82 Million in U.S. Lacked Health Insurance -Study

The two "golden eras" of American health care
Many A2Kers are too young to remember how the increase in employer-paid health insurance began. During World War II, there were wage and price controls which limited salary increases. Providing employer-paid health insurance was one way to get around the wage controls and keep the scarce supply of workers happy. You may find the following history enlightening. ---BBB

The two "golden eras" of American health care
The "economic" golden era

Any health care economist worth his or her salt will tell you that from an economic standpoint, an ideal health care system is one in which patients pay directly for their medical care. In such a system, patients freely choose their own physicians, and together with their physicians make all medical decisions, mindful that any costs incurred thereby are theirs to pay. Cost controls are therefore automatic. During the 1920s and for the next few decades, this "ideal" system existed in the United States. Inasmuch as doctors at the time had very little to offer in terms of expensive (or effective) therapies, and since patients' expectations were (appropriately) low, this system worked extremely well from an economic point of view.

The "medical" golden era

This economic equilibrium began to falter in the 1930s, and the disequilibrium rapidly accelerated in the years following World War II. The first kink in the armor of direct contracting between physicians and their patients occurred during the Great Depression, when hospitals began to suffer from patients' inability to pay their bills. Over the initial objections of physicians, financially stressed hospitals prevailed on state legislatures to legalize the insurance schemes that became known as Blue Cross. In order to assuage the moral indignation of physicians, however, the Blues were created as non-profit, provider-oriented insurance organizations.

"Provider-oriented" meant two things. First, Blue Cross (and later, Blue Shield) did not try to tell physicians how to practice medicine. Physicians were free to practice as they saw fit, and the Blues would simply pay the bills on a fee-for-service basis. Second, the boards of trustees of local Blue Cross and Blue Shield organizations were loaded with prominent local physicians and hospital administrators.

Not only did such a system preserve the direct physician-patient relationship, it also paid the bills more reliably than did patients themselves. The system worked to so well that soon physicians became willing to countenance the formation of private health insurance companies, as long as those companies followed the same general guidelines set by the Blues.

Health insurance proved to be so popular that, during the wage and price controls of World War II, companies began offering it to their employees in lieu of higher wages. After the war, American labor unions began to demand that employers provide health insurance as a benefit of employment. The government liked this idea, too, and in order to encourage it, tax laws were changed to make the provision of this benefit extremely attractive to employers.

It is important to note that this new tax policy created a fundamental change in how health care was paid for. In effect, it shifted a huge chunk of the fiscal burden for health insurance from consumers and employers to the government, where it remains to this day. Within a few years, the majority of American workers had employer-provided health care insurance, heavily subsidized by the federal government.

Then in the 1960s, the federal government became directly involved in paying for American health care on a large scale with the institution of Medicare, and then Medicaid. Since that moment, the proportion of health care spending directly attributable to the government has steadily grown - from 24% of all dollars spent on health care in the 1960s, to 40% by 1990. Today, when you include tax subsidies for health insurance, fully 51% of America's health care spending is accounted for by the government, and paid for by taxpayers.

Since politicians can tax the people only so much, a lot of this spending has been piling up in the form of the national debt, awaiting our children and grandchildren.

But for physicians and their patients in the second half of the 20th century, the resultant system seemed nearly perfect. While patients retained complete freedom of choice regarding which doctors and hospitals they used, and while the physician-patient relationship remained largely free of outside influence, somebody else was paying the bills. There arose an almost complete dissociation between providing (and consuming) health care, and paying for it.

This economic arrangement did at least two things that would ultimately spell its own doom. First, it allowed the American health care myth to flourish - the notion that the best possible care should be provided to everybody, and that where health care is concerned, there are no limits. It created expectations that ultimately could not be met.

Second, this system fostered the development of the medical-industrial complex. Since any medical advance that seemed useful would be paid for, powerful corporations arose dedicated to meeting the bottomless demand for medical advances. The pharmaceutical companies, hospital suppliers, and medical device companies began turning out a steady stream of improved and expensive technology. Ironically (given that this whole system had evolved largely due to physicians' attempts to shield themselves from corporate influence), these corporations used their considerable marketing clout to influence the decisions, the practice patterns, and even the demographic distribution (such as patterns of specialization) of the medical profession.

The bottomless expectations of patients and physicians, coupled with the never-ending meeting (and flaming) of those expectations by industry, created a rapidly spinning positive feedback loop. The more health care the doctors and patients got, the more they wanted. The more they wanted, the more the medical-industrial complex was happy to provide. It was inevitable that those paying the ever-mounting health care costs (i.e., employers and the government) would eventually reach the breaking point. While the system that prevailed during this "golden era" came to be regarded as the norm by (if not the birthright of) American physicians and their patients, from a broader perspective that system is clearly an unsustainable aberrancy. At some point the mounting costs of "no limit" health care had to generate its own backlash. The system had to implode.

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Thinking outside the box, a proposal to fix the system:

1. The government will phase out existing taxpayer paid healthcare programs without pulling the rug out from under those it forced into these programs and without leaving the truly destitute with no safety net. Everybody, however, will be expected to pay something, however little, for the healthcare that they receive.

2. Immediate litigation reform will be encouraged and supported in all states limiting payouts for malpractice suits and limiting malpractice suits to gross negligence.

3. The federal government will authorize medical savings accounts that could be say up to $2500 or so tax free that the taxpayer can put in the bank. The taxpayer will draw on that account for medical care until it is exhausted at which time medical insurance could kick in. (Those who did not want a large deductible on their health insurance would not be required to take one and would just pay a higher premium.) If the medical savings account was not exhausted at the end of a specified period, say one year, the taxpayer could spend it in any way s/he wished, tax free. I can think of no plan that would ensure thrifty management of healthcare better than this. If it is coming out of your pocket, you think you won't question that $5 aspirin?

4. Move healthcare from a concept that everything is covered to one that works more like car insurance. Car insurance covers the big stuff. Otherwise, you pay for oil changes, flat tires, minor problems that do not exceed your deductible yourself. One exception that the insurance companies would probably approve is that an annual physical could be included in the insurance coverage. This plan would be almost certain to bring insurance levels down to an affordable level for all but the poorest of Americans.

Any candidate for president who proposes reforms along these lines will have my vote.

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Miller wrote:

The VA system in the USA has one of the best and most cost effective pharmacy plans, for our Vets.

If that's indeed the case, Miller, then it's the only part of the VA system that's working. I talk with U.S. vets on a nearly daily basis, who can't get any service from the VA med system. It's falling apart.

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In Houston the summer jobs usually given teens are being taken by adults for the most part.

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ehBeth
Beth, when I worked for the doctor's union in the 1970s-1980s, I represented a lot of doctors who worked for the Veterans Administration's hospitals. Many of them were frustrated at the inadequacies of the system then.

But one thing really troubled me that was happening in California, at least, and I assume across the nation. Physicians and dentists who were brought before the Board of Medical Quality Assurance for alcohol and drug addiction and were threatened with loss of the licenses were frequently placed in a diversion program sponsored by the American Medical Association. Under this diversion program they were allowed to continue practicing under strict supervision and testing for a provisional period. If at the end of the period they were rid of their addiction they were allowed to resume normal practice. The problem arose about where to find the kind of supervision necessary and an institution willing to take a chance on them. As a result, the vast majority of these doctors ended up being hired to practice at state prisons, state and county hospitals, and the Veterans Administration hospitals.

I know this for a fact because these doctors required more of my representation time than any other group because of the difficulties they were having kicking their additions or abusive management by other doctors who were not there for the same reasons.

I've been away from the doctors union for 15 years and don't have current information regarding whether this is still the practice, but I assume it is as long as there are addicted doctors.

Now it doesn't mean that these doctors from the diversion program are not technically good doctors, many of them are. But it does mean that these government facilities are not spending the money to buy the best doctors available. They are hiring on the cheap. This often, but not always results in substandard care. It is a burden to the other doctors on the staff who resent having to spend their valuable time supervising the addicted doctors when they would rather spend it with patients.

With Bush cutting funding for veterans hospitals, it can only lead to going the cheap way, not the best.

BBB

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Could we please put to bed the myth that Bush has cut veteran's benefits and/or cut funding for VA hospitals? Please know that except for a very few fringe groups, most veteran organization representing the vast majority of veterans are praising the president to high heaven for his initiatives to help them:

Fact you aren't getting from the mainstream media:

Quote:

A Significant Increase in Resources
Making up for the 1990s - President Bush has provided more new funding for veterans in four years than President Clinton did in eight years. President Clinton averaged a 3 percent increase per year in the VA budget while President Bush has averaged an 8 percent increase per year. Since President Bush came into office in 2001 the VA budget has increased from $48 billion to $65 billion.

Veterans Support Our Commander in Chief George W. Bush
President Bush Honors Our Veterans

"Our veterans have borne the costs of America's wars and have stood watch over America's peace. And, today, every veteran can be certain: The nation you served and the people you defended are grateful." President Bush, November 11, 2003

Keeping His Word
President Bush has fulfilled, and in many cases surpassed, commitments to veterans on four key issues:

Allowing Veteran Medicare Recipients to Continue Receiving TRICARE Benefits - The President signed the FY 2001 Defense Authorization Bill which allows veterans to continue to receive their TriCare health benefits even when they become Medicare eligible.

Timely Access to Quality Healthcare - The average time that a veteran has to wait to see a primary care physician has dropped 90% since 2001. The waiting list was 300,000 in 2001 and is now below 30,000. With the funding in the FY 2005 request, the VA will meet its goal scheduling non-urgent primary care for 93% of veterans within 30 days and 99% within 90 days.

Reduce the Backlog of Disability Claims - When President Bush took office, the number of claims waiting to be processed had soared to over 600,000 and as a result, many veterans were waiting an average of over 230 days for a claim to be processed. The VA has slashed its inventory of pending disability claims by 58% to 253,000 and reduced the average length of time it takes to process a claim by 30% to about 160 days. In 2005, 2.7 million veterans will receive $24.9 billion of these tax-free benefits from the VA.

Classify Diabetes as a Disability - The President proudly signed the Veterans Education and Benefits Expansion Act of 2001, which allowed diabetes to be considered a service-connected disability for veterans.
Supporting Concurrent Receipts

Concurrent Receipt - On November 24, 2003, President Bush signed legislation providing concurrent receipt of both military retired pay and VA disability compensation for those military retirees most deserving, the combat-disabled, reversing a century of law preventing concurrent receipt.

A Significant Increase in Resources
Making up for the 1990s - President Bush has provided more new funding for veterans in four years than President Clinton did in eight years. President Clinton averaged a 3 percent increase per year in the VA budget while President Bush has averaged an 8 percent increase per year. Since President Bush came into office in 2001 the VA budget has increased from $48 billion to $65 billion.

A Dramatic Increase in Funding - The President is proposing to increase funding for the VA by $5 billion next year - from $60.3 billion last year to $65.3 billion for the next fiscal year. This represents an 8% percent jump and more than 38% increase since 2001.

40% More for Medical Care - The President's $30 billion request for medical care in his FY 2005 budget represents more than a 40% increase from when he took office. As a result, 1.4 million more veterans will receive care in 2004 than in 2000 and 194 new community-based clinics will open to be more responsive to veterans' needs.
Improving Access to Health Care

Creating a Modern, Effeciant, World-Class Helath Care System - Through the Capital Asset Realignment for Enhanced Services (CARES), President Bush is working to restructure VA hospitals around the country to provide veterans with efficient access to quality health care. The FY 2005 budget more than doubles the amount previously request for construction of new and improved facilities. The President has proposed a 20% increase in outpatient health care services, create 48 new outpatient clinics, and construct two new VA hospitals.

Emergency Care - The President's budget allows the VA to pay for emergency room care for veterans in non-VA hospitals. Veterans with life-threatening illnesses should seek and receive care at the closest possible facility.

Prescription Drugs - The President took the unprecedented step of allowing veterans with a prescription from their private physician to have those prescriptions filled by the VA - saving veterans hundreds of dollars in prescription drug costs. This will benefit approximately 200,000 veterans.

Eliminating Copayments - The President has eliminated copays for veterans receiving hospice care. In addition, the Budget will eliminate all forms of copays for prisoners of war who have provided unique service to our Nation.

Caring for Families
Veterans Benefits Act of 2003. On December 16th, 2003, President Bush signed a bill authorizing $1 billion over the next ten years for new and expanded benefits for disabled veterans, surviving spouses, and children.
Restores Spousal Benefits. The spouses and children of veterans who are killed in action, or die of service related causes will receive Dependents Indemnity Compensation which allows the surviving spouse or dependent children to receive the full amount of accrued benefits if the veteran dies while their claim is still pending. Home loan guarantees are available to surviving spouses.

Education & Health Benefits for Children. Pensions are available to surviving spouses and unmarried children of deceased veterans with wartime experience. Dependents education assistance is available to spouses who have not remarried and the children of veterans who are killed in action, or die of service related disabilities.
Support Today for Tomorrow's Veterans

Better Pay and Housing - President Bush has increased basic salary and payments for food and housing almost 29 percent since taking office. President Bush has provided historic increases in military compensation. Under former President Clinton, military pay decreased an average of almost 2% per year relative to consumer price index. Since President Bush took office, military pay increased an average of 5.2% per year relative to consumer price index. The average compensation is now more than $40,000 for enlisted members and more than $79,000 for officers.
Better Benefits - Service members also receive retirement benefits and health care for themselves and their families at little or no charge.
Tax Relief - On December 16, 2003, the President signed the Military Family Tax Relief Act of 2003 to provide tax relief and other benefits to members of the armed services and their families.

Prevents Double Taxation. This law prevents states from using the income earned by a service member in determining the spouse's tax rate when the spouse works and taxed in a state other than the state in which they maintain their permanent legal residence. Protection from Eviction.

Service members and their families are protected from eviction from housing while on active duty due to nonpayment of rents and housing leases up to $2,400 per month - up from $1,200 per month.

Life Insurance. Updates life insurance protections provided to activated Guard and reserve members by increasing from $10,000 to $250,000 the maximum policy coverage that the federal government will protect from default for nonpayment while on active duty.

http://vets4bush.com/BushToVets.shtml

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ehBeth wrote:

Miller wrote:
The VA system in the USA has one of the best and most cost effective pharmacy plans, for our Vets.

If that's indeed the case, Miller, then it's the only part of the VA system that's working. I talk with U.S. vets on a nearly daily basis, who can't get any service from the VA med system. It's falling apart.

The hospital system may not be the greatest, but the ambulatory pharmacy program is excellent, relative to service and quality of the medications.

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Re: ehBeth

BumbleBeeBoogie wrote:

Beth, when I worked for the doctor's union in the 1970s-1980s, I represented a lot of doctors who worked for the Veterans Administration's hospitals. Many of them were frustrated at the inadequacies of the system then.

But one thing really troubled me that was happening in California, at least, and I assume across the nation. Physicians and dentists who were brought before the Board of Medical Quality Assurance for alcohol and drug addiction and were threatened with loss of the licenses were frequently placed in a diversion program sponsored by the American Medical Association. Under this diversion program they were allowed to continue practicing under strict supervision and testing for a provisional period. If at the end of the period they were rid of their addiction they were allowed to resume normal practice. The problem arose about where to find the kind of supervision necessary and an institution willing to take a chance on them. As a result, the vast majority of these doctors ended up being hired to practice at state prisons, state and county hospitals, and the Veterans Administration hospitals.

I know this for a fact because these doctors required more of my representation time than any other group because of the difficulties they were having kicking their additions or abusive management by other doctors who were not there for the same reasons.

I've been away from the doctors union for 15 years and don't have current information regarding whether this is still the practice, but I assume it is as long as there are addicted doctors.

Now it doesn't mean that these doctors from the diversion program are not technically good doctors, many of them are. But it does mean that these government facilities are not spending the money to buy the best doctors available. They are hiring on the cheap. This often, but not always results in substandard care. It is a burden to the other doctors on the staff who resent having to spend their valuable time supervising the addicted doctors when they would rather spend it with patients.

With Bush cutting funding for veterans hospitals, it can only lead to going the cheap way, not the best.

BBB

Drug addiction and behavioral problems are not unique to MDs practicing in the VA system. These problems are charactieristic in general of society today, but markedly so amongst lawyers and physicians, both groups having very high stress jobs.

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Foxfyre wrote:

Could we please put to bed the myth that Bush has cut veteran's benefits and/or cut funding for VA hospitals? Please know that except for a very few fringe groups, most veteran organization representing the vast majority of veterans are praising the president to high heaven for his initiatives to help them:

Fact you aren't getting from the mainstream media:

Quote:
A Significant Increase in Resources
Making up for the 1990s - President Bush has provided more new funding for veterans in four years than President Clinton did in eight years. President Clinton averaged a 3 percent increase per year in the VA budget while President Bush has averaged an 8 percent increase per year. Since President Bush came into office in 2001 the VA budget has increased from $48 billion to $65 billion.

Veterans Support Our Commander in Chief George W. Bush
President Bush Honors Our Veterans

"Our veterans have borne the costs of America's wars and have stood watch over America's peace. And, today, every veteran can be certain: The nation you served and the people you defended are grateful." President Bush, November 11, 2003

Keeping His Word
President Bush has fulfilled, and in many cases surpassed, commitments to veterans on four key issues:

Allowing Veteran Medicare Recipients to Continue Receiving TRICARE Benefits - The President signed the FY 2001 Defense Authorization Bill which allows veterans to continue to receive their TriCare health benefits even when they become Medicare eligible.

Timely Access to Quality Healthcare - The average time that a veteran has to wait to see a primary care physician has dropped 90% since 2001. The waiting list was 300,000 in 2001 and is now below 30,000. With the funding in the FY 2005 request, the VA will meet its goal scheduling non-urgent primary care for 93% of veterans within 30 days and 99% within 90 days.

Reduce the Backlog of Disability Claims - When President Bush took office, the number of claims waiting to be processed had soared to over 600,000 and as a result, many veterans were waiting an average of over 230 days for a claim to be processed. The VA has slashed its inventory of pending disability claims by 58% to 253,000 and reduced the average length of time it takes to process a claim by 30% to about 160 days. In 2005, 2.7 million veterans will receive $24.9 billion of these tax-free benefits from the VA.

Classify Diabetes as a Disability - The President proudly signed the Veterans Education and Benefits Expansion Act of 2001, which allowed diabetes to be considered a service-connected disability for veterans.
Supporting Concurrent Receipts

Concurrent Receipt - On November 24, 2003, President Bush signed legislation providing concurrent receipt of both military retired pay and VA disability compensation for those military retirees most deserving, the combat-disabled, reversing a century of law preventing concurrent receipt.

A Significant Increase in Resources
Making up for the 1990s - President Bush has provided more new funding for veterans in four years than President Clinton did in eight years. President Clinton averaged a 3 percent increase per year in the VA budget while President Bush has averaged an 8 percent increase per year. Since President Bush came into office in 2001 the VA budget has increased from $48 billion to $65 billion.

A Dramatic Increase in Funding - The President is proposing to increase funding for the VA by $5 billion next year - from $60.3 billion last year to $65.3 billion for the next fiscal year. This represents an 8% percent jump and more than 38% increase since 2001.

40% More for Medical Care - The President's $30 billion request for medical care in his FY 2005 budget represents more than a 40% increase from when he took office. As a result, 1.4 million more veterans will receive care in 2004 than in 2000 and 194 new community-based clinics will open to be more responsive to veterans' needs.
Improving Access to Health Care

Creating a Modern, Effeciant, World-Class Helath Care System - Through the Capital Asset Realignment for Enhanced Services (CARES), President Bush is working to restructure VA hospitals around the country to provide veterans with efficient access to quality health care. The FY 2005 budget more than doubles the amount previously request for construction of new and improved facilities. The President has proposed a 20% increase in outpatient health care services, create 48 new outpatient clinics, and construct two new VA hospitals.

Emergency Care - The President's budget allows the VA to pay for emergency room care for veterans in non-VA hospitals. Veterans with life-threatening illnesses should seek and receive care at the closest possible facility.

Prescription Drugs - The President took the unprecedented step of allowing veterans with a prescription from their private physician to have those prescriptions filled by the VA - saving veterans hundreds of dollars in prescription drug costs. This will benefit approximately 200,000 veterans.
Eliminating Copayments - The President has eliminated copays for veterans receiving hospice care. In addition, the Budget will eliminate all forms of copays for prisoners of war who have provided unique service to our Nation.

Caring for Families
Veterans Benefits Act of 2003. On December 16th, 2003, President Bush signed a bill authorizing $1 billion over the next ten years for new and expanded benefits for disabled veterans, surviving spouses, and children.
Restores Spousal Benefits. The spouses and children of veterans who are killed in action, or die of service related causes will receive Dependents Indemnity Compensation which allows the surviving spouse or dependent children to receive the full amount of accrued benefits if the veteran dies while their claim is still pending. Home loan guarantees are available to surviving spouses.

Education & Health Benefits for Children. Pensions are available to surviving spouses and unmarried children of deceased veterans with wartime experience. Dependents education assistance is available to spouses who have not remarried and the children of veterans who are killed in action, or die of service related disabilities.
Support Today for Tomorrow's Veterans

Better Pay and Housing - President Bush has increased basic salary and payments for food and housing almost 29 percent since taking office. President Bush has provided historic increases in military compensation. Under former President Clinton, military pay decreased an average of almost 2% per year relative to consumer price index. Since President Bush took office, military pay increased an average of 5.2% per year relative to consumer price index. The average compensation is now more than $40,000 for enlisted members and more than $79,000 for officers.
Better Benefits - Service members also receive retirement benefits and health care for themselves and their families at little or no charge.
Tax Relief - On December 16, 2003, the President signed the Military Family Tax Relief Act of 2003 to provide tax relief and other benefits to members of the armed services and their families.

Prevents Double Taxation. This law prevents states from using the income earned by a service member in determining the spouse's tax rate when the spouse works and taxed in a state other than the state in which they maintain their permanent legal residence. Protection from Eviction.

Service members and their families are protected from eviction from housing while on active duty due to nonpayment of rents and housing leases up to $2,400 per month - up from $1,200 per month.

Life Insurance. Updates life insurance protections provided to activated Guard and reserve members by increasing from $10,000 to $250,000 the maximum policy coverage that the federal government will protect from default for nonpayment while on active duty.

http://vets4bush.com/BushToVets.shtml

In addition to Rx meds, the Vets also are able to obtain OTC products on an ambulatory basis and at a very markedly reduced cost to them. I've seen the Rx orders, so I know this to be the truth.

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Foxfyre wrote:

Could we please put to bed the myth that Bush has cut veteran's benefits and/or cut funding for VA hospitals

I could care less about who is responsible for the mess the VA is currently in. What I care about is the vets I talk to regularly who are having difficulty getting any kind of good service. I can't believe that more Americans aren't outraged. Those are your parents, your aunts and uncles, your brothers and sisters, your children.

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Yes, and I have a lot of relatives and close friends who are or who will be veterans and I also have a close friend who is a physician at the VA Hospital here in Albuquerque. You know what most of them say? Things start getting better when you have a pro-VA pro-military administration like Reagan and Bush. Funding is inadquate and things go to hell under presidents who do not give a strong military their highest priority.

You can't blame GWB for the current mess. But I resent him being blamed for it instead of the credit he deserves for initiatives to make it better.

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I agree.

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82 Million in U.S. Lacked Health Insurance -Study

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