Comparing Health Systems and Challenges in Costa Rica and the United States
Implications for the United States
As a sign that it recognizes the unsustainable nature of its health care expenditures, the United States has begun undertaking similar but significantly smaller fiscal reforms than those in Costa Rica. Government efforts to reduce health care costs resulted in decreased reimbursements for doctors and hospitals through Medicare and Medicaid. In 2003, Medicaid reimbursement was set at 69% of Medicare reimbursement, and Medicare payments were still significantly less than private insurance reimbursements (Rice et al., 2013, 127). However, the reduced payments mean that only 60% of primary care physicians are accepting new Medicaid patients (Rice et al., 2013, 127).
The emerging primary care demand, stemming from a Medicaid expansion in half of the states and millions of people wielding health insurance for the first time, has yielded a shortage of primary care physicians that is especially exacerbated in rural regions. These geographic gaps in care mirror the lack of coverage for rural Costa Ricans, but financial limitations have prevented clinic expansion to areas with too few residents.
With greater demand for services comes the challenge of increasing quantity of care without reducing quality. The emergency department, one of the most expensive sources of health care, has observed a tremendous increase in quantity of patients and subsequently cost of care. As a result of both uninsured and underinsured patients, visits to the emergency department have grown from 353 to 390 visits per 1,000 people between 1997 and 2007 (Rice et al., 2013, 237).
Like in Costa Rica, the emergency departments serve as the safety net for citizens who lack adequate insurance but need immediate medical attention because all departments are legally required to provide enough care to stabilize patients. Although the Affordable Care Act was purported to reduce the use of the emergency room, evidence suggests that it has only increased use and consequently expenses (Rice et al., 2013, 237).
Unlike Costa Rica, the United States does not currently place any restriction on hospitals in the purchase of medical equipment or pharmaceuticals (Rice et al., 2013, 38). However, its newly formed ACOs are an experiment to determine whether broad caps on total expenditures are effective in limiting the ever-growing costs of medical care. Although most hospitals and medical personnel are not nationalized, mandating maximum spending levels for private institutions can result in the desired cost savings. Limiting technology expenditures, unnecessary surgeries, and expensive options for medications has proven useful to Costa Rica in reducing costs but may be politically untenable with an American population that has enjoyed unlimited health care choice for many decades.
Recognizing the unpopularity of rationing care, the federal government has forfeited control over slashing costs to the ACOs, which will determine the best method of reducing costs without massive reductions in care quality. The ACOs now have a unique opportunity to adopt some of the fiscal reforms that Costa Rica has undergone to maintain its system’s long-term survival. If these institutions implement the cost-effective strategies that Costa Rica has undertaken without coercion from the federal government, then perhaps the necessary fiscal reforms will be better received by the American public.
However, these cost-cutting measures come at a price measured as a decrease in not just dollars but also quality of health care services. It is naïve to assume that the United States can reduce its extravagant health care expenditures without any subsequent change in appointment wait times, drug availability, compensation for medical personnel, or reduction in rural medical facilities. Costa Rica is a prime example of a centralized system forced to undergo fiscal restraint for the sake of long-term sustainability. Although the United States possesses far more economic resources, it too cannot maintain growth in health care expenditures without repercussions.
Considering the recent changes that established federal subsidies for health insurance expansion, in addition to the existing costs of chronic disease, an aging population, and rising medical prices, the Congressional Budget Office predicts a future of consistently mounting health care costs for the United States. Although it may have the financial resources to delay payment now, the country will be forced to confront the unsustainable nature of its medical expenditures in the future. Drawing on the lessons offered by Costa Rica, which also faces a rise in chronic conditions, an aging population, and skyrocketing costs, the United States must implement cost-saving solutions to preserve its health care system for future generations.
The tactics utilized by Costa Rica – limitations on medications, reductions in funding available for technological upgrades, reductions in compensation for medical personnel, appointment limitations, and changes in the proportion of expenditures shouldered by the government – have still proven inadequate in sustaining the health care system for the long term. Furthermore, in both Costa Rica and the United States, private insurance will persist for those with the financial means to purchase more comprehensive care, undermining attempts to establish truly equitable health care systems. Despite its proclivity for debt financing, the United States too will confront the realization that growing health expenditures – particularly those by the public sector, which bears a disproportionate burden of the costs – must be halted.
Although financial problems have led Costa Rica to abandon its promise for universal health care access and significantly reduce the quality of care, the United States still has time to develop strategies to expand quantity of medical services and reduce expenditures without terrible reductions in current medical service standards. Although the challenge is formidable, preemptive attempts to cut costs through ACO experiments under the Affordable Care Act offer greater hope than waiting until a crisis to adopt fiscal reforms.
Ultimately, both Costa Rica and the United States must outlast their temporary demographic shifts and discover methods of reducing the chronic but preventable diseases that account for 75% of health care expenditures. Reducing costs before they are even incurred by improving population health demonstrates that prevention is the best medicine for both our bodies and the economy.
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