The Mirage of Reform covers the conception of health insurance. There were three major waves of support for national health insurance. Unfortunately, all three attempts failed to turn national health insurance into a reality.
The first widespread support for national health insurance came in the early 20th century:
The first interesting point comes from the first section, where Starr states the following: "So, contrary to the modern view of the welfare state as "liberal" reform (in the current American sense), social insurance was generally introduced first in authoritarian and paternalistic regimes." (p.239). I find this interesting because in the present day, mostly liberals (or democrats to a certain extent) favor a national health insurance plan. However, in its beginnings, health insurance was not viewed in the same light. It represented an intrusion of the government into health care. Before health insurance, health care was given to the poor through almshouses, etc. that provided free services to all who needed them. In contrast,health insurance was created, "as a means of maintaining the incomes, productive effort, and political allegiance of the working class." Therefore, it can be seen as a government intervention that quite apparently "abolished the traditional system of poor relief," such as health care provided in almshouses, that had been commonplace until this time.
Health insurance was first backed by the Socialist party in 1904. The American Association for Labor Legislation (AALL) was the major association that backed health insurance. The association gained the suppport of the Progressive Party; unfortunately, the party's decline after the election of 1912 hindered legislation in support of national health insurance to be passed. However, the issue did gain some widespread support throughout the country at this time. Some points of tension did exist, which included the following: 1. public health supporters thought that "preventive medicine ought to be the overriding concern;" 2. how physicians should be paid for their services; 3. physicians worried that they would lose their autonomy.
More trouble arose when the American Federation of Labor publicly opposed health insurance. Leaders of the association believed that "workers could rely [...] on their own economic power, not the state, to obtain higher wages and benefits." Many believed that "compulsory health insurance was contrary to their interests. {...} [and that] voluntary insurance would be the 'higher and better method."
In the end, support for health insurance waned and the legislation fell through. Two key reasons are noted by Starr: first, the growing opposition from doctors; and, second, America entering WW1, which "diverted attention from social reform, channeled the enthusiasm for doing good into a crusade abroad, and divided the old nationalist Progressives[...]." Along with these two developments, Starr also states that conflicting views of the three main parties (physicians, labor, and businesses) and a lack of a national leader to back the program also contributed to the collapse of health insurance reform in America.
Second, around the time of the Depression & Roosevelt Administration:
When the topic of health insurance reappeared in the '20's, the main focus shifted from solving "wage loss of sickness" to "financing and expanding access to medical care." This shift occurred because politicians became aware of rising medical costs as a major problem, which could be attributed to the "complete transformation of hospital care at the turn of the century." Also, the rising power of physicians and "gradual depletions of physicians in rural areas" also effected health insurance issues at this time.
However, health insurance was pushed to the sidelines when Social Security became apolitical priority during the times of the Depression. Many believed that aiding the aging population would help alleviate some of the economic burden of the Depression. While in European countries, support for compensation for the elderly, and even worker's compensation, "naturally" led to support for widespread health insurance, the contrary occurred in the U.S. Although some political members, including members of the Committee of Economic Security, were for health insurance, leaders of the social security movement believed that including "any health insurance amendment would 'spell defeat for the entire bill.'" However, "the ommisison of health insurance from the Social Security Act was by no means the act's only conservative feature. It relied on regressive tax and gave no coverage to some of the very poor [and], the standards for unemployment insurance were weak."However, the bill did extend the role of public health, like giving state funds for maternal & infant care and general public health work.
The Depression seemed to be the perfect circumstances in which support for a national health insurance policy resurfaced. Many people were unable to pay for health services, so, for the first time, physicians went to welfare departments and demanded they pay for free services. In 1935, the "Resettlement Administration began to set up and subsidize cooperative medical prepayment plans among the poor farmers it was assisting." [...] In effect, this was gveronment-sponsored health insurance. Health insurance "promised to stimulate use of physicians' services and help patients pay their bills." To counteract this economic problem, the AMA tried to restrict the number of physicians in hopes of increasing their incomes. Their efforts proved fruitless. So, by the 2930's, the AMA stopped such efforts, and "instead of opposing all insurance [...], it began to define terms on which voluntary programs might be acceptable." However, they never supported the actual carrying out of these terms. These actions were not favored by a majority of the AMA members. It is said that only an "active minority" carried out such actions. Few tried to oppose the AMA. One significant opposition came from the "Committe of Physicians for the Improvement of Medicine."
Despite the AMA's opposition, Roosevelt's administration did support a possibilie national health insurance program. In 1938, a conference was even heled to discuss the "nation's health needs" for such a program convened. However, in the end, a national health insurance policy was excluded from the New Deal. Starr states many possible reasons for this exclusion. First, only about a "third of the population" was definitely for a national health insurance policy. Second, there was severe opposition from medical societies against compulsory health insurance. Some bleieve that "if the President had actively supported [a bill for health insurance]," it may have been passed, for"he obstacles to health insurance may have been more political than structural." Whatever the truth may have been, health insurance, once again, failed to become a national policy.
Third time's a charm? Truman Administration:
Finally, in the 1940's, national health insurance finally received full backing of the president and became a central issue of national politics. It was proposed that national health insurance be "operated as part of Social Security" and be "universal and comprehensive." In 1945, Truman asked Congress to create a national health insurance program. His plan called for expanding hospitals and increasing public health and maternal & child health services. Most importantly, the plan called for a universal health insurance system. Yet, he wanted to make sure to emphasize that iw as not socialized medicine.
Once again, there was opposition from the medical profession. The AMA went so far as to state in an editorial that the program would force doctors to become "slaves." Other health professionals were also against the plan. Additionally, there was mixed feelings about Truman's plan in Congress. As a result of such opposition, it was obvious that the health insurance plan would not be passed at this time. The furthest Truman got to passing his proposal was passing the Hospital Survey and Construction Act in 1946. While some supporters tried to continue efforts for the national health insurance plan, these efforts were axed when Republicans took control of Congress in 1946.
But, wehn Truman won the election in 1948, many Republicans believed that national health insurance would actually become a reality. Opposite sides faced off against one another. Compromises were available, such as the compromise backed by Bernard Baruch in 1947 that recommended voluntary insurance for the Americans with high incomes and compulsory insurance for the poor. Unfortunately, such compromises were never agreed upon by both sides.
Despite vagrant opposition for national insurance, there was some expansion of Social Security in other areas. First, in 1950 amendments broadened coveraged for the elderly. The amendments also "provided matching funds to the states for payments to doctors and hospitals for medical services to welfare recipients."
These amendments "confirmed the patterns of government intervention since 1935." They expanded coverage for the elderly and those who could not afford health services and strayed away from any hopes of a "single health insurance system." The presidential administration also diverged its attentions from national insurance with the onset of problems with Korea. Thus, once again, supporters of a universal health insurance filtered away.
Failure... failure... failure:
This counts three failures: first, in the early 1900's, second during the Roosevelt administrations, and, finally, in the Truman administration. Starr poses the question: "Why had reform failed?" He states that "America is frequently described as a less ideological society than Europe, more given to interest-group than ideological politics."I observed a repetitive pattern in which different parties (mostly people from labor, physician, and business groups) redundantly fight for their own interests. This commotion always focus to stray from from the central focus, creating a "single health insurance system," to those of the individual parties.
Starr also states other reasons
- The public has little control over the ultimate fate of health insurance politics because they are easily swayed by each party.
- Each party had limited resources
- Business also began to support the AMA -- employers didn't want the costs health insurance would bring and also wanted to "draw the line agaisnt socialism"
- Also, in general, ideological support for capitalism in America grew during the postwar period. This led to general opposition to any national health insurance policies.
- Finally, fragmentation among government agencies and individual parties that all lobbied for their own interests prevented any unified support for national health insurance.
Personal thoughts & Connection to Present times:
Each try for a national health insurance can be characterized in certain ways:
- Liberal support for universal health care after political leaders identify key problems in the population and problems in current medical coverage
- Passionate opposition from the AMA and other medical professionals
- Split views and support from interest groups; mainly, labor, business, and physician groups
- Opposition from conservative or Republican parties
- Demise of national health care insurance reform due to conflicting views and inability to secure a unified support for reform
Just as always, physicians are vehemently against health care reform. I have personally spoken to many doctors about why they oppose this reform. First, and foremost, they believe that this insurance "alternative" will eventually become the monopoly insurance provider. This will, in their opinion, allow the government to control physicians' work by controlling reimbursements for services provided. There are several other reasons physicians are against this program. However, all reasoning centers around a single complaint: physicians do not like government intervention in their profession. Thus, as Starr states repeatedly throughout this book, physicians do not like "third party" interference that may compromise their autonomy.
From the business aspect, insurance companies have also voiced opinions against universal health care. However, I will not go into details about their opinions. Although, I believe the following website roughly estimates insurance companies' response to Obama's tries at health care reform: "Insurance Companies Laughing at Obama's Health Care Troubles"
As of yet, we do not know if this try for national health insurance will lead to success or ultimate defeat as previous tries have. But, it is very interesting to look at the parallels between current and past attempts.
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