Chapter 10

1. Chapter 10 American Health Care: How it Became Inefficient, Inequitable, and Costly Donald W. Light

2. Early Competitors to a Profession on the Rise • Medical schools of questionable quality and standards arose across the country • Massive quantity of medical schools soon fed a growing surplus of physicians • This lowered their prices for patient services

3. Early Competitorsto a Profession on the Rise • Cities and local jurisdictions established dispensaries during the nineteenth century • Where the newest procedures from the leading specialists were “tested” on supposed charity cases

4. Early Competitorsto a Profession on the Rise • Dispensaries spread quickly in the face of rising immigration • Correspondingly meeting the greater need in many communities

5. Early Competitorsto a Profession on the Rise • Alternative healers offered care located outside incipient medical mainstream • Until the 20th century: • Medical science offered little better than those outcomes achieved by eccentric healers • Latter offered stout competition

6. Early Competitors to a Profession on the Rise • Many physicians contracted with mutual aid societies • Government bodies that provided care at low prices • Those outside of contract care felt such a practice placed considerable downward pressure on health care prices

7. Early Competitors to a Profession on the Rise • Patent medicines and nostrums were common during much of the nineteenth century and into the twentieth • Poor record of medical science up to that point fed demand

8. Combating Competition: The Medical Profession Fights Back • From 1870 forward: • State licensing boards were established • “Captured” by local medical societies, which selected members

9. Combating Competition: The Medical Profession Fights Back • Revitalized AMA opened campaign to improve the scientific quality of medical schools • Council on Medical Education’s Flexner Report led to the closure of many inferior institutions

10. Combating Competition: The Medical Profession Fights Back • Monetary support soon followed to schools that “passed the test” • This led to a decline in the number of newly-minted physicians

11. Combating Competition: The Medical Profession Fights Back • “Poor working conditions” of physicians under contract medicine were exposed • Contract doctors pressured to abandon such practices • Mutual aid societies switched from contract schemes to reimbursement of (physician-determined) medical costs

12. Combating Competition: The Medical Profession Fights Back • Localities urged to leave the field of clinical medicine • Limiting role of free medicine in dispensaries • Hospitals transformed from charitable institutions to scientific centers • Managed in the interests of physicians

13. Combating Competition: The Medical Profession Fights Back • As the medical profession established lists of approved drugs: • Nostrums and quack remedies sidelined • Drugmakers prohibited from listing the ingredients on bottles and the diseases a drug was designed to treat • Allowed physicians to make that determination

14. A Profession Consolidated • By the 1920s • Organized medicine had established a legal monopoly • Competition from any quarter was largely vanquished

15. A Profession Consolidated • Physician autonomy and a focus on treating those who could pay was effectively institutionalized • Medical profession received further assistance from an amenable legal climate during a period of “professional authority”

16. Paying the Price of Success • Private corporations soon realized the extent to which profits could be made • Became involved in the veritable health care monopoly formed by physician leaders • Payers soon rebelled against high health care costs • HMOs and other managed care schemes expanded

17. Paying the Price of Success • Physicians now face greater interference from private firms than they might possibly have encountered from the state under a system of national health insurance

18. Chapter 10 Summary • Emergent medical profession was challenged by five sources of competition: • Proliferation of “medical schools” • Rise of free care at local dispensaries • Patent/quack medicine • Alternative healers • Contract medicine

19. Chapter 10 Summary • These forces of competition led to low income and prestige for the bulk of physicians

20. Chapter 10 Summary • Proceeding years and decades were largely spent suppressing sources of competition • By the end of the twentieth century: • Physicians paid the price of success as professional autonomy came under fire from various payers