User:Doc Tropics/United States health reform 1912-1920

U.S. health reform in the period 1912-1920 was an issue raised nationally by Theodore Roosevelt's call for national health insurance, in his third party bid for president in the election of 1912. Woodrow Wilson was preoccupied with other domestic policy issues and World War I, so most of the debate during this period was at the state level.

The American Association for Labor Legislation was instrumental in developing and advocating a model insurance law for universal health insurance that would have been administered on a compulsory basis by the states. Although this model bill was introduced in several state legislatures, progress on state-level universal coverage initiatives stalled.

Conservatism and fears of communism of the latter years of World War I and its immediate aftermath, were factors. Doctors, some of whom initially supported reform efforts, became the chief force opposing reform.

The issue

Background

For most of the 19th Century, Americans received health care in their homes from midwives, physicians, homeopaths, and herbalists. These generally charged low fees and patients were able to pay out-of-pocket for care (Kovner & Knickman, p.132). By the close of the 19th century, however, Americans increasingly believed that medicine was a science and that "physicians were best able to deliver high quality health care" (Kovner & Knickman, p. 132). The number of hospitals in America grew from fewer than 200 in 1873 to over 4,000 (with 35,500 beds) in 1900. Medical education system began requiring internships and residencies in hospitals as a part of physician training (Kovner & Knickman, p. 132) and training itself became more rigorous and uniform across the country. Health care as we now know it was on the rise at the beginning of the 20th century.

According to Harvard professor Lawrence Henderson, 1912 constituted a "Great Divide" when "for the first time in human history, a random patient with a random disease consulting a doctor chosen at random stands a better than 50/50 chance of benefiting from the encounter (Harris 1966: 5). The Flexner Report was issued that same year, recommending a complete overhaul of the U.S. medical education system, including shutting down a large number of medical schools (Starr 1982).

Sick leave was not a typical benefit offered to workers: those who became sick could experience sizable reductions in income. Medical care was relatively inexpensive, so the chief concern centered around sickness insurance that would replace wages for sick workers (a companion to the unemployment insurance also being sought by reformers during this period). There was no private health insurance to speak of, an innovation that did not appear until 1929.

How the issue got noticed

Isaac Rubinow's Social Insurance (1913) highlighted the economic effects of sickness, with focus on the affordability of a healthy life. The poor classes experienced a far higher mortality and sickness rate than the upper and middle classes, for a variety of reasons. First, food: fresh and nourishing food at higher prices, and the growth of pre-prepared food. Second, time for physical exercise was a luxury for the workingman. Those active outdoors usually had to work in all weather conditions, leading to multiple diseases of exposure. Many indoor trades had their own occupational diseases. Industrial poisonings by arsenic, lead, and mercury were not uncommon (Rubinow 1916: 211). It was estimated that the average American wage-worker lost $20 per year due to missed work due to sickness, or 3% of his earnings (Rubinow 1916: 222). This may not seriously hurt the economic stability of the family, but having to pay out-of-pocket for medical treatment, or skipping treatment and prolonging the disease, might make a significant impact.

The role of labor

The "Bread and Roses Strike" of 1912 was a major turning point in American history and the labor movement. Textile mill workers organized to fight for fair wages, safe working conditions and better living standards. This strike was important because it represents the first time in American history that people from different backgrounds joined together to fight for their collective rights. The strike and subsequent victory of 1912 gave strength to the union advocates of the labor movement, and proved that workers could achieve better wages and working conditions through patient and peaceful demonstrations.

Strikes, demonstrations and unionization eventually led to the passage of the Clayton Act in 1914. This act made explicit the legal concept that "the labor of a human being is not a commodity or article of commerce". Important legal developments and the establishment of the union framework opened the door for employer health care coverage for American workers.

The push for compulsory health insurance began to build in the United States around 1915. The underlying concern was to insure workers against catastrophic industrial accidents that were common at the time. Consequently, life insurance companies rose to the top of the insurance industry by providing lump sum payments at death. The unionization of America's workers was instrumental in establishing an insurance industry designed to serve and protect America's workers.

How the issue was framed

During this period emphasis was on the adverse financial consequences suffered by families with a sick member and wage loss. Concerns about the price of medical care were secondary. The major issue was the sickest, especially serious illness of wage-earners. The American Association for Labor Legislation's Social Insurance Committee, formed in 1913, chose to address the need for health insurance first, reasoning that "sickness was one of the greatest causes of poverty." (Numbers, 19)

The policy stream

Policy communities

The Progressives were social reformers concerned about poor working conditions especially among America's poor. The Progressive movement arose in the late 19th century in response to the growing industrialization of America and the movement was fueled by accounts of corporate greed written by Upton Sinclair and Ida Tarbell.

Policy entrepreneurs

Although he never got elected to a third term to push for enactment of universal coverage, Roosevelt nevertheless was a pivotal player in finally placing this issue on the national agenda. As reflected in his "trust-busting" while president, Roosevelt was a champion of the "little guy" against large corporate interests; thus, he was motivated to propose national health insurance on behalf of the common man, but may also have been attracted to the issue given his sickly childhood as an asthmatic.[1]

William F. Willoughby, an official in the Department of Labor, wrote a book called Workingmen's Insurance that advocated a labor union supported system. Dr. Isaac M. Rubinow, a later champion of the cause, began writing on the subject of European measures of health insurance reform in 1904. Frank Vanderlip, a former assistant secretary of the treasury under William McKinley, studied the German system as well. The Russell Sage Foundation in 1908 sent Dr. Lee K. Frankel, a social worker, and Miles Dawson, a lawyer, to Europe to investigate those systems.

Many of the other reformers at the state level were doctors motivated by concern for their patients; if they were motivated by financial concerns, they kept such motivations well-hidden.

Origin of the idea of national health insurance

The idea of national health insurance had begun in Germany in 1883 under Bismarck. The German Reichstag had adopted a compulsory sickness insurance law which offered protection to limited groups of industrial labors. John Graham Brooks' Compulsory Insurance in Germany, 1893, was the first study of the idea in the United States. By 1912, a number of other European nations had adopted very similar social insurance systems to pay for medical care, including Norway in 1909 and Great Britain in 1911 (Ways and Means 1974). But national health insurance was part of a comprehensive package of reforms sought by Progressives during this period. Ironically, even though the Progressive party candidate in 1912 (Teddy Roosevelt) lost the election, virtually every plank of the Bull Moose Party eventually was enacted during the decades to come. The sole exception to this was national health insurance.

The political stream

The national mood

Arizona was the last of the 48 states to enter the union (1912) and it would be nearly a half century later that two more states would enter. The country at the beginning of the 20th century was an emerging international power whose public felt increasingly confident about their role in the world. Americans were reluctant to get involved in World War I, but once they did so, they were a decisive factor affecting the outcome. However, the Bolshevik Revolution in Russia frightened Americans, culminating in the Red Scare of the early 1920's. To feed this fear, a few radicals perpetuated highly public acts of violence. In April of 1919 thirty-six bombs were sent in the mail to prominent government officials and capitalists such as Attorney General Palmer, Justice Holmes of the Supreme Court, and J.P. Morgan. One month later, Attorney General Palmer's house in Washington was defaced by a bomb (Allen 1931: 42). To counteract the Red Scare, the Attorney General raided pool halls, bowling alleys, and restaurants, places that communists might gather, and arrested 4,000 people and deported 550 (Quadagno 2005: 17). Palmer loaded 249 resident aliens, including feminist Emma Goldman, onto an Army ship and sent it off to the Soviet Union. Newspapers nicknamed the ship the Soviet Ark (Watson 2002: 53). Any group looking to solve social problems with government action was suspected of communist ties. So by the end of this period, Americans were reticent to adopt reforms that appeared to pose any threat to their cherished values of liberty and self-reliance. Doctors ultimately were able to exploit these anxieties and use the rhetoric of anti-communism to derail state-level universal coverage initiatives. Meanwhile, labor strikes began popping up across the country, the most notable being the bloody strikes by the Boston police force and the nation's steel workers in 1919. The Socialist News proclaimed the steel strike an "open class war" while other newspapers condemned the strike as un-American and Bolshevist inspired (Murray 1951: 453-455).

Organized political interests

The Progressive Movement. The Progressives ultimately were a highly influential political movement even though they failed at repeated efforts to get one of their candidates elected as president. They succeeded on the policy front largely because opposition parties were able to co-opt their ideas rather than defeat them on their merits. The American Association for Labor Legislation (AALL) created the Committee on Social Legislation, headed by Edward T. Devine, which began an active movement for compulsory, state-supported health insurance in America. The Committee on Social Legislation drew up the "Standard Bill" that they hoped would serve as a model for future legislation. The AALL's bill applied to all manual workers and others earning less than $1,200 a year. Benefits were of 1)medical aid, 2)sick pay, 3)maternity benefits, and 4) a death benefit. (Starr 1982: 244) Because the AALL claimed to be an academic, scholarly organization, it contained an important group of college professors, including Henry Seager of Columbia University, who served as president of the AALL three times. He believed that social scientists could also be social reformers and that scholarship should be of service to society. This was one reason each AALL recommendation was prepared on the basis of "'scientific' investigation by experts" (Yellowitz 1965: 55-58). Seager viewed sickness as a social rather than an individual problem, leading him to lament, "In the United States we are still so far from considering illness as anything beyond a private misfortune against which each individual and each family should protect itself, as best it may, that Germany's heroic method of attacking it as a national evil through government machinery, seems to us to belong almost to another planet (Rubinow 1916: 205)."

Physicians. Some doctors were Progressives and aided in the drafting of early health insurance legislation from 1915 to 1919. Attention to the issue of health insurance began to diminish as the medical needs of the war became a prominent issue in the minds of many doctors (Walker 1969: 301). An increasingly vocal minority ultimately culminated in the unanimous passage of a resolution by the American Medical Association House of Delegates at their 1922 convention stating their opposition to all forms of state medicine (Mays 2004: 19) except services to military personnel and a few other special interest groups. In 1917, physicians in California formed the League for the Conservation of Public Health to organize opposition to a bill similar to the AALL's "Standard Bill." With support and financial backing from the Insurance Economic Society, a group of insurance companies headed by Prudential and Metropolitan, the bill was defeated. In New York, the AALL bill was met with equal opposition from physicians. County doctors went so far as to depose the physician who chaired the state committee that endorsed the AALL bill. The bill, however, did pass in New York, with the caveat that physicians could still set their own fees and lead a health insurance commission created to run the program (Quadagno 2005: 20).

Health insurance industry. There was no health insurance industry to speak of during this period; hence there was no industry to either promote or oppose the idea of universal coverage. The Insurance Economic Society, however, did fear that government involvement in health care would undercut the commercial life insurance and funeral benefits industry. This group did oppose the idea of universal coverage (Quadagno 2005: 20). The AALL "Standard Bill" prompted some insurance companies to consider offering health insurance, and in 1921 Metropolitan sold its first individual health policy. Prudential followed in 1925 by offering group health insurance (Quadagno 2005: 21).

Business. Both large and small businesses played almost no role t the beginning of the debates about universal coverage during this period. However, large manufacturers began to lend support to the opposition later in the movement. Manufacturers such as B.F. Goodrich and many steel companies felt that businesses were better equipped to provide insurance than the government. In 1917, the National Association of Manufacturers expressed their support for a voluntary system of state-provided insurance rather than a compulsory program (Walker 1969: 302). In theory, businesses large and small might have benefited from health insurance coverage for workers, but conversely might have strongly resisted any efforts to make business pay for coverage or even collect payroll taxes from workers to finance social insurance-style medical benefits.

Labor. Although unions were not yet widespread in America, the labor movement and Progressives were closely allied in terms of their policy agenda generally as well as the aspiration for health insurance coverage specifically. In a 1917 piece, Irving Fisher, president of the American Association for Labor Legislation, proposed that compulsory health insurance was the ideal way to prevent sickness and improve the national mortality rate. He also argued that the decrease in labor due to the war made this of utmost importance. The American Federation of Labor represented only a small percentage of the working force and therefore lacked significant political influence.(Numbers:1978) That said, labor lacked the power to overcome the strong influence of doctors on policymakers at the state level. Indeed, it was Franklin Delano Roosevelt's experience with the power of doctors while he served as New York's governor that ultimately convinced him to remove national health insurance from his Social Security bill in 1935 rather than risk defeat of the entire package in the face of heated opposition to NHI from the doctors (Mays 2004: 21).

Government

The Presidency. As noted earlier, the president played little role in the mostly state-level debates that occurred around national health insurance during this period. Theodore Roosevelt left the presidency in 1908, and entrusted President Taft to continue his policies. Taft, however, made policy decisions such as restricting conservation and revising tariffs that alienated Republican progressives. In 1912, Roosevelt was convinced by progressive Republicans to run for president against Taft. At the 1912 Republican convention in Chicago, Roosevelt's delegates walked out and formed the Progressive Party. This led the way for Democratic party nominee Woodrow Wilson's victory in 1912, as Roosevelt and Taft split the Republican vote.

Congress. Likewise, with the exception of a small spark of interest exhibited by Meyer London, Congress was not active in championing or blocking national health insurance during this period. Of note was the Sheppard-Towner Act, a measure calling for federal aid to help improve infant and maternal mortality rates. First introduced in 1918, the Act was eventually passed in 1921 despite strong opposition from the American Medical Association, which saw the bill as a move towards state-mandated healthcare. Many attributed this success to strong lobbying by a number of women's organizations along with the support of President Harding.

The Supreme Court. Even if the health insurance movement could have gotten a bill passed into law, it is doubtful that such a law would have survived the Supreme Court of the day. The Court was coming to be occupied by a group of four justices known collectively as The Four Horsemen (Supreme Court). They became famous later for their opposition to FDR and his New Deal. Cases like Hammer v. Dagenhart (later overruled by U.S. v. Darby) demonstrate judicial recalcitrance toward federal intrusion into the marketplace. The Horsemen were particularly interested in protecting the States from federal interference - even when this meant striking down a child labor law.

19th Century jurisprudence took a significantly different interpretation of the commerce clause of the U.S. Constitution. The federal government had to have more basis than that an economic action might have a mere "effect" on prices in order to enact legislation, in contradiction to the later ruling of Wickard v. Filburn, which saw a central government empowered to restrict one's ability to plant on one's own land for the consumption of himself and his family.

State government. In contrast, several states, most notably the populous states of California and New York, engaged in highly vocal debates on this issue, but none ultimately enacted any major sort of legislation. The opposition of state medical societies was far too powerful to resist. In 1917 alone, bills involving health insurance were introduced in the legislatures of 15 states. In 1918, the governors of New Jersey and Massachusetts in their annual messages recommended the implementation of health insurance as a way to protect public health. No legislation was produced by these efforts. Only California had a bill go to popular vote; that bill, however, was struck down (Ketcham 1919: 89-92).

In New York, the health insurance movement was energetic and very successful. Senator Ogden L. Mills of the State Legislature first introduced the idea in 1916, but it quickly took off. Senator Courtlandt Nicoll revised the bill and the new bill got lots of support. The New York State Federation of Labor made health insurance their top agenda. Further strong support came from the Women's Joint Legislative Conference, the Young Women's Christian Association, the Consumers League and the Woman's Suffrage Party. Even Governor Alfred Smith endorsed a health insurance law (Terris.

The Bill was passed by the Sate Senate in April, 1919, but never made it to the Assembly for a vote. The Speaker, Thaddeus Sweet, thought the bill was too "Bolshevistic" and this allow opposition to join the wagon. The New York State Manufacturers and Merchants Association, the commercial insurance companies and many in the medical profession all joined in opposition against the bill.

Like previous attempts, the idea of health care insurance reform was denied. Socialist scares and heavy opposition halted any and all progress on health reform.

Consensus-building

During this period, New York probably came closest to enacting legislation to achieve universal coverage. The strong and persistent leadership of the governor was instrumental in pushing opposing parties in the direction of trying to compromise. But again, ultimately, the power of the state medical society trumped the best efforts of state policymakers to get reform enacted.

The policy window for health reform

Why the window of opportunity for health reform opened

Theodore Roosevelt was the first presidential candidate to call for national health insurance in his 1912 third party bid for president under the progressive Bull Moose Party (Mayes 2004: 1). The only major national health insurance proposal introduced in Congress during this period was a House Joint Resolution submitted in 1916 by a Socialist Congressman from New York's East Side, Meyer London, (NY) in 1916 (Chapman and Talmadge 1970: 6). [see H.R.J. Res. 159, 64th Cong. 1st Sess. 53 Cong. Rec. 2856 (1916)]. Most of the action was at the state level, with universal coverage initiatives discussed in CA, NY and several other states. (further info can be found in Theodore Rex by Edmund Morris)

Why the window of opportunity for health reform closed

National efforts. Ironically, Roosevelt's bid cost incumbent Republican president Howard Taft the election, leading to the election of the nation's first and only PhD: former New Jersey governor Woodrow Wilson. Although Wilson's first inaugural address in 1913 had suggested the federal government should safeguard the nation's health (Chapman and Talmadge 1970: 6), he never seriously pursued this issue during his presidency, as he was preoccupied with other domestic issues in his first term--e.g., creation of the Federal Reserve, establishment of a national income tax, and trade reform--and with World War I and the League of Nations during his second term. Wilson also suffered a devastating stroke in September of 1919. But because of the Constitution's silence as far as presidential incapacity and efforts by his wife Edith Wilson, the Wilson agenda was fixed into place for the last year and a half of his presidency. (further info can be found in Edith and Woodrow by Phyllis Lee Levin) Thus, this initiative never even reached the point of an administration bill being sponsored in Congress. There was a congressional initiative, but its sponsorship by a Socialist member of Congress virtually ensured its being ignored, although it at least got to the point of congressional hearings even though it was never voted on in committee. But in the context of the later public paranoia exhibited in reaction to the Bolshevik revolution, it seems implausible that this measured could have garnered much serious support even had it been brought to a floor vote.

Several groups who had initially supported health care reform began to change their position. Forrest A. Walker proposes several reasons for this tide of change. Health care reform came late in the Progressive era when a more conservative aura was blanketing the United States. Furthermore, the movement in favor of health reform never gained popular support. It was a movement of academics and never reached out to the common working man for support. World War One was also a major reason why health care reform never gained much momentum. The public's attention was taken by the war. Because national health insurance began in Germany, it was seen as unpatriotic during the war to support the movement (Walker 1969: 300).

In addition, the existence of a myriad of special interest groups with diverse, ambiguous and often conflicting interests made it difficult to establish a unified front with which to fight for reform. The three main special interest groups were the medical profession, labor organizations and businesses. The groups clashed in ways that prevented reform from becoming reality (Starr 255).

As well, it is worth noting this was a very conservative period for the U.S. Supreme Court, with various progressive laws designed to improve working conditions declared unconstitutional. Even if national health insurance had been enacted during this period, it is not altogether clear it could have survived Supreme Court scrutiny on constitutional grounds.

State-level efforts. Between 1915 and 1920, eight states (California, Connecticut, Illinois, Massachusetts, New Jersey, Ohio, Pennsylvania, and Wisconsin) appointed official commissions to investigate health insurance. The "Standard Bill" for health insurance was drafted by the American Association for Labor Legislation in 1915 and introduced in a number of state legislators. In 1916 and 1917 the "Standard Bill" was introduced in the New York Legislature by Senator Odgen L. Mills, and the bill was modified considerably. In 1919 it was introduced in a bipartisan manner and held strong support from labor groups and civic associations, but no state bill was ever enacted because of growing opposition.

Doctors initially supported the idea of universal coverage at the state level, but ultimately came to the conclusion, based in part on observations about what was happening abroad in the countries with national health insurance, that "government medicine" might pose a serious threat to their livelihoods. Forces external to the medical profession had significant influence in leading physicians to come to this conclusion. By couching their concerns in inflammatory language that preyed upon the prevailing public fear of communism, they were successfully able to marshal strong opposition to reform initiatives so that nothing was enacted. Editorials ran in newspapers such as the New York Times that tied health insurance to bolshevism.

References

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