The Healthcare Breakdown: From Origins to the Present-Day Challenges

Ben H.

Hatched by Ben H.

Sep 25, 2023

3 min read


The Healthcare Breakdown: From Origins to the Present-Day Challenges


In this article, we will delve into the origins of health insurance and how it has evolved over time, leading to the challenges we face in the present day. From the humble beginnings of the Baylor Health Plan to the current issues surrounding healthcare coverage, we will explore the key factors that have shaped the system.

Origins of Health Insurance:

Our journey begins in 1929 in a small town called Dallas, Texas. Justin Ford Kimball, the astute vice president of Baylor Hospital, noticed a troubling trend during the depression era. Revenue and admissions were down, while unpaid bills were on the rise. To address this, Kimball devised the Baylor Health Plan, offering 21-day hospital stays for $0.50 per month. This plan laid the foundation for our modern health insurance system.

The Birth of Blue Cross and Blue Shield:

Kimball's innovative approach paved the way for the establishment of Blue Cross and Blue Shield, which provided hospital and medical coverage, respectively. These organizations played a crucial role in expanding health insurance coverage across the United States. By 1950, 50% of Americans had employer-sponsored health insurance, and within a decade, the figure rose to 66%.

Link to Labor Conditions and Employer-Sponsored Health Insurance:

The Stabilization Act of 1942, which froze wages, created an opportunity for large companies to attract talent through health insurance benefits. As wages remained stagnant, employers utilized health coverage as a means to lure workers and ensure their loyalty. This connection between employment and health coverage, however, has had implications that still persist today.

The Downfall of Employment-Based Health Coverage:

While profit is not inherently bad, the current system of leveraging legal and statutory mechanisms to generate excessive profits is a cause for concern. Employers spend around $1.2 trillion on healthcare annually, further entangling workers' healthcare access with their employment. This dependency limits workers' options and leaves them vulnerable to poor treatment by employers.

The Need for Decoupling Health Coverage from Employment:

To foster a strong economy and support workers, it is crucial to decouple health coverage from employment. This would eliminate the unfair shackles that force individuals to stay in unfavorable job conditions solely for the sake of healthcare access. The artificially inflated cost of healthcare exacerbates this problem, making it increasingly challenging for individuals to navigate the system.

Actionable Advice:

  • 1. Advocate for Universal Healthcare: Push for comprehensive healthcare reform that ensures every individual has access to affordable and quality healthcare, regardless of their employment status.
  • 2. Support Alternative Models: Explore alternative models of health coverage, such as community-based cooperatives or state-run programs, as potential solutions to the current challenges.
  • 3. Promote Price Transparency: Advocate for greater price transparency in the healthcare industry, enabling individuals to make informed decisions and hold providers accountable for their pricing practices.


The origins of health insurance can be traced back to innovative solutions for revenue and collections in the healthcare industry. However, the current system has become convoluted, leaving individuals at the mercy of their employers for healthcare access. To overcome these challenges, it is essential to advocate for comprehensive reform, explore alternative models, and promote price transparency. By addressing these issues, we can work towards a healthcare system that prioritizes the well-being of individuals over profit.

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