How did American Healthcare get so Bad?
How did American healthcare get so bad? Why do we tolerate a system where you risk bankruptcy for a hip replacement?
Compared to socialized medicine, on almost any metric the US has one of the best medical systems in the world -- doctors per capita, hospital bed capacity, waiting times, surgical outcomes, access to specialists.
I'm not saying it's great — tens of thousands die from medical mistakes, for example.
But almost everybody else is worse, including Canadians who drive to the US to pay out-of-pocket instead of waiting 6 months for a hip replacement.
The problem is all this comes with nosebleed prices and a funding system that is corrupt, mind-boggling complicated, and often outright predatory, over-treating — and over-charging — patients.
The Most Expensive Healthcare on Earth
US healthcare costs 2 and a half times the average in the OECD, and it can feel like a reverse lottery where every so often it wipes you out. You go back to Start, penniless.
So what went wrong?
In short, American health-care is expensive because it's designed and written by lobbyists -- insurers, hospitals, ambulance-chasing trial lawyers, and above all the doctors’ union -- the American Medical Association.
Like all regulation, every word governing US healthcare is designed to benefit the industry and the union. Never the patient.
These rules ban competition and drive up prices. They push over-treatment and over-prescription. And above all, the system hides the costs to patients, leaving insurers to police hospitals in ways that destroy patients.
So how to fix it?
The “Lodge Doctor” System
Happily, it wasn't always this bad.
Our crony medical system is a creature of a World War 1 era effort by the AMA -- the doctors' union -- to outlaw competition and drive up prices.
The AMA destroyed the “Lodge Doctor” system of voluntary co-ops run by mutual aid organizations like the Fraternal Order of Eagles or Ancient Order of United Workmen.
These organizations were the social safety net before government displaced them, and they provided care for nearly all Americans. Because they held prices down, it meant that any poor person in America was treated for free.
You may have heard stories of doctors treating the poor for nothing — perhaps for a few eggs. That was not only standard before the AMA, you would be shunned by other doctors if you actually charged poor people.
What a difference goverment makes.
Under the system, members would pay a fee -- less than $100 a month inflation-adjusted -- for health care, disability, and life insurance. That included a so-called lodge doctor who was on-call for members and would do house calls.
It’s worth noting that’s roughly 20 times cheaper than today — inflation-adjusted. And good luck getting a house call.
You can read a full description of the system by Professor Roderick T Long here, and by David Beito here. In short, it was affordable and doctors actually served patients.
The AMA Breaks Health Care
The AMA, of course, hated this system because it was too cheap and because it placed doctors as supplicants serving blue-collar workers who the AMA felt were their social inferiors.
So they broke it.
First they took over licensing to radically cull the number of new doctors, driving up the price of doctors — which ended house calls — and giving us 11 plus years of medical school to limit how many could afford to become doctors.
Then they lobbied to deny lodge doctors hospital privileges — meaning if you were really sick they couldn’t admit you as a doctor. They even worked to deny emergency care to lodge members.
This wiped out the lodge system, replaced by heavily regulated -- and very well paid -- AMA members.
Finally, the AMA made it literally illegal to practice medicine without their license — a restriction that still stands today.
Meaning if you post online about, say, vaccine risks, strictly speaking you committed the crime of practicing medicine without a license.
After this union takeover, every ongoing reform made it worse, driving up prices and shutting out competition. This is because every reform is written by the AMA and incumbents.
The 1973 HMO act, 1985 COBRA Act, 1997 CHIP, 2003 Part D, and of course Obamacare -- all written by union and industry, for union and industry.
The common theme being to mandate ever-more expensive coverage and treatment — including, famously, contraception and potentially gender reassignment — even if the patient doesn’t want it and certainly doesn’t want to pay for it.
Insurers then try and knock out individual claims to keep coverage affordable enough to keep customers — er, patients.
What’s Next
It's tempting to try and fiddle the edges -- promote price transparency, incentivize high-deductible plans or co-payments that control costs.
But these are doomed so long as government effectively run health care in America. Because government rules will always be written by lobbyists.
That leaves the radical solution: go back to Voluntary Co-Ops. They still exist -- the Amish use Co-ops, and 3 states still have functioning Co-ops: Maine, Wisconsin, and Montana.
But it would take a root-and-branch disgorgement of the tens of thousands of mandates and regulations that make up our crony medical system.
Replaced with the original intent of affordable pooled risk that actually serves the patient.
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The decline of American healthcare began in 1954 when Congress decided that corporations could deduct healthcare insurance but individuals could not. Over time, the economics of that decision caused the vast majority of insurance to cover groups, not individuals.
If Congress had done the same thing with auto insurance, instead, that’s what this article would be about.
My dad was a doctor with decades of experience as a public health officer, a family practitioner, medical school faculty, and a board-certified clinical and forensic pathologist. He held the medical establishment as described here in contempt for the reasons stated in your post, especially the insurance industry and its collusion with big pharma, the AMA, and government regulators, not always to the benefit of the patients and the patients' families and caregivers.
He taught our family to learn to take care of our own health for everyday issues and to beware new drugs and cosmetic fixes via most OTC drugs. And, to ask hard questions of our health professionals and to seek out doctors who were skeptical of the Medical Machine.
I have been able to find great docs. My criteria for a primary physician? Someone who is curious and keeps learning, who treats patients as partners, who has a sense of humor about themselves, and whose staff is loyal because treats them well.