HOWARD — Sorting through family papers after her mother, Beulah, passed away, Pauline Henwood McGinnis of Howard was amazed when she found the original, typed bill for her own birth in 1934. The total charge from Mount Vernon’s Mercy Hospital was $30.40.
“I wish that’s what it had cost when I had my five children,” McGinnis said.
Pauline was the third of five children. She said that her father, John Henwood, a machinist at Cooper-Bessemer, managed his money out of his pocket in those days of the Great Depression, and proudly paid the bill in full, in cash, as the family left the hospital every time a child was born. In Pauline’s case, that bill included a hospital room for four days at $3.60 per day. The charge for use of the delivery room was $10, dressings were $5 and laboratory work was $1.
A visit from the stork costs more in 2009, to say the least. Where a hospital room would run a customer $3.60 per day 75 years ago, average room prices in 2009 run from $1,500 to $3,000, depending on location. Even going with the lower end of that spectrum, this shows a staggering increase of 417 times since 1934. The upper end of the range raises the rate to over 800 times higher.
Such a rate of increase is not supported by the inflation that has afflicted the economy in the past three-quarters of a century. If the increase followed the national inflation rate for that period, based on the Consumer Price Index figures compiled by the U.S. government, a hospital room should only have increased to a cost of $57.31 per day. That is still 14.9 times the 1934 cost, although nowhere near the precipitous rise the United States has seen in charges since 1934.
The reverse-avalanche increase did not happen overnight. Comparison with a Knox Community Hospital bill from 1984 shows the cost of a room had increased to $184 per day, more than a 50 times increase. Following the Consumer Price Index, the increase between 1984 and 2009 should only have boosted the cost of a room to $377, not to $1,500 or more.
The reasons for these increases, as identified in a study published in the Government Printing Office’s March 2006 “Monthly Labor Review,” are numerous. One is that the number of health care workers has grown five times over in the past century. Another is that as more care options became available, people began to turn to hospitals for treatment that was once taken care of in the home.
But according to the report, the motivation behind both of these developments was the rise of the modern insurance system. In 1939, 6 percent of American workers had hospital insurance. By 1950, over half of all workers had insurance. By 1970, that figure had increased to 86 percent of working Americans, where it has largely remained. As coverage has grown, so has the tendency to opt for more expensive treatments.
Insurance also encouraged the development of new technologies, another area that has greatly influenced the cost of health care services. Those technologies have helped many people live longer. This longer life, however, has also increased the need for health care to Americans who would not have survived in the past.
Have the increased insurance, technology and costs been worth it?
“Back then, we weren’t rich, we weren’t poor, we were just sort of in the middle,” McGinnis said. “But my mother didn’t have to work away from home. Today it takes both parents to make a living.”
She cited friends and relatives who have reached retirement age, but can’t afford to retire due to the cost of insurance.
At the same time, she said, with the amount hospital bills had increased by the time McGinnis had her five children, she and her husband would not have been able to afford it alone, the way her father did during the Great Depression.
“We had insurance,” McGinnis said.
News reporter Pamela Schehl contributed to this article.