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August 14, 1987

The Health Care Financing Administration

JAMA. 1987;258(6):822. doi:10.1001/jama.1987.03400060098038

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When the Medicare and Medicaid programs were enacted in the mid-1960s, the intention was to assist certain people in need without interfering with the private practice of medicine. What legislators, citizens, and physicians wanted was a single medical system for everyone. What they were building on was a voluntary system, barely three decades old, which was mainly managed at the community level.

The various Blue Cross and Blue Shield plans across the nation were the major intermediaries in those days and were perceived as doing a commendable job of managing the system. Costs were moderate, services were acceptable, and quality of care was rarely questioned.

The federal programs changed all that. By removing cost constraints for the care of the elderly, the programs additionally removed financial restraints that had been felt by both family and physicians. What could be done often was done, and in the process not only did