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The U.S. Health Care System

by The Commonwealth Fund

What is the role of government?

The Affordable Care Act (ACA), enacted in 2010, established “shared responsibility” between the government, employers, and individuals for ensuring that all Americans have access to affordable and good-quality health insurance. However, health coverage remains fragmented, with numerous private and public sources, as well as wide gaps in insured rates across the U.S. population. The Centers for Medicare and Medicaid Services (CMS) administers Medicare, a federal program for adults 65 and older and some people with disabilities, and works in partnership with state governments to administer both Medicaid and the Children’s Health Insurance Program (CHIP), a conglomeration of federal–state programs for certain low-income populations.

Private insurance is regulated mostly at the state level. In 2014, state and federally administered health insurance marketplaces were established to provide additional access to private insurance coverage, with income-based premium subsidies for low- and middle-income people. In addition, states were given the option of participating in a federally subsidized expansion of Medicaid eligibility.

Who is covered and how is insurance financed?

In 2015, about 67.2 percent of U.S. residents received health coverage through private voluntary health insurance (VHI): 55.7 percent received employer-provided insurance, and 14.6 percent acquired coverage directly. Public programs covered roughly 37.1 percent of residents: Medicare covered 16.3 percent, Medicaid 19.6 percent, direct-purchase 16.3 percent, and military coverage 4.7 percent.1

In the first quarter of 2016, 27.3 million individuals were uninsured, representing 8.6 percent of the population, down from 9.1 percent in 2015.2 The implementation of the ACA’s major coverage expansions in January 2014 has increased the share of the population with insurance. These reforms include: the requirement that most Americans procure health insurance; the opening of the health insurance marketplaces, or exchanges, which offer premium subsidies to lower- and middle-income individuals; and the expansion of Medicaid in many states, which increased coverage for low-income adults. Between 2014 and the start of 2016, the overall rate of health insurance coverage increased for most racial and ethnic groups. Hispanics had the largest increase (6.6 percentage points), followed by Asian Americans (4.8 points), non-Hispanic blacks (3.1 points), and non-Hispanic whites (2.4 points).3 It is projected that the ACA will reduce the number of uninsured by 24 million by 2018.4 However, with the likely repeal of the health law by the new Congress and administration, it is unknown how progress in reducing the uninsured population will be affected.

Public programs provide coverage to various, often overlapping, populations. In 2015, more than 10 million Americans were both entitled to Medicare and eligible for Medicaid services (the so-called dual eligibles).5 CHIP, which in some states is an extension of Medicaid and in others a separate program, covered more than 8.1 million children in low-income families in 2015.6

Undocumented immigrants are generally ineligible for public coverage, and nearly two-thirds are uninsured. Hospitals that accept Medicare funds (which are the vast majority) must provide care to stabilize any patient with an emergency medical condition, and several states allow undocumented immigrants to qualify for emergency Medicaid coverage beyond “stabilization” care. Some state and local governments provide additional coverage, such as coverage for undocumented children or pregnant women.

What is covered?

Services: The ACA requires all health plans offered in the individual insurance market and small-group market (for firms with 50 or fewer employees) to cover services in 10 essential health benefit categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health services and substance use disorder treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including dental and vision care. Each state determines the range and extent of specific services covered in each category by selecting a benchmark plan that covers all 10 categories; most states choose one of the largest small-group plans as the benchmark. Specific covered services vary somewhat by state.

Private insurance plans sometimes use narrow networks of providers, with limited or no coverage if patients receive out-of-network care. Private coverage for dental care and optometry is also available—sometimes through separate policies—as is long-term care insurance. Private health insurance is required to cover certain preventive services (with no cost-sharing if provided in-network).

Medicare provides coverage for hospitalization, physician services, and, through a voluntary supplementary program, prescription drugs. The program also has eliminated cost-sharing for a number of preventive services. Medicare offers a choice between “traditional” Medicare, which is open-network and pays predominately on a fee-for-service basis, and Medicare Advantage, under which the federal government pays a private insurer for a network-based plan. Medicare covers post-acute care but not long-term care, while Medicaid offers more extensive long-term care coverage (see below). In addition, Medicaid covers a broad range of core services, including hospitalization and physician services, with certain optional benefits varying by state.

Cost-sharing and out-of-pocket spending: Cost-sharing provisions in private health insurance plans vary widely, with most requiring copayments for physician visits, hospital services, and prescription drugs. High-deductible health plans—those with a minimum annual deductible of USD1,250 per individual or USD2,500 per family—can be paired with tax-advantaged health savings accounts (i.e., deposited funds are not subject to federal income tax). The ACA includes cost-sharing subsidies for the purchase of plans through the insurance exchanges, with the largest subsidies aimed at people with incomes between 100 percent and 250 percent of the federal poverty level (USD20,090 for a family of three, as of 2015).7 In the last open-enrollment season, 57 percent of people who selected plans in the federally facilitated marketplaces had cost-sharing subsidies.8

Medicare requires deductibles for hospital stays and ambulatory care and copayments for physician visits and other services, while Medicaid requires minimal cost-sharing. Most public and private insurers prohibit providers from balance billing—charging patients more than the copayment required by their insurance plan—if they have an agreement with the payer to accept their set or negotiated payment amounts. Out-of-pocket spending accounts for 11 percent of total health expenditures in the United States.9 Cost-sharing for most private insurance plans is capped at USD6,850 for individuals and USD13,700 for families per year for 2016 and USD7,150 for individuals and USD14,300 for families for 2017.10

Safety nets: A variable and patchwork mix of organizations and programs deliver care for uninsured, low-income, and vulnerable patients in the United States, including public hospitals, local health departments, free clinics, Medicaid, and CHIP. Under the ACA, 32 states and the District of Columbia expanded Medicaid coverage to cover individuals with incomes up to 138 percent of the poverty level. Premium and cost-sharing subsidies are also available to low- and middle-income individuals through the insurance exchanges or marketplaces, with health plan premium subsidies offered to those at 133 percent to 400 percent of the poverty level and cost-sharing subsidies offered to those at 100 percent to 250 percent of poverty.11 Hospitals that provide care to a high percentage of low-income and uninsured patients receive disproportionate-share hospital payments from Medicare and Medicaid to partially offset their uncompensated care. The federal government also funds community health centers, which are a major source of primary care for underserved and uninsured populations. In addition, private providers are a significant source of charity and uncompensated care.

How is the delivery system organized and financed?

Publicly financed health care: In 2014, public spending accounted for about 49 percent of total health care spending.12 Medicare is financed through a combination of payroll taxes, premiums, and federal general revenues. Medicaid is tax-funded and administered by the states, which operate the program within broad federal guidelines. States receive matching funds from the federal government for Medicaid at rates that vary based on their per-capita income—in fiscal year 2016, federal matching ranged from 50 percent to 74 percent of states’ Medicaid expenditures.13 The expansion of Medicaid under the ACA is currently fully funded by the federal government through 2017, after which the government’s funding share will be phased down to 90 percent by 2020 (subject to change under the new administration and Congress). Federal premium subsidies on the exchanges are offered in the form of tax credits.

Privately financed health care: In 2014, private health insurance spending accounted for about 39 percent of total health care spending.14 Private insurers, which can be for-profit or nonprofit, are answerable to state insurance commissioners and subject to varying state (and federal) regulations. Private health insurance can be purchased by individuals but is usually funded by voluntary, tax-exempt premiums, the cost of which is shared by employers and workers on an employer-specific basis, sometimes varying by type of employee. The employer tax exemption is the government’s third-largest health care expenditure (after Medicare and Medicaid), reducing tax revenues by USD260 billion per year.15

Some individuals are covered by both public and private health insurance. For example, many Medicare beneficiaries purchase private supplemental Medigap policies to cover additional services and cost-sharing. Private insurers, in general, pay providers at rates higher than those paid by public programs, particularly Medicaid. This disparity leads to wide variations in provider payment rates and revenues, which depend to a large extent on payer mix and market power.

Medicare’s payment rates are typically determined according to a fee schedule, with various adjustments based on cost of living and other local and provider characteristics. Medicaid rates vary by state. Private health insurers typically negotiate payment rates with providers.

Primary care: Primary care physicians account for roughly one-third of all U.S. doctors. The majority operate in small self- or group-owned practices with fewer than five full-time-equivalent physicians, although larger practices are becoming increasingly common. Practices—particularly large ones—often include nurses and other clinical staff, who are usually paid a salary by the practice. Patients generally have free choice of doctor, at least among in-network providers, and are usually not required to register with a primary care practice, depending on their insurance plan. Primary care doctors have no formal gatekeeping function, except within some managed-care plans.

Physicians are paid through a combination of methods, including negotiated fees (private insurance), capitation (private insurance), and administratively set fees (public insurance). Physicians can also be given financial incentives, made available by some private insurers and public programs like Medicare, based on various quality and cost performance criteria. Insured patients are generally directly responsible for some portion of physician payment, and uninsured patients are nominally responsible for all or part of physicians’ charges, although those charges can be reduced or waived.

Outpatient specialist care: Specialists can work in both private practice and hospitals. Some insurance plans (such as health maintenance organizations, or HMOs) require a referral by a primary care doctor to see a specialist and limit patients’ choice of specialist, while other plans (such as preferred provider organizations, or PPOs) allow patients broader and direct access. Access to specialists can be particularly difficult for Medicaid beneficiaries and the uninsured, because some specialists refuse to accept Medicaid patients owing to low reimbursement rates, and safety-net programs for specialist care are limited. Like primary care physicians, specialists are paid through negotiated fees, capitation, and administratively set fees and are typically not allowed to bill above the fee schedule for services offered in-network. Multispecialty and single-specialty groups are increasingly common. Specialists can see patients with either public or private insurance.

Administrative mechanisms for paying primary care doctors and specialists: Copayments for doctor visits are typically paid at the time of service or are billed to the patient afterward. Some insurance plans and products (including health savings accounts) require patients to submit claims to receive reimbursement. Providers bill insurers by coding the services rendered; this process can be very time-consuming, as there are thousands of codes.

After-hours care: After-hours access to primary care is limited (39% of primary care doctors in 2015 reported having after-hours care arrangements),16 with such care often being provided by emergency rooms. As of 2007, there were between 12,000 and 20,000 urgent-care centers in the United States providing walk-in after-hours care. Most urgent-care centers are independently owned by physicians, while about 25 percent are owned by hospitals.17 Some insurance companies make after-hours telephone advice lines available.

Hospitals: Hospitals can be nonprofit (approximately 70% of beds nationally), for-profit (15% of beds), or public (15% of beds). Public hospitals can serve private patients. Hospitals are paid through a combination of methods, including per-service or per-diem charges, per-case payments, and bundled payments, in which case the hospital may be financially accountable for readmissions and services rendered by other providers following discharge. Some hospital-based physicians are salaried hospital employees, but most are paid on some form of fee-for-service basis—physician payment is not included in Medicare’s diagnosis-related group (DRG) payments. Hospitalists are increasingly common and are now present in a majority of hospitals.

Mental health care: Mental health care is provided by a mix of for-profit and nonprofit providers and professionals—including primary care physicians, psychiatrists, psychologists, social workers, and nurses—and paid for through a range of methods that vary by provider type and payer. Most insurance plans cover inpatient hospitalization, outpatient treatment, emergency care, and prescription drugs; other benefits may include case management and peer support services.

The ACA aimed to improve access to mental health and substance abuse care by establishing it as an essential health benefit (see above), applying federal parity rules to ensure that coverage is comparable, and increasing access to health insurance more generally. As a result of the law, most health plans now cover preventive services and cannot deny coverage because of mental illness. Several ACA mechanisms, such as accountable care organizations and bundled payment (see below), promote the integration of behavioral and primary care.

Long-term care and social supports: Long-term care is provided by a mix of for-profit and nonprofit providers and paid for through methods that vary by provider type and payer. Medicaid, but not Medicare, offers the most extensive coverage of long-term care, although it varies from state to state (within federal eligibility and coverage requirements). Since Medicaid is a means-tested program, patients must often “spend down” their assets to qualify for long-term care assistance. However, hospice care is included as a Medicare benefit, as are skilled short-term nursing services and nursing home stays of up to 100 days. Long-term care insurance that offers comprehensive care is available but rarely purchased. Most certified nursing facilities are for-profit (69%), while 24 percent are nonprofit and 6 percent are government-owned.18 Caregiver support programs and personal health budgets—such as cash and counseling programs in Medicaid—are available in some states to support caregivers and recipients of home-based care. Some of these programs allow recipients to employ family members. However, most informal and family caregivers do not receive payment or benefits for their work.

diagram of health care system

What are the key entities for health system governance?

The U.S. Department of Health and Human Services (HHS) is the federal government’s principal agency involved with health care services. Organizations that fall within the HHS include the:

  • Centers for Medicare and Medicaid Services
  • Centers for Disease Control and Prevention, which conducts research and programs to protect public health and safety
  • National Institutes of Health, which is responsible for biomedical and health-related research
  • Health Resources and Services Administration, which supports efforts to improve health care access for people who are uninsured, isolated, or medically vulnerable
  • Agency for Healthcare Research and Quality, which conducts evidence-based research on practices, outcomes, effectiveness, clinical guidelines, safety, patient experience, health information technology, and health disparities
  • Food and Drug Administration, which is responsible for promoting public health through the regulation of food, tobacco products, pharmaceutical drugs, medical devices, and vaccines, among other products
  • Center for Medicare and Medicaid Innovation, an agency within CMS that was created by the Affordable Care Act to test and disseminate promising payment and service delivery models designed to reduce spending while preserving or improving quality
  • Patient-Centered Outcomes Research Institute, also created by the ACA, which is tasked with setting national clinical comparative-effectiveness research priorities and managing research on a broad array of topics related to illness and injury.

The National Academy of Medicine (formerly the Institute of Medicine), an independent nonprofit organization that works outside of government, acts as an adviser to policymakers and the private sector on improving the nation’s health. Stakeholder associations (e.g., the American Medical Association) comment on and lobby for policies affecting the health system.

The independent, nonprofit Joint Commission accredits more than 20,000 health care organizations across the country, primarily hospitals, long-term care facilities, and laboratories, using criteria that include patient treatment, governance, culture, performance, and quality improvement. The National Committee for Quality Assurance, the primary accreditor of private health plans, is responsible for accrediting the plans participating in the newly created health insurance marketplaces. The nonprofit National Quality Forum builds consensus on national performance priorities and on standards for performance measurement and public reporting. The American Board of Medical Specialties and the American Board of Internal Medicine provide certification to physicians who meet specified standards of quality.

What are the major strategies to ensure quality of care?

In 2011, the U.S. Department of Health and Human Services released the National Quality Strategy, a component of the ACA that lays out national aims and priorities to guide local, state, and national quality improvement efforts, supported by an array of partnerships with public and private stakeholders. Current initiatives include efforts to reduce hospital-acquired infections and preventable readmissions (see below).

CMS has moved toward increased public reporting of provider performance data in an effort to promote improvement. One such initiative is Hospital Compare, a service that reports on measures of care processes, care outcomes, and patient experience at more than 4,000 hospitals. The release of such information is intended to both increase transparency and improve quality.

States have developed additional public reporting systems and measures, including some that address ambulatory care. Consumer-led groups, such as Consumers Union and the Leapfrog Group, also report on quality and safety.

Incentives to reduce avoidable hospital readmissions among Medicare patients were introduced in October 2012, by way of financial penalties. Since the program’s initiation, 30-day readmission rates nationally for conditions subject to penalties have declined from 21 percent to less than 18 percent.19 Incentives to reduce hospital-acquired conditions, by reducing Medicare payments to the lowest-performing hospitals by 1 percent, were also introduced. Recent data show the first-ever decline in rates of hospital-acquired conditions nationally, with a 17 percent decline over the first three years.20

HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through these programs and others, such as Hospital Value Based Purchasing.21

What is being done to reduce disparities?

There are wide disparities in the accessibility and quality of health care in the United States. Since 2003, the annual National Healthcare Disparities Report, released by the Agency for Healthcare Research and Quality, has documented disparities among racial, ethnic, income, and other demographic groups and highlighted priority areas requiring action. Federally qualified health centers (FQHCs), which are eligible for certain types of public reimbursement, provide comprehensive primary and preventive care regardless of their patients’ ability to pay. Initially created to provide health care to underserved and vulnerable populations, these centers largely provide safety-net services to the uninsured. Medicaid and CHIP provide public health insurance coverage for certain low-income populations. In addition, the ACA has a number of provisions aimed at reducing disparities: subsidies to enable low-income Americans to purchase insurance through the exchanges; efforts to achieve parity for mental health care and substance abuse services; and additional funding to community health centers in underserved communities. There are also a multitude of public and private initiatives at the local and state levels.

What is being done to promote delivery system integration and care coordination?

Government agencies and private insurance companies are leading efforts to move away from the current specialist-focused health system to a system founded on primary care. In particular, the “patient-centered medical home” model, with its emphasis on care continuity and coordination, has aroused interest among U.S. experts and policymakers as a means of strengthening primary care and linking medical services more closely to community services and supports.

Another trend is the proliferation of accountable care organizations (ACOs), networks of providers that assume contractual responsibility for providing a defined population with care that meets quality targets. Providers in ACOs share in the savings that constitute the difference between forecasted and actual health care spending. More than 800 ACOs have been launched by public programs and private insurers, and more than 28 million Americans are enrolled in one.22 Two Medicare-driven ACO programs have been rolled out—the Medicare Shared-Savings Program and the Pioneer ACO Program, which together encompass more than 470 ACOs servicing 17 percent of the Medicare population, or 8.9 million Americans.23 Patients have reported better care experiences, quality measures have generally improved for the tracked indicators, and there have been modest cost savings.24 CMS has unveiled the new Next Generation ACO program for experienced, high-performing ACOs.

Medicare, Medicaid, and private purchasers, including employer groups, are also experimenting with new payment incentives that reward higher-quality, more efficient care. One strategy is “bundled payments,” whereby a single payment is made for all the services delivered by multiple providers for a single episode of care. About 7,000 hospitals, physician organizations, and postacute care providers participate in bundled payment initiatives.

In addition, CMS has supported the development of local programs that aim to better integrate health and social services. Medicaid ACOs are also implementing programs to integrate primary care and behavioral health services. Some ACOs are not only trying to integrate clinical and social services, but also are exploring innovative financing models, such as cross-sectoral shared-savings models.

What is the status of electronic health records?

The 2009 American Recovery and Reinvestment Act led to significant investment (more than USD30 billion) in health information technology. The legislation established financial incentives for physicians and hospitals to adopt electronic health record (EHR) systems, under what is known as the EHR Incentive Program. As of 2015, 84 percent of physicians used some form of EHR system, and three out of four hospitals (76%) had adopted at least a basic EHR system, representing an eightfold increase since 2008.25

The Meaningful Use Incentive Program is designed to gradually raise the threshold for EHR functionality above which providers receive incentives and avoid penalties. The current focus is on information exchange.

How are costs contained?

Annual per capita health expenditures in the United States are the highest in the world (USD9,364 in 2014), despite a recent slowdown in spending from 2008 to the present.10 Payers have attempted to control cost growth through a combination of selective provider contracting, price negotiations and controls, utilization control practices, risk-sharing payment methods, and managed care. Recently, both public and private payers have focused more attention on value-based purchasing and other models that reward effective and efficient health care delivery. Patent expirations and a movement toward favoring generic drugs over brand-name drugs, meanwhile, have led to a slowdown in pharmaceutical spending in recent years, although growth rebounded in 2014 with the market entry of expensive biologics for conditions such as hepatitis C. Another growing trend is the increase in private insurance plans with high deductibles.

A number of reforms included in the ACA attempt to develop payment methods in the Medicare and Medicaid programs that reward high-quality, efficient care. Some of these use pay-for-performance mechanisms, whereas others rely on bundled payments, shared savings, or global budgets to incentivize integration and coordination among health care providers.

Despite a recent slowdown in health care spending, the latest data, through July 2016, showed that spending had grown 4.9 percent over the previous year.26

What major innovations and reforms have been introduced?

The Affordable Care Act ushered in sweeping insurance and health system reforms aimed at achieving near-universal coverage, greater affordability of coverage and care, higher quality and efficiency, lower costs, more robust primary and preventive care, and a broader array of community resources. As of February 2017, the future of ACA is unknown, though it will most likely be repealed or altered by the new Congress. The exact nature of any replacement program is unknown.

Since implementation of the ACA, the number of uninsured adults has declined by historic proportions.27 Groups that have long been at greatest risk of being uninsured—young adults, Hispanics, blacks, and those with low income—have made the greatest coverage gains, though inequalities remain.28

In 2015, the U.S. Department of Health and Human Services announced a goal to move 50 percent of Medicare payments to alternative payment models, including ACO-based arrangements, by 2018. As of early 2016, HHS had already reached an interim goal of 30 percent.29 Medicare has also begun paying for doctors to coordinate the care of patients with chronic conditions. To be eligible for an extra USD40 per patient, doctors must draft and help carry out a comprehensive care plan for each patient who signs up for one. Under federal rules, those patients have access to doctors or other health care providers on a doctor’s staff 24 hours a day, seven days a week, to deal with “urgent chronic care needs.”

In 2015, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was passed by Congress to align financial incentives for providers with high-value care. The law overhauls how hundreds of thousands of clinicians are paid by Medicare, through two value-based provider payment pathways under Medicare Part B: Advanced Alternative Payment Models (APMs) and the Merit-Based Incentive Payment System (MIPS).30 The Advanced APM path aims to promote participation in existing APMs such as ACOs, medical homes, and bundled payments for joint replacement and cardiac care. MIPS adjusts traditional fee-for-service provider payment according to several factors: quality, cost, provider efforts to utilize health information technology, and practice improvement. The reforms under MACRA are meant to support the transition of the U.S. health care system from fee-for-service payment to payments based on the value and quality of care delivered; they are intended to generally promote approaches to care delivery focused on better care, efficient spending, and healthier patients.


1J. C. Smith and C. Medalia, Health Insurance Coverage in the United States: 2014—Current Population Reports (U.S. Census Bureau, Sept. 2015). Note that estimates by type of coverage are not mutually exclusive; people can be covered by more than one type of health insurance during the year.

2R. A. Cohen, M. E. Martinez, and E. P. Zammitti, Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, January–March 2016 (Division of Health Interview Statistics, National Center for Health Statistics, Sept. 2016); and R. A. Cohen, M. E. Martinez, and E. P. Zammitti, Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, 2015 (Division of Health Interview Statistics, National Center for Health Statistics, May 2016).

3R. A. Cohen, M. E. Martinez, and E. P. Zammitti, Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, January–March 2016 (Division of Health Interview Statistics, National Center for Health Statistics, Sept. 2016).

4Congressional Budget Office, Insurance Coverage Provisions of the Affordable Care Act—CBO’s March 2015 Baseline (CBO, 2015).

5Centers for Medicare and Medicaid Services, Analytic Reports and Data Resources (CMS, 2016)., FY 2015 Number of Children Ever Enrolled in Medicaid and CHIP (Centers for Medicare and Medicaid Services, 2015).

7Assistant Secretary for Planning and Evaluation, U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs (ASPE, 2015).

8Assistant Secretary for Planning and Evaluation, Addendum to the Health Insurance Marketplaces 2016 Open Enrollment Period: January Enrollment Report (ASPE, 2016).

9Organisation for Economic Co-operation and Development, OECD Health Statistics 2016 (OECD, 2016).

10Out-of-Pocket Maximum Limits on Health Plans (Obamacare Facts, 2016).

11Kaiser Commission on Medicaid and the Uninsured, Current Status of State Medicaid Expansion Decisions (Henry J. Kaiser Family Foundation, Jan. 1, 2017).

12Organisation for Economic Co-operation and Development, OECD Health Statistics 2016 (OECD, 2016).

13U.S. Department of Health and Human Services, “Federal Financial Participation in State Assistance Expenditures; Federal Matching Shares for Medicaid, the Children’s Health Insurance Program, and Aid to Needy Aged, Blind, or Disabled Persons for October 1, 2015 Through September 30, 2016,” Federal Register, 79(231):71426–28.

14Organisation for Economic Co-operation and Development, OECD Health Statistics 2016 (OECD, 2016).

15National Bureau of Economic Research, Tax Breaks for Employer-Sponsored Health Insurance (NBER, 2014).

16R. Osborn, D. B. Moulds, E. C. Schneider, M. M. Doty, D. Squires, and D. O. Sarnak, “Primary Care Physicians in Ten Countries Report Challenges Caring for Patients with Complex Health Needs,” Health Affairs, Dec. 2015 34(12):2104–12.

17T. Rice, P. Rosenau, L. Y. Unruh et al., “United States of America: Health System Review,” Health Systems in Transition, 2013 15(3):1–431.

18State Health Facts, Distribution of Certified Nursing Facilities by Ownership Type, 2014 (Henry J. Kaiser Family Foundation, 2015).

19R. B. Zuckerman, S. H. Sheingold, E. J. Orav et al., “Readmissions, Observation, and the Hospital Readmissions Reduction Program,” New England Journal of Medicine, April 21, 2016 374(16):1543–51.

20Agency for Healthcare Research and Quality, 2013 Annual Hospital-Acquired Condition Rate and Estimates of Cost Savings and Deaths Averted from 2010 to 2013 (AHRQ, Oct. 2015); and S. T. Edwards and B. E. Landon, “Medicare’s Chronic Care Management Payment—Payment Reform for Primary Care,” New England Journal of Medicine, Nov. 27, 2014 371(22):2049–51.

21U.S. Department of Health and Human Services, “Better, Smarter, Healthier: In Historic Announcement, HHS Sets Clear Goals and Timeline for Shifting Medicare Reimbursements from Volume to Value,” news release (HHS, Jan. 26, 2015).

22D. Muhlestein, “Growth and Dispersion of Accountable Care Organizations in 2015,” Health Affairs Blog, March 31, 2015.

23Centers for Medicare and Medicaid Services, “Physicians and Health Care Providers Continue to Improve Quality of Care, Lower Costs,” news release (CMS, Aug. 25, 2016); and D. Muhlestein, “Growth and Dispersion of Accountable Care Organizations in 2015,” Health Affairs Blog, March 31, 2015.

24S. T. Edwards and B. E. Landon, “Medicare’s Chronic Care Management Payment—Payment Reform for Primary Care,” New England Journal of Medicine, Nov. 27, 2014 371(22):2049–51.

25R. Osborn, D. B. Moulds, E. C. Schneider, M. M. Doty, D. Squires, and D. O. Sarnak, “Primary Care Physicians in Ten Countries Report Challenges Caring for Patients with Complex Health Needs,” Health Affairs, Dec. 2015 34(12):2104–12; and D. Charles, M. Gabriel, and T. Searcy, Adoption of Electronic Health Record Systems Among U.S. Nonfederal Acute Care Hospitals: 2008–2014, ONC Data Brief No. 23 (Office of the National Coordinator for Health Information Technology, April 2015).

26Altarum Institute, Health Sector Economic Indicators—Insights from Monthly National Health Spending Data Through July 2016 (Altarum Institute, Sept. 9, 2016).

27J. C. Smith and C. Medalia, Health Insurance Coverage in the United States: 2014—Current Population Reports (U.S. Census Bureau, Sept. 2015).

28S. R. Collins, M. Z. Gunja, M. M. Doty, and S. Beutel, Who Are the Remaining Uninsured and Why Haven’t They Signed Up for Coverage? Findings from the Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016 (The Commonwealth Fund, Aug. 2016); and M. M. Doty, M. Z. Gunja, S. R. Collins, and S. Beutel, “Latinos and Blacks Have Made Major Gains Under the Affordable Care Act, But Inequalities Remain,” To the Point, The Commonwealth Fund, Aug. 18, 2016.

29U.S. Department of Health and Human Services, “HHS Reaches Goal of Tying 30 Percent of Medicare Payments to Quality Ahead of Schedule,” news release (HHS, March 3, 2016).

30Centers for Medicare and Medicaid Services, Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive Under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, Final Rule (CMS, Oct. 14, 2016).