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Chapter 3: The Evolution of Health Services in the US

Terms in this set (58)

Four main eras in US Health Care Evolution
pre-industrial
post-industrial
corporatization
healthcare reform
Five main factors explain why the medical profession remained largely an insignificant trade in preindustrial America: #1: Medical Practice was in disarray:
-Being a medical professional did not require the rigorous training and schooling as it does today
-The generally well-educated clergyman or government official was more learned in medicine than physicians were at the time.
-Tradesmen, such as tailors, barbers, commodity merchants, also practiced the healing arts by selling herbal prescriptions, nostrums, elixirs, and cathartics.
-Later in 1847, the American Medical Association was founded with the main purpose of erecting a barrier between orthodox practitioners and the "irregulars."
-It wasn't until 1870 that medical education was reformed and licensing laws were passed in the US
Five main factors explain why the medical profession remained largely an insignificant trade in preindustrial America: #2: Medical procedures were primitive
-in the absence of diagnostic tools, a theory of "intake and outgo" served as an explanation for all diseases. It was believed that diseases needed to be expelled from the body (bleeding, induced vomiting, bowel movements, and urination).
-Technologies like anesthesia, antiseptic techniques, stethoscopes, x-rays, thermometers, and microscopes were not available.
-Diagnoses relied heavily on the 5 senses.
Five main factors explain why the medical profession remained largely an insignificant trade in preindustrial America: #3 An institutional core was missing
No widespread development of hospitals until 1880s, unlike Europe.
-American hospitals played only a small part in medical practice because most hospitals served a social welfare function by taking care of the poor, those without families, or those who were away from home on travel.
almshouse
also called the poorhouse, served general welfare functions by providing food and shelter to the destitute of society (poor, orphans, ill, insane, disabled, elderly.) Caring for the sick was incidental because some residents would inevitably become ill.
pesthouse
was operated by local governments to quarantine people who had contracted contagious diseases (cholera, smallpox, etc.) These institutions were the predecessors of contagious-disease and tuberculosis hospitals.
Dispensaries
were established as outpatient clinics, independent of hospitals, to provide free care to those who could not afford to pay. They were private and financed by bequests and voluntary subscriptions. Their main function was to provide basic medical care and dispense drugs to ambulatory patients. Later, they got absorbed by hospitals as outpatient facilities
Mental asylums
were built by states for patients with untreatable, chronic mental illnesses. Techniques like bleeding, forced vomiting, and hot and ice-cold baths were used.
Hospitals
were known for poor sanitation and inadequate ventilation.

These early hospitals were houses of death.

The morality rate among hospital patients stood around 74% in the 1870s.

People went to hospitals because of dire situations, not personal choice.
Five main factors explain why the medical profession remained largely an insignificant trade in preindustrial America: #4: demand was unstable
Professional services suffered from low demand in the mainly rural, preindustrial society, and much of the medical care was provided by people who were not physicians.
-Many families could also not afford medical services because (1) the indirect costs of transportation and the "opportunity cost" of travel could easily outweigh the direct cost of physicians' fees and (2) the costs of travel often double because 2 people, the physician and an emissary, had to make the trip back and forth. For a farmer, a trip into town could mean a days work lost.
-Private practices and fee for service-the practice of billing separately for each individual type of service performed-was firmly embedded in American medical care.
Five main factors explain why the medical profession remained largely an insignificant trade in preindustrial America #5. Medical education was substandard
From about 1800-1850, medical training was received through apprenticeship with a physician. Many of the trainees (called preceptors) were poorly trained.
-By 1800, there were only 4 small medical schools: UPenn, Columbia, Harvard, and Dartmouth.
-To enhance professional status, prestige, and income, American physicians later initiated the establishment of medical schools in large numbers.
Medical Services in the Postindustrial Era: 7 key factors contributed to this transformation:
1. Urbanization
2. Science and technology
3. Institutionalization
4. Dependency
5. Autonomy and organization
6. Licensing
7. Educational reform
1. Urbanization:
-It distanced people from their families and neighborhoods where family-based care was traditionally given
-Women began working and could no longer care for sick family members
-Physicians became less expensive to consult as phones, cars, and roads reduced price of travel.
-Doctors went from seeing 5-7 patients a day to around 18-22
2. science and technology
-Advances in bacteriology, antiseptic surgery, anesthesia, immunology, and diagnostic techniques, along with new drugs, gave medicine an aura of legitimacy.
-This gave doctors culture of authority- the general acceptance of and reliance on the judgment of the members of a profession.
-Science-based medicine created an increased demand for advanced services that were no longer available through
3. Institutionalization
The evolution of medical technology and the professionalization of medical and nursing staff enabled advanced treatments that necessitated the pooling of resources in a common area of care (hospitals).
-As hospitals expanded, their survival became increasingly dependent on physicians to keep the beds filled because the physicians decided where to hospitalize their patients. This gave physicians enormous influence over hospital policy.
-Hospitals in the US did not expand and become more directly related to medical care until the late 1890s. However, as late as the 1930s, hospitals incurred frequent deaths due to infections that could not be prevented or cured. Nevertheless, hospital use was on the rise due to large influxes of immigrants in large cities.
4. Dependency
Patients depend on the medical profession's judgment and assistance.
-First, dependency is created because society expects a sick person to seek medical help and try to get well by complying with medical instructions.
-Second, dependency is created by the profession's cultural authority because its medical judges must be relied on to legitimize a person's sickness, exempt the individual from social role obligations such as work or school, and provide competent medical care so the person can get well and resume his or her social role obligations
-Third, in conjunction with the physicians' cultural authority, the need for hospital services for critical illness and surgery also creates dependency when patients are transferred from their homes to a hospital or surgery center.
5. Autonomy and organization
The AMA was formed in 1847, but did not attain real strength until it was organized into county and state medical societies were incorporated, delegating greater control at the local level.
-The AMA's principal goal was to advance the professionalization, prestige, and financial well-being of its members.
-The concerted activities of physicians through the AMA are collectively referred to as organized medicine, to distinguish them from the uncoordinated actions of individual physicians competing in the marketplace.
6. Licensing
By 1896, 26 states had enacted medical licensure laws.
-Through both licensure and upgrading of medical school standards, physicians obtained a clear monopoly on the practice of medicine.
-In 1888, in the Supreme Court decision, Dent v. West Virginia, Just Stephen J. Field wrote that no one had the right to practice "without having the necessary qualifications of learning and skill." In the late 1880s and 1890s, many states revised laws to require all candidates for licensure, including those holding medical degrees, to pass an exam.
7. Educational reform
Reform of medical education started around 1870, with the affiliation of med schools with universities.
-Charles Eliot, president of Harvard, extended the academic year from 4 to 9 months, increased the length of med school from 2 to 3 years. Lab instruction, clinical subjects such as chem, A&P, and pathology, were added to the curriculum.
-At John Hopkins, medical education for the first time became a graduate training course. Standards at John Hopkins became the model of medical education.
-The Carnegie Foundation for the Advancement of Teaching appointed Abraham Flexner to investigate medical schools located in the US and Canada. The Flexner Report (1910), was widely accepted by both the profession and the public. Schools that did not meet the proposed standard were forced to close.
Specialization in Medicine
Only since the early 1990s, under health maintenance organizations (HMOs), has the gatekeeping model requiring initial referral to a specialist gained prominence. The distinctive shaping of medical practice in the US explains why the structure of medicine did not develop around a nucleus of primary care.
___ specialist to generalist ratio
58:42
National Mental Health Act of 1946
funding for education and research
Olmstead v L.C.
directed US states to provide community-based services to people with mental illness.
NIMH
early treatment of mental disorders
Development of Public Health
Historically, public health practices in the US have concentrated on sanitary regulation, the study of epidemics, and vital statistics.
-The growth of urban cities brought about much disease.
-The development of public health played a major role in limiting the spread of infection among populations
-Public health measures and better medical care reduced mortality and increased life expectancy
-By 1900, most states had health departments
When did health services for veterans start?
after WW1
The 1st broad-coverage health insurance in the US emerged in the form of _______ in 1914
workers' compensation

(The employer is financially liable for the full cost of injuries and illnesses from the job, regardless of who is at fault)
-Workers' compensation served as a trial for the idea of government-sponsored, universal health insurance in the US. However, the growth of private health insurance, along with other key factors discussed later, has prevented any proposals for a national health care program from taking place.
3 forces created the need for health insurance in America
1. technology: advanced treatments became available, but hey were expensive

2. social: desirability of medical treatments

3. economic: unpredictability of medical needs and costs of treatment
Rise of Private Health Insurance
1911:
1916-1918:
1929:
1939:
1911: blanket insurance policies became available (life, sickness, nursing care)

1916-1918: state employer mandates failed

1929: modern health insurance was born (Baylor Plan)
-established by J.F. Kimball for school teachers
-at Baylor University hospital
-a prepaid plan
-became the model for Blue Cross

1939: the California Medical Associated started the Blue Shiel Plan to cover physician services
Three main developments pushed private health insurance to become employment based in the US
(1) to control high inflation in the economy during WWII, Congress imposed wage fezzes. In response, many employers started offering employees health insurance in lieu of wage increases, (2) In 1948, the US Supreme Court ruled that employee benefits, including health insurance, were a legitimate part of union-management negotiations, (3) In 1954, Congress amended the Internal Revenue Code to make employer-paid health coverage nontaxable which provided an incentive to obtain health insurance as an employer-furnished benefit
National Health Insurance: Actions taken in the US
-1914:
-1917:
-1935:
-1940:
-1992:
-1914: workers compensation

-1917: the American Association of Labor Legislation attempted to expand its social agenda by advocating national health insurance

-1935: Franklin Roosevelt, New Deal

-1940: Franklin Roosevelt: bills on national health insurance failed to pass
-Harry Truman: first US president to propose national health insurance

-1992: Clinton and Bush proposals
-Hisotrically, repeated attempts to pass national health insurance legislation in the US have failed for many reasons, which can be classified under 4 broad categories:
1. Political Impracticality: Unlike Europe, the American government was highly decentralized and engaged in little direct regulation of the economy or social welfare.

2. Institutional Dissimilarities: American hospitals were mainly private, whereas in Europe they were largely government operated. Any efforts that would potentially erode the fee-for-service payment system and let private practice of medicine be controlled by a powerful third party (the government) were opposed. Other institutions such as insurance, pharmacies, and even unions opposed it as well.

3. Ideological Differences: The American value system has been based largely on the principles of market justices. Individualism and self-determination, distrust in the government, and reliance on the private sector the address social concerns as typical American values have stood as a bulwark against anything perceived as an onslaught on individual liberties.
-During the era of the Cold War, any attempts to introduce national health insurance were met with the stigmatizing label of socialized medicine. With their power of money, the AMA made sure no national health insurance bills would be passed.

4. Tax Aversion: An aversion to increase taxes to pay for social programs is another reason middle-class Americans, who are already insured, have opposed national initiatives to expand health insurance coverage.
-"Avoiding tax increases took priority over expanding health insurance coverage and caused the demise of Clinton's health care reform initiative"
3 Medicare/Medicaid precursors
1. Amy Forand's bill (1957) to expand Social Security to include hospital and nursing home care for the elderly

2. Kerr-Mills Act (1960) gave federal grants to states to provide health insurance

3. Rep. Byrnes' proposal -Bettercare- premium cost sharing between the elderly and the federal government
Medicare is Title ____ of the Social Security Act
Title XVII
Part A of Medicare:
hospital and limited nursing home coverage (based on Forand's bill)
Part B of Medicare:
covers physician bills (based on Byrnes' )
Part C of Medicare
allows private health insurance companies to provide Medicare benefits. These Medicare private health plans, such as HMOs and PPOs, are known as Medicare Advantage Plans.
Part D:
drug coverage
-you pay for this part and you pick a certain plan
Under Medicare, physicians can balance bill:
charge the patient the amount above the program's set fees and recoup the difference (medicare could only pay 80%)

*Medicaid doesnt do this
Medicaid is title ____
Title XIX
Medicaid
-federal matching funds to the states (based on Kerr-Mills)
-for poor people
-Based on a means test developed by state
-all age groups
-cost is shared by federal and state
3 Prototypes of Managed Care: Contract Practice
A common arrangement was to contract with independent physicians and hospitals at a flat fee per worker per month, referred to as capitation. The AMA recognized the necessity of contract practice in remote areas, anywhere else was regarded as a form of exploitation.
-Later, in the 80s and 90s, MCOs used contractual arrangements with providers and were successful in replacing the tradition fee-for-service payment arrangements by capitation and discounted fees.
3 Prototypes of Managed Care: Group Practice
Group medicine represented another form of corporate organization for medical care. Group practice changed the relationship among physicians by bringing them together with business managers and technical assistants in a more elaborate division of labor.
-Sharing of expenses and incomes and other economic advantages caused group practices to grow
3 Prototypes of Managed Care: Prepaid Group Plans
In time, the efficiencies of group practice led to the formation of prepaid group plans, in which an enrolled population received comprehensive services for a capitated fee.
The HMO Act of 1973
-Passed during the Nixon administration, with the objective of stimulating growth of HMOs by providing federal funds for the establishment and expansion of new HMOs.
-The reason for stimulating HMOs was the belief that prepaid medical care, as an alternative to fee-for-service, would stimulate competition among health plans, enhance efficiency, and slow the rate of increase in health care expenditures.
-Required employers with over 25 employees to offer an HMO alternative if one was available in the area.
-Unfortunately, by 1976, only 174 HMOs had formed, because employers didn't take the HMO option seriously and continued to offer traditional fee-for-service insurance until their own insurance expenses started to grow rapidly during the 1980s.
Medical Care in the Corporate Era: Corporatization here refers to the ways in which healthcare delivery in the US has become _____
the domain of large organizations.
____ has emerged as a dominant force by becoming the primary vehicle for insuring and delivering health care to the majority of Americans.
Managed care
Together _____ and _____ organizations have, in reality, corporatized the delivery of health care in the US.
managed care

integrated health services
General Agreement on Trade and Services (1995)
-to remove barriers to international trade in services

-in health care services it may affect: insurance, hospital services, telemedicine, and medical treatment abroad
Information Revolution
the delivery of health care is being transformed in unprecedented and irreversible ways y telecommunications, information technology, and informatics.
Globalization
refers to various forms of cross-boarder economic activities.
Mutchncik and colleagues identified 4 different modes of economic interrelationships:
(1) advanced telecommunication infrastructure in telemedicine enable cross-border transfer of information for instant answers and services. (2) Consumer travel abroad to receive elective, nonemergency medical care, referred to as medical tourism; Hospitals in India and Thailand offer state-of-the-art medical facilities to foreigners at a fraction of the cost for the same specialty procedures done in the US or Europe. Conversely, wealthy foreigners come to multispecialty centers in the US, such as the Mayo Clinic, to receive highly specialized services. (3) Foreign direct investment in health services enterprises benefits foreign citizens. (4) health professionals move to other countries that present high demand for their services and better economic opportunities than their native country.
-Globalization has both positive and negative effects.
Era of Health Care Reform
There has been incremental reform to health care (ex: Small incremental reforms: Children's Health Insurance Program (CHIP) in 1997 and Medicare Prescription Drug, Improvement, and Modernization Act, 2003, added Part D to Medicare. But, the ACA represents the most sweeping reform since the creation of Medicare and Medicaid.
The Oregon Health Plan
initiative took place in the 80s. Incorporated 3 main components: (1) expansion of Medicaid to cover people who previously did not qualify. The cost of Medicaid expansion was to be paid by implementing supply-side rationing. (2) The Oregon Medical Insurance Pool was established as a state agency with funding to offer health insurance to people who could not buy coverage because of previous health conditions. (3) An employer mandate in which employers are legally required to help pay for their employee's coverage was installed. The law had a play-or-pay provision in which employers must either provide insurant or pay into a public health insurance program. (Although, ERISA partially blocked this)
The Massachusetts Health Plan:
In April 2006, Massachusetts became the first state to pass a bipartisan plan that intended to achieve nearly universal coverage in the state. The reform has 4 main features: (1) the individual mandate requires all state residents to have health insurance or face legal penalties. (2) The employer mandate requires all employers with more than 10 workers to offer, at a minimum, a section 125-cafeteria plan that permits workers to purchase heal insurance with pretax dollars. (3) Government subsidies enable low-income individuals to buy insurance under a feature called Commonwealth Care. People whose incomes are lower than the poverty line get their premiums paid for by the state. Those earning up to 300% of the federal poverty line pay a subsidized premium. (4) At the core of the plan is the reorganization of large part of the states private insurance system into a "single market" structure with uniform rules and central clearinghouse, called a Connector, to facilitate the purchase and administration of private health insurance plans.
Passage of the Affordable Care Act
-Patient Protection and Affordable Care Act, 2010 and Health Care and Education Reconciliation Act, 2010
-Partisan legislation: Not a single Republican voted in favor
-President Obama united his own party behind the legislation
-Backroom deals were made with waffling members and interest groups
-The AMA reversed its historic stance in supporting the legislation
-The American public was kept in the dark about the details
-Legal challenges pushed the legislation before the Supreme Court
The Supreme Court's Ruling
• The majority of ACA provisions were ruled constitutional under the Congress' power to tax (the individual mandate)
• However, the federal government could not coerce the states to expand their existing Medicaid programs
The Aftermath
-Opposition to the law continues
-The Obama administration delayed implementation of the employer mandate until 2015
-Several provisions of the law have been implemented since 2010, however, major implementation challenges continue
-The future remains uncertain
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