Reddit reviews The Social Transformation of American Medicine: The rise of a sovereign profession and the making of a vast industry

The truth is, if we could isolate one reason why healthcare is so expensive, it would be a lot easier to find a solution. I'm a few months shy of a Master's degree in Public Health, and I've spent 2+ years studying US Healthcare and Policy. To really grasp where we are today, you have to understand that the US Healthcare "System" evolved as a piecemeal operation that, through time, has been controlled by various competing interests. This is a relatively brief summary that talks about how medical care changed since the 1800s.

The shortest answer I can give is that the actual cost of providing care has become so far removed from the service itself, that prices have no reflection on reality. Providers are trying to capture the cost of all their services in your charge, and try to set it in such a way that they don't get fisted by private insurance companies and Medicare/Medicaid. When you pay $500 for a night guard at an ER, you're paying for the actual cost of the guard, the salaries and benefits of doctors/nurses/cleaning crew, the time you spent sitting in a bed, the cost of electricity on the ER floor, the sanitation and laundry charges of the hospital, etc. How those costs are allocated and how providers are paid are constantly changing through state/federal fee schedules, insurance negotiations, etc. Health care providers are trying to stay above water, and insurance companies are trying to make their shareholders happy.

Example: If an insurance company negotiates a rate with a hospital that they will pay 85% of whatever you charge, you raise your charge 117% to compensate and get back the original cost. As this happens over and over for three decades, you end up with hospital bills that charge you $30 for an aspirin that you see everyone bitching about. Medicare, Medicaid and charity care throw an entirely different monkey wrench in the system, as they almost universally underpay for services, leaving the hospital to let private payers shoulder the costs.

The most important thing to keep in mind is that, in spite of the desire to blame some sinister insurance/pharma/medical force that is made of men with cigars laughing in dark rooms, it's almost entirely the consequence of short-term responses to immediate pressures. Nobody has really stopped looked at the big picture, which is why we're in such a clusterfuck today.

If you have more specific questions, you can ask. I also highly recommend The Social Transformation of American Medicine, which is still one of the best analyses of US Healthcare out there.

I show this sketch when I teach about the medicalization of birth.

Woman: "Excuse me? What should I do?"

Doctor: "Oh, nothing dear. You're not qualified!"

Love it.

Edit: I knew this would draw some comments. So there are multiple ways of discussing the medicalization of birth. Personally, I don't care how you give birth. The way I teach it is in the context of physician authority. In the late 19th early 20th century American doctors had almost no respect. There was no authority overseeing medical education. You could open your own med school and pump out degrees for a fee. Thus there were tons of quacks and charlatans. There's a larger story of why that changed, but one small piece of it is that physicians had to extend their authority over things that they could reasonably improve, or (if you're a cynic) make the argument that they could improve. With the invention of the forceps and the implementation of germ theory, birth became one of those things. Contrast this with Germany, where physicians enjoyed much higher degrees of respect and autonomy relative to their American counterparts. They wanted nothing to do with birth because it was the purview of midwives. What helped establish authority and respect for American doctors would only serve to diminish authority for German doctors (or so they thought anyway). Thus birth has a stronger history of medicalization (turning a previously non-medical phenomenon into a medical one) in the U.S. than in Europe. It's much more complicated than that, but that's the basic gist. This is coming mostly from Paul Starr's The Social Transformation of American Medicine.

Again, I don't care how you give birth.

If you are interested in reading more on this subject, you absolutely have to check this book out The Social Transformation of American Medicine: The rise of a sovereign profession and the making of a vast industry It won the Pulitzer Prize in 1983 and describes the evolution of our healthcare industry over the past 200 years.

Not sure if you're familiar but there's a very good book (it's a bit of a tome let me warn you) called The Social Transformation of American Medicine and it talks about how medicine as a field developed in the US - this includes how a lot of previous practices (such a herbalism and midwifery) became less popular, and even illegal.

Health doesn't function like a normal market good for several reasons. The most important, though, is that people do not assess healthcare like they do other commodities. You don't decide whether or not to get an operation or procedure (even an elective one) in the same way that you assess whether or not to buy a new cell phone or graphics card. That's why Martin Shkreli, for instance, can jack the price of a drug several thousand percent.

This has come out in history multiple times. My favorite is the Hill-Burton Act. That's a link to a wikipedia article but I like Paul Starr's account. Basically, they tried to drive down medical costs by expanding hospitals and increasing the numbers of doctors. More players in the market should increase supply relative to demand and drive down prices. The problem is that they failed to realize that doctors can actually drive demand. They can prescribe tests, drugs, and offer services that may only be marginally beneficial. As a patient, you're going to play it safe and do what your doctor says. This legislation actually wound up increasing the cost of medical care.

tl;dr: medical services do not function like other commodities in a market.

Edit: Here's another, and more recent article, by Atul Gawande.

But you didn't give me "actual numbers." You throw up a fact sheet and expect me to accept that as if you have some deep understanding of America's healthcare system and how it's financed and nothing could be further from the truth.

You don't understand the system and you don't understand it's problems, let alone how to fix it. If you want some numbers I suggest you read some Paul Starr. Jonathan Cohn is a good choice too.

You'll have to read Paul Starr's The Social Transformation of American Medicine to understand the whole story, but here's my parable:

• In the US, since about the turn of the 20th century, health care financing has been about finding ways to make paying for the health care costs of hospitals and health professionals regular and predictable - rather than being principally concerned with supporting the ability of patients and families to pay some or all of their treatment bills. That latter issue has always been of secondary concern. It's always been a concern, just never the foremost concern.
  
  
  
• Health treatment has always been inherently conservative - "first do no harm", and all that. When they change at all, health treatment habits change slowly, as do their practitioners.
  
  
  
• We pay for health treatment transactionally - as if we were buying units of care off the shelf. Naturally facilities, and doctors, who "do" health care and want to make more money, do more procedures. The more procedures, the more payments. We don't buy health, we buy a knee surgery here, a bottle of blood pressure medicine there. "Of course we don't buy health, silly" you say - "we can't". So ask yourself; why not? Because it's not impossible, it's just that we just don't do it that way.
  
  
  
• Treatment of the most desperate, difficult cases takes serious resources, and serious skills. The most desperate cases are a very small share of the total - but they consume a very large share of all resources devoted to health care. This is America - we're good at addressing really tough problems. Remember the moon landing? Well, saving the lives of 1.5-pound babies, born at 22 weeks, are like mini-moon landings. Anyway, we find ways to tackle those really tough problems, to find resources to do it, and to fool ourselves that we can afford it, because that's what we do.
  
  
  
• But meanwhile we hate "taxes", and government, and bureaucracy - those aren't the American way. So we fool ourselves that our inefficient, wasteful means of gathering and deploying resources is the 'right' way, the pragmatic, "free market", "innovative" way to pay for health care - that our refusal to be systematic about acquiring resources to support our pretty highly capable health treatment facilities and clinicians makes "our" special, "exceptional" kind of sense. It would be funny, if it weren't so stupid.
  
  
• Taken altogether, we spend a lot more - 33 to 50% more - than people in other comparable countries do on "health", and we get no better health than they do for all our spending. We generally don't even get more health transactions - we just pay more for them. Mainly because that's how we do - that's our habit.
  
  But that still doesn't explain why health insurance* is so expensive, but now that should be easy to see. Health insurance is designed to pay some or all of a decently well-defined realm of possible treatment charges. It's not suited, mainly, to change how those procedures happen. It's a mostly passive follower of what gets charged, and while payers exert some pressure on care providers to moderate their ways, the pressure is feeble, and its motivations compromised.

Doctors used to have to make house calls because there were no doctors' offices. There were some hospitals or convalescence homes, but they were run by charities or clergy and were places where you were given comfort rather than actual treatment.

Their profession was a very low-status one, and house calls reflected that. Doctors had to drive long distances to treat people, were paid very little, and had low status because they were largely ineffective. It wasn't until the start of the 20th century -- with the advent of clean water, antibiotics, and cleaner surgeries -- that doctors had more status, a union of professional peers (the AMA), and offices or hospitals to work with.

Source:http://www.amazon.com/The-Social-Transformation-American-Medicine/dp/0465079350

I've heard that The Healing of America by T.R. Reid is good, though I haven't read it myself.

I can't recommend enough The Social Transformation of American Medicine, although I doubt it would "be assigned in an intro course." It's not exactly a light read, though.

I'm absolutely not defending it, I have a master's degree in Health Services Administration and have worked with many different healthcare organizations, including hospitals and physician groups, always on the provider side.

In a sense, my livelihood depends on how complicated the system is. I don't mean to be flippant about that, and I have worked throughout my career to make healthcare more accessible to people than less, believe me. My father worked in public health, several of my family members are (or were) direct care providers, from nurses to doctors to paramedics. Trust me, you didn't want to have dinner with us if you couldn't stomach really disgusting stories and lasagna at the same time.

> I don't see why everything you just said can't be true, but you make sure that the hospital you run uses doctors that take the insurance you sell.

This seems obvious, there are some variables. The main one is "network." Insurers negotiate payment rates with each individual provider (hospitals, doctor groups, etc.). More expensive plans have a broader network, cheaper ones smaller networks.

Now, in certain areas (such as mine) almost all of the pediatric specialists are employed by the educational and research institution, so insurers have no choice but to bite the bullet and take whatever the hospital offers for fees. Still, I'd conservatively estimate that 20% of that hospital's operating budget is spent simply to collect from insurance companies (they make it hard in so many ways.)

However, for adult specialists insurers take a harder line because there can be several different groups offering the same service. A good trauma doctor can basically write his own check to work anywhere, because they're so specialized. So, they formed groups to protect their own interests. Many of the specialties fall under the same category, and they're simply too expensive to employ full-time.

The major failure of the American healthcare system, in my view (and my view is not original), is that it is a mostly not-for-profit system controlled by for-profit banks. What I mean by "controlled by" is that insurers have an inherent interest (and, in fact, responsibility to shareholders) to make as much profit as possible. Essentially, they focus on profits, and that focus directly conflicts with the needs of patients, creating an inherent barrier between the provider and the patient.

Hospitals and doctor's groups are not without their own conflicts and absurd motives, but I challenge you to find any provider who is driven, from inception, by a profit motive. Sure, some providers are very egotistical, but I think you probably have to be to do those jobs. To get into the really high dollar specialties as a physician, you have to study under the most qualified and preeminent physicians in the specialty you're getting into, and they tend to be pretty powerful personalities.

For a great read albeit dated (won the Pulitzer Prize '84) I cannot recommend enough The Social Transformation of American Medicine: The rise of a sovereign profession and the making of a vast industry.

Even the first insurers separated physician services and hospital services. To get an idea why, and the book would explain: hospitals, in the past, were basically waiting rooms for the mortuary, provided as mostly as charity. Staffed by volunteers, they would give you a bed and a place to convalesce, or pass peacefully, if you didn't have family in the area.

Physicians were basically witch doctors for most of our recorded history, with maybe a few herbal remedies for common conditions, but basically if you got really sick or hurt, you were fucked. A physician couldn't treat you, you just had to convalesce.

The profession of MD and the diagnostic capabilities of healthcare organizations has evolved more than can be imagined over the last century. I am also a pilot, and marvel that we went from the Wright brothers to landing on the moon in 60 years, but honestly, what we have accomplished in diagnosing and treating physical health (IMO) dwarfs the aviation industry.

Long response to a simple question, but I hope I turn you into a universal healthcare proponent. Our system is outdated, too complicated, and results in way more bankruptcies and poor outcomes than necessary. It's part of American culture, unfortunately, and I hope that someone will change it.

For the record, I think the American Care Act was too much compromise to the banks to really accomplish change. More people are insured, but the inherent profit motive of banks still makes care inefficient and further entrenches the divide between those who practice medicine (docs) and patients.

edit: grammar

The Social Transformation of American Medicine

If you want to understand the history of healthcare economics in the United States, I think this is an excellent place to start:

http://www.amazon.com/Social-Transformation-American-Medicine-profession/dp/0465079350

The Social Transformation of American Medicine is the most oustanding book I've ever read on the history of medicine in America and how we got to the system we have now.