Beneath the Brink: A Critical Look at the American Healthcare System

Many consider the American healthcare system to be the best in the world thanks to its fast-paced research, evidence-based strategies, novel therapies, and advancements in pharmaceutics and technology. Yet we also have a life expectancy that, for the first time in recorded history, has trended downwards since the COVID-19 pandemic, maternal mortality rates that are dismal compared to many other developed countries, and many surveys rank the U.S. healthcare as far inferior to many developed countries. Most worrisome, however, is how our healthcare system is funded and the downstream effects that this has on the delivery of healthcare on the front line.

Part of the problem is how we fund healthcare. Though Medicare and Medicaid only cover those over the age of 65 (Medicare) or those who live below a certain income level (Medicaid), over 150 million Americans are covered by them. The Affordable Care Act (ACA) covers an additional 20 million people, and CHIP covers almost 10 million children.

The money spent on these services comes from taxpayers, like you or I, and has always gone to the private sector – we use it to pay private health insurances or healthcare systems, and many of which have fiduciary responsibilities towards their stockholders. Let that sink in: we are indirectly funneling taxpayer money to pay dividends to the stockholders of these companies.

"In its current format, unless something gives, our healthcare system is headed toward the edge of a precipice."

In 2023, almost half of our $6.3 trillion federal budget went to pay for Social Security and Health insurance (Medicare, Medicaid, CHIP, ACA). This massive amount of healthcare spending is expected to continue to grow every passing year as the baby boomers continue to age and are being joined by Gen X. In 2020, 17 percent of Americans who are aged 65 or older accounted for 37 percent of all personal healthcare spending. Since our lifespan has been increasing overall - good news for all of us - it also means that our healthcare costs will continue to skyrocket.

At the same time, we are still feeling the lingering effects that the COVID-19 pandemic has on healthcare workers. Many in healthcare decided to leave medicine after experiencing extreme burn-out, and many Gen Z’s who experience healthcare become disillusioned with it, have many other better alternatives to make money, and would prefer not to have to sacrifice anything for their job. 

Sacrifice - from not being at home with our families on nights, weekends and holidays; from staying late to take care of our sick patients, from having to work additional shifts because we are short on staff – is something that we in our industry used to take pride on yet is not something that the next (smarter?) generation is willing to undergo.

The combination of fewer healthcare workers and fewer entering the field means labor costs also climb. In the meantime, hospitals are faced with supplies that are rising in cost due to inflation, as well as diminishing reimbursements from both government and private healthcare payors. The agglomeration of rising healthcare costs, labor costs, supply costs and diminishing reimbursement is why hospital profit margins are going down the drain. This has led to the acceleration of hospital closures in the last decade. Hospitals, however, are not the only healthcare providers that are affected: these same problems affect outpatient offices, and our current ability to access healthcare is worse now than it was pre-COVID-19.

Now, more people show up in the ER, being far sicker than they would have been had they had better access to healthcare. Combine a sicker patient who has fewer options of where to go, and the effect is unprecedented hospital volumes. Over the past several years, we have, at times, experienced impossible volumes, with far sicker patients and nowhere to place them. All while facing severe staffing and supply shortages, which means we must do much more with far less. Because those who entered this industry did so with the conviction that they wanted to help others, the need for sacrifice is now more necessary than ever, and this continues to drive others out of the field, compounding the problem.

In the meantime, the federal and state governments continue to attempt to enact laws that would hurt hospital and healthcare worker compensation. In Delaware, House Bill 350 has been presented, which would allow a Review Board to determine the annual hospital budget, potentially slashing hundreds of millions that are currently used to keep hospitals open.

In its current format, unless something gives, our healthcare system is headed toward the edge of a precipice.