To understand the Affordable Care Act, health care reform, and how it's going to transform our system, we need to understand the health care system and how we got here, and the structure and where it came from. To do that, we go back to the 19th century. At that time, doctors were disreputable. They were snake oil salesmen. They were very low prestige. Similarly, hospitals were places called the sinks of human history. They were places that only the poor one, they were places for death, they were not the places of hope and cure. They were long wards, infections were rampant, surgeries were dirty, and people usually got infected and died from them. Doctors like the practice at hospitals because they got some experience, they also got prestige by having admitting privileges, but they cared for the middle class and the upper class in their home. Things began to change in the latter part of the 19th century, mainly due to three changes in science. The first big change was anesthesia and painless surgery. In 1846, the famous surgeon John Warren at the Massachusetts General Hospital showed that you can desensitize a patient and operate without pain. A huge development occurred in painless operations. Then, there was the germ theory of disease discovered by Koch in Germany and Pasteur in France. That combined with Lord Lister's antiseptic surgical techniques and then a septic surgical techniques made surgery much safer and caused less infection. Finally, in 1895 x-rays were discovered, and the use of x-rays to peer inside the body and see bones was pioneered. This meant that the hospital became a much safer place to go, a place that actually provided real therapy to people not just moralizing. You could get a safe operation. Operations expanded and fewer people died of infections. Simultaneously, there was a reform of medical education led by the American Medical Association and then the Carnegie Foundation. The Flexner Report was produced in 1910. Abraham Flexner went around to all 155 medical schools around the United States and Canada and assess them. He made a major recommendation that transformed medical education. First, that students should have college training in sciences. Second, that medical education ought to be divided into two years of pre-clinical work and two years of clinical work in a hospital. Third, that medical schools should be affiliated with universities and have full time university professors instead of private practitioners just making money. That had a very big effect on doctors. First, it decrease the number of poor students who became doctors and the number of students from rural areas because they could not afford eight years of education before they began earning an income. But it also dramatically increased the quality of doctors and they became much more professionalized. Through the 1930s, there was an expansion of hospitals and the quality of care improved. After World War II, two big changes further fueled the expansion of hospitals and the specialization of doctors. One, was the Hill Burton Act passed in 1946. Senator Lister Hill was a Democrat of Alabama and Harold Burton was a Republican of Ohio. This bill provided federal funds to support the building of community hospitals. Federal government through the Hill Burton Act actually paid for about a third of all hospital expansion in the 40s, 50s and early 60s. There were some provisions to the bill, some of which were not enforced. There were to be no discrimination based upon race, religion or national origin. There were supposed to be minimum requirements of uncompensated care for people who didn't have insurance and the emergency rooms were supposed to be open to all. But, there was very little accountability on these provisions. Importantly, the federal government gave a lot of money to states to build more hospitals. The second big change, was funding of the National Institutes of Health, an expansion of biomedical research in this country and the triumph of trying to discover new cures and therapies. This led to a sequence of discovery. In the 1950s, real breakthroughs in various areas. In the early 1960s then these breakthroughs became treatments at elite academic hospitals. In the 1970s and 80s, they spread around the country to community hospitals. So, just take one example, organ transplantation, the first successful organ transplantation between twins occurred in 1954 at the Brigham and Women's Hospital in Boston. A lot of experimentation, organ transplantation proliferated and then became standard of care in the 1970s. Similarly the intensive care unit founded in 1955, then proliferates especially when you can do cardiac monitoring in them, you can do cardiac catheterization to see what's happening in the heart, that expands at academic centers in the 60s and then goes out to most community and other hospitals in the 1970s and 80s. And the same pattern happens with cancer chemotherapy. The first successful chemotherapies begin to be developed in the late 1950s, cures of childhood leukemia and Hodgkin's disease in the early 1960s. The development of more treatments by the late 1970s. Breast cancer can be cured. Testicular cancer can be cured. And these therapies can be delivered in many many community hospitals. A further change is Medicare, created in 1965. It pays hospitals very generously because the government did not want hospitals to resist taking patients on Medicare. So not only do they get payment, they also get some money for expanding their facilities. This encourages hospitals to expand and to add new wings and to add new equipment. The result is that through the decades, hospital payment increases and the proportion of the health care dollar going to hospitals skyrockets like a hockey stick. And you can see it starts out low and then really rises over time as more technologies are developed, hospitals expand to use the technologies and through the 70s and 80s they expand. Doctors go into more specialist care and there are a variety of reasons for this. One of them, is in World War II, the Army actually gives specialists a higher rank. After the war the VA, the Veterans Administration, also give specialist higher pay. And so, this encourages them. The National Institutes of Health provide research funds for specialists and training grants to create more specialists in this country, and as specialists get trained in a few elite hospitals and medical centers, they begin to go out to the community hospitals looking for positions and to other academic centers, and you get a proliferation of specialists. In addition, specialists are paid more not just by the Veterans Administration, but health insurance pays more for procedures, so surgeons and cardiologists and radiologists doing procedures get higher reimbursement. And this again incentivizes doctors to go into specialist training. The result is that the United States has more specialists than almost any other country and fewer primary care doctors. The whole transformation took hospitals from the sinks of human life, doctors from snake oil salesmen, to really being able to provide therapies in the early part of the 20th century. And then after World War II, a huge expansion of hospitals and specialized doctors providing care in and across America. Next, we're going to look at the history of how we pay for health care. The history of private health insurance as well as the history of Medicare, Medicaid and other government funded programs.
