"What Happens Next?" An Overview of Strategic Initiatives Combating the Misallocation of Health Care Resources

The National Home for Disabled Volunteer Soldiers; Dayton, Ohio, established 1867
The National Home for Disabled Volunteer Soldiers; Dayton, Ohio, established 1867

Up until a half century ago, the federal presence in the direct financing of health care was limited to such special populations as the armed forces and their dependents, Indian tribes and the merchant marine.

A federal Public Health Service existed with a principal mission to deal with contagious diseases.

An indirect subsidy providing tax deductions for employers providing health insurance was enacted in the mid-1940s. Part of a series of early post World War II legislative actions intended to prevent hyperinflation, its unintended consequences would be far-reaching.

The enactment of Medicare and Medicaid 50 years ago transformed American health care. It settled the question of whether the funding of health care in the United States would be a governmental responsibility.

President Lyndon Johnson signs Social Security Act amendments creating Medicare as former President Harry Truman observes
President Lyndon Johnson signs Social Security Act amendments creating Medicare as former President Harry Truman observes

The Medicare program’s emphasis on citizens 65 and older proved to be highly successful in improving the health of the nation’s elders, was politically popular, and soon became the major force in the funding of American health care.

The Medicaid program, whose mission was to assure basic health care for the most economically disadvantaged Americans, was impacted by variations from state to state in structure, eligibility and financing.

A feature common to both Medicare and Medicaid was the political decision (arguably an imperative to secure enough votes for passage) that the legislation not take on the mission of re-organizing the health care system. Such issues as who would provide health care service and at what cost were hardly addressed.

The consequences of infusing massive amounts of funds into the healthcare system as it existed in 1965, without appropriate structural reforms in that system, proved to be significant.

Among those consequences were the further encouragement of long-term trends towards the sub-specialization of medicine, in medical schools and in practice, and the encouragement of a disproportionate percentage of physicians and health care institutions to locate in high income areas, to the disadvantage of rural and lower socioeconomic urban areas.

The Kalamazoo Family Health Center, Kalamazoo, Michigan
The Kalamazoo Family Health Center, Kalamazoo, Michigan

There were countervailing movements with the objective of creating “primary care systems” that are community-oriented and appropriately designed for universal access to health care.

New approaches to training generalist physicians, community-oriented health centers, medical homes, primary care teams are important components of strategies to increase access to primary health care.

Those countervailing movements are the subject of the National Conferences on Primary Health Care Access, whose 27th conference will be held April 4-7, 2016 at the Grand Hyatt on the Island of Kaua’i.