Health care reimbursement: Clemens to Clinton.

THE HISTORY OF HEALTH INSURANCE The history of health insurance goes back centuries, possibly to ancient China and the Norman Conquest. Henry I introduced sweeping health care reforms to the newly combined kingdoms of England and Normandy. Soon thereafter, at least one “physician,” “John of Essex,” was receiving an honorarium of one penny per day for his efforts. As historians explained, that sum was roughly equal to that paid to a foot soldier or a blind person. Historically, doctors haven’t always been the high earners that they are today (1). There’s clearer historical evidence to suggest that American doctors were receiving capitation-like payments. Mark Twain is on record as saying that during his boyhood in Hannibal, Missouri, his parents paid the local doctor $25 per year for taking care of the entire family regardless of their state of health (2). As for the ancient Chinese, it is said that many Chinese physicians were paid only if their patients got well. Stories that the emperors cut off the heads of doctors who failed to cure them are only legends (3). Before 1920, medical expenses in the USA were very low. The chief expense of any illness was not the actual health care costs but the lost wages. According to a study conducted by the state of Illinois in 1919, lost wages from illness were four times larger than the expenses associated with treating the illness. Most families purchased “sickness” insurance (akin to our disability insurance) (4). There was a low demand for health insurance as well as an unwillingness on the part of insurance companies to provide the product. They lacked the information to calculate the risks and to write premiums. Death insurance was common. But “death” was pretty clearly defined, and “loss of health” was much harder to quantitate.