Skip to main content

Two-Tiered U.S. Healthcare System Looming

 |  By Philip Betbeze  
   October 21, 2011

I've been hosting more than my fair share of "roundtable" style discussions among healthcare leaders lately. I like doing it. The discussions in these groups are meant for dissemination. The participants know this, yet are often remarkably candid about the challenges they face as healthcare gets turned upside down in the general upheaval we call healthcare reform.

Though these leaders are generally frustrated with the details, it's interesting that none would argue that upheaval isn't necessary. For many, it's the way change is happening that represents the problem. And it's an access problem.

In quiet moments during breaks at the roundtable events, and sometimes during the discussions, executives will cautiously bring up a controversial opinion. Usually they'll make a remark in passing, poking me to follow up on the trend or theory. Sometimes I do; sometimes I don't.

Lately, I've been hearing whispered opinions that basically go like this: Enactment of the Patient Protection and Affordable Care Act started a metaphorical snowball rolling downhill toward a two-tiered health system. 

Essentially, the argument goes, increased access to healthcare that comes along with PPACA, coupled with the government's miserable payer record (in terms of cost of care, not promptness), practically guarantees a healthcare system in which the publicly subsidized insurance theoretically covers all, but to such a pitiful degree that a massive industry in the secondary healthcare market is enabled. Perhaps not even the politicians who crafted it could have seen coming.

Perhaps you're familiar with a two-tiered healthcare system. It's what they have in England, to name just one example. Under this model, the government provides a basic level of medically necessary healthcare, for which timeliness, and, some say, quality, are not guaranteed.

But back to whether two tiers are in our country's future. I don't know if I completely agree with the assessments I've been hearing from leadership. I have to admit, however, that given what we know about healthcare reform, and about disturbing trends among independent physicians, it looks like we're headed that way, unless there is a change in direction.

The penalty for not obtaining health insurance is currently insignificant and Medicare, at around 90% of costs, and Medicaid, at much less than that, are poor payers. The information I'm relying here is all anecdotal, but in Texas, many independent physicians have already closed their rolls to new Medicare patients, to say nothing of Medicaid. This is happening in other states as well.

Because just about everyone over 65 is on Medicare, and hospitals need that business, they're not likely to be in the vanguard of the new two-tiered health system, but smaller organizations will. How will you know it's happening? You'll know when more and more complex organizations, from physician practices to outpatient centers, begin to refuse to deal with government payers entirely.

On the balance, worse doctors, and poorer quality institutions, will want that business. That's not necessarily a bad thing for society. After all, the previously uninsured will have access to care that they theoretically didn't before (outside of the emergency room).

Admittedly, moving to a two-tiered health system such as we see in the U.K., Canada, and parts of Europe would take time. There will be plenty of opportunities for course correction along the way to avoid it. But given what we know now, a two-tiered healthcare system may be coming.

Some could argue that we have a two-tiered healthcare system right now, and I couldn't argue about that conclusion. We have to decide as a society whether a two-tiered system would be better than what we have now, or if it would be worse.

Philip Betbeze is the senior leadership editor at HealthLeaders.

Tagged Under:


Get the latest on healthcare leadership in your inbox.