DHA 700 Week 2 Structure of the US Health System Example

Five Point Three Trillion Dollars and No Single System: Mapping the Structure of US Health Care From a Rural North Carolina Health System

[Student Name]

University of Phoenix

DHA/700: Introduction to Health Administration in Doctoral Study

Week 2 Assignment

[Instructor Name]

[Date]

The rural health system, its hospitals, payer mix and operations are composites written for a model paper; national data and research findings come from the sources cited.

At orientation, a new member of the health system's board, a retired schoolteacher, asked the chief operating officer a question that deserved a careful answer: why does a hospital in a small eastern North Carolina town have to deal with so many insurers, agencies and rules? The answer is that the United States does not have one health system but a set of interlocking parts. This paper maps those parts from the vantage point of a composite three-hospital rural system.

The Scale of the System

No country outspends the United States on medical care. National health spending rose 7.2% in 2024 to $5.3 trillion, or $15,474 per person, and reached 18.0% of gross domestic product, up from 17.7% in 2023; the growth was driven mainly by greater use and intensity of services rather than by prices (Hartman et al., 2026).

Part One: Financing and Insurance

Money flows to providers through several channels. Private insurance, mostly through employers, covers the largest share of people. Medicare covers adults 65 and older and some people with disabilities. Medicaid, jointly funded by the federal government and states, covers people with low incomes and many people in nursing homes. Marketplace plans cover people who buy insurance individually, and a share of people remain uninsured. National estimates show Medicaid enrollment falling in 2024 as states resumed eligibility checks, while Marketplace enrollment rose.

Financing Seen From the Rural System

The composite system's revenue shows the structure's complexity. About 42% of its patient revenue comes from Medicare, including Medicare Advantage plans run by private insurers; about 27% from Medicaid, now largely managed by prepaid health plans after North Carolina's move to Medicaid managed care and expansion; about 24% from commercial insurers; and the rest from self-pay patients and other sources. Each payer has its own rules, rates, prior authorization requirements and billing systems, and the system employs a staff of more than forty just to manage claims, denials and appeals.

Part Two: Delivery Organizations

Care is delivered by a mix of organizations: hospitals, physician practices, community health centers, nursing homes, home health agencies, pharmacies and others. Many are independent; others belong to health systems. Hospitals may be nonprofit, for-profit or government-owned. Rural hospitals may be designated critical access hospitals, which receive cost-based Medicare payment in exchange for limits on size.

The Rural System's Place in Delivery

The composite system includes a 180-bed regional hospital and two smaller hospitals, one a critical access hospital, along with 14 clinics. It refers complex cases to an academic medical center two hours away and depends on independent nursing homes and home health agencies to discharge patients, which is why delays in those sectors ripple back into its emergency department.

Part Three: Regulation

Regulation comes from many sources. Federal agencies set conditions of participation for Medicare and Medicaid, regulate drugs and devices, enforce privacy and patient safety rules and oversee fraud and abuse. States license facilities and professionals, regulate insurance and run Medicaid within federal rules. Private accreditors inspect hospitals. Local governments set zoning and public health rules.

Regulation Seen From the Rural System

For the composite system, regulation means Medicare conditions of participation and surveys, accreditation visits, state licensure, price transparency requirements, emergency treatment obligations, quality reporting programs and Medicaid managed care contracts with several plans. The compliance office tracks more than 400 separate regulatory requirements.

Part Four: Public Health

Public health agencies, federal, state and local, monitor disease, promote health, respond to emergencies and regulate environmental hazards. The system's county health departments are partners in immunization, emergency preparedness and community health needs assessments.

How the Parts Interact

The parts interact through money, rules and patients. A Medicaid policy change in the state capital alters revenue in a rural clinic. A shortage of nursing home beds lengthens hospital stays. A federal quality program changes how hospitals track readmissions. No single entity coordinates the whole, which is why administrators spend so much time managing the connections.

International Comparison

Comparisons show what this structure costs. A study of 11 high-income countries found that in 2016 the US spent 17.8% of gross domestic product on health care, compared with 9.6% in Australia to 12.4% in Switzerland; US use of many services, such as hospital discharges and physician supply, was similar, but prices for drugs, salaries and administration were higher, and the US had the lowest life expectancy, 78.8 years, and the highest infant mortality among the countries (Papanicolas et al., 2018). The United States buys about the same amount of care as its peers and pays far more for it.

Reading the Comparison Carefully

The comparison suggests that high US spending reflects prices and administrative complexity more than overuse, although some services, such as imaging, were used more in the US. For a rural administrator, administrative costs are visible every day in the staff needed to handle multiple payers.

Judging the Structure: The Triple Aim

Berwick's Triple Aim asks a health system to do three things at once: make care a better experience for patients, make the population healthier and bring down spending per person. Berwick and colleagues argue that meeting these aims requires an identified population, a commitment to universality for its members and an integrator that accepts responsibility for all three, with roles including partnership with families, redesigned primary care, population health management, financial management and system integration (Berwick et al., 2008).

The Triple Aim From a Rural Vantage Point

In the composite system's region, fragmentation makes integration difficult. No single organization is responsible for the population's health, costs or experience across settings. The system's participation in an accountable care organization and in Medicaid managed care contracts are partial steps toward the integrator role Berwick describes.

What This Means for Administrators

For health administrators, the structure means managing many payers and regulators, building partnerships across independent organizations, investing in data systems that follow patients across settings and advocating for policies that reduce fragmentation. It also means understanding the system well enough to explain it to a board member who is new to it.

Answering the Board Member

The chief operating officer's answer to the retired teacher was this: the hospital deals with many payers and rules because American health care is financed by many sources, delivered by many independent organizations and regulated by many authorities. That structure costs more than other countries' systems and delivers weaker results on some measures, and the system's leaders must work to connect the parts for their community.

Conclusion

The US health system is best understood as interlocking parts: financing through private insurance, Medicare, Medicaid and the Marketplace; delivery through independent and system-owned organizations; regulation by many authorities; and public health. It spends $5.3 trillion a year, more than peers, largely because of prices and complexity, and it falls short on outcomes. The Triple Aim offers a standard for judging it, and a rural system's experience shows why administrators must manage its connections.

References

Berwick, D. M., Nolan, T. W., & Whittington, J. (2008). The Triple Aim: Care, health, and cost. Health Affairs, 27(3), 759-769. https://doi.org/10.1377/hlthaff.27.3.759

Hartman, M., Martin, A. B., Lassman, D., Catlin, A., & National Health Expenditure Accounts Team. (2026). National health care spending increased 7.2 percent in 2024 as utilization remained elevated. Health Affairs, 45(2), 110-120. https://doi.org/10.1377/hlthaff.2025.01683

Papanicolas, I., Woskie, L. R., & Jha, A. K. (2018). Health care spending in the United States and other high-income countries. JAMA, 319(10), 1024-1039. https://doi.org/10.1001/jama.2018.1150