1. HSA 3111: Evolution of US Health Services 1 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Topics Prelude Preindustrial Era Postindustrial Era –National Healthcare Efforts –Early Managed Care Efforts Corporate Era “…anyone who had the inclination to set himself up as a physician could do so, the exigencies of the market alone determining who would prove successful in the field and who would not” R. Hamoway (1979)

2. HSA 3111: Evolution of US Health Services 2 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Prelude The chapter offers tremendous insights into the history of the US health care system and the events, attitudes, market forces, and political pressures that resulted in our current system. These insights also help to explain current debates surrounding healthcare reform. The chapter is weak (almost silent) on explaining the implications for health care professionals who are not physicians. –We will need to make inferences on our own

3. HSA 3111: Evolution of US Health Services 3 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Prelude (cont.) What is it about the United States and its attitude toward government that causes us to be the only developed country without a centralized healthcare system? Hint: Name the four largest countries that have had successful revolutions (total replacement of government) since 1776. –What were the results of the other three? –How did our results differ? –What does the 10 th Amendment to the Constitution say?

4. HSA 3111: Evolution of US Health Services 4 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Prelude (cont.) Given the absence of a single-payer (government) healthcare provider in the U.S.: –What market forces have influenced the structure of the healthcare system? –How have technological advances affected the structure? –What political forces also influenced healthcare delivery?

5. HSA 3111: Evolution of US Health Services 5 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Three Historical Phases Preindustrial era: Mid 1700s – Late 1800s Postindustrial era: Late 1800s – Late 1900s Corporate era: Late 1900s – beyond

6. HSA 3111: Evolution of US Health Services 6 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Preindustrial Era What did it take to be a physician in the 1800s? –“Anyone who had the inclination to set himself up as a physician could do so, the exigencies of the market along determining who would prove successful in the field and who would not.” (p. 85) How many hospitals were there? How many medical schools were there? What were the graduation requirements? What were the licensing requirements?

7. HSA 3111: Evolution of US Health Services 7 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Preindustrial Era (cont.) Medical Practice characterized by –Very primitive diagnostic capabilities –Very limited surgeries (the faster the better) –Medicine considered a trade rather than a profession Lower end of the middle class –Physicians competing with home remedies and traditional healers –Travel cost a large part of medical cost –Physicians saw 4-5 patients a day –Low confidence in the medical profession

8. HSA 3111: Evolution of US Health Services 8 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Preindustrial Era (cont.) Hospitals –No widespread development before 1880s Europe developed hospitals before 1800 –Not closely allied with medical practice –Often staffed by unpaid junior physicians and students looking for experience –Other institutions had healthcare functions Almshouse Pesthouse

9. HSA 3111: Evolution of US Health Services 9 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Preindustrial Era (cont.) Unstable Demand –Many physicians not much better than local practitioners –Little science behind medical practice –Costly travel component –Doctors concentrated in urban areas but much of the population was rural –No insurance or other support for payments

10. HSA 3111: Evolution of US Health Services 10 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Preindustrial Era (cont.) Medical Education –Primarily apprenticeship (if that) –Only 4 medical schools in 1800, 42 in 1850 Direct admission from secondary school Two-year curricula –Later schools were income generating for teachers –Unrestricted entry –Little science-based education –No standards for curricula

11. HSA 3111: Evolution of US Health Services 11 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era Saw the current shape of the U.S. healthcare system develop More urbanized population Increased technology Rising costs Rising professionalism Resistance to national healthcare

12. HSA 3111: Evolution of US Health Services 12 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Urbanization –Separated people from families and many alternative sources of healthcare –Physicians became less expensive to consult Travel cost reduced –Physicians moved to cities to follow the business

13. HSA 3111: Evolution of US Health Services 13 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Science and Technology: What were the impacts of increasing scientific knowledge on the healthcare professions? –Increased capabilities  Increased confidence –Shifting from “trade” to “profession” –Increased “cultural authority” –Increased practical authority –Need for increased specialized training

14. HSA 3111: Evolution of US Health Services 14 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Growth of Institutions –More complex treatments and technologies required more resources than the GP’s office –Bundling of equipment, physician, nursing, support staff, and facilities needed –Hospital developed as the hub around which other resources/participants centered –Hospitals and physicians developed a symbiotic relationship Bilateral power base

15. HSA 3111: Evolution of US Health Services 15 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Patient Dependency –Physicians developed a gatekeeping role with respect to patients through cultural and legal paths Physician validation of illness for absence Ditto for treatment Prescription authority Health insurance payments –Commensurate roles not granted to alternative healthcare providers

16. HSA 3111: Evolution of US Health Services 16 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Cohesiveness and Organization –Common training curricula increased cohesiveness –Specialization resulted in referrals and local relationships among physicians –AMA resisted control of physician employment –Physicians remained largely independent of other institutions Hospitals Insurance companies

17. HSA 3111: Evolution of US Health Services 17 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Licensing & Educational Reform –Medical licenses were (and still are) regulated by states –Significant variance among medical school quality –AMA pushed for licensing only their accredited school graduates –Quality improvements in school curricula and exams had positive effects… –…but practical effect was also to give physicians a monopoly position with respect to medical practice

18. HSA 3111: Evolution of US Health Services 18 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Specialization –17% of physicians specialists in 1931 –60% are specialists today –Similar diversification in allied healthcare professions –U.S. healthcare system fell into a state where access to specialists was often unregulated Increased costs for insurance companies Uncoordinated care for patients

19. HSA 3111: Evolution of US Health Services 19 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Other Trends –Increased development of public health functions –Increased incidence of chronic conditions Why do you think this was? Healthcare system still oriented at acute conditions –Veterans healthcare system –Workers’ Comp Role as a trial balloon for universal healthcare

20. HSA 3111: Evolution of US Health Services 20 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Postindustrial Era (cont.) Private Health Insurance –Development of need for alternative funding –What were the motivations for the Baylor Plan and subsequent development of Blue Cross and Blue Shield plans? –What motivated the development of employer- based health insurance during WW II? And why has it persisted today? And what is happening to it today?

21. HSA 3111: Evolution of US Health Services 21 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest National Health Care Efforts Compulsory sickness insurance spread throughout Europe from 1883 to 1912 Every effort to create universal health insurance in the US failed until 2010 –And that still isn’t ‘universal’ Revisit the questions on slide #4 –Market forces –Technology developments –Political forces

22. HSA 3111: Evolution of US Health Services 22 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest National Health Care Efforts (cont.) Look at the huge array of forces aligned against national health insurance from 1946 to the present. –AMA –Taxpayers (who already had insurance) –Politicians –Pharmacists So how did Medicare and Medicaid sneak through in 1965?

23. HSA 3111: Evolution of US Health Services 23 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest Early Managed Care Efforts What is managed care and why was it developed? Variations on a theme –Contract practice—physicians under contract to provide services at a set rate plus other controls –Group practice—grouping multiple providers under one business –Prepaid group plans Capitalized on group practice efficiencies for a set fee per time period to subscribers Precursors to HMOs Required alternative in 1973 HMO Act

24. HSA 3111: Evolution of US Health Services 24 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest The Corporate Era Look at the ebb and flow of market power described on p. 110. –Physicians and hospitals dominated the market place as suppliers until mid-1980s –Managed care contracting with providers became dominate next Controlled supply of customers (patients) –Providers began to consolidate to create countervailing market power Two types of corporations deal with each other Where do the patients fit in?

25. HSA 3111: Evolution of US Health Services 25 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest The Corporate Era (cont.) Information Revolution –How is healthcare similar to banking? –What are the information management limitations of healthcare in the modern age? –How can information technologies overcome these limitations? –How have technologies empowered patients?

26. HSA 3111: Evolution of US Health Services 26 Dr. Lawrence West, Health Management and Informatics Department, University of Central Florida http://systems.cohpa.ucf.edu/lwest The Corporate Era (cont.) We know about globalization of many businesses Identify ways in which healthcare has become global –Access to providers –Knowledge –Investment –Disease spread