Managed care was started as early as the 1900’s, the cited pioneer of the structured system of care that is known today as “Managed Care” is Dr. Michael Shadid. His goal was to help meet the health care needs of a certain groups of people. Such as: rural residents, workers and families in the lumber, mining and railroad industries; the enrollees paid a set fee to physicians who then delivered care under the terms of their agreement. By 1929 the Los Angeles department of water and power contracted with Drs Ronald Ross and H. Clifford Loos to provide service for almost 2,000 workers along with their families. In a about a few years Ross-Loos clinic enrolled 12,000 workers with an additional 25,000 dependents costing 2.69 per subscriber per month.
Workers compensation was started in 1933, in Los Angeles by Dr. Sidney Garfield and several other associates. They were providing medical care on a prepaid basis for approximately 5,000 workers on a construction project. How it worked was, the insurance companies would pay Dr. Garfield a percentage of their premium income to take care of accident cases and would pay 5 cents out of their pay for other medical services. A man by the name of Henry Kaiser was so impressed of how Garfield’s program was coming about, during World War II Henry Kaiser started two programs on the west coast to provide comprehensive health services to workers in the steel mills and his shipyards. By the time the war was over Kaiser had a good idea to reorganize medical care and provide prepaid and comprehensive services at reasonable prices to the public. It was called the “Kaiser Permanente health plan” it had a large growing network of clinics and hospitals and almost a half a million Americans enrolled.
When the 1940’s rolled around there were several of prepaid group practices...