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TRANSFORMATION IN HEALTH CARE
An Abridged History of Modern Medicine, or: Another Fine Mess (Laurel and Hardy, 1930)
Andrew Dahlke, MD
The reason to study history is so
we do not repeat the mistakes of our forefathers. If we do not know where we came from, how will we ever know where we are going? The following lists key events over the past 60 years and outlines the consequences of these actions.
Every law or action has intended consequences and unintended consequences, and it often takes years to see them.
1965 – President Lyndon B. Johnson signed Social Security amendments and created Medicaid and Medicare. This was opposed by the American Medical Association (AMA). When President Johnson was asked how he would get doctors to participate, he said, “I am going to pay them.” There
is a great line from the ‘60s television show Gilligan’s Island, where Thurston Howell, III claimed Medicare was
going to ruin medicine. The rates of Medicare reimbursement increases are the rising cost of medical care. Drug costs, medical device costs, medical legal costs, and equipment costs have all risen much faster than the cost-of-living index. Hospitals claim they lose more than $1,000 per day on every Medicare inpatient admission.1
Intended consequences: Large increase in the number of insured. Large decrease in payments to doctors.
Unintended consequences:
Large increase in federal and state budget
of a powerful force in Washington that
imposes its will on doctors and hospitals in an unpredictable manner. Uncertainty in any business raises borrowing costs. Gross underpayment to hospitals for inpatient admissions makes hospitals recoup the loss on the outpatient side.
1973 – The Health Maintenance Organization Act. This gave grants
and loans to provide, start, and expand a Health Maintenance Organization (HMO). This removed some state alternative care delivery model. The concept was to replace fee-for-service number of dollars per person per month (PPPM). This was supposed to give doctors an incentive to keep people healthy and to solve their medical problems in a less costly manner. The primary care physicians in this model were employed and could not control their schedule.2, 3
My sister started in an HMO right out of internal medicine training. She was given 10-minute time slots to see patients, including new and complex ones. This era demeaned and devalued the primary care physician. Private insurers and HMO-like hybrid organizations saw the actions of the HMOs and followed with reimbursement cuts to the primary care physician. First, Medicare cut the over-65 reimbursement to the bone. Next, HMOs commoditized primary care, which led to draconian cuts in non-Medicare primary care reimbursement.
Intended consequences: Lower cost of care by decreasing patient access to health care and decreasing payments to physicians.
Unintended consequences:
Patients and doctors became furious with HMOs. Patients frustrated by lack of health care access purchased private non-HMO insurance. Companies that wanted to keep their employees happy purchased private non-HMO insurance. Doctors wanted to practice good care and refused to ration care. They chose to second. Doctors left HMO employment and returned to private practice. These market forces led to the demise of the HMO industry.
1986 – The Emergency Medical Treatment and Active Labor Act (EMTALA). Requires a hospital emergency department (ED) that
accepts Medicare payment to provide
an appropriate medical screening examination to anyone seeking treatment for a medical condition, regardless of citizenship, legal status, or ability to pay. Participating hospitals may not transfer or discharge patients needing emergency treatment except with informed consent, stabilization, or transfer to a more appropriate care setting. The cost of providing this care is not paid for by the government. Since approximately six percent of ED patients are uninsured, the hospitals claim that this is another unfair burden on hospitals.4,5
Intended consequences: The small portion of the population that hospitals is now able to seek emergency department treatment without fear of denial.
Unintended consequences:
EMTALA applies to every ED patient, not just those without insurance. When a
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