• These are not new issues

    Yes, I’m still blogging about Paul Starr’s The Social Transformation of American Medicine. I could fill dozens of posts with passages that illustrate how the health care issues we’re wrestling with today have been with us for generations. Sure the political context changes, but it’s been over a century or so of: how much is too much? how do we pay for it? who should get it? should insurance be public or private? should it be mandatory or voluntary? should it be prepaid or indemnity? how much cost sharing? and so on.

    I don’t think many people realize this fact. I didn’t. The central issues pertaining to health care financing go way back, back to the dawn of medicine worth paying for at all.

    Anyway, get this, from page 307 of The Social Transformation of American Medicine. Other than the global budget, it foreshadows Medicare’s physician payment mechanism and problems with it:

    The early Blue Shield plans in California and Michigan were beset by difficulties. They had no mechanisms for controlling utilization and proved unable to maintain expected levels of payment. Rather than use a fee schedule, California Physicians Service [in 1939] set up a “unit value” system that assigned relative values to different physicians’ services in units that ideally were supposed to be worth $2.50. Doctors agreed to accept whatever payment levels the plan could afford. Because of the failure to control utilization, the units were worth just $1.30 after the first accounting period and fell to $1.10 by December 1940.

    Or, how about this, from page 319, illustrating the interplay between physician price setting power and third-party payment in the 1950s:

    It seemed that doctors who were accustomed to setting fees according to their patients’ ability to pay, were raising charges now that their insured patients could afford to pay more. “In a local in Butler, Pennsylvania,” reported an official of the United Rubber Workers,” we started out with an insurance program that provided fifty dollars for the maternity fee. We had found that for a number of years the maternity fee in that community was $50.

    “Strange as it may seem, in less than a year we found that the standard charge for maternity in Butler went to $75. Then we came in with the surgical schedule we now have which provides $75 for normal delivery. We now find that the normal delivery charge in Butler is $125.” Bargaining for higher medical benefits seemed to benefit the medical profession more than the [plan’s] members.

    Here’s a passage about the 1970s that from page 407. Similar dynamics hold today, though the litigants have changed:

    In health reform, a little known law of nature seems to require that every move toward regulation be followed by an opposite move toward litigation. The Association of American Physicians and Surgeons, a right-wing faction of the AMA, sued the government over the constitutionality of PSROs [professional standards review organizations]. The AMA itself sued when the proposed utilization review regulations were issued. It sued again to block the health planning law from being carried out. The Association of American Medical Colleges sued over regulations imposed on medical schools. These lawsuits did not reverse the tide of regulation, but they slowed it down.

    I could go on and on. You get the idea. Been there, done that, still doing it.

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