lose federal funding.
• Employer mandate has been pushed back until 2015.
Precedents of Health Care Reform
Expansion of health insurance under the ACA is based on two main historical initiatives:
1. The Oregon Health Plan
In the 1980s, the plan was formulated over several years through successive legislation. It
2. The Massachusetts Health Plan
– Implemented in 2007.
– Individual mandate: All residents must have health coverage or face a penalty
– Employer mandate: All employers with 10 or more workers to offer a cafeteria plan
TERMINOLOGY
• Almshouse—Also a poorhouse, was an unspecialized institution existing during the 18th and
mid-19th centuries that mainly served general welfare functions, essentially providing shelter to
the homeless, the insane, the elderly, orphans, and the sick who had no family to care for them.
• Balance bill—The practice of billing the patient for the balance remaining after insurance has
paid its share of the total charges.
• Capitation—A payment mechanism in which all healthcare services are included under one set
• Fee for service—The practice of billing separately for each individual type of service
performed.
• Gatekeeping—Requires patients to initially make contact with a generalist who provides basic
and routine care, evaluates the need for specialized services, and makes referrals to specialized
care if it is determined to be appropriate.
uncoordinated actions of individual physicians competing in the marketplace.
• Part A of Medicare—Provides coverage for hospital care and limited nursing home care.
• Part B of Medicare—Government-subsidized voluntary insurance for physician services and
outpatient services.
• Pesthouse—Operated by local governments during the 18th and mid-19th centuries to
REVIEW QUESTIONS
1. Why did the professionalization of medicine start later in the United States than in some
Western European nations?
Advances in medical science, experimental research, and medical education in the United States
had lagged far behind advances taking place in Europe, notably in Britain, France, and Germany.
2. Why did medicine have a domestic, rather than professional, character in the preindustrial
era? How did urbanization change that?
There are four main reasons why the practice of medicine in the United States during the
preindustrial era had a domestic rather than a professional character. (1) In rural and small-town
(3) Personal health services had to be purchased without the help of government or private
insurance. (4) There was often little that a physician could do for a patient that the patient’s
3. Which factors explain why the demand for the services of a professional physician was
inadequate in the preindustrial era? How did scientific medicine and technology change
that?
The reasons given for Question 2 also explain why there was a low demand for the services of a
professional physician in the preindustrial era. Advancement in science and technology was one
4. How did the emergence of general hospitals strengthen the professional sovereignty of
physicians?
For both economic and scientific reasons, the rise of hospitals was a key precondition for the
formation of a sovereign profession. For economic reasons, as hospitals expanded, their survival
5. Discuss the relationship of dependency within the context of the medical profession’s
cultural and legitimized authority. What role did medical education reform play in
galvanizing professional authority?
The medical profession’s cultural authority is grounded in scientific knowledge, and its authority
is legitimized when society accepts its competence in delivering specialized judgments. The
6. How did the organized medical profession manage to remain free of control by business
firms, insurance companies, and hospitals until the latter part of the 20th century?
The structure of medical practice in the United States has been based on private enterprise. Once
the medical profession became organized, it was in a much better position to resist control from
7. In general, discuss how technological, social, and economic factors created the need for
health insurance.
From a technological perspective, medicine offered new and better treatments. Because of its
well-established healing values, medical care was regarded as socially desirable. The value
8. Which conditions during the World War II and postwar period lent support to employer-
based health insurance in the United States?
During the World War II period, Congress implemented wage freezes. Hence, it became popular
to offer group health insurance in lieu of wages.
9. Discuss, with particular reference to the roles of (a) organized medicine, (b) the middle
class, and (c) American beliefs and values, why reform efforts to bring in national health
insurance have historically been unsuccessful in the United States.
The concerted activities of physicians have been represented by the AMA. The AMA has
10. Which particular factors that earlier may have been somewhat weak in bringing about
national health insurance later led to the passage of Medicare and Medicaid?
The main reason why proposals to create Medicaid and Medicare passed, whereas national health
insurance initiatives had failed, is that Medicaid and Medicare were designed to cover only the
11. On what basis were the elderly and the poor regarded as vulnerable groups for whom
special government-sponsored programs needed to be created?
12. Discuss the government’s role in the delivery and financing of health care, with specific
reference to the dichotomy between public health and private medicine.
By and large, a dichotomy has remained between public health and private medicine. However,
the government has been able to carry out some aspects of its public health responsibilities of
13. Explain how contract practice and prepaid group practice were the prototypes of today’s
managed care plans.
Industries operating contract practice plans either hired physicians on salary or contracted with
14. Discuss the main ways in which current delivery of health care has become corporatized.
Managed care has become a dominant force for the delivery of health care to the majority of
Americans. The rise of managed care consolidated immense purchasing power on the demand
15. In the context of globalization in health care services, what main economic activities are
discussed in this chapter?
(a) Telecommunication infrastructure enables physicians in the United States to transmit
radiological images to countries such as Australia where they are interpreted and reported
16. What were the two main aspects of the Supreme Court’s ruling in lawsuits filed against
the ACA of 2010?
The Court ruled that the majority of ACA provisions—including the individual mandate—were
constitutional under Congress’ power to tax. The Court, however, struck down a major provision