Health Perspectives Vol. I No. 7 September-October 1974


Americans have a strong belief in the myth of freedom. That myth has a corollary that a people can make educated choices based on complete, factual information. The subsidiary issues all derive from these.

Economic theory a topic of changing hypotheses and realities calls for informed consumers who use information to advance their own self-interests. That is the basis for what it called the “free market”. In most areas of social and individual economic intercourse consumers take the time to do research about the products and services they want to acquire. The ‘free’ marketplace provides many products, their compliments and substitutes. A compliment example would include the gasoline used for an automobile. A substitute would include public transportation as an alternative to use of a privately owned auto. These options are known and understood by most people. Decisions to use one option over another are also except in the delivery of care usually made without pain or fear of death as a major factor. The ‘free’ marketplace also requires that there are many suppliers or providers of each product or good. These multitudes of providers in the ‘free’ marketplace are in competition with each other. The value of their products and services is reflected in the price the consumers will pay for them. That intersection of suppliers (“supply”) and consumers (“demand”) sets the price and quantity of each product and service. But as stated above, pain and fear motivate seeking care and consumers are not able to gather all the quality and expense information to make informed decisions. Even when they are able to do so, the level of pain or immediacy of the prospect of death often render the statement an “informed consumer” meaningless.

A simple for instance covers this point. A person experiencing the signs of a heart attack is not likely to object to the ambulance which arrives after a 911 call. That ambulance may not take the person to the hospital of choice. And even if it does, there is no guarantee that the doctor, nurses, lab technician, radiologist, anesthesiologist, etc. are the providers of choice; are the most experiences, effective, safest, etc. Price does not play a significant role or we would have reports of persons dying as they seek another emergency room, set of providers, etc. at another hospital. Or we would hear stories of persons who would state their lives were saved because they left an emergency room, switched hospitals, demanded a better pathologist, radiologist, surgeon, etc.

In economics, each economic law and theory includes a set of definitions or conditions. Firstly, it acknowledges that some consumers might not have all the information or choose not to use it and secondly, even with the information there might be other factors at play. Some of these other factors include the use of government to support or undermine competitor suppliers’ access to enter or leave the marketplace; the use of advertising which might be false, incomplete or emotional; brand loyalty the basis of which might have nothing to do with the true value of the product or service. These two conditions and the many other factors cause consumers to act as if they were ignorant. Economists call this “consumer” ignorance. In politics, another crucial aspect of impact on consumer choices, costs, expenses, prices and supplies one quote (by Adolf Hitler) stands out above the many other notable statements.

“How fortunate for governments that the people they administer don’t think.”

In the USA at the point of publication there were over 5,000 acute care hospitals, some private, some public and most somewhere in between. There were as many physical rehabilitation, substance abuse and other specialized hospitals; thousands of nursing homes; hundreds of thousands of ancillary and diagnostic programs, services and facilities; over 500,000 physicians, a million nurses, hundreds of thousands of physical, occupational, emotional, familial, and psychological therapists; thousands of dentists, podiatrists; chiropractics, and, opticians and hundreds of tens of thousands of prescription drug outlets. And there were in the background a newly burgeoning group of alternative practitioners, some more recognized that others; midwives and nutritionists as two examples, and a host of others all denigrated, ignored or avoided in the public and media eyes.

But one group, the medical doctors, with a corner on the marketplace of diagnosis and treatment of disease, illness and injury wanted to ensure that the older group of alternative practitioners and certainly the newer claimants to truth in wellness, health and prevention were eliminated as competitors.

Into this fray marched CCAHS’ publication on the RIGHT OF THE PUBLIC TO KNOW.

In the late 1960’s and early 1970’s a proposition to alleviate the then considered outrageous total national expense of $100,000,000,000 for medical care became a subtle vehicle to move the marketplace into a profit making sphere of the economy. The first calls for freedom of information arose in the political arena. People wanted to know what the government was doing, why and for how much. Government included oddly enough just about everyone and everything associated with government except elected officials. It was assumed that they were doing well and opposition faced political, social and economic retribution. But attacks on the underlings and the bureaucratic agencies were fair game. As the cry for openness, an nice term for honesty and truth in government increased, a secondary front opened where civic and consumer leaders were demanding an end to secrecy in private and quasi-public dealings in medical care, research, grants, funding and executive compensation.

The irony is that in New York the highest paid executive of the Associated Hospital Services of New York (aka as Blue Cross, New York City) in 1968 made all of $75,000 as his annual salary. His top Vice President made the astronomical sum of $50,000. Neither had a golden parachute, stock in Blue Cross (there was none to be had as a non-profit, regulated hospital insurer), profit sharing (there was no distribution of excess funds during the surplus part of the rate structure cycle), or extraordinary medical or retirement benefits. Most hospital executives made even less. And the average primary practice medical doctor after expenses made even less. Despite all their failings somewhere in the mix, the environment and their thinking was at least a bit more than lip service to the myth that medical care should be accessible to all at a reasonable, affordable price and that implied that consumers would have enough information to make rational choices.

However, there were so many pieces of information hidden from the public that the cry for complete transparency in today’s lingo and full disclosure then had validity. The hook to force open access to information where the demand for openness could be effective was the fact that most hospitals, medical doctors and other practitioners were heavily dependent on government funds to survive and therefore somehow obliged to explain their costs and quality. The other pressure point was the then recent freedom of information laws that required government to do likewise. The main sources were Medicare, Medicaid, Workers’ Compensation, special interest research and educational grants, general tax support or exemption and special benefits.

Initial calls for information were about gaining access to gross data and not necessarily data specific to an individual. The publication provided ways and legal basis for requesting and if necessary taking legal action to force compliance with requests.

The industry locked ranks to avoid, delay and minimize any obligations to disclose information necessary to make educated choices about policy and personal medical care. One often used argument was that disclosure would violate individual rights to privacy.

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