The History (and maybe the future) of U.S. Health Care

Your mail isn’t delivered in a biplane. Why hasn’t the vehicle for medical care changed since then? One area M.D. gives some fascinating background as to how this system came to be. Plus “Let the healthcare revolution begin: First shot fired right here in Salt Lake City”: Gahlinger offers his own innovative solution, Medicruiser clinics.
by Paul Gahlinger
The medical clinic, as we know it today, first appeared in 1907. Before then, doctors made house calls, and if people were severely ill, they were admitted to a hospital or sanatorium. Dr. William Mayo was a typical doctor in the rural town of Rochester, Minnesota. A few years earlier, both of his sons returned home from medical school to join their father’s practice, and they had some new ideas, as sons often do. Joined by a friend, they set up a waiting room, hired a receptionist to greet patients and phone prescriptions to the pharmacy, and streamlined health care so that a nurse would take temperatures and blood pressures, give injections, and do other basic tasks, freeing the doctor to see many more patients.

By far the biggest innovation was the medical record. Before then, doctors had a personal relationship with patients that resembled that between clergy and their parishioners. They might jot a few notes in a journal or on index cards, but it was a private as a diary. The Mayo brothers developed a patient chart in which they all wrote notes. They shared with other doctors, as needed. It was a revolutionary way to do medicine-and led, eventually to the renowned institution still known as the Mayo Clinic.

A hundred years later, the American medical clinic is… pretty much the same. The typical clinic of today still uses paper charts, telephone contacts with the pharmacy, and a receptionist presiding over a room of coughing and sniffling patients, bored out of their minds and flipping through old magazines.

Let’s put this into perspective. Three years before the Mayo boys started the clinic, another couple of brothers fired up the first functional airplane. In a century, aviation went from a flimsy open-cockpit airplane to the Boeing 787 Dreamliner. Aviation and medicine have a lot in common. Both services involve highly trained professionals and support staff, they can be dangerous if not done properly, and they are services that we pretty much take for granted as part of modern life.

So why is one in the space age and the other stuck in the horse and buggy era? It is no surprise to me that the Old Order Amish avoid air travel and limit their exposure to modern technology, but feel completely comfortable visiting medical clinics.

How about a price comparison? In 1907, a typical doctor visit cost about a day’s wages. Today, a typical urgent care visit costs about $120, and a specialty clinic about twice that. In other words, about a day’s wages (at least in some parts of the country). On the other hand, for the same money, you can fly across the country, and for a week’s wages, can you can fly roundtrip to Europe, Asia, or South America. In 1907, traveling halfway around the world would have taken months and cost a year’s wages. Air travel has become vastly cheaper and faster and safer, while improvements in the operation of the family medicine clinic have been minimal-and in some ways, care has become even worse. Why is that?

No commercial pilot nowadays relies on instruments of the 1920s-or even the 1980s. These days, cockpits in even small personal aircraft are equipped with instruments almost unimaginable just a decade ago, providing benefits such as real-time graphical weather downloads, terrain warnings, collision avoidance, cell phone service, even information on local restaurants and such at the airport. As a physician and pilot myself, I find it ironic that I have these wonderful high-tech features in my own small airplane, which are hardly essential for the sort of flying I do, while in the clinic, where I routinely diagnose life-threatening conditions, I still use the stethoscope given to me by my mother long ago as a graduation present.

Of course, plenty of new high-tech tools are also available for health clinics, and not necessarily all that expensive. But adopting new equipment is discouraged in many ways: the doctor usually doesn’t get paid more, runs the risk of malpractice if the equipment is too innovative, and has to spend time learning how to use and maintain the new gear. It might be better for patient care, but there is often no payoff when it comes to the doctor’s time and money.

The contrast came to me quite starkly a couple years ago when I had to fly to Singapore. I went online, found a convenient flight, bought my ticket and selected my seat and meal preferences, and paid by credit card. It took about five minutes. At the airport, I swiped my frequent flyer card (I could also have used my credit card) at the kiosk, and it printed out my boarding pass. My suitcase disappeared into a dark hole, not to be seen again until after I arrived in Singapore. I then walked through the security gate to the departure lounge and onto the airplane. It was seamless. In terms of human factors engineering, a “step” can be an interaction with a person, changing location, or filling out a form. Out of curiosity, I counted the number of such steps required for my flight to Singapore. It came to nine steps.

A year later, I came down with a lung infection while studying public health in a particularly destitute region of the Philippines. After I returned, I decided to see a lung specialist. It had been a while since I’d visited a clinic as a patient, and I was curious to see how this compared in human factors engineering terms.

First, it took navigating through layers of a telephone tree just to get the appointment, and the receptionist clearly had no clue when I tried to explain what I wanted. I showed up a half hour before my appointment. The receptionist handed me a clipboard with lengthy forms to complete. She made a photocopy of my driver’s license and health insurance card. Then I had to sign a number of waivers for this and that, half of which I didn’t really understand. A billing clerk then came out to explain which parts of my care would be covered by my insurance, which would not, and the required co-payment-she could not tell me about whether or not I had met the deductible-and advised that I would be billed, although she wasn’t sure how much or for which parts, but added that I should receive reimbursement if I was overcharged. All of this required enough signatures to rival closing escrow for my house. (In the following months, I got nine letters from the clinic, the laboratory, and my insurance provider, all with invoices for hundreds of dollars, including some which stated at the top “This is not a bill” while containing demands for payment and warnings of referrals to collection agencies if I did not do so immediately.) The whole check-in process took about 45 minutes, and I was late for the appointment even though I’d arrived early.

I was finally ready to see the doctor. But first, I was shunted from one medical assistant to another-one to record my weight and blood pressure, another to take a urine sample, yet another to take a blood sample, and then a nurse who asked for more detailed information about my health complaint. Finally, after I was undressed and shivering slightly in the silly paper gown, the doctor arrived with a flourish-and evidently had no idea why I was there. I had already explained it all to the receptionist and again to the nurse, but there apparently was little communication among them. So I went through the whole thing again, more quickly because the doctor seemed impatient and clearly had little time for an extended story of how I came by this affliction. He jotted a few notes, said he wanted to see me again the following week after my blood test results came in, and disappeared out the door.

Out of curiosity, I counted the number of Human Factors steps. It came to 31. And that did not even include the additional steps needed for treatment, such as getting the medicine from the pharmacy, calling for the lab test results and paying the various bills, let alone dealing with all the following paperwork.

When it is easier to fly halfway around the world than to be seen at a medical clinic, we have a problem.

Most Americans are fed up with the problems of this country’s medical system, and politicians are picking up the chant. The high cost of health insurance! The number of uninsured! The cost of medications! The lack of access in rural areas! On and on-pointing out shortcomings that everyone knows will be difficult and expensive to solve.

The real problem, in my opinion, is that our health care system has yet to enter the 21st century. Why do even the clinics of the University of Utah and Intermountain Healthcare -highly rated medical institutions-still depend largely on paper records? Why do we still have waiting rooms full of coughing and sniffling patients, spreading their germs to the point that if you enter a hospital you have a 20% chance of getting sick from something else? Why do we have medication errors that result in the deaths of as many as 100,000 people and about 1.5 million injuries per year, at a cost of $3.5 billion, with the majority of these errors due to simple miscommunication and bad handwriting? This sort of gross inefficiency and appalling lack of quality control would never be tolerated in any other industry.

How do those 100,000 medical deaths-just from medication errors, alone-compare to the hazards of aviation? In 2006, there were 910 million visits to physician offices. There were about 10 million commercial airline flights in the United States, carrying 744 million people. But in that year, there were just two airline accidents with a total of 50 deaths.

Clearly, our health care system is outrageously antiquated in comparison to aviation and other services. Why?

We need to look back to the Second World War for the explanation. When the United States entered the war in 1941 vast numbers of men entered military service, resulting in a shortage of workers. Factories became desperate for labor. They hired women and imported workers from Mexico, but it was not enough. The normal response to this sort of situation is an increase in wages as companies compete, especially for skilled employees. The Roosevelt administration was terrified of setting off a crippling inflationary wage spiral, and quickly enacted a law that prohibited any increase in wages. Factories instead turned to offering other benefits to lure workers: free education, free housing, and the most attractive of all, free health care.

After the war was over, the unions gave up the educational benefits (to some extent), and free housing (mostly barracks-type dwellings, anyway), but insisted on keeping the health care benefits. And that is why the U.S. is now the only country in the world that forces companies to provide health care for their employees. Not all companies-just those with over 15 employees that meet other criteria. The result is an absurd patchwork of health care benefits that covers only a portion of the population. And if you quit or lose your job, you also lose the health care that went with it.

In the standard marketplace, you have two parties: the buyer and the seller. Competition results in higher quality and lower prices. But our health care marketplace is not like that. With so-called health insurers paying for the care, we have three players: you (the customer), the health care provider (typically the doctor, clinic, or hospital, etc.), and the payer (health insurance provider). This is the same system that existed in the Soviet Union for other products like groceries-and it works about as well.

I was fortunate to experience the Soviet system before it disappeared. To buy food, you went to the store, waited in endless lines, then tried to find something worth buying on the near-empty shelves, then got a chit to take to the register for approval, back to the shelf (hoping the produce was still there), and finally made the purchase. The system was a disaster because the provider of the food wasn’t paid by you but by the government, so they had no incentive to provide quality or quantity of food-they got paid the same regardless. There was no marketplace feedback, so the shelves were bare.

It is a similar situation here with health care-the doctor doesn’t get paid by you, but by the insurer, and the pay is the same for good or bad quality. What is worse, the insurer does not pay for quality but by procedure. If you have back pain and the doctor spends an hour showing you how to get better and avoid pain in the future, she gets paid almost nothing. If she spends 10 minutes with you and writes a prescription for a painkiller, she gets paid more. If she spends only five minutes and gives you an injection, she gets paid much more. And if she does surgery on your back, she makes enough for a trip to Hawaii. It is inefficient and promotes poor quality, inappropriate and excessive procedures, and increasingly out-of-control costs. And no plan currently favored by any of the Presidential contenders makes any significant change in this system.

Now that we know the problem, what can we do about it?

The solution is to get away from the current way of paying for health care. With third-party payers, there is a major disincentive to change anything, since the payer does not benefit from the changes. For example, why don’t health insurance companies provide nutritional counseling or free vaccines, which clearly result in greatly reduced illness and medical expenditures later in life? The answer is that the health insurer does not reap these benefits, since by then the patient may no longer be their customer. In other words, someone else will benefit from their outlay. The result is that health insurers provide little preventive care, even though providing such care is vastly more cost efficient than paying for the disease and disability later on.

The doctors and other providers also resist change. Why use an electronic medical record, which is complicated to learn, when you are used to simple paper charts? You get paid the same, so why bother? When some doctors wanted to do follow-up care with their patients by email, the insurance companies refused to pay for it. (It is a still a contentious issue.) And every innovation, no matter how minor, opens up possible charges of malpractice. The current system actively discourages change.

Health insurance: Why not like house and car insurance?

One irony that escapes just about all discussion of health insurance is that it is really not insurance. Rather, it is prepaid health care. When you buy insurance-whether for your house or car-you pay a small amount because you risk losing a large amount. Car insurance does not, for example, pay for oil changes or new windshield wipers. Those are expected maintenance. House insurance prevents the loss of your investment in your house should it burn down, but it does not pay for repainting the walls or repairing the furnace. But that is what we expect health “insurance” to do. Health insurers already have your money; every benefit they pay comes right out of their profit. So they try everything to put up barriers to care, such as requiring pre-approval -which is absurd when you are bleeding in the back of an ambulance.

If direct supplier-consumer market forces are brought back into play, there will be an incentive to make use of the Internet and advanced technology. It is amazing how efficient and quality-conscious providers become when they are forced to compete for customers. The American automobile industry is an obvious example. For much of the last century, it was notorious for turning out unsafe cars that fell apart within years. Just a few decades ago, even seatbelts were not available for most vehicles; they were an extra aftermarket installation. Then Honda and Toyota came along and captured huge portions of the market with much better cars. GM, Ford and Chrysler were forced to improve safety and quality in order to compete. As shown by a recent documentary film, GM produced a desirable electric car-and then killed it. Now they are scrambling to catch up to Toyota’s Prius. The fact is, market forces work.

Don’t expect politicians to bring much change. Because they are at the mercy of powerful lobbyists, we cannot depend on them to radically alter the system. Instead, the market will change the system. People will start traveling overseas for cheaper health care (see the article on medical tourism in CATALYST, August 2007). They will abandon overly expensive so-called health insurance plans and opt for other ways of paying for health care. Companies will rebel against outrageous health insurance costs by finding alternatives. Some companies are already weaseling out of costly health care by hiring workers part-time or as “independent contractors.” Starbucks became such a dramatic business success by hiring only part-time baristas just under the minimum IRS criteria that would trigger a benefit package. (Starbucks, along with Wal-Mart and several other companies who prospered by avoiding paying benefits, are now providing health care-at least for a greater proportion of their employees.) Those companies who must provide these employee benefits will increasingly will rebel against outrageous health insurance costs by finding alternatives, such as the Health Savings Account (HSA), rewards for not using health services and countless other clever stratagems. All this would not be necessary if we had a government provider for basic care -like every other industrialized country.

But this is America, the cry goes up, and we don’t want a Big Government socialized medical care system! In fact, we already do-just not a single one. We have Medicare (for seniors and the handicapped), Medicaid (for some of the poor), Veteran’s Administration (for those who served in the armed forces), TRICARE (for families of those who serve in the armed forces), and other programs such as for inmates in jails and prisons-and, of course, free government health care for our politicians. All of these programs are run basically the same as the “socialized” government health care of Canada or other countries. A simple solution, in my opinion, would be to take the VA-which is relatively high-quality, inexpensive, and gets kudos for being a very efficient system-and open it to every resident of the United States. Haven’t we all, in our own way, served this country?

Paul Gahlinger is a physician and author living in Salt Lake City.