Ep 01: History Of How We Got Here

Welcome back to the Let’s Fix It series about the American health care system. I’m Dr. Chris Robertozzi, a practicing podiatrist in Newton, NJ. This podcast will provide a history of how we got where we are today in America’s health care. Before the development of health care insurance, patients paid their health care costs out of their own pocket. This is called fee for service business model. It functioned like any other professional service such as plumbers, electricians or appliance repairmen.

Health care insurance in the United States began in 1915. It was for protecting workers against medical costs and sickness in industrial America.

Hospital and medical expense policies were introduced during the first half of the 20th century. Individual hospitals began offering services on a pre-paid basis. This led to the formation of Blue Cross organizations in the 1930s.

During World War II, a significant amount of the manufacturing work force was in Europe fighting. As a result, there was a shortage of workers. Manufacturing companies provided health care insurance to attract women into the work force since health care was not affected by the wage and price controls imposed by the Federal government. By 1976, almost 86% of the employed population aged 17-64 years of age had hospital and surgical insurance.

President Lydon B. Johnson signed Medicare and Medicaid programs into law in 1965. This is the public sector health care insurance for the elderly and the poor respectively.

The American Medical Association’s (AMA) Current Procedural Terminology (CPT), International Classification of Diseases (ICD) and Healthcare Common Procedure Coding System (HCPCS) became the standard for submitting insurance claims in the mid 80’s. At that time, most insurance companies paid a high percentage of the bill using the AMA’s coding as a guide for reimbursement.

Insurance companies would inquire if the doctor was board certificated. Then, it meant that physicians practiced at a higher standard of care. Today board certification is the minimum standard. To get on an insurance plan or keep hospital privileges, physicians must be board certified. There are many legitimate reasons why physicians are not board certified. The three most common reasons are first, women take sabbaticals to start their families after finishing their residency programs. When they return to practice, the period that they could sit for the exam elapsed before they could get the required cases to submit. Second, physicians are unable to get the number and or mix of cases required within the time limit to sit for the exam. Finally, doctors are not board certified when they complete their residency program.

The insurance companies initiated the usual and customary fee. This was based on the average fee in a geographic area. The insurance companies then paid 80% of the usual and customary fee to the physician regardless of what the invoice stated from the doctor. The patient in most cases was responsible for the other 20% if they went to an in-network doctor. The physician was unable to collect the difference between their fee and the usual and customary fee if they were in-network. Health care providers then raised their fees so they could get paid their fair fee like anyone else who provided professional services. The services were paid by a formula that the insurance company devised not necessarily using the American Medical Association’s relative value units for services rendered. Consequently, the fees of those who provided health care in any form continued to go up, causing the high prices that we see today.

In the 90’s, HMOs and PPOs became popular. Insurance companies continued with their networks. This allowed the insurance companies to sell their products to the businesses based on the physicians they had in their network. Also, about the same time, a few insurance companies started the capitation form of payment. This is where a physician gets paid a set fee for every member in their network regardless of the fact whether the physician sees the patient or not and regardless of how many times or services the physician provides. There was a copay or coinsurance that was due by the patient for the service provided.

Reimbursement to physicians then became determined by the insurance company without the benefit of the American Medical Association’s relative value units. Then, providers of health care increased their fees to keep up with inflation, the cost of living and then some so they could maximize their reimbursement. It has gotten to the point where some of the fees are absurdly high and some of the reimbursements are extremely low.

Slowly over the years, authorizations and predeterminations became required by the insurance company to get certain services covered. Generally, they are required for surgeries, the newer more expensive medications, biomedical devices or new technology. Time limits were put on how frequently services could be provided. Certain documentation became necessary in the doctor’s progress notes that was not what was taught in medical school. The cost of running a practice continued to go up as did minimum wage, the price of office supplies and services, just like in every other business. However, for the most part, reimbursement over the decades has gone down to all health care providers when compared to the increase in the cost of living and inflation. The amount of documentation that is now required for the same service is significantly more than 40 years ago. Thus, instead of spending time with the patient, providers now worry about time needed for documentation. Medical malpractice also adds to the need for excessive documentation and ordering any test that may have a bearing on the treatment of the disease. As a result of the documentation frenzy, patients are rightfully feeling rushed. They no longer feel like a person with a close relationship with their physician but rather a cog in the wheel. This has led to strained relationships between providers and patients. The caring in health care is rapidly fading away.

Changes in the health care system were made to address a certain issue. The solution to that problem, however, had an impact on other parts of the system that were not considered. Thus, another problem was created that didn’t exist before. That is why the entire health care system needs to be evaluated with representatives from every contributing area so that the entire system can be improved.

If you want a better health care system and think that what I’m proposing will get our country there, then contact the organizations that I will mention and request that they send a representative to the Zoom meetings to start on February 5, 2025, at 4:00 pm EST. They have all been sent an invitation for the proposed collaboration on health care. I will provide the names and phone numbers of the various organizations at the end, but you can see all the organizations and their phone numbers on the website: www.betterhealthcarereform.com. It is appropriate if no one answers the phone to leave a voicemail. A simple statement such as please participate in the Let’s Fix It health care reform Zoom meetings starting February 5, 2025, at 4:00 pm EST. Feel free to give your name and any other pertinent information you are comfortable sharing. The listed associations received a letter in December with all the details.

Those who attend will rewrite the health care proposition that will be sent to Congress to make the appropriate changes whether it is a law or alterations in the delivery of health care. A summary of each meeting will be posted on the website within a few days so you can keep up with the progress and provide feedback. Likewise, the recommended changes that will be sent to Congress for approval will be posted.

The Affordable Care Act took 26 months from the time President Obama took office until it was passed by Congress on March 23, 2010. It was not implemented until January 1, 2014, 45 months later. Our goal is to write the proposal, pass Congress and be implemented in less than six years.

The following are the names and phone numbers of the organizations that need to be contacted to participate in the Let’s Fix It Zoom meetings for health care reform.

American Academy of Physician Assistants: (703) 836-2272

American Association for Respiratory Care: (972) 243-2272

American Association of Nurse Anesthesiology: (847) 692-7050

American Association of Nurse Practitioners: (512) 442-4262

American Chiropractic Association: (703) 276-8800

American Dental Association: (312) 440-2500

American Health Care Association/National Center for Assisted Living: (202) 842-4444

American Hospital Association: (202) 638-1100

American Institute for Medical and Biological Engineering: (202) 496-9660

American Medical Association: (312) 262-3211

American Nurses Association: (800) 284-2378

American Occupational Therapy Association: (301) 652-6611

American Osteopathic Association: (312) 202-8000

American Physical Therapy Association: (800) 999-2782

American Podiatric Medical Association: (301) 581-9200

American Public Health Association: (202) 777-2742

America’s Health Insurance Plans: (202) 778-3200

National Association for Home Care and Hospice: (202) 547-7424

National Patient Advocate Foundation: (202) 347-8009

National Pharmaceutical Association: (480) 405-9291

Thank you for taking time out of your day to listen to this podcast. Please share this with your family and friends and let’s all work toward a better health care system for all American citizens. Please contact the organizations and let them know that you would appreciate their participation at the Let’s Fix It meetings so we can achieve a better quality of health care for all Americans and reverse our rank in health care in the world.

Ep 01:

History Of How We Got Here

TRANSCRIPT