In Module One, the first line in the lecture was, “The United States simply
cannot afford to pay $256 billion in healthcare costs. The economy cannot
support it” (OIG, 1980). As we have come to realize in this course, the cost
of health care within the United States is increasing to far greater levels
than originally projected. In an uncertain economic environment, more
citizens are turning to the federal government for health care assistance. In
the months prior to the passing of the Affordable Care Act of 2010,
proponents and opponents of the legislation reverted back to an age-old
political tactic: stumping. Town hall meetings were held around the country
to “listen” to the concerns of the populace as they relate to health care.
Time and time again, we heard average Americans state: “We don’t want
the government messing with our health care.” This raises the question:
How involved is the government in our current system? Some additional
side questions to this would then be, how much, or what portion, does the
government pay, and how did the government get involved in what was
supposed to be a free and competitive market?
Government involvement within the field of health care is as complex as it is
massive. There are a myriad of government regulations and pieces of
legislation (the major pieces will be covered in the next module) such that it
is very difficult to accurately record the true level of government
involvement. Some reports estimate that the government pays as much as
60% of the annual $2.6 trillion dollar tab, while others come in slightly
lower. One thing is clear: No matter what level of measurement is used to
assess expenditures, the level of government involvement is rapidly
increasing. In 2006, the government-funded portion of health care was
placed at 46%. Using the same metrics today, that percentage is closer to
55%. If we exclude the health care tax benefits, the percentages jump to
51% for 2006 and 63% for 2012. Knowing that the federal government is
incurring greater than half of all health care-related expenses in the United
States, it is difficult to maintain the idea of not wanting “the government
messing with our health care.” How did we get here?
As mentioned previously, the Civil War provided the means necessary to
alert those in powerful positions to the woes of the health care system.
Money began to flow into the health care system. Where there is money,
there are opportunists. Snake oil salesmen from around the globe flocked to
the United States to sell their carpet bags full of promised cures. Powerful
drugs such as codeine and morphine were sold over the counter, causing far
more harm than benefit. Individuals looking for a change in career sent in
their payment for $50 and were issued valid medical doctor licenses, no
schooling required; as long as the check cleared, you were a licensed
physician. Some medical programs of the late 1800s were a tad more
academic in nature. Before you were issued a license, you were asked to
read a three-page pamphlet; however, this was based on the honor system,
and the license accompanied the reading material. The words “trust me, I’m
a doctor” seem almost comical when taken in this context.
Nevertheless, major strides in technology and pharmaceuticals eventually
began to raise the level of learning required. The medical school was
created. At the turn of the century (1900), there were approximately 155
such schools in the United States; each had its own level of expectations
and degrees of difficulty. Some required individuals to have at least two
years of previous collegiate work, while others did not care if one had
completed high school. The Carnegie Foundation, not the federal
government, took notice. The Foundation sent Abraham Flexner around the
country to visit every medical school and record everything from admission
requirements and level of faculty to curriculum. The Flexner Report was
issued in 1910, and it had such an impact that the ripples are still felt today.
Of the 155 schools visited, only 66 survived the fallout; 57 of the 66
medical programs merged themselves with large universities and as a result
came under the jurisdiction of state licensing boards. The report moved
medical education and subsequent physician licensing under the control of
government entities, either directly or indirectly. If the Civil War was step
one in government involvement in health care, the Flexner Report created
step two. Now that the government had influence (if not outright control)
over medical education, it could now attempt to regulate not only the
quality of physicians, but the quantity as well.
Another ripple effect of the Flexner Report was tuition. The cost of medical
education skyrocketed. By merging with the university system, combined
with the closure of 90 schools in the country, the remaining medical schools
could increase tuition drastically. As the quality increased and the quantity
decreased, the remaining physicians could extract exorbitant salaries. This
rapid rise created a world of mystique and respect for the licensed medical
professional, never seen before. Countless individuals wanted to become
physicians; they readily applied at the remaining schools. This swelling of
applicants heightened tuition even further. Schools charged astronomical
fees for attending their medical programs to the point where the average
wage earner could not afford medical college. Those admitted to the
programs not only required deep pockets, they also required political
connections. As such, the health care door was now wide open to the
influences of the federal government.
In previous modules, we discussed the creation of Medicare and Medicaid
as federally sponsored programs. In this week’s readings and resources, you
will learn how the government underestimates the expenditures of its
programs and how it may be very difficult to sustain such expenditures. Can
our system continue to spend at such high rates?
References
Kaiser.edu (n.d.). U.S. health care costs. Retrieved from
http://www.kaiseredu.org/Issue-Modules/US-Health-
Care-Costs/Background-Brief.aspx
U.S. Office of the Inspector General. (1980). Semiannual report April 1,
1980 – September, 30, 1980. Retrieved from
http://www.oig.dol.gov/public/semiannuals/04.pdf
