The External Medicine Podcast

Christy Chapin, PhD: Bad Incentives, the AMA, and How US Healthcare Became Dysfunctional

July 08, 2022 The External Medicine Podcast Episode 21
The External Medicine Podcast
Christy Chapin, PhD: Bad Incentives, the AMA, and How US Healthcare Became Dysfunctional
Show Notes

In this conversation, Daniel Belkin and  Mitch Belkin speak with Professor Christy Chapin, who is an Associate Professor of History at University of Maryland Baltimore County. We discuss how the American insurance company-based model of healthcare developed in the first half of the 20th century. Specifically, we explore the role of some of the major actors who created the fragmentary and expensive US healthcare landscape: the American Medical Association (AMA), Blue Cross and Blue Shield, as well as private insurance companies.

Prefer video? Watch the  interview on Youtube.

In this episode, Professor Chapin defines what she terms the “insurance company model” of healthcare. We explore various competing models at the turn of the 20th century, including prepaid physician groups, which were an early multi-specialty group practice. (This model of healthcare delivery, which Professor Chapin argues, could have become the dominant model of US healthcare, was effectively banned by the American Medical Association in 1938). 

We discuss the organizational history of the AMA, its rise to prominence, and how it influenced the development of American healthcare. While the AMA attempted to maintain physician autonomy in the 1920s, concerns of government involvement prompted a 1938 deal with insurance companies that produced our current model of 3rd party financed healthcare. By insisting on a fee-for-service payment structure, this led to vast increases in the cost of care. Overtime, increasing insurance company regulation and government involvement (Medicare, the ACA, etc.) have attempted to reduce costs with limited success.

Professor Chapin argues that the US healthcare system is not a free market. Rather, it is a product of warped incentives brought about by historical negotiations between insurance companies, hospitals, government agencies, and special interest groups. Cost containment measures instituted by insurance companies to reduce costs have led insurers to effectively control the practice of medicine.

Who is Christy Chapin?

In addition to being an Associate Professor of History at UMBC, Professor Chapin is a visiting scholar at Johns Hopkins. Her professional interests include 20th century U.S. political, business, and economic history. She’s also the author of Ensuring America’s Health: The Public Creation of the Corporate Health Care System, which was published in 2015.

What is the External Medicine Podcast?

The External Medicine Podcast explores some of the most exciting ideas in medicine. Co-hosted by Daniel Belkin, MD, and Mitch Belkin, MD.

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