The document discusses five historical factors that have influenced how healthcare is delivered in the US: 1) The authority of the medical profession in organizing care, 2) Viewing healthcare as a market commodity, 3) Limited role of government in healthcare, 4) Influence of technology, and 5) Effect of medical malpractice litigation. It analyzes each factor in more depth, particularly the role of physicians in establishing standards and controlling financing mechanisms, and how this led to physicians operating as self-interested entrepreneurs and healthcare as a market-based system. The document also discusses the increasing but still limited role of government in healthcare financing and regulation.

1. Running Head: Historical Factors That have Influenced Health Care 1
Historical Factors That Have Influenced How Health Care is Delivered in the U.S.
Ardavan A. Shahroodi
Northeastern University
Professor James J. Ferriter
HMG 6110-The Organization, Administration, Financing and History of Health care in the
U.S.
Friday, April 12, 2013

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Introduction
In the U.S., the delivery of health care has been influenced by five major factors. The
first of these factors has been the largely uninterrupted authority of the medical profession in the
organization and delivery of health care related services. The second factor has been the
consideration of health care as a market commodity. The third factor is seen as the limited role
of state and federal authority in the organization and delivery of health care. The fourth factor
may be regarded as the enormous influence of technology in every aspect of the delivery of care
and the fifth factor is the relatively newer effect of medical malpractice litigation. The combined
effect of all these factors have led to the creation of an environment where escalating costs and
lack of access by a substantial minority of the population and citizenry will have serious social
and economic consequences for the present and future generation of Americans.
Analysis of the Five Factors that have Influenced Health Care delivery
According to Barr (2011), at the turn of the 20th century, the field of medicine in the U.S.
was composed of a wide variety of skills, competencies, knowledge and resources at the
individual and organizational/institutional level (p. 16). Barr (2011) maintains that “There were
no standards, either legal or ethical, to maintain a consistent level of quality in the way
physicians practiced medicine” (p. 16). Nevertheless Parsons (as cited in Barr, 2011) brings to
our attention that the ascendancy of science and technology in American society facilitated the
viewing of physicians as “altruistic agents who possessed valuable scientific knowledge and
technical skills” (p. 17). In order to address discrepancies existing in the training and practice of
medicine, a commission of experts was created in order to study and offer solutions that would
bring about consistency and quality to the field of health care. The views of the commission
called the Flexner Report paved the way for state and local governments to depend and rely on

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physician associated professional organizations such as the American Medical Association
(AMA) to “guide the restructuring of medical practice” (Barr, 2011, p. 16) in this country.
As a result, the first historical factor that has influenced the practice of health care in the
United States is the ascendancy and power of the medical profession and her representative
organizations to exert substantial authority and direction in the manner by which medicine is
organized, accessed and delivered in this country. Barr (2011) argues that in time physicians
were seen “as agents of reason, worthy of our trust to act autonomously on behalf of patients,
exerted substantial influence over governmental policy toward medical care” (p. 17) and led to
the civil authority “granting sovereignty to the medical profession over the organization and
financing of medical care” (p. 18).
Barr (2001) presents us with two views that analyze the role of physicians in American
society. One view offered by Parsons (as cited by Barr, 2011) sees physicians as “Agents of
Reason” (p. 18) with their authority based on “Specialized knowledge” (Ibid), “Technical skills”
(Ibid), “Professional ethics” (Ibid) in addition to being regarded as “altruistic healers” (Ibid)
“paternalistic” (Ibid) and “unbiased’ (Ibid). The other opinion, maintained by Freidson (as cited
by Barr, 2011) sees physicians as “Agents of Power” (p. 18) with their authority based on
“Control of Knowledge” (Ibid), “Limited entry into profession” (Ibid), “Sovereignty over
system” (Ibid) in addition to being regarded as “self-interested entrepreneurs” (Ibid) with
“conflicting loyalties” (Ibid) who are “imperfect agents for their patients” (Ibid). As much as the
reality of the situation may be somewhere in the midst of both commentaries the fact remains
that as Barr (2011) maintains “for much of the twentieth century, power over the organization
and delivery of health care was concentrated in the medical profession” (p. 50) in order to

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“establish standards of education and licensure, guide medical ethics, define financing
mechanisms for care, and control the ways hospitals are used” (Ibid).
A direct outcome of the authority that has been bestowed to the medical profession in
order to organize the health care environment is the historical emergence and promotion of the
“individual physician as self-interested entrepreneur” (Barr, 2011, p. 17). This in turn entails the
consideration of “medical care as a market commodity” (Barr, 2011, p. 17) that may be regarded
as the second factor that has influenced health care where a potential health care provider is in
possession of the “right to charge a separate fee for each service they provided, and to base that
fee on whatever the market would bear” (Ibid). Of course, in recent years the growing state and
federal government programs such as Medicare and Medicaid have altered and ameliorated the
nature of medicine/health care as a “market commodity” (Barr, 2011, p. 50). However, the
significant concept here is embedded in the word “right” (Barr, 2011, p. 17) that health care
providers enjoy in order to practice their profession such as the decision not to see Medicare and
Medicaid insured patients and charge other patients according to “…whatever the market would
bear” (Ibid). As Barr (2011) would observe, the practice of medicine is exercised as a “market
commodity to be distributed according to ability to pay. Other than basic emergency services,
there is no acknowledged right to health care for those under 65 years of age” (p. 50).
A third interrelated and interconnected factor that has influenced how medicine is
practiced and medical services are delivered in the U.S. is the very fact that “Government has
historically had relatively little role in guiding our system of health care” (Barr, 2011, p. 50). As
has already been mentioned governmental authority both at the state and federal level have
depended on the medical profession to set the standards for the delivery, training and the

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financing of medical services. All the same, as Barr (2011) maintains “government’s role has
increased in recent years due to its growing role in paying for care” (p. 50).
In this light, the Affordable Care Act (ACA) will aim to increase the “availability of
health insurance” (Barr, 2011, p. 33), “controlling the cost of health care” (Ibid), offer “patient
protections” (Ibid) by addressing the pre-existing conditions matter and introduce other
budgetary, cost saving and qualitative reforms. Once the major ACA initiatives are implemented
beginning in 2014, “health insurance will become available to an estimated 32 million people
who previously were uninsured” (Barr, 2011, p. 33). An additional most significant policy
initiative of the ACA is the introduction of a “national program of comparative effectiveness
research (CER)” (Barr, 2011, p. 68). The ultimate aim of the CER is to “provide
recommendations for the optimal approach to care, but not to create mandates as to how specific
conditions should be approached” (Barr, 2011, p. 69) thereby answer the question “Which of
these alternative treatments works best?” (p. 68).
A fourth historical factor that has influenced how health care is delivered in the U.S. is
the effect of modern technology in the practice of medicine. Barr (2011) argues that the “value
we as a society place on technology and technological advances encourages the development and
use of high-tech medical treatments, even when the added benefit of those treatments is small
compared to their cost” (p. 56). Indeed there exists this almost mystical faith in the ability of
technology to improve our lives and offer cure to our ills. Some of this faith, I have to admit is
well grounded as I and many of my loved ones/family/friends/acquaintances have benefited from
the utilization of technology in helping our recovery from illness during our lives. However,
Barr (2011) argues that we as a society have automatically come to believe that “more

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technological a treatment is, the better it is” (p. 57) and that as “patients we have not received
complete treatment unless we receive the most advance technology” (Ibid).
Barr (2011) utilizes a number of examples, cases and scenarios in order to illustrate this
“irrational exuberance” in the automatic enthusiasm that we afford to all new health related
technological and scientific matters. In pages 54-56 of our textbook, Barr (2011) gives us a
number of examples utilizing marginal cost/marginal benefit analysis in order to illustrate how in
many occasions a physical examination in addition to a simple X- ray may be sufficient in the
diagnosis of orthopedic related injuries and conditions. At that level, Barr (2011) proposes the
marginal cost and marginal benefit to the society and the individual are more likely and in most
cases equal. Nevertheless, in the U.S. the cost/benefit analysis in the diagnosis and treatment of
injuries and maladies is rarely utilized and routinely more advanced and expensive technologies
such as MRI imaging are prescribed.
Barr (2011) also discusses the controversy concerning prostate specific antigen (PSA)
tests and how this more high tech and expensive test that is shown to project “false-positive
results” (p. 57) may lead to the unnecessary decision to remove prostate glands with painful and
discomforting side effects. Furthermore, Barr (2011) illustrates how diuretics that were a low
tech and inexpensive medicine available for two decades in order to treat blood pressure where
shown in a “double-blind” (p. 59) (patient and doctor were not told of the contents of the
medicine) study to be “superior in preventing one or more major forms of cardiovascular
disease” (Ibid). In that study diuretics were compared to other more high-tech and expensive
medications. All this infatuation with the desirability of more technologically advanced and
consequently much more expensive medical treatment options, Barr (2011) argues has
exponentially increased our health care related expenditure.

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A fifth historical factor that has influenced how health care is delivered is the effect of the
medical malpractice system and environment and its practical and financial consequences for
both patients and their physicians. The specter of medical malpractice suits has forced
physicians and hospitals to purchase insurance policies that would protect them and their practice
from financial liability. This in turn has also convinced physicians and medical
establishments/hospitals that they must exercise “defensive medicine” (Barr, 2011, p. 65) that is
the practice of ordering additional costly and potentially unnecessary diagnostic tests. However
as Brennan et al. have found in a study of “30,000 hospital records in 51 hospitals” (as cited in
Barr, 2011, p. 66) that “Among the patients who received negligent care, only a tiny fraction
(between 1 and 2%) filed a malpractice suit in response to their care” (Ibid).
Conclusion
The above five historical factors have combined to influence the delivery of health care in
the United States in a synergic fashion effecting the practice of medicine by increasing cost in an
exponential manner. The unmitigated role of the medical profession in the organization and
delivery of services, the practice of health care as a market commodity, the limited role of
governmental authority, the unhindered utilization of more technologically advanced solutions in
providing care and the deleterious and demoralizing effects of the medical malpractice
environment have led to an unsustainable state of affairs. This level of unsustainability is
uniquely observed in the uncontrollable expense of maintaining such a financially draining
system and the social costs of having so many of our citizens deprived of the benefits of a
professional and quality laden level of care. I would like to end this first assignment with the
comments of Professor Ferriter that the goal and the challenge must be to “influence the structure
of health care without jeopardizing the quality of the delivery system that exist” (Class 1, Lecture

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Outline, p. 7). That would be the most responsible and logical way of addressing our health care
dilemma.

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References
Barr, D. A. (2011). Introduction to U.S. health policy: The organization, financing, and delivery
of health care in America (3rd ed.). Baltimore, MD: The John Hopkins University Press.
Brennan, T. A., Leape, L. L., Laird, N. M. et al. (1991). Incidence of adverse events and
negligence in hospitalized patients: Results of the Harvard Medical Practice Study I.
New England Journal of Medicine 324:370-76
Freidson, E. (1970). Profession of medicine: A study of the sociology of applied knowledge.
New York, NY: Dodd, Mead.
Parsons, T. (1951). The social system. New York, NY: Free Press.
Parsons, T. (1975). The sick and the role of the physician revisited. Millbank Memorial Fund
Quarterly 53:257.