Primary Components and Regulations of the US Healthcare System

The US healthcare system is not a fully integrated and coordinated system. Instead, it is made up of loosely tied delivery, insurance, financing, and payment networks. The US healthcare system comprises five stakeholders: the consumers, payers and insurers, medical suppliers, healthcare providers, and regulators and policy-makers.

To regulate the system, public as well as private entities at the federal, state, city, and local county levels supervise it and play their role. The constant objective of regulatory authorities is to improve quality, expand access, and control the prices of the healthcare system. Due to this, all stakeholders within the system come under different regulations. Multiple governmental agencies and nongovernment organizations administer the system.

Role of the FDA

The Food and Drug Administration (FDA) is a crucial part of the US healthcare infrastructure. It regulates medicine, food, and a wide range of other products.

In addition to regulating drugs, the FDA is also responsible for regulating radiation-emitting products and medical devices in the USA. Be it the Pfizer vaccine, modus vape, 3Chi Delta 8, elastic bandages, enema kits, or any other product, the FDA ensures the safety and effectiveness of each device and product.


The role of the FDA has expanded with the expansion of cross-border trade. Now a huge portion of FDA-regulated items like medicines and foods are imported.

Key Components of the US Healthcare System

According to Lübbeke et al., the following are the key components of the US healthcare system:

1: Healthcare Consumers

Simply put, healthcare consumers are patients. These are the people who are at the receiving end of healthcare services. Although they are of pivotal importance for healthcare decision-making, their decisions usually depend on the assistance of medical professionals. However, they may not be aware of their financial obligations.

For instance, a patient may choose to get services from an in-network provider. The provider, in turn, has fixed rates with the insurance company to bestow healthcare services at negotiated rates.

However, due to the utter unawareness of the patient, the provider may hire out-of-network people who charge full prices from patients. So leaving them with robust, expensive bills. Therefore, healthcare consumers must be vigilant about in-network healthcare providers and make their medical decisions accordingly.

2: Insurers and Payers

Payers in the healthcare sector include the public sector, the private sector, and the consumers who are responsible for financing functions. And financing in this sector is contingent on accumulating money for the reimbursement of health providers and healthcare services.

Now come third-party payers.

Any organization that insures or pays healthcare expenses for consumers is a third-party payer. Each consumer has to pay a certain price for the services he gets. It is called a rate or charge, set by a third-party payer or the provider, respectively.

Patients’ insurance is the source of payment for healthcare providers. With finance secured, patients can easily access health facilities, which in turn increases the demand for medical facilities.

USA: A Multi-Financing System: Unlike other developed countries that have a single-payer system, the USA healthcare is a multi-financing system. The government runs the national health insurance programs and taxes finance them. Due to this, the US healthcare system is a complicated mix of private and public, for-profit and non-profit providers and insurance.

3: Providers

The third component is healthcare providers, which are comprised of individual providers as well as organizations that provide healthcare services to patients.


Individual Providers: Individual providers are hospitals, group medical practices, practitioners, ambulatory facilities, and nursing homes. As this system is a complicated mix of healthcare services provided in several dimensions, the human capital that is required to provide these services is also complex and varied. Individual providers are further categorized into two:

  • Healthcare practitioners and technical occupations
  • Healthcare support occupations

Organizations: Physical facilities in the system have several categorizations. Primary care and ambulatory care facilities comprise dentists’ and doctors’ offices, and public and community health buildings. Ambulatory surgical centers and hospitals are two important types of inpatient care and specialized ambulatory facilities.

Nursing homes are part of institutional forms of long-term care. On the other hand, home healthcare agencies, end-stage renal facilities, and hospice are part of non-institutional forms of long-term care. Healthcare facilities are under private or public ownership. Each category also has numerous other types of facilities.

4: Suppliers

As their names suggest, suppliers in the healthcare sector are companies that supply and supply medicines and medical supplies. They are medical equipment companies and pharmaceuticals. Healthcare suppliers are the backbone of the system because they provide medical supplies like medication, oxygen, CPAP machines, and wheelchairs that people crucially need.  To cover the large portion of the cost of medical prescriptions and supplies, insurance companies come forward.

5: Policymakers and Regulators

Authorities at the federal, state, and local levels regulate the delivery of healthcare services that formulate rules for the whole system. The Center for Medicare and Medicaid Services sets reimbursement standards and provides subsidized medical coverage.

That, in turn, regulates the delivery of healthcare services to ensure security, safety, and quality of healthcare services.

In addition, the US Department of Health and Human Services is charged with the authority of combating fraudulent claims, protecting patient privacy, and ensuring healthcare providers and insurers comply with the law.

At the bottom of this lies the government which is pivotal to all the aspects of the system like setting standards for patient safety, privacy and security laws about patient information, standards for participation in government-run programs, licensing requirements, and quality standards for healthcare organizations.

Concluding Remarks

In short, the US healthcare system is a complicated web of consumers, insurers and payers, suppliers, providers, and regulators. They all are pivotal to ensuring the quality, transparency, safety, and security of the whole system.

To regulate the system, several federal, state, and local authorities formulate policies and implement them to ensure the smooth functioning of the system. The Food and Drug Administration (FDA) is the backbone of the whole system that regulates food, medicine, and other products. Besides that, other legislations set the whole mechanism for these authorities to function.