How will a cut in the budget cure the US health system? Denis Staunton reports from Washington
For more than 50 million Americans on low incomes who depend on the publicly funded Medicaid programme for their healthcare, life has just become a little tougher.
President George W Bush last week approved major changes to the programme, cutting its budget and obliging recipients to pay more for doctors' visits and prescriptions.
The president said he wanted further cuts to trim $36 billion from the cost of Medicaid and its sister programme, Medicare, which provides healthcare for the elderly.
Dan Hawkins from the National Association of Community Health Centers describes last week's bill as one of the most significant changes in America's healthcare policy for more than a decade.
"It will fundamentally change the nature of America's only taxpayer-financed programme of healthcare for the poor and the disabled, shifting more of the cost onto those poor and disabled individuals, many of whom will not be able to bear those costs and therefore will forgo seeking important care that they need, especially important early care and preventative care," he said.
Mr Bush said the cuts were necessary to avoid placing an unbearable burden on future generations, claiming that if spending went unchecked, Medicaid, Medicare and Social Security [ the federal pension system] would account for 60 per cent of the US budget by 2030.
He argued that the cuts would simply slow the growth of spending, which would continue to rise.
"It is the difference between slowing your car down to the speed limit, or putting your car into reverse," he said.
Most Americans have private health insurance, usually provided by their employers.
Coverage is expensive and most policies require individuals to pay part of the cost of treatment and pay for their own prescriptions above a certain limit.
A health crisis is one of the three most common causes of bankruptcy in the US, along with divorce and the loss of a job.
Because insurance pays for most of the cost of treatment, however, insured patients have little incentive to avoid unnecessary visits to the doctor or to think twice about expensive tests and treatments that may be of little value.
No other country spends nearly as much on healthcare as the US, where per capita spending on healthcare is more than twice as much as the average in industrialised countries.
But Mr Hawkins said that all the evidence showed was that Americans were not getting value for money.
"We're in worse health and we don't live as long as Europeans do. Our life expectancy is lower, the quality of our care is worse, our health outcomes are worse and yet we spend twice as much," he said.
Part of the problem is that too many uninsured people are using hospital emergency rooms for the kind of treatment they should get from a family doctor. Without health insurance, they have nowhere else to go.
"So they wait until they're so sick that they really must get care now," Mr Hawkins said.
"They go to a hospital emergency room, which is not a place that will provide continuous, ongoing care but just episodic, one-time and very expensive care.
"And by the time they get there, they are so sick that many of them need to be admitted to the hospital for inpatient care, surgery and other important care and the cost of their care is so much greater than it would have been had they only had the ability to go see a family doctor early on," he said.
Health insurance companies and healthcare providers such as doctors and hospitals have little incentive to change the system but American business is increasingly alarmed by the cost of providing insurance coverage for their employees.
In his State of the Union address this month, Mr Bush identified the cost of healthcare as an obstacle in the way of US competitiveness and American exporters were complaining that they were competing against European rivals who need to spend little on healthcare because they have publicly funded health services.
US employers have sought to address the problem by shifting more of the cost of healthcare onto individuals through health savings accounts.
Mr Hawkins dismisses such moves as inadequate to deal with the long-term problems of America's healthcare system but he sees little prospect of Americans embracing a European-style public health service any time soon.
"We are still the wild west where government is seen as the court of last resort rather than the court of first resort," said Mr Hawkins.
"First we rely on the marketplace to address an issue or a problem and only in the case of market failure - total and utter failure - do we then turn to government," he said.
"We do that for public safety, we do that for fire and police, we do that in large part but very grudgingly for our education system.
"But we have not yet arrived at the point where we understand the market failures that pervade our healthcare system and that really makes it vitally important that government play a role on behalf of us as citizens," Mr Hawkins said.