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The Keckley Report

The Biggest Misconceptions about the U.S. Health System: A Fair and Balanced Review

By May 2, 2016March 1st, 2023No Comments

Opinions about the U.S. health system vary widely based largely on our individual experiences as users from time to time. And most Americans don’t think of it as a system at all. Rather, it’s a collection of doctors, hospitals, insurers, drug and device manufacturers and others that operate in a complicated, disconnected, expensive industry that’s increasingly difficult to navigate and afford.

Little wonder that opinions about health reform and the Affordable Care Act divide our nation: half see it as over-reach by the federal government that threatens a system best left alone, and half see it as a remedy for systemic flaws. Both argue their positions fervently, and neither is inclined to consider the view of the other. And in both camps, there are widely held misconceptions that run counter to what’s actually known.

For those who oppose health reform and the ACA and are predisposed toward its undoing, the biggest misconceptions are…

1- Quality of care in the U.S. system is second to none in the world. The case can be made that the latest technologies, drugs and facilities in the U.S. system are readily available but the latest and best is also accessible in most of the world’s developed systems. After all, the healthcare system’s innovators—technologies, drugs, business processes, diagnostics and therapeutics—sell in a global market. Moreover, the U.S. system falls short on infant mortality and life expectancy gains compared to others. And as called out in Institute of Healthcare Improvement analyses, our system misdiagnoses with embarrassing frequency and is at fault for more than 440,000 Americans who die as a result of avoidable errors in our system. Our system’s quality of care has notable strengths, but vexing weaknesses. We’re good, but the fact is we are not the best across the board.

2-Americans think the rest of the world is envious of the U.S. health system: Americans are prone to believe our system is better than any other health system in the eyes of their citizens. But the Swiss, French, Canadians and the Brits give higher scores to their systems than we do ours per Deloitte’s global consumer survey. The world sees the U.S. health system’s training programs and its specialized care as strengths, but it’s costs, uneven access, and pluralistic payment system as deficiencies. And contrary to what’s frequently stated as fact, many citizens in single payer and government run systems are more satisfied with their systems than U.S. citizens with ours.

3-Health insurance coverage means access to care is assured.  One in seven Americans lack insurance coverage of any kind; for the rest, coverage is decreasingly affordable and increasingly limited. It worries Americans: pre-retirees consider loss of their financial security their top fear (EBRI) and Millennials think Medicare will not be there when they reach retirement.  Having health insurance coverage is better than not, but having coverage does not assure access to needed providers (i.e. psychiatry, primary care) nor escape from financial calamity resulting from a health problem or accident. Those with insurance coverage are better off than those without, but they can be wiped out financially due to medical costs even if insured. It happens frequently: medical debt is second only to college loans as a threat to household financial security.

4-The industry has been irreparably harmed by the ACA. The profitability of the U.S. health system since passage of the ACA has, for the most part, improved, especially for organizations that are investor-owned and the biggest in their sectors. Those hurt by the ACA are smaller organizations that face solvency issues or struggle to access capital for innovation and growth. Rural hospitals, independent home care agencies, early stage biotech start-ups and small medical practices face hurdles forcing many to align with larger organizations or shut down. The impact of the ACA on profitability in the U.S. system has been uneven. There are winners and losers in every sector.

5-Fixing medical liability would fix the cost problem in healthcare. So called “defensive medicine” is widely misunderstood. Peer reviewed studies of practice patterns showed costs for tests, services and treatments to fend off potential medical liability amounts to 2% of spending, or $54 billion/year. In 34 states, there are caps on pain and suffering, and the judicial system effectively weeds out frivolous complaints from those that are substantive. That’s three times higher than assertions by physician organizations that assert their fear of litigation adds $170 billion/year to health costs. And notably, malpractice premiums have decreased across the industry for several years reflecting improvements in the adjudication of grievances for those harmed by the health system. The fact is that the costs of defensive medicine are overstated: the opportunity to generate more revenue for a medical facility or the preferences of clinicians to practice a certain way are significantly more costly.

For those who favor reforms and think the ACA might not go far enough, the major misconceptions are these….

1-Healthcare in the U.S. is a right, not a privilege, in the U.S. As currently codified in the U.S. system of laws, the guarantee of life, liberty and the pursuit of happiness does not include a guarantee of healthcare to all Americans. Over the past 70 years, our system evolved to a social pact that holds the government responsible to provide health services for the poor and elderly, with employers and individuals outside these cohorts responsible for their own. Whether healthcare is a right or privilege is a fierce debate among industry pundits: those in favor see as a fundamental like public education; those opposed cite the spotty performance of public education to bolster the case against. But the misconception that’s common is that healthcare is a birthright for Americans: that’s not the case.

2-There’s plenty of money in the healthcare system and it’s not in jeopardy. The U.S. spends $9400 per person on its healthcare: 30% higher than any other developed system in the world and plenty if allocated appropriately. But the system is in jeopardy because access to capital via investment follows the shortest route to profitability for investors and access to capital from bond offerings, loans or government grants for not-for-profits—hospitals, post-acute providers, et al—is decreasingly available or affordable. Moody’s, Fitch and Standard & Poor’s have cautioned against over-exuberance in the acute sector—illustrative of the constraints ahead for a sector in the industry that is foundational to healthcare in most communities. The money in the health system is stretched thin, especially in the not-for-profit sectors that serve those in greatest need.

3-There’s little individuals can do about their health costs. The majority of Americans believes the health system is too complicated to navigate effectively and there’s little they can do to manage its costs. But significant research shows lifestyle changes in eating habits, exercise and stress management highly correlate to a healthier life and lower costs for healthcare. And Americans have at their disposal powerful tools to enable selection of doctors and hospitals that get the best outcomes at the lowest prices, and alternatives to treatments not suggested by their providers. While true that the health system can be threatening, there’s much consumers can do to get a handle on their own health costs, and unprecedented online tools and resources to assist.

4-Employers have an obligation to provide health insurance coverage for their employees. The ACA requires employers with more than 50 full-time employees to provide affordable health insurance coverage or pay a penalty. But employers are not obligated to provide coverage and in many industries (restaurant, hospitality, light manufacturing, retail et at) the majority do not.  The major determinant of whether an employer provides health coverage is the value it ascribes to the benefit in getting and keeping its workforce intact. The ACA is not responsible for declining coverage by employers; increasing health costs and a determination by business owners that it is not requisite to their competitive strategy are reasons for their decisions.

5-Physicians are in it for the money and protect their own interests at their patient’s expense. There are bad actors in medicine—some estimate as many as 5% who practice outside accepted standards of professionalism and ethicality. But 95% believe they’re making a difference in the lives of their patients, and they flinch at the notion some of their own seem to care more about money than medicine. Peer review has not been as rigorous as necessary, but market forces are exposing greed, ethical breeches and business conflicts of interest so buyers may beware. The profession of medicine is under a microscope: it’s a misconception held widely that physicians care less about patients and more about their pocketbooks.

Public opinion about the Affordable Care Act has not changed measurably since 2010 when it passed. In election cycles like campaign 2016, misconceptions are reinforced by harsh rhetoric that seeks to divide rather than inform.

For our society, it’s worth taking a fresh look at how the system’s strengths can be protected and its shortcomings remedied. As a start, we should address these 10 major misconceptions in a fair and balanced way.