Managed Care,  the term used to identify the current revolution in American health care, began with the Medicare Act of 1964.  Prior to that time, Health care was delivered by individual doctors and hospitals, and paid for by patients, by indemnity insurance,and by the massive charitable efforts of those in the field.  Results were predictable, effective, and responsive to the needs of the day. I was there at the time.

    Medicare began as a well-intentioned idea that quickly spawned a series of governmental heavy-handed initiatives which have been as predictable in effects as an 800 lb. gorilla in a china shop and as controllable as a supertanker at full steam.

    The Medicare Act exploded expectations and demands, worsened by requirements that resulted in most diagnostic studies being performed in hospitals.This led it to the " three-day blue plate special of  diagnostic studies in hospitals,studies that largely had been done earlier in physicians' offices at one/ third the cost.  (Could there have been a cozy collusion between hospitals, insurance companies-paid on a cost-plus basis, and the government on this??) The situation required more hospitals, guaranteed by the Hill-Burton Act.  That required more physicians. Thus, within one year (1968), the federal government transferred a major portion of its health-care funding from medical research to the development of new medical schools, leading fairly promptly to an increase in the number of schools from about 80 to 120 and the number of graduate physicians from 8000 per year to 16,000 per year. Should anyone have been surprised that,in this climate, " build it and they will come"?

    And they came, and have been coming ever since, further prodded by the government's generosity in allowing, beginning in the 1970's,  health insurance tax-deductible to the employer and also tax-exempt to the employee. Suddenly there was a free lunch.  Add  to that the frenzy of litigation in America, including medical malpractice claims, that seeks payment for both acts of God and for the misdeeds of man, and which predictably produced the response called " defensive medicine" Add to that the belated realization that both great advances in medicine and the inevitable bloat caused by the above miscalculations was costing ever more in gross national product.  Add to that the heavy-handed response (so what else is new?) of official Washington, both in regulatory methods and in attitude, producing a bitter adversarial relationship with the only people truly in a position to correct the problem-the health-care professionals.  Add to that the open  invitation to the business world to craft a new cash cow from health-care delivery by cutting both fat and muscle while considering the delivery of medical services to be a nuisance to be avoided-all under the protective umbrella of antitrust exemption for the insurance industry.

    And that, Dear Heart,  is why and how we are where we are: hospitals and physicians struggling to safeguard patients' health while absorbing a 30% theft of services this decade.  Patients  bewildered, anxious, becoming angry.  Health-care companies cashing in.  Health-care consultants in suits giving  health-care professionals at the bedside medical practice guidelines they must follow in order to get paid, or to have their patients'  care covered: guidelines which-if followed-often could lead to DOA's  and/or to malpractice suits.  Wonderful.

    What should have been done? What should be done now?

1: The bloat and fat, produced as a predictable consequence of the misguided laws and policies of the last 30years,  have been removed by managed care, although by means of a hatchet rather than by a scalpel.  Now,reverse the adversarial relationship with health-care professionals to a cooperative effort that rewards them for efficient and necessary care provided.

 2: Empower patients and their physicians, through passage of bills currently before Congress, to deal more equally with managed-care organizations (MCO's) when entering into contracts, and when contesting contractual provisions.  This should include the right to sue MCO's in medical malpractice when they actually practiceMedicine through arbitrary decision- making that directly affects the patient's care.

3:Allow  third-party beneficiary suits by employees against employers who contract with MCO's  on their behalf in a manner that injures them.

4:The pharmecutical industry has produced magnificent results with new medicines. However, the industry is duplicative and wasteful in it's allocation of resources. Rein in the pharmaceutical industry in its current feeding frenzy of churning old  products, devising " new products"  which often are only " pretty faces " without  benefit to patients, spending more on public-relations and marketing than  on research, all stimulated by tax advantages and by a hands-off policy with regard to what some might soon consider-as in the de-facto handling of the health-care industry-a public utility .

5: Make sure that there is no free lunch for any patient who needs care, unless he or she truly cannot pay anything.  The first and irresistable step to health care expenditure is the appearance  of the patient on the doctor's doorstep.

6: Finally, the only approach that will work to preserve the best and most accessible health care system in the world is a consensus developed by the society and its government between 2 choices:

A )Recognize the health-care benefits of the last 30 years, and pay for them, with whatever percentage of the gross national product it takes; or

B) Ration- prioritize-health care delivery in accordance with a rank-order  system proposed by health-care professionals, deliberated and decided upon by the public, and enacted into law.  And don't expect to to do it the way the State of Oregon did it about 15 years ago, applying rationing only to Welfare recipients!

Wake-up, America, while you still can.

GS