Wednesday, March 7, 2007

Health Insurance History Tidbits

The concept of Health Insurance was proposed in 1694 by Hugh the Elder Chamberlen from the Peter Chamberlen family (famous as they discovered the modern use of obstetrical forceps. It remained a family secret for over a century)
Hugh the Elder published he advocated the introduction of a health insurance scheme for the rich as well as the poor. For a small yearly sum the insured would be attended by approved skillful physicians and surgeons, furnished with the necessary medicines for all diseases, except the pox, midwifery, and the stone, for which a supplementary charge would be made. Another 254 years were to pass before the National Health Service was introduced in the UK in 1948.
(National Insurance Act in 1911, a small amount was deducted from weekly wages, to which was added contributions from the employer and the government. In return for the record of contributions, the workman was entitled to medical care, though not necessarily to the drugs prescribed. To obtain medical care, he registered with a doctor. Each doctor who participated in the scheme thus had a 'panel' of those insured under the system, and was paid a capitation grant out of the fund calculated upon the number.) This is much like the HMO system we know today!
Before 1948 patients were generally required to pay for their health care. Free treatment was sometimes available from teaching hospitals and charities hospitals, such as the Royal Free Hospital. Some local authorities operated local hospitals for local ratepayers, (under a system originating with the Poor Law), but provision was patchy and quality of care varied greatly..
(In the late 19th century, early health insurance was actually disability insurance, in the sense that it covered only the cost of emergency care for injuries that could lead to a disability)

Modern Health Insurance really began with Germany, under Chancellor Bismarck, with 2 insurance laws put into effect in 1883. He enacted a variety of paternalistic social reforms, which can be considered the first European labor laws. The Health Insurance Act of 1883 entitled workers to health insurance; the worker paid two-thirds, and the employer one-third, of the premiums. Accident insurance was provided in 1884, whilst old age pensions and disability insurance in 1889.

In America Prior to the 20th century there had been little consideration given to the health insurance issue, as medical care was a relatively unimportant economic activity. Health care was not perceived as a major industry, and most of the care of the sick was not part of the market economy, but, rather, was taken care of at home or through charity services at almshouses. Throughout most of the 19th century, the lack of transportation and communication capabilities made health care a household.

There eventually was a shift from the home to the doctors’ office and by the turn of the 20th century to the hospital setting. With each shift in location the cost of health care increased for the individual.


The typical physician in 1913 averaged only $500 to $700/year, which little more than the income was made by members of the American manual laboring classes.

The Gilded Age, 1875-95, it was widely believed that the federal government had no direct responsibility for the welfare of the individual in society.

The Progressive Movement, 1895‑1920, was a multi-faceted attempt to have private charity and the federal government cooperate in reforming American society and promoting the individuals betterment. The push for this mandatory health insurance came from the American Association of Labor Legislation, a private organization. However, this attempt at social reform was hampered by WWI as well as the growing economic success of physicians, who no longer needed to look to health insurance as their major source of income. Then came the Great Depression.
The Blue Cross concept was created in 1929 by a pioneering businessman, Justin Ford Kimball. He offered a way for 1,300 school teachers in Dallas to finance 21 days of hospital care by making small monthly payments to the Baylor University Hospital.
The Blue Shield concept around the same time was growing out of the lumber and mining camps of the Pacific Northwest. Serious injuries and chronic illness were common among workers in these hazardous jobs. Employers who wanted to provide medical care for their workers made arrangements with physicians who were paid a monthly fee for their services.
Enrollment in Blue companies grew from more than 1,000 in 1929 to 3 million in 1939. By 2006, Blue companies covered more than 94 million Americans. Through the years, the Plans have developed private and public partnerships.

The Blue Cross and Blue Shield Association is the trade association for the independent, locally operated Blue Cross and Blue Shield companies.

The BlueCard Program

Enables members to obtain healthcare services while traveling or living in another Plan's service area, receiving the same benefits provided by their home Plan. The program provides a single electronic network for claims processing and reimbursement among Plans.

resources:

HISTORY OF AMERICAN HEALTH INSURANCE by Jonathon Erlen
Wikipedia, the free encyclopedia
Blue Cross Blue Shield Association
http://bcbs.com/about/search.jsp?query=history