1. The Evolution of the HealthCare System Robin Cleeland, Ph.D., LCSW 2. English Poor Law Tradition Bias against federal and state action inregard to social welfare. Adopted English poor law tradition. Only local gov’t has the authority, right,and obligation to provide benefits. Benefits are provided to the “deservingpoor.” 3. Local Government Initiatives Local governments did engage in somepublic health initiatives in the 18th, 19thand early 20th centuries. Built public hospitals and public healthclinics. Created health codes Minimal in nature and directed toward theaged, disabled and deserving poor. 4. Health Care w/o Government Most people received health care at home. Traditional healers. Midwives. Faith healers. Herbalists. Doctors existed but were not like today. 5. The Rise of Physicians and Hospitals State became involved in regulating thesale of potions, herbs, and medicines. Physicians were recognized by stateregulators as “providers of choice.” From late 1800’s to early 1900’s, hospitalstook a central role. 6. Hospitals Prior to the late 1800’s, the nation hadfew hospitals. Hospitals that existed in U.S. were usuallyrun by local counties or charitableorganizations. Hospitals almost exclusively served thepoor, indigent, aged, and disabled. Poor conditions for poor people. 7. Factors that Changed Hospitals The technology of medicine changed. The nursing profession changed. The U.S. became more urban andindustrialized. Hospitals developed new means oftreating people. Medical education changed. (Flexner) 8. Changes in Hospitals As a result of all of these factors, therewas a dramatic rise in the number ofhospitals during the 20th century. In 1873, the U.S. had approximately 178hospitals. By 1900, the number hadreached 4,000. By 1930, the U.S. had7,000 hospitals 9. Hill-Burton The Hill-Burton Program, enacted in 1946,provided federal dollars for communitiesto build hospitals around the country. The program represented the federalgovernment’s first substantial contributionto the health-care system. The goal was to establish a hospital inevery community in the U.S. 10. The Cost of Health Care With the growing number of hospitals andthe increasingly sohisticated medicalprecedures, came and increase in the costof health care. At the same time, the ability of patients topay was declining—particularly during theGreat Depression. 11. Paying for Health Care Hospital administrators ere concernedabout how to support their new facilities. Pre-pay agreements began in the 1920’sand allowed hospitals to enter agreementswith employers if they paid a set fee forevery employee in advance. Hospitals, employers, and consumers wereunhappy with this model. 12. The Birth of the Blues The American Hospital Association enteredinto talks with state regulators to create anew kind of insurance plan based on third-party payers. The regulators insisted that the plans benon-profit. Blue Cross and Blue Shield were born. 13. Government Encourages the Third- Party System The U.S. retained its limited governmentphilosophy. However, insurers, providers, and employers allaccepted help from the government. Govt. made health insurance tax deductible. Health insurance was exempt from the wagefreeze during WW II. 14. Commercial Insurance Commercial companies wanted to share thesuccess of BC/BS. Targeted healthy people. Charged lower premiums that BC/BS. The government encouraged the competition. As a result there was a tremendous growth inemployer-sponsored private insurance. In 1988, more than 140 million Americans hadprivate health insurance. 15. The New Deal Roosevelt sought to use the governmentto save the economy and provide healthcare. He wanted national health insurance, butthe AMA was opposed. Roosevelt compromised and created awelfare system that includes a social-insurance wing and a welfare wing. 16. Hospital Insurance for the Aged Truman proposed national healthinsurance, but lost. The American view has been that healthcare is not a right; it is a benefitpurchasable by those who can afford it. Truman proposed hospital insurance forthe aged and lost. 17. Medicare and Medicaid LBJ won the presidential election in alandslide and had a democratic majority inCongress. For the first time since FDR, the Congresshad the ability, the votes, and the powerto enact comprehensive health legislation. Johnson decided to propose healthinsurance for the aged. 18. As a result of a compromise: Johnson’s proposal for hospital insurancewas enacted as Medicare Part A. The Republican proposal for physicianinsurance for the aged became MedicarePart B. The AMA proposal to expand welfare-medicine became Medicaid. 19. Community Health Centers The program, enacted in 1965, establishedcommunity centers that were clinic-based andoriented toward primary and preventive care. The model sought to allow local groups todevelop their own kinds of health careprograms. These centers were initially funded by thefederal government and later by Medicaid. 20. Medicaid Enacted in 1965 Funded jointly by federal and stategovernments. In 200, Medicaid provided healthinsurance to 40 million low-incomeAmericans at a cost of approx. $200 billiona year. 21. Roots of Managed Care Prepaid health care existed in the 19thcentury, but most providers opposed it. Uncomfortable with prepayment. Providers who took prepayment riskedbearing some of the expenses associatedwith treating consumers who have highcosts.21 22. Problems with the Traditional SystemBy the 1960s and 1970s, there were 3 majorproblems with the traditional system:-rising costs-variations in care-uncoordinated care 23. The Rise of Managed Care Capitated prepaid system—the incentive isto provide less care instead of more. By directly hiring physicians, prepaid planscan reduce physician autonomy—createpractice guidelines. Instituted gatekeeper systems. 24. Problems with Managed Care Patients may lose ability to choose anydoctor. Physicians resisted loss of autonomy. Changed fiscal incentives. 25. The Government and ManagedCare Congress passed the HMO Act of 1973which set aside federal money to helpspur the growth of HMOs around thecountry and required large employers tooffer their employees and HMO option. This was an attempt to deal with thehealth care crisis. 26. The Crisis Continues Americans were not ready for HMOs in1973. By the mid-1980s, large employers startedto complain that they were spending toomuch money on health care and startedlooking at managed care for a solution. 27. IRA’s and PPO’s HMOs were unpopular because consumerscouldn’t choose their doctors. IRAs (independent practice associations) gavepatients ability to choose from an approved listof MDs and see them in their own offices. POSs allowed consumers to see a doctor outsideof the approved list for a higher fee. 28. Managed Care Grows During the 1990’s, managed careexperienced phenomenal growth. Managed-care plans became looser in anattempt to satisfy consumer demands forchoice and physician demands forautonomy. Rising costs are again creating a crisis formanaged care. 29. Legislating Managed Care Bind between pleasing consumers andmanaging costs. Patient protection laws. Employers choose to self-insure to avoidlegislation. 30. Suing HMOs 80%-85% of Americans belong to health planthat prohibits them from bringing to state courta claim for wrongful denial of coverage. Most people have to bring the claim to federalcourt where the awards would be smaller. Pres. Bush wants to limit awards to $500,000total. Advocates argue that the threat of litigationcreates accountability. 31. Questions for DebateIs health care a right?Should the U.S. have national healthinsurance?Should there be caps on medical malpracticeawards?Does managed care work?What is the responsibility of Americans forlimiting health care costs?