Episode 282: What Happened to Health Care
Words & Numbers
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The Insurance Company Model
In 1937, AMA leaders sat down in this cigar smoke filled room and created out of air the insurance company model. They put rules on it: Physicians had to be paid fee for service. And then we get fee schedules that are developed in the 1950s. But of course, the fees just escalated very rapidly. It doesn't take a genius to see that this is a flawed model. Everybody recognized this was what the AMA decided to go with.
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