So, how did we get this way? During World War II, wage and price controls prohibited pay increases for workers. To allow increases without repealing these controls, Congress exempted employer-sponsored group health insurance from controls and from taxation. This created a tax advantage for group health insurance, and it became almost universal by the mid-1960s.

With consumers not demanding competitive services (such as with auto insurance), the medical industry developed thousands of new treatments and drugs. Some of these were powerful, but others were not effective or economical. In any event, they were developed in the absence of a competitive market, and sold to corporate and insurance company executives, not to the American consumer.

Since 1960, U.S. healthcare costs have risen from $27 billion annually to over $2 trillion today, far exceeding the rate of inflation. The average length of employment has fallen from 25 years to only 4 years. Employers have little incentive to spend precious benefits dollars on preventive practices, the benefits of which won't show up until the employee is long gone or retired.

But, enough of how we got this way. In our next issue, we will explore some of the innovation which has come into play recently, due in large part to legislation that leveled the playing field between employer-sponsored group health insurance and individually purchased insurance.