Healthcare Economics

Circumstances that shaped early US healthcare
– the dawn of professional authority – 1850-1930


This is the third article in the series by Arby Khan – The Importance of Determining ‘Value’ in Healthcare – and will continue to describe the historical forces that shaped the beginning of healthcare in the US (1850-1930). It is critical for countries in the Middle East that are currently developing their healthcare infrastructure to understand these forces because these are the very forces that shaped the current US healthcare system that is not getting “value” for the amount of resources expended[1, 2]. The hope is that these countries in the Middle East – many imitating parts, or all, of the US system – can avoid its shortcomings.

Summary of previous article in the series

Medicine in 1760-1850 – even though armed with long, complicated, Latin words and hard to understand diagnoses – did not produce any significant cures. It is hardly surprising, then, that people mistrusted professional doctors and looked elsewhere for answers. Naturally, alternative forms of medicine – domestic medicine and lay or popular medicine – flourished and even commanded equal respect. There was, of course, some overlap between all three forms of medicine but they existed mostly as distinct entities. Domestic medicine was dominated by the American mother who was charged with taking care of and healing her family. Professional medicine was more confusing. There were three ways one could become a doctor – apprenticeship, medical school, or licensure - and neither one had any strict standards of required knowledge or skill. The few requirements that did exist were never enforced. Lay or popular medicine essentially consisted of “specialists” such as midwives, bonesetters, and inoculators, and “generalists”, such as the botanics and nostrum vendors, who treated all ailments. All three types of medicine wielded essentially equal influence and treated an equal number of patients. This state of affairs in conjunction with poor outcomes in medicine and surgery resulted in healers generally being held in low esteem. Efforts by healers to bolster this esteem failed mostly because there was no real science, methodology, standards, or results to recommend them. This was soon to change, however, and the invention of the stethoscope, the discovery of anesthesia, microbes, and antisepsis, and the evolution of surgical techniques, all in the late 1800s and early 1900s, would eventually elevate the physician to a respectable status.


As professions have arisen and evolved in society, their success depends mainly on a source of true authority. As we have seen in the previous article, medicine in the period of 1760-1850 had no convincing source of authority – technical, organizational, or political. Such lack of authority resulted in physicians – and the profession in general – lacking collective power. The pre-requisite for such collective power is to have, as a starting point, some criteria dictating membership in the profession and a standard set of rules and processes. However, there was significant mutual hostility, competition, differences in economic interests, and sectarian antagonism amongst the physicians. Thus internally divided, physicians were incapable of investing in any endeavors that would collectively move the profession forward [2,3]. A telling quote by Dr. Samuel Gross, a famous surgeon, tells it all – “Every man seemed to live in and for himself. Hardly any two could be found willing to meet each other in consultation. Jealousy and ill-feeling were the order of the day.” All this was soon to change, however, and the period of 1850-1930 brought technical advances and discoveries to medicine, brought cohesion amongst the practitioners, and lastly brought comprehensive legal recognition of the art and science of medicine.

Creation of Uniformly High Standards and Effective Medical Societies

The impetus for the formation of the American Medical Association (AMA), one of the many important stakeholders that shaped the future of medicine in the US, came from physicians who were in between the spectrum of elite and less educated physicians. Neither the top ranks of physicians nor the bottom had a strong interest in effective medical licensing. The lesser educated physicians feared the laws would be used to exclude them. The elite, on the other hand, stood to gain very little from licensing because their practices, and consequently their status and income, were essentially guaranteed. Thus it came to be that in 1846, in New York, the gathering of “young men who have not yet acquired fame” and of “the younger, more active, and perhaps, more ambitious members of the profession” became the first meeting of what would later become the AMA. Its chief organizer was only twenty-nine years old. At that time, the AMA primarily aimed to raise and standardize the requirements for medical degrees[3]. The repealing of licensing statutes by the states (described in the previous article[2]) forced the AMA to distrust the state legislatures and thus turn inwards and rely on their own system of regulation. This is an important point because this, in the subsequent century, led the AMA to continue to distrust the government and oppose them – many times just because they had done so in the past and it was engrained within the AMA. This culture of opposition to the government was eventually instrumental in fiercely opposing national healthcare insurance. This is an important lesson for countries in the Middle East because if individual organizations shape the structure of healthcare they will do so to benefit themselves and not the nation’s health as a whole. Whereas it is important for all stakeholders in medicine to have a voice, no one group should be allowed to dominate the profession to the point where they nudge it in a direction contrary to the needs of the country.

A significant change in the organization and stature of medicine in the US started in 1873 in the form of a $7 million dollar grant from the Baltimore merchant named Johns Hopkins. It is difficult to attribute such a feat to one individual or event but, as far as that is possible, it can be attributed to Johns Hopkins. Of course, institutions such as Harvard and University of Pennsylvania had attempted to further formalize and lengthen medical training to three years with some success. However, the most radical departure from the status quo was possible at Johns Hopkins University because of the independent source of finances – that is, financing the school was not dependent upon fees from medical students. Johns Hopkins moved scientific research and clinical instruction to center stage and established a meaningful relationship between the two. Johns Hopkins also increased the length of medical training to four years and it was also at Johns Hopkins that the concept of advanced training i.e. residency programs, was born. The influence of Johns Hopkins’ brand of medicine extended far beyond Baltimore, Maryland, as it sent its graduates all over the country in the ensuing years[3, 4].

Another pivotal milestone in the consolidation and standardization of medical education was the now famous Flexner report. The AMA had already begun the process of ranking medical schools and had deemed many to be quite subpar. However, professional courtesy and ethics prevented the AMA from disclosing the names of the failing medical schools. Instead, the AMA invited an outside group, the Carnegie foundation for the Advancement of Teaching to conduct an investigation. The foundation agreed and chose for the task a young educator, Abraham Flexner. Flexner visited every one of the medical schools in the US and his severe judgments far exceeded the hopes of even the most ardent AMA members. He was much more severe in his judgment of particular institutions than the AMA had been in any of their evaluations. He clearly showed that claims made by the weaker, mostly proprietary schools in their catalogues were patently false. This scathing report, led, eventually, to a significant consolidation of medical schools and physician training and to the Johns Hopkins model of medical education and training being adopted by all the medical schools. By 1915, the number of medical schools had fallen from 131 to 95. Eventually, only 70 schools survived[3].

In several countries in the Middle East, finances, by and large, are not an impeding factor in the development of healthcare infrastructure. Thus, such countries remain free from such pressure. However, they are susceptible to “pressure of expertise”. As waves of foreign hospital systems come to the Middle East to help set up infrastructure and give advice, individual countries need to be careful what parts of the system are applicable to their country. As a corollary, they should be willing to make changes, radical if necessary, to the existing models of healthcare delivery so that they function optimally in their local environment. Sometimes only radical changes are the best ones – however these are the very changes that are difficult to make. Making such decisions, however, is relatively easier when a country or an institution has financial independence.

Technical Advances

In addition to the creation of standardized and high quality medical training programs and medical societies (AMA, etc.), which was one of the several events that led to the legitimization and effectiveness of the medical profession, there were significant advances in the science of medicine which allowed physicians to actually heal the suffering patient. The reader will recall, from the previous article[2], that mortality and morbidity of any medical procedure was so high, even up to the early 1900s, that physicians commanded essentially no respect and inspired little faith.

Once again, no one event in the evolution of medical science led to improved outcomes – rather, valuable advances arose only from valuable antecedents. The preliminary stages, and the basics, were laid down by people such as Hippocrates (medical ethics), Galen (anatomy and the science of direct observation), Harvey (circulation of the blood), Vesalius (definitive human anatomy), Pare (early advances in surgical techniques), Morgagni (the anatomical concept of disease), and Jenner (discovery of vaccination)[5].

The critical mass of knowledge necessary to create the truly effective medical practitioner was somewhat, but not quite, complete by the early 1800s. It was during the period 1800 – 1930 that the remaining pieces were discovered and put together. The stethoscope, which led to direct observation of the live human body, was developed by Rene Laennec in 1816. This was indeed revolutionary and the way in which the stethoscope was discovered is captivating and is documented in Laennec’s own words[5]:

In 1816, I was consulted by a young woman laboring under general symptoms of diseased heart, and in whose case percussion and the application of the hand were of little avail on account of the great degree of fatness. The other method just mentioned (the application of the ear to the front of the chest) being rendered inadmissible by the age and sex of the patient, I happened to recollect a simple and well-known fact in acoustics, and fancied at the same time, that it might be turned to some use on the present occasion. The fact I allude to is the augmented impression of sound when conveyed thought certain solid bodies, as when we hear the scratch of a pin at one end of a piece of wood, on applying our ear to the other. Immediately, on this suggestion, I rolled a quire of paper into a sort of cylinder and applied one end of it to the region of the heart and the other to my ear, and was not a little surprised and pleased, to find that I could thereby perceive the action of the heart in a manner much more clear and distinct than I had ever been able to do by the immediate application of the ear. From this moment I imagined that the circumstance might furnish means for enabling us to ascertain the character, not only of the action of the heart, but of every species of sound produced by the motion of all the thoracic viscera.

Similar intriguing moments accompanied many discoveries in medicine, but relating these stories is beyond the scope of this article (they are, however, fascinating and the reader is directed to reference number 5 for an excellent review of memorable moments in medical history).

Following discovery of the stethoscope there were many other advances. The finding that bacteria caused infections and that simple hygiene and prevention of bacterial transmission from one patient to another prevented the majority of infections was a seminal event in the evolution of medicine. Three people can be credited for making this observation – Ignaz Semmelweis (circa 1847), Louis Pasteur (circa 1856), and of course Joseph Lister (circa 1867)[6]. The next discovery, arguably the most significant in a long time and certainly the first major American contribution to the world of medicine, was anesthesia. There is much controversy about who was the first to discover anesthesia but what is certain is that the birth of anesthesia occurred when William Thomas Green Morton demonstrated the effectiveness of ether at the Massachusetts General Hospital in Boston on October 16, 1848[7]. Putting all these discoveries together for the world of surgery was William Halsted, one of the pioneers of surgery. It is easy to imagine how awareness that bacteria caused disease, improvements in surgical techniques, and the availability of anesthesia would rapidly come together to create miraculous improvements in surgical outcomes. It is about this time that American medicine emerged from the designation of “backwater of medicine” and took center stage in the advancement of the field.

The lesson learnt from history that discovery, or research, is pivotal to the advancement of science may sound like a cliché – but clichés persist because they illustrate a fundamental truth that usually should not be ignored. Countries in the Middle East are currently in the process of developing their clinical abilities and that is a sound approach. However, since many Middle Eastern countries today enjoy significant financial resources and advantages, it is reasonable for them to invest in research as In fact, Qatar has certainly taken this lesson to heart and is investing large amounts of surplus money into medical research and bringing it together with clinical medicine in a meaningful way8 – not very different from what Johns Hopkins University did in the early 1900s.

• To be continued…

(The second half of the third part of the series will be published in September- October 2012).

Arby Khan, MD, FACS, MBA is the Deputy National Director for Surgery for the United States Veterans Health Administration - which oversees 151 hospitals and more than 1000 outpatient clinics. Dr Khan is a regular contributor to Middle East Health. He has written on a range of subjects – such as Human Resources management in hospitals, Change Management in GCC hospitals, Brain Death and Hospital Resource Management and organ transplant- related legislation, among others – with a view to improving healthcare in the UAE and the wider region. He is a multi-organ Transplant Surgeon and Immunologist and has successfully started, from the ground up, two multiorgan transplantation programmes – one in the United States and one in Abu Dhabi. He is the author of many clinical and basic immunology papers, and has been educated, trained and employed variously at University of California - Berkeley, McGill University, University of California - San Francisco, Harvard Medical School, Yale University - Graduate School of Immunobiology, University of Pittsburgh - Starzl Transplantation Institute, University of Vermont - School of Medicine, and Columbia University (NY). He also holds an MBA, with Distinction, from London Business School.

– The views expressed in this article are those of the author and do not necessarily represent the views of the institutions for which Dr Khan has worked or currently works.



1. Khan, A., The Importance of determining ‘Value’ in Healthcare. Middle East Health, 2012(Jan-Feb).

2. Khan, A., Circumstances that Shaped Early US Healthcare - 1760-1850. Middle East Health, 2012(March-April): p. 54-59.

3. Starr, P., The Social Transformation of American Medicine1982: Basic Books.

4. Imber, G., Becoming a Surgeon, in Genius on the Edge - The Bizarre Double Life of Dr. William Stewart Halsted, G. Imber, Editor 2011, Kaplan Publishing: New York.

5. Nuland, S.B., Doctors - The Illustrated History of Medical Pioneers 1988, New York: Black Dog and Leventhal Publishers, Inc.

6. Nuland, S.B., The Germ Theory Before Germs - The Enigma of Ignac Semmelweis, in Doctors - The Illustrated History of Medical Pioneers, S.B. Nuland, Editor 1988, Black Dog and Levanthal Publishers, Inc: New York.

7. Nuland, S.B., Surgery Without Pain - The Origins of General Anesthesia, in Doctors - The Illustrated History of Medical Pioneers, S.B. Nuland, Editor 1988, Black Dog and Levanthal Publishers, Inc: New York.

8. Morris, R.A., A Vision of the Future Starts to Take Shape. Middle East Health, 2012. May-June: p. 32.

9. Starr, P., The Reconstitution of the Hospital, in The Social Transformation of American Medicine, P. Starr, Editor 1982, Basic Books.

10. Starr, P., The Triumph of Accomodation, in The Social Transformation of American Medicine, P. Starr, Editor 1982, Basic Books.

11. Starr, P., The Liberal Years, in The Social Transformation of American Medicine, P. Starr, Editor 1982, Basic Books.

12. Starr, P., The Consolidation of Authority 1850-1930, in The Social Transformation of American Medicine, P. Starr, Editor 1982, Basic Books.

13. Starr, P., The Boundaries of Public Health, in The Social Transformation of American Medicine, P. Starr, Editor 1982, Basic Books.

14. Starr, P., The Mirage of Reform, in The Social Transformation of American Medicine, P. Starr, Editor 1982, Basic Books.

15. Starr, P., Remedy and Reaction - The Peculiar American Struggle over Healthcare Reform 2011, New Haven, CT: Yale University Press.

16. Gorsky, M., Hospitals, Finance, and Health System Reform in Britain and the United States, c. 1910-1950: Historical Revisionism and Cross-National Comparison. Journal of Health Politics, Policy, and Law, 2012. 37(3).

Date of upload: 26th Jul 2012


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