An Overview of the Healthcare Delivery System

Healthcare reform. The idea of healthcare reform feels daunting to me. President Obama’s health insurance reform includes the following goals as listed at The White House:

• Require insurance companies to cover pre-existing conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums.
• Create a new Small Business Health Tax Credit to help small businesses provide affordable health insurance to their employees.
• Lower costs for businesses by covering a portion of the catastrophic health costs they pay in return for lower premiums for employees.
• Prevent insurers from overcharging doctors for their malpractice insurance and invest in proven strategies to reduce preventable medical errors.
• Make employer contributions more fair by requiring large employers that do not offer coverage or make a meaningful contribution to the cost of quality health coverage for their employees to contribute a percentage of payroll toward the costs of their employees’ health care
• Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage.
• Ensure everyone who needs it will receive a tax credit for their premiums.

Not only does President Obama want to change health insurance, but he also hopes to reduce costs for consumers and business by:

• Lowering drug costs by allowing the importation of safe medicines from other developed countries, increasing the use of generic drugs in public programs, and taking on drug companies that block cheaper generic medicines from the market.
• Requiring hospitals to collect and report health care cost and quality data.
• Reducing the costs of catastrophic illnesses for employers and their employees.
• Reforming the insurance market to increase competition by taking on anticompetitive activity that drives up prices without improving quality of care.

I can’t imagine the average person understanding all the stakeholders that will battle it out as the President and Congress goes through its federal budget process to reform healthcare because the healthcare industry is complex. The delivery system has five major components—financial resources; nonfinancial resources; state and local governments; and consumers/patients. The image below is a general overview of the healthcare delivery system. As you listen to the news, refer to this diagram so you can have a broader context of which part of the delivery system the media and government officials are discussing.

The Healthcare Delivery System’s Components