Cover

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Half Title, Title Page, Copyright, Grant Info, Dedication

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Contents

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pp. vii-viii

Timeline of Major Federal Legislation

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pp. ix-x

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Introduction

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pp. 3-9

A 1971 editorial in the New Republic, the small but highly influential magazine of political commentary, announced that the US health system was “staggering towards a breakdown.” With hospital care having climbed from $48.15 a day in 1966 to $74 a day (a 53 percent increase), the system had been recently profiled as “Our Ailing Medical System” ...

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1. A System Run Amok

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pp. 10-32

In 1969, rising healthcare costs were gaining prominence as one of the nation’s foremost domestic challenges. Over the previous decade, average annual medical costs for a family of four had risen from $408 to $676: a rate of increase roughly three times that of general inflation. Some psychiatrists were charging a “dollar a minute” for therapy, ...

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2. Medical Free Markets

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pp. 33-52

American healthcare in the early 1970s was ill, but the ailment was not readily apparent. The rising costs, misdistribution of doctors, overcapitalization of hospitals, poor public health outcomes, overspecialization of physicians, and general shortage of good preventive care were all symptoms of a broader malaise: disorganization. ...

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3. Reining in the Excess

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pp. 53-67

As the 1970s drew to a close, the most promising route to reining in excessive billings and costs lay in HMO-like payment schemes and multispecialty group practices. HMOs had spawned a variety of payment schemes—used prepayment, capitation, preventive care, and lower hospital admissions rates—to hold down costs. ...

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4. The Lure of Profits

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pp. 68-80

The US hospital could trace its roots back to medieval eleemosynary convalescent houses in which succor and prayer were plentiful and therapeutics were in short supply. Early colonists in New York, Philadelphia, and Boston started institutions in which local doctors could obtain visiting privileges to counsel and treat while patients waited to heal on their own or die. ...

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5. Efforts to Rationalize

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pp. 81-101

Of all the many sources of funds for purchasing medical care in the United States when Ronald Reagan became president, one stood out for size and influence: Medicare. The national program, implemented in 1966 to cover acute hospital and physician care for citizens over age 65, had evolved but had not changed dramatically. ...

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6. HillaryCare

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pp. 102-123

On April 4, 1991, US Senator John Heinz III (R-PA) died in a freak helicopter accident. In the race to claim his seat that fall, the state’s Republican leaders nominated Dick Thornburgh, a former governor and sitting US attorney general. The state’s Democratic leaders nominated Harris Wofford, a former Peace Corps volunteer and university president. ...

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7. Managing Care

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pp. 124-144

The Clinton health plan had failed largely because it compelled people to move from their traditional fee-for-service insurance plans to a managed care plan. Americans resisted the move, correctly realizing that moving from indemnity insurance to managed care would restrict their choices and limit their ability to see specialists. ...

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8. Quantity and Quality

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pp. 145-153

Years of rising healthcare costs raised the question as to why the sector seemed so inclined to excessive inflation. A number of economists and planners suspected that a major factor in healthcare inflation was the endless stream of new pharmaceuticals, procedures, and medical devices that flooded the market and demanded reimbursement from all payers. ...

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9. Ethical Wrangling

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pp. 154-168

For a very long time, the primary barrier to physicians achieving optimal results was capacity; doctors were constrained by their own inability to control bleeding, halt infection, excise a tumor, constrain a cancer, or repair broken tissue. Physicians and biomedical scientists tirelessly expanded their own capacities to heal, ...

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10. Medicare and Medicaid: Evolving Government Programs

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pp. 169-188

Medicare was confronting challenges in the 1990s. The program was funded through a combination of payroll taxes, monthly premiums, and general tax revenues, and was funded on a pay-as-you-go basis: that is, current taxpayers funded current beneficiaries. ...

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11. (Un)Affordable Care

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pp. 189-214

Americans have always complained about hospital bills, but in the years following the widespread adoption of managed care practices, these bills grew exponentially worse. Managed care companies saved money in a variety of ways, but one of their most powerful tools was aggressively negotiating discounted rates with hospitals. ...

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12. Afterword

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pp. 215-224

US healthcare cannot be neatly wrapped up. The story is tremendously complex—winners and losers fight daily over the spoils of a $2.3 trillion enterprise. Many who have won are not even aware of the degree of their victory; others who are losing or have lost do not understand how far they have fallen behind. ...

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Acknowledgments

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pp. 225-226

Thank you to Paul Ehrlich, friend and physician, who read the entire manuscript and helped me clarify points and avoid errors and redundancies. Thank you also to Samantha Ehrlich, my research assistant on three books, who tracked down hundreds of old articles and saved my eyesight from the microfilm reader. ...

Notes

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pp. 227-270

Index

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pp. 271-285