Medicare and The Law of Unintended Consequences

This post carries on the line of conversation begun in The Origins of Heart Catheterization: Part I and Part II.

While Dr. Sones labored in the relative obscurity of his catheterization laboratory, the American public was experiencing a crisis in healthcare availability, particularly among the over-65 age group. The population of elderly in the U.S. was growing rapidly. Between 1950 and 1963, their ranks grew from 12 million to 17.5 million. The cost of hospital care was also increasing 6.7% annually, several times the rate of increase in the cost of living of the time. From 1950 to the day of Dr. Sones’ discovery, the average cost for a day in the hospital jumped from $29 to $40. As a result, private health insurance carriers were forced to increase rates, driving premiums higher and farther out of reach for many. Half of all elderly were uninsured. Many feared that, while the sophistication of medical services advanced, healthcare was becoming increasingly unavailable to many, perhaps most, Americans.

The pivotal contribution that ignited wide dissemination of healthcare technology didn’t come from a physician, nor someone in healthcare. It was spurred by a nearly-forgotten bureaucrat. Without the behind-the-scenes laboring of this one man, the present healthcare system might be quite different.

It was largely the work of Nelson H. Cruikshank, an ordained Methodist minister with a Master of Divinity degree and veteran of battling for rights of the elderly and poor deprived of health care. For 10 years, Cruikshank served as director of the AFL-CIO's Social Security Department and had been instrumental in getting the Social Security Disability act passed. Working on the side of organized labor but maintaining the public demeanor of a church pastor, Cruikshank gained a reputation as a fighter for the working man, one who didn’t back down from a political brawl. In an interview regarding the question of corporate-retained earnings for capital investment, he blasted the practice, calling it "taxation by corporation without representation. Through prices paid for consumer goods, buyers are providing capital for industries over which they have no control and from which they receive no dividends” (Time Magazine, Dec. 20, 1948).

For years, Cruikshank lobbied tirelessly on behalf of American unions to bring the new national healthcare bill, known as Medicare, to a vote on the floor of Congress. Numerous efforts at a national program had languished for a decade before Medicare was drafted, and the Medicare legislation remained bottlenecked for years in committees. Cruikshank’s relentless and forceful persuasion was instrumental in finally bringing the bill to a vote. Among the most vocal opponents Cruikshank parried was the American Medical Association (AMA), terrified that the new program would lead to loss of control over healthcare delivery and reimbursement. The AMA labeled Medicare "the most deadly challenge ever faced by the medical profession."

Cruikshank proved how tough he was when he faced off with Dr Morris Fishbein, then president of the AMA, in a radio debate. Oscar R. Ewing, attorney and Democratic political organizer under the Truman administration, offered these reminiscences of the debate:

“Dr. Fishbein described the horrible confusion that existed in the [government-run] British Health Service that had recently been established in Britain. He told of the utter confusion that he found existed when he was in England a few weeks previously; that there were long queues in every doctor's office, that doctors were overburdened with paper work; that a mother who wanted an extra allowance of milk for her sick child had to get a doctor's prescription for it and then go to the Health Department for permission to buy the milk. Dr. Fishbein painted a picture of complete confusion.

“After Dr. Fishbein had described all these horrible details he found existing when in England a few weeks earlier, Mr. Cruikshank pulled out this particular diary [published in a nationally-syndicated column called “Dr. Fishbein's Diary” ] of Dr. Fishbein in which he described his last visit to London. He had arrived in London Friday morning and that afternoon had gone out to spend the weekend with Lord and Lady so-and-so at their country place; that he'd come back to London Monday morning, had stopped by the Health Department to pick up some papers, and had gone on to catch the noon plane for Paris. So the questioner then asked, "Well, is your appraisal of the British Health Service based on those few hours in London?" The question was a stinger and pretty much discredited Dr. Fishbein.”

(Interview by Mr. J.R. Fuchs, April 29, 1969; Harry S. Truman Library Archives)

Cruikshank went on to point out that Dr. Fishbein had indeed never visited the offices of British general practitioners and had spent his brief stay in the company of British aristocracy, attending the Olympics, then making the rounds of Parisian night clubs. Fishbein stumbled through the remainder of the interview, trying unsuccessfully to cover up his gaff. Dr. Fishbein was forced out of his post as AMA president by his peers shortly following the humiliating episode.

Largely due to the years of behind-the-scenes maneuvering by Mr. Cruikshank, on July 30, 1965, President Lyndon Johnson signed the Social Security Amendment that enacted the Medicare program. The legislation that survived into law included Medicare Part A, the portion of the program providing payment for hospital-based diagnostic and treatment services, and Medicare Part B, allowing payment for office-based services and outpatient diagnostic tests.

Finally, after decades of political battles, a national healthcare bill had been passed. Although benefits were restricted to only those eligible for Social Security benefits, it represented a start, a first step toward greater access to healthcare for the broader American public.

At first, the full implications of the Medicare program were not apparent. But as healthcare technology advanced, including that sparked by Sones’ innovation in coronary imaging, Medicare, much as engineered in large part by Nelson Cruikshank, proved a bonanza of payment for heart procedures. Medicare also set the pace for the payment for procedures by non-government, private health insurance.

Thus the stage was set. Thanks to Medicare, over the next 40 years cardiovascular healthcare services, yielding generous revenue for practitioners and hospitals, exploded on the scene, much to the surprise of many, including the AMA. When then president of the American College of Cardiology, Dr. Charles Fisch, was asked how the passage of Medicare affected cardiology, he replied, “It made cardiologists rich, as simple as that” (American Cardiology: The History of a Specialty and Its College, W. Bruce Fye, MD). Indeed, from its introduction in 1965 to 1980, Medicare payments for health claims ballooned 10-fold from $9.6 billion to $105.7 billion, a substantial portion of which went to pay for cardiology claims.

Little did Nelson Cruikshank, ministerial defender of the working man, anticipate that the Medicare he helped engineer would prove to be the catalyst for explosive growth of the modern cardiovascular healthcare system. Ironically, the program of healthcare-for-all that Cruikshank envisioned has, over the last 40 years, soured into a self-serving system that has been corrupted by the profit motive.

In too many instances, it’s a system that uses the working man as its victim, rather than its beneficiary.

Comments (6) -

  • Scott Miller

    11/5/2008 3:47:00 PM |

    Another great historical article.  Thanks.

    Question: Now that Obama is confirmed, how do you think this will affect the medical profession?  In particular, I've heard him place some emphasis on prevention. Does this give you hope that the current sad state of government priorities will change?

  • Anonymous

    11/5/2008 5:39:00 PM |

    How I wish I had had all this information back in 2004 when my mother went through her final illness, which included catheterization and bypass, followed by a massive stroke that left her aphasic and paralyzed and on a ventilator until her last hours. At the time I trusted the doctors who said she had to have the catheterization and bypass, but now I wonder if they weren't racing to see how much Medicare and supplemental insurance money they could get thanks to her weakening heart before it gave out.

    Universal health care for all sounds like such a good idea in theory, but just how much will our taxes have to increase to finance all the medical greed of those counting on the government to pay for everything they prescribe? And I can't imagine what a mess medical care will be managed by a federal bureaucracy. I just hope the way I eat now will keep me out of the clutches of the medical establishment as much as possible.

  • Dr. William Davis

    11/6/2008 2:39:00 AM |

    Although I am hoping for positive change legislatively, I don't think that the prevention vs. catastrophic care issue can be adequately addressed by policy.

    My view is to educate the public to develop informed consumers. That is why I do what I do. We should all be trying to educate those around us on the sometimes perverse financial equation that operates in healthcare.

  • Anna

    11/6/2008 10:44:00 PM |

    I hear a lot about the astronomic costs of health care for the baby boomers (I was born at the tail end of the boomers).  I doubt there's much meaningful we can do about the health of the boomers at this point, but I do wonder a lot about what will happen to the health care of the younger generations, the ones who have and are growing up with the low fat/high carb nutrient depleted industrial foods.  They're already starting out with so many health disadvantages.

    I'm doing what I can to get my 10 yo started in the right direction, so that he knows what are good and poor food choices that those choices do make a difference (he's already started to notice that the kids in his class with "issues" often have poor diets).   I'm trying to show him when we go on road trips through agricultural belts that the production of the grocery store foods is quite different from the kinds of local, small traditional farm foods I seek out for our family.  I can only hope he'll have the option to put that knowledge into practice when he's out on his own.

  • Anonymous

    11/7/2008 9:14:00 PM |

    One thing we baby boomers need to think about is keeping our legs strong and our balance good,
    Falls kill a lot of older people.
    So, include some balance work in with the aerobic fitness.

    Jeanne Shepard

  • Anna

    11/9/2008 8:56:00 PM |

    I agree with Jeanne about the focus on balance as a way to avoid the problems caused by falls, not to mention modifying the home to reduce things which tend to contribute to falls - "throw" rugs; inadequate hand grips on steps, showers, & tubs:, adequate lighting, and simply keeping walking surfaces clear of items.  As a good example, late last winter my 80 yo MIL suffered a fractured tibia while getting up in the night; she slipped on a magazine she left on the floor next to the bed.  Thank goodness she wasn't still living alone.

    But rather than cardio, I would focus more avoiding falls and maintaining good balance through strength and weight-bearing exercise/training.  

    Aerobic/cardio exercise is rather indirect, more time consuming, and less efficient (not to mention too much cardio can wear out the joints and cause overuse injuries).  There are plenty of baby boomers facing joint replacements thanks to too much aerobic focus in the 80s and 90s.