Date:   7/23/2006 7:58:42 PM ( 18 y ago)
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Courtesy of Ohfor07...

http://www.lewrockwell.com/rockwell/sickness.html

Government intervention in the US medical market began in the late 19th century, first in form of government regulations on medical schools. No one dreamed where this would eventually lead. Moreover, no one would have thought to call such interventions a species of socialism. Socialism, it was believed, was Plato; it was Marx; it was not the American Medical Association; the AMA is about insuring quality, not equalizing wealth or expropriating the expropriators.

In fact, the empowerment of this physician cartel was the original sin of American medicine. Through its ability to limit supply and outlaw competition, organized medicine has punished its customers, although the word is never used so as to disguise what is, after all, an economic relationship.

Competition among providers leads to rational pricing and maximum consumer choice. But this is exactly what the AMA has always sought to prevent. The AMA, organized in New York City in 1848, advanced two seemingly innocent propositions in its early days: that all doctors should have a "suitable education" and that a "uniform elevated standard of requirements for the degree of MD should be adopted by all medical schools in the US." These were part of the AMA's real program, which was openly discussed at its conventions and in the medical journals: to secure a government-enforced medical monopoly and high incomes for mainstream doctors.

Membership in the new organization was open only to "regular" physicians, whose therapies were based on the "best system of physiology and pathology, as taught in the best schools in Europe and America." Emphatically not included among the "best" were the homeopaths. How the "regulars" came to crush the homeopaths and other competitors, and penalize patients in the process, is a story of deception and manipulation, of industry self-interest and state power. The organization knew it needed more than persuasion to secure a monopoly, so it also called for a national bureau of medicine to oversee state licensing and other regulations.

In those limited-government days, however, the idea went nowhere. But in the statist Progressive Era after the turn of the century, anticompetitive measures became respectable, and the AMA renewed its drive for a cartel, spurred on by the popularity of self-medication and the increasing number of medical schools and doctors. Then the AMA's secretary N.P. Colwell helped plan (and some say write) the famous 1910 report by Abraham Flexner. Flexner, the owner of a bankrupt prep school, had the good fortune to have a brother, Simon, who was director of the Rockefeller Institute for Medical Research.

At his brother's suggestion, Abraham Flexner was hired by the Rockefeller-allied Carnegie Foundation so that the report would not be seen as a Rockefeller initiative. AMA-dominated state medical boards ruled that in order to practice medicine, a doctor had to graduate from an approved school. Post-Flexner, a school could not be approved if it taught alternative therapies, didn't restrict the number of students, or made profits based on student fees.

The Flexner Report was more than an attack on free competition funded by special interests. It was also a fraud. For example, Flexner claimed to have thoroughly investigated 69 schools in 90 days, and he sent prepublication copies of his report to the favored schools for their revisions. So we can see that using lies to advance political goals long predated the Gore campaign.

With its monopoly, the AMA sought to fix prices. Early on, the AMA had come to the conclusion that it was "unethical" for the consumer to have any say over what he paid. Common prices were transmuted into professional "fees," and the AMA sought to make them uniform across the profession. Lowering fees and advertising them were the worst violations of medical ethics and were made illegal. When fees were raised across the board, as they frequently could be with decreased competition, it was done in secret.

Then there was the problem of pharmacists selling drugs without a doctor's prescription. This was denounced as "therapeutic nihilism" and the American Pharmaceutical Association, controlled by the AMA, tried to stamp out this low-cost, in-demand practice. In nearly every state, the AMA secured laws that made it illegal for patients to seek treatment from a pharmacist. But still common were pharmacists who refilled prescriptions at customer request. The AMA lobbied to make this illegal, too, but most state legislatures wouldn't go along with this because of constituent pressure. The AMA got its way through the federal government, of course.

By the end of the Progressive Era, the AMA had triumphed over all of its competitors. Through the use of government power, it had come to control education, licensure, treatment, and price. Later it outcompeted fraternal medical insurance with the state-privileged and subsidized Blue Cross and Blue Shield. The AMA-dominated Blues, in addition to other benefits, gave us the egalitarian notion of "community rating," under which everyone pays the same price no matter what his condition.

The rest of the story wrote itself. A cartelized profession is one that is easier to control and nationalize. Thus the New Deal brought us massive national subsidies. The Great Society brought us the disastrous welfare systems of Medicare and Medicaid. There were also the HMO subsidies from the Nixon administration's monstrous Health Care Financing Administration. The employer-mandates that make life so difficult for small business and led to the creation of more HMOs resulted from the lobbying of large corporations wanting to impose higher costs on their competitors, and labor unions attempting to cartelize the labor force and keep out low-price labor services.

And today, both major parties say all this apparatus is wonderful and should be protected and expanded until the end of time. It is true that there are some wonderful efforts afoot to resist further socialization of medical care. But there are no active political movements alive that are making any progress toward a fully free market in medicine, toward a full de-Nazification, a complete de-Sovietization, and a total de-AMAization.

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