Big: Grappling with the Size of U.S. Health Care
- Our health care system serves a country extending 4,600 miles—from the Bering Straits to Key West. The distance from the equator to the North Pole: 6,000 miles.
- If the U.S. health care system were a nation, it would have the fifth largest gross domestic product (GDP)—$2.9 trillion—in the world, larger than that of France or the U.K.
- Prior to the enactment of the Affordable Care Act, the U.S. had more underinsured and uninsured people combined (about 85 million) than the entire population of Germany.
In other words, when the United States sets about to reform its health care system—as it has through the Affordable Care Act (ACA)—it is taking on a really big job. We need to keep that in mind as we judge progress in the ACA’s implementation.
Take for example the estimated 20 million individuals who gained new insurance coverage under the ACA as of May 1, 2014. Is that a big number? Is it a success or a failure? Well, given the 85 million number cited above, it doesn’t seem so great. But 20 million is the population of Denmark, Sweden, and Norway combined. And it’s equivalent to the number of enrollees in Medicare as of 1970, five years after its enactment.
Here's another example of how seemingly small things may be pretty big in the U.S. health care context. For most of the past 50 years, U.S. per capita health care costs have grown a few percentage points faster than per capita GDP. Since about 2008, however, health care cost increases have about equaled GDP growth. There is debate about whether the ACA has anything to do with this, but putting that aside, is it a big deal? What’s in a few percentage points? Well, if these slower rates of growth in health care spending persist until 2022, the U.S. will save an estimated $1.8 trillion: about equal to the current GDP of India or Canada, and larger than that of Australia ($1.5 trillion).
And still another illustration. After the enactment of the ACA, Medicare hospital readmissions within 30 days fell by 1.5 percentage points in the U.S., from 19 percent in 2011 to 17.5 percent in 2013. This drop coincided with the ACA’s enactment of incentives for hospitals to cut readmissions. Less than a 2 percentage-point drop doesn’t seem like a big deal. But in the U.S. that corresponds to 150,000 fewer elderly patients trundling back into hospital beds, enough to populate Kansas City, Kansas (145,786), Dayton, Ohio (141,527), or Salinas, California (150,441).
We are pretty tough on ourselves and our collective projects in the U.S. But we don’t often take into account the incredible effort required to move the health care needle, or the enormous value in human and economic terms of seemingly modest progress.
Now, for some, the very size of the U.S. health care reform challenge means that government should stay out of it. If it’s really big and complicated, the argument goes, government is the last place to look for help.
But there’s another point of view. When a 18-wheeler is barreling out of control down a mountain road, it’s really hard for it to stop or turn. But standing by and letting it crash is not an option—the damage will be too awful. And that is where we are with our huge, out-of-control health care system. Government has stepped in because no other party seems to have the will or capacity to engage the brakes or grab the wheel. The truck may have begun to slow. Don’t expect it to stop on a dime.