[...]... discrepancies in the quality of care The $2 trillion American healthcare system is in critical condition Like any patient in critical condition, the first step to finding a cure is proper diagnosis This is what the first half of the book is all about Beginning with the landmark 1932 report of the Committee on the Costs of Medical Care, I describe how researchers have identified myriad systemic problems with the. .. seeking to keep control of Congress and win the White House in the November 1960 election The Kerr-Mills Act of 1960 created the Medical Assistance to the Aged program Following the model of the welfare programs created under Roosevelt, MAA used federal matching grants to encourage states to expand vendor payment programs but otherwise took a hands-off approach to regulating the healthcare system The carrot... drugs and long-term care would drive up spending in these categories (The conventional wisdom at the time was that the demand for hospitals and physicians would not be substantially affected by insurance.) Finally the AMA and American Hospital Association wielded considerable political muscle; as long as government paid the bills and otherwise stayed out of the way, doctors and hospitals wanted to be... important work explained how to predict healthcare spending in a community Hospitals needed to develop this expertise if they were to avoid losing money on prepayment; such “medical underwriting” remains one of the core tasks of any insurance company today.26 With the access problem worsening with each passing year of the Depression, more and more hospitals banded together to offer Blue Cross plans By... achieve these goals For all of our efforts, they remain as elusive as ever 4 · INTRODUCTION For much of the twentieth century, quality and efficiency took a back seat to access Private sector health insurance in the United States began in fits and starts prior to the 1930s, expanded to cover 10 million Americans by the start of World War II, and then took off in the 1950s Despite several failed efforts to. .. societies, and a conference of state health officers The Journal of the American Medical Association even remarked that the time for the medical profession to interest itself in social insurance legislation is now.”5 Employers (who did not want the additional expense) and insurance companies (which were not yet selling health insurance and did not want to be told whether and how to do so) opposed the proposal... cover the costs of care for the uninsured Long after Hill-Burton mandates for charity care have expired, the nonprofit hospitals that the program created dominate the market Hill-Burton funds are surely part of the reason for the success of nonprofits, but there are others, including the trust that many Americans place in their community and faith-based nonprofit providers, and the fact that nonprofits are... and almost the entire “tax subsidy” goes to middle-class and wealthy households.32 The tax exemption creates other problems There is currently an uneven playing field in the health insurance market The added cost of expensive plans and the extra healthcare that comes with them can be paid with before-tax dollars Almost everything else we buy is paid for with after-tax dollars This makes it cheaper to. .. insurance programs with financial assistance from the federal government Roosevelt endorsed the idea but it met with stormy protests and went nowhere in Congress AN ACCIDENTAL HEALTHCARE SYSTEM · 17 NHI Remains an Elusive Goal As the nation emerged from the Great Depression and transitioned to a war time economy, healthcare spending began to rise once again and national health insurance remained a prominent... Security) program to cover up to sixty days of hospital care annually Republicans were unanimous in opposing the plan and the AMA once again trotted out the label of “socialized medicine.” The plan withered on the vine When World War II ended, Congress envisioned a surge in the demand for hospital care To meet this need, Congress in 1946 created the Hill-Burton program, which over the next three decades . Data Dranove, David. Code red : an economist explains how to revive the healthcare system without destroying it / David Dranove. p. ; cm. Includes bibliographical references and index. ISBN 97 8-0 -6 9 1-1 294 1-9 . y0 w0 h0" alt="" Code Red This page intentionally left blank AN ECONOMIST EXPLAINS HOW TO REVIVE THE HEALTHCARE SYSTEM WITHOUT DESTROYING IT David Dranove David Dranove CodeRed p r i n c. did not want the additional expense) and insur- ance companies (which were not yet selling health insurance and did not want to be told whether and how to do so) opposed the pro- posal. The president