The health care system is a complex entity. It encompasses individual health-care personnel, healthcare facilities, and medical products. Ownership is mainly in private hands, though the federal, state, county, and city governments also own some facilities. The health care system has multiple goals: extending and improving life, maintaining healthy people, treating illness and injury, and fostering research into new treatments. Its efficiency is judged by the extent to which it achieves these objectives. A common measure is life expectancy, which reflects the effectiveness of healthcare systems, although other measures can be used to compare and evaluate the performance of specific health-care providers.
Individuals want health care that maximizes their potential and meets their personal health goals, while society wants to ensure equitable access to the necessary health services. These conflicting goals make it difficult to achieve both efficient and effective health-care systems. They are further complicated by uncertainty about the effectiveness of the various component parts of the system. This uncertainty is reflected in rapidly rising health-care costs and unexplained variations in the use of different services by different providers for apparently similar patients.
Some economists have argued that some health-care services are socially valuable even if they do not improve individuals’ welfare. These services are valuable because they reduce the risk of a future disease or injury that might otherwise have occurred. The value of these services is not reflected in current-period market demand, which only takes into account the benefits accruing to consumers of the service. Instead, there is an additional type of value that is relevant to some health-care services: option value.
In the United States, most health-care workers and consumers have a strong preference for a health-care system that pays a fixed amount of money to all people who receive health insurance coverage. This is a consequence of a combination of factors: the value of the medical care itself (in terms of its effect on health status or quality of life); a desire to avoid uncertainty about costs and benefits; and a concern that health-care providers are not incentivized to offer cost-effective care.
Despite the prevalence of this preference for health insurance, few countries rank at the top or bottom on both availability and accessibility of health-care services. Those that do best on these measures, such as Australia and the Netherlands, spend the least on health-care per capita.
However, these systems have their weaknesses. For example, they do not do as well on measures of access to and quality of care process, which focuses on the patient experience in the interaction between health-care providers and patients.