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How America’s Health Care Fell Ill
As modern medicine has grown ever more powerful, our ways of providing it and paying for it have gotten ever more wasteful, unaffordable, and unfair. An explanation and a possible first step toward a solution.
May/June 1992 | Volume 43, Issue 3
The second revolution is in microscopy. The light microscope, in use since the seventeenth century, can enlarge no more than two thousand times and essentially cannot produce images in three dimensions. The electron microscope, widely available by the 1950s, can enlarge more than a million times. This made it possible to investigate cellular structure and metabolism in depth for the first time. Our understanding of the basic machinery of life itself, and of precisely how disease disrupts that machinery, took a quantum leap forward. The more recent scanning electron microscope can produce three-dimensional images, and it has now become possible to see structures at the atomic level and even, miraculously, to manipulate those atoms one by one.
The third revolution is in chemical analysis. Whereas not long ago we were limited to detecting chemicals at levels of parts per million, today, thanks to such techniques as radioimmunoassay, gas chromatography, and mass spectroscopy, our ability to detect chemical substances has grown by several orders of magnitude. Now substances both natural and introduced can be detected in body fluids and tissues at levels of only a few parts per trillion. Our comprehension of biochemistry, as a result, has become deeper and wider by an equal order of magnitude.
The fourth revolution is in imaging. The stethoscope was the first technological means doctors could use to learn what was going on within a living body and thus diagnose disease using information from within. The X-ray technology developed at the turn of the century increased this ability considerably. But today CAT scanners, magnetic resonance imaging, PET scanners, and ultrasound, all technologies made possible only by computers, yield extraordinarily precise images of physical, chemical, and electrical processes within the living body. It is no exaggeration to say that the difference between the images obtainable from X rays and those from magnetic resonance imaging is the difference between the projection of shadow puppets and a Steven Spielberg movie.
One fundamentally important consequence of the germ theory of disease, one not foreseen at all, was the spread of hospitals for treating the sick. Hospitals have an ancient history, and India had an extensive network of them as early as A.D. 400. Usually operated by charitable or religious organizations, they were intended for the very poor, especially those who were mentally ill or blind or suffered from dreaded contagious diseases, such as leprosy. Anyone who could afford better was treated at home or in a nursing facility operated by a private physician.
Worse, until rigorous antiseptic and later aseptic procedures were adopted, hospitals were a prime factor in spreading, not curing, disease. Childbed fever, for instance, which killed as many as one woman in five who gave birth in a hospital, was far less prevalent among those who gave birth at home. Thus, until the last quarter of the nineteenth century, hospitals were little more than a place for the poor and the desperate to die, and in 1873 there were only 149 of them in the entire United States. Fifty years later there were 6,830, and they had become the cutting edge of both clinical medicine and medical research.
But hospitals had a financial problem from the very beginning of scientific medicine. By their nature they are expensive to operate and extremely labor-intensive. Moreover, their costs are relatively fixed and not dependent on the numbers of patients served. To help solve these problems, someone in the late 1920s had an idea: hospital insurance. The first hospital plan was introduced in Dallas, Texas, in 1929. The subscribers, some fifteen hundred schoolteachers, paid six dollars a year in premiums, and Baylor University Hospital agreed to provide up to twenty-one days of hospital care to any of the subscribers who needed it.
While this protected schoolteachers from unexpected hospital costs, in exchange for a very modest fee, the driving purpose behind the idea was to improve the cash flow of the hospital. For that reason the scheme had an immediate appeal to other medical institutions, and it quickly spread. Before long, groups of hospitals were banding together to offer plans that were honored at all participating institutions, giving subscribers a choice of which hospital to use. This became the model for Blue Cross, which first operated in Sacramento, California, in 1932.
Although called insurance, these hospital plans were unlike any other insurance policies. Until then insurance had always been used only to protect against large, unforeseeable losses. But the first hospital plans didn’t work that way. Instead of protecting against catastrophe, they paid all costs up to a certain limit. The reason, of course, is that they were instituted not by insurance companies but by hospitals and were designed, first and foremost, to guarantee a regular cash flow and generate steady demand for hospital services.
A pharmaceutical revolution began in the 1930s and was followed by the revolutions of electron microscopy, chemical analysis, and imaging.
The result was rather as if the local auto mechanic, in search of a steady income, had offered, for $10 a month, to make any needed repairs on your car up to $120 a year. That scheme works well if a windshield wiper breaks, but it’s not much help if your transmission blows up.