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What's Wrong With American Healthcare?

By Gene Santoro 
Originally published by American History magazine. Published Online: October 15, 2009 
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Health is not a free market commodity, like a car. People will spend everything they have and whatever they can borrow for health.

An Interview With Medical Historian James Mohr

Q. Is government involvement in health care un-American?

A. There is a long American tradition of public responsibility for health. In the 19th century, for instance, states devoted as much as 30 percent of their budgets to public mental health care. And when it became clear that vaccination actually worked against smallpox, state after state created labs to provide vaccines free of charge to citizens. So to say it's un-American is profoundly wrongheaded.

Is the current system broken?

It can't be sustained as it is right now if we care about the public's overall health. We can't afford it. The World Health Organization ranks the U.S. 38th in health-care quality, below Dominica and Costa Rica and above Slovenia and Cuba. Meanwhile, per capita we're spending half again as much as our nearest competitor.

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What's the key problem?

Nowhere else are doctors paid the way they are here, or allowed to have such absolute autonomy. Decisions made in the 19th century created an occupation that almost guarantees a handsome income and high status, but offered few incentives to be rigorous about internal discipline: It's still almost impossible to lose a medical license. As a result, medical mistake rates are stupefying: Hundreds of thousands of Americans die annually from medical errors.

You sound like an anti-doctor muckraker.

I'm not. I believe most physicians are caring professionals. But because of the way our health-care system evolved, bad doctors are rarely held accountable for their mistakes. Under 5 percent of doctors account for roughly a third of malpractice suits, yet the system lets them keep their licenses.

How are doctors regulated?

Historically there has been very little regulation. By the 1880s, the doctors who graduated from a medical school were pushing to upgrade the profession. They wanted licensing laws at the state level and tighter educational requirements, and got them. But unlike elsewhere, American licenses came with no strings attached.

What was the result?

The heightened educational standards began reducing the number of medical school graduates, thereby reducing the number of license-able physicians. And so their power and prestige in society increased—along with their incomes, which was the bottom line. Meanwhile, the situation priced many Americans out of health care.

What about early efforts to provide national insurance?

In 1915 and 1916, bills were introduced into Congress that would have produced a structure similar to those in place today throughout Western Europe. Initially the AMA—the American Medical Association—was all for it. After all, doctors had been accustomed to collecting only 50 percent of their bills, so 100 percent looked like a good deal. National insurance seemed inevitable. But the AMA soon began to shift its position.

Why?

The leadership was afraid: If the government became the principal payer, doctors might lose their autonomy and become government employees at fixed salaries. So they hunkered down behind the concept of fee-for-service: direct payment by the patient. They actively opposed doctors who hired out to group practices, and ostracized doctors who signed contracts with labor unions on a per-head basis, similar to modern HMOs. World War I brought new arguments: National insurance was Prussian, socialist, un-American.

What resulted?

Doctors' incomes and medical costs continued to rise steadily in the 1920s. In 1932 the Committee on the Costs of Medical Care, a national blue ribbon panel that included the AMA, again recommended a national insurance program. But a committee minority said that would destroy the medical profession. The AMA claimed this minority represented the majority of physicians—although no one could ever calculate whether that was true—and killed that initiative too.

Were there any alternatives?

The Depression forced the medical profession to tolerate some medical cooperatives, like the Mayo Clinic and Kaiser. These were large, powerful operations that could withstand pressure. Some local groups also developed co-op plans, but they were generally in areas where there wasn't much money at stake, like coal-mining regions, so the AMA let them go.

What about Medicare and Medicaid?

The AMA initially fought the proposals, calling them a government takeover. But this time—in the progressive 1960s—they lost. Ironically, they realized, "Wow, were we ever wrong! Now we have this government spigot of money pouring into the largely unregulated world we created in the 19th century." That's where the real acceleration of medical costs started.

What changed?

That much money without much regulation attracts people who know a lot more about running major enterprises than individual doctors do. So there was an explosion of major medical for-profit corporations. Today, doctors find themselves more concerned about falling under the control of corporate medicine than the government. That's one reason so many physicians are reconsidering health-care reform.

Can the free market fix the system?

No. Health is not a free market commodity, a good you can choose, like a car. People are willing to spend everything they have and whatever they can borrow for health.

Would a public plan lead to rationing care?

We ration it already, on an ability-to-pay basis. Yet we also pay for those who can't, in subtle and indirect ways like soaring emergency room expenses charged to taxpayers, and a less healthy and productive citizenry overall. We need to adjust this malfunctioning distribution system to make our health-care dollars go much farther.

How?

For one thing, by not doing tests for which there's little demonstrable payoff—except for the test providers. These hidden costs riddle the system.

For example?

A 60-year-old woman complains her knee has been hurting. The orthopedist says, "It could be this or that." The patient wants an MRI to settle the uncertainty, even though it's costly. The doctor is willing; he might even own 50 percent of the MRI lab. The MRI shows tears in her meniscus. She wants scope surgery, and the doctor has a financial incentive to agree. It's the orthopedic operation most commonly performed on women in this country. But half of all women 60 and older have these tears. If there's some pain, it's most likely arthritis. This whole costly process probably won't make much difference.

Whose fault is this?

There's no bad guy here. The patient wants it. Because of the system's structure, the doctor has incentives to do it. It probably won't hurt. But it's not money well spent.

How do we fix it?

Doctors have a vested interest in you getting sick. They are paid to get you better—and generally the more that costs the more they make. We need to change that incentive. If doctors were salaried—and we can afford handsome salaries—to maintain people's health in the most effective, not most expensive, manner, we would have a far better structure. Around the country there are plenty of small practices and some big ones that do that and work very well indeed.

What's the biggest worry?

No change. Making no progress. We won't revolutionize the system overnight. Change will be incremental on myriad fronts. But we have to be world leaders instead of lagging. We have to find ways to combine what is positive and unique about our system while eliminating the historical anomalies that make it unsustainable.

James C. Mohr is a professor of history at the University of Oregon and editor of New Perspectives on Public Health Policy (Penn State Press, 2008).


26 Responses to “What's Wrong With American Healthcare?”


  1. 1
    Tony Tramonte says:

    I feel that the medical industry right now knows that their time at the trough is just about done, so they are taking everything they can now, much as the financial industry did at the end of the Bush Presidency.

  2. 2
    Biscuit says:

    Sounds like the professor has a predisposed opinion of health care and a liberal agenda.

  3. 3
    Kathy says:

    Sounds like someone hasn't done all his research on the countries that have had soicalized healthcare….I agree that we have a problem ….but is letting the government take over the best idea ???? I think one only need look at the system now that says that medicare is broke…..you want them to determine who can have what and when,,,,,,this is different medicine than what the our elected senators and etc. have….I like how the Va. treats my husband… and I am for letting our service men have healthcare……but letting everyone have health care is asking for a REAL NIGHTMARE !!!!!!

  4. 4
    mr.spock says:

    how much did obama pay this guy for this poppycock?

  5. 5
    HistoryNet Staff says:

    Much more discussion of this article here;
    http://www.armchairgeneral.com/forums/showthread.php?t=84259

  6. 6
    Justin R. Riggins says:

    When I read an article that is highlighted at ACG, I expect something that has been researched or well thought out by the author.

    What a dissapointment. I am opposed to further intrusion into private industry, medical and otherwise by the the federal government, but I could have made a better arguement supporting government intervention than this writer.

    Come on, ACG. Don't waste out time with something as sophmoric as this type of analysis.

  7. 7
    Breanna Ferriby says:

    How can something written from a historical perspective make people so angry? Why is providing for a citizens a nightmare? Health is right. We all pay for everyone's illnesses now. To me it makes more sense to shift to paying for health. There's been so much rhetoric about things being "un-American." It feels un-American to me to let people die because they can't afford healthcare.

  8. 8
    Dave Dee says:

    Actually US health care is just about the best in the world – IF YOU'RE HAVE HUGE AMOUNTS OF MONEY that is.

    Otherwise it's well down in world rankings. Government-assisted health care works very well in Canada, the UK, Australia and Europe so what's so special about the US?

    Isn't it weird how the US government will spend unlimited money on protecting its citizens from military enemies like terrorists and communists, etc but can't be bothered to protect them against microbial enemies, disease and acccidents?

    It's a funny old world.

  9. 9
    JD says:

    The Govt does not PAY for anything. The Govt TAKES the money of its citizens and decides that it knows best where to "use" that money. If anyone really thinks the govt will be able to run health care at the quality of care available now to us, just view any of the other hundreds of govt programs for your answer.

    The problem is NOT the health care system. We have the FINEST health care in the world. What the problem comes from is that govt has ALREADY become involved in heath care and created this mess. Your health care will be decided by a govt manager who will base decisions solely on cost. You think its bad now, just stand by.

    Because its "free" will result in people clogging up every clinic, hospital and ER will every complaint of sniffles and ache and pain. Just look to your favorite socialist country as to what the WAIT is now for their health care for simply procedures. Why do you think people from these countries come to ours for treatment. The willingness to relinquish so much of our freedom in this country for "promises" of utopia reflects the danger we face from within.

    • 9.1
      MJ says:

      Well, lets see your plan then. I don't think you'd be saying this if you were out of work or down on your luck. I lived in England and Japan, and the national health care system really works – especially in Japan. The fear you have is based on all the biased news you read. The idea of government is that the people elect educated, sensible, unbiased leaders to guide the country in decisions that affect us as one nation.

    • 9.2
      Tim says:

      We have some of the best surgeries and the brightest doctors in the world, but we do not have the best ways to pay for them and not everyone has access to them. People come to America for treatment only if they have MONEY. If they are poor, they get nothing here. For all the rich white men out there, the current system looks fine. For the average black man, who's life expectancy is 69 years (the equivalent of 3rd world Iran) it's not looking so good. Do you think poor, obese people with no access to a gym or healty food because they are have 5 kids (because of low funding for planned parenthood in poor, republican states) and no education are clogging up the system? We need stronger primary care, to prevent these problems from getting worse. When people clog the system with heart disease, lung cancer, and diabetes, it's mainly because they don't have good help in the first place. White republicans are so inconsiderate sometimes.

  10. 10

    [...] Mohr, history professor at the University of Oregon, places the current healthcare debate in a historical context. He explains, “We have to find ways to combine what is positive and unique about our system while [...]

  11. 11
    HistoryNet Staff says:

    This article was from American History magazine, not Armchair General magazine. Just a clarification.

  12. 12
    Sean says:

    Notice the author of this article did not mention tort reform. Aside from any financial 'incentives' to run these myriad tests, doctors want to make sure they've covered everything so, if something were to happen, their patients can't sue them for NOT running a certain test.

  13. 13
    joe says:

    a much larger waste of money is the amount being paid to government employees such as mr. mohr. i suggest a new pay scale for all public servants such as he. by dramatically cutting government employee salaries and benefits we would have enough to finance public health care. of course public servants will pitch a fit over anything disturbing their tax payer financed way of life.

  14. 14
    JoeBlotnik says:

    Sounds more like a political site instead of a history site…

  15. 15
    Loup says:

    There's a lot of misinformation being touted in these comments. This was a fair and balanced, historically informed interview, one that in fact doesn't go nearly far enough — health care is a human right, not a privilege or commodity. We don't question that when it comes to personal and national security, K-12 education, fire fighting, etc. Medicare has its problems, but it is far more cost-effective than private insurance — 3% overhead vs. up to 30% — and its rate of inflation has in fact been lower than private insurance. It's not immune to inflationary medical costs because it doesn't cover everybody. If it did, there would be a savings of $400 billion a year, easily enough to cover everyone. Single payer is not "socialized medicine" — it's a publicly financed, PRIVATELY delivered system of health care. Patients in Canada can see any doctor anywhere in the country. In the US, you're severely limited to your "in-network" provider, that is if you even have insurance. Unfortunately the health reform passed by the House isn't going to solve the problem of out-of-control costs — it's a bonanza to the private health insurance and pharmaceutical industries. But that's the US "free enterprise" system for you — socialization of risks and costs, privatization of profits. When it comes to health care, that becomes a life and death matter for millions.

  16. 16
    Susan Johnson says:

    Any attempt to reason with a liberal is a waste of time and breath. The only hope that we have is to pray for our country, live what we profess, and get to the polls in 2010.

    • 16.1
      Matthew says:

      Just so you know Susan we know your way has never worked and never will the proof is in the numbers. I think your either working for, own, or run an insurance Co, or you're mentally crippled by your party's greed lies.

  17. 17
    Whale says:

    Where in the US Constitution does it allow for Congress to mandate that every person in the country pay for health care? No where. Where in the US Constitution does it say that health care is a RIGHT of the people? No where. If, as Obama repeatedly claims, that the vast majority of the country is behind him and believes in Govt run health care, then all he has to do is have his tame Congress pass a Constitutional amendment proposal and send it out to the states to have the people vote on it, but he won't do it, because he KNOWS that he would never get it passed by the 3/4 of the people.

    Why would anyone think that the Government is capable of running anything as important as our health care? The Government, at all levels, are supposed to be limited to doing those things that we as individuals CAN NOT do for ourselves(police, fire, national defense, etc), they are not supposed to be taking our taxes and wasting them on spending projects that make politicians money or increase their ability to be reelected.

    Furthermore, how can anyone trust anything that Obama says? He does nothing but lie continuously, especially about his health care spending. "My health care bill won't raise the national deficit as much as one dime" is what he and Pelosi and Reid keep telling the media. Unfortunately, the media is either in bed with Obama(likely) or just too stupid(more likely) to realize that the federal budget DEFICIT is the yearly amount by which spending exceeds revenue and the accumulation of the yearly DEFICITS – the few examples of yearly surpluses + interest on the debt = the national DEBT.

    Politicians crow about how they have lowered the DEFICIT, but that is just political talk to fool the uninformed, they are just adding a smaller amount to the national debt, not actually lowering it.

    Obama "claiming" that he won't add a dime to the deficit in the year 2020 is nothing but sophistry as the 2020 budget has not, and will not, be written until 2019 at the earliest. It is all a BIG LIE! One quick and easy way that they could ELIMINATE the budget deficit entirely, is by simply passing items off-budget and not counting them as part of the yearly budget, as the Congress recently did with Dr's medicare payouts.

    whale

  18. 18
    Mike says:

    Wow. A lot of whoppers from health care reform opponents here, but that's not too surprising I guess. Sad to see so much intellectual dishonesty on a devoted to the academic rigor of studying history.

    Funny how the folks who don't want the federal government to be in charge of anything use its services everyday and rarely complain about most of them. They have no problem with the military or the interstate system, but for some reason the government can't be trusted to run health care…no one ever elaborates on why. No one ever provides ANY empirical evidence that health care is terrible in nations with a government run health system.

    Don't forget, being shrill is not necessarily being factual or having a sound argument.

  19. 19
    Bobelcnu says:

    FROM THE ARTICLE:

    What about Medicare and Medicaid?

    The AMA initially fought the proposals, calling them a government takeover. But this time—in the progressive 1960s—they lost. Ironically, they realized, "Wow, were we ever wrong! Now we have this government spigot of money pouring into the largely unregulated world we created in the 19th century." That's where the real acceleration of medical costs started.

    ANDTHAT FOLKS, SAYS IT ALL. ONCE GOVERNMENT GOT INVOLVED IT BECAME POSSIBLE TO GRAB PREVIOUSLY UNIMAGINED AMOUNTS OF MONEY. MY FAMILY, AND MANY OTHER FAMILIES, HAD MANY CHILDREN. AFTER WWII VERY FEW HAD "HEALTH CARE." WE RAISED SEVEN CHILDREN IN GOOD MIDDLE CLASS PROVIDENCE WITHOUT HEALTH CARE. THEY WERE BORN BETWEEN 1949 AND 1962. UNFORTUNATELY, GOVERNMENT "PROMISES" AND PROGRAMS CREATED UNPRECEDENTED AND TAXPAYER FUNDED WEALTH FOR DOCTORS AND MEDICAL CORPORATIONS. THE FREE MARKET CAN INDEED PLAY A FORCE IN HEALTH CARE, BUT ONLY IF THE GOVERNMENT GETS OUT.

  20. 20
    RHD says:

    I think people need to take a step back from political quarrels and view the problem for what it is.

    "Health is not a free market commodity, like a car. People will spend everything they have and whatever they can borrow for health."

    I am as capitalist as it gets. Capitalism is the best economic system because it takes into account and harnesses (to some extent) human nature. But even the most ardent fan of capitalism like myself, must be aware that it isn't perfect. The free market is great for commodities, health however is not one.

    At some point, it comes down to this, do you, or don't you respect the idea that some things SHOULDN'T be used to turn a buck off of? In a civilized country like ours, illness should be one of those. (Prison's should be another but that's another subject entirely).

    I personally detest socialism as the worst embodiment of government and dread big government, so honestly, in the case of health, I wish we could create some third entity. Not private business, not government, but something in between, held responsible to the citizens, but I suppose I'm just not genius enough to dream that third entity up.

    Bottom line is… it's not a political theory, but common god damn sense that doctors shouldn't be working on commission, which they are now.

    And one last point to those utterly terrified of government involvement in health. If you live in the USA, the substances you eat and drink are insured to be safe by the oversight of two WHOLLY government run institutions, the FDA and the USDA. We let the government, not private industry, insure that what we feed our families is safe, and yet I don't hear people ENRAGED at the government domination of food safety inspection and demanding we hand that over to the government… maybe because they remember private industry said tobacco was harmless and didn't want any type of warning about health effects on the package until they were forced to in 1965… by……. dah dahdadah.,.. the big evil government that can't look out for the health of its citizens.

    When I buy my food at an American grocery store, I have a strong sense of confidence that it won't be contaminated or harm me. If you feel the same, maybe you should rethink how you feel about the government being involved in your health.

    Oh, and one last thing – Beyond a BA at Yale and PhD at Stanford the man wrote one of the definitive histories of abortion. "This history has figured prominently in several US Supreme Court decisions, and Professor Mohr has twice testified to the US Senate as an expert historical witness on reproductive rights issues." – Translation, the guy has been studying medical history and getting published (from books to articles in the JAMA) in the field for over 30 years. – so – have whatever opinion you want, but the man knows his shit.

    • 20.1
      Matthew says:

      well said, May I add my thought, For profit helth only worked until the people lost the ability to pay the profit takers.

  21. 21
    Eric says:

    Whatta joke. I just picked up a couple of issues of American History, thinking I'd give it a try. This piece shows it's just another left-wing rag with no impartiality.



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