How we got into this health insurance mess

In 1903, The Baptist Church founded a hospital at Baylor University Medical Center in Dallas, Texas. By the 1920s, more and more people were coming for treatment, many of whom were unable to pay their bills. To address this problem, Baylor’s vice president offered insurance to the local teachers’ union. For $6 a year, teachers were entitled to a twenty-one-day stay in the hospital, all costs included.

Within a decade, the model spread across the country and the program was given a name: Blue Cross, a not-for-profit organization at that point. By 1939 three million people had signed up for insurance. However, most people—including my family—did not have health insurance. At that time, treatments were unsophisticated and cheap. We paid out of pocket. But as technology and treatments became more complicated, costs began to rise. At this point, we could have filled the need with a publicly-funded system, as the Brits did in 1948, or even with private insurance sold direct to customers, like car insurance. But a quirk of history nudged us toward employer-based health insurance.

When we entered WWII, a huge part of the workforce was sent off to fight, causing labor costs to rise. To keep the costs from skyrocketing, the Roosevelt Administration imposed a wage freeze—a move that made it more difficult for companies to attract workers. So the Administration permitted increases in health-insurance benefits and made them tax exempt. Ever since, we have been trying to figure out how to cover the vast portion of the country that doesn’t have employer-provided health insurance. No other country in the world has built its health-care system this way. As Dr. Atul Gwande says, we have an “unhnoly, expensive mess that leaves millions unprotected.”

“In a country where pretty much everyone has trash pickup and K1-12 schooling for the kids, we’ve been reluctant to address our Second World War mistake and establish a basic system of health-care coverage that’s open to all.” Seems like a no-brainer to me.

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