U.S. Government’s Role in Healthcare

To get a handle on our government’s role in healthcare, let’s look at what the Department of Health & Human Services (HHS), our government’s department for all things dealing with health, has to say. In HHS’s mission statement we see that our government’s role in healthcare is “to enhance and protect the health and well-being of all Americans” and this mission is accomplished in two ways:

  1. “fostering advances in medicine, public health, and social services” and
  2. “providing for effective health and human services”.

These two do not exist as separate islands of effort—the first acts as the foundation for the second and together they fulfill the mission to “enhance and protect the health and well-being of all Americans”.   This relationship is shown in the figure below.

government's role in healthcareIf you access this website six months from now, the mission statement might reflect the Republicans’ new political agenda of undoing our federal government’s responsibility and commitment to the health care of its people.

Let’s look at each of the three elements that make up our government’s role in healthcare separately.

“To Enhance and Protect the Health and Well-Being of All Americans”

This part of our government’s role in healthcare is the final goal and it is assumed that the efforts under the two parts on the other side of the equation DELIVER this final goal. Since health care is largely obtained from private for-profit businesses (except for select groups like veterans and military personnel), all government efforts in healthcare must come about through regulation and the influence exerted through government programs like Medicare and Medicaid.

When our government states that its mission is for “all Americans” I like to think this means individual Americans (the people) and not healthcare businesses. Some government actions (like affordability measures) pit the interests of the American people against the financial interests of healthcare businesses and the government must choose which group is the ultimate beneficiary of its efforts.  Our government “enhances” the well-being of all Americans by supporting “advances in medicine, public health, and social services”.  Our government “protects” our health by enacting laws and creating regulations that make sure for-profit motivations within our private healthcare system do not deprive Americans of a minimum quality of healthcare.

Let’s now see how this goal is accomplished in the two ways given on the left side of the equation in the figure above.

“providing for effective health and human services”

“effective”

This part of our government’s role in healthcare should read “providing for cost-effective health and human services” given our urgent need to reduce our health spending and improve quality of care.  Under Obamacare (PPACA) reforms, cost-effective reforms have accelerated with the creation of the Independent Payment Advisory Board (IPAB) and the Center for Medicare and Medicaid Innovation (CMMI). Freed from micromanagement by influence-peddling politicians, these Medicare entities are experimenting and testing payment and service delivery models for improved affordability and quality care now and in the future.  What happens in the Medicare program eventually filters down to all Americans in employer-sponsored health insurance plans.

If Obamacare (PPACA) is repealed  and/or Medicare is privatized,  cost-effective efforts by the government will be largely halted. If this happens, our government’s new healthcare goal would have to read “to enhance and protect the financial well-being of healthcare businesses“.

“human services”

We all know what health services are–they are the medical services provided when we are sick. What exactly are human services?  Also called “social services”, human services refer to all services that contribute to good health and well-being. These are before sickness healthcare.  For example, health education, old age pensions, disability and sickness benefits, food assistance, employment programs, unemployment benefits, family support, and supportive housing services all fall under the human services umbrella and contribute to improved health.

By placing “and human services” in its mission statement, HHS acknowledges that services other than after sickness medical services contribute to the “health and well-being of all Americans”. Unfortunately, our government doesn’t put its “money where its mouth is” for all Americans because of historic prejudices ingrained in the U.S. mind-set. In the United States, “health services” fall in the for-profit world of successful healthcare businesses while “human services” fall in the world where “government handouts to the undeserving and damaged” must be constantly minimized. Those profiting in the “health services” end of healthcare do not wish to share the “spoils” of health spending with “human services” and therefore the latter is grossly underfunded. Perhaps if our government made greater efforts at eliminating inefficiencies and abuses within the health services, the savings could be used to fund more human services.

As a percentage of GDP, the U.S. government spends less on this component of healthcare than other major industrialized countries. In addition, the U.S. was also the only major industrial country studied  where health services spending accounted for a greater share of GDP than human services spending. In other words, the U.S. puts its money in “after sickness” healthcare while other industrial countries put it in “before sickness” healthcare.

The lack of “before sickness” health spending is one of the reasons that other industrial nations have better healthcare— our life expectancy at birth is lower, our infant rate is higher, our prevalence of chronic diseases is higher, and the management of chronic diseases is poorer.

“Fostering Advances in Medicine, Public Health, and Social Services”

Healthcare today is vastly better than it was fifty years ago largely because of advances in medicine, public health, and social services. The foundation for much of the improvement rests with scientific research studies and our government’s efforts (using taxpayer money) can be divided into two categories—

  1. Medicine–basic and applied science aimed at developing future cures for diseases
  2. Medicine, public health and services–research and development for new and better ways of delivering health care to the American people today.

Taxpayer-funded basic and applied science aimed at developing cures for diseases is coordinated by the National Institute of Health (NIH), an agency that received its first funding in 1937 and today has a budget of $31.3 billion (2016)  These research efforts do not address delivery of actual health care to individual Americans in the short term and are typically “mined” by for-profit healthcare businesses to develop new treatments in the future. While the NIH is not barred from funding research into the delivery of healthcare, it is not part of its culture or mission.

Taxpayer-funded research and development for new and better ways of delivering safe, higher quality, more accessible, equitable, and affordable health care in the nation’s hospitals and doctors’ offices is coordinated by the Agency for Healthcare Research and Quality (AHRQ) and the Patient-Centered Outcomes Research Institute (PCORI).  PCORI, created under Obamacare (PPACA) as a non-governmental institute in 2010, is specifically tasked with advancing Comparative Effective Research. With funding from a special trust (like the Medicare trust fund), PCORI is free to function outside the world of congressional influence peddling and manipulation so that even research that threatens healthcare business profits will be evaluated and reported.

One needs look no further than the budgets for these three research organizations to see our government’s role in healthcare at work. As the figure below shows, the commitment to research for the delivery of health care (i.e., the care that reaches Americans today shown in red in the figure) is minuscule compared to the research devoted to finding cures for diseases (green).

government's role in healthcare research funding

While the NIH does do some delivery of care research, this type of research is not its primary mission.  The NIH spent almost as much to support training of the next generation of research scientists ( $767 million in FY 2015) as our government budgets for healthcare delivery research (the budgets for the AHRQ and PCORI combined).

Summary—Our Government’s Role In Healthcare

Our government’s role in healthcare is “to enhance and protect the health and well-being of all Americans” and it is supposed to be achieved by (1) “providing for effective health and human services” and (2) “fostering advances in medicine, public health, and social services”.  This role is most obvious in how it funds (or doesn’t fund) healthcare research and often puts the financial interests of private for-profit healthcare businesses ahead of what delivers high quality, affordable healthcare to the American public.

The delivery of effective healthcare today is just as important as future advancements in health care and woefully underfunded.  Our government’s role in healthcare needs a mindset shift that recognizes all delivery of care research, including “human (social) services” contribution to cost-effective healthcare.  Until our government makes a substantially larger commitment to research aimed at improving the delivery of health care (through AHRQ and PCORI), it will never fulfill its mission to “enhance and protect the health and well-being of all Americans”. This research would greatly help Medicare as it experiments with new cost-effective models.

Other Articles of Interest

Kersten Lausch, et.al., Cost Containment in the Affordable Care Act: An Overview of Policies and Savings, Center for Healthcare Research & Transformation, May 22, 2014

Elizabeth H Bradley, et.al., Health and social services expenditures: associations with health outcomes, BMJ Quality & Safety Oct 2011, 20 (10) 826-831

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