The Great American Health Care Machine

Today is September 30, 2010.  The new health care law provisions are starting to kick in. Insurance premiums are increasing and the Republicans are vowing to dismantle the new law if they win in the November election.

For the past 25 years, I have written on health care policy and politics and have worked in the healthcare industry for over 30 years—in academic  institutes , nonprofit agencies, a for profit HMO, and as an entrepreneur.  I am a long standing consumer advocate having worked for seven years with the public to determine what they need and want in a health care system. Consequently, I am in an unique position to write this analysis because I have been in the industry, but not of it.   My degrees are in Japanese and Comparative Governments. I have nothing to win or lose by an analysis of the problems and the stakes that have shaped the current system.  I return to writing to give a positive voice for a health care system that could work for the American people.  I plan to blog once a week to offer fresh insights and perspectives on current and past reform efforts.

My premise: we cannot fix the health care system without systemic changes to the organization and delivery of health care services. Nor can we make meaningful changes without altering the way we reward and compensate health care professionals and institutions.

The organization and delivery of health care services have been controlled by the health care industry—largely hospitals and doctors.  Health care reform has been held hostage to partisan politics,  the domineering voices on the left and the right and their unyielding stranglehold on solutions other than their own. The noise of these two extremes—single payer vs. marketplace—has drowned out any semblance of hope for a middle ground that could have the real possibility of working.

American Health Care’s Long-Standing Fatal Flaws—An Historical Perspective

“The problem of providing satisfactory medical services to all the people of the United States at the cost which they can meet is a pressing one. At the present time, many persons do not receive services which is adequate either in quantity or quality, and the costs of the service are inequably distributed. The result is a tremendous amount of preventable physical pain and mental anguish, needless deaths, economic inefficiency and social waste. Furthermore, these conditions are….largely unnecessary.  The United States has the economic resources, the organizing ability, and the technical experience to solve these problems.”  First paragraph, Chapter 1, Medical Care for the American People, October 31, 1932.

Medical Care for the American People reflects the recommendations of the Committee on the Costs of Medical Care, an independent commission which formed  in 1929, with funding from several private foundations, such as the Milbank Memorial Fund, the Rockefeller and Carnegie Foundations, among others.  The Committee cited several reasons American health care was so expensive:

  • The tremendous variation of services and costs based on location and type of provider
  • There are too many medical specialists—45%
  • Individuals/families with lower incomes receive fewer services, in spite of large volume free work, and woefully inadequate mental health hygiene and public health services
  • Lack of a preventive system of care and reliance on fee for service payment system
  • Lack of a community-focused health care system, instead of an unorganized system unfathomable for the community as a whole
  • Increased specialization of care and larger capital investments in buildings and equipment I have increased costs rather than decreased them
  • Costs are uneven and unpredictable
  • Large overhead for physicians –nearly 40%–adds to the cost of care without adding value

The Committee’s recommendations included:

  • Services based on a larger body of scientific medical services
  • Greater expansion of public health services, especially in rural areas
  • Better geographical distribution of practitioners and agencies
  • Incomes of general practitioners and specialists should be more nearly equal and incentives for “fee splitting” (between specialist and primary care) should be removed
  • Better control over the quality of care and improve quality as fast as possible
  • More effective control over the number and type of practitioners trained
  • Reduce waste—from reduction of unnecessary medications and services to  reduction of high overheads and unused hospital rooms

Their final recommendation:

“Those who furnish the services on the one side and those who receive and pay for them on the other, must cooperate if either is to meet the needs which they perceive or to attain the benefits which they desire.”  Page 35. Medical Care for the American People

The Committee was formed in 1929—prior to the advent of penicillin; prior to health insurance; in the midst of the Depression.  Their report was never adopted and the systemic issues they identified remain to this day.  We have never had that joint cooperation between the medical/health care industry and the public.

Follow this blog to learn more about their findings, why nothing happened then and what could happen  now.   Coming next:  Who were the members of the Committee on the Costs of Medical Care and why did this group form?

©Kathleen O’Connor, September 28, 2010

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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One Response to The Great American Health Care Machine

  1. Lynn Murphy says:

    Congratulations on your new (old) venture. I have so appreciated all the Code Blue info over the past couple of years, and while we all didn’t get completely what we wanted, at least there was some movement and the national light shining on the issue for a time. Much more to be done………….I will look forward to following the issues on the O’Connor Report!
    Thank You!,’
    Lynn Murphy

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