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ARTICLE |

Paying for Health Care

Thomas Bodenheimer, MD, MPH; Kevin Grumbach, MD
JAMA. 1994;272(8):634-639. doi:10.1001/jama.1994.03520080076049.
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At the center of the debate over health system reform in the United States lies the decision of how to pay for health care. Health care financing in the United States evolved to its current state as a series of social interventions. Each intervention solved a problem but in turn created its own problems requiring further intervention. In this article, we discuss the historical process of health care financing as solution-creating-new-problem-requiring-new-solution. The four basic modes of paying for health care are out-of-pocket payment, individual private insurance, employment-based group private insurance, and government financing. These four modes can be viewed both as an historical progression and as a categorization of current health care financing (Table).

Out-of-Pocket Payments  Fred Farmer broke his leg in 1892. His son ran 4 miles to get the doctor who came to the farm to splint the leg. Fred gave the doctor a couple of chickens to

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