Medical Care - A Historical Fact Worth Pondering

08/28/2012 09:00

Today, thoughts about Medicare and Medicaid fill the TV and radio airwaves. Medicare and Medicaid are at the center of political thought and debate, and their costs are clearly out of control. These programs are the fastest growing items on the cost list of the United States government. Stopping them completely seems unrealistic and politically impossible. However, has anyone stopped and thought for just a moment about medical care before these programs existed?

Prior to 1966 when the programs were instituted and put into action under Lyndon Johnson, how were patients cared for? What mechanisms were in place to care for the indigent? Did the programs initiate treatment of a new portion of the population that previously had no medical care? The answer to the last question is a resounding NO. So how did the system work? My exposure to medical care began before these systems were in place. Allow me to give you a tour of medical care in the early 1960’s.

The primary source of medical payment in that era was privately owned medical insurance. The bills for care were the patient’s bills. The insurance company directly reimbursed the patient. The doctor did not submit his charges to the government or to the insurance company. The doctor may have had to verify that treatment took place, but the payment, and the reimbursement forms were the obligations of the patient. The most fortunate were those who simply paid their expenses directly. So what happened to the uninsured or the indigent with no funds?

In outlying areas, the doctor realized that a certain fraction of their patients would fall into this unfortunate group. Doctors adjusted their fees for those who could pay to treat those who could not pay. If you were a person of wealth, a small medical fee was looked on as an insult. Payment of larger fees by the wealthy allowed the doctor to deliver philanthropic medical care to the poor.

What about serious medical conditions, those that required a major operation and/or an extended hospitalization? These patients were referred to University Hospitals. A University Center typically had an attached private wing or separate building. For example, Columbia-Presbyterian Medical Center contained Harkness Pavilion, a twelve-story building composed completely of private rooms. It was filled with patients of two types. Those with considerable personal wealth and those with open ended insurance coverage or some combination of both. They had come there to be the private patients of the Professors who taught at the Center. The Professors made their living treating these patients, and received a token salary from the University for their ability to teach the Residents. The Residents were postgraduate students of Medicine interested in pursuing a career in a certain specialty of Medicine. The Residents assisted the Professor in delivering care to his private patients. The fees were not fixed in Harkness Pavilion but varied with the status of the patient. Again, a low fee would be looked on as an insult to the economic status of the patient.

The Residents witnessed directly the clinical expertise of the teaching Professors and learned, as an apprentice would, the steps of excellent care.

The largest portion of patients was in the core of the medical center – in this case, a 22 story building filled with indigent, or near indigent patients. The patients were divided by floor according to the illness being treated. These patients were under the direct care of the Residents. The patients were in 12 bed wards or 4 bed rooms. A Professor, rotated on a monthly basis, assisted the Residents in the care of these patients. Each morning, the assigned Professors saw the patients (a process called Rounds with the Resident in charge, the Intern in charge, and a group of medical students) and monitored their care. In surgical cases the Professor assisted and taught the Resident directly. The patient care, so monitored, was excellent, and there was NO BILL. The system produced excellent results. The teaching Professor volunteered his teaching in return for the free assistance of the Resident staff on the Professor’s patients.

In 1966, Lyndon Johnson’s Great Society started Medicare and Medicaid.  The legislation resulted in many of these previous University patients seeking care in smaller community hospitals with the care of private physicians. The concentration of patients with serious illness in a single location was lost. True expertise was no longer brought to bear on each patient in the community. The Medical Centers themselves partitioned their wards into two bed units. All patients were to be “private patients”. Although altruism and good intentions were undoubtedly responsible for the new rules, the results were bills; new bills, from the teaching professors, for their participation in the care of “Ward” patients. The government programs defined in a RVS code (relative values system) charges for all care. No cushion of funding was developed to care for the indigent. All patients, even the most wealthy, were charged as the RVS dictated. Government payment took the place of philanthropic care. The government probably had no idea of the volume of care previously taken care of by philanthropy. Perhaps that explains why the annual cost of these new programs took only three years to reach the projected annual cost at 30 years!

High fees are not an indicator of excellent medical care. Great care is a result of great minds delivering the medical care. The government purchased “designer medicine” confusing excellent care with the furnishings, ambiance, and amenities previously found in the in the private wings of the Medical Centers.  No new care was given to anyone. Better care was not the result, the only result was New Bills;. New Bills from the private wing for those over 65. New Bills from the attending physician of ward patients now either Medicaid or Medicare patients. New Bills from community doctors and their community hospitals who began to participate in the care of patients with serious illness.

Although the government was trying to improve the care available to all patients, the government actually did a disservice to the public by destroying a smoothly operating system of medical care and creating an unsustainable, expensive structure.  Unfortunately, it seems unlikely that this series of changes can be undone. But it certainly shouldn’t be allowed to grow.