Voluntary mutual aid associations >>government "solution"

[ShakeZula06]

Great article, much shorter then the last one I posted:
How Government Solved the Health Care Crisis: Medical Insurance that Worked — Until Government "Fixed" It

Before health care became government regulated health care prices were very low, low enough that government decided to fix it with intervention.

Mutual aid groups or fraternities were very popular in the 19th century and early 20th century, until government began to "fix" the healthcare problem:
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In the late 19th and early 20th centuries, one of the primary sources of health care and health insurance for the working poor in Britain, Australia, and the United States was the fraternal society. Fraternal societies (called "friendly societies" in Britain and Australia) were voluntary mutual-aid associations. Their descendants survive among us today in the form of the Shriners, Elks, Masons, and similar organizations, but these no longer play the central role in American life they formerly did. As recently as 1920, over one-quarter of all adult Americans were members of fraternal societies. (The figure was still higher in Britain and Australia.) Fraternal societies were particularly popular among blacks and immigrants. (Indeed, Teddy Roosevelt's famous attack on "hyphenated Americans" was motivated in part by hostility to the immigrants' fraternal societies; he and other Progressives sought to "Americanize" immigrants by making them dependent for support on the democratic state, rather than on their own independent ethnic communities.)

The principle behind the fraternal societies was simple. A group of working-class people would form an association (or join a local branch, or "lodge," of an existing association) and pay monthly fees into the association's treasury; individual members would then be able to draw on the pooled resources in time of need. The fraternal societies thus operated as a form of self-help insurance company.

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"Lodge practice" refers to an arrangement, reminiscent of today's HMOs, whereby a particular society or lodge would contract with a doctor to provide medical care to its members. The doctor received a regular salary on a retainer basis, rather than charging per item; members would pay a yearly fee and then call on the doctor's services as needed. If medical services were found unsatisfactory, the doctor would be penalized, and the contract might not be renewed.

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Most remarkable was the low cost at which these medical services were provided. At the turn of the century, the average cost of "lodge practice" to an individual member was between one and two dollars a year. A day's wage would pay for a year's worth of medical care.

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Then the "problem":
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The response of the medical establishment, both in America and in Britain, was one of outrage; the institution of lodge practice was denounced in harsh language and apocalyptic tones. Such low fees, many doctors charged, were bankrupting the medical profession. Moreover, many saw it as a blow to the dignity of the profession that trained physicians should be eagerly bidding for the chance to serve as the hirelings of lower-class tradesmen. It was particularly detestable that such uneducated and socially inferior people should be permitted to set fees for the physicians' services, or to sit in judgment on professionals to determine whether their services had been satisfactory. The government, they demanded, must do something.

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Britain's "solution" to the "problem":
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And so it did. In Britain, the state put an end to the "evil" of lodge practice by bringing health care under political control. Physicians' fees would now be determined by panels of trained professionals (i.e., the physicians themselves) rather than by ignorant patients. State-financed medical care edged out lodge practice; those who were being forced to pay taxes for "free" health care whether they wanted it or not had little incentive to pay extra for health care through the fraternal societies, rather than using the government care they had already paid for.

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America's "solution" to the "problem":
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In America, it took longer for the nation's health care system to be socialized, so the medical establishment had to achieve its ends more indirectly; but the essential result was the same. Medical societies like the AMA imposed sanctions on doctors who dared to sign lodge practice contracts. This might have been less effective if such medical societies had not had access to government power; but in fact, thanks to governmental grants of privilege, they controlled the medical licensure procedure, thus ensuring that those in their disfavor would be denied the right to practice medicine.

Such licensure laws also offered the medical establishment a less overt way of combating lodge practice. It was during this period that the AMA made the requirements for medical licensure far more strict than they had previously been. Their reason, they claimed, was to raise the quality of medical care. But the result was that the number of physicians fell, competition dwindled, and medical fees rose; the vast pool of physicians bidding for lodge practice contracts had been abolished. As with any market good, artifical restrictions on supply created higher prices — a particular hardship for the working-class members of fraternal societies.

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Why do we have a crisis in health care costs today? Because government "solved" the last one.

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[jogger08152]

Prices wouldn't be comparable today I think. Figure a doctor needs to make 250-350k per year minimum (salary + malpractice insurance + facilities + paying off medical school).

If he works 2000 hours a year and spends 5 hours per year per patient (some will be less, but some, old ones and sickly ones, will require more time, thus bringing up the average), he can treat about 400 patients per year, so each would need to pay 6-700 bucks per year (minimum) just for their internist. Add in drugs, ER visits, hospitalization and specialists, and costs will be roughly in the neighborhood of where they are now, I'd think. If the author thinks the price would be significantly less, I'd like to see his numbers.

[TomCollins]

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Prices wouldn't be comparable today I think. Figure a doctor needs to make 250-350k per year minimum (salary + malpractice insurance + facilities + paying off medical school).

If he works 2000 hours a year and spends 5 hours per year per patient (some will be less, but some, old ones and sickly ones, will require more time, thus bringing up the average), he can treat about 400 patients per year, so each would need to pay 6-700 bucks per year (minimum) just for their internist. Add in drugs, ER visits, hospitalization and specialists, and costs will be roughly in the neighborhood of where they are now, I'd think. If the author thinks the price would be significantly less, I'd like to see his numbers.

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5 hours per patient? You are WAY off here. My guess is the average would be closer to 30 minutes per year per patient.

[jogger08152]

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Prices wouldn't be comparable today I think. Figure a doctor needs to make 250-350k per year minimum (salary + malpractice insurance + facilities + paying off medical school).

If he works 2000 hours a year and spends 5 hours per year per patient (some will be less, but some, old ones and sickly ones, will require more time, thus bringing up the average), he can treat about 400 patients per year, so each would need to pay 6-700 bucks per year (minimum) just for their internist. Add in drugs, ER visits, hospitalization and specialists, and costs will be roughly in the neighborhood of where they are now, I'd think. If the author thinks the price would be significantly less, I'd like to see his numbers.

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5 hours per patient? You are WAY off here. My guess is the average would be closer to 30 minutes per year per patient.

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Are you taking into account the elderly (12% of the US population in 2004), many of whom visit their doctors multiple times a year, and women of childbearing age in making this estimate?

[ShakeZula06]

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Prices wouldn't be comparable today I think.[lists reasons why health care is too exspensive now]

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They were saying the same thing back then...
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Such low fees, many doctors charged, were bankrupting the medical profession.

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Of course, then it was just fear mongering from doctors who wanted to use force to drive their salaries up.

The article states that the dues for healthcare were about equal to one day's wages for a whole year. Even if today it would closer to three times that it's still incredibly cheaper then health care is currently.

[jogger08152]

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Prices wouldn't be comparable today I think.[lists reasons why health care is too exspensive now]

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They were saying the same thing back then...
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Such low fees, many doctors charged, were bankrupting the medical profession.

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Of course, then it was just fear mongering from doctors who wanted to use force to drive their salaries up.

The article states that the dues for healthcare were about equal to one day's wages for a whole year. Even if today it would closer to three times that it's still incredibly cheaper then health care is currently.

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I don't see how it could still be so little. The services medecine provide now, compared to the turn of last century, have increased at a rate far, far greater than inflation. Getting an MRI isn't cheap - no surprise, because BUILDING an MRI isn't cheap. I'd expect that sort of problem to be pretty endemic, no pun intended. Ditto malpractice insurance, which I'm afraid is here to stay as well.

[ShakeZula06]

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I don't see how it could still be so little.

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Amazing what the free market can do. [img]/images/graemlins/wink.gif[/img]

The point of government intervention in the first place was explicity to raise prices. This is documented history. Prices started raising before the advancements you speak of, and that was point of the government intervention.
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The services medecine provide now, compared to the turn of last century, have increased at a rate far, far greater than inflation. Getting an MRI isn't cheap

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So have cars, computers, TVs and a thousand other products. Some how hundreds of milions of people consume them with ease. That might be different if computer companies lobbied congress.

As the article states, one days wages covered health care for a year (for lower class workers!). Even if that number was tripled, it still makes insurance cheap enough for anyone who wants it to consume.
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Ditto malpractice insurance, which I'm afraid is here to stay as well.

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Malpractice is just one example of how [censored] up government law is. I know a friend of a friend who has stopped practicing medicine because of the insurance. We need heavy reform in that particular area. That alone would lower health care and health insurance in the states.

[jogger08152]

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I don't see how it could still be so little.

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Amazing what the free market can do. [img]/images/graemlins/wink.gif[/img]

The point of government intervention in the first place was explicity to raise prices. This is documented history. Prices started raising before the advancements you speak of, and that was point of the government intervention.
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The services medecine provide now, compared to the turn of last century, have increased at a rate far, far greater than inflation. Getting an MRI isn't cheap

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So have cars, computers, TVs and a thousand other products. Some how hundreds of milions of people consume them with ease. That might be different if computer companies lobbied congress.

As the article states, one days wages covered health care for a year (for lower class workers!). Even if that number was tripled, it still makes insurance cheap enough for anyone who wants it to consume.
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Ditto malpractice insurance, which I'm afraid is here to stay as well.

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Malpractice is just one example of how [censored] up government law is. I know a friend of a friend who has stopped practicing medicine because of the insurance. We need heavy reform in that particular area. That alone would lower health care and health insurance in the states.

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On this point I wholly agree with you, but (and this is important to your OP) reforms haven't come into being yet. These add expense to medecine that isn't really avoidable (now). That's part of the reason I say "I don't see how it could be so cheap." There are certain costs, like MI, that are going to keep the overall expense high until/unless they are changed. (Malpractice insurance is a good example of a very bad cost; MRI machines are the opposite.)

[almostbusto]

my 2 cents/knee-jerk reaction to the thread title:

for-profit free market solutions >> Voluntary mutual aid associations >> government "solution"

[pvn]

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my 2 cents/knee-jerk reaction to the thread title:

for-profit free market solutions >> Voluntary mutual aid associations >> government "solution"

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Voluntary mutual aid associations ARE a free-market solution. And they can be for-profit enterprises (the doctors certainly make some money).