Editor's Note: This article begins an 8-part series excerpted from the "Healthcare Hostage Crisis" chapter of AC360° contributor David Gewirtz's upcoming book, How To Save Jobs, which will be available in October. To learn more about the book, follow David on Twitter at http://www.twitter.com/DavidGewirtz.
David Gewirtz | BIO
Editor-in-Chief, ZATZ Publishing
Every American is being held hostage by the largest special-interest group in the history of the world. This chapter tells the story of how we got into this mess and will help you understand the mind-boggling magnitude of the problem. It's a life and death battle for the health and welfare of each of us. And guess what? We're not winning.
It is almost impossible to discuss jobs without discussing healthcare. It wasn't always that way. In fact, before about 1920, the concept of health insurance didn't really exist. While there were hospitals and medical practitioners, the sort of heroic, life-saving healthcare our doctors now routinely practice barely existed. Before 1900 or so, most Americans didn't even realize the benefits of using soap or washing their hands, and antiseptic practices were virtually unknown.
Given that there really wasn't much 1920s-era doctors could do for very sick people, there was no reason for an insurance industry that would pay for medical care. You could buy something called "sickness insurance," which was similar in spirit to our modern disability insurance. If you were out of work for a few days, sickness insurance would make up for your lost salary.
Of course, a lot has changed since 1920. As I'm sure you know, we're once again going through a fuss about national health insurance. But what you might not know is that there were attempts in America to create a nationalized health insurance program going back as far as 1920.
It turns out, just like with many doctors today, doctors back then didn't like the idea of national health insurance. According to Melissa Thomasson of Miami University, their primary concern was money: a national program wouldn't allow them to discriminate against some patients, charging one patient more for the same services as another patient. Groups of physicians hired what we'd now call lobbyists to argue against any sort of national health insurance. Obviously, they were successful and were free to discriminate.
Yep, there were lobbyists even in the 1920s.
Medical costs, of course, had been going up. Hospitals started getting new-fangled equipment, new procedures were being developed, and battlefield medicine techniques from World War I and World War II trickled back to the home-front, increasing the ability of doctors to save lives - but also increasing the costs of treatment.
How employer-funded healthcare got its start
As medical care in America got better, it got more expensive. But there was no real link between employers and medical care until World War II. Believe it or not, employer-funded healthcare started off as a marketing gimic.
After Pearl Harbor was bombed by the Japanese and America fully entered the war, President Franklin Delano Roosevelt enacted a series of sweeping policies designed, according to Richard E. Schumann of the Bureau of Labor Statistics, to "increase total production, reallocate production to military uses, and control wages and prices."
By law, employers couldn't use wages as incentives to attract workers.
But there was a loophole. Employers could offer so-called "fringe-benefits." These benefits were goodies outside of the control of the various regulating agencies that employers could use to lure labor.
One such loophole was health insurance. And so employer-paid health insurance was offered to American workers for the first time.
And it's here the seeds were planted for one of America's longest running and most serious assault on capitalism. American business was, forever more, to be held hostage by health insurance.
About this chapter
Before I delve deeper into this disturbing debacle, I want to talk about what you'll be reading in this series. This chapter is distressing. It showcases just how completely dysfunctional the American healthcare system is - and how bad that is for American society. But as you read it, remember that Americans are a very resourceful people and there are good, better, and even best solutions to problems even as gnarly as America's healthcare system.
And even if the politicians do what we expect politicians to do - water everything down and create something too little, too late, and maybe even make matters worse, Americans, individually and through our business leaders, can find ways to make things better. Later in the book, I'll showcase some tactics business owners and individuals can take to create a better, healthier society.
So, fear not. There is some good news later in the book. But not in this chapter. In this chapter, prepare to be outraged.
Follow David on Twitter at http://www.Twitter.com/DavidGewirtz.
Editor’s note: David Gewirtz is Editor-in-Chief, ZATZ Magazines, including OutlookPower Magazine. He is a leading Presidential scholar specializing in White House email. He is a member of FBI InfraGard, the Cyberterrorism Advisor for the International Association for Counterterrorism & Security Professionals, a columnist for The Journal of Counterterrorism and Homeland Security, and has been a guest commentator for the Nieman Watchdog of the Nieman Foundation for Journalism at Harvard University. He is a faculty member at the University of California, Berkeley extension, a recipient of the Sigma Xi Research Award in Engineering and was a candidate for the 2008 Pulitzer Prize in Letters.
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