A Review of Healthcare In America

Section 1: The History of Healthcare in the United States

Healthcare in the early colonies was rudimentary because very few trained physicians made the journey to the new land. The few physicians who made the journey were mere apprentices as the upper-class physicians who remained in Europe, were in the employ of royal courts or universities. As a result, mortality in the new world was extremely high.

Those who fell ill enough to be attended to by a physician were treated with folk remedies. Most treatments at the time were botanical in nature and lacked any empirical evidence as to efficacy. The appearance of the plants was used to gauge the illness that they cured. Sunflowers and daffodils because of their yellow color were thought to cure jaundice and other liver ailments. Forget-me-nots were used to treat bites from insects due to the plant’s stinger resembling tail. And walnuts, due to their brain appearance, were used to treat headaches, vision issues, etc.

Hospitals were established during this time-frame, but they were not today’s centers of healing. Rather they were almshouses where the poor would send their ill loved ones to die. While not yet fully documented nor completely understood, people in this time-frame knew enough about the spread of contagious diseases to at least isolate infected individuals from the population.

Due to the infectious nature of the hospital, those who worked there were individuals who could not find work elsewhere or who were ill themselves. In general, medical training for hospital staff was non-existent.

Those individuals who could afford it would treat their sick with live-in nurses or physicians.

The Civil War

The Civil War did not discriminate as to who had wealth and who did not. Wealthy family members were horrified and appalled at the conditions of the hospitals where their loved ones were taken to recuperate. For the first time, money, and lots of it, flowed into the healthcare system.

Due to the sheer number of wounded soldiers, the war provided the opportunity to radically improve surgical techniques, conduct research, and refine nursing methods and standards. Not only were wealthy individuals investing in healthcare, but the United States government was as well.

In 1886, after the war ended, the US Army created the Hospital Corps. This agency was established to gather the vast amounts of data collected through the war and disperse the results of the findings as needed. This central warehouse of medical data formed the hub of our modern medical information systems.

The Early 1900’s

At the turn of the century, factories were in full swing because of the Industrial Revolution. These places were hot, humid, and lacked ventilation. They were perfect petri-dishes for major outbreaks of illness and disease. If you worked at one of these factories, due to relatively high unemployment, if you called off sick to work, you were likely to be replaced. Sick employees spread their illness and production fell.

It did not take long for owner-operators to determine that it was far more cost-effective to pay the employee to stay home and not risk the reduction in production. Sick insurance was officially born.

In 1923, Baylor Hospitals in Dallas, Texas, created a program with a local group of teachers. The program provided health insurance for a pre-paid monthly fee. The program was so cost-effective that it did not take long to expand across the nation. Blue Cross/Blue Shield was born.

World War II

More than 16 million Americans served in World War II. The sheer number of men needed to fight the war left many manufacturing positions vacant. Women, in record numbers, entered the workforce. Interestingly, production in most factories and plants exceeded pre-war levels.

When the war came to an end, it was expected that the women would return to their homes and the returning soldiers would take up their previous positions. However, not many employers, and even fewer women, wanted things to return to “normal.” Women were no longer dependent on men and many of the glass ceilings were shattered because of the war.

The government, in an attempt to provide employment for the millions of soldiers who protected the nation, enforced wage controls. These wage controls were designed to encourage women to return to the home. Employers fought back by adding benefits for employees; chief among them was employer-sponsored health insurance.

The 1960’s

In 1960, the government started tracking National Health Expenditures (NHE) and calculated them as a percentage of Gross Domestic Product. At first measure, healthcare was 5% of GDP.

John F. Kennedy tried to develop a healthcare plan for senior citizens. It received minimal support from Americans at the time, but it was the opposition it faced from the American Medical Association (AMA) that sealed its fate.

After Kennedy was assassinated and Vice President Lyndon B. Johnson took over as President, he quickly picked up where Kennedy left off. Johnson worked with Congress to try and develop a plan that would provide healthcare for all citizens and not just the elderly. Again, because of extreme opposition from the AMA and fear of socialized medicine, the plan had to be revised.

A compromise between all parties was reached and the Social Security Act of 1965 was signed into law. Instead of providing universal healthcare, it provided health insurance for the elderly and those below or at the federal poverty level: Medicare and Medicaid were officially established.

The 1980s

NHE accounts for 8.9% GDP.

Under the Reagan Administration, federal regulations restricting healthcare were loosened and the ensuing privatization of healthcare became more common. In 1986, President Reagan signed the Consolidated Omnibus Budget Reconciliation Act (COBRA) which allowed former employees to maintain enrollment in their previous employer’s health insurance plan. They were responsible for the full premium, but it protected individuals who might otherwise lose insurance because of pre-existing conditions.

The 1990s

NHE accounts for 12.1% of GDP.

The national expenditures of healthcare as a percent of GDP was increasing at an alarming rate. President Bill Clinton believed that the rapid increase was unsustainable and set to work on a national health insurance plan. Clinton proposed the Health Security Act of 1993, which would have provided health insurance to all Americans.

Once again, the bill received large amounts of opposition and it was quietly defeated in Congress.

In 1996, President Clinton signed the Health Insurance Portability and Accountability Act (HIPAA). It established privacy standards for medical records and placed restrictions on how pre-existing conditions could be treated in health plans.

Lastly, the Clinton Administration enacted the Children’s Health Insurance Plan (CHIP) and it expanded Medicaid assistance to uninsured children up to the age of 19 in families with incomes too high to qualify for Medicaid.

2008 to 2016

NHE accounts for 16.6% of GDP.

When President Barack Obama took office, he wasted no time in getting to work on healthcare reform. This healthcare bill was not an attempt at universal healthcare, rather, it was designed to expand the availability of health insurance through existing networks. Americans earning less than 400% of the federal poverty level would qualify for government subsidies to help cover the cost.

After multiple revisions in both the House and the Senate, the bill known as the Patient Protection and Affordable Care Act (ACA), was signed into law on March 23, 2010. The law, nicknamed ObamaCare, represented the largest overhaul and expansion of healthcare coverage since the passage of Medicare and Medicaid in 1965.

At launch, it was met with heavy opposition for a variety of reasons; chief among them was the individual mandate which stated that a person was required to have health insurance or pay a penalty. Although the ACA brought insurance to an estimated 12 million Americans, the largest impact of the act could arguably be the clause related to pre-existing conditions.

Prior to the passing of the ACA, it is estimated that 1 in 7 Americans were denied insurance based on pre-existing conditions.

2017 to Present Day

NHE accounts for 17.9% of GDP.

Upon being elected to office, President Donald Trump sought to repeal the ACA. Six months into 2017, the late Senator John McCain voted down a critical vote by the Senate to repeal the ACA. As a result, the Trump Administration has begun a systematic process of trying to dismantle the ACA insurance program despite the enrollment of millions of Americans. In 2019, the individual mandate was effectively repealed which caused a large increase in insurance premiums.

Despite multiple attempts, and even Supreme Court interventions, the ACA has remained resilient. While the ACA has indeed insured a greater number of Americans, the ACA failed to reign in runaway medical costs.

Section 2: Current Issues

There are numerous issues facing healthcare today in the United States. We will address staffing and staffing shortages in Module 4. As such, in this section, we will examine cost, the uninsured, and a growing level of mistrust of the medical community.


As noted above in section 1, the cost of healthcare continues to grow at a rapid pace. The United States currently spends 17.9% of its Gross Domestic Product (GDP) on healthcare. The following graph depicts countries that offer universal health coverage for their citizens and measures their respective National Health Expenditures against their GDPs.

Although the United States does not offer universal health insurance, it pays more than any developed country on earth. One would expect that with such expenditures, the US would have the highest overall health outcomes. Unfortunately, as compared to all developed countries, the US is the worst-performing as measured by 14 health indicators established by the World Health Organization. 

There are several reasons that we are spending more than other countries. Chief among them are the number of uninsured, the amount of waste, cost of medications, and differences in salaries. We will touch on the uninsured a little later in this section. Let us briefly discuss medications.

In countries with universal health insurance, the government is the only source of payment. As such, the government can and does enact price controls on procedures, supplies, and medications. The United States does not place similar price controls on medications allowing pharmaceutical companies to charge that which is above supply and demand. As an example, Januvia (a diabetes-related medication) costs $15.70 in the US and only $1.40 in other countries. Another example is Humira (an anti-inflammatory medication). It costs $2,436 per dose in the US and can be purchased in other countries for $787 – less than one-third the US price.

At the current level of spending, by 2027, NHE will account for 20% of GDP ($6 trillion). In 2035, NHE reaches 25% of GDP ($9 trillion). Unless something changes drastically in the healthcare system, this number may simply be unsustainable.

The Uninsured

Before the Affordable Care Act (ACA) was passed in 2010, there were an estimated 40 million Americans without health insurance. The ACA, or ObamaCare as it is known, brought health insurance to a little over 12 million individuals. In 2019, the most recent year for which information is available, there are a little over 28 million Americans without some form of health insurance. The number of uninsured has been rising since the Trump Administration in 2019 repealed the individual mandate component of the ACA which stated that a person must have health insurance or pay a fine. It is estimated that at the end of 2020, there will be a little over 31 million Americans without insurance.

Individuals without insurance are seven times more likely to visit the emergency room as opposed to those with health insurance. The reason being is that individuals without insurance forego preventative measures and/or wait until an illness or issue is so severe that it requires urgent attention.

Additionally, in 1986, Congress enacted the Emergency Medical Treatment and Active Labor Act or EMTALA for short. EMTALA stated that an individual experiencing an emergency or a person in active labor, could not be denied medical treatment based on ability to pay.

By sheer definition, anyone showing up at the emergency room fits the guidelines as outlined in EMTALA. The hospital, by law, must stabilize the individual. Due to this law, many uninsured use the emergency room as their source of primary care. This cost must be absorbed by the hospital or distributed in increased costs to individuals with insurance.

Growing Mistrust

Our last issue that is impacting healthcare in the United States is a growing level of mistrust with the field of medicine. As the use of social media sites continues to expand across America, there is an accompanying rise in disinformation. Particularly, a handful of anti-vaccine ad buyers are distorting the truth about vaccinations. Unfortunately, people are paying attention.

The “anti-vax” movement, as it is known, is gaining in popularity across the country. Fueled by the Trump Administration’s war on science, an unprecedented number of individuals are avoiding vaccinations for their children. It is at such a worrisome level, that the Department of Health and Human Services’ Office of Infectious Disease and HIV/AIDS Policy is launching a 2020 National Vaccine Plan.

Diphtheria, hepatitis B, measles, meningitis, mumps, tetanus, tuberculosis, and yellow fever, all vaccine-preventable diseases, are on the rise because of the anti-vax movement. Recently in New York, officials have declared a public health emergency due to a measles outbreak, of which most of the patients are children.

Experts suggest that the anti-vaxers are just the proverbial tip of the iceberg. In 2020, only 34% of the public trusted health professionals as compared to 80% in 2016. COVID-19 and the sheer number of political mishaps surrounding the government’s response is the number one greatest factor in the loss of trust.

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