Archives for category: Healthcare

Former pediatrician Karen Li wrote a great article for Newsweek on why, after 10 years as a pediatrician in private practice, she said goodbye to the career she loved. The article offers a revealing look at the consequences of managed care, a paradigm (and, as Li attests, a blight) of American healthcare for the past 20 years. An excerpt of her article:

“No longer did we have extra time to spend with our patients. No longer could we prescribe the best medication. No longer could we send our patients to the best specialist or hospital. No longer could we order all the necessary tests to make a diagnosis. No longer did medicine make any sense. Why would a businessman or, worse yet, the HMO secretary with a treatment algorithm on her desk have any right to tell us what was best for our patients? After all, who had the medical training?”

(Li also happens to be the doctor who pounded my back immediately after I was born. I hope that if I had been able to, I would have looked her in the eye and said thank you.)

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I like the direction we’re headed with Obama’s recently passed healthcare reform bill, but the fact remains that the American healthcare system is still a mess. To understand where we are right now, we have to look at where we’ve been. The healthcare crisis didn’t pop up overnight: it’s been brewing for  over a century. PBS produced a healthcare timeline that lays out, decade by decade, the evolution of American healthcare since 1900. Here I summarize it and define its more technical terms.

1900s

In 1901, the American Medical Association (AMA) reorganizes as the national organization of state and local associations, and over the next decade membership increases from 8,000 physicians to 70,000. Drumroll please…“organized medicine” has begun.

1910s

Progressive reformers advocating for more health insurance seem to be gaining public support until the 1917 entry of the US into WWI undermines their efforts. (At this point, people usually just pay doctors for individual visits and services. You could call it a “pay-as-you-go” system.)

1920s

Prosperity + political complacency à no strong efforts to change healthcare

General Motors signs a contract with Metropolitan Life to insure 180,000 workers

1930s

The Depression à greater focus on unemployment insurance and “old age” benefits than on health insurance

Social Security Act is passed but does not include health insurance

Against the advice of insurance professionals, Blue Cross begins offering private coverage in many states

1940s

Prepaid group healthcare, which is seen as radical, begins

During WWII, wage and price controls are placed on American employers, who begin to offer health benefits to entice potential employees. This gives rise to the employer-based system in place today.

Truman pushes a national health program plan that would include all Americans, but it’s shot down by the AMA and called a Communist plot by a House subcommittee. (Just like how Obama’s plan is labeled Communist, Socialist, fascist, etc. today: incorrectly.)

1950s

The price of hospital care DOUBLES. Those outside the workplace are having a harder and harder time affording insurance.

1960s

There are now over 700 healthcare insurance companies

President Johnson signs Medicare and Medicaid into law

Things aren’t looking good for supporters of  “Compulsory Health Insurance”

1970s

President Nixon renames prepaid group health care plans “health maintenance organizations” (HMOs)

Unexpectedly high cost of Medicare + economic inflation + rising hospital expenses (and profits) + greater use of technology & medications à skyrocketing healthcare costs. The words “healthcare” and “crisis” are first used in the same sentence. 

1980s

Corporations begin to integrate the hospital system, previously a decentralized structure. Overall shift to privatization & corporization of healthcare.

Under President Reagan, Medicare shifts to payment by diagnosis instead of by treatment. Patients are classified into one of about 500 groups (diagnosis-related groups, or DRGs) expected to have similar hospital resource use. Private plans quickly do the same.

Insurance companies complain that doctors are exploiting the traditional fee-for-service reimbursement, which encourages a doctor to over-prescribe, over-diagnose, and over-treat because he earns a net profit on each visit and procedure. Capitation payments become more common, with a doctor paid a set amount for each patient assigned to him – encouraging a doctor to reduce the effort spent on each patient.

1990s

Health care costs rise at double the rate of inflation

Expansion of managed care (techniques intended to reduce the cost of providing healthcare) moderates increases in health care costs – at first.

Federal health care reform legislation fails again to pass in the U.S. Congress. (Remember “Hillarycare”?)

By the end of the decade there are 44 million uninsured Americans. 44 million too many.

2000s

Health care costs still rising. Duh.

People start realizing that Medicare is doomed.

Direct-to-consumer advertising for pharmaceuticals and medical devices is on the rise. (“Ask your doctor if ____ is right for you!”)

2010: Obama healthcare reform bill passed…but THAT’s a whole other post.