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 8th 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
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.
