Medicine. The American Economy: A Historical Encyclopedia

Practice of curing or preventing illnesses that substantially
influences the economics of the United States in that more
people are living longer lives and costs for their care are increasing.
The federal government got involved in the field of medicine in earnest for the first time after the Civil War in 1865.
U.S. Army surgeons, faced with a staggering number of casualties, had only crude equipment and medicines to work with
during the war. After the war ended, medicine assumed
greater importance. Medical schools taught their students the

latest treatments and procedures, and the practice of medicine was restricted to individuals who had completed formal
training. The American Medical Association (AMA),
founded in 1847, sought to standardize training and required
physicians to be licensed. But it was not until the SpanishAmerican War in 1898 that breakthroughs in research netted
substantial results, especially in the area of germ theory. The
discovery of microscopic organisms opened up new avenues
of research. The government has funded much of the medical
research since the Spanish-American War.
At the beginning of the twentieth century, army surgeon
Walter Reed and his medical team, funded by the U.S. Army
and the federal government, discovered the cause of yellow
fever—the mosquito. Government funding during the two
world wars yielded a significant breakthrough in the discovery of penicillin. Throughout the cold war, the United States
suspended support of research into medicine and the life sciences for the most part, resuming it when communism in the
Soviet Union and Eastern Europe collapsed. From the 1960s
throughout the 1990s, the percentage of federal dollars devoted to medical research has continued to increase, one reason being the spread of AIDS in the United States. By the late
1990s about 9 percent of the federal government’s R&D
budget was spent on drugs and medicine.
In addition to funding research programs, Congress also
established the Department of Health and Human Services
(HHS). With a 2002 budget of $460 billion and more than
65,000 employees, the HHS is the largest health care provider
in the United States. Besides administering the Medicare programs for the elderly and the Medicaid program for the poor,
the HHS also conducts medical and social science research,
seeks to prevent the spread of infectious diseases through its
immunization services, works to ensure food and drug safety,
administers maternal and infant health programs, oversees
the Head Start education of preschool students, provides inhome meals to elderly citizens, deals with substance abuse
and treatment, and addresses child abuse, domestic violence,
and mental health.
The high cost of medical insurance combined with the
large number of uninsured Americans has sparked a debate
over the development of a national health care system. The
implementation of national insurance began in the mid-
1960s with the creation of Medicare and Medicaid. During
the administration of President Bill Clinton, proponents of a
national health care system, in an effort spearheaded by first
lady Hillary Rodham Clinton, attempted to pass legislation
that would guarantee coverage for all Americans. The attempt failed, but the issue continues to be raised in Congress.
—Cynthia Clark Northrup
References
Gabe, Jonathan, David Kelleher, and Gareth Williams, eds.
Challenging Medicine. New York: Routledge, 1994.
Huefner, Robert P., and Margaret P. Battin, eds.
Changing to
National Health Care: Ethical and Policy Issues.
Salt Lake
City: University of Utah Press, 1992.

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