Before Medicaid

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How did doctors treat the poor before Medicaid?  A professor at Harvard University did a nice historical review and basically described how charity care and “sliding scale” fee structures were used by doctors.  But things changed:

  • Then after World War II, when government and private insurance companies became more involved in paying for care, doctor could no longer charge a wealthy patient more than a struggling one, for insurers and public programs wouldn’t allow it.
  • Further threatening the math behind an informal sliding scale was the subsequent move by insurance companies to rein in doctor fees. Using their bargaining power, they got major price concessions from doctors in exchange for sending patients their way.
  • “Barter economies, sliding scales … the minute insurance came into the picture, that stuff disappeared,” Jones said.
  • Now we have a government-funded system built on two morally questionable assumptions, said Princeton University health economist Uwe Reinhardt, who served three terms on the national commission that advises Congress about physician pay rates. Suppose he teaches three undergrads at Princeton, he says. One goes to law school and becomes a lawyer, one gets an MBA and goes to work on Wall Street, while the third goes to medical school and becomes a doctor. Of the three, he says, only the doctor is expected to provide free or discounted services. “I love the way, with one wave of your hands, you somehow tax the doctors and nurses and make them give charity care,” he said. “I view giving charity care when it’s expected of you as a tax.”
  • The second bit of uniquely American illogic embedded in the Medicaid system is the assumption that a doctor’s services are worth less when administered to a poor person, he said. Put another way, rates are based on the social status of the patient. “If a doctor worked an hour with a patient, he should get paid,” Reinhardt said. “And yet we say, ‘No, you should be paid less because you treated a poor person.’ What kind of orange juice did we drink in high school? It’s an outrageous idea.”

My answer to this?  Get out of the system!

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