National spending on health care rose 6.9 percent in 2000 to $1.3 trillion, propelled by increased hospital and drug costs. Health care now accounts for one-sixth of the U.S. gross national product, and growth in health expenditures has surpassed the 6.5 percent growth of the economy as a whole. A Pricewaterhouse Coopers study, 1 commissioned by the American Association of Health Plans, examined the factors behind new health care spending in 2001-2002 and identified a number of them that are driving costs. The cost-driving factors appear to be provider expenses, a dramatic escalation of litigation and malpractice costs, increased consumer demand, and government benefit mandates. Private employers find it difficult to pay for health insurance for their workers since health insurance premiums increased 8.4 percent in 2000 to $444 billion. Fewer employers are offering health insurance, while the unemployed are left at best with limited coverage at a much higher cost. Although these astronomic expenditures do not directly impact most individuals, consumers are increasingly aware that they must now spend more of their own money on medical services. Moreover, an increasing number of physicians and clinics are refusing to accept Medicare assignment, which leads to higher costs for beneficiaries.
Some 40 million Americans have no health insurance. The Public Citizen Health Research Group considers that “the absence of universal access in the U.S. is a global scandal. No other industrialized country has so many citizens totally without access to even the most rudimentary health care.” 2 Many advocates consider managed care reform to be of lesser importance than working toward the achievement of coverage to the uninsured. With a weakened economy, it is now estimated that the number of uninsured could grow to 52 million by 2009. The reasons for the lack of insurance can be attributed to a number of factors: a decline in employment-based coverage, an escalation of the cost of health insurance, an increase in service sector jobs that typically do not offer insurance, a growing number of part-time workers who have limited access to insurance coverage, a growth in the number of minority groups and immigrants who are less likely to hold jobs that provide coverage, welfare reform that has reduced the number of Americans who have Medicaid, and the scaling back by employers of retiree health care benefits. An Institute of Medicine Report, Care without Coverage: Too Little, Too Late, offers evidence that Americans who do not have health insurance are at risk for poorer health as a result of their lack of coverage, particularly in relation to prevention and screening, cancer, and chronic conditions such as diabetes, cardiovascular disease, HIV infection, and mental illness. 3
Tension is widespread in the U.S. health care sys-