‘The Health of People Between Two Extremes’

‘The Health of People Between Two Extremes’

A Brief History of the Failed Attempts to Establish Universal Health Care in the United States of America

by José E. Pérez Carrillo

 Throughout much of their collective history, the American people have prided themselves on landmark precedents that have led and/or inspired others to emulate and imitate.   From jazz music to blue jeans, basketball to mass production, Coca Cola and men on the moon, Americans like to see themselves as trendsetters.  These and more are examples of American ingenuity and industry, the Yankee work ethic that revels in the ideal that anything is possible.  As evidenced by the examples listed above, one cannot fault the average American for thinking that anything is, indeed, possible. 

There is, however, one glaring omission from the North American trophy case of global achievement: national health insurance (NHI) for its people.  This paper endeavors to begin the lengthy and oft times troublesome exploration and – perhaps – explanation of the history of instances and individuals that tried – in vain – to provide the American people with universal health care.   This document will take a look at the historical processes behind one of the United States’ more compelling social policy issues in a somewhat chronological manner, looking at the earliest attempts to establish NHI as well as inspirations from aboard, the highlights and the lowlights of this process, the reasons and factors behind success and failure in a concise fashion. 

The writer wishes to acknowledge the support and encouragement of various entities who responded to direct requests for communication and feedback in an effort to provide additional context for this project.  Because of time and space constraints, not all of the information provided or suggested to the writer was able to be incorporated into this initial attempt to look at the social policy issue of national health insurance but the gratitude for them exists nonetheless as well as the intention to incorporate them and more into future extensions of this work. 

The beginnings of the efforts to establish national health insurance in the United States can be traced back to the earliest days of the republic when the country’s second president, John Adams, signed into law a measure that provided health care coverage for both merchant marines and United States naval sailors (Lepore, 2009).  Robertson & Judd as well as Trattner even make mention of failed efforts on the part of Hull House to be at the vanguard of the establishment of NHI (as cited in Linhorst, 2002), but, alas, the historical record appears to fail to yield any more mention of it. 

Ample scholarship, however, does exist that establishes a direct line between Victorian Era European models for universal health care (in particular, the German model established by Otto von Bismarck) and inspiration (based as much on economic motivations as social justice considerations) for subsequent attempts in the United States (B. Hoffman, 2003; Lepore, 2009; Palmer, 2009; Schremmer & Knapp, 2011; Walker, 1969).

The social and economic conditions of the United States at the turn of the 20th century seemed to demand some legitimate initiative in the direction of establishing NHI.  For example, at the time, there was a void in meeting social needs (no government action, no policies, no legislation) and, as the United States’ population became more diverse and numerous, the number of people insisting on access to the promise of America increased (B. Hoffman, 2003; N. Unger, 2011).   The U.S. was transforming itself from a country dominated by an agrarian society to an industrial behemoth and the American people were becoming less rural and more urban and this transformation was fast and big.  Thus, as Americans moved into increasingly crowded metropolitan areas, they needed “experts in what is safe” and this “need” extended to health care (N. Unger, personal communication, 28 NOV 2011).  Additionally, as the industrial establishment of the U.S. expanded, so too did the need for more and more workers.  Safeguards for employees were lacking and lost income due to infirmities made being sick a very big reason for poverty – more so even that the actual cost of care itself (B. Hoffman, 2003).   The view that society has a responsibility to care for those least able to care for themselves emerged in earnest during this period (Segal & Brzuzy, 1998; N. Unger, personal communication, 28 NOV 2011). 

Among the proponents of this nascent push for NHI in the U.S. were reformers within the Progressive Party (Silverman, Epstein, & Waters, 2000; Unger, 2011).  Even further to the left ideologically among those advocating for NHI in the early 1900’s was the American Socialist Party which included universal health care as part of its party platform at its founding in 1901 and as part of its presidential campaign platforms in 1904, 1908, and 1912 (Birn, Brown, Fee, & Lear, 2003; B. Hoffman, 2003).  

Not all proponents for NHI in the United States, however, were necessarily leftists or even centrists.  Perhaps the biggest name in the early days of the debate for NHI in the USA was Theodore Roosevelt who, as a candidate for the Bull Moose Party during the 1912 presidential race, championed the establishment of universal health care (Farrell, 2006; C. Hoffman, 2009; Meyer, 2009; Palmer, 2009).   In the official published version of the Bull Moose Party’s platform for 1912, specific mention is made, in fact, of “social insurance” (Hofstadter, 1963).   *To dispel any revisionist attempts to pigeonhole Roosevelt (he of the jingoistic foreign policy during his tenure in the White House) as a socialist, T.R. took care to specifically disparage socialism as being inferior to individuality in a letter he wrote during that era to writer Upton Sinclair (Crunden, 1982). 

In 1915, the American Association of Labor Legislation (AALL) emerged.  Based on both German and British models for health care (B. Hoffman, 2003), the AALL was designed to provide coverage for working class people to cover doctor’s bills, nurses’ services, hospitals, sick pay, maternity expenses, and death benefits (Palmer, 2009).  The costs were shared by workers, employers, state (Palmer, 2009) and actually enjoyed the initial support of the American Medical Association (AMA) but not for long (Palmer, 2009; Schremmer & Knapp, 2011). 

As the reader will see, the AMA has gone to great lengths to not only have a voice in the ongoing debate about NHI in the US but it has also done much to ensure the debate is ongoing vis-à-vis ever vigilant attempts to block any semblance of universal health care in the United States.  Their success is almost ironic, however, when one takes into consideration that the AMA has never represented all or even most doctors in the U.S. with enrollment in the power lobbying body rarely including more than 2 out of 5 doctors nationally (Palmer, 2009).  That said, it is important to point out that at the time of its inception in 1901, total enrollment in the AMA was less than 10,000 doctors and by 1910, that figure had ballooned up to 70,000 (Silverman, Epstein, Waters, 2000).  Indeed, the AMA’s support of AALL or any NHI proposal for that matter was short-lived.

Ultimately, the demise of any drive for NHI during the Progressive Era is traced back to the inclusion of death benefits (assailed mercilessly by an already powerful life insurance industry), organized labor (which disagreed with AALL on ideological points), hostility from doctors, and US entry into World War I (Palmer, 2009; Silverman, Epstein, Waters, 2000). 

 Further obstacles to NHI prior to 1920 include lack of unity on the part of American workers and the beginnings of so-called red-baiting, via which enemies of NHI used accusations of Communism/Bolshevism to scare people away from idea of NHI (Palmer, 2009). 

During the 1920s, the cost of health care in the United States began to rise (Palmer, 2009; Silverman, Epstein, Waters, 2000) as middle class Americans used hospital services more (Palmer, 2009) no doubt a result of the continuing urbanization of the US (N. Unger, personal communication, 2011).  Also of significance, this migration towards cities in the US meant resources for rural healthcare began to dwindle (Silverman, Epstein, Waters, 2000). 

 Subsequently, medical bills began becoming bigger parts of personal budgets (Palmer, 2009).  To compound the socioeconomic issues of the day, this period saw increasing disparity in wealth resulting in a decreasing middle class (C. Hoffman, 2009).   In spite of this, the relative collective trauma of World War I plus “reform fatigue” (N. Unger, personal communication, 2011) resulted in a period of political apathy on the part of most Americans (Silverman, Epstein, Waters, 2000). 

The lack of political activism on the part of regular Americans did not manifest itself among the ranks of all of their countrymen – at least not among some within the higher socioeconomic strata.  In 1926, a group of affluent people calling itself the Committee on the Cost of Medical Care (CCMC) began meeting.  They included approximately 50 doctors, economists, public health specialists, and representatives from lobbying bodies.  The CCMC funded its own activities and studies and, eventually, advocated for more resources to be allocated for health care on a voluntary basis (Palmer, 2009).  The CCMC favored group medicine (C. Hoffman, 2009) and, its subsequent attacks against the CCMC, the AMA gave birth to the provocative label “socialized medicine” (C. Hoffman, 2009). 

With the close of the 1920s, the American people also saw the beginning of one of the most turbulent periods in US history.  Beginning with the infamous stock market crash of 1929 and the Great Depression that followed, many latent social issues had the potential to be brought again to the fore of national consciousness.     

One of the central figures of this period of American history is President Franklin D. Roosevelt whose first year or so in office was marked by a quarter of the American population being unemployed, rising medical costs, many medical services going unpaid, and illness because the number one reason for poverty in the country (C. Hoffman, 2009). 

 In this atmosphere, polls showed that more American people liked the idea of NHI but not if they had to pay more for the service (C. Hoffman, 2009).    At this time, the company known as Blue Cross was born in Minnesota as a private response to a public need (Silverman, Epstein, Waters, 2000; Cohn, 2007). 

 The Roosevelt administration ambitiously sought to remedy many of the social problems of the nation with New Deal programs.   The Social Security Act was one of the monumental pieces of social legislation enacted during this era yet the White House was reluctant to include any provisions for NHI therein out of fears that any such inclusion would provoke the AMA et al to attack with ill intent the entire Social Security program.  Similarly, the Wagner Health Act of 1939 (which issued to federal grants to states) omitted any tangible piece of universal health care in its provisions (Palmer, 2009; Silverman, Epstein, Waters, 2000). 

The AMA for its part feared that any type of national health insurance plan would result in a loss of independence for its members and a change in status as salaried civil servants for them as well (C. Hoffman, 2009; Farrell, 2006).  Adding to the difficulty, private insurance companies – following the Blue Cross lead – began to multiply (C. Hoffman, 2009).   Even within the avenues of governance, NHI was hamstrung by members of the President’s own political party.  Southern democrats or Dixiecrats allied themselves with Republicans on Capitol Hill to limit powers of federal government largely because of fears that emerging and proposed federal measures would eventually threaten/target Jim Crow segregation (C. Hoffman, 2009; Schremmer & Knapp, 2011). 

As Roosevelt and the country were settling into the former’s third term as president, the United States entered World War II.   At the height of the war, the Wagner-Murray-Dingell Bill was introduced in Congress.  The Wagner-Murray-Dingell (WMD) measure proposed compulsory health insurance which would be funded via a payroll tax (Palmer, 2009; C. Hoffman, 2009).  Among the proposed legislation’s supporters was the Committee for the Nation’s Health which was comprised of organized labor, activist farmers, and progressive doctors.  WMD, however, was instantly demonized by detractors as being a communist initiative (Palmer, 2009) and died in committee, lost in a fog of propaganda and war (Schremmer & Knappy, 2011).  *Wagner-Murray-Dingell was introduced as a bill in Congress for the next fourteen congressional sessions and it never passed (Hoffman, 2009). 

 1945 marked the end of both the second world war as well as, with his death in springtime, the Roosevelt presidency.  Suddenly thrust into the Oval Office was Roosevelt’s relatively unknown vice president, Harry Truman of Missouri.   Once sworn in as president and with the victory in the Pacific theater ending World War II, Truman wasted little time in making his own push for NHI.  Touting his proposals as important components of the Economic Bill of Rights originally espoused by his predecessor in the White House (Frank, 2009; C. Hoffman, 2009; Schremmer & Knapp, 2011; Silverman, Epstein, & Waters, 2000; Truman, 1945), Truman presented his proposal to the nation during an address to Congress in November of that year in which he called for universal health care (Palmer, 2009; Truman, 1945).   Truman was prudent enough to eliminate any so-called funeral benefit from his package largely because of the damage that provision did to the Progressives’ NHI plan a generation earlier (Palmer, 2009). 

All told, Truman’s NHI proposal allowed for doctors and hospitals to determine their own method(s) of payment and also called for expansion of hospital construction (which did pass via Hill-Burton 1946) as well as the training of more doctors as part of his vision of a healthier United States (C. Hoffman, 2009; Truman, 1948).   Truman enjoyed – at times – mixed support from Congress (Palmer, 2009) but several other powerful forces rallied against him and what those foes – predictably – called “socialized medicine.” At the vanguard of this latest anti-NHI movement was the AMA joined this time by the American Bar Association, the American Hospital Association, and many journalists as well as Congressional committees chaired by conservative/reactionary elements (C. Hoffman, 2009; Palmer, 2009). The president, however, was determined to get the measure passed and, hence, did not back away from challenges as evidenced by the following excerpt from a letter he sent in 1949 responding to an American doctor who was highly critical of the plan: 

“I am not worried about [the poor] nor am I worried about those who make $25,000 a year and over.  The health of the people between those two extremes is what is most important to the country….  Before I get out of this office I am going to find out what is wrong and I am going to try to remedy it.  I’d suggest you Doctors had better be hunting for a remedy yourselves unless you want a drastic one.”   (Truman, 1980) 

Inevitably, a powerful surge of contrary forces doomed Truman’s plans for NHI in the United States.  In addition to the aforementioned, the Republicans resumed control of Congress during mid-term elections in 1946 (Palmer, 2009), and, with post-war economic boom times, larger employers were more inclined to give unions their own internal company health plans such as when the United Mine Workers successfully staged a strike that earned them an employer contribution of 10¢ a ton of coal mined to be allocated towards health and welfare plans (Quadagno, 2005).  The role of special interest groups and divided public policy (especially in the wake of aggressive redbaiting against the President’s plan by the AMA) spelled doom for Truman’s NHI plan (Palmer, 2009; Silverman, Epstein, & Waters, 2000) not to mention in-fighting amongst Democrats (Frank, 2009) – especially Dixiecrats having nightmares about desegregated hospitals (C. Hoffman, 2009).   

As the latest push for universal healthcare lay smoldering in its charred ruins, ideas started to emerge about being more focused in efforts to bring about national health insurance.  In 1958, Representative Aime Forand of Rhode Island introduced a plan to cover hospital costs for the aged.  The AMA attacked it but something different happened:   the sharpening in focus gave rise to the first (and heretofore, only) grass-roots movement related to NHI (Palmer, 2009).  Civil rights organizations and organized labor joined the cause for health care for the aged (C. Hoffman, 2009; Quadagno, 2005). The AMA counteroffensive was not enough to derail the passage of the federal legislation that was signed in 1965 by then President Lyndon Johnson (with Harry Truman standing beside him) but it was strong enough to create different “plans” with what became Medicare (Palmer, 2009; C. Hoffman, 2009; Silverman, Epstein, & Waters, 2000).  The AMA was not the only entity offering an alternative to the federal plan.  Aetna wanted federal vouchers for to pay for private coverage/services (C. Hoffman, 2009). 

For the rest of the population, the 1950s were marked by sharp contrasts.  Productivity swelled which helped spur the resurgence of the middle class (C. Hoffman, 2009) yet the price of hospital care doubled (Silverman, Epstein, & Waters, 2000). The number of private insurance companies was growing rapidly (reaching over 700 that were selling health coverage by the 1960s; Silverman, Epstein, & Waters, 2000) yet those same private plans were almost impossible to obtain for retired and/or seriously infirm Americans (C. Hoffman, 2009).  Ironically, within a decade of the destruction of Truman’s Fair Deal NHI proposal, worries were increasing about a shortage of medical doctors in the United States (Silverman, Epstein, & Waters, 2000). 

As the country continued to change its image and perspective in the 1970s, some things appeared to remain unaffected by any historical and /or social forces.   The American Medical Association, specifically, continued to place itself in the most adversarial position in relation to any processes in favor of NHI (Quadagno, 2005).    The 1970s also saw – in keeping with cyclical theories of historical processes – a return to difficult economic times for the American people.  Rising inflation and health care costs (healthcare costs constituted 4% of the 1965 federal budget but had spiked to 11% of the budget just eight years later) compelled then President Richard Nixon to institute freezes on both prices and wages (C. Hoffman, 2009). Perhaps sensing a historical opportunity, Senator Ted Kennedy (Massachusetts) unveiled his own NHI plan via a publication he authored entitled, “Health Care Crisis in America” (C. Hoffman, 2009).  Nixon countered with his own plan that was to be funded by a payroll taxing reaching up to 65% and other entities followed suit thus diluting strong support for any of the proposed plans (C. Hoffman, 2009).   Adding to the situation, conservatives were unsure of which way to push especially when the AMA ironically attempted to brand Nixon’s plan as communist while organized labor withheld support of Kennedy’s plan because it felt a better plan would be available if they waited for what they felt was an imminent return to democratic control of Congress.  As a result, nothing was accomplished or even put on the floor of either chamber of 
Congress for a vote (C. Hoffman, 2009).  

After a brief sabbatical, the 1980s saw a return to prominence for conservative elements to Washington, D.C.   The administration of Ronald Reagan was noted for big tax cuts, bigger spending on military expenditures, huge health care costs (12% of GDP) and record debt. 

 To make things more difficult for the average American, income disparities widened (C. Hoffman, 2009).  Additionally, procedural reforms in how laws were proposed and enacted decentralized Congress and placed greater priority on coalition-building (C. Hoffman, 2009). 
  During this period, a hospital-cost containment measure in Congress failed to pass three years in a row (C. Hoffman, 2009). 

With the escalating trend of health care costs continuing, many Americans worried about losing health care benefits as well as not being able to pay their bills.  More ideas surfaced to attempt to address these concerns but none took hold (C. Hoffman, 2009).  With the election of Bill Clinton to the White House in 1992, a renewed attempt from the executive branch of the federal government to bring about NHI came about.   The Health Security Act endeavored to provide universal health care, competition between insurers, regulatory powers for the federal government…and a health security card (C. Hoffman, 2009).  To help realize this goal, Clinton created a task force to look at the issue, naming the First Lady, Hillary Rodham Clinton, as chairperson of the task force.  The task force was comprised of over 30 closed groups, and a total of over 600 experts in the field.  The task force eventually published a report that was in excess of 1,300 pages.   None of this did anything to galvanize unified support among the American people (Meyer, 2009; C. Hoffman, 2009).  To add to the melee, a special interest group in opposition to NHI offered its own plan and Senator Paul Wellstone (Minnesota) advocated for his single payer plan.  

In an apparent return to the conservative era of the 1980s, the beginning of the 21st century for the United States revisited increased defense spending and proposed cuts to social programs as well as a strong financial downturn – and virtually no proposals for universal health care.   With the overwhelming election of democratic majorities to both houses of Congress during the mid-term elections of 2006 and the strong electoral victory for Barack Obama as President, a renewed push for NHI began in 2009.  

In spite of the fact that the United States remains, as Irving Fisher pointed out in 1916, the only industrialized nation without NHI (as cited by Lepore, 2009), the same forces that have kept the US behind its industrialized contemporaries once again mobilized to attack Obama’s proposal. This process is ongoing as of the time of this writing and those forces have included rumor-mongering (“socialized medicine”), small yet aggressive and vocal groups of critics effectively high-jacking town hall meetings established to discuss proposal, and sound bites (Frank, 2009) to maintain the archaic paradigm of no universal health care in the U.S.  The United States Chamber of Commerce alone spent huge sums of money to sponsor bellicose ads against the plan (Meyer, 2009). 

The tragic part of the seemingly perpetual persecution of efforts to establish NHI in the U.S. is that figures do not support continuing the status quo.  For example, shortly before dying in 2009, Kennedy wrote in Newsweek magazine that, while most other industrialized countries spend about 10% of their gross domestic product on health care, the US spends 17% of its GDP and, he added, it is a phenomenon not confined solely to the public sector.   He wrote that General Motors spends more of automobile revenue on healthcare than it does to purchase the steel needed to the automobiles in the first place (Kennedy, 2009).  

Perhaps the reader may be thinking that the money to care for people in what is often described as the richest country in the world (Kennedy, 2009) is needed and thus well-spent.  Data, however, suggests otherwise.   There is evidence that there are disparities between access and outcomes in the US and, in spite of spending more on health care, the United States does not produce the indicators to match the expenditures (Vladeck, 2003).   
To illustrate the point, the United Nations Development Report of 2005 (as cited by Ojeda, 2006) indicates that US spent $5,274 per person on health care in 2002 (most in the world) while Cuba spent only $236 person for the same year.   That same UN report ranked countries according the percentage of 12 month children having received their measles vaccinations for the following year.   Cuba, which only spent 4% of the amount per capita by the US for the same period of time, was tied for having second-best outcomes against measles in babies (99%) while the US was ranked seventieth (Ojeda, 2006).  Vladeck attributes this dynamic of policy dyslexia to the compulsion to skew facts about outcomes to appear competitive even when, as pointed out by human rights activist Danny Glover two years after Vladeck’s essay was published when speaking about the aftermath of Hurricane Katrina, many segments of the US population are living closer to a developing country reality than one expected in an industrialized country (Vladeck, 2003; Glover & Belafonte, 2005). Hillary Clinton (as cited by Palmer), while heading the task force for health care reform in the 1990s observed, “I did not appreciate how sophisticated the opposition would be in conveying messages that were effectively political even though substantively wrong,” (Palmer, 2009).   Further, Catherine Hoffman offers some reasons historically for the failures of the US to enact NHI: 

• Complex issues at work within the process and in conflict with each other 
• Differences ideologically 
• Rabid responses from special interest groups 
• Weakened Executive Branch of federal government 
• Legislative powers decentralized  (C. Hoffman, 2009). 

In an essay he wrote on the need for NHI while a candidate for President, Barack Obama almost prophetically observed how campaign promises about universal health care (if made at all) are often dashed upon the unforgiving rocks of Beltway politics (Obama, 2008).  What has been the case, especially over the past two generations, argue some, is that comprehensive national health insurance is mired in incrementalism, or the begrudging concession by conservatives of only some gains in the direction of NHI (C. Hoffman, 2009; Kennedy, 2009; Vladeck, 2003).  Examples of incrementalism are Medicare, Medicaid, and the Children’s Health Insurance Program (C. Hoffman, 2009). 

Vladeck also offers perspective on reasons to explain why the US still does not have NHI: 

• The collective pessimistic/cynical and individualistic nature of Americans especially in regards to how government is perceived 
• A large number of Americans view themselves as “middle class” even in the face of strong evidence to the contrary. 
• The deeply ingrained nature of racism and xenophobia in the American psyche that impairs coalition-building 
• No real grass-roots approach was ever mobilized to demand NHI 
• Equitable distribution of wealth/resources is a virtual impossibility constitutionally 
• Politics are localized and diverse if not contradictory and, as a result… 
• Weak political parties exist (little difference ideologically between the two major parties) which, in turn, gives … 
• Well-monied lobbies and special interests undue power and influence over law- and policy-making processes. (Vladeck, 2003)

Much of what Vladeck postulates is found in a sentiment attributed to Vincente Navarro by Palmer  her commentary in which the former opines that the US middle class and its historical and collective aversion to NHI is the fruit of exploitation and oppression by the elitist capitalist-corporate strata of American society (Palmer, 2009). 

As stated above, this paper is but an introduction to a dynamic and pressing issue affecting hundreds of millions of people daily in the United States of America.  This paper does not aim to solve the problem described above; it only seeks to bring greater awareness in the hope that such an increase in awareness may in fact be the catalyst by which some future generation of Americans (if not this one) can indeed bring to fruition in its public health what it – in theory if not practice – enjoys in its educational and electoral systems:  access for all who want it and benefit for all who need it (Pérez, 2006).  

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