Search the LHSFNA website
Published: January, 2008; Vol 4, Num 8

 

How We Got Where We Are

Before World War II, few Americans had health care coverage of any kind. Most people lived in small towns and seldom saw a doctor unless they were seriously ill. 

In the years immediately after the war, the U.S. government retained wartime wage and price controls to facilitate the transition back to a peacetime economy. These controls prevented wage competition among employers for soldiers returning to private employment, so many offered health insurance instead. The nation’s unions were more than happy to accept the bargain. By the mid-1950s, employer-provided health coverage had become a standard of middle class life in America.

This was not the case in other industrial countries. After WWII, the devastated economies of Europe and Japan struggled to get back on their feet. Employers could not offer high wages, much less health insurance. Instead, business and labor together turned to government to establish nationalized health care systems. Canada, evolving from Provincial care beginning in 1948, finally achieved universal health care in 1966.

Thus, while state-run health care became standard everywhere else, in the prosperous and growing economy of the U.S., a private system took root. In the long run, profound differences emerged.

In most industrialized nations, all people have the same right to a certain level of care. The government collects taxes, manages the system and pays the health care providers. Basic services are “free” for patients. 

In America’s system, the cost of care is paid through health benefit plans – employer-paid, worker-paid or a combination of both – or directly by the patients. The costs for the services and supplies offered by a variety of providers – hospitals, doctors and other care providers – are set by supply and demand in the private market with government regulation in some areas.

Judging by the support of the voters, both systems seem to have worked satisfactorily through the decades. However, as the post-war boom leveled off in the 1960s, each system encountered increasing financial difficulties which, in turn, had impact on service delivery. 

In countries with universal, taxpayer-financed coverage, rising costs forced choices between higher taxes or reductions in service. The balance has been struck differently in different countries but has meant more triage wherein emergencies are handled first while less critical procedures may require significant waits for care. Still, all citizens receive basic health care and have equal access to whatever level of specialized care may be available.

Because the American system is not government-financed (except for Medicare, Medicaid, military health and a few other smaller programs), as costs soared, taxes to finance health care did not rise dramatically. Instead, insurance premiums increased, leading many employers to drop or reduce health care benefits, thereby transferring the cost to their employees. Today, about one in six Americans has no insurance coverage. However, anyone with the means to purchase health care services can get almost instant care regardless of their condition. This inequity is a source of increasing dissatisfaction throughout the United States. 

With the cost of medical care continuing to rise and the politicians focusing on the issue, a turning point for the U.S. system may be on the horizon.

[Steve Clark]