Free Thoughts, Ep. 264: The Public Creation of the Corporate Health Care System

Starting in the 1930’s, the American Medical Association (AMA) reluctantly agreed to accept a health insurance model because they feared the federal government would overreach into the health care sphere. They decided that the best way to protect themselves was to have only the insurers finance health insurance. A huge component of this was that every physician would be paid for each service they provided during a patients’ visit. Essentially, the AMA drove health care costs up by incentivizing physicians to provide any relevant tests because they would be paid for every service during each appointment. To the physician, they were charging a faceless third party somewhere, for each service, rather than thinking they are charging their patients for each service. Therefore, costs were already a huge problem before Medicare passed in the 1965. Today, we have to look at how hospitals and doctors are incentivized in order to analyze our overall health care system. Essentially, the AMA enabled government intervention in the health care system, when they originally agreed upon the creation of a health insurance market to prevent government interference.

When was the discovery of germ theory and how did it change the sphere of health care? How did the American Medical Association increase the professionalization of doctors? Are we rationing health care or are we over-providing it? What percentage of the GDP does the U.S. spend on health care? Do we demand more out of health insurance than insurance can handle?

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[projectmalus]

The pay per use or prepaid sounds good. I don't mind contributing to emergency services, research, hospice etc but paying for someone who doesn't take care of themselves seems counterproductive. Put the money into health education.


The germ theory is fine but incomplete. We swim in a sea of spores, pollen and germs, all of which are opportunists and looking for a good home. Where does the "problem solving" perspective come from, bygone days of Man against Nature? Instead of seeing germs as attackers, see them as indicators that show problems with the system. The microbiologist Dr Elaine Ingham has many videos on this.


People who take care of themselves should be rewarded with less costs. If preventable disease was reduced (and the AMA dismantled!) the system would work just fine, by keeping costs low.

[paul-ldvh]

I still believe that Medicare and Medicaid have inappropriately influenced the overall perception of the cost of services. The fee schedule presented by Medicare has historically always increased costs for services regardless of market conditions. Many private insurers tend to follow the HCPCS codes enacted by Medicare.