The Issue

The United States spends more per person on health care than any other nation yet has lower life expectancy, greater lags in childhood health, and more avoidable deaths than other high-income countries. The COVID-19 pandemic has further exposed the health system’s weaknesses. Health policy plays a crucial role in shaping every nation’s health care system and creating opportunities for improvement.

The Challenges

  • Quality: Quality of care in the U.S. is worse than in many other high-income countries. The U.S. spends less on social supports, such as childcare, housing, nutrition, unemployment, and transportation. It also has higher rates of chronic diseases, leading to preventable illnesses and deaths.
  • Access to care: The U.S. does not have the universal insurance coverage that is available elsewhere. During the pandemic, loss of employment — and job-based insurance — can mean millions of Americans losing their health care coverage.
  • Disparities in care: Americans face inequities in care based on gender, race, ethnicity, income, education, language, and geography.
  • Spending: The U.S. will likely spend more than $4 trillion on health care in 2020, more per person than any other country, largely because it pays more for services, medications, and devices.
  • Administrative complexity: U.S. patients and clinicians spend a lot of time tracking insurance coverage and responding to bureaucratic requirements.

As the COVID-19 pandemic painfully reveals, in health care, markets can fail to allocate resources to meet health needs, preserve the quality of care, and achieve desired levels of access and equity.

The Big Picture

Governments have a major role to play in licensing and regulation, setting quality standards, and using purchasing power to negotiate prices. In most high-income nations, government fills the gaps when markets fail, whether it’s providing health coverage for the elderly, people with disabilities, or for people with low incomes. They also play a key role in preparing for disasters and pandemics like COVID-19.

Private-sector organizations also play a critical role, especially in the U.S., where functioning markets can reduce costs and innovate in areas such as diagnostics and therapeutics. However, private markets do not always restrain costs in health care and sometimes fail to respond in a crisis.

The Bottom Line

The U.S. health care system faces many challenges, but it can be changed through sound health policies.