hsa 3111: evolution of us health services 1 dr. lawrence west, health management and informatics...

HSA 3111: Evolution of US Health Services

1Dr. Lawrence West, Health Management and Informatics Department, University of Central Floridahttp://systems.cohpa.ucf.edu/lwest

Topics

• Prelude• Preindustrial Era• Postindustrial Era

– National Healthcare Efforts– Early Managed Care Efforts

• Corporate Era

“…anyone who had the inclination to set himself up as a physician could do so, the exigencies of the market alone determining who would prove successful in the field and who would not”

R. Hamoway (1979)



Prelude

• The chapter offers tremendous insights into the history of the US health care system and the events, attitudes, market forces, and political pressures that resulted in our current system.

• These insights also help to explain current debates surrounding healthcare reform.

• The chapter is weak (almost silent) on explaining the implications for health care professionals who are not physicians.– We will need to make inferences on our own



Prelude (cont.)

• What is it about the United States and its attitude toward government that causes us to be the only developed country without a centralized healthcare system?

• Hint: Name the four largest countries that have had successful revolutions (total replacement of government) since 1776.– What were the results of the other three?– How did our results differ?– What does the 10th Amendment to the Constitution

say?



Prelude (cont.)

• Given the absence of a single-payer (government) healthcare provider in the U.S.:– What market forces have influenced the structure

of the healthcare system?– How have technological advances affected the

structure?– What political forces also influenced healthcare

delivery?



Three Historical Phases

• Preindustrial era: Mid 1700s – Late 1800s• Postindustrial era: Late 1800s – Late 1900s• Corporate era: Late 1900s – beyond



Preindustrial Era

• What did it take to be a physician in the 1800s?– “Anyone who had the inclination to set himself up

as a physician could do so, the exigencies of the market along determining who would prove successful in the field and who would not.” (p. 85)

• How many hospitals were there?• How many medical schools were there?• What were the graduation requirements?• What were the licensing requirements?



Preindustrial Era (cont.)

• Medical Practice characterized by– Very primitive diagnostic capabilities– Very limited surgeries (the faster the better)– Medicine considered a trade rather than a

profession• Lower end of the middle class

– Physicians competing with home remedies and traditional healers

– Travel cost a large part of medical cost– Physicians saw 4-5 patients a day– Low confidence in the medical profession




• Hospitals– No widespread development before 1880s

• Europe developed hospitals before 1800– Not closely allied with medical practice– Often staffed by unpaid junior physicians and

students looking for experience– Other institutions had healthcare functions

• Almshouse• Pesthouse




• Unstable Demand– Many physicians not much better than local

practitioners– Little science behind medical practice– Costly travel component– Doctors concentrated in urban areas but much of

the population was rural– No insurance or other support for payments




• Medical Education– Primarily apprenticeship (if that)– Only 4 medical schools in 1800, 42 in 1850

• Direct admission from secondary school• Two-year curricula

– Later schools were income generating for teachers– Unrestricted entry– Little science-based education– No standards for curricula



Postindustrial Era

• Saw the current shape of the U.S. healthcare system develop

• More urbanized population• Increased technology• Rising costs• Rising professionalism• Resistance to national healthcare



Postindustrial Era (cont.)

• Urbanization– Separated people from families and many

alternative sources of healthcare– Physicians became less expensive to consult

• Travel cost reduced– Physicians moved to cities to follow the business




• Science and Technology: What were the impacts of increasing scientific knowledge on the healthcare professions?– Increased capabilities Increased confidence– Shifting from “trade” to “profession”– Increased “cultural authority”– Increased practical authority– Need for increased specialized training




• Growth of Institutions– More complex treatments and technologies

required more resources than the GP’s office– Bundling of equipment, physician, nursing, support

staff, and facilities needed– Hospital developed as the hub around which other

resources/participants centered– Hospitals and physicians developed a symbiotic

relationship• Bilateral power base




• Patient Dependency– Physicians developed a gatekeeping role with

respect to patients through cultural and legal paths• Physician validation of illness for absence• Ditto for treatment• Prescription authority• Health insurance payments

– Commensurate roles not granted to alternative healthcare providers




• Cohesiveness and Organization– Common training curricula increased

cohesiveness– Specialization resulted in referrals and local

relationships among physicians– AMA resisted control of physician employment– Physicians remained largely independent of other

institutions• Hospitals• Insurance companies




• Licensing & Educational Reform– Medical licenses were (and still are) regulated by

states– Significant variance among medical school quality– AMA pushed for licensing only their accredited

school graduates– Quality improvements in school curricula and

exams had positive effects…– …but practical effect was also to give physicians a

monopoly position with respect to medical practice




• Specialization– 17% of physicians specialists in 1931– 60% are specialists today– Similar diversification in allied healthcare

professions– U.S. healthcare system fell into a state where

access to specialists was often unregulated• Increased costs for insurance companies• Uncoordinated care for patients




• Other Trends– Increased development of public health functions– Increased incidence of chronic conditions

• Why do you think this was?• Healthcare system still oriented at acute

conditions– Veterans healthcare system– Workers’ Comp

• Role as a trial balloon for universal healthcare




• Private Health Insurance– Development of need for alternative funding– What were the motivations for the Baylor Plan and

subsequent development of Blue Cross and Blue Shield plans?

– What motivated the development of employer-based health insurance during WW II?

• And why has it persisted today?• And what is happening to it today?



National Health Care Efforts

• Compulsory sickness insurance spread throughout Europe from 1883 to 1912

• Every effort to create universal health insurance in the US failed until 2010– And that still isn’t ‘universal’

• Revisit the questions on slide #4– Market forces– Technology developments– Political forces



National Health Care Efforts (cont.)

• Look at the huge array of forces aligned against national health insurance from 1946 to the present.– AMA– Taxpayers (who already had insurance)– Politicians– Pharmacists

• So how did Medicare and Medicaid sneak through in 1965?



Early Managed Care Efforts

• What is managed care and why was it developed?• Variations on a theme

– Contract practice—physicians under contract to provide services at a set rate plus other controls

– Group practice—grouping multiple providers under one business

– Prepaid group plans• Capitalized on group practice efficiencies for a

set fee per time period to subscribers• Precursors to HMOs• Required alternative in 1973 HMO Act



The Corporate Era

• Look at the ebb and flow of market power described on p. 110.– Physicians and hospitals dominated the market

place as suppliers until mid-1980s– Managed care contracting with providers became

dominate next• Controlled supply of customers (patients)

– Providers began to consolidate to create countervailing market power

• Two types of corporations deal with each other• Where do the patients fit in?



The Corporate Era (cont.)

• Information Revolution– How is healthcare similar to banking?– What are the information management limitations

of healthcare in the modern age?– How can information technologies overcome these

limitations?– How have technologies empowered patients?



The Corporate Era (cont.)

• We know about globalization of many businesses• Identify ways in which healthcare has become

global– Access to providers– Knowledge– Investment– Disease spread

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