good source is an article published by John Iglehart in the New England Journal of Medicine (Iglehart, 1998). It provides a basic understanding of the public and private insurance systems that is appropriate for medical students.
Students might also be taught that a broad cross section of Americans are uninsured (AHRQ, 2002), and that roughly one-quarter of the uninsured come from families with a member who has access to employer-provided insurance but chooses not to purchase it (Gruber and Washington, 2003). Such individuals may have access to free or subsidized care, but otherwise pay the full price of medical care from their own pockets and fail to benefit from the discounted fees and medication prices that health plans typically negotiate. Although many uninsured adults come from low-income households, some 19 percent of the uninsured are from families with incomes above 300 percent of the poverty line (Kaiser Family Foundation, 2003). The effects of being uninsured on health are the subject of ongoing study, with conflicting results (Bhattacharya et al., 2003; Goldman et al., 2001; Levy and Meltzer, 2001).
Medical students can be introduced to the different systems of care and their explicit (and implicit) attempts to control costs. Medicare and some Medicaid programs regulate the prices paid to providers directly. Capitated plans pay physicians a fixed amount regardless of how much care is delivered. Managed care plans sometimes intercede directly in the patient–provider relationship through practice guidelines, although physicians have chafed at the imposition of such controls (Studdert et al., 2002). In fact, most cost increases can be tied to the development of new medical technologies and the increased use of existing technologies. For example, increases in the supply of diagnostic imaging and cardiac, cancer, and neonatal technologies are associated with higher utilization and spending (Baker et al., 2003).
More generally, medical students can learn how medical services are rationed and how central their actions are to this process. As noted by Fuchs (1984), the basic method of rationing goods and services in this country is through the marketplace. The willingness of patients to purchase physician services and of physicians to supply them determines how they are apportioned and distributed.
For most nonmedical goods, consumers balance the benefits expected from a purchase against the cost, with the result being an efficient allocation of resources. Expenditures for medical services are different because most patients have insurance, and even the uninsured have a safety net. This means a third party is paying for care. The patient will therefore want additional care, and a “conscientious” physician will provide it even though its cost to society exceeds the benefit to the patient.
Regardless of the specific topics selected, medical students need to graduate with a basic understanding of the health care system that can be reinforced and further explored during postgraduate training.