An American Sickness: How Healthcare Became Big Business and How You Can Take It Back

by Elisabeth Rosenthal

The archetype for today’s insurance plans was developed at Baylor University Medical Center in Dallas, Texas (now part of Baylor Scott & White Health, since it merged with another health system in 2013, forming a giant healthcare conglomerate), which was founded in 1903 in a fourteen-room mansion by the Baptist Church. A devout cattleman provided the initial $50,000 in funding to open what was then called the Texas Baptist Memorial Sanitarium, “a great humanitarian hospital.” By the 1920s, more and more Texans were coming for treatment. When Justin Ford Kimball, a lawyer who was Baylor’s vice president, found out that the hospital was carrying a huge number of unpaid bills, he offered the local teachers’ union a deal. For $6 a year, or 50 cents a month, teachers who subscribed were entitled to a twenty-one-day stay in the hospital, all costs included. But there was a deductible. The “insurance” took effect after a week and covered the full costs of hospitalization, $5 a day, which is about $105 in 2016 dollars.