Selling Our Souls by Reich Adam Dalton

Author:Reich, Adam Dalton
Language: eng
Format: epub
Publisher: Princeton University Press
Published: 2014-03-16T16:00:00+00:00

{ PART THREE }

GroupCare Tames the Market

By the early 1970s, across the United States, there were growing calls for restraint and rationalization in what had become—in the minds of many—an unwieldy and unreasonably expensive health system. Patients’ rights advocates, business leaders, and political figures on both the left and the right began to mobilize against the autonomy and excess of the medical profession and the hospital industry. In 1971, the Nixon administration began advocating for grants and loan guarantees incentivizing the establishment of “health maintenance organizations,” or HMOs, integrated health systems that would combine health insurance with health care provision and so provide medical organizations with incentives to manage the health of patients (or members) in a cost-efficient manner.1 This idea actually originated in the 1930s and 1940s among industrial employers and health practitioners as a strategy for efficiently maximizing wellness across a workforce.2 In the 1970s it gained renewed attention, and broader support, as more constituencies began to conceive of health as a technical problem that might be solved through efficient management.

Whereas the public hospital was founded in order to guarantee a limited right to care for the poor, and the voluntary hospital offered paying patients an emotional framework that helped reconcile their “dignity” with hospitalization (and to distinguish themselves from the poor), the HMO was founded as a medical organization meant to bring hospital care in line with ideals of standardization and cost efficiency for the middle class (and for its employers).3 Whereas the public hospital was founded in opposition to the market, and the voluntary hospital framed the market in moral terms, the HMO sought to bring medical care into line with market norms. And whereas the public hospital was founded for the indigent, and the voluntary hospital accommodated the wealthy, the HMO began as the medical organization for the industrial working class.

Las Lomas’s first HMO, the Community Health Association, was a short-lived endeavor spearheaded by a coalition of labor unions in 1959. And while the organization planned on constructing its own hospital facility, the enterprise dissolved in 1968. GroupCare arrived in Las Lomas in 1979, when it bought the twenty-three acres on which its hospital and clinics now stand. The organization began seeing patients in 1980. Since GroupCare did not initially own its own hospital, its arrival in Las Lomas was at first a boon for PubliCare Hospital, which contracted with GroupCare to provide its members with hospital services. One nurse at PubliCare remembers that period as particularly intense: “To go through three code blues on an eight-hour shift was just another day, because there were so many patients here.” A GroupCare doctor remembers how PubliCare was “way buoyed up by GroupCare patients” during that time.

Among many observers, the growth of managed care has been understood as a key indicator of the market transformation of American medicine. Yet it is, on its face, somewhat paradoxical that we consider managed care and the marketization of health care as being so intimately related. Outside of health care, the

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