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

by Elisabeth Rosenthal

Massachusetts General Hospital started the first anesthesia department in the United States in 1936.

In 1993, before the Blues went for-profit, insurers spent 95 cents out of every dollar of premiums on medical care, which is called their “medical loss ratio.” To increase profits, all insurers, regardless of their tax status, have been spending less on care in recent years and more on activities like marketing, lobbying, administration, and the paying out of dividends. The average medical loss ratio is now closer to 80 percent.

Medicare uses 98 percent of its funding for healthcare and only 2 percent for administration.

From 1997 to 2012, the cost of hospital services grew 149 percent, while the cost of physician

The median cost to a hospital for each full-time resident in 2013 was $134,803. That includes a salary of between $50,000 and $80,000. Federal support translates into about $100,000 per resident per year. Researchers have calculated that the value of the work each resident performs annually is $232,726. Even without any subsidy having residents is a better than break-even deal.