A look at the history of U.S. health care and health insurance

Health insurance in the U.S. has some of its roots in the World War II shipyards of Henry J. Kaiser, who built 747 vessels for the Navy. The war made workers scarce, so Kaiser needed a way to attract them and, once there, keep them healthy. He couldn't pay them more because wages were frozen, so he offered them health care, which was provided by doctors at company clinics and hospitals. In turn, he asked employees to kick in 50 cents a week for the benefit. (Photo: Kaiser Shipyards in Richmond, Calif., courtesy of SanPedro.com/Permanente Metals Corporation)

"The war ended, the workers quit the shipyards, leaving behind hospitals and doctors but no patients," Bob Rosenblatt reports for the Los Angeles Times. "So the company decided to open the system to the public — and that's how generations of Californians who never heard of Kaiser shipyards have since gotten medical care."

Kaiser's story is just one example of how America's health insurance system developed, Rosenblatt writes. As at the shipyards, most people still get coverage through their jobs and, unlike the rest of the industrialized world, not from the government.

In fact, there has long been a fight against having the government in charge of providing care, Rosenblatt contends. In 1918, when California proposed a constitutional amendment that would have organized a state-run program, doctors said "compulsory social health insurance" was "a dangerous device invented in Germany." The amendment lost, but many presidents pursued the issue. Franklin D. Roosevelt "flirted with the idea but never threw political muscle behind it," Rosenblatt reports. Harry S. Truman asked Congress to provide national health insurance, but could not bring it to a vote.

It was the model exemplified in the shipyards that was adopted, and "health insurance became a standard feature in labor contracts," Rosenblatt writes.

Things changed in 1965, when President Lyndon B. Johnson pushed through a heavily Democratic Congress what Rosenblatt calls "a legislative three-layer cake:" Medicare Part A, Medicare Part B, and the federal-state Medicaid program. The legislation was controversial, with fears that doctors would refuse to see Medicare patients and hospitals would refuse to dismantle segregated wards. "The doctors didn't strike," Rosenblatt writes. "And the hospitals were immediately integrated without protest."

In 1993, President Bill Clinton wanted to extend national health insurance to everyone, but Rosenblatt says "Congress felt excluded and insulted, and the plan never came to a floor vote in the House or Senate."

President Obama did the opposite and relied on the congressional process. "Key to the plan was a mandate that everyone buy into the system; it was the best way to spread out the costs of illness," Rosenblatt writes. It's that mandate up for debate in the Supreme Court next month, but even if the Affordable Care Act is subsequently thrown out, "people already enjoy some benefits and won't want to give them up," Rosenblatt writes.

"It seems a safe bet that some provisions in the Affordable Care Act will stay on the law books," Rosenblatt concludes. "This places a few more patches on the national healthcare quilt. That's the American way." (Read more)

State and companies were unprepared for quick move to managed care, state auditor concludes

Kentucky officials and the companies in charge were unprepared for the switch to Medicaid managed care, State Auditor Adam Edelen said Wednesday. He sent the Cabinet for Health and Family Services 10 recommendations to improve the system, which provides health care for 560,000 Kentuckians who are poor, disabled or elderly.

Since the legislative session began, providers and patients have bitterly complained that the three new managed-care companies are "too slow to reimburse providers" and have "cumbersome pre-authorization processes to allow treatment," reports Beth Musgrave for the Lexington Herald-Leader. The state moved to managed care Nov. 1, a move meant to save the state $1.3 billion in three years.

In addition to the recommendations, Edelen said he will form a Medicaid auditing unit designed to improve the system. He recommended: hiring more managed-care staff to fix backed up claims payments and treatment authorizations, developing a system to measure whether providers are receiving payments in a timely way, and considering removing mental health services from the contracts. Kelly Gunning of the National Alliance on Mental Illness told lawmakers last week that she had asked mental health to be removed from the contracts in January, saying it had not worked in other states either. The companies are reportedly asking psychiatric patients to switch medications, even if the ones they are already on are working. The move has "meant that more people with serious mental illness have had to return to state psychiatric treatment centers," Musgrave reports.

Edelen said Kentucky officials "did not learn from the 1997 launch of Kentucky's first managed care contract — Passport in the Louisville area — and seemed ill-prepared to monitor and enforce the three new managed care contracts," Musgrave reports. Under managed care, the companies are paid a predetermined per-patient, per-month amount regardless of what care is needed. Because they won't be paid using a fee-for-service model — believed to be more costly — and will try to streamline care, managed care is meant to save money. (Read more)

House Judiciary Committee approves two bills to curb synthetic, Rx drug abuse

Cracking down on drugs is one of the most pressing topics of the 2012 General Assembly, and lawmakers showed they were serious about it this afternoon. (Associated Press photo by Ed Reinke of House Judiciary Committee Chairman Rep. John Tilley, D-Hopkinsville)

In an effort to get a handle on prescription drug abuse — and so-called pill mills that supply the addictive medications — the House Judiciary Committee approved a bill that will place controls on pain management clinics, reports Jack Brammer of the Lexington Herald-Leader. House Bill 4 also puts the power to police the problem into the hands of the attorney general; cracks down on prescribers who have had trouble with the law for drug-related crime; requires that the clinics be owned by people who have a medical background; and will get a detailed look at how many deaths are occurring by having coroners report any death caused from the use of drugs or drug overdoses.

"We don't really know how bad (the problem) is," said House Speaker Greg Stumbo, the Prestonsburg Democrat who filed the bill. "I think it will astound us when we get the results in because I think it might double what we think the numbers are."

The committee also approved House Bill 482, which prohibits trafficking and possession of synthetic drugs that are sold as bath salts or incense in convenience stores and other places. The measure, sponsored by committee chairman John Tilley, D-Hopkinsville, was passed unanimously.

Both bills will now go to the full House for consideration. (Read more)

Meds-for-meth compromise bill introduced

Lawmakers said they would compromise on the idea of making pseudoephedrine available only by prescription, and they have. Senate Bill 3 would only require a prescription for medicines containing the drug after a patient has bought 3.6 grams of it per month and a maximum of 15 grams per year. Gelcaps and liquid forms of the drug would still be excluded. (Associated Press photo by John Flavell of recovering addict Melanda Adams and Senate Majority Floor Leader Robert Stivers, who introduced the bill)

Now, people are limited to buying 9 grams per month and 120 grams per year of cold and allergy medicines containing pseudoephedrine, which is the key ingredient to make meth. The bill would also prevent anyone who has been convicted of a meth-related crime from buying the drug without a prescription for five years.

Last week, Sen. Robert Stivers, R-Manchester, withdrew a bill that would have required a prescription for any purchases of the drug. Stivers introduced this new bill yesterday and told The Courier-Journal it gives people who use the medicines "adequate opportunity without incurring medical expenses or the cost of a prescription to access these on a monthly basis and an annual basis."

Opponents to the bill still feel it is too restrictive, with the Consumer Healthcare Products Association continuing "to oppose burdensome restrictions to over-the-counter cold and allergy medicines that thousands of law-abiding Kentuckians rely upon for relief," Elizabeth Funderburk, senior director of communications for the group that represents makers of over-the-counter medicine and dietary supplements, told the Louisville newspaper.

Opponent Pat Davis, mother of six and wife of 4th District U.S. Rep. Geoff Davis, railed against the new proposal. "I'm not sure why they're calling it a compromise bill because I'm not sure who they compromised with," she said. She pointed out if four members of her family were to get sick with a cold, and took Sudafed to treat it for seven days, that would amount to 13.44 grams of the medicine — nearly the annual limit. "Really what this bill is is the same bill," she said. "They're throwing out a few crumbs, which they're calling 15 grams."

Jackie Steele, commonwealth's attorney for Laurel and Knox counties, told the paper that the lower limits could lead to a reduction in meth labs, but not for long. "I hope this cures it," he said of the meth-lab problem. "I don't think it will."

In London, whose Walgreens has the highest sales of pseudoephedrine in the state, Police Chief Stewart Walker agreed with Steele. "The bad guy is always going to figure a way around this," he said. "(With the compromise) you probably leave the door partly open and there's so much more room for added work."

The Senate Judiciary Committee could consider the new bill Thursday, and the entire Senate could vote on it this week, Stivers told the Lexington Herald-Leader. (Read more) For The Courier-Journal's story, by Jessie Halladay and Tom Loftus, click here.