United States healthcare system : A Comprehensive Analysis

Introduction: The Duality of U.S. Healthcare

The United States healthcare system stands as a monumental paradox in the landscape of global health. It is, by a significant margin, the most expensive system in the world, a global engine of biomedical innovation, and home to some of the most advanced medical facilities and highly trained specialists.¹ Patients with access to its premier services can receive world-class, life-saving care. Yet, this portrait of excellence is starkly contrasted by a reality of profound dysfunction. When measured against its high-income peers, the U.S. system consistently underperforms on critical metrics of access, equity, administrative efficiency, and, most alarmingly, overall population health outcomes.³

This duality is not a recent development but a deeply entrenched feature of the system’s unique architecture. Unlike every other developed nation, the U.S. does not guarantee universal health coverage for its citizens, leaving a significant portion of its population uninsured or underinsured.⁴ Its structure is a complex and often bewildering hybrid of public and private entities, for-profit and nonprofit providers, and a patchwork of financing streams that includes employers, federal and state governments, and direct household spending.⁶ This fragmentation creates a system of extremes: one that produces groundbreaking medical technologies while simultaneously allowing millions to suffer and die from preventable conditions; one that champions patient choice while erecting byzantine administrative and financial barriers to care; and one that spends more than any other nation only to achieve some of the worst health outcomes among its peers.

The raw data paints a clear picture of this contradiction. In 2023, U.S. health spending reached an unprecedented $4.9 trillion, equivalent to $14,570 per capita and constituting 17.6% of the nation’s Gross Domestic Product (GDP).² This level of expenditure is nearly double the average of comparable high-income countries.⁴ Despite this immense investment, life expectancy in the U.S. lags years behind its peers, and the nation suffers from the highest rates of maternal mortality, infant mortality, and avoidable deaths—fatalities that could have been prevented with timely and effective healthcare or public health interventions.³ As of the first quarter of 2024, an estimated 27.1 million people, or 8.2% of the population, remained uninsured, a reality unheard of in other wealthy nations.⁸

This report seeks to deconstruct this paradox. It will provide a comprehensive, evidence-based analysis of the U.S. healthcare system’s strengths and weaknesses, moving beyond a simple list of pros and cons to explore the deep, causal relationships between them. The system’s greatest triumphs are often inextricably linked to its most profound failures. Its capacity for innovation is fueled by the same market dynamics that make it prohibitively expensive. Its emphasis on choice contributes to the fragmentation that leaves millions behind. By examining the system’s architecture, performance, and the core tensions that define it, this analysis will illuminate why the world’s wealthiest nation has the most expensive and yet one of the most inequitable and underperforming healthcare systems in the developed world.

Metric	United States	Comparable Country Average	Source(s)
Health Spending as % of GDP (2021)	17.8%	11.5% (OECD Avg)	4
Health Spending per Capita (2023)	$14,570	~$6,000 (OECD Avg, 2021 data)	2
Life Expectancy at Birth (2022)	77.5 years	82.2 years	3
Avoidable Mortality Rate (Deaths per 100,000, 2020)	336	158 (OECD Avg)	4
Uninsured Rate (2021)	8.6%	0.2% (Effectively 0%)	4
Practicing Physicians (per 1,000 population, 2021)	2.6	3.7 (OECD Avg)	4

Section 1: The Pros and Cons of a Hybrid Architecture

The Pro – Pluralism, Competition, and Choice

The defining characteristic of the U.S. healthcare system is its pluralistic, hybrid structure, a mix of public and private payers and providers that stands in contrast to the more centralized systems of other developed nations.⁵ The primary source of coverage for most Americans under 65 is private insurance provided through an employer, covering over 150 million people.⁵ This is supplemented by a vast public infrastructure that includes Medicare for the elderly and disabled (covering over 66.7 million), Medicaid for low-income individuals (covering over 84.8 million), the Children’s Health Insurance Program (CHIP), and specialized systems for veterans and military personnel.⁶ The Affordable Care Act (ACA) added another layer with government-regulated marketplaces for individual insurance, covering around 17 million people.⁵

For those with comprehensive coverage, this pluralism can offer a significant degree of choice and flexibility. Unlike single-payer systems where the government is the dominant insurer, the American model creates a marketplace of diverse insurance products. Patients can often choose between different types of plans, such as Health Maintenance Organizations (HMOs) with lower premiums but restricted networks, and Preferred Provider Organizations (PPOs) that offer greater freedom to see out-of-network providers at a higher cost. This optionality extends to public programs as well; since 1973, Medicare beneficiaries have had the choice between traditional fee-for-service Medicare, which offers broad access to any provider accepting Medicare, and private Medicare Advantage plans, which often provide additional benefits within a managed care framework.⁶

This structure is rooted in a philosophy that values competition and consumer choice. The theory is that competition among insurers and providers should drive efficiency and improve quality. For patients with robust PPO plans, this can translate into the ability to self-refer to specialists and choose from a wide array of hospitals and clinics, embodying a core American value of patient autonomy.¹³

The Con – Fragmentation, Coverage Gaps, and Inequity

The downside of this pluralistic model is severe fragmentation, which is the direct cause of the system’s most persistent and damaging failures: coverage gaps, administrative complexity, and profound inequity. The United States remains the only developed nation that does not provide universal health coverage, a direct consequence of its fragmented, employment-based system.⁴ In 2023, 25.3 million people under the age of 65 were uninsured.¹⁵

The link between employment and insurance is a critical vulnerability. In a system where most non-elderly people get coverage through a job, losing that job often means losing health insurance, a perilous situation that was starkly highlighted during the mass layoffs of the COVID-19 pandemic.⁵ This creates a system where access to healthcare is not a right of citizenship but is often contingent on one’s employment status.

Furthermore, the “choice” offered by the system is often an illusion, heavily constrained by income, geography, and the very structure of the insurance plans. Access to public programs like Medicaid is not uniform; it is administered by states, which set their own eligibility rules within federal guidelines.⁶ The ACA’s Medicaid expansion was made optional for states by a Supreme Court ruling, creating a tragic “coverage gap” in the 10 states that have not expanded the program. In these states, millions of adults earn too much to qualify for traditional Medicaid but too little to be eligible for subsidized ACA marketplace plans, leaving them with no affordable coverage options.¹⁵

This fragmentation breeds deep and persistent inequities. The system effectively segments the population by risk, with healthier, higher-income, and stably employed individuals concentrated in private insurance pools, while sicker, poorer, and elderly populations are concentrated in public programs. This structure disproportionately harms communities of color. In 2023, the uninsured rates for Hispanic (17.9%) and American Indian/Alaska Native (18.7%) populations were nearly three times the rate for White populations (6.5%).¹⁰ The system’s vaunted “choice” is, for many, no choice at all. It is a structure that offers flexibility to the privileged while systematically excluding the vulnerable, reflecting a foundational philosophy that treats healthcare as a market commodity rather than a social good. The pro of choice for some is achieved at the direct expense of the con of uninsurance for many.

Section 2: The Pros and Cons of an Innovation-Driven System

The Pro – A Global Engine of Medical Discovery

The U.S. healthcare system is the undisputed world leader in biomedical research and development. It fosters a vibrant and competitive ecosystem of academic medical centers, pharmaceutical companies, and biotechnology firms that consistently produces a stream of cutting-edge drugs, medical devices, and novel therapeutic approaches.¹ According to the 2024 World Index of Healthcare Innovation, the United States ranks first in the Science & Technology dimension, leading the world in Nobel prizes in chemistry and medicine per capita and ranking second in R&D expenditures per capita.¹⁷

This leadership was on full display during the COVID-19 pandemic, as the U.S. government’s Operation Warp Speed collaborated with private firms like Moderna and Pfizer to develop and distribute highly effective mRNA vaccines in record time.¹ This capacity for rapid innovation extends across the medical field. The U.S. leads the world in new drug and medical device approvals, giving American patients access to the latest treatments, often years before they become available in other countries.¹ The biotechnology sector is particularly dynamic, with firms like Amgen and Genentech pioneering breakthroughs, while medical device manufacturers such as Johnson & Johnson and Medtronic set global standards.¹⁷

This innovation is not limited to products; it extends to procedures and the very structure of medicine. The U.S. is at the forefront of the emerging field of personalized medicine, which uses a patient’s unique genetic profile to tailor treatments and predict disease risk.¹ Recent years have seen remarkable breakthroughs originating from U.S. institutions, including the development of brain-computer interfaces that allow paralyzed individuals to communicate, the world’s first successful total-eye transplant, and new gene-editing therapies with the potential to cure inherited diseases.¹⁹ This environment also supports a highly specialized physician workforce trained in the latest techniques, which contributes to superior outcomes in specific, high-tech areas of care, such as a 32% reduction in cancer mortality risk since 1991.¹

The Con – Innovation at an Unsustainable Price

This powerful engine of innovation is fueled by a system that permits exceptionally high prices, which are a primary driver of the nation’s exorbitant overall healthcare costs. The financial rewards for successful innovation in the U.S. market are immense, creating powerful incentives to price new drugs, devices, and procedures at whatever the market will bear. This is a direct result of the system’s structure, which, unlike those in other developed countries, lacks centralized price negotiation mechanisms and government price controls.²¹

While the pharmaceutical industry consistently argues that high prices are necessary to fund the high cost of research and development, this claim is heavily contested.²³ A significant portion of foundational biomedical research is publicly funded through taxpayer-supported grants from the National Institutes of Health (NIH); one study found that NIH funding contributed to the development of every single one of the 356 drugs approved from 2010 to 2019.²³ Furthermore, analyses have shown that major pharmaceutical companies often spend more on stock buybacks, dividends, and marketing than they do on R&D.²³

The high prices are not limited to drugs. The cost of advanced technologies, such as MRI and CT scans, is far higher in the U.S. than elsewhere, even when accounting for utilization rates.⁴ An MRI scan in the U.S. costs an average of $1,119, significantly more than in other high-income countries. This high-cost innovation directly fuels the nation’s affordability crisis. Nearly one in four American adults reports difficulty affording their prescription drugs, and many resort to skipping doses or not filling prescriptions altogether due to cost.²⁶

The system’s approach to innovation has created a perilous feedback loop. The potential for enormous profits drives investment, which leads to valuable new products. These products are then launched at extremely high prices, justified by the need to fund future innovation. This has created a powerful economic and political lobby that fiercely resists any form of price regulation, making meaningful cost control incredibly difficult to achieve.²⁴ The system has, in effect, become dependent on the very high prices that make it unsustainable for patients and the nation as a whole.

Section 3: The Pros and Cons of Patient Choice and Specialization

The Pro – Autonomy and Direct Access to Specialists

A core philosophical underpinning of the U.S. healthcare system is the value placed on patient autonomy and choice. This ideal is often expressed as the freedom for patients to choose their own doctors, hospitals, and treatment plans.¹³ For individuals with less restrictive insurance, such as PPO plans, this can mean the ability to see a specialist directly without needing a referral from a primary care “gatekeeper,” a common requirement in many other countries’ health systems. The U.S. boasts a vast and highly subspecialized network of physicians, and for insured patients with the means to access them, wait times for specialist appointments can be relatively low.¹

The ethical framework of “shared decision-making” is held up as the gold standard of care, a process wherein the patient is treated as a fully informed partner, knowledgeable about the risks and benefits of all treatment options, and able to make a choice that aligns with their personal values.¹⁴ This emphasis on patient empowerment is reflected in legislation like the proposed Patient Choice and Quality Care Act, which aims to ensure that patients’ care decisions are honored.¹³

Furthermore, the system is adapting to expand the reach of specialized care. The rapid growth of telehealth, which saw the number of American users grow from 300,000 in 2010 to over 27.6 million in 2022, is breaking down geographic barriers, allowing patients in remote or underserved areas to consult with specialists located elsewhere.¹ This is complemented by the use of mobile clinics, which bring primary care, screenings, and dental services directly into communities, conducting over 6.5 million visits annually.¹

The Con – The Illusion of Choice and Barriers to Access

In practice, the ideal of patient choice often collides with a harsh reality of constraints and barriers. For a large portion of the population, the “choice” of provider is severely limited by the restrictive networks of their insurance plans. Venturing “out-of-network” can lead to exorbitant bills and financial ruin. The complexity of the system is itself a barrier; a Kaiser Family Foundation survey found that many consumers struggle to understand even basic insurance terms like “premium,” “deductible,” and “provider network,” making an informed choice nearly impossible.²⁷

Even when a patient has a referral and selects an in-network specialist, access is not guaranteed. A 2021 survey found that approximately one-third of the U.S. population experienced a problem accessing a specialist for themselves or their families.²⁸ The most common barriers were difficulty getting an appointment, long wait times, and the high cost of care.²⁸ These barriers are not distributed equally, with significant disparities in access based on geographic region, income, and race.²⁸

Perhaps the most significant constraint on patient choice is the practice of prior authorization. This process requires physicians to obtain approval from an insurance company before a prescribed treatment, test, or procedure can be delivered. Insurers frequently delay or deny these requests, effectively overriding the clinical judgment of a physician and the preference of a patient.³⁰ Patient advocacy groups like Patients Rising are actively engaged in fighting what they describe as insurance companies dictating care, a practice that can lead to delayed treatment and adverse health outcomes.³² This creates a profound disconnect between the system’s stated philosophy of choice and the lived experience of patients and physicians, who often find their decisions overruled by a third-party payer focused on cost containment. The administrative labyrinth of the system actively undermines the very autonomy it claims to champion.

Section 4: The Pros and Cons of Quality and Outcomes

The Pro – Excellence in Acute and High-Tech Care

While the U.S. healthcare system’s overall performance is poor, it demonstrates pockets of remarkable excellence, particularly in the delivery of resource-intensive, high-technology care for acute conditions. When a patient needs complex, immediate intervention, the system can perform exceptionally well.

Data shows that the U.S. has better outcomes than many peer nations on measures of 30-day mortality for acute events like heart attacks (myocardial infarction) and ischemic strokes.³ This suggests that the quality of emergency response and hospital-based surgical and critical care is very high. Once a patient is inside a well-equipped hospital for a life-threatening event, their chances of survival in the immediate aftermath are often better than in other countries.

This excellence extends to the treatment of specific complex diseases, most notably cancer. The U.S. has some of the highest five-year cancer survival rates in the world, a testament to the rapid access patients have to the latest oncological drugs and advanced treatment protocols developed through the nation’s powerful innovation engine.¹ The system also performs well on certain preventive screenings, with rates for breast and colorectal cancer screenings among the highest compared to other high-income countries, likely contributing to earlier detection and better treatment outcomes for these specific diseases.⁴ This demonstrates a capacity to mobilize resources effectively for targeted, high-priority clinical goals.

The Con – A Failure in Population Health

The system’s success in “sick care” is completely overshadowed by its profound failure in “health care.” While it excels at treating established disease with high-tech interventions, it lags dramatically on nearly every broad measure of public and population health. The U.S. has the lowest life expectancy at birth among 11 comparable high-income countries—77.5 years in 2022, nearly five years shorter than the peer average of 82.2 years.³

This is driven by the nation’s exceptionally high rate of avoidable mortality, which refers to deaths from conditions that are either preventable through public health measures or treatable with timely and effective care.⁴ The U.S. rate is more than double the average of its peers, indicating systemic failures in both prevention and basic healthcare access.⁴ The maternal mortality rate in the U.S. is more than three times higher than in most other high-income countries, and the infant mortality rate is also the highest among its peers.³

The U.S. also struggles with a heavy burden of chronic disease. It has the highest rate of obesity among comparable nations and the highest percentage of people living with multiple chronic conditions.⁴ These poor outcomes are inextricably linked with pervasive health disparities. Across a wide range of conditions, from diabetes and HIV to heart disease and maternal mortality, racial and ethnic minorities experience significantly worse outcomes than their White counterparts.³⁵ For example, Black infants are more than twice as likely to die as White infants, and the age-adjusted mortality rate for diabetes is about twice as high for Black, American Indian/Alaska Native, and Native Hawaiian/Pacific Islander people as it is for White people.³⁶

This stark contrast between acute care success and population health failure reveals the system’s fundamental orientation. Its financial incentives, physician training, and research priorities are all heavily skewed toward complex, high-margin, technological interventions. It systematically underinvests in the foundational pillars of a healthy society: primary care, preventive services, and the amelioration of social determinants of health like poverty, poor nutrition, and unsafe environments.²⁹ The system is brilliant at rescuing a patient from the brink of death but is tragically ineffective at preventing them from getting sick in the first place.

Section 5: The Pros and Cons of a High-Cost System

The (Lack of) Pros – The Cost Conundrum

It is exceedingly difficult to frame the extreme cost of the U.S. healthcare system as a “pro.” The most common defense is that high spending is the necessary price for the world-leading innovation detailed previously. However, as the evidence suggests, this relationship is not a simple, efficient trade-off. The system’s costs are so far beyond those of other innovative, high-income nations that they cannot be justified by this argument alone. Therefore, this section will focus almost exclusively on the multifaceted negative consequences of the system’s cost, which is its most universally criticized and damaging feature.

The Cons – A Cascade of Negative Consequences

The exorbitant cost of U.S. healthcare is the system’s central, defining failure. It is not merely a line item in the federal budget but a corrosive force that creates a cascade of negative consequences, permeating every aspect of American life and undermining the system’s performance on every other metric.

The scale of the spending is staggering. At $4.9 trillion in 2023, or $14,570 per person, the U.S. spends more on healthcare than any other nation, both in absolute terms and as a percentage of its economy (17.6%).²Crucially, this high spending is driven primarily by higher prices for medical services, drugs, and administrative overhead, not by Americans consuming more care. In fact, compared to peer nations, Americans have fewer physician visits per capita and shorter hospital stays.²

The drivers of these high prices are numerous and systemic. They include the immense administrative costs born from a fragmented multi-payer system, higher wages for physicians and nurses compared to other countries, and exceptionally high prescription drug prices due to a lack of government negotiation.²² The fee-for-service payment model, which reimburses for volume rather than value, incentivizes overtreatment.³⁴Furthermore, widespread consolidation in the hospital and insurance markets has given large health systems immense market power to set high prices with little competition.⁴²

Driver of Excess Spending	Estimated Contribution to Excess U.S. Health Spending	Source(s)
Administrative Costs (Insurance & Provider)	~30%	44
Physician & Nurse Wages	~15%	44
Prescription Drugs	~10%	44
Medical Machinery & Equipment	<5%	44

This high-cost environment manifests as a severe affordability crisis for individuals and families. Just under half of all U.S. adults report that it is difficult to afford their healthcare costs.²⁶ This financial strain leads to widespread medical debt, a uniquely American phenomenon that affects an estimated 41% of adults and is a leading cause of personal bankruptcy.¹² The personal stories of financial ruin are devastating, with families forced to choose between life-saving treatment and their homes, or bankrupted by an unexpected illness.⁴⁶

Ultimately, high cost is not just a financial problem; it is a clinical quality problem. The most dangerous consequence of the affordability crisis is care avoidance. An estimated 36% of American adults—and a staggering 75% of the uninsured—report having skipped or postponed needed medical care in the past year due to cost.¹⁵ When patients delay seeking care, preventable conditions become expensive emergencies, chronic diseases go unmanaged, and health outcomes inevitably worsen. The financial toxicity of the U.S. healthcare system is a direct contributor to its poor performance on population health metrics. The cost itself is a pathology, creating a vicious cycle where high prices lead to delayed care, which leads to sicker patients and, ultimately, even higher costs.

Section 6: The Pros and Cons of Administrative Structure

The (Lack of) Pros – Inherent Inefficiency

It is nearly impossible to identify a “pro” for the U.S. healthcare system’s administrative structure. While a certain level of administration is necessary to organize, fund, and deliver care in any system, the complexity and cost of administration in the United States are so far beyond international norms that they are widely recognized as a primary source of waste and burden with no discernible benefit to patient health or outcomes. The system’s administrative overhead is not a feature but a fundamental flaw.

The Cons – The Administrative Labyrinth

The system’s multi-payer, fragmented architecture creates a uniquely large, costly, and burdensome administrative labyrinth. This complexity is the single biggest component of excess spending in U.S. healthcare, consuming resources that could otherwise be directed toward patient care, public health, or research.²⁷ Estimates suggest that administrative costs account for between 15% and 30% of total U.S. health spending, with the annual cost of 

excess administration—spending beyond what is necessary—ranging from $248 billion to over $500 billion.²⁷

This immense burden is a direct consequence of the system’s design. Providers—hospitals and physician practices—must navigate a bewildering array of different rules, billing codes, and submission processes for thousands of different public and private insurance plans.²⁵ This requires massive investments in billing departments and administrative staff. A comparison with Canada’s single-payer system is illustrative: the U.S. has 44% more administrative staff, and U.S. physicians dedicate approximately 50% more of their time to administrative tasks.²⁷ The administrative costs associated with private insurance plans, at around 17% of expenditures, are far higher than those for the traditional public Medicare program, which operates at an efficiency of 2-5%.²⁷

This administrative weight falls heavily on clinicians, contributing significantly to professional burnout. A primary care physician can spend half of their day interacting with electronic health records (EHRs) for tasks like billing, coding, and navigating prior authorization requests from insurers.²⁷ This is time and energy diverted from direct patient care.

The burden also falls squarely on patients. They are forced to decipher bewildering and often inaccurate bills, fight coverage denials, and navigate complex appeals processes.²⁷ This administrative complexity is not a standalone problem; it is the dysfunctional connective tissue of the entire system. It is a direct result of the fragmentation described in Section 1. It is a primary driver of the high costs detailed in Section 5. It is a major source of the physician burnout that degrades the quality of care discussed in Section 4. And it is a significant barrier that prevents patients from exercising the choice and accessing the care detailed in Section 3. Administrative waste is an active, harmful force that degrades the system’s performance on every key metric.

Section 7: The Pros and Cons of Coverage and Equity

The Pro – Progress Through Policy (The ACA)

The most significant and successful effort to address the U.S. healthcare system’s deep-seated failures in coverage and equity was the passage of the Patient Protection and Affordable Care Act (ACA) in 2010. The law demonstrated that concerted policy intervention could make substantial progress in patching the system’s most glaring holes. Since its implementation, the ACA has helped more than 40 million Americans gain access to health coverage, driving the nation’s uninsured rate to historically low levels.¹⁰

The ACA achieved this through a multi-pronged approach built upon the existing public-private framework. It expanded Medicaid eligibility to nearly all adults with incomes up to 138% of the federal poverty level in states that chose to participate.⁴⁹ For those with higher incomes who lacked access to employer coverage, it created regulated online marketplaces where they could purchase private insurance, with federal subsidies (premium tax credits) available to make the plans more affordable.⁴⁸ The law also enacted critical consumer protections, most notably prohibiting insurance companies from denying coverage or charging higher premiums based on pre-existing conditions and allowing young adults to remain on their parents’ insurance plans until age 26.¹⁶

The impact on access and equity was significant. The ACA substantially reduced the number of people who reported not receiving medical care because of cost and dramatically increased the probability that a newly insured person would have a usual source of care.⁴⁹ The law also made meaningful strides in reducing racial and ethnic disparities in coverage. People of color, who had the highest uninsured rates prior to the law, saw some of the largest gains, particularly in states that fully embraced the law by expanding their Medicaid programs.¹⁶

The Cons – Persistent Gaps and Pervasive Disparities

Despite the ACA’s historic achievements, the United States still falls well short of universal coverage, and profound inequities remain deeply embedded in the system. The ACA was a reform of the existing fragmented system, not a replacement for it. As such, it inherited and is constrained by the same structural flaws that created the problems it sought to solve.

As of 2023, between 25 and 27 million people remained uninsured.⁸ The primary reason individuals cite for lacking coverage remains the same: the high cost is simply unaffordable.¹⁰ A significant portion of these uninsured individuals live in the 10 states that have refused to expand their Medicaid programs, leaving them in the “coverage gap”—too poor to qualify for marketplace subsidies but not poor enough to qualify for their state’s restrictive Medicaid program.¹⁰

Demographic Group (Nonelderly, 2022)	Percentage of Uninsured Population	Uninsured Rate within Group	Source(s)
Race/Ethnicity			10
White, non-Hispanic	37.7%	6.6%
Hispanic	41.5%	18.0%
Black, non-Hispanic	12.4%	10.0%
AIAN, non-Hispanic	1.1%	19.1%
Family Income Level			10
Below 100% FPL	21.0%	16.4%
100-199% FPL	25.6%	16.1%
200-399% FPL	34.2%	10.8%
400% FPL and above	19.2%	4.4%
Family Work Status			10
1+ Full-Time Worker	73.3%	N/A
Part-Time Worker(s)	10.9%	N/A
No Workers	15.8%	N/A
State Medicaid Expansion Status			15
Resides in Expansion State	N/A	7.6%
Resides in Non-Expansion State	N/A	14.1%

The problem of the “underinsured” is also growing. These are individuals who have health insurance but whose plans come with such high deductibles, copayments, and other out-of-pocket costs that they still cannot afford to use their coverage when they need it.⁹ Deep-seated racial and ethnic health disparities also persist. Even after the ACA’s gains, people of color are more likely to be uninsured, face greater barriers to accessing care, and suffer from worse health outcomes for a wide range of conditions.³⁵ The ACA’s success highlights what is possible through policy, but its limitations reveal the powerful, structural resistance to achieving a truly universal and equitable system in the United States.

Section 8: The Path Forward: Competing Visions for Reform

There is a broad, bipartisan consensus that the U.S. healthcare system, in its current form, is on an unsustainable trajectory. The exorbitant costs, persistent coverage gaps, and poor relative outcomes present a challenge that can no longer be ignored. However, there is profound disagreement on the appropriate solution, with competing visions for reform that reflect fundamental ideological divides about the role of government, the function of markets, and the very nature of healthcare itself.

One major school of thought advocates for strengthening and building upon the Affordable Care Act. This incrementalist approach seeks to fix the known flaws in the current law rather than replacing it entirely. Key proposals include making the enhanced marketplace premium subsidies (extended by the Inflation Reduction Act) permanent, creating a federal solution to close the Medicaid coverage gap in non-expansion states, and adding a government-run “public option” health plan to compete alongside private insurers in the ACA marketplaces.¹⁶

Professional medical organizations offer nuanced perspectives. The American Medical Association (AMA)largely supports the incrementalist view, advocating for policies that improve the ACA to cover the remaining uninsured and stabilize insurance markets.⁵⁶ However, the AMA’s primary focus is on reducing the immense regulatory burdens that plague physicians. Their key reform priorities include streamlining or eliminating insurer-imposed prior authorization requirements, which delay necessary care, and fundamentally reforming the Medicare physician payment system to ensure that annual updates keep pace with inflation, thereby protecting the financial viability of physician practices.³⁰

The American College of Physicians (ACP) has put forth a more transformative vision. While supporting incremental improvements, the ACP officially calls for a transition to a system of universal coverage achieved through one of two paths: a single-payer system where the government is the sole insurer, or a system with a dominant public option offered alongside regulated private insurance.⁵⁹ The ACP’s vision explicitly targets the root causes of the system’s failures, calling for a dramatic reduction in administrative costs, a significant increase in investment in primary and cognitive care, and a concerted effort to address the social determinants of health that drive poor outcomes.⁶¹

In opposition to these government-centric approaches are those who advocate for market-based reforms. This perspective argues that the solution to the system’s problems is not more government intervention, but less. Proponents call for greater price transparency to empower consumers, deregulation to foster more competition among providers and insurers, and the expansion of consumer-driven tools like Health Savings Accounts (HSAs) to give individuals more direct control over their health spending.¹²

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Conclusion

The debate over the future of U.S. healthcare is, at its core, a debate over this central paradox. The evidence presented throughout this report demonstrates that the system’s market-driven elements are responsible for both its greatest strengths and its most catastrophic weaknesses. The same competitive, high-reward environment that fosters world-leading innovation also generates unsustainable costs and deep inequities. Any viable path forward must grapple with this fundamental tension. A purely market-based approach is unlikely to solve the problems of access, affordability, and equity, as decades of experience have shown the market is ill-suited to these tasks. Conversely, a reform that stifles the dynamism of American medical research risks discarding one of the system’s few areas of genuine global leadership.

The ultimate challenge for policymakers is to find a uniquely American synthesis: a system that can rein in the market’s most damaging excesses—through mechanisms like price negotiation, administrative simplification, and a robust social safety net—while preserving the incentives and infrastructure that foster discovery. Achieving this balance will require moving beyond entrenched ideologies and focusing on evidence-based policies that can finally resolve the American healthcare paradox, ensuring that the wealthiest nation on earth can also provide high-quality, affordable, and equitable care to all of its people.