Two-Tiered U.S. Healthcare System Looming

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. We have to decide as a society whether that model would be better than what we have now, or if it would be worse.

7 comments on "Two-Tiered U.S. Healthcare System Looming"
Anna Cox (10/25/2011 at 3:25 PM)

"...worse doctors, and poorer quality institutions..." What a biased and poorly informed statement. I've spent most of my career as a NP working in community outpatient clinics, providing care to those without insurance, or with public health insurance. No, this is not a recipe for getting wealthy, but to suggest that the providers who work to care for these patients are incompetent and offer poor quality care, is beyond the pale. You owe the hard-working men and women of community care a big apology.
Phyllis Kritek (10/25/2011 at 12:05 PM)

I am one of the persons arguing that we have a two-tiered system now, perhaps even more than two tiers. There are hundreds of studies that document that fact, particularly those that address inequity in health care services for the indigent and for some minority populations. It is disingenuous to posit otherwise. And equally disingenuous to posit that the PPACA is going to suddenly introduce inequity in care. Health care in the US has for some time now been better for you as a patient if you are wealthy and meet an array of other less overt criteria. PPACA may simply make that fact more transparent.
Tyco Brahe (10/24/2011 at 1:47 PM)

Of course we already have a two-tiered system: Those who have insurance and those who don't. The free market will never give us an answer as economists all agree that healthcare does not follow free market principles[INVALID]everyone will have to use healthcare sometime. There is no choice. Even Adam Smith, the father of the free market, believed that healthcare may be better served by the government. America will have to do what the rest of the developed world has already done: Universal healthcare, most effectively with a Medicare-for-all single payer system. Any other system just delays the inevitable.
bob (10/21/2011 at 3:29 PM)

We've always had a two tiered system in the United States. . When I originally became involved in hospital management, there was no government payment for care of individual patients in most states. For patients who could not find a physician to provide charity care at their offices [not uncommon then and now], the hospitals and other organization provided charity clinics, usually with little or no billing, with physician services provided by physicians without any "reimbursement". Physicians provided charity care because of related hospital privileges, including the opportunity to learn to become a recognized specialist, to admit and serve their private patients for free etc. With the disappearance of most hospital-based charity clinics after Medicaid, your belief that "The penalty for not obtaining health insurance is currently insignificant" is out of touch with the reality I know about. It is probably true that the quality of primary care and other government supported free clinics today is at least as high as in most private physician offices, but there aren't nearly enough of them, and most do not provide a full range of specialty services. You must know that many patients without health insurance have major, life threatening problems when they eventually appear at hospital ERs. Also, the notion that England, Canada and other countries with government payment for relatively comprehensive care of the entire population has a two tiered system because of inadequate payment rates is very misleading. Everyone is in the British government system that has very little patient payment at all, but anyone in that system is free to also carry insurance or have large bank accounts that enables them to use resources outside the system whenever they like, very much like well-to-do patients in the U.S. who pay something extra for private room service in hospitals. In fact, in England, much of the inpatient care for those who prefer a private relationship with their physician is provided in government hospitals by specialist physicians who are almost all on the government payroll for most of their income.
Steven Watkins (10/21/2011 at 1:42 PM)

Of course, PPACA will lead to a two-tiered delivery system. This is EXACTLY the intent of our liberal congress. Why do you suppose PPACA drops billions of our tax dollars into the FQ Health Centers? This is the safety net for the exploding Medicaid population. American hospitals cannot increase their payor mix from 65% Medicare & Medicaid to 85% M&M. These are payers which reimburse hospitals 80% of their actualy cost of delivering care. Do the math! There is no place left to shift their costs. Employers are fed up....and will begin contracting with health plans offering a lower cost tiered network.
Michael Samms (10/21/2011 at 1:09 PM)

Philip, You touch on the fact that we already have a two-tier system. Commercial insurance vs. Medicare/Medicaid. It boils down to physician reimbursment. I've been beating the drum regarding how health care breaks the rules of supply and demand. Instead of addressing new policy, we need to address the fundamentals. Addressing the fundamentals isn't sexy or fun. It's hard work which is why most don't recognize the need for simplicity. Only the true intellectual will recognize the need. In her book Overtreated Shannon Brownlee states, "...the supply of medical resources, rather than the underlying needs of patients, is determining how much medical care they get. Or to put it another way, supply is inducing demand." She also writes, "...medicine does not function like other economic markets. If doctors found they weren't getting enough business, they didn't have to slash their fees in order to attract new patients; they could simply give more medical care to patients they already had." Evidence is compelling that increased supply correlates with increased healthcare costs in aggregate over time. If two patients per day need a diagnostic procedure, but the equipment's capacity is 12 patients per day, it is highly predictable that 12 patients per day will receive the diagnostic procedure because of the artificial demand creation phenomenon. Payers need a lever to mitigate the uncontrolled expansion of the supply of services, without denying services to patients. The approach must avoid interfering with the respected provider-patient relationship while still arresting the growth of artificial demand. A solution is offered via procedure scoring which can alter reimbursement based upon geographically specific saturation of available/provided services. The process is fully explained at This scoring model will create savings of almost $100 billion annually without denying any needed patient service. Share: Email
Charles Bruno (10/21/2011 at 1:07 PM)

We have not a two-tier system, but a three-tier system made up of rapidly devolving publically funded programs, i.e., Medicaid/Medicare, a third-party insurer system for those lucky enough to be employed, and a "boutique" system for those truly fortunate to bypass the regulators and failed managed care focused delivery systems. With an aging population, continued global and national economic decline and demand for advanced medical technologies, it is only a matter of time before the whole house of cards collapses. I say all this having worked over 20 years for both payer and provider organizations in the Southern California managed care market, as well as having taught healthcare economics at the graduate level. God help us all.


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