Watch Paul Starr’s full 30-minute presentation at the LDI 50th Anniversary Symposium

Fully understanding the chaotic situation of national health care policy today can best be achieved by more fully understanding the forces that have shaped that policy over the last century, Pulitzer Prize winning author Paul Starr told a plenary session at the LDI 50th Anniversary Symposium.

Starr, PhD, a Princeton University Professor of Sociology and Public Affairs began his quest to tell this story with the 1982 publication of his landmark book, “The Social Transformation of American Medicine,” that chronicled the history of U.S. medicine from Colonial Times to the opening years of the Reagan era.

In 2016, as the fate of the Affordable Care Act remained a topic of acrimonious national debate during the Presidential election, Starr’s publisher was preparing a reprint of the book and asked the author to write a epilogue detailing events from the early 1980s to 2016.

20,000-word epilogue
Starr’s appearance as a keynote speaker at the Leonard Davis Institute of Health Economics’ 50th Anniversary Symposium was also an opportunity for the author to promote the just-published second edition of that work that anchors his career. The new section — a 20,000-word, three-chapter epilogue that could well stand alone as its own book — completed the earlier story by detailing the politically tangled history of U.S. health care from the 1980s run-up to the failed Clinton health care legislation in 1993 to the ongoing saga of the ACA.

Particularly in the post World War II era, Starr noted that explosive increases in both technological knowledge, products and overall costs have set in motion 5 chain reactions that led directly to today’s continuing bitter battle over health care:

  1. Rising costs spurred the rise of new methods of financial control by government, employers and insurers.
  2. Those new methods of control set off cycles in the insurance industry with the introduction of new forms of coverage, like HMOs in the 80s and 90s.
  3. Pressures from payers led to increased consolidation among healthcare providers greatly concentrating market power, enabling them to drive up prices further.
  4. The continuing rise in costs and erosion of job-based coverage have created a persistent crisis of affordability.
  5. Changes in finance, organization and politics have led to popular anger, professional resistance, political backlash, intensified ideological and interest group conflicts, sometimes producing reforms by churning through various kinds of innovations that ultimately achieved little more than widespread disappointment.

Two great cycles
“There have been two great cycles over the last 35 years,” Starr said. “The first was the rise of managed care and its partial retreat where the central idea was cost containment by putting providers at risk…The second which is still ongoing, began around 2000 and has been a struggle over risk shifting with the new central idea of cost containment by putting consumers at risk for costs. Just as the Health Maintenance Organization (HMO) epitomized the first cycle, so the high deductible health plan has epitomized the second.”

“Despite all the ‘reforms’ over the past three decades,” Starr said, “health care costs have risen to higher levels than anywhere else and the crisis of affordability for consumers and government remains. As a result, the underlying pressures for institutional and political change persist and there’s no reason to believe that we have reached any kind of stable equilibrium in health policy and health care organization.”