What I'm Learning About U.S. Healthcare

The recent events in U.S. healthcare have brought into sharp focus how vital understanding this complex system is for every consumer. The tragic killing of UnitedHealthcare CEO Brian Thompson in Midtown Manhattan in December 2024 was a stark reminder of the deep human frustrations sometimes boiling beneath the surface of the healthcare industry 1. Thompson led a huge part of UnitedHealth Group, providing coverage for over 49 million Americans and managing billions in revenue, yet his public profile was low 2. The alleged motive to spark a public discussion about the healthcare industry underscored the intense emotional charge surrounding healthcare access and affordability 1. This event, though extreme, highlighted the profound, often personal, consequences of healthcare decisions.

Soon after, the "One Big Beautiful Bill Act" (OBBBA), signed into law on July 4, 2025, represented a seismic policy shift that will touch millions 3. Estimates from the Congressional Budget Office (CBO) projected these changes could leave a staggering 16.0 million more people uninsured by 2034 4. Such figures demand a clear understanding of the U.S. healthcare system, its challenges, and its direction. The passage of the OBBBA was met with strong objections from many people including healthcare organizations and medical professionals, with statements expressing outrage and estimating that 11.8 million people would lose health care coverage due to the act. Many also warned of a significant and negative impact on the ability of eligible individuals to access and maintain Medicaid/ACA coverage. This blog post aims to provide that foundational understanding for anyone seeking to engage with, or understand, the challenges and future of American healthcare.

Let's talk about the American healthcare system. It's truly not a fully coordinated system, but rather a loosely structured mix of how we get insurance, how care is delivered, how we pay for it, and how it's all financed 5. There are generally five key groups involved: us, the healthcare consumers or patients; the insurers and payers, like insurance companies and the government; the healthcare providers, meaning doctors and hospitals; the medical suppliers, such as drug companies and equipment makers; and the policy makers and regulators, at federal, state, and local levels. It's a complex dance, and knowing who the players are helps a lot.

My understanding of how medical care is actually delivered has changed a lot, and a look at history helps explain why our system is so unique. The U.S. has a staunch belief in capitalism which has kept us from developing a national healthcare system like many other first-world countries 6. In the early 1600s, medical practice in England was split into three groups: the physicians, the surgeons, and the apothecaries 7. Physicians were seen as elite, often holding a university degree, while surgeons and apothecaries learned through apprenticeships. However, this clear distinction didn't last in colonial America, where university-trained MDs were expected to do it all, performing surgery and preparing medicines. Medicine was fairly rudimentary for early colonists, with women playing a major role, especially in childbirth. Mortality was extremely high, and most sick people were treated with folk remedies, though smallpox inoculation was introduced early. There was virtually no government regulation in these early days.

The first medical society was formed in Boston in 1735, and the New Jersey Medical Society, chartered in 1766, was the first organization to regulate practice, set educational standards, and establish a code of ethics. These professional societies began examining and licensing practitioners as early as the 1760s. The first general hospital in Philadelphia was established in 1750, and the Medical College of Philadelphia, founded in 1765, was the first medical school in the U.S.. The first American M.D. degree was awarded in 1770.

By the early 1800s, proprietary medical colleges began to spring up, attracting many students because they cut down on general education and long lecture terms. At this time, anyone with an inclination could set up a physician practice; sometimes clergy and tradesmen like barbers were also medical providers. The red and white striped poles outside barber shops, for instance, represented blood and bandages because barbers were often also surgeons, using the same blades for hair and surgery 5. Because there were no restrictions, competition was intense, and many physicians lacked technical expertise.

To address abuses in medical education, the American Medical Association (AMA) was formed on May 5, 1847. Its goals included creating a standard code of ethics and adopting uniform higher educational standards for MDs 6. Early AMA standards required a liberal arts education, an apprenticeship, and three years of study including hospital attendance. The growth was significant: in 1810, there were 650 medical students, but by 1900, that number had jumped to 25,000, though nearly all graduates were white males 7. Notable figures like Daniel Hale Williams, one of the first Black MDs, and Elizabeth Blackwell, the first woman to be granted an MD degree in the U.S., marked early diversity in the profession. The Johns Hopkins University School of Medicine, opened in 1893, became a model for modern medical education, combining university-level research, well-equipped laboratories, and its own hospital for physician training. Sir William Osler, a founder of Johns Hopkins, established the first residency training and brought students to the patient's bedside, moving medical education beyond just textbooks.

A major turning point came with the Flexner Report, published in 1910. This highly critical evaluation of American medical schools led to the closing of many substandard institutions and the creation of strict standards of excellence for medical education, including standardized admissions testing like the MCAT. By 1930, nearly all medical schools required a liberal arts degree for admission and a comprehensive curriculum. Specialization only really began in the mid-20th century, a shift that continues to fuel debates in modern healthcare reform. Today, medicine is regulated at several levels: medical schools adhere to standards, state laws govern physician licensure (requiring the United States Medical Licensing Exam - USMLE), and national organizations establish certification standards, often through the American Board of Medical Specialties for specialists.

Now, let's talk about how care is delivered today. Care usually falls into two main types. Inpatient care happens when you are admitted to a hospital and stay overnight. Today, there are 6,093 hospitals in the United States as of the 2023 AHA Annual Survey. Our emergency departments (EDs) are a big part of our healthcare safety net, required by law (EMTALA, enacted in 1985) to provide medical screening and stabilize anyone with an emergency condition, regardless of their ability to pay. This is vital, but it also means emergency rooms are often used for problems that aren't true emergencies, especially by uninsured or underinsured people, making it a very expensive way to receive basic services.

Outpatient care is any service you get without needing to stay overnight. This includes things like annual exams, lab tests, day surgeries, or physical therapy. It often costs less because there's no overnight stay. For many of us, Primary Care is our first stop, focusing on preventing illness, promoting wellness, and treating common health needs. If you need surgery but don't need to stay overnight, you might go to an Ambulatory Surgical Center (ASC). There's also Urgent Care, for things that need immediate attention but aren't life-threatening emergencies. These centers have been growing really fast, with around 400–500 new urgent care centers opening each year, and an impressive 89.4% of the U.S. population is within a 20-minute drive of one.

Beyond these immediate needs, care can also extend to longer-term situations. Post-Acute Care (PAC) helps people regain functional abilities after an illness or injury, aiming to get them back to normal life. Long-Term Care (LTC) is for people who need help with daily activities over an extended period. Most of this care is actually provided at home by unpaid family and friends, but it can also happen in facilities like nursing homes or assisted living facilities.

For the end of life, there's Palliative Care and Hospice Care. Palliative care focuses on comfort and improving quality of life for those with serious illnesses, even alongside treatments. Hospice care is for people with a terminal illness, usually when doctors believe they have six months or less to live, with the focus shifting entirely to comfort.

Now, let's tackle the money side, because this is where things get really complicated, and where much of the frustration, and the OBBBA bill's impact, truly hits home. In the U.S., having health insurance often means having access to healthcare. We mainly have two types:

Private Health Insurance is the most common kind, mostly through our jobs. It began to take shape in the 19th century with early sickness insurance offered by companies like the Massachusetts Health Insurance Co. of Boston in 1847. The blueprint for modern health insurance was established in 1929 when J.F. Kimball began a hospital insurance plan for schoolteachers at Baylor University Hospital in Texas, which became the model for the non-profit Blue Cross plans 6. These plans initially only covered hospital charges to avoid interfering with private physicians’ incomes, partly to placate the AMA.

A significant shift happened during World War II. With wage freezes imposed by the Stabilization Act of 1942, employers couldn't offer higher salaries to attract and keep workers, so they began offering health insurance as a benefit, laying the foundation for employer-sponsored health insurance as we know it today. During this time, industrialist Henry Kaiser, facing the challenge of providing care for thousands of employees in remote areas, contracted with Dr. Sidney Garfield to provide pre-paid care, which eventually evolved into the Kaiser Permanente Health Plan, a precursor to our modern managed care system of HMOs and PPO.

Today, managed care plans like PPOs and HMOs are dominant, aiming to control costs by encouraging us to use in-network (The hospitals, facilities, physicians, and other health care providers who contract with your health plan to provide care) doctors or hospitals. With these plans, we often pay premiums (monthly fees), a deductible (what we pay ourselves before insurance kicks in), copayments (fixed fees per visit), and coinsurance (a percentage of the bill). These costs are partly designed to address moral hazard where having insurance might make us use more services and adverse selection where sicker people are more likely to buy insurance. Insurers also use tools like prior authorization or utilization review, where they decide if a service is medically necessary (I think this is the reason the CEO of UnitedHealthcare was killed).

Public Health Insurance is funded by the government. The U.S. is the only major country that does not offer a universal healthcare program. Proposals for national health insurance faced repeated opposition, notably from the AMA, which consistently argued such plans would impact the financial security of providers. Bills like the AALL plan in the early 1900s, President Roosevelt's plan in the 1930s, President Truman's plan in the 1940s (which opponents called socialist), and President Kennedy's plan in the 1960s all failed, often due to this powerful opposition.

It wasn't until 1965 that President Lyndon B. Johnson signed the Social Security Act, laying the groundwork for what we now know as Medicare and Medicaid. Medicare is a federal program primarily for almost all Americans aged 65 and older, as well as some younger people with disabilities or specific conditions. It covers hospital stays (Part A), doctor visits and outpatient care (Part B), prescription drugs (Part D), and private Medicare Advantage plans (Part C). Medicare generally pays about 60% of the charges, which can still place a significant financial strain on hospitals and health systems. Medicaid & CHIP are joint federal and state programs for low-income individuals and families. Medicaid covers millions, while CHIP (Children's Health Insurance Program, established in 1997) helps children in families who earn too much for Medicaid but still need affordable coverage. However, Medicaid's reimbursement rates are often low (around 40% of billed charges), leading some providers to be hesitant to accept Medicaid patients, creating access issues.

Beyond these, the government also provides healthcare for specific groups through specialized public systems: the Indian Health Service, the Military Health System, and the Veterans Health Administration.

This brings us back to the OBBBA bill, which made sweeping changes to public health insurance programs. For instance, it now mandates community engagement requirements, also known as work requirements, for many adults in Medicaid expansion states. If you don't meet those 80 hours a month of work or community service, you could lose your Medicaid and become ineligible for Affordable Care Act (ACA) premium tax credits, effectively locking many out of subsidized coverage. This is a huge shift, projected to leave 4.8 million more people uninsured by 2034. These requirements must be implemented by January 1, 2027, at the latest. The bill also requires states to redetermine eligibility for the expansion population every six months, starting January 1, 2027, instead of once a year. It mandates a 10-year moratorium on streamlining enrollment regulations, from July 4, 2025, to September 30, 2034, which is expected to mean fewer individuals will enroll or maintain coverage. The bill also tightens eligibility for certain immigrant groups, starting October 1, 2026, meaning refugees, asylees, and Temporary Protected Status (TPS) recipients would generally no longer be eligible for Medicaid. The period for retroactive Medicaid coverage is also shortened to two months for non-expansion enrollees and one month for expansion enrollees, effective January 1, 2027. States are now required to impose cost-sharing (up to $35 per service) on adults in the expansion population with incomes over 100% of the federal poverty line, starting October 1, 2028, with some exceptions. It also makes it tougher for states to fund their Medicaid programs by eliminating a statutory safe harbor for new provider taxes immediately on July 4, 2025, and phasing down existing ones in expansion states. It also caps state-directed payments to providers.

And for the ACA marketplaces, the OBBBA bill didn't extend the enhanced premium tax credits (EPTCs) that had significantly improved affordability. These are scheduled to expire at the end of 2025. This expiration is expected to lead to significantly higher premiums and an estimated 4.2 million people becoming uninsured. New verification requirements for tax credits, effective for plan years beginning on or after January 1, 2028, will effectively end automatic re-enrollment for subsidized enrollees, requiring them to take actionable steps to verify income and other information each year. This is projected to increase the uninsured population by 700,000 in 2034. The bill also restricts special enrollment periods for low-income individuals from receiving tax credits, effective January 1, 2026. A CMS final rule even prohibits marketplace insurers from covering gender-affirming care as an essential health benefit, effective January 1, 2026. For immigrants, both the OBBBA and the CMS final rule impose significant restrictions on ACA subsidies and eligibility, affecting many lawfully present residents and DACA recipients, with specific classes of immigrants excluded from eligibility for tax credits starting January 1, 2027.

Our U.S. healthcare system constantly struggles with what's called the Triple Aim: simultaneously trying to improve the patient experience, improve the health of populations, and reduce costs. It's a huge balancing act, and honestly, we often fall short.

Access to Care is a major problem for many people. It's about the timely use of personal health services to achieve the best possible health outcomes. Many people face barriers that prevent or limit access, which may increase the risk of poor health outcomes. The biggest barrier is often not having health insurance, but it's also things like not having reliable transportation or what's called health literacy, meaning not fully understanding health information or how to navigate the system. To help with this, a growing number of health navigators (or patient advocates) are working to help people overcome barriers like financial issues, communication problems, system complexity, and psychological hurdles, directly increasing health literacy. The idea of patient navigation started in 1990 with Dr. Harold Freeman in Harlem, aiming to increase access for the poor and uninsured 5. The ACA later established insurance navigators to assist with marketplace enrollment. Unfortunately, the OBBBA bill's changes to Medicaid and ACA subsidies seem poised to increase these access barriers for many.

Quality of Care means healthcare that is safe, effective, patient-centered, timely, efficient, and equitable. Historically, ensuring quality, especially for medicines, was a major challenge. In the early 1800s, medicines were inconsistent, sometimes dangerous, and often unreliable 9. This led physicians like Lyman Spalding to found the United States Pharmacopeia (USP) in 1820, an independent organization focused on creating standards for the quality of medicines. The USP's standards were officially recognized by federal legislation, often tragically, in response to poor quality medicines, such as the Drug Importation Act of 1848, a 1906 law after contaminated diphtheria antitoxin killed children, and the 1938 Food, Drug, and Cosmetic Act after an unsafe elixir sulfanilamide caused over 100 deaths. Today, USP continues to build trust, helping develop generic medicines and tackling global challenges like antimicrobial resistance and supply chain integrity, as more than 80% of medicines or their ingredients come from outside the U.S.. Quality improvement in care delivery is also a big focus, with organizations using methods like "Plan-Do-Study-Act" (PDSA), "Six Sigma" for reducing errors, and "Lean" for eliminating waste 5. Quality is measured by things like accreditation, core measures, and patient safety goals.

Cost of Care is perhaps the most talked about issue. The U.S. spends way more per person on healthcare than any other high-income country, and this has been a consistent trend for decades. In 1960, National Health Expenditures (NHE) accounted for 5% of our GDP. This rose to 6.9% in 1970, 8.9% in 1980, 12.1% in 1990, and 13.3% in 2000 6. By 2017, it was 17.9% of GDP. More recently, in 2023, health spending increased by 7.5% to $4.9 trillion, or $14,570 per person, and it made up 17.6% of our GDP 10. To put this in perspective, in 2020, the U.S. spent $11,945 on health expenditures per person, which is nearly double the average of $5,736 spent by other high-income countries in the OECD. Yet, despite this massive investment, our health outcomes often lag behind. For example, life expectancy in the U.S. was 77 years in 2020, three years lower than the OECD average, and it dropped even further in 2021. This stark contrast shows that simply spending more money isn't always making us healthier. There are many reasons for these high costs: our aging population, expensive medical technology, rising prescription drug costs, and deep-seated social determinants of health [Exploring the U.S. Healthcare System, 49, 53, 65, 191, 197]. The OBBBA's impact on student loans for future medical professionals directly links to the long-term cost of a skilled workforce.

The government gets involved in healthcare for many reasons. Sometimes it's because of market failures, like when individual choices affect everyone else. Or because patients don't have enough information to judge drug or doctor quality. Other times, it's a matter of equity and fairness, believing everyone has a right to healthcare. The government intervenes in various ways: through tax breaks for employer health insurance, regulations like licensing for doctors and hospitals, providing public insurance programs like Medicare and Medicaid, and offering public health information and drug testing.

Historically, public health developed separately from private medical practices, with public health specialists focusing on a collectivistic and preventive approach, while private practitioners focused on individualistic, curative care. Early public health pioneers like Edwin Chadwick, Dr. John Snow, and Lemuel Shattuck, in the 1800s, demonstrated the link between environment and disease, leading to early public health laws and departments 5. Charles Winslow defined public health in 1920 as preventing disease and prolonging life through organized community efforts. Key public health achievements include vaccines (e.g., diphtheria, whooping cough, polio, smallpox eradication by 1980), the discovery of penicillin, and early detection programs for major diseases.

The Affordable Care Act (ACA), signed into law in 2010, was a huge attempt to tackle healthcare access and affordability issues. It mandated that most residents have health insurance, provided subsidies for lower-income families to buy private insurance through marketplaces, and most notably, made it illegal for insurance companies to deny coverage based on pre-existing conditions. Before the ACA, it's estimated that one in seven Americans were denied health insurance because of a pre-existing condition 6. The ACA also allowed young adults to stay on their parents' plans until age 26 and significantly reduced the number of uninsured Americans, with the uninsured rate dropping from 16% to 8.8% between 2010 and 2018.

However, the OBBBA bill now reverses some of these gains. For example, while the ACA encouraged states to expand Medicaid with federal funding, the OBBBA's new requirements, coupled with previous Supreme Court decisions making expansion optional, mean that many of the poorest in non-expansion states are still without coverage. The restrictions on subsidies and new eligibility hurdles mean that the Big Beautiful Bill may lead to a less inclusive, more challenging healthcare landscape for many vulnerable populations. Actions by the Trump administration, such as striking down the individual mandate penalty in 2017 and allowing states to add work requirements to Medicaid, also systematically chipped away at the ACA's reach. Efforts to increase price transparency by forcing hospitals and insurers to disclose negotiated rates, and attempts to lower prescription drug prices through legislative or executive action, have also faced significant hurdles.

Looking ahead, technology is also changing everything. We have Electronic Health Records (EHRs) that store our medical history and help doctors make decisions. Telemedicine and telehealth became lifelines during the pandemic, allowing virtual visits and remote monitoring. These services were used for 6% of healthcare visits in 2023, up from 0.2% in 2019, though their use in rural areas has declined since the pandemic. Policy still needs to catch up to ensure their widespread, equitable use, as existing licensing and reimbursement barriers may limit their full potential. Then there's the exciting, and sometimes scary, world of Artificial Intelligence (AI) and Machine Learning (ML), which can analyze vast amounts of patient data to help diagnose diseases or predict medical events. The "Internet of Medical Things" (IoMT) with wearable devices tracks our health. But all this technology brings big concerns about cybersecurity and data privacy, with laws like HIPAA (Health Insurance Portability and Accountability Act) of 1996 and the HITECH Act of 2009 trying to protect our sensitive health information.

The killing of Brian Thompson, though an act of individual violence, serves as a chilling, visceral manifestation of extreme frustration tied to the healthcare system. Simultaneously, the One Big Beautiful Bill Act offers a stark, systemic demonstration of how policy decisions, enacted through legislative processes, can profoundly reshape the lives and health trajectories of millions. These two events, one a shocking individual tragedy and the other a sweeping legislative act, vividly illustrate the immense complexity, sensitivity, and critical importance of U.S. healthcare policy. They underscore that decisions made in boardrooms and legislative chambers directly translate into Delivery and Outcomes for countless individuals. This foundational understanding is essential for anyone seeking to engage with, or understand, the challenges and future of American healthcare.