When the idea of public coverage was first broached on the eve of the First World War, the American health care system was a very different beast.
Medicine was scarcely a profession, whether measured by status or income. Hospitals were where one went to die. Pharmacies, virtually unregulated, trafficked in snake oil and promises. The closest thing to health insurance on the market was an installment plan for a coffin and flowers. And the risk that most Americans faced was not the cost of being sick or injured, but the cost of missing a paycheck as a result.
In response, US reformers — motivated both by the human costs of industrial capitalism and their European peers — proposed a modest state-level program of indemnity insurance for workers, financed equally by public, employer, and employee contributions.
The fledgling American Medical Association (AMA) wasn’t wholly opposed to the idea, which would have created a stable revenue stream. But state and local medical associations objected to any interference in the patient-doctor relationship and any hint of “contract” practice (in which doctors were salaried or paid on a per-capita basis). Employers bristled at the notion that health care should be considered a cost of employment, and at the prospect of plans passing in some states and not others. Samuel Gompers’ American Federation of Labor (which preferred higher wages to stigmatized public benefits) was lukewarm, although many state federations pressed for passage.
The insurance industry, for its part, dug in hard. The counter-offensive, spearheaded by Prudential’s Frederick Hoffman, was animated in equal parts by the industry’s anxiety over creating a regulatory precedent and by Hoffman’s conviction that “lesser races” were uninsurable. Major insurance firms (led by Prudential and Metropolitan) sought common cause with employers and doctors, and bankrolled a furious publicity campaign that (with a boost from American entry into World War I) successfully portrayed the pursuit of health security as “UnAmerican, Unsafe, Uneconomic, Unscientific, Unfair, and Unscrupulous.”
This early episode in American health reform was not especially consequential; the idea was only floated in a few states and approved in none of them. But it set in motion a pattern of opposition marked by persistent arguments and assumptions — that health care was a consumer good rather than a public good, that any departure from fee-for-service provision was tantamount to socialism, and that “the color line” precluded broad or universal coverage.
It also set in motion a pattern of health politics in which health interests — doctors, hospitals, insurers, employers, unions, and others — proved willing and able to mobilize political resources, cobble together strategic alliances, and deploy apocalyptic claims to fend off or recast reform.