Health insurance after World War II
Using World War II as a starting point is somewhat arbitrary, but two events occurred around that time that initiated a new era in American healthcare. The first was rapid innovation in medical care because of advances made during battlefield surgery, and because of insights gained from the effort to produce penicillin in large quantities. The second event, and for us the more important one, was the spread of group health insurance, which American companies began offering to their workers during the war in partial compensation for the wage freeze that was in effect.
Health insurance proved to be so popular that after the war (encouraged by the federal government through tax incentives), it quickly became a nearly universal benefit for American workers. Then, in 1965, the federal government created Medicare and Medicaid, providing health insurance to millions more (and suddenly making the government itself the biggest third-party payer). This rapid adoption of a third-party payment system for healthcare changed everything.