Historical Factors in Health Care Cost Escalation

(© Michelle Sahl 1998)

 

There are a number of characteristics germane to the American health care system that developed between 1890 and 1980 which, although not recognized at the time, thwarted efforts to provide cost-effective, comprehensive health care for the nation’s citizens.  I will discuss the evolution of two features which are of particular interest.  The first is the organized medical profession and the physician’s role in the historical health care arena.  The second is the role of the federal government, or lack thereof, in the evolution of health care interests.

 

Organized Medicine and the Physician’s Role in American Health Care:

As early as the late 1800s, political camps began to emerge in the medical “helping” profession which suggested motives of self-interest that superceded the focus of caring for the ill.  According to the profession’s history, as presented in Donald Light’s Reforming America’s Health System:  Origins and Dilemmas, the country experienced an expansion of medical schools, toward the end of the nineteenth century, which resulted in a “competitive glut” of medical practitioners representing various fields, such as homeopathy, osteopathy, and allopathic and eclectic medicine.  The arrival of the twentieth century brought with it a strong determination on the part of organized medicine, under the consolidated leadership of the American Medical Association (AMA), to squelch the “competition.”  The AMA recognized the “competition” as not only the various types of practitioners, but also hospitals, free clinics or dispensaries, contract medicine arrangements, and druggists/the drug industry.  The AMA regarded each of these “competitors” as a threat, honing in on the same patients that the AMA regarded as their avenue to income.  Systematically, the AMA erected literal as well as figurative “barriers” between patients and these other competitors.  These barriers ranged in form from public ridicule and advertising campaigns, to the establishment of “professional entrance requirements.”  Such efforts ultimately secured the AMA’s position as the primary force behind what amounted to a professionally driven health care system from the 1920s through the 1980s....