CLINICAL LAB SCIENEC

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ESSENTIALS OF CLINICAL LABORATORY SCIENCE
is often provided at the expense of those who do pay for their services, through
increased costs for service. Some insurance, funded by taxpayers through federal
government programs such as Medicare and Medicaid, pays reimbursement to
hospitals and physicians at a somewhat lower rate than the actual costs of providing
the service.
Health Care Providers and Insurance
Early in the history of the United States, the physician was paid directly by the
patient. Often the amount charged was related to the financial status of the
patient. A rich person was charged much more for a physician’s service than
a poor one. The country doctor often accepted his payment in produce, eggs,
or chickens, and sometimes labor. Where teaching hospitals were found in the
major cities, indigent patients were treated free of charge to provide experience
and training for medical students and their comparably well-paid professors of
medicine. Medical school professors were on salary but typically had time to
treat private patients for pay to supplement their salaries, a practice that is still
common today in a number of medical schools.
As our nation became more industrialized, moving from a largely agrarian
economy to an urban one, reimbursement for medical services began to change.
Particularly at the end of World War II, changes occurred precipitously as many
then had the means with which to pay for medical care, because many families
were becoming more prosperous in a postwar economy. This gave rise to group
insurance plans that gave an economical manner in which to pay for medical
services. The familiar Blue Cross-Blue Shield system of medical insurance was
initiated at this time and was often called “the doctor’s plan” because it was
originally organized by and for physicians. A large insurance program, the Kaiser-
Permanente Medical Care Program, was put in place in 1945 by industrialist
Henry J. Kaiser. It was probably the first nonprofit HMO (health maintenance
organization). It provided first-rate medical care at a lower cost than the feefor-service
Blue Cross. Physicians were salaried and worked an 8-hour day if
they decided to accept employment by this organization, which was desirable
for many who had previously worked long hours in private practice. Although
physicians were not as well compensated as those in private practice, a normal
and regular family life often overrode the reduced compensation. It also
became obvious that Kaiser’s physicians, who were salaried, tended to order
fewer unnecessary procedures and less surgery than did those who were paid
for these procedures. In other words, the profit motive has a profound effect on
how medicine is practiced. Although HMOs are still prevalent in some regions,
they have been significantly replaced by PPOs and other plans. The executives of
many insurance plans are often paid handsomely, in most cases, rivaling industrial
standards for CEOs and administrative assistants.
The Medicare system, a government-run entity, was begun in 1965, and
provided medical insurance for people 65 years of age and older. Medicaid was
also passed at that time. An unintended result of these programs to provide
adequate care to many resulted in skyrocketing numbers of persons seeking
health care. HMO facilities were designed specifically to control costs but were
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