How Government Solved the Health Care Crisis – Animation
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How Government Solved the Health Care Crisis – Animation


Today, the United States faces a health care
crisis. Medical costs are too high and health insurance
is out of reach for the poor. The cure is obvious to nearly everybody: government
must step in to solve the problem. Eighty years ago, Americans were also told
that their nation was facing a health care crisis. Back then, the complaint was that medical
costs were too low, and that health insurance was too accessible. But in that era, too, government stepped forward
to solve the problem. And boy, did they solve it! In the late 19th and early 20th centuries,
one of the primary sources of health care and health insurance for the working poor
in Britain, Australia, and the United States, was the fraternal society. Fraternal societies (or “friendly societies”
in Britain and Australia) were voluntary mutual-aid associations. Over one-quarter of all American adults were
members of fraternal societies in 1920. Fraternal societies were particularly popular
among blacks and immigrants. A fraternal society was a group of working-class
people who formed an association and paid monthly fees into the association’s fund;
individual members would then be able to draw on the pooled resources in times of need. There were a great many societies to choose
from. Their most commonly offered services were
life insurance, disability insurance, and lodge practice. Lodge practice meant that the lodge would
retain a doctor to provide medical care to its members. Members would pay a yearly fee and then call
on the doctor’s services as needed. If members were unhappy with the doctor, the
contract might not be renewed. Most remarkable was the low cost at which
these medical services were provided. At the turn of the century an average worker’s
daily wage would pay for a year’s worth of medical care, much cheaper than on the regular
market. Yet licensed physicians competed vigorously
for lodge contracts, perhaps because of the security they offered. This competition kept members’ costs low. The response of the medical establishment,
both in America and in Britain, was one of outrage; Many saw it as a blow to the dignity
of the profession that trained physicians should be eagerly bidding for the chance to
serve lower-class tradesmen. Such low fees, many doctors complained, were
bankrupting the medical profession. Socially inferior people were setting physicians’
fees and sitting in judgment to determine whether their services had been satisfactory! They demanded that the government must do
something. And so it did. In Britain, State-financed medical care crowded
out lodge practice; A working-class person, now being forced to pay taxes for “free” health
care, was very unlikely to also pay for health care through the fraternal societies. In America, a similar process unfolded. Medical associations like the AMA had been
granted the political privilege of control over the medical licensure procedure. The associations used this power to impose
sanctions on doctors who dared to sign lodge practice contracts. Doctors could be denied the use of hospital
facilities or expelled from the association. The effort to destroy lodge practice even
extended to denying emergency medical care to lodge members. The AMA also made the requirements for getting
a medical license much stricter, ostensibly to raise the quality of medical care. But the result was that the vast pool of physicians
bidding for lodge practice contracts disappeared. This artificial restriction on the supply
of medical care dramatically reduced competition, which resulted in higher prices. This hit the working-class lodge members especially
hard. The final blow to lodge practice was struck
by the fraternal societies themselves. The National Fraternal Congress successfully
lobbied government for laws setting a legal minimum on membership fees that fraternal
societies could charge. Perhaps the congress did so hoping to benefit
from cartel pricing, but thanks to the higher membership fees the societies ended up losing
even more members to industrial insurance firms and the welfare state, which eventually
replaced them. Collectively, government interventions destroyed
the mutual aid health care system and with it, the availability of low-cost healthcare
to the working poor. We can only guess at how lodge practice would
have developed if had been allowed to continue, and what innovations we’ve missed out on
since competition in the medical world was hobbled. One thing does seem clear, we have a crisis
in health care costs today because government ‘solved’ the last one.

About Bill McCormick

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81 thoughts on “How Government Solved the Health Care Crisis – Animation

  1. Government in a nutshell: Markets are working too well, and you want special, monopoly privilege? Sure thing! Just pay us a kickback…

  2. This is definitely something they never talked about in my lower and higher education courses.

    It runs completely against the fallacy that the poor were completely and utterly without any insurance until the government spoon-fed it to them.

  3. This is complete nonsense

    http://www.theatlantic.com/politics/archive/2014/03/the-conservative-myth-of-a-social-safety-net-built-on-charity/284552/

    As this article points out, these societies covered far from everyone. They only existed in densely populated cities, industrial areas, and ethnic and immigrant communities, and In some states, only 30% of workers were covered. They generally only provided insurance to working men, so women could not gain insurance, and there were age limits (generally over 45) and exclusions of sick people. They also tended to provide partial insurance and hire substandard doctors.

    Also, there's a huge question as to whether this would even be possible today due to the enormous costs of healthcare brought by technological advances.

  4. Can you cite the sources for this video? My father is a physician and he questioned whether the AMA had anything to do with medical licensing at any point in history. Need some citations up in here!

  5. Single payer works quite well thank you,, Australia, Germaby, France et al and here in Canada. Why not in the US? Big Med Big Phsrma Big Insce and Big HMOsand hospitals demand their interests/profits come ahead of Health Care FOR EVERYONE ‼️‼️ What part of that is too complex to understand⁉️⁉️

  6. 1910: PHYSICIAN CONDEMNS PRACTICE FOR LODGES http://query.nytimes.com/mem/archive-free/pdf?_r=2&res=9507E2D71F39E333A25755C0A9679D946196D6CF

  7. Well since our government is not actually a government but rather a CORPORATION in biz to make profit, it makes sense they would help set up sweet money making deals with their NWO ex-classmates and frat brothers in the health and ins industries… I do pray daily they all die so the rest of us can have our peace, freedom and prosperity back… It's all I can do.

  8. Wow, what an important video!! Very few people (including me, a retired MD) knew about this. Sounds right to me!

  9. When I did GCSE, British secondary education, history classes our entire feed on the NHS was "first there was nothing and then someone came up with the NHS". Didn't hear a single thing about lodges. Amazing how the government will just lie to its people like this.

  10. The American terrorist government has never solved anything that benefited the people they pander to corporations and the wealthy and there will never be a solution to the health care issue in cunt fucking America just as in so many other areas like say cable TV.internet services in other countries like China or Japan the internet is way faster and cost a 10th of what it does in cunt fucking America why is it faster because the companies slow it down and refuse to invest the money to install the proper hardware to provide the services why because the corporation got together and divided up the country so each company had an area no competition, no need to invest in better services and higher cost for shit services, a illegal monopoly that to this day the terrorist American government has done nothing about.
    See the terrorist american government is not by the people for the people it is for corporations and the wealthy you do not matter you are a necessary evil to them as you are to the corporations you work for that now that there are no unions to stand for you thanks to propaganda and government acts of terror so now you work for slave wages and the government gives these billion dollar corporations millions of your tax dollars to compensate them for your employment and then also provides welfare help to you because you cannot live in cunt fucking america on the earning they do give you.
    It is simple the terrorist American government will not do anything that will solve the medical crisis because that would mean going against the corporations and the rich that own the businesses and as we see in history and today they do not stop these entities from stealing, murdering, and corrupting they back it.

  11. Is there a list already made of all the healthcare laws in place that have to do with this? At the very least it would give us an idea of what to repeal/undo.

    I know Trump promised to undo regulations on healthcare so maybe there's a chance it could be done. It's worth a shot.

    I can't believe this video doesn't have more views though.

  12. 1) This explanation is overly simplistic. You covered health care for some of the working class, what about people on either side of the income band that was covered by the fraternal societies?
    2) It reaches back almost 100 years to make the case that government is bad. Oddly enough, a few years later government was good when FDR's new deal rescued everyone from the depths of the Great Depression.
    3) The rest of the industrialized world has moved on to single-payer, government sponsored health care. In the US, we pay far more per capita for our health care yet we get worse outcomes. And that was happening before the ACA.
    How about we make health care non-profit again? Take the insurance companies out of the loop, reduce the patent protections we give to big pharma, etc.

  13. This video keeps talking about the turn of the century. When life expectancy was in the 40s? When hospitals were dirty and had virtually no technology, antibiotics hadn't even been developed yet, most modern drugs didn't exist, we didn't even know how most diseases were caused, and doctors were still doing things like bloodletting and enemas?

    Yeah, I'm not surprised health care costs were low. lol.

  14. Interesting quote from the Atlantic:

    "But there were a few major problems with these societies. The first was that they were regionally segregated and isolated. These forms of insurance didn’t exist in places without dense cities, industry, or deep ethnic and immigrant communities. Even in states with large cities and thriving industries like California and New York, only 30 percent of workers had some sort of health-care coverage through fraternal methods. Moreover, the programs were fragmented and provided only partial insurance.

    Also, these were programs designed for working men—for the most part, they did not cover women. Health insurance contracts, for example, were explicit in not providing for coverage of pregnancy, childbirth, or child care (seen as women’s responsibilities at the time). The doctors the lodges hired were often seen as providing substandard care. And most of these societies had age limits. Those over 45 were generally ruled out, and those that weren’t were charged higher rates. Those already in poor health were excluded through medical examinations. There were maximum and minimum limits on benefits, and as a result, long-term disability wasn’t covered. As late as 1930, old-age benefits represented just 2.3 percent of social benefits given out by fraternal organizations. Thus, though they were pervasive throughout this time period, they never provided more than a sliver of actual, robust social insurance. "

  15. Are you planning on making a video on anti trust? I think it is one of the biggest myths that anti trust broke up monopolies

  16. They should've mentioned that Obamacare specifically banned any new fraternities from paying for the medical expenses of their members. Preexisting fraternities which already offered that (Shriners and the like) were allowed to continue doing so. My pre-Obamacare monthly insurance cost was under $60 with a $2,500 deductible and it was almost $500 a month for a $3,500 deductible the last time I checked. The politicians knew that costs would dramatically surge after socialized healthcare. Because the lawmakers knew that middle class people made too little to get government assistance and couldn't afford the jump, they cut off the two logical alternatives available to the middle class. They taxed people who couldn't afford insurance and they made it illegal to form a mutual aid society. If it weren't for Obamacare specifically banning medical assistance through fraternities then we would've seen an enormous resurgence of them.

  17. I would love it if you could also do a similar video for education. Stefan Molyneux talked about it in his Death of the West video here: https://youtu.be/6_R4ZOzr-f4?t=18m25s

    It would make it easier to spread the message on the topic.

  18. Excellent video!!! Thank you for such a good presentation. We need more videos like this to refute statist nonsense. Statism is a cancer in our society. The truth of laissez-faire liberty is the cure.

  19. This is a joke, right?
    Medicine was simply just less good back then, hence much cheaper.
    The A.M.A. standards saved lives.
    Back in the 19th century, doctors were still into bloodletting a lot of the time.
    Not to mention that they hadn`t figured out how to not give babies heroin, or that putting poisonous shit into food was a bad idea.
    https://curiosity.com/topics/the-poison-squad-ate-questionable-foods-to-keep-people-safe-curiosity/

  20. This description of lodges sound a lot like how unions developed here, and the systems which carried over into the welfare state and current insurance.

  21. Good video. Never heard of lodges. Kind of reminds me of unions. Is that fair? Or way off the mark? I prefer free market solutions, over government mandated programs. Both seem to have flaws, but governments seem to breed corruption and stupidity, and oft times simply attracts power hungry, self serving, greedy individuals; and thus, a kakistocracy.

  22. This video asserts that Australia had a strong fraternal society medical support system. This article supports this assertion. http://www.takver.com/history/guoof1.htm It seems fraternal societies even got together to supply hospitals and ambulances. This is history the government would prefer you didn't know about. I can find no mention of medical services offered through fraternal societies in any Australian government documentation. Below are a few sources.

    http://www.nma.gov.au/online_features/defining_moments/featured/medicare
    https://www.islhd.health.nsw.gov.au/Services/Public_Health/history.asp
    http://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/1301.0~2012~Main%20Features~The%20history%20of%20co-operatives%20in%20Australia~288

  23. when will people understand government is the cause not the answer to our healthcare problems, get government and insurance companies out of our healthcare and the problems end

  24. What the AMA did with government is called Rent Seeking. It should be a capital crime.

    Government is malevolent, it is a disease masquerading as its own cure and it is malignant.

  25. One of the source's links

    https://www.researchgate.net/profile/Albert_Loan/publication/235899483_Institutional_Bases_of_the_Spontaneous_Order_Surety_and_Assurance/links/09e41513f34fe999a9000000/Institutional-Bases-of-the-Spontaneous-Order-Surety-and-Assurance.pdf

  26. A similar healthcare system is currently on the rise in the US. Its called Direct-Primary Care, and so long as we can keep the leftists at bay for a few more years, i expect it's going to replace our current healthcare model soon. If only the media wouldnt bury every mention about it…

  27. This is so completely Orwellian it almost hard to believe it actually happened. Even worse, our government acts like it never existed. 1984 has become reality.

  28. I wonder how much taxes are being collected from big pharmacy as well as insurance… if the economy handled it! This problem would never have existed… doctors can set there OWN pricing and quality of care…

  29. Ah, just another case of:
    – People want some service (healthcare) and are willing to pay for it.
    – Other people (doctors) are willing to provide that service for a competitive price.
    – …
    – Government steps in.

    By the way, back in the middle ages, healthcare for the poor was provided for free – hospitals were funded by the rich.
    Sure, healthcare services provided were really bad, in many cases all they offered was a place to sleep and maybe some food. And sometimes they even expected the sick to work, if they were capable of doing so. Essentially, hospitals existed so that sick people would be kept away from the healthy people. This is why the rich were so eager to pay for these hospitals. They didn't want sick people to spread disease, and they didn't want to see them in the streets. You could even say it was a prison for the sick.
    BUT, the service was free, and the rich payed for it willingly, so that's still something to consider.

    … also, it was good for the public image of the rich. Now everyone could see how good they are, since they care for their sick slaves.

  30. How much would you expect to pay for an ER visit and stitches if you sliced your hand open, in 1950? Take a guess… https://twitter.com/kristenterlizzi/status/920735466437185539?s=20

  31. Government is designed and can do only 3 things efficiently : protect people against internal and external violence (army and police), and insure people follow contracts (courts). Anything else they get involved in (and sadly, now its almost everything, regardless of country) is highly inefficient, expensive, useless and dysfunctional. But hey at least they have the education system to teach everyone from an early age that only the government can save them from any evil, and the alternative is anarchy and/or evil, evil capitalists (of which there isn't really any historical example of).

  32. 0:22 I had to rewind that because I thought I heard wrong

    "There is a crisis, things here are too good. The free market has created a standard of living that is too high. We need government to fix that"

    I shouldn't be surprised at this point but the level that government holds back humanity is astonishing

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