March 10, 2017

Horse 2240 - The Idiotic Tale Of American Health Care

I think that few would argue against the evidence that says that the United States, which spends more per capita on health care and yet manages to still have about 35 million people not covered by any sort of health cover at all, and say that it is a good system. If you are of that opinion that the United States gets good value when it comes to health care, as compared with other countries, then you might as well go away now because this post is of no use to you at all.
I think that it is as obvious as the day is long, that the health care system in the United States is too expensive and not good value for money. The trail that I have been following for the past few days, is trying to work out why the land of the free and the home of the brave could end up where it has as the land of the idiotic and the home of the medically bankrupt.

At the turn of the twentieth century, in the era known as "the great binge", medicine was almost unregulated and people could become surgeons and doctors with practically no training whatsoever. Remember, this was the age in which heroin could be bought over the counter and tonic drinks like Coca-Cola actually still contained small amounts of cocaine.
The United States government brought an end to the madness with the formation of the Food And Drug Administration and the American Medical Association started looking at regulations with regards who was allowed to practice medicine. Naturally this saw medical costs rise but at least all of the charlatans were driven out of the market.

From what I can gather, in the United States and in nowhere else in the world, hospitals started charging fees for service; the first of which was Baylor University Hospital in Dallas, Texas. Suddenly, with a profit model in place, hospitals in the United States were seen as businesses rather than just a public service and this is really where the tone of the American health care system was set.
Because the cost of health care began to rise, as did the quality of said health care, hospitals came up with the idea of charging a monthly fee which would cover you in case the need to go to the hospital arose. In 1928, Baylor University Hospital sold prepaid health care to the teachers at the various schools in the region for 50 cents per month ($6 per year) and it is from this network of hospitals selling prepaid health care that the Blue Cross network grew out of. And then... Dun dun DUN, the Depression hit after the stock market crash of 1929.

Depending on which side of the political divide that you sit on, and which series of filters you choose to distort your view of reality, Franklin D Roosevelt was either an angel or a devil. Herbert Hoover came to power in 1929 and within the year had to deal with the worst economic disaster that they world had ever seen. By the time that FDR took over in 1933, the Depression had come into full bloom and wasn't really solved until a massive increase in aggregate demand, which most people have the cheek to call World War Two. It was during the war, when it was finally realised that government could act to effect in the economy, that FDR came up with the idea of a Second Bill Of Rights, which also happened to include the right to health care.
Among these are:
- The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
- The right to earn enough to provide adequate food and clothing and recreation;
- The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
- The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
- The right of every family to a decent home;
- The right to adequate medical care and the opportunity to achieve and enjoy good health;
- The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
- The right to a good education.
- Franklin D Roosevelt, State Of The Union, 11th Jan 1944

Across the Atlantic, it was the leader of the Conservative Party no less, who came to his senses and realised that the country was more productive and better off if the health of its citizens was taken care of. Winston Churchill announced the idea of the National Health Service in 1944 and it was finally enacted by the Bevan Labour Government in 1948 which followed after the war and followed through on, when Churchill led the Conservatives back to government in 1952. In America though, FDR had died before the end of the war and as such, the Second Bill Of Rights was never introduced to Congress. Furthermore, when Eleanor Roosevelt saw a fuller expression of those principles with the Universal Declaration Of Human Rights in 1948 at the United Nations, the United States took the opinion that this was an affront to the US Constitution and to this day, almost seven decades later, it still hasn't been ratified and shows absolutely no sign of ever being ratified either.
Britain after seeing the horrors of war concluded that people's health was valuable and after winning the war, thought about how to win the peace. America after seeing the horrors of war and after seeing what had happened in Nazi Germany and what was happening in the Soviet Union concluded that human rights were not valuable to enshrine in law. People's right to bear arms and hold the instruments of death was more  valuable than whatever other rights that they could have had, including health care.

At roughly the same time, when output needed to be increased to help the war effort and employers wanted to attract the best workers, the US Department Of Labor decided to implement maximum wage caps, to keep costs down. Employers found that if they wanted to attract better workers, they had to offer other incentives and hospitals were willing to negotiate contracts with employer groups. Fringe benefits such as health care didn't fall under the wage cap and so organisations such as Blue Cross and other similar employer based insurance schemes really began to take off. This was further incentivised through taxation exemptions and extra write off which became part of the Federal Taxation Code in 1943 and then the 1950s.

Harry Truman attempted to introduce a single payer government health care scheme during his second term in my office but the American Chamber Of Commerce, the hospitals themselves and the American Medical Association reacted so violently against it that it never survived a single reading in the House Of Representatives and was dropped as policy. Various Labour Unions fought bitterly against the Congress until 1953 when Eisenhower became President and they then came to the opinion that they had to accept the mess and work with that.

It seems to me as an outsider that it was mostly because of these series of historical accidents rather than by design, why the US health care system is so incredibly expletive deleted. It wasn't because the system was better because it most certainly is not but the further that time went on, the harder it was too undo. In 1965, President Johnson was able to kind of use a bit of a band-aid solution with Medicare and Medicaid but that still only covered people over the age of 65 and those who were so stuck in poverty so abject that's its disgusting.
As an aside, the acts which brought Medicare and Medicaid into being were signed in the Truman Presidential Library and Medicare card numbers 1 & 2 went to Harry Truman and Bess Truman.

The fight didn't end there though and Ted Kennedy tried to have a go at introducing yet another attempt at the single  payer system but he ended up coming against the Presidency of Richard Nixon. Despite his protestations, Richard Nixon absolutely was a crook and his meetings with Edgar Kaiser of Kaiser Permanente would result in the Health Maintenance Organization Act of 1973, which enshrined the utter stupidity of the American health care system to the current day.
Ehrlichman: Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because...
… the less care they give them, the more money they make.
President Nixon: “Fine.” [Unclear.]
Ehrlichman: [Unclear] “… and the incentives run the right way.”
- Taped conversatrion between John Ehrlichman, White House Domestic Affairs Advisor and Richard Nixon, 17th Feb 1971.

Bill Clinton made a half hearted attempt to implement a single payer health care system but again never found the numbers in the Congress and President Obama did manage to make changes to health care with the Affordable Care Act in 2010, which forced health care companies to cover people with pre-existing conditions and it also introduced a mandate for people to buy health insurance but that's also seen push back and as I write this, the first portions of legislation to repeal it are being put to the Congress but still there isn't really a replacement plan; not is there hope of what should have been done under Truman 70 years ago and introduce universal health care.

The four basic economic questions are what to produce, how to produce, for whom to produce, and who owns and controls the factors of production. In answering all of these questions, we have to assume that the what, how, for whom, and who owns, are all controlled by people who would rather line their own pockets than what the basic question of health care is in a state run system - how do we heal the sick? As long as the people who control health care in America continue to decide that profit is better than that question, health care will also continue to be too expensive and not good value for money.

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