© 2008 Delmar Cengage Learning. Introduction. © 2008 Delmar Cengage Learning. 2 Overview Health...

© 2008 Delmar Cengage Learning.

Introduction


2

Overview• Health care in America is fundamentally

political

• Like every other issue, health care tends to follow the public policy process

• Costs are a paramount issue in American health politics

• Managed care is a revolution without revolutionaries


3

Health Care IsInherently Political

• Health care decisions relate to the allocation of scarce resources– The very definition of politics

• National health care systems are reflective of a country’s political traditions and norms


4

Health Care and the Policy Process I

• First step in policy process – Getting item on national political agenda

• National Health Insurance (NHI)– First appeared on agenda due to the efforts of

early (private) reformers• Returned to agenda as part of FDR’s New Deal


5

Health Care and the Policy Process II

• In second step of policy process:– Political solutions to a given problem are

formulated

• Could be “re-heated” policies hatched previously

– Garbage can theory of policy making


6


• Early proposals to provide “workingman’s insurance” resurrected during New Deal era and after


7


• Those opposed to comprehensive (public) provision of benefits offered private schemes– More modest federal financing proposals

• Hill-Burton, et. al.


8

Health Care and the Policy Process III

• Third step of policy process involves making a political decision

• National health insurance never enacted– Medicare and Medicaid passed by Congress

• Signed into law 1965


9

Health Care and the Policy Process IV

• In fourth stage of the policy process– Political decision (law) is implemented

• Medicaid initially left states with wide latitude


10

Health Care and the Policy Process IV

• Some, such as New York, used program as means to achieve universal coverage by lowering eligibility requirements

• Federal government soon clarified law by setting maximum income levels


11

Health Care and the Policy Process V

• Fifth stage of policy process involves the administration of a given program

• Relates to the day-to-day functioning of government program


12

Health Care and the Policy Process VI

• This final stage of policy process often not realized– Involves evaluation of a given program


13

The Cost of Health Care in America

• American health care system is by far the most expensive in the world– Accounting for an ever-burgeoning share of

gross domestic product (GDP)– Many of the political issues revolving around

health relate to the cost of care


14

The Managed Care “Revolution”• Managed care offered as means of

reducing growth in health care costs

• Featured in failed Clinton health plan– Eventually adopted independently by private

sector

• After brief stabilization:– Health care costs continue(d) to rise


15

Values in Health Care: Fairness and Efficiency

• Broad agreement on desirability of both values in principle– But difficult, if not impossible, to achieve

consensus on realizing both

• “Inherent tension” between the two

• Multiple definitions of both– Depending on one’s perspective


16

Efficiency Defined• Most simply, efficiency can be conceived

as a bargain– With the ideal of achieving the highest ratio of

outputs to input

• Myth: efficiency can be measured – Efficiency can only be properly defined in

reference to an individual, party, or constituency


17

Assumptions of the Ideal Market: The Rational Actor

• Individuals are rational when it comes to their behavior in a given market

• Persons possess the ability to discern which goods or services will improve their situation – Employing all available information, individuals

will choose the best of available options


18

Realities of the “Health Care Market” The Rational Actor

• “Counterfactual problem” in health care makes it difficult to decide if an alternative decision in care would have yielded a better, or even different, outcome– Market offers few cues

• Few know about different health plans– Good “report cards” on plans hard to come by


19

Assumptions of the Ideal Market:Predetermination of Preferences

• Preferences are inherent to the very identity of an individual– Produced, as if by magic, through the

“Immaculate Conception of the Indifference Curve”

• Providers of goods and services cannot significantly alter individual preferences


20

Realities of the “Health Care Market”Variability of “Consumer” Preference• Patient preferences can be “physician-

induced” – Doctors possess far more information than

patient– Extent to which this actually occurs is unclear


21

Assumptions of Ideal Market: Broad Agreement on Resource Distribution

• Members of society:– Expected to share some degree of consensus

on the way in which goods and services are distributed

• Improvements in the fortunes of others do not cause significant distress on the part of others


22

Realities of the “Health Care Market”

• Possible resentment at superior care offered some– Vastly superior care available to the wealthy in

American society– Could create envy among those who are not

better off


23

The Individualistic Model of American Politics

• Americans “born free without having to become so”

• Tocqueville historically relying on themselves – Not a paternalistic monarch or state to attain

privileges


24

The Individualistic Model of American Politics

• Early philosophical liberalism written into U.S. Constitution and design of government institutions

• Self-interest often seen to trump hard science– Presenting continual challenges to health care

professionals


25

Considerations of the “Community” in American Politics• Political historians have discerned long

tradition of appeal to communal traditions and assistance– Broad public health programs launched by

cities at the turn of the 20th century • New Deal-era legislation


26

Divergence within the Puritan Tradition

• Early Puritan ethos elaborated into twin moral stream in American political history

• Individualistic “neo-Puritans” stressed sins of the individual, or the “other”


27

Divergence within the Puritan Tradition

• Collectively-inclined neo-Puritans chose to focus on the sins of the community– Advocating collective action to solve problems

• Including those relating to public health


28

Morality Politics in Practice:Case of School Health Clinics-1

• Public health officials by 1990s advocated opening health centers directly inside schools

• Conflicted with cultural conservatives– Recommended alternative course of

emphasizing individual discipline – “Just say no” anti-drug campaign


29

Morality Politics in Practice:Case of School Health Clinics-2

• Despite opposition, clinics flourished and multiplied across country

• Developed home-grown constituency of parents, students, public-health advocates

• Achieved compromise with conservatives on certain issues


30

Morality Politics in Practice:Obesity Debate-1

• Surgeon general first defined obesity as public health crisis in 2001

• Reactions focused on the individual obese

• Fast-food industry came to be blamed by new breed of “muckrakers”


31


• Villainizing of fast-food purveyors led, in turn, to villainization of the obese

• Policy options mooted include mandating high insurance premiums for the obese


32


• In the end:– Biggest impact of definition of obesity as public

health crisis may come in the way it informs the public

• Changing lifestyle choices


33

Chapter 3 Summary• American political history often viewed

through the lens of individualism, community, or, in the case of this study, morality


34

Chapter 3 Summary

• Original Puritan impulse led to divergent world views– One focusing on the sins of the individual

• Or groups thereof

– Other focusing on the ills of society• Social gospel


35

Chapter 3 Summary

• Morality politics can be seen at play in the cases of school health clinics and the debate over obesity in America


36

U.S. Congress: A Unique Institution

• Few other legislatures play such a powerful role when it comes to initiating policy

• Accords with the “consensus” model of policy making– Interests must bargain with numerous

institutional actors in order to achieve positive outcome on any given issue


37

U.S. Congress: A Unique Institution

• Lack of competing national (unifying) institutions– Tradition of bureaucratic government ensures

Congress retains powerful role in policymaking


38

The ChangingFace of Congress

• Party unity/discipline has changed over time– Generally lower than in majoritarian systems

• House started 20th century as a highly centralized institution– Power gradually decentralizing over time – Up to the 1990s


39

The Fate of Health Care Reform in Congress-1

• National health care reform legislation first introduced (gingerly) by Robert Wagner in 1939

• President Truman made health care reform a priority– Further reform attempts were made in the

1970s – Most recently, in 1993-’94


40


• Not a single piece of health care reform legislation ever made it to the stage of debate on the floor of the House or Senate


41


• Despite Democratic majorities in mid-20th century and party leadership commitment to health care reform– Party cohesion in Congress was low

throughout the period


42


• Conservative southern Democrats managed to scuttle reform efforts through the mid-1960s

• Next, the American Medical Association (AMA) became an obstacle to reform


43


• Newer groups such as the National Federation of Independent Business (NFIB) led interest group opposition to health care reform legislation over time


44

Presidential Strategy and Health Care Reform

• President Clinton waited too long to unveil reform plan– Too close to the midterm elections

• Ordering of process also proved faulty– Administration hoped to prevail in the House

before moving on to the Senate but this did not work


45

Presidential Strategy and Health Care Reform

• Lengthy (secretive) process of formulating reform plan gave interest groups time to galvanize members against it

• Intensity of opposition generated greater than expected enthusiasm among natural allies


46

Chapter 4 Summary

• Congress is unique among the legislatures of the world

• Structural profile of Congress has changed significantly over time


47

Chapter 4 Summary

• Congress has often served as the graveyard of health care reform legislation

• Clinton health care reform package died largely as a result of poor legislative strategy


48

The Limited Presidency

• Presidential power is often curbed by the other governing institutions– Including Congress and the judiciary

• Popular distrust of centralized authority has further limited presidential power


49

The Powerful Presidency

• Crises tend to increase the powers of the president– Particularly in time of war

• Real or figurative

• Powerful personalities and skilled political operators have taken full advantage of the powers left to the president


50

Three Faces of the Presidency: The Individual

• Individual presidents possess the power to place items on the national agenda– To “shape the national conversation”

• Some presidents have entered office with a passion for health reform– Others have been forced to address the issue


51

Three Faces of the Presidency: The Political Operator

• Presidents must become masters of the broader political system if they hope to accomplish their objectives

• Some presidents (particularly Johnson) have proven successful in health policy through their shrewd approaches to handling Congress and other political institutions


52

Three Faces of the Presidency: The Policy Manager

• President must lead an executive branch of 1.8 million employees– Paying particular heed to his cabinet

• “Successful” presidents – Achieve a balance between carefully

considering the advice of policy advisors, and becoming bogged down in details


53

The Presidents and Health Care:Franklin D. Roosevelt (1933-45)

• Universal health insurance initially included among suggested New Deal reforms– Eventually scrapped out of fear that such

“overreach” could jeopardize the broader program of social security


54

The Presidents and Health Care: Harry S. Truman (1945-53)

• Early champion of national health insurance

• Initial health insurance plan foiled by intransigent Congress


55

The Presidents and Health Care: Harry S. Truman (1945-53)

• Despite defeat in first term, Truman presented his plan to Congress during second term– He did not get much further


56

The Presidents and Health Care: Lyndon B. Johnson (1963-69)

• In wake of JFK assassination:– Democrats made huge Congressional gains– Johnson did not need to rely on support

conservative southern Democrats

• Proposals for national health insurance narrowed to plans to provide health coverage to the poor and elderly


57

The Presidents and Health Care: Lyndon B. Johnson (1963-69)

• 1965– Medicaid (coverage for the poor) and

Medicare (coverage for the elderly) signed into law

– In the presence of former President Truman


58

The Presidents and Health Care:Richard M. Nixon (1969-74)

• Early champion of health maintenance organizations (HMOs)– Signed legislation that encouraged their

(gradual) expansion across the country


59

The Presidents and Health Care:Bill Clinton (1993-2001)

• Great latter-day champion of comprehensive health care reform

• Reform plan foundered due to poor Congressional political strategy


60

Chapter 5 Summary

• Two aspects of the presidency: – The powerful and the limited

• Three faces key to understanding presidential role in health care policymaking: – The individual, political operator, and policy

manager


61

Chapter 5 Summary

• The presidents from FDR forward have each had a unique impact on the direction of health policy


62

The Role(s) of the Courts

• Legislatures pass laws– Wording is often left (deliberately) vague– To serve competing interests

• It is the role of the judiciary to clarify legislation– To assist in the implementation of laws


63

Three Models of Health Law• Used to conceptually describe the

overarching legal climate that shape important court decisions at a given time


64

Three Models of Health Law• Some, or all, might be present at a single

point in time– Nonetheless, one has tended to dominate

during the historical periods outlined in the slides that follow


65

Model of Professional Authority (1880-1960)

• During early period– Health law seemed to exist for the sole

purpose of supporting and enhancing the authority of the professional physician


66


• During early period– Supported doctors in their quest to determine

the terms under which they were to practice– Difficult for patients to collect malpractice

damages during period


67


• Key case:– Schloendorff v. Society of New York Hospital

• Involved the complaint of a patient, on whom a surgeon in hospital performed an operation without consent


68


• New York Court of Appeals ruled that the hospital could not be held liable for the operation– As it did not exercise control over the medical

professionals who happened to work there


69


• Major shortcomings:– Precedents established under model could not

effectively provide for those who could not afford care under fee-for-service model

– Doctors could not always regulate themselves• Provided no mechanism by which medical costs

could be controlled


70

Model of the Egalitarian Social Contract (1960-’70s)

• Rather than simply reinforcing discretion of the medical profession– Stressed importance of broad “contract”

between doctor and patient governed by fairness and justice


71


• Decisions abolishing medical discrimination on the basis of race, gender, etc. established under this model


72


• Key case: – Rosado v. Wyman

• Not directly related to health care• Aligned more broadly with social welfare programs


73


• Court held that: – a) Federal statutes ensuring beneficiary

protections were to be taken seriously, enforced

– b) Administrators should exercise (limited) discretion when implementing law, ensuring that values, conditions of the

beneficiary are taken into account


74


• Court held that: – c) In cases in which the law was directed

to states, the individual beneficiary could bring legal action against the State if he/she had a grievance under the law


75


• Major shortcomings:– Failed to control rapid upward spiral in health

care costs– No meaningful guidance on how to

regulate/ration the use of expensive medical technology

– Failed to broaden access to (particularly public) health coverage


76

Model of Market Competition (1970s-???)

• Proposed addressing the twin problems of cost containment and rationing– Allowing the “invisible hand” of the market to

send appropriate cost signals to “consumers”

• Assumed that the bulk of the health care consumed was actually discretionary– Not a life-or-death proposition


77


• Key case: – McGann v. H.& H. Music Company

• AIDS patient claimed benefits under company insurance plan– Company capped lifetime benefits for AIDS

patients alone– Employee claimed discrimination under statute

of ERISA law


78


• Court ruled that ERISA only protected employees under a specific plan– Allowed firms to change plans at any time– Ruled against H. & H. employee


79

ERISA (1974) Explainer

• Employee Retirement Income Security Act – Sought to expand employee protections vis a

vis company-provided pension schemes and health plans

– Providing means by which employees who felt they were the victims of discrimination under a play could seek recompense


80

ERISA (1974) Explainer

• Made acceptable to large firms by simultaneously voiding prior state regulation statutes– Law thus conflicted in tone/intent


81

Model of Market Competition (1970s-????)

• Major shortcomings:– Limited success in cost containment– Rationing has come at the cost of decreasing

legitimacy being accorded the health care sector by those for whom legal protection is sparse


82

Model of Market Competition (1970s-????)

• Redistribution of resources has occurred under model– But from the poor to the (already) wealthy


83

Emergent Fourth Model(?) of Health Law

• Many now seek middle ground between unrestrained market forces, social solidarity

• Emergent recognition that forces of globalization must be tempered if they are to have purely positive effects


84

Emergent Fourth Model(?) of Health Law

• Advances in biotechnology provides further wrinkle to a market competition model already under considerable stress


85

Chapter 6 Summary

• Judiciary assists in process of implementing laws once they have been enacted by legislatures

• Three legal models helped shape direction of health policy over time


86

Chapter 6 Summary

• Model of professional authority held sway from around 1880-1960– Schloendorff v. Society of New York Hospital

the paradigmatic case

• 1960 through the 1970s – Model of the egalitarian social contract

prevailed• Rosado v. Wyman the paradigmatic case


87

Chapter 6 Summary

• Model of market competition reigned from the 1970s through the very recent past– McGann v. H. & H. Music Company illustrates

this model– Fourth model in health law may be emerging


88

Realities of the “Health Care Market”

• Possible resentment at superior care offered some– Causes unease among many policy makers

• Who believe provision of care should not be tied to ability to pay


89

Regulation in Health Care:The Options

• Microregulation– Relies upon direct observation and control of

key actors in market – Actually commonly employed in U.S.


90

Regulation in Health Care:The Options

• Macroregulation: – Emphasis is placed on broader incentives or

disincentives– Examples include global budgeting

• Largely found in systems elsewhere


91

Policy Alternatives to “Pure” Market

• Demand-side policies– Seek to regulate pricing of services through

such mechanisms as patient cost-sharing• Consumer-driven health care


92

Policy Alternatives to “Pure” Market

• Supply-side policies– Seek to control the amount, availability of

services available through controls on “suppliers”

– Measures include global budgeting, limits on quantity of physicians, hospital beds


93

Markets and Government in Health Care: Cross-National Complexity

• Different countries attach differing ideals to their respective health care systems

• Detection of the level of regulation versus market processes often problematic


94

Markets and Government in Health Care: Cross-National Complexity

• Even measures of outcomes are imperfect

• Decisions on the role of markets and regulation in health care – Require the consideration of national ideals

and priorities


95

Chapter 2 Summary• Economists define the ideal market as:

– One in which individuals are rational– Preferences are pre-established– Broad agreement exists on the distribution of

resources


96

Chapter 2 Summary

• None of these conditions are met in the case of health care

• Various forms of regulation present alternatives in cases of market failure


97

Efficiency in Practice

• “The Waiting Room Game”– Efficiency from doctor’s point of view

• Always having patient available to treat, thus filling waiting room

– Does not factor in wasted time on the part of patients – One person’s efficient outcome represents another’s

wasted time/resources


98

Contesting Fairness: Actuarial Fairness vs. the Solidarity Principle

• Actuarial fairness stressed by certain insurers beginning in 1980s– Tied cost of insurance premium to an

individual’s risk– Rhetorically asking why one should be forced

to finance another’s risks


99

Contesting Fairness: Actuarial Fairness vs. the Solidarity Principle

• Solidarity principle/ideal more closely approximated in European systems– Society at large funds the care of the sick and

those (otherwise) least able to finance care


100

Actuarial Fairness in Practice• Insurers first sought to exclude racial

minorities for their “greater risk”

• Despite laws seeking to reform such practices:– Minorities in some areas, as well as those

suffering from certain diseases, find themselves unable to receive coverage


101

Actuarial Fairness in Practice

• Many insurers continue to perfect ways to further fragment market– Closely matching premiums to level of risk

• While excluding certain groups altogether


102

The SolidarityPrinciple in Practice

• Seeks to accomplish the ideal of basing distribution of medical care on the basis of need– Not ability to pay

• Assumes that the community should be responsible for the cost of care for the infirm


103

The SolidarityPrinciple in Practice

• Represents subsidy from the vast majority to the minority– Underlying principle of social insurance


104

Efficiency and Fairness in the American Health Care System

• Current system infused with the spirit of actuarial fairness– Difficult to overcome


105


• Neither efficiency, nor fairness are “neutral criteria” through which to judge quality of health care system– They are values that have different meanings

to different people


106


• There will always be winners and losers in nearly any health care system


107

Chapter 1 Summary

• Fairness and efficiency – Two values crucial to any health policy debate

• Idea of efficiency requires one to define specific perspective


108

Chapter 1 Summary

• Central to the idea of fairness– Tension between actuarial fairness and the

solidarity principle

• Contemporary health care system tends to favor actuarial fairness over solidarity


109

Three Periods of (Health Care) Federalism

• Minimalist period (American Revolution through the Civil War era)– States and federal governments “tested the

waters” as to the policy areas in which one or the other could claim dominance

– Most health functions were consigned to local jurisdictions


110


• Emergent period (approx. 1865-1965)– Federal government and, particularly, the

states entered the health policy arena, through state regulation of the incipient medical profession, and such federal measures as Sheppard-Towner and Hill-Burton


111


• Contemporary period (post-1965)– Witnessed a vast expansion in federal health

programs– Increased fiscal entrepreneurialism on the part

of the states– Federal grants to states have played a

prominent role in this expansion


112

Federal Grant Typology

• Categorical grants are sums issued to states that must then be used for a specific purpose– Usually governed by a specific statute or

statutes


113


• Block grants are sums given to states in the interests of achieving a broader goal– Allow states to use them at their discretion


114


• Entitlement programs– Opposed to those operating under fixed

budgets– Require states (or, in some cases, the federal

government) to fund any beneficiary as defined by a specific plan or piece of legislation no matter the cost

– Outlays toward such programs can thus only be predicted in a given year, not controlled


115

States as Fiscal Entrepreneurs

• States normally try to extract as much federal money as possible under such programs as Medicaid


116

States as Fiscal Entrepreneurs

• Many programs match federal funds to state contributions– So states often devise tricks

• Collecting payments from localities or hospitals, to (artificially) inflate their state contribution

– This, in turn, increases their federal match


117

Devolution and the States

• With mixed success, recent presidential administrations have attempted to reduce the federal commitment to states

• Many measures of retrenching devolution allow states greater flexibility in administration of programs– Reducing the federal match in exchange


118

Chapter 7 Summary

• The nature of the relationship between the states and federal government has changed over time

• Various types of federal grants to states are chief venues of federalism in health policy


119

Chapter 7 Summary

• Retrenching devolution has changed the dynamic between the federal government and the states in recent years


120

States and Health Care: Protecting the Public’s Health

• Since mid-19th century– States have taken the lead in monitoring the

health conditions amongst their citizens


121

States and Health Care: Protecting the Public’s Health

• States are largely responsible for the control and, where possible, elimination of microbial and airborne substances that can give rise to ill health– The latter is of particular significance in the

wake of 9/11


122

States and Health Care:Providing a Health Safety Net

• Through such institutions as state hospitals and divers funding programs (including, but not limited to, Medicaid)– States are responsible for providing health

care to those left behind by the fee-for-service health care service

– Or those generally unable to fend for themselves


123

States and Health Care:Supervising the Medical Profession

• Through Boards of Health– States are responsible for the licensure of

medical professionals• Effectively regulating the profession


124

States and Health Care:Regulating the Insurance Industry• States are responsible for regulating the

health insurance industry within their borders– Determine whom they must cover– Benefits they are to provide


125

States and Health Care:Regulating the Insurance Industry• This task has been made more difficult with

the passage of ERISA (1974)– Drastically limits the state regulatory role in

self-insuring firms and the plans they provide


126

States and Health Care Diversity: Demographics

• States vary significantly in terms of their demographic characteristics– Impacts the nature of the health care system to

be found in each


127

States and Health Care Diversity: Demographics

• Factors that can influence health and health care:– Rural/urban character of a state– Levels of poverty– Racial/ethnic profile


128

States and Health Care Diversity: State Health Profile(s)

• Conditions within certain states (including demographic characteristics)– Can contribute to different patterns of ill (and

good) health– Affect range of ailments encountered

• Distribution across the state


129

States and Health Care Diversity: Access to Care

• States differ considerably when it comes to the ease with which their citizens can access care

• Factors that can influence access to care:– Economic health of states– Population distribution


130

States and Health Care Diversity: Political Culture

• Depending on the predominant political traditions and beliefs found among citizens– Some states simply tend to be more innovative

and/or generous in the field of social welfare


131

States and Health Care Diversity: Political Culture

• Elazar et. al. – Offer geographically-dispersed political

cultures that affect policies/political structures found in each area


132

Medicaid: The 900-Pound Gorilla

• As outlined in previous chapter:– Federal and state governments provide health

care coverage to:• The poor• Many children• Those suffering from certain conditions (including

HIV/AIDS)• Two-thirds of those receiving nursing home care


133

Medicaid: The 900-Pound Gorilla

• State contribution toward Medicaid often comprises a full one-fifth of the overall (state) budget(!)

• Funding crunches are common:– Just when state revenue is contracting during

bad economic times, the numbers requiring benefits under Medicaid tend to rise


134

Medicaid: The 900-pound Gorilla

• Many states offer benefits for groups ineligible for Medicaid– But unable to acquire coverage on the private

market


135

Chapter 8 Summary

• States play broad and varied role in health care:– Monitoring public health– Providing a health “safety net” for the less

fortunate (and uninsured)– Licensing members of the medical profession– Regulating health insurers


136

Chapter 8 Summary

• Several variables determine the precise nature of health services in a given state:– Demographics– State health profile– Access to health care– Political culture

• Medicaid– The states’ “900-pound gorilla”


137

U.S. Health Spending:More than Meets the Eye

• At first glance, the U.S. (far right), appears to spend far less on health care than (otherwise) comparable nations…

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138

U.S. Health Spending:More than Meets the Eye

• Once one factors in tax breaks and publicly-regulated/subsidized private benefits, however, U.S. spending levels (again, far right) rise considerably.

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PubliclyRegulated andSubsidizedPrivateSpending

PublicSpending,Including TaxExpenditures


139

Rise of Private, Employer-Sponsored Health Coverage

• Early battle by progressives to enact national health insurance drew attention to the need to expand health coverage

• Such groups as AMA, insurance companies championed private coverage as an alternative to government intervention


140

• Early treatment of employer contributions to health plans as non-taxable fringe benefits led firms to use employer-sponsored health plans as a means to entice, retain workers

Rise of Private, Employer-Sponsored Health Coverage


141

Expansion of Private Health Coverage

• After first successful employer group insurance plan (Baylor Hospital, 1929) arose– Concept caught on across the country during

the 1930s and 1940s


142


• Following second (failed) attempt to enact national health insurance in association with Social Security– Private insurers redoubled efforts to expand

coverage


143


• Price/wage controls in wartime made health coverage particularly important as a recruitment tool

• President Eisenhower (1954)– Clarified tax status of private health plans,

confirming their tax-exempt status


144

Covering the Consequences: Political Legacy of Private Health Coverage

• Spread of private health coverage gave rise to numerous parties with an interest in defending the status quo– Thus limiting the political “room” to enact

comprehensive reform


145


• Use of private enterprise to serve public goals gives government little leverage over the health care system/industry


146


• Most, though by no means all, receive some form of health insurance under present system, blunting demands for reform

• Costs for switching from largely private to public provision of health insurance would now be monumental


147

The Dreamers: Attempting to Develop a System of National Health Insurance

• President Truman famously failed to attain national health insurance in late-1940s

• Passage of Medicare and Medicaid in mid-1960s represents first (and only) broad expansion of public health coverage


148


• Competing visions of national health insurance in early-1970s withered in the shadow of Watergate


149


• President Clinton’s attempt to enact national health insurance failed– Private insurers implemented portions of it– Shepherding policyholders into managed care

plans


150

Chapter 9 Summary

• U.S. spends greater proportion of income on health care than it initially appears– Once tax breaks and private benefit structures

are taken into account

• Nonetheless, the redistributive aspects of health spending tends to favor the rich


151

Chapter 9 Summary

• Though many have, over time, recognized the need for a greater government role in health coverage and spending– The rise of private insurance and its vast

consequences have made national health insurance little more than a perennial fantasy


152

Early Competitors to a Profession on the Rise

• Medical schools of questionable quality and standards arose across the country

• Massive quantity of medical schools soon fed a growing surplus of physicians– This lowered their prices for patient services


153

Early Competitorsto a Profession on the Rise

• Cities and local jurisdictions established dispensaries during the nineteenth century– Where the newest procedures from the leading

specialists were “tested” on supposed charity cases


154


• Dispensaries spread quickly in the face of rising immigration– Correspondingly meeting the greater need in

many communities


155


• Alternative healers offered care located outside incipient medical mainstream

• Until the 20th century:– Medical science offered little better than those

outcomes achieved by eccentric healers• Latter offered stout competition


156


• Many physicians contracted with mutual aid societies– Government bodies that provided care at low

prices

• Those outside of contract care felt such a practice placed considerable downward pressure on health care prices


157


• Patent medicines and nostrums were common during much of the nineteenth century and into the twentieth

• Poor record of medical science up to that point fed demand


158

Combating Competition: The Medical Profession Fights Back

• From 1870 forward:– State licensing boards were established– “Captured” by local medical societies, which

selected members


159


• Revitalized AMA opened campaign to improve the scientific quality of medical schools

• Council on Medical Education’s Flexner Report led to the closure of many inferior institutions


160


• Monetary support soon followed to schools that “passed the test”– This led to a decline in the number of newly-

minted physicians


161


• “Poor working conditions” of physicians under contract medicine were exposed– Contract doctors pressured to abandon such

practices

• Mutual aid societies switched from contract schemes to reimbursement of (physician-determined) medical costs


162


• Localities urged to leave the field of clinical medicine– Limiting role of free medicine in dispensaries

• Hospitals transformed from charitable institutions to scientific centers – Managed in the interests of physicians


163


• As the medical profession established lists of approved drugs:– Nostrums and quack remedies sidelined

• Drugmakers prohibited from listing the ingredients on bottles and the diseases a drug was designed to treat– Allowed physicians to make that determination


164

A Profession Consolidated

• By the 1920s– Organized medicine had established a legal

monopoly– Competition from any quarter was largely

vanquished


165

A Profession Consolidated

• Physician autonomy and a focus on treating those who could pay was effectively institutionalized

• Medical profession received further assistance from an amenable legal climate during a period of “professional authority”


166

Paying the Price of Success

• Private corporations soon realized the extent to which profits could be made– Became involved in the veritable health care

monopoly formed by physician leaders

• Payers soon rebelled against high health care costs– HMOs and other managed care schemes

expanded


167

Paying the Price of Success

• Physicians now face greater interference from private firms than they might possibly have encountered from the state under a system of national health insurance


168

Chapter 10 Summary

• Emergent medical profession was challenged by five sources of competition:

1. Proliferation of “medical schools”

2. Rise of free care at local dispensaries

3. Patent/quack medicine

4. Alternative healers

5. Contract medicine


169

Chapter 10 Summary

• These forces of competition led to low income and prestige for the bulk of physicians


170

Chapter 10 Summary

• Proceeding years and decades were largely spent suppressing sources of competition

• By the end of the twentieth century:– Physicians paid the price of success as

professional autonomy came under fire from various payers

© 2008 Delmar Cengage Learning. Introduction. © 2008 Delmar Cengage Learning. 2 Overview Health...

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Transcript of © 2008 Delmar Cengage Learning. Introduction. © 2008 Delmar Cengage Learning. 2 Overview Health...