Tuesday, June 19, 2007

How did the HMO system start?

One of the most compelling segments of Michael Moore's Sicko comes when he asks a simple question: How did the HMO system originate?

Turns out, it all began with a chat between John Erlichman and Richard Nixon in 1973. The chat is preserved on tape, and the film plays the recording while showing stills of the two men. A transcript of the conversation is here:
President Nixon: “...You know I’m not to keen on any of these damn medical programs.”

Ehrlichman: “This, uh, let me, let me tell you how I am …”

President Nixon: [Unclear.]

Ehrlichman: “This … this is a …”

President Nixon: “I don’t [unclear] …”

Ehrlichman: “… private enterprise one.”

President Nixon: “Well, that appeals to me.”

Ehrlichman: “Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because …”

President Nixon: [Unclear.]

Ehrlichman: “… the less care they give them, the more money they make.”

President Nixon: “Fine.” [Unclear.]

Ehrlichman: [Unclear] “… and the incentives run the right way.”

President Nixon: “Not bad.”
[Emphasis added.] In the film, Moore cuts directly to a televised statement made by Nixon the very next day, in which the Tricky One announces that his new initiative will insure the best health care in the world for all Americans -- even though the President was told that the system insured that Americans would receive the least amount of care possible.

Interestingly, the transcript reveals that Spiro Agnew was opposed to the idea. Who'd a thunk it? The most corrupt veep in history (until recent times) was, in this instance, on the correct side of the issue. Back then, of course, the VP did not tell the P what to do.

3 comments:

Anonymous said...

It's only recently that HMOs were being more accurately described as the blood-sucking fiends that they certainly are at this point.

For decades they were proudly described as being less expensive than standard medical insurance because they were meant to keep their patients healthier. It was said that it was in the doctor's best interest to practice the preventative care that would have made future medical interventions less likely.

Now with HMO monthly premiums for a family of 4 pushing $1000, and co-pays of up to $40 on prescriptions, that notion is a bit of a joke.

Anonymous said...

Kaiser Permanente had its faults back in those days, but overall it was a pretty efficient way of delivering healthcare. It leaned a bit toward a factory mentality, but that isn't entirely a bad thing. If you just wanted to get in, see your regular doctor, get a diagnosis and treatment plan and medicine, and go home, Kaiser was a good way to go. Incidentally, a basic Kaiser plan in the '70's paid for a full annual physical, no co-pay. Where do you find that today?

It's true Kaiser had a profit motive, but it also was guided by an ethos that kept the profit motive in check.

Anonymous said...

I think Nixon's national health plan would have been a tremendous advancement over what has grown up, Frankenstein-like, in the meantime. Liberals of the day let the perfect be the enemy of the good, and thought the country could do far better than what Nixon proposed (badly misreading the direction of the country). 35 or so years later than when Nixon declared the state of health care in the country 'a crisis,' and some 50 plus years since Truman first proposed some kind of national health care plan, it has become clear that managed health care of some sort was, and remains, a key ingredient for a national health care plan.

That, after all, was the Clinton plan's critical ingredient as well.

sofla