The passage of the US healthcare bill is undoubtedly a major political triumph for President Obama. By 2019, almost all Americans will, at last, be covered by almost comprehensive health insurance. In the US context this is undeniably a major step forward. However, in terms of global national health system development, this brings the USA to something like the stage reached by the leading European nations a century ago.

Ideological imperatives inevitably forced the US President to extend existing insurance-based arrangements rather than attempt more radical alternatives. Unfortunately, whilst the extended arrangements are to be welcomed, insurance is a shaky foundation for covering health risks.

The general principle of commercial insurance is to decline to cover any risk which seems likely to occur. This is why, in the USA, those with dubious or uncertain health histories have been refused cover (or priced out of it) and why women (who are judged to be higher risk) frequently have to pay higher premiums.

Group insurance, particularly that provided by employers, has also proved to be unreliable. For example, it has been estimated that, in 2008, more than a million Americans lost their health insurance when they lost their jobs in the recession.

Insurance-based systems are also expensive to run. Commercial insurers will only cover high risks if they are guaranteed a government subsidy. The costs of running and policing a system based on individual payments and claims are high. These and associated costs have been estimated to absorb as much as 40% of health expenditure in the USA.

Even the best insurance cannot guarantee access to services when they are needed. The ‘health gaps’ in some states have been described as “shockingly wide”. For example, in some rural states, doctors are thin on the ground. Infant and maternal mortality rates approach third world levels in some areas. Apparently, in Montana, the average emergency response time is eighty minutes. Financial coverage is only the beginning: it needs to be matched by comprehensive planning and provision of services.

In reality, for most people, ill-health is a certainty, not a risk. Inevitable life events are simply not insurable on commercial terms. This is why most other developed nations have introduced more cost effective and equitable systems of service entitlement based on citizenship. These involve either government sponsored, non-commercial insurance or, in the case of the Nordic countries and the UK, tax-funded arrangements which cut out the middle man entirely. They also involve better planning of services on the ground.

So, well done Mr President! Now for the real challenge!

Written by Professor David Hands, Visiting Professor