Who Really Screwed Up Healthcare?

The problem is not the healthcare system itself. It’s the way insurance companies are structured.

It seems that healthcare in the US was always dysfunctional.  Doctors and patients alike were stuck in a quagmire most think was created by the insurance companies and aided by the government.  The truth is there was a time when the healthcare systems functioned in the U.S.



The previous model for healthcare was completely different than the current one.  In the early 1900s there were many ways to deal with healthcare.  Unions, businesses, co-ops, and mutual aid societies had various ways to deliver healthcare to patients.

A successful model in the past was for a group of doctors to establish a clinic where there were many different types of medical care available: general care doctors, specialists, surgeons, and many others. Because the care was in one place, doctors could confer with each other over patients’ cases.  Doctors could share patients and give quality medical care.  How did this work? People paid a fee to the medical group – not to an insurance company.  The doctors received a salary plus a percentage of the profits.  The emphasis was on quality patient care.

Contrast this with the current system which is run by insurance companies.  Doctors receive a set amount for a procedure.  So what do they do?  They ask for more tests, give more drugs, in order to drive up the amount of money they receive. Doctors overprescribe and oversupply care.  Why?  They have had to become business people in order to have control over their earnings.  Quality patient care goes out the window.  The doctor has to prescribe within the narrow window allowed by an insurance company, rather than what might better benefit the patient.



How did we get to this?  The American Medical Association felt threatened by the early healthcare models.  Reported in the New York Times, American Medical Association (AMA) members sat on the state licensing boards and could revoke the licenses of any doctors who participated in the alternative systems or take away their hospital privileges.

Reforming healthcare is not a new thing, it started in the 1930s.  President Harry Truman wanted to introduce universal healthcare after the war, the idea was a single payer system using prepaid physician groups.  While all this was going on, the AMA was lobbying to keep government out of healthcare.  The way they chose to do it was to introduce the insurance industry model.  This model forbade insurance companies from overseeing doctors and from financing practices.  By putting their energy into this model, they were able to push away Truman’s reforms, and later Eisenhower’s.



This insurance model fostered rising healthcare costs rather than better patient care.  Doctors and insurance companies successfully fought any government intervention in healthcare. The rapidly rising costs made it adverse to expanding coverage for people – in 1945 it was 25% of the population and today it is 80%.

All the Affordable Care Act (ACA) did was to add more support to a failing system.  The Republicans wants to get rid of that support and just patch up the old system.  Neither is the answer.  Perhaps lawmakers should take a walk and look at the past, when healthcare actually worked in this country.

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