History of the Healthcare System in the United States, Term Paper Example

Introduction

The emergence of the modern healthcare system in the United States is grounded in significant historical roots. Healthcare practices have shifted dramatically since the early 20^th Century, and continue to become increasingly complex yet innovative in many areas. It is important to establish a greater understanding of the history of this unique healthcare system and how it grew into the industry that it is today. There are a number of key points in history that demonstrate the continued growth of the healthcare system, and many challenges that have mandated change in different areas. The following discussion will address the history of the healthcare system in greater detail and will emphasize some of the most relevant and noteworthy events that have taken place over the past century and into the 21^st Century to evaluate healthcare as it has expanded and grown into the system that exists in 2012.

Analysis and Literature Review

From a historical perspective, to early roots of healthcare in the United States began in the early 1900s, when the American Medical Association gained prominence and surgery was increasingly common (PBS). At this time, there were few industries to provide medical support to their employees, with the exception of the railroad industry, which became an emerging leader in this practice (PBS). In the 1910s, hospitals began to utilize antiseptics and other cleanliness techniques more often, in addition to medication administration to reduce pain in patients (PBS). In the 1920s, employer-sponsored insurance becomes increasingly prominent, but healthcare remains inadequate, particularly in rural areas (PBS). In the 1930s, it was evident private insurance would be a benefit to many consumers, as Blue Cross began to offer private coverage to many individuals and families (PBS). During the 1940s, the concept of universal healthcare came to fruition with President Truman; however, many important medical organizations did not agree with this strategy (PBS). During the 1950s, the welfare system was introduced for those who could not afford healthcare of their own, and the federal government officially became accountable for this group; during this decade, there was a dramatic increase in the availability of new medications for administration by physicians (PBS). During the 1960s, there was approximately 700 companies involved in selling health insurance to consumers and companies, along with an increased need for healthcare professionals, who were not available; finally, Medicare and Medicaid became a reality during this decade (PBS). In the 1970s, HMOs became a reality, while healthcare as a whole became more expensive for all persons (PBS). In the 1980s, healthcare became more of a business than ever before, with hospitals merging with companies to become larger systems and the industry became more private than ever (PBS). In the 1990s, healthcare was an economic burden on the country, with many individuals without any form of health insurance to their names (PBS). Finally, the 2000s introduced the potential restructuring of Medicare and universal healthcare reform, accompanied by extensive increases in pharmaceutical advertising (PBS). Each of these decades provides support for the belief that the healthcare system  has experienced significant transitions in recent years, and has become difficult to manage in the wake of rising costs and complex regulations. Each of these factors did not transpire overnight, and continues to be influential in shaping how the healthcare system exists today.

Perhaps one of the most important areas of healthcare over many decades has been the emergence of insurance within the industry. According to Zhou, “In the first few decades of the twen­tieth century, health care underwent a major transformation. The late 1800s and early 1900s were full of medical advances, from the identification of in­fectious agents to the development of antitoxins, vaccines, and new medical technologies such as X-ray radiography and blood pressure meters. The abun­dance of innovation transformed the public image of medicine, and people began to place more trust in medical institutions.” Under these conditions, it was only natural for insurance companies who might have only provided life insurance in the past to also consider different forms of health insurance to expand their revenues (Zhou). Furthermore, as health insurance became more relevant, organizations began to recognize the importance of quality in healthcare treatments by improving education for professionals (Zhou). Since there were a limited number of qualified physicians available to provide healthcare services to an even larger group of people, it became necessary to provide insurance to manage the increased cost of receiving these services (Zhou). The early stages of health insurance did not always cover some of the most serious conditions due to the relative cost of procedures and treatments; however, it became increasingly important to provide coverage for more serious health concerns because this coverage could potentially increase survival rates for patients (Zhou). In the earliest years, “Before the birth of modern medicine, hospitals were poorhouses where the indigent went to die. Then came the advent of effective medicines, especially antibiotics, along with a revolution in medical schools… Health care became much more effective, and much more expensive. Clean hospitals, educated doctors and real pharmacological research cost money. People proved willing to pay for care when they were really sick, but it wasn’t yet common to go for checkups or survivable illnesses” (Blumberg and Davidson). Since there were opportunities for significant growth within the healthcare sector, it became increasingly important for more and more individuals to have access to these services even if it did not appear that they could afford them (Blumberg and Davidson). Therefore, the increased availability of health insurance was a prominent contributor to the growth of healthcare throughout the 20^th Century.

Healthcare services in the early part of the 20^th Century represented a period of significant growth; however, many consumers became concerned because they were unable to afford these services due to their cost (Tewes 1). As a result of the Great Depression, Blue Cross was created to provide a means of managing health services through a collective financing effort (Tewes 1). These efforts also demonstrated that there was a strong interest in providing healthcare services to a much larger group of people who required them (Tewes 1). In addition, “progressive employers began to provide health benefits to their works through group insurance. Pioneered by the Blues, group insurance was a new and cost-efficient way to provide coverage to s large numbers of people while minimizing anti-selection (workers were assumed to be younger and healthier than the general population (Tewes 2). At the same time, many organizations began to provide insurance to employers and the general public as a profit-making business without considering the humanity of healthcare practices (Tewes 2). From a government-based perspective, new regulations began to take shape in the mid-20^th Century which captured the attention of the general public and companies alike, such as the following: “the most influential government intervention to shape the employer-based system of health insurance was a ruling in 1943. It stated that employer payments made directly to commercial insurance companies for group medical/hospital employee premiums were not taxable as employee income. That ruling was codified and extended in 1954 and the result was increased demand for employer provided health insurance throughout the 1950s. By focusing on providing health insurance only to groups of employed workers, private insurance companies were able to overcome the adverse selection problems they had feared would make the health insurance market unprofitable” (Tewes 2). Under these circumstances, it became evident that employers were one of the most feasible options to provide health insurance to their employees to promote health and wellbeing (Tewes 2).  Therefore, the healthcare system began to represent the interests of the American people in a different way, one that utilized a variety of alternatives to meet the needs of an increasingly diverse population (Tewes 3).  These elements were highly relevant in determining how to best move forward with improved healthcare outcomes throughout the 20^th Century.

Establishing a structure to pay for healthcare services was perhaps the most significant level of the entire industry because if these services could not be paid for, patients would not be likely to seek treatment for their needs. Therefore, it was important from a historical perspective for organizations to work collaboratively to create environment which embraced innovation and cost effectiveness. From a historical point of view, consumers were responsible for paying for their healthcare services in the United States in the early 1900s: “estimated health expenditures in 1929 were $3,649 million. Of that, consumers paid $2,937 million, public sources paid $495 million, and philanthropy paid $217 million” (Lightbourn 6). These costs placed a tremendous burden on the American consumer, and as the costs of care continued to increase, it became evident that consumers could no longer pay for these services out of their own pockets and required insurance to manage these costs (Lightbourn 6). The costs of these healthcare benefits became so significant that many consumers found it difficult to obtain even the most basic services; therefore, in future decades, the development of the Medicare and Medicaid systems, accompanied by a welfare system were create to ensure that as many patients as possible could receive healthcare services in an efficient manner (Lightbourn 6). However, perhaps the most significant perspective of healthcare to influence decades of practice was the following: “The intellectual climate of the 1920s and 1930s had celebrated the superiority of socialist ideas of economic organization. Unfortunately, the notion that more tax money and enhanced centralized control can reduce health care costs has proven to be extraordinarily durable. The following decades were to see the implementation of many of the solutions proposed by the Committee on the Costs of Medical Care. Preserved in the regulatory amber that accreted steadily in the 1930s, 1940s, 1950s, and 1960s, the flaws inherent in the 1930s solutions plague U.S. health care consumers to this day” (Lightbourn 8). This perspective regarding healthcare services demonstrated that associated costs could somehow be curtailed by centralized regulations, even though this logic is somewhat distorted and has not benefited the industry as a whole, even into the 21^st Century (Lightbourn 8). The federal government’s involvement in healthcare practice in the earlier years of the 20^th Century was essential; however, there were a number of critical gaps in judgment that caused damage to the overall direction of the healthcare system and how it impacted the general public (Lightbourn 8). From a practical standpoint, there were significant challenges that the federal government created of its own accord as a result of its involvement in the creation of the modern healthcare system, yet these regulations and concepts were necessary to allow the system to grow and to thrive (Lightbourn 8).

Conclusion

The healthcare system in the United States is complex and intricate and requires continuous innovation and reform. The roots of this system remain historic in that they shaped what the healthcare system is today, and they also enabled healthcare providers to emerge at the top of their fields with extensive training and success. Although this system took many decades to become the powerhouse industry that exists today, the intelligence and knowledge of many experts in the field made many wise decisions to ensure that the healthcare system would achieve optimal success in providing care and treatment for as many patients as possible. The inclusion of mandates and services for the poor was a tremendous asset to the system to ensure that equal opportunity healthcare could be had by all. Healthcare industry leaders and government representatives recognized the value of creating new ideas and approaches to facilitate successful outcomes. This rich and colorful history represents a complex phenomenon that continues to grow and thrive in the wake of significant reform.

Works Cited

Blumberg, Alex, and Davidson, Adam. Accidents of History Created U.S. Health System. NPR. 29 November 2012. http://www.npr.org/templates/story/story.php?storyId=114045132

Healthcare Crisis: Healthcare Timeline. PBS. 29 November 2012. http://www.pbs.org/healthcarecrisis/history.htm

Lightbourn, George. The History of Health Care Costs and Health Insurance. Wisconsin Policy Research Institute Report. 29 November 2012. http://www.wpri.org/Reports/Volume19/Vol19no10.pdf

Tewes, Rhondda. Evolution of the Health Care System in the United States. League of Women Voters. 29 November 2012. http://www.lwvil.org/healthcare_EvolutionHealthCareUS.pdf

Zhou, Katherine. The History of Medical Insurance in the United States. Yale Journal of Medicine & Law. 29 November 2012.  http://www.yalemedlaw.com/2009/11/the-history-of-medical-insurance-in-the-united-states/