How we got to our current Healthcare System.

American Health Care is an ecosystem, which evolved rather than a planned system. It is a crazy quilt, which covers most Americans.  

 Planned healthcare systems include those of Rwanda and Taiwan (1995).   Unlike in the US, in which entrenched opposition by rent seekers has prevented reform, the 1994 upheaval and its relative poverty let  Rwanda start from scratch.   The British created their National Healthcare system in 1948. Prior to this they had a patchwork system in which employees were covered but not their dependents.  Canada developed its Medicare system in 1968. 

With evolution some species are efficient and some are not. 

And healthcare is complicated

Events in American Healthcare

1798 US Marine Hospital for Seamen was founded by the government.  It was the first American socialized medicine.

1846 the American Medical Association was created.  Healthcare was very primitive and there was no system.  People hired their doctors who could do little. 

The American Healthcare system evolved after WW2.  Before WW2 people paid for the doctor's service and hospitals were run by churches and charities. 

1900 Aetna Life insurance offered health coverage for disability from disease except TB, VD, insanity, or disability due to alcohol or narcotics.

1904  - the first workman’s compensation Law in Maryland was declared unconstitutional.  The AMA counsel on medical education standardized the education for doctors and by 1910 had organized half of American doctors.

In 1911 Theodore Roosevelt campaigned on creating a national health insurance system and lost.

In 1912, the College of Surgeons sets standards for hospital accreditation.  Health insurance companies defeated state attempts at universal health insurance.

In the 1920s healthcare was medieval.  It consisted of lotions that did not work and was a trivial part of ones budget.  In 1900 the average annual healthcare budget was $5 was spent, which would be $100 today.  2.9% of the family budget was spent on sickness and death. 

Hospitals were poorhouses where the indigent went to die usually started by Churches .  They were non profit.

1920 – 29  effective medicine, antibiotics became available and hospitals became a place to have babies.

By the late 1920s hospitals had empty beds. People spent more on cosmetics than medical care. 

1927 President Coolidge convened a committee to address growing health care crisis in terms of access and cost.    Heart disease became and still is the leading cause of death.

1929  Baylor Hospital started a subscription service and in the depression it became popular and was known as Blue Cross. But not many people bought it .  The first HMO was founded in LA

In 1935 Social Security was passed providing economic support for the elderly.  At AMA’s insistence national healthcare was removed.  

1935 - WW11 wages were limited and employers used fringe benefits to attract workers

9 % of population in 1940 went to 63% in 1963.   People with good jobs got care through work, and everyone else looked to government.  Costs were spread over a large group. 

1939 California Physicians service became the basis for Blue shield, a prepayment plan for physician’s services.

1040 Penicillin came into wide use and 12 million of 132 million had health insurance.

1943 The IRS rules employer based healthcare to be tax free 

1945  President Truman supported national health insurance but it failed after being portrayed as communist. 

Medical care is fee for service, as pre-paid plans are barred by most states. Since for profit insurance companies are permitted to charge lower premium for the healthy they overtake Blue Cross. 

1960 to 80 medical school enrollment doubled and the number of specialists increased.  There are 700 insurance companies In the US.

In 1965  Medicare and Medicaid were introduced.    Physicians could price discriminate.   Medicaid covers health and long-term services for 59 million low income Americans most being working families.  The sickest 1% make up 25% of spending.   Medicare covers hospital and drug cost for those over 65.  By now 6.6% of the family budget was spent on healthcare.

1969 Nixon announces a healthcare cost crisis healthcare spending is 7.1% of GDP and by 1973 HMO act is passed Enrollment only reaches 10 million.

1980 DRG payments.   From ww2 to 1980 most doctors were fee for service in private practice.  After 1980 capitation spread.  Hospitals use price discrimination.

1980 – 90 Healthcare cost continued to rise.  The country moved to manage care which fixed cost.

Corporations begin to buy up hospitals hospitals.  In 1983 President Reagan changed to a DRG system which fixed payments to hospitals by disease.    Congress expanded drug company rights through  increased patent protection.   By 1990 drug company profits were 25% of revenue. 

1993 President Clinton proposed a national health insurance.   This was the 8^th attempt at national healthcare and was also defeated.

1997 drug companies were allowed to advertise directly to consumers.  US  life expectancy reached 77 years and healthcare spending 14% of GDP

2000 President Bush signs the Medicare Prescription Act covering drugs.  Healthcare cost reach 16% of  gdp.  62% of workers participate in employer health plans.  Only 57% of children covered through their guardian’s health plan

Insurance companies merge resulting in 3 for profit and 2 non-profit controlling 90 percent of the market.

 By 2010 Spending reaches 2.6 trillion.

The US relies on doctors and hospitals to provide care.   

In 2014 the affordable care act will require all people to have health insurance.  Those who don't get it though their employer or a government program would be required to purchase it on their own or through an insurance exchange.

2010  - Over considerable opposition the Affordable Care Act is  signed and in 2012 the Supreme Court declares it constitutional.

Healthfair for the uninsured.

The Bottom Line: Healthcare from Softbox on Vimeo.