A Brief History of Heath Insurance in the U.S
As with so many other services in our country, health care and access to it is a privilege not a right. Any interaction with the health care system carries with it the question of cost. It is a regressive system, rewarding those with the best jobs the benefit of the best health insurance coverage. And those unfortunate enough to have jobs “without benefits” are left to choose between non emergent medical care and food, transportation, child care, etc.
41% of US adults bear medical debts. That is more than 100 million people. 58% of all debt collections in the US are for medical bills. This is not at all the case in most other developed countries, wherein there is a social contract ensuring that no one will be bankrupted by medical bills. Nor will they have to consider cost prior to receiving medical care. To quote a recent article in the Journal of the American Medical Association, “In no other developed nation on earth is deep medical debt as present a threat as in the US.”
How did this happen? Why are health care, income, employment and insurance so entwined?
Until the early 20th century there was not much science-based medical care other than emergent surgery. There was no clean water, vaccines had not been developed nor had antibiotics. There were various popular practitioners offering cures with their “tonics” or other non-scientific cures. As a consequence, the average American spent about $5.00 per year ($175.00 In current dollars per year) on health care. Hospitals were mostly poor houses where the destitute went to die. As Medicine became more sophisticated and somewhat more expensive, this changed. Hospitals could offer safe and sterile environments for childbirth, surgery and treatment of a wider range of medical conditions.
There were two main catalysts that led to the development of “health insurance.”
I The Great Depression:
In 1929 Justin Kimble, a prominent educator in Dallas, TX who went on to become the Vice President of the Baylor Health System, saw the difficulties people had in paying their hospital bills as they weathered the Great Depression. He proposed a plan whereby the Dallas teachers would each pay 50 cents per month into a health plan that would guarantee them up to 21 days in the hospital if needed. This would only apply to Baylor and was quite successful.
This model went on to be widely adopted for the general population throughout many hospital systems in the country and became what we would eventually know as Blue Cross. Much later a Blue Shield plan was added to pay physician costs as well.
II World War II
The next big impetus for employer or union sponsored health care was WWII. Health insurance was offered by employers to compensate for low wages, or as a recruiting tool for jobs that were going unfilled with so many working aged men off fighting the war.
Then, in 1943 the IRS made employer-based health insurance tax free. It thus became the rule rather than the exception that health insurance would be provided by employers. As a result, the US went from 7% of the population with health insurance in the early 1940s to 70% in the early 1950’s.
In 1965 President Johnson signed Medicare and Medicaid into law, providing coverage for the indigent and elderly.
Sounds good so far. However, increases in longevity and medical developments unimaginable in 1965 were not taken into account. The life expectancy then was 68, so that, for instance, the average individual would need Medicare coverage for about 3 years.
Also, there was no cardiac bypass surgery, there were no CT scans or MRI’s, no organ transplants, advanced chemotherapy, or any of the myriad treatments now available. Also, babies born in the early 21st century have an average life expectancy of 80 years.
Along with the remarkable advances in medicine and pharmaceuticals there has developed the multi-billion dollar health insurance industry. Corporate greed has become one of the governing factors in how we access medical care. Physicians now spend hours daily doing non-patient care work to satisfy the various health insurance companies. Often services or medications available to patients are determined by these businesses which serve the interests of their stock holders rather than patients.
And unfortunately with the increasing privatization of Medicare, this program is also being coopted by health insurance companies.
While the original intent of health insurance was earnest, it has become unmanageable. The Direct Primary Care (DPC) model that we use allows us to work solely for our patients and nor for insurance companies. Until our country accepts that all citizens deserve adequate health care, providers will have to find ways to practice their profession as best they can, with a huge percentage of health care dollars going to corporations rather than for the direct care of patients.
