The Medicare act, which became effective Dec. 7, 1956, provided that dependent spouses and children of members of the uniformed services on active duty were henceforth to receive certain specified medical care as a legal right. Beneficiaries were to choose freely between service hospitals and civilian physicians and hospitals. The result was to increase the 415,000 dependents who received in-hospital care in service hospitals in 1956 to a total of nearly 700,000 who received care in service hospitals and civilian hospitals combined in 1957 and 1958. This over-all increase was accompanied by a decrease of service hospital admissions to a point below their optimum operating level. The program was restricted, effective Oct. 1, 1958, to stay within budget limits and comply with the desire of Congress that service hospitals be used at optimum capacity. The restrictions have operated so as to achieve optimum levels in service hospitals, but there has also resulted a substantial decrease in the over-all number of dependents receiving care. The goal of the program is to have the total amount of care returned to a proper level.
Wergeland FL. THE MEDICARE PROGRAM-PROBLEMS IN PERSPECTIVE. JAMA. 1959;171(11):1485–1487. doi:10.1001/jama.1959.03010290043010
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