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What Works and What Doesn’t Work Well in the US Healthcare System


Most observers agree that the US healthcare system is expensive, provides variable quality and leaves many without coverage. The policy challenge is that there is little consensus on how to approach reform. Many proposals assume that systems appearing to work in one nation can be transferred in toto to another or, alternatively, that only minor tweaking of an existing system is possible. The former approach ignores fundamental social, political and legal realities, and the latter ignores the potential for increased benefits. Additionally, many proposals are ideologically driven, focusing on how to finance expanded coverage. Broadening the discussion to examine other components of the system that do not work well may identify sufficient benefits for various stakeholders to engage them in finding more comprehensive solutions that address a range of problems.

This paper examines areas in which the US healthcare system performs worse than one would like and areas in which it appears to work well. In the first category is the high proportion of people without coverage, the inefficient and inequitable incentives for the purchase and provision of insurance, the problems in deciding what should be covered, the ineffective payment incentives, administrative costs and complexities, the variable quality and lack of responsiveness to patient preferences, the less than optimal safety, under-valued primary care, provider de-professionalisation, and the costs that appear to be on auto-pilot. In the second category is the rapid and wide-reaching technological innovation, the ready access to care for the insured, and clinical and patient autonomy. Among the things taken as given is our constitutional (rather than parliamentary) political system and underlying public values about the roles of individuals and government. Current players will be active in any debate about reform, so their interests must be addressed. Likewise, certain underlying economic and social drivers of behaviour will continue and should be considered in any reform proposal. Potentially changeable, however, are the roles and functions that the current players may take on in a new system. Likewise, health system-specific legislation should be as malleable as are financing approaches.

A more expansive view of the health system’s problems makes potential solutions more complex. By addressing problems faced by people currently with coverage and by providers and other stakeholders within the system, however, the benefits may be sufficiently widespread to create the political consensus that has so far eluded reformers in the US.

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Correspondence to Harold S. Luft.

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Luft, H.S. What Works and What Doesn’t Work Well in the US Healthcare System. PharmacoEconomics 24, 15–28 (2006).

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  • Healthcare System
  • Health Insurance Coverage
  • Reconfigured System
  • Employer Contribution
  • Medicare Spending