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Showing posts from June, 2018

How did American healthcare get so expensive? Perhaps it was Ronald Reagan's presidency.

The New York Times has pointed out a very interesting coincidence. It was during the presidency of Ronald Reagan that health costs and outcomes began to diverge from the rest of high income countries with which we compare ourselves.

In an article by Austin Frakt, a healthcare economist, physicist and mathematician, he points out that America began to abandon healthcare cost controls, except for Medicare, when Ronald Reagan took the helm from Jimmy Carter, who had steadfastly backed limiting public and private healthcare spending. Deregulation of many institutions followed. Regulation of industries related to health were rolled back and new regulations which helped control spending in Europe were not introduced.

In the early 1980's insurance companies began to change the way they paid hospitals for their services, introducing "DRG's (diagnosis related groups). Hospitals responded to this change in payment methods, being paid according to diagnosis rather than time or inte…