November 08, 2019

Credit: Getty Images / Alex Wong

We spend more on medical care than any other developed country in the world - almost twice the average - but the U.S. lags behind many other wealthy nations on outcomes such as infant mortality and life expectancy. How did we get here?   

Christy Ford Chapin, a historian at the University of Maryland Baltimore County and author of “Ensuring America's Health: The Public Creation of the Corporate Health Care System,” explains how what she calls “the insurance company model” was invented.

And although reducing health care costs is a priority for voters, Jonathan Cohn, a senior national correspondent at HuffPost and author of the book “Sick: The Untold Story of America's Health Care Crisis - and the People Who Pay the Price,” says forces that have hindered reform efforts in the past will almost certainly present pitfalls again in the future.

Three Takeaways:

  • According to Chapin, the leaders of the American Medical Association invented the insurance company health care model back in the 1930s. In the early 20th century,  there were a variety of other health care systems available, including cooperatives and mutual aid societies, but the powerful A.M.A. considered them a threat to the autonomy of physicians. The organization also opposed government managed health care and lobbied hard against President Harry Truman’s efforts to introduce a national health insurance program after World War II, calling it “socialized medicine.”
  • In the U.S., doctors are typically paid using a fee-for-service model, rather than a fixed salary. Prices and administrative costs are much higher than in other developed countries and there are few incentives to contain costs in a system which is managed by for-profit private insurance companies, says Chapin.  
  • Cohn believes that America’s racial diversity is one of the reasons the country has had a difficult time creating a national health care system. Traditionally, it’s been a harder sell to encourage people to pay into a system which supports others who don’t look like them, he explains.

More Reading:

Business, health care, Christy Ford Chapin, insurance, Jonathan Cohn

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