The Care of Strangers*: the economic story of hospitals and hospitality ~ Prologue

by faithgibson on April 22, 2016


Prolog to “The Economic Story of Hospitals”

Topics included in this manuscript: The economic history of hospitals;

  • How the system for financing American hospitals in the early 20th century differed greatly from other industrialized countries because the US chose a market-based business model
  • The role played by organized medicine’s historic defense of the entrepreneurial model of private ownership of doctors’ services and medical facilities
  • An ingenious plan invented by a famous obstetrician in 1914 to finance a nationwide system of community (or ‘general’) hospitals as private institutions supported by patients fees;  the lynchpin  to finance this new system of general hospitals called for a new business plan and marketing PR that would eliminate the historic association of hospitals as places where people with  horrible and fatal diseases went to die, and replacing it with a brand new idea of  hospitals as providers of health services to essentially healthy people who predictable had ‘happy’ outcomes
  • The elimination of the traditional ‘Healing Arts‘ multidisciplinary system for providing health & medical care in the early decades of the 20th century and its replacement with an allopathic-only, MD-centric system of disease management
  • The broader impact on the American economy in the 21st century of these historical decisions that dominated all national policies for much of the 20th century
  • What a profit-based business model for hospitals means to society and how it affects individuals, both in accessing necessary hospital services, and the quality of care received
  • Contemporary consequences of these public health policies, including the plight of the uninsured, how being uninsured is also associated with a much higher perinatal and maternal mortality in the US than comparable countries
  • The current budgetary crisis attributed to the Medicare and Medicaid programs
  • The inability of the US to compete successfully in a global economy based on the disproportionate spending/unproductive expense of the 19th-century thinking that molded the American disease-management system, leaving us without any true “healthcare” system

streetart@ ~ Prologue ~ @

My perspective on modern medicine & hopes for a brighter future

I have always had a deep appreciation for modern medicine, realizing very early in my life that certain people (myself among them) were alive only because of the wonders of medical science while others I knew were dead or permanently disabled.

These poor souls had the misfortune to be born before a medical or surgical ‘cure’ had been found or they were unable to pay for the necessary medical services.

Medical issues were frequently talked about in our small town as word spread of the large and small tragedies caused by serious illness or injury. This included a high school classmate of my mother’s who died suddenly from a ruptured appendix just months before the first sulfa drugs came available. As a 4-year-old I had pneumonia and my parents always credited the ‘wonder drug’ penicillin with saving my life.

Everyone I knew thought of hospitals as mythical institutions that could magically save life and limb, so it was somehow fitting that hospitals became such an important part of my adult life. This was not because I or my loved ones were frequently hospitalized, but simply because  I entered nursing school the summer after I graduated from high school.

By the tender age of 21, I was ‘an insider’, working nights in the L&D of the same large hospital that I trained in. It was an exceptionally busy place and we often had a dozen deliveries during my 8-hr shift, which was exciting and satisfying. I loved my first job as an L&D nurse.

After having my own children, I quit my full-time nursing and worked week-end shifts in the ER during their busiest hours. Our hospital’s ER typically saw 100 emergency cases per 24 hrs; 70 of those patients were admitted during my 8-hour shift – 12 to 8 pm on Saturday and 10 am to 6 pm on Sundays. I saw a whole lot more of life (and death) than I was emotionally prepared for, and yes, these experiences changed the way I thought about life, death and the American system for providing (often refusing to provide) necessary medical services.

Everyday Tragedies

Minutes after arriving for my first shift as an ER nurse an 8-month old baby brought in by ambulance was pronounced dead-on-arrival or ‘DOA’.  Its mother and her best friend were taking their high school GED tests together at the local college while the friend’s husband was babysitting the children of both families. He put the youngest – an 8-month old little girl who just beginning to stand on her own – ‘safely’ in a playpen, to be entertained by the older children while he prepared breakfast in the kitchen.

One of the older kids playfully placed a silver Concho Indian belt around the little girl’s neck that somehow also got looped over the corner post of the wooden playpen. When the 8-month old lost her balance and fell back, she was strangled by the belt around her neck. I will never forget the mother of the baby that died so tragically standing in the middle of our ER comforting her friend, whose husband had been left in charge of the children.

The very next morning, our first emergency case was a 6-week old infant diagnosed at birth with osteogenesis imperfecta (brittle bone disease) who was discovered dead in his crib by his parents. After filling out the paperwork and contacting the coroner, I slipped quietly away and called my husband at home and told him to go in kids bedrooms to make sure our 8-month son and 23 month-old daughter were both still breathing.

That certainly was not my last irrational thought during the 7 years I work in the ER, and no, it never did get any easier!

Early attraction to the profession of nursing

Hospitals and the nursing profession were apparently my destiny from a very early age. One of my earliest memories is watching newsreels of Red Cross nurses caring for wounded soldiers in large hospital wards at the end of World War II. The darkness of the movie theater, the huge size of the screen, and male announcer’s penetrating voice-over were riveting to an impressionable four-year-old. Under such circumstances, it isn’t such a surprise that I was mesmerized by the starched white caps, crisp uniforms, long flowing capes and the dramatic story of lives saved by the US Army Nurses Corps.

For my 6th birthday my maternal grandmother (and excellent seamstress), made a child’s version of a nurse’s cap for me, and a long white apron appliquéd with a red-cross and dark blue wool cape reminiscent of those worn by nurses during second world war.

Playing ‘nurse’ with my friends and my dolls was a favorite childhood past time. I even convinced my mother to save beet juice in a jar, which I used for pretend blood transfusions to save the life of my ailing teddy bear. I still have a black and white photo of me dressed in this costume, sitting on the front steps of our house with my childhood friend Diane Gresham while we played a very serious game of ‘hospital’.

Inter-generational tragedies and happy-endings

It seems that our extended family had more than the usual number of reasons to be interested in medical science. Some were mild or transient, others life-changing and lasted for generations.

During an epidemic of meningitis, my paternal great grandparents as infants both they became critically ill with the disease and suffered permanently hearing loss. As was the customary at the time, such children were sent to live in a state-run boarding school for the deaf. They attended the same boarding school, fell in love, married and soon became non-hearing, non-speaking parents to a family of four boys.

As the eldest child, my grandfather he was called on to conduct all the family business between his parents (who could only communicate through sign language) and the hearing-speaking world outside their home. As an adult, he married my grandmother and together they had 5 children, with my father as their eldest son.

No doubt my grandfather was responsible as a youngster but as an adult, he became an alcoholic husband and extremely negligent parent. He frequently lost his job and was rarely able to properly support a wife and five children. His alcoholism set the scene for an accident that permanently blinded one of his younger children.

As a nine-year-old, my father accidentally stuck his little brother Teddy in the eye with the metal nib of an old-fashioned ink pen (the kind used by school children in the 1930s). It was just a wooden dowel that held a metal nib at one end that was repeatedly dipped to an inkwell while doing one’s schoolwork.

While my dad was sitting cross-legged on the floor, trying to pull the nib out of its wooden handle, his younger brother as a 2 1/2-foot tall toddler, leaned over his shoulder to see what he was doing. At that very instant, the metal nib suddenly came loose and hit Teddy directly in the eye, puncturing his eyeball. As expected my grandmother took him to the doctor to have the painful injury assessed.

The family doctor stressed how very serious this injury was, and that my Uncle Ted needed to be immediately hospitalized so the injured eye could be surgically removed. This was to prevent a systemic inflammatory reaction that would cause blindness in the uninjured eye. This happens when aqueous fluid that normally fills the eyeball (and is responsible for keeping its round shape), leaks out of the punctured eyeball and into the victim’s the blood stream.

As soon as the aqueous fluid from the injured eye gets into the injured person’s general circulation, the human body responds as if it was a foreign body and triggers an autoimmune attack. Unfortunately, this inflammatory response causes irreversible damage the optic nerves of both eyes, which ultimately results in total blindness. Nowadays the prescription drug cortisone would be given to prevent this dangerous complication, making the surgical removal of the injured eye unnecessary.

But in the 1930s, cortisone drug treatment was not an option, and due to the family’s extreme poverty, hospitalization and surgery were also out of the question. With only an 8th grade education, my grandmother couldn’t understand a sophisticated idea of an immune response. She could not believe that removing his injured would save the sight of his uninjured eye, and besides, there was no money to pay a surgeon and hospital bills. Instead, she took Teddy back home and just hoped for the best.

But within a few months, an inter-generational tragedy descended on our family when my uncle Ted lost his sight just short of his 4th birthday. His older brother (my father) never got over feeling ‘responsible’, as evidenced by his constantly yelling at us kids to ‘BE CAREFUL’ and my grandfather had yet another reason to drink more and work less.

Tragedy compounded

A couple of years after Teddy’s tragic injury, the youngest of my grandmother’s children — a five-year-old little boy named Albert — became desperately ill with diphtheria. Again there was no money for hospital care and after three miserable days – the first 2 in delirium, the last in a deepening coma — Albert slowly quite breathing and quietly died on a little cot that had been moved into the living room. Years later, when my grandmother talked about Albert’s death, she would point to a spot just slightly left of the doorway between the living and dining room as the place where youngest of her 5 children died.

A tiny silver lining in a sea of sadness

As a little girl I was fascinated by my uncle’s blindness – the unsettling idea that such an essential sense as sight could be so casually, yet so severely damaged. Fascination was matched by an intense curiosity about what the world would be like if you couldn’t see. I never stopped wondering how Uncle Ted found his way around the house and how he could tell us kids apart before we spoke. When my cousins and I came to visit, Uncle Ted would lightly touch the side of our face with his fingertips and announce each of our names, which he got right every time.

His strategy for coping with blindness taught me to think in terms of  ‘seeing’ with my fingers. This kind of seeing with my fingers gave me a set of unique skills that were an unexpected but personally appreciated “silver lining” in an otherwise an unmitigated tragedy.

As an adult, i felt bad about benefiting from his handicap, but it certainly is useful in my life as a midwife. When I palpate a pregnant mother’s abdomen to determine the size and position of her unborn baby, I just close my eyes and let my fingers ‘see’ just how the baby is curled up in its mother’s uterus, palpating the baby’s back, tiny butt, arms and legs, and checking to be sure it is head down (i.e. not breech).

The day the sun died …

When I was in my teens, I ask my uncle what it was like when he went blind – did his vision fail slowly, with lights and color slowly getting dimmer and dimmer and fading to black over weeks or months? Or did it happen suddenly, like blowing out a candle and being left in total darkness? He said he was playing outside in the street beside the house one sunny Sunday afternoon when suddenly it got totally dark. Somehow he found his way back into the house to ask his mother: “what had happened to the sun?”

As I grew to adulthood, I watched my uncle struggle to live independently as a husband and father, but his wife left him and move away with their only son. With no other options, he moved back home to live another 30 years in a tiny dark room in his mother’s house. While we talk a lot about ‘death with dignity’, I was always impressed by how the handicap of his blindness forced him to live with so little dignity. Mostly he spent the day talking on his ham radio to other enthusiasts around the world.  His operator ‘handle’ was LPW or ‘Little Peanut Whistle’.

Exchanging unpreventable tragedies of pre-scientific medicine for preventable tragedies as an economic lock-out

My uncle Ted paid the price every hour of every day of his life for the inability  of medical science to cure meningitis in our great-grandparents in the 1880s, and the lack in the of what is now a simple drug – cortisone — in the early 1930s that could have prevented the nerve-killing inflammation caused by the injury to his eye.

Antibiotics would have kept my great-grandparents from going deaf and anti-inflammatory drugs would have prevented my uncle from going blind. However, an effective public healthcare system could also have been prevented my uncle’s life-long blindness by providing the necessary hospital care and surgical remove of the injured eye, thus preserving sight in his uninjured eye.

Since sulfa and antibiotics became available to the general public in 1945, the common medical problems that most of us face are not the scientific inadequacies of medicine to successfully deal address. Modern medicine is generally effective and we have enough doctors and hospitals capable of providing appropriate care. The problem is no long the inabilities medical science but the inability of the patient (or family) to pay for desperately needed and effective but extremely expensive medical services.

The political and policy issues that surround our fee-for-service business model runs straight through the entire 20th century and on to our present time. As an ER nurse, I saw the consequences of this every day in many big and little ways. However one case, in particular, stands out in my mind – an emergency room patient by the name of Lance Anderson. 

The totally unnecessary death of Baby Boy Lance Anderson

Late on a warm sunny afternoon, obviously worried parents brought their 9-month-old baby boy to our ER department. He was dressed a worn pediatric hospital gown, which either meant a recent discharged from the hospital or that his parents had run out of baby clothes for him. Even to my relatively inexperienced 22-year old eyes, this child looked and acted very sick.

When I found out that he was the youngest in a family with nine kids, I took the parents’ concern very seriously. According to the baby’s chart, their family pediatrician was Dr. Bailey. I’d just seen him walk through the ER on his way to make his afternoon rounds on the pediatric floor, so I paged him to come to the ER immediately.

When Dr. Bailey arrived he went to the nurses’ station to get the baby’s chart, and then to a different part of the ER to call his office. Later it became clear that he was checking to see if the parents had paid their previous bill. After he hung up the phone, he went to the doorway of exam room and standing 10-feet away, curtly announced to the parents that he wouldn’t be able to see their child. Then he said “I think you know why” , turned on his heels walked away without anther word.

Dr. Thompson, the ER doc hired by the hospital to see patients that didn’t have a private physician, was a recent graduate and had very little experience treating infants. In addition, he was quite obviously annoyed by the idea of  ‘deadbeat’ parents who he assumed were abusing the system.

After a few unsympathetic questions and a  lack-luster exam of the baby’s ears and throat, he told the parents emphatically that their son was diffidently NOT seriously ill. Then he wrote a prescription for antibiotics and told them to be sure and stop at the cashier to pay for the emergency room visit before they left the hospital.

As he left the exam room, a tired and dejected-looking mother picked up her pale and limp child. With her baby’s head resting listlessly on her shoulder, arms lying limp around her neck, the three of them left the emergency department. I watched as the parents dutifully followed Dr. Thompson’s instruction and walked wearily down the corridor that led to the hospital’s cashier.

Dr. Thompson stood next to me and also watched, just to be sure they didn’t stiff the hospital by slipping out without paying the bill for their ER care. It was a walk of shame for the parents — but the real shame was on us, as so-called ‘caring professionals’, and on the uncaring, unhealthy s0-called “healthcare system”.

Early the next day the county coroner, Dr. Greenblatt, came to the ER. This was unusual since it was a Sunday morning and not normal a ‘work day’ for country employees. However, he was hot to know “about that Lance Anderson kid”. When I asked what he meant, he said, “Because he’s dead!

After paying their hospital bill, the parents didn’t have enough money to get the prescription for antibiotics filled. When they woke up that morning, they found their youngest child lying cold and blue in his crib. He’d died sometime during the night.

Had these parents refused to seek medical treatment for any reasons (religious belief, didn’t want to spend the money, drunk, high on illegal substances, etc), they would have quickly been accused of criminal neglect. The other children in their family would have been taken into protective custody and sent to foster homes (at great expense to the State) while the parents were prosecuted for wrongful death (also at great expense to the State). Society would have felt a wonderfully righteous vindication for putting these ‘negligent parents’ behind bars for many years while the remaining eight children became wards of the Court (also great and on-going expense to the State).

Like the classic story about the horse, the rider and a missing nail in the horseshoe, this story is about the inability of these parents, after paying for ER care that was NOT caring, to afford an antibiotic prescription. Apparently the cash they had on them went instead to pay for the egregiously negligent ER care for their youngest son.

But in our ever-so-legal system, neither of the doctors that refused to provide effective care to this child were held responsible for anything. There was no oversight of their wrong actions and willful inactions because, in our for-profit healthcare system, this is business as usual. As a sick child, if your parents can’t pay, you don’t get care and if you die needlessly, no one is in the medical professional is accountable although in some cases they can claim that somehow the parents were to blame for not bringing the child in soon enough.

What makes this story ever so much sadder is that Baby Boy Lance Anderson died in 1967. Its 48 years later but for many low-income families, things are no better. Day and night in hospitals all across America this scene is repeated with the same deadly conclusion.

The Affordable Care Act ~ much better, but still no cigar (yet)

Passage of the AHCA is a big and important step forward, but it did not change the facts or faults associated with our for-profit, and now corporate hospital system.

Due to policial constraints, the AHCA was unable to correct the underlying problems created early in the 20th century when organized medicine labeled government-supported health insurance plan as “socialized medicine”. This well-finance group embarked on a politically effective, decades-long campaign that blocked nationalized health insurance while vigorously defending and promoting the privatized American hospital system as a for-profit business

But the American version of hospitals as a for-profit system was built on a false foundation. The central fact of ‘who pays’ when people get seriously ill or injured is itself quite simplesomeone other than the ill or injured person themselves.  A “business plan” based on revenue from sick people as paying customers has never been ‘profitable’ at any time in history or place in the world. In fact, sick people are the worst of all demographics to depend on as paying customers. Non-paying customers are not in fact ‘customers’ at all, but a business expense like salaries, utility bills, and building maintenance.

The only way to profit as a private provider of sickness care is to contract with a dependable third party payor — religious charities or wealthy philanthropists, or governments and/or private insurance companies to pay these bills.  Whether it is tax revenue or insurance premiums, the money dispersed comes from a revenue pool that always originates with healthy employed adult citizens.

Governments, charities, insurance companies, even wealthy philanthropists ultimate depend on money that comes from all the rest of us. Even if we think of ourselves as “premium” payers instead of “tax” payers, it is still citizens who pay for the healthcare system. This may avoid the dreaded “S” word (socialized medicine), but doesn’t change the facts — the cost of healthcare and medical services are always spread across the entire population of healthy, wealthy or employed adults. As a result, the income for hospital-based care and services is also some version of money provided by healthy, wealth-generating adult citizens.

Collectively we are the economic foundation of our American hospital system.

By understanding that we can become proactive how it is it is run, what kind of services it provides, and under what circumstances.

READ MORE –> Chapter 1: The economics of hospital-based services as an element of national health care: