HISTORY OF USA HEALTHCARE: A WORKING TIMELINE

  • Post Civil War physician licensure

    • Dent vs WV (1889)

  • Upton Sinclair The Jungle in 1906 catalyzed legislation that produced FDA

  • Blue Cross was during great depression to help out teachers in Dallas with care at Baylor Hospital, where Blue Shield was in the Pacific Northwest to help out lumberers and miners

  • 1943 IRS: employer sponsored insurance is tax exempt

    • WWII health coverage instead of salary increases

      • ESI confirmed in 1954 “policy trap” by Professor Starr - a costly, inefficient system that is protected enough of the public to make it resistant to change

  • 1945 Managed Care with Kaiser Permanente on the Colorado River Aqueduct Project

  • 1946 “Hill Burton Act”/Hospital Survey and Construction Act - “separate but equal” tradeoff, safety net services for hospitals receiving federal funds

  • 1948 Truman campaigned on national health coverage, never got it done

  • 1955 charitable nonprofit funding for scientific research (American Cancer Society and March of Dime), ending polio with Salk vaccine

  • 1964 LBJ Great Society

    • LBJ recognized could not pass single payer health care, Democrats developed three layer cake: Medicare Part A (hospital insurance for older adults and individuals with disabilities under Social Security), Medicare Part B developed by Republicans (government subsided insurance to cover physician services), Medicaid (assistance to states to care for the poor).

      • Medicare Administrative Contractors would receive the federal money and pay the provider’s claims.

        • Provider and insurance company support for Medicare by giving private insurance companies more control over the funds that paid for the new system, which lodged the administration of Medicare into the private insurance system

  • 1972 Michael Grossman: A state of health corresponds to health capital (Grossman, M. 1972. On the Concept of Health Capital and the Demand for Health. Journal of Political Economy 80 (2): 223–255.)

  • 1973 HMO Act

    • Capitation to incentivize efficiency, prevention and health promotion

  • 1970s era cost control measures that did NOT work

    • Certificate of need (CON) programs to control hospitals capital expenditures

    • Health planning agencies

    • Peer review organizations to give advice on whether a physicians service were necessary on a given case

  • 1974 Watergate led to the end of Nixon and national health insurance

  • 1974National Health Planning and Resource Development Act

    • Eliminated Hill-Burton and replaced it

  • 1975 O’Connor v. Donaldson - institualization, due process, can't confine a non dangerous individual who is capable of surviving freely in freedom by himself or with the help of willing and responsible family members or friends

  • 1980s Corporatization of health care

    • Mergers and acquisitions

      • Perception: goal was to maximize reimbursement and increase market share rather than meat the communities needs

  • 1982 End of cost based reimbursement and implementation of Medicare’s PPS

  • 1982

  • 1983 Social Security Amendments phased in diagnosis related groups (DRGs) for hospital inpatient services under PPS

    • DRGs are a theoretical cost saving measure that takes into account variables like demographics, area wage index, and procedures involved for Medicare payment

    • DRGs are calculate when Medicare takes the average costs to treat Medicare patients in a particular DRG…base rate is then adjusted by aforementioned variables, then additional benefits for teaching and low income service hospitals

    • Baseline DRG costs are recalculated annually and released to hospitals, insurers, and providers through CMS

    • In some DRGs, hospitals have to share DRG payment with the rehab facility or home health care provider if it discharges them to a facility with those services

    • Early discharge discouraged by penalty for readmittance of same condition within 30 days

  • 1985 COBRA

  • 1986 EMTLA (emergency medical treatment and labor act) - no discrimination at hospital intake

  • 2008 MHPAEA (Parity Act) - standard of care for behavioral health services must be on par with standard of care for physical health

 

 

  • 2010 PPACA (Affordable Care Act, Obamacare)

    • PPACA + 3 0ther statutes that resulted from political realities and compromise among stakeholders

    • Most major improvement to health care since 1964 Medicaid and Medicare with goal to spread risk by creating new health care markets and statutory requirements like…

      • Essential health benefits

      • Individual Mandate w/ exemptions

      • To deal with adverse selection, ACA required insurers to accept every employer and individual who applied for coverage without any rate changes for variables such as demographics or preexisting conditions

    • Cadillac Tax

    • Elimination of lifetime and annual coverage limits

    • Dependent children to remain on parent’s insurance plan until the age of 26

    • Employer mandate & Employer responsibility assessment  - employer with at least 50 employees will pay fine if they do not offer ACA compliant health plan options

    • NFIB vs Sebelius (2012)

      • Upheld individual mandate, elimination of annual and lifetime benefits limitations, prevention of policy rescission because of illness, coverage up to 26, coverage for preexisting conditions, and reforms to underwriting practices

    • King vs Burwell (2015)