History of Healthcare in America Shows Why Government is to Blame for Costs and Availability

healthcare in America

It’s government’s fault (after decades of lobbying and corporate campaign donations) that healthcare is unaffordable and requires insurance.

Because anything government touches with regulation and public money becomes exponentially expensive and loses quality and availability.

An economic history of the American health care system-Part 1

From the pre-Flexner era to the great depression

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“The American health care system was born in the 1910’s out of the so-called “Flexnerian reform” in medical education and the resulting licensing laws.
Prior to that time, medical care in the United States was essentially unregulated. Patients had complete freedom to obtain medical care from whomever they wished.”
 

An economic history of the American health care system – Part 2

From the Great Depression to the present time

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“Insurance programs benefited greatly from the federal Stabilization Act of 1942 which allowed companies facing scarce labor (during a time of price and wage control) to compete for this labor by offering health insurance benefits and by making those benefits exempt from payroll taxes.
 
With these successive legislations and rulings, commercial insurance entered the health care market more willingly and employers began to offer health insurance to employees on a very large scale. Between 1940 and 1950, the number of people with health insurance grew from less than 10 million to over 80 million Americans.
 
What were the economic consequences of the introduction of health insurance? The return of medical price inflation. When the economy began to grow after the war, health care utilization and health care costs again increased, rapidly outpacing the increase in the general price level.
 
What was the increase in medical prices attributed to? Once again, the increase in prices was attributed mostly to scientific and technological advances, the same error in judgment that had been made during the medical price inflation of the 1920’s, as we saw previously.