What Is Health Care?

For over two decades high and escalating health care costs have been a major concern of the American public. Inexorably rising costs threaten the solvency of federal and state governments, the competitiveness of U.S. industry, and the health and financial security of tens of millions of Americans. Concern about the rise in costs has been matched by efforts to control these costs, but a variety of strategies have been employed without much success.

Health care consists of all services and devices for improving and maintaining human health. It includes primary health care, which is delivered by physicians, dentists, and nurses; secondary care, which is provided in hospital settings by allied health professionals such as physiotherapists and occupational therapists; and tertiary care, which is provided in outpatient settings by laboratory technicians, pharmacists, and physicians’ assistants. In addition, it includes health insurance, which covers medically necessary care. It also encompasses interventions by government agencies, such as food safety surveillance and distribution of condoms for the prevention of transmissible diseases, and by voluntary private organizations, such as needle-exchange programs and drug-testing clinics.

People differ on how to answer the question of what health care should be: Some think that it should be viewed like any other consumer product or service, and should be purchased based on individual choice and ability to pay; others believe that healthcare is a right that the government has an obligation to provide. Still others think that it is a social good, and should be distributed more fairly than through the market mechanism.

In general, those with libertarian sympathies think that the government should stay out of healthcare and let the marketplace operate in a free-market fashion. These individuals have a particular view of what the purpose of healthcare should be, and believe that people should be able to choose their doctors and purchase insurance coverage in the way they wish.

Those who hold business interests in health care have been responsible to some degree for the escalation of costs. Employers and their employee-benefits providers have reacted to the continued rise in health care costs by taking steps to limit the growth of these expenses, including introducing cost sharing arrangements, increasing the deductibles on their plans, or changing their benefit offerings to emphasize more preventive health measures.

The structural problems of the financing and delivery of healthcare are complicated and involve many players. However, all of the players have a role to play in solving the problem and mitigating its effects.

Ultimately the solution to this dilemma will rest in a combination of strategies. Some of these are aimed at rebalancing the roles of those who buy and deliver healthcare, especially employers and their employees-employers buying health care and health insurance on behalf of their workers; doctors and other healthcare providers delivering healthcare services to their patients; and those purchasing and managing the delivery of healthcare, including pharmaceutical companies and the firms that manage the purchase of healthcare services through group purchasing organizations, pharmacy benefit managers, and insurance companies.

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