Running head: HEALTH CARE

Health Care Systems and Reforms: A Review of the Literature

Paola Camacho
University of Texas at El Paso




















HEALTH CARE 2

Abstract
There have been continuous changes to healthcare systems around the word due to the
demands of the growing population, the advancement of medical technology and services and the
socio-economic situations of different nations. The provision of healthcare takes up a major
sector in the political sphere in all countries, but it is also an issue of conscious and ethical
concern that has sparked massive controversy. This literature review will look into the struggles
within the healthcare systems and provide information on the healthcare systems in various
developed countries as well as the reform that has changed these systems. It will also analyze the
impact of the Affordable Care Act in the United States and provide the divisive views on the
reform.













HEALTH CARE 3

Health Care Systems & Reform: A Review of the Literature
There has been a growing consensus among Americans about a need for the revision or
reform of the healthcare system. Although most people agree that the system is flawed, there is
no single formula for a fully functional and spectacular healthcare system, and the means of
reform has ignited a debate in America that has been boiling for years. No high-income country
can avoid the trials and tribulations that come with healthcare dilemmas, and healthcare
expenditures have been increasing worldwide. The United States healthcare system has been
notoriously recognized through a bundle of healthcare horror stories, and it has received
unfavorably low scores and come in near to dead last in the rankings of the best healthcare
systems in the world. It is perplexing that a nation that spends so much on the sector of
healthcare and holds on to some of the most prominent medical professionals can rank so low,
and it is up to interpretation to see what makes other developed countries better at providing
healthcare than America. In order to obtain a better understanding of the current healthcare
dilemma in the United States and how other healthcare systems function, the following three
questions will be asked:
1. What have been the struggles of healthcare reform and policy historically?
2. How do other developed nations healthcare systems function?
3. How is Obamacare impacting the American healthcare system and what are the pros and
cons of the universal reform?
The following Review on the Literature will focus on these questions and provide
information about healthcare systems and reforms in various developed nations.
What have been the struggles of healthcare reform and policy historically?
HEALTH CARE 4

The introduction of Obamacare is historically important for it is the largest reform in the
healthcare system, but the notion of universal health care has continuously faced an antagonistic
spirit in the United States. The dire situation of the American healthcare system has been
addressed since the days of Franklin Roosevelt (Obama, 2009) and after World War II, Harry
Truman was the first president to endorse universal healthcare. Truman voiced to the public,
The health of this nation is a national concern; financial barriers in the way of attaining health
shall be removed. The American Medical Association was quick to strike down the proposal,
for it was socialized medicine, an extension of Russian communistic control. Americas deep
resentment of the communists combined with overall public disapproval of the idea wiped it off
Trumans agenda before ink ever met paper (Watson, 2013).
Years later, the issue of healthcare reached an apogee of policy after the assassination of
John F. Kennedy. Kennedy had promoted the plan of Medicare in order to create a government
provision of healthcare for the elderly. Soon after Johnson took office, he signed Medicare into
law in 1965, and the enactment of Medicaid was soon to follow. Ever since the creation of these
government programs, the drive for healthcare reform died down and turned into subtle waters
(Watson, 2013). When Clinton took office, he reintroduced the universal healthcare plan and
Hilary Clinton delivered passionate speeches around the country to promote the plan. The notion
of universal healthcare was shot down mercilessly, and the Clintons dropped the promotion of
the plan that had sullied their public image (Moore, 2007). It would not be until Obamas
presidency when the universal plan would see the light and actually become policy.
Globally, the universal healthcare model has been influential in all developed nations
towards establishing their current healthcare systems. Germany was the first to implement a
compulsory universal system in 1849 in Prussia. In 1883, there was high emphasis on the
HEALTH CARE 5

importance of social welfare for the poor in order to obtain national survival (also known as the
Bismarckian Model), and the system held strong throughout the years. More recently, in 1977,
Germany underwent significant policy change with the Health-Insurance Cost-Containment Act
which was intended to put an end to the rising costs in hospitals, and the 1990s experienced
more intense reform (Aspalter et al, 2012).
The Bismarckian Model in Germany influenced the major healthcare changes in many
countries as well as the impact that grand-scale war had on policymaking. In the late 1890s, a
major part of Japans policy agenda during the Meiji government was to expand social health
insurance. Workers insurance in Japan started at the beginning of the 20
th
century as its early
roots, and the universal system was implemented in 1961, heavily influenced by the trauma of
World War II. The United Kingdom was heavily influenced by the war, and at the peak of
WWII, Aneurin Bevan devised a new healthcare plan by designing the National Health Service
(NHS), which has remained a critical feature in the British system. The National Health Service
Act of 1946 was the foundation of the British universal healthcare system, and it was not until
1974 that major organization took place of the administration. The U.K. has recently undergone
more Labor reforms to increase the equality and quality of healthcare (Aspalter et al, 2012).
France is ranked as the country with the best healthcare system in the world by the WHO
(WHO, 2000) and it has a variety of influential roots that made the modern system. After 1945,
President Charles de Gaule attempted implement the Laroque Plan to establish a universal
system but failed. However, there was continuously an extension of coverage of the health
insurance system which marked a long and arduous transition from the famed Bismarckian
model to a modified universal insurance system. In 1999, the Universal Health Insurance
Coverage Act extended and quasi-universalized health insurance coverage. Modern changes
HEALTH CARE 6

show a strong formal universality and a more centralized power for government in
administration and policy yet a push for privatization (Aspalter et al, 2012).
The earliest propositions of universal healthcare in the United States were hailed as a
doomed communistic future, and the contrast of the socialist spirit in public provision of services
versus the strong capitalist control of services is clearly seen in the history of Chinas healthcare
system. With the foundation of the Peoples Republic of China in 1949, China provided
healthcare for all, and there was a strong emphasis to provide for the rural poor and a focus of
preventive care. Communist China led massive healthcare campaigns, and Mao Zedong hailed
the eradication of a malignant infectious disease known as schistosmiases as one of the greatest
steps towards pushing the nation forward to crush capitalism. The citizens of China received
quality healthcare, and China even sent medical teams to less developed countries as an act of
humanitarianism which further enhanced its image. The WHO stated that Chinas healthcare
system was an exceptional model for all developing countries to follow. However, in the mid-
1990s, new reform took place to get on track with the world, and there was an emphasis on
market liberalization. Since then, the system changed from a public good to a set of marketized
and commoditized practices that lost the praise of the WHO immediately (Watson, 2013).
How do other developed nations healthcare systems function?
Healthcare systems continuously face the challenges of aging populating, prevailing
diseases and increasing costs and their history of policy shows the overall national attitude
towards healthcare. There is a vast variety of the ways each system functions, but there is a
similarity that runs through the systems which are continuously ranked as the best in the world: a
parallel in universality. However, there is no perfect healthcare model, and each country has its
own unique policy to go along with the history that shaped it. There are important details in each
HEALTH CARE 7

system such as the division and grasp of power between private and public sectors, the main
forms of funding and the extension of how coverage is distributed and to whom. Public opinion
on some of the most well-known systems in other developed countries is typically positive, and a
survey was conducted by the author at the University of Texas at El Paso by the author. The
subjects who responded to the survey were all students with various backgrounds, and they were
asked the following question: Do you think other developed countries have good healthcare
systems? Figure 1 shows the results. The survey was conducted in person on a randomized
sample and through the use of online surveying on forty-eight individuals. A total of eight
students responded no and the other forty responded yes.

In the U.K., the creation of the NHS has made the largest publicly funded healthcare
system in the world. Healthcare is purchased with primary care trusts and through the insurers,
and a vast majority of providers are in the public sector. This system has been noted for high
rates of patient satisfaction towards primary care, but is flawed due to the delays in receiving
specialist care. In contrast, the universal healthcare system in Sweden is highly decentralized. It
is funded through multiple levels of taxation and spreads management and financing to regional
83%
17%
Do you think other developed countries have
good healthcare systems?
YES
NO
HEALTH CARE 8

and local authorities. It faces the same problem of delay as with the British system, but uses an
interesting backup plan. If more than three months pass with scheduling delays for planned care,
Sweden will pay for all fees to send the patient out-of-country to receive the procedure. An
interesting quality of the Swedish system is the extension of coverage, which has recently been
granted to illegal immigrants within the country (T.T., 2012).
The French healthcare system is split between the national, regional and departmental
levels of government. The funding of the system comes from a variety of tax revenues and it is
made up of three insurance funds: the national health insurance fund for salaried workers, the
agricultural scheme and the national health insurance fund for independent professionals
(Schabloski, 2008). The bundle of power in the system is located in the parliament, with strong
democratic pressure influencing policy (Aspalter et al, 2012). Both private and public institutions
strive in the system, with only one-fourth of the hospitals under public control and what critics
note as a peculiar balance between the two sectors (Schabloski, 2008).
The Canadian healthcare system has been a frequent example of universal healthcare in
debates on both sides of the spectrum. Canada was ranked at thirty in the WHOs list of best
healthcare systems worldwide (WHO, 2000), and a commonly heard flaw of the system is the
struggle with administrative efficiency and the infamous waiting lists (Schabloski, 2008). The
Canadian system is an amalgamation of public, mixed and private services and it is highly
decentralized, allowing provinces and territories to set their own policies. Seventy percent of the
financing is achieved through territorial and federal governments, and regional authorities are
responsible for allocating a budget for their given population. Canadian healthcare is essentially
a single-payer system, with all residents eligible for medical necessities without charge.
HEALTH CARE 9

Japan was ranked as the tenth best healthcare system by the WHO (WHO, 2000), and is a
mentionable system due to its advancement in medical technology which is comparable to the
United States (Aspalter et al, 2012). According to the Commonwealth Fund, Japan is highly
equipped in medical goods such as hospital beds per capita, surpassing the relatively low amount
in the United States (David, 2011). The Japanese healthcare system is more centralized, with a
strong role of the national government in both health policy and administration. The system is
financed by private and public funds and is organized into three types of insurance. A gem of the
system is the national, fixed reimbursement schedule to maintain costs, but the Achilles heel is
especially tender when it comes to the aging population. Although the aging population is a
major concern in every developed healthcare system, Japan spends more than one-third of its
healthcare expenditure on the elderly and will probably be affected more than other nations in
the upcoming years (Schabloski, 2008).
How is Obamacare impacting the American healthcare system
and what are the pros and cons of universal reform?
The United States has been a favorite target to highlight the draconian practices in the
shadows of the healthcare system. The shocking injustices of the healthcare system make up the
bulk of the argument towards the ethical approach of universal healthcare. Many Americans are
unable to obtain coverage or are dropped from their insurer due to pre-existing conditions and
there are even harsher cases where insurance providers refuse to cover expensive medical
procedures despite matters of life or death (Moore, 2007). Before the heavily criticized passage
of the Affordable Care Act, or Obamacare, the United States was the only developed nation
without a system of universal healthcare (Obama, 2009). America has always boasted its free-
HEALTH CARE 10

market and capitalistic prowess with gleaming pride, and there was understandable discontent
and outcry with the incoming monster of socialized medicine.
The author conducted a survey on the University of Texas at El Paso campus in respect to
the public opinion on the American healthcare system and reform. Figure 2 and Figure 3 display
the results of the survey. The same forty-eight students responded to the following questions
through randomized in person and online surveying. For the first question, ten students
responded no and thirty-eight responded yes. For the second question, twenty-seven students
responded no and twenty-one responded yes.

On March 23, 2010, the most significant change in healthcare policy since the enactment
of Medicare and Medicaid took place with Obama signing the Patient Protection & Affordable
Care Act (Watson, 2013). The new law brewed up a massive storm of debate, but it acted as a
catalyst for major change (Cannone, 2011) and marked a groundbreaking moment in history.
Aside from being criticized for its excessive length of over nine-hundred pages, the ACA has
received criticism on numerous grounds, with many misinformed claims and serious concerns
with the impact of the law on many individuals and both small and large businesses. The
proposal of creating a public option faced heavy controversy, and after negotiating with the drug
21%
79%
Do you think the healthcare
system in the United States is
a good one?
Yes No
44%
56%
Do you think Obamacare is a
good step of reform?
Yes No
HEALTH CARE 11

and hospital industries, Obama removed that aspect from the plan altogether. Another major
concern of Obamacare is that it would put barriers on competition, but supporters state that it
will actually create new insurance providers and only set guidelines for insurers to follow rather
than stifle competition (Nather, 2013).
There are several key beneficial parts of Obamacare which make up the main goals of the
act, but alongside the good intentions of the reform, there come both evident and possible
downfalls. Obamacare makes it illegal for insurance providers to turn anyone down based on
pre-existing conditions as well as charging more for having these conditions. There are
arguments that all the sick newcomers who could not obtain or afford insurance before will
create a death spiral and raise healthy peoples premiums, but the individual mandate is in
place to lessen the damage. The individual mandate is supposed to bring enough young and
healthy people into the market, but it faces the challenge of cultural resistance in many states
(Nather, 2013). Between December and October of 2012, 2.2 million people signed up for
Obamacare out of the estimated 48 million uninsured Americans, falling far below government
expectations (Newsy, 2014).
An essential part of the plan is its expansion of Medicaid, which closes the doughnut-
holes and covers people up to the 133% federal poverty line instead of the previous 100%
restriction. This expansion was intended to be mandatory, but the Supreme Court ruled it
optional for the states to incorporate. Governor Rick Perry of Texas and Governor Bobby Jindal
of Louisiana refused the expansion out of an anti-Obamacare spirit, even though the government
offered to cover 100% of the states Medicaid bills for the first three years. Some states denied
the expansion due to their wariness of Congress and suspicion that there would be a cut to the
promised funding down the road (Nather, 2013). So far, only half of the states have expanded
HEALTH CARE 12

Medicaid (Newsy, 2014). The CBO estimates that 3 million fewer people will gain coverage
since the states have optional expansion, and the RAND Corporation Analysis says that the states
that are not expanding are shooting themselves in the foot, since they would need to spend $1
billion to reimburse hospitals for the care provided to the uninsured (Nather, 2013).
In response to the implementation of compulsory healthcare, there will be fines for those
who do not obtain coverage. The fines in 2014 start at $95 or one percent of household income
and they increase to $325 or 2% of income in 2015 and $695 or 2.5% of income in 2016. The
shortcoming of the fining system is the possibility that it wont inspire uninsured people to
purchase healthcare, since the penalty will always be cheaper to pay. However, choosing to pay
the penalty is basically money down the drain while purchasing healthcare is a decision that
could impact ones future in the long-run. The fines are heavier on big businesses, which will be
required to provide their employees with healthcare or face the consequence of a $2000 annual
fine per worker. A big business is considered as one with a minimum of 50 full time employees
(with 30 hours constituting the full time week). In order to ease the discontent in the market, the
Obama administration stated that 96% of businesses are too small to receive these requirements,
and of the big businesses that meet the bar, more than 90% already offer coverage (Nather,
2013).
Obamacare offers tax credits to encourage small businesses to offer health care, and the
credits are also distributed to individuals who cannot afford insurance but do not qualify for
Medicaid. These government subsidies are beneficiary boosts to draw more people into the
system, but despite their good intentions, critics state that they will not put food on the table
(Nather, 2013). On February 4, 2014, the impact of Obamacare looked even grimmer when the
Congressional Budget Office released its report. It estimated that Obamacare would lower full-
HEALTH CARE 13

time employment due to several factors. Workers may be discouraged more from earning more
due to their qualifications for subsidies and the higher tax with higher income. Other factors
included the effect of expanding Medicaid since it would discourage workers from earning more
and the requirement for big businesses to cover their full-time employees (C.H., 2014).
Conclusion
The provision of healthcare has been a historically significant concern all around the
world. Countries have responded to major events or national ideals with policy towards their
healthcare systems, and each nation is impacted by similar challenges to the system. Although
the problems in healthcare provision have been parallel concerns throughout the world, each
country has shaped its own unique healthcare system and has been analyzed for its effectiveness
and flaws continuously. There has been a correlation of universal healthcare provision
throughout the developed countries, sparked by the Bismarckian Model and continued through a
process of modernization and globalization. The United States is etched into history as the last
developed nation to adopt a universal system with the controversial passage of the Affordable
Care Act, and both critics and supporters of the plan have foundation for their arguments.
Although the universal model is concurrent in the best ranked systems, the new policy of
universal healthcare in America is still budding, and the overall effect is yet to be reached for
better analysis.






HEALTH CARE 14

Resources:
Alspalter, C., Uchida, Y., & Gauld, R. (Eds.). (2012). Health care systems in Europe and Asia.
New York, NY: Routledge.

Binstock, R. H. (1993). Healthcare costs around the world: is aging a fiscal black hole?.
Generations, 17(4), 37.

B. Obama, personal communication, September 9, 2009.

Cannone, F. T. (2011). Behind the changing healthcare delivery model. Metropolitan Corporate
Counsel Northeast Edition, 19(8), 42-44.

C.H. (2014, February 5). Grim prognosis, The Economist.

Clarke, S. P. (2013). Healthcare reform in 2013: enduring and universal challenges. Nursing
Management, 44(3), 45-47.

The Commonwealth Fund. (2011). Issues in international health policy: The U.S. health system
in perspective. New York, NY: David A. Squires.

Davidson, K. A. (2013). The most efficient health care systems in the world (infographics). The
World Post. Retrieved from:
http://www.huffingtonpost.com/2013/08/29/most-efficient-healthcare_n_3825477.html

Insure the Uninsured Project. (2008). Health care systems around the world. Santa Monica, CA:
Alyssa Kim Schabloski.

Moore, M., & Moore, M. (2007). Sicko. United States: Dog eat dog Films.

Nather, D. (2013). Understanding Obamacare. Arlington, VA: Politico.

Newsy. (2014, January 18). Young, fit and uninterested. The Economist.

T.T. (2012). Sweden to give illegal immigrants healthcare. The Local. Retrieved from:
http://www.thelocal.se/20120628/41702

Watson, P. (Ed.). (2013). Health care reform and globalization. New York, NY: Routledge.

WHO (2000), The World Health Report 2000: Health Systems: Improving Performance, WHO:
Geneva.