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US Healthcare Market-Based & Governmental Approaches

The Healthcare system is one of the central aspects of human well-being as it improves the quality of life and provides a decent level of health to those in need. The system has been continuously changing over time, and a variety of innovations has happened to it over the last decades. Humanity went through a long way from treating with herbs and bloodletting to advanced methods of care including technical assistance, instrumental and program innovations. However, along with knowledge development, the medical sphere has become a business providing customers with a decent quality service making profits at the same time.

With ongoing economic growth, the beneficial goals are more likely to take a prevalent place in the treatment process. The original purpose of medicine goes to the background which ends with inappropriate outcomes of patient’s care and providing poor help to the ones requiring it the most. A variety of developed countries has inserted such a healthcare model, and the US is on the list. In the United States, a market-based approach to medical aid plays a significant role. In this assignment, two healthcare models will be evaluated from the perspective of their framework: governmental and market-based.

The latter takes a prevalent part of modern US healthcare as most of the hospitals are private businesses providing patients, or customers, service. Access to private hospitals is the insurance a citizen gets from an employer. The aim goal of the insurance is to provide medical help to the employed contingent of the country with high quality and efficiency. The system covers only the working population which places unemployed people into a lack of medical aid. Moreover, some employers do not provide medical insurance that also affects working personnel and their quality of life. With a market-based approach, prices for treatment are set freely by contract between the healthcare provider and a customer. All the laws and strategies are free from intervention by the state, and the private company has full authority.

Quality assessment in the private sector is more complicated as the companies are private businesses performing in their way. However, there are organizations providing quality measurements to US hospitals. The most central are National Quality Forum and Commonwealth Fund assessing state and private sectors. They issue recommendations and standards for the healthcare providers. The OECD Health Care Quality also releases the reports about effectiveness, equity, and efficiency of the hospitals. The reimbursement in this model depends on the diagnosis-related groups (DRG). Consequently, when the hospital after a patient’s treatment expenses, spends less than DRG payment, it makes a profit. Such conditions can lead to the higher intention to make benefit from the process of any medical act that impacts a patient’s condition and general approach to the one in need. The private sector makes a profit for the country’s economy providing cost-saving and efficiency forgetting at the same time about the quality of the treatment. That is why the market-based approach does not centralize prevention and screening examinations as they mostly aim to sell a customer the most expensive goods whilst screening and prevention do not require high payments.

The primary drivers of healthcare financing are the owners of the hospital that can be represented by either a group of people or an individual person. Further on, employers set treatments with the hospitals to provide workers with insurance. The disadvantage of such a strategy is the monopoly condition of the hospitals that might take advantage of price-setting and further actions. Then, employers are caught in a financial trap as they are to afford the insurances for the personnel.

The government approach takes a partial part in the healthcare system of the US; however, it provides a specific contingent of people with treatment covering their expenses. Even though most of the hospitals and clinics are private, some are governmental and financed by the state and federal budget. Such hospitals provide medical care for specific population groups such as military personnel (Liu & Kelz, 2018). Programs Medicaid and Medicare are also supported by the government and cover a significant part of the country’s population. Medicare provides help to Americans above 65 years old, and to those below 65 who have permanent kidney failure or disabilities. Nevertheless, the program does not include expenses for ophthalmological, hearing, and dental cases, and 75% of beneficiaries requiring for hearing aid did not receive it, 70% needed dental care, and 43% of the patients had troubles with vision and did not receive examination over 2017 (Willink, Shoen, and Davis, 2018). The program has a variety of advantages but still needs improvement in several aspects.

Medicaid is another state company covering Americans with low income or disabilities. At the beginning of the 1970s, the program was providing healthcare to over one-tenth of the US population (Stevens Robert & Stevens Rosemary, 2017). Nowadays, with the Affordable Care Act, Medicaid implements improvements by realizing the Children’s Health Insurance Program (CHIP) covering new scales of the population involving at least 9.6 million children (National Medicaid and CHIP Program Information, 2021). At the same time, the costs federal budget spends on the program are highly expansive and they continue to grow (Currie & Duque, 2019). Assessing state programs, it is essential to comprehend their impact on public healthcare and government expenses to reach the balance level.

The qualifications for the state approach are to provide medical aid to people that are not able to afford insurance due to various issues: disability and instability on the labor market, low income, old age, poverty, etc. It is essential to cover particular strata on a bigger scale to prevent the worsening of their condition and deaths. The quality control is provided by the Centers for Medicaid and Medicare Services (CMS) that tests the quality measures from Electronic Health Records, patients’ claims, assessment instruments, and registries (Quality Measures, 2021). The National Quality Forum (NQF) develops new evaluating programs for CMS for further implementation such as the Hospital Inpatient Quality Reporting (IQR), the Hospital Outpatient Quality Reporting (OQR), the Physician Quality Reporting System (PQRS) (Quality Measures, 2021). Moreover, on July 5, 2017, CMS issued the amendment concerning Medicaid: Changes to the Payment Error Rate Measurement (PERM) and Medicaid Eligibility Quality Control (MEQC) Programs (Medicaid Eligibility Quality Control Program, 2021).

State programs straightly reimbue healthcare providers within around 30 days. Doctors sign a treatment with the company agreeing on their payment rates. A physician can also be a non-participating provider that can still take patients for treatment, then the patient pays for the care, and seek reinforcement from Medicare. The study by Casper et al. (2019) estimated the reimbursement rate of Medicaid and presented significant variations between the states. Prevention and wellness are important for state healthcare programs. Medicare, for instance, had annual wellness visits, and pregnant women can get an assessment of their well-being. Medicare also provides Pap tests for patients above the age of 65, which is an essential screening for cervix cancer.

In my opinion, the government approach is the best model for the healthcare system as it provides health to people in need covering most of the expenses. Nowadays, it also covers most of the population. Medical aid must be free and easily accessible as people might have a risk of acute conditions, hardly treated disorders, and government should protect them and give them the possibility to be treated for free. The citizens’ taxes can be redistributed and provide a decent level of care in the United States. Our country is highly developed and has an advanced level of medicine; still, it struggles with vast payments for this branch as the current approach is to make the patient pay more.

The most reform should be implemented in the strategy of physicians’ action: to prescribe the only needed for the patient medications and tests. The governmental chain needs better control over the covered groups of population and provides them with high-quality treatment, prevention, and screening examinations. High expenses also need reform to minimize payments and save the developing tendency of the medical branch. The policies differ from state to stay which should be balanced and improved to provide a sustainable model of healthcare and reach appropriate outcomes with a high level of patients’ trust and reliance.

In this assignment, the two models of the healthcare system have been estimated: governmental and market-based. The frameworks of the models, their primary goals, financing sources, the significance of the treatment outcome, prevention, and screening differ. Whilst private hospitals aim to maximize revenue, the governmental chain provides treatment and screening on a wider scale. Eliminating the profit-based perspective might help improve the marker-based model and the general attitude to the medical institution in the United States.


Liu, J. B., & Kelz, R. R. (2018). Types of hospitals in the United States. JAMA, 320(10), 1074. Web.

National Medicaid and CHIP Program Information. Web.

Willink, A., Shoen, C., & Davis, K. (2018). How Medicare could provide dental, vision, and hearing care for beneficiaries. Issue Brief (Commonwealth Fund), 1-12.

Stevens, Robert & Stevens, Rosemary. (2017). Welfare medicine in America: A case study of Medicaid. New York: Routledge.

Currie, J., & Duque, V. (2019). Medicaid: What does it do, and can we do it better?. The ANNALS of the American Academy of Political and Social Science, 686(1), 148-179. Web.

Quality Measures. Web.

Medicaid Eligibility Quality Control Program. (2021). Web.

Casper, D. S., Schroeder, G. D., McKenzie, J., Zmistowski, B., Vatson, J., Mangan, J., Stull, J., Kurd, M., Rihn, J. A., Anderson, D. G., Kaye, D. I., Radcliff, K., Woods, B., Hilibrand, A. S., Vaccaro, A. R., & Kepler, C, K. (2019). Medicaid reimbursement for common spine procedures: Are compensation rates consistent? Spine, 44(22), 1585-1590.

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ApeGrade. "US Healthcare Market-Based & Governmental Approaches." December 20, 2022. https://apegrade.com/us-healthcare-market-based-and-amp-governmental-approaches/.


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