Health Reform's Been Tried and Tried

September 26, 1993|By ELIZABETH FEE

Health care insurance reform may be an idea whose time has come, but it is not a new idea. Nor is it an American idea. National health insurance has existed in Europe since the late 1880s, when it was put in place in response to pressure from an activist labor movement. Germany was the first country to have a national health insurance plan, and the other European countries followed.

As this country moves forward in the examination of our latest health insurance reform proposal, it is helpful to look at the history of this effort in the United States. Before the introduction of the Clinton proposal, there were three major efforts to pass some form of health insurance reform in this country. Each was in response to both a practical need and to the political ideology of the time.

The first national health insurance framework was introduced by the American Association for Labor Legislation (AALL) in 1915 during the Progressive era. This was a time when labor unions were looking at a wide spectrum of reforms to protect their workers. Unions and their supporters were devoting their energies to establishing a minimum wage, limiting the length of the work day, preventing industrial accidents and setting up workers' compensation programs.

The main intent of this first health insurance bill was not so much to provide access to care as to help pay partial wage costs for sick workers. This was a time when extended illnesses such as tuberculosis could wipe out a family financially -- and often did. Covering medical costs was secondary to covering lost wages, since sickness was often a cause of poverty.

Initially, the medical profession was sympathetic to health reform legislation and supported plans that did not place restrictions on the practice of medicine. By 1917, the American Medical Association had turned against the legislation because of its opposition to government control and fears that it might affect doctors' incomes.

At the same time, there was a split in the labor movement. Some leaders of the American Federation of Labor opposed health insurance because they wanted unions to maintain control over sickness insurance. Most workers, however, favored a national system of health insurance. American business was firmly opposed, especially small businesses. Leading the battle were the insurance companies, which were making a great deal of money by selling death benefits.

Despite this turmoil, a national health insurance plan remained a live issue up until the beginning of the first World War. With World War I came a backlash of anti-German sentiment and a profound opposition to ideas associated with that country. In 1917, the Russian revolution produced a fear of everything that carried the taint of socialism or communism. In the "red scare" of that period, many socialists and progressives were thrown in jail.

The '20s were quiet and conservative. As the cost of medical care began to rise steeply and specialties emerged, access to care became an issue. The middle class began to complain about health care costs.

As a result, in 1932 the Committee on the Cost of Medical Care (CCMC) produced its final report, which outlined the issues that were to dominate the '30s. Led by progressives and supported financially by a coalition of large private foundations, the CCMC argued for group practices, regional organization of medical care around hospitals, an emphasis on primary care and rational use of specialist services. Although the CCMC worked diplomatically and took pains to include both the AMA and insurance companies, the AMA condemned the report as an "incitement to revolution."

At the same time, during the Depression, hospitals began offering health insurance as a way to keep themselves alive economically. This insurance was also helpful to physicians, since it helped assure that they would get paid.

Blue Cross plans begun by the hospitals started slowly but became quite successful, eventually emulated by an entire industry of insurance providers separate from the hospitals.

Franklin D. Roosevelt was the first president to take up the banner of national health insurance. He initially planned to include health care insurance in his Social Security Act of 1935. But he decided that fighting for this measure would prove a political liability. FDR realized that he would have to choose his battles and count his votes. Faced with violent opposition from the AMA, Mr. Roosevelt jettisoned national health insurance and focused on the widely popular issues of unemployment insurance and the national pension plan we now know as Social Security.

World War II also created changes by bringing about a huge expansion of employer-based insurance plans. With the strict controls on wages brought about by the war, unions found themselves able to negotiate successfully for health benefits in lieu of wage increases. In addition, the government made health benefits a tax-free expense for businesses.

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