problem changed in nature: it was no longer a

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question of compensating for the loss of wages of the sick worker, it was now a question of
allowing the American population as a whole to have access to care, particular to hospital care
(Cohen, Hoffman & Sage, 2017). Health insurance thus became an instrument for the
development of medicine and medical care.
In 1935, President Franklin Roosevelt voted for the Social Security Act, which provided
old-age and death insurance to employees. He had originally wanted to add health insurance, but
he had to give up the project in the face of intractable opposition from private insurance and the
American Medical Association (AMA), the all-powerful professional association of American
doctors.
At the end of his life, President Roosevelt, returning to the question of health insurance,
spoke of introducing it when the war was over. His successor, Harry Truman, took up the torch,
and in 1945 proposed to Congress a system of universal health coverage, but that did not affect
the organization of care, and allowed doctors to exercise as they pleased (In Mulligan & In
Castañeda, 2017).
In 1965, two years after the assassination of President Kennedy, allowed the vote
of Medicare and Medicaid, the two historic programs of American health insurance, as part of
the fight against poverty of the "Great Society" wanted by President Johnson (Gray, Lowery &
Benz, 2013).
Has the Affordable Care Act fundamentally changed U.S. policy?
Affordable Care Act, unlike President Clinton's reform proposal, reassures the majority
of the American population, which is ensured by the employers: the system remains in place, the
reform will not force them to change their health insurance. On the other hand, it introduces an
obligation for employers (companies with more than fifty employees) to contribute to the health

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coverage of their employees, and an individual obligation, under penalty of a fine, to take out, as
of 2014, a health insurance that covers a minimum basket of services. The state of Massachusetts
has already made health insurance compulsory, but this is the first time that the federal
government has succeeded in passing such a law, which for critics of the reform is contrary to
the Constitution (Gray, Lowery & Benz, 2013).
Analyze one of the following non-U.S. health care economic models:
Japan’s health care model
One of the best health and public health performances in the world, a relatively low
apparent cost, a consensual image of regulation: the whole seems conducive to making the
Japanese health care system an example to follow.
Analyze the influence of politics on the economics of the non-U.S. health care model you
chose.
In Japan, there is no tension between government and the doctors. Medical practice in
Japan takes three forms. The liberal cabinet is made up of 34% of the doctors, who practice the
vast majority of them solo. Hospitals bring together about 62% of doctors who work as
employees (Olivares-Tirado & Tamiya, n.d.). Most specialized care is provided at the hospital,
which is most often managed by local or national government (city or region-prefecture)
(Hellmann, 2010). Between these two classic formulas is a framework of exercise, called clinic,
which one must consider as hybrid. In a context where it is forbidden for private investors, if
they are not doctors, to take shares in a lucrative establishment, these very small clinics (of
which individual doctors are traditionally the owners) constitute a quite complete mesh of the
territory. They represent above all a natural landing point for doctors who, having built their

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weapons at the hospital, wish to make their reputation more profitable: in fact, the average age of
physicians practicing in a clinic is 64 years, as against 45 for all doctors.
Compare the U.S. health care model with the non-U.S. health care model you chose.
Compared to Japan’s health care model, it is clear that Japan’s health care model is best
in terms of payment structure, benefits, provider interactions and even in terms of reform
processes. In terms of payment structure, Japan’s health care model levy certain percentage of
tax in VAT to be used to cover the universal health care. In U.S. employers are responsible for
deducting some amount from employees to gather for their health care insurance. In terms of
benefits, Japan’s health care has more benefits because it covers everyone without limitation.
The U.S. health care covers only those who have insurance cover. Concerning provider
interactions, Japan has better system which is based on negotiation. Another difference is that
Japan’s health care reforms are based on negotiation whereas in U.S. the health care reforms are
based on competition between different parties.
Other relevant features is that Japan’s health care model is characterized by more
affordable care, reduced wait times, and more effective care facilities. Most of these features are
not found in U.S. health care model.

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References
Cohen, I. G., Hoffman, A. K., & Sage, W. M. (2017). The Oxford handbook of U.S. health law.
Gray, V., Lowery, D., & Benz, J. K. (2013). Interest groups and health care reform across the
United States. Washington, DC: Georgetown University Press.
Hellmann, A. (2010). Japan: Health-, Elderly- and Child- Care in comparison to the German
system: based on a case study. München: GRIN Verlag GmbH.
In Mulligan, J. M., & In Castañeda, H. (2017). Unequal coverage: The experience of health care
reform in the United States. New York : New York University Press.
Jacobs, L. R., & Skocpol, T. (2014). Health Care Reform and American Politics: What Everyone
Needs to Know, Revised and Updated Edition. Cary: Oxford University Press, USA.
Olivares-Tirado, P., & Tamiya, N. (n.d.). Trends and Factors in Japan's Long-Term Care
Insurance System [recurso electrónico]: Japan's 10-year Experience.
Yamagishi, T. (2011). War and health insurance policy in Japan and the United States: World
War II to postwar reconstruction. Baltimore: Johns Hopkins University Press.