The US Healthcare System: Hierarchization With and Without the State

Abstract

Historically, market competition has been the dominant co-ordinating mechanism in the healthcare system of the United States, which also emphasizes the relevance of private actors in financing, service provision, and the regulation of healthcare. Since the introduction of the public Medicare and Medicaid programmes in 1965, major changes have occurred and the state has become an important actor — but in an increasingly fragmented environment (for example Hacker 2002; Oberlander 2002). The growing role of the state primarily manifests itself in the financing of these public programmes but, in assuming responsibility for the appropriation of public monies, also in the hierarchical regulation of those programmes. This is most surprising as the conventional wisdom about the de-regulatory American state in general, and the ‘private nature’ (Docteur et al. 2003: 5) of the healthcare system in particular, teaches us the contrary. It is true that public expenditure as a percentage of total spending was only about 45 per cent in 2006 and therefore relatively low compared to the OECD average (OECD 2009, cf. also Chapter 3). When measured as a percentage of GDP, however, the level of public spending in the US, at 7.1 per cent, is close to the OECD average. These figures do not even include the considerable level of tax exemptions through which the federal government subsidizes private employment-based health insurance.