A history lesson in health care reform

A map of North America surrounded by a stethoscope, medicine capsules and medical syringe symbolizes health care reform in the U.S.


Kai Ryssdal: OK, so now the health care bill is officially done. I know you've heard that before, but President Obama signed the last package of legislative fixes at a ceremony in Virginia this morning. If it feels like we've all be talking about health care forever, man, you have no idea. Over the past year of this debate, there have been references to the Clintons in '93 and '94, Lyndon Johnson and Medicare in 1965 as well.

But to find the beginning of the U.S. health care debate, you've got to go farther back than that. From the Marketplace Health Desk at WHYY in Philadelphia, Gregory Warner reports.

[Knock on William Dubin's office]

Gregory Warner: Hi.

Dubin: Hey, how are you doing?

Warner: Great.

So this is a story I heard from a doctor that I met one time.

Warner: Can you introduce yourself to me?

Dubin: I'm William Dubin, I'm professor and interim chair at Temple University School of Medicine, Department of Psychiatry.

Bill Dubin is not only a psychiatrist. He's also an amateur historian, and he's got a book in his lap...

Dubin: Called "The Social Transformation of American Medicine" by Paul Starr.

...Which is where he read the following story. It's a story that begins at the turn of the 20th century.

Dubin: Well, what happened and the way this developed is, Europe now by 1900, 1905 now has compulsory health care insurance. The United States doesn't.

Now, it's 1912, and the progressives nominate Teddy Roosevelt to be their candidate in the presidential election.

["Symphonic Raps" by Louis Armstrong]

Dubin: And Roosevelt came out 100 percent behind compulsory health care insurance. And his actual quote was, no country could be strong if the people are sick and poor.

[Archival tape of Teddy Roosevelt's speech]

Dubin: Of course, Roosevelt lost the election.

["Two Deuces" by Louis Armstrong]

But the progressives weren't about to give up that easily. Remember, this was the Age of Progress, the time for child labor laws and worker's comp. Progressives felt it was time to change health care as well. So a group of economists and politicians and doctors, including Teddy Roosevelt's personal physician, got together to propose universal health insurance for the working class.

Dubin: This was the first time in the United States somebody actually put together a proposal, looking at health care. And the paper that came out said, "You know, let's pay the doctors and the hospitals, let's have insurance that will pay doctors and hospitals, sick pay, maternity and death benefits."

And they suggested a sliding scale, so the less your income, the lower your premium.

Dubin: Sounds familiar doesn't it? This was 1915, this proposal.

In 1915, penicillin hadn't been discovered yet, and pure mutton tallow was still the most popular cure for cuts. But the reform debate feels strangely modern. The progressives even grappled with the cost of care.

Dubin: They stated, and this was in 1916, that paying doctors for individual services would be too expensive.

Because paying doctors for each service gives them a financial incentive to do more.

Dubin: So let's give them a lump sum of money to take care of the patients.

Which is how it's done now at hospitals like the Mayo Clinic, or other so-called "high value" hospitals, which are models for efficient care.

Dubin: But it was proposed in 1916 as a way to get out of the cost of medicine, because the belief was that fee for service would lead to serious financial problems in the end.

Big business opposed reform, and so did labor unions, whose power to negotiate health benefits was their main recruiting tool for new members. And messing with how doctors got paid? Not a popular move. The American Medical Association, which had initially supported reform, now attacked it.

Dubin: Because they were concerned about income, and they were concerned about autonomy. And the positions of physicians really from the beginning of this country is, no one should ever come between us and our patients. Very similar to the arguments today.

Opponents of the reform effort came up with a strategy. This was in the years leading up to World War I. America was about to go to battle with Germany. And Germany had been the first country to pass universal health care.

Dubin: And they used this anti-German feeling as a way to attack compulsory health care as some insidious plot to undermine the American government and the American people.

Warner: So, they called them the dirtiest word you can call an American, which is a European.

Dubin: Right, and only in this time, there were various, "Germans," and "Prussians" and "doing the Emperor of Germany's work."

This became the pattern. When reformers tried to restart the debate in the '20s, they were called socialists.

Dubin: Right, and in Harry Truman's era, they called them Bolsheviks and communists. And that's the whole history of health care reform is, champions, they lose, someone picks it up again, champions it, they lose.

Until the day comes when they win.

In Philadelphia, I'm Gregory Warner for Marketplace.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.
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In Response to Jeff Behm:

I enjoyed this piece tremendously, and I for one am NOT a supporter of this bill, for many of the reasons you pointed out yourself.

It is refreshing, however, to get a historical context on issues. And while the structure of the piece is one of "champions" and "naysayers" - it's notable that some of the first naysayers were unions and doctors themselves! More than politics, I saw this piece as being as much about how we find outselves in our present predicament of a fees-per-service compensation structure.

Okay, okay, we get the point: government control of health care has been the issue that the Left has kept coming back to even when neither the facts nor the public supported it. But those who proposed this were called socialists and communists in part because they often were, and in part because it's a reasonable assumption that people in unyielding pursuit of a major plank of the socialist agenda will be at least sympathetic to the rest of that agenda. In any case, all through this time anyone *opposing* this government takeover of health care has been called far worse.

One point, one request, and oa couple of questions. The interview (above)on Marketplace was not intended to serve as a comprehensive historical view on the health care debate or reform. I appreciate that its goal was to reveal the cyclical nature of fear-mongering tactics which have not changed over the years. Thank you, Marketplace. Please continue to engage us in learning about the economic ramifications during the bill's unfolding as "your" trusted economists to keep track of the health care reforms, progresses, regresses, etc. Dont' tire of teaching and connecting us to these facts. Finally, is the lagging life expectancy in the US as compared to other developed nations due to higher rates of violence, rather than to health factors? Has anyone dome data on this determination by the World Health Organization?

I won't argue with Gregory Warner's historical account of the healthcare issue, but it made my blood boil to hear such a distorted & dishonest perspective of the current bill & debate. This is NOT a tale of champions (Congressional Dems) eventually winning out over naysayers (GOP). It is a tale of greedy & corrupt politicans carefully crafting a bill to appease their far-left constituents while avoiding any real reform and cost accountability. The DNC is heavily funded by Trial Lawyers, Big Pharma, and the AMA. So it is no surprise that those entities got what they paid for -- a bill which gets them off the hook, and which will cost Americans billions. Shame on Marketplace for allowing such a distorted perspective on this important issue. BY the way, I support the idea of "real" healthcare reform (which neither party gave us). Thank you.

I really enjoy Marketplace and find your stories accurate and refreshing. However, I really need to correct a misconception that is being perpetuated about salaried physicians. All salaried physicians are paid by some entity and that entity must make a profit (or margin, if nonprofit) to survive and continue that salary.

I have found that all health systems that I deal with have a very strong interest in maximizing the number of outpatient tests and scans done, since these are strong drivers of income. For example, if I refer a patient to a tertiary center I found that they very much want to do their own scans on patients rather than have them done at home. In the past they have also wanted to do chemotherapy there, but since the profits on chemotherapy have disappeared they are now happy to send the patients back to us for that service. I suspect that there is subtle (and perhaps not always so subtle) pressure to keep all the ancillary services “in-house” to keep the place running. This is just good business practice.

This situation in the US is very different from a nationalized health plan where the entire institution is given a fixed yearly budget and told to treat patients with that amount of money. In those systems (and the VA, an excellent health system, is included in this) there is a strong emphasis on more efficient care, fewer tests, etc. In those systems physicians are criticized rather than praised for ordering expensive tests.

So please distinguish the model of physician salary as a stand-alone issue from that of an institutional “salary” (i.e., a fixed budget); they are very different things.


Enough about the woes of corporations, especially the few insurance corporations who are estimated to have spent just in the few weeks prior to the passage of this health care bill over a quarter billion $ and in 2009 spent over 260M as of October of that year.

All this needs to be balance with the following facts. For 2006-2010, the U.S. life expectancy will lag 38th in the world, after most developed nations, lagging last of the G7 (Canada, France, Germany, Italy, Japan, U.K., U.S.) and just after Chile (35th) and Cuba of all things (37th). In 2000, the World Health Organization (WHO) ranked the U.S. health care system 37th in overall performance, right next to Slovenia, and 72nd by overall level of health (among 191 member nations included in the study). The U.S. system is often compared with that of Canada. Canada's system is largely publicly funded. In 2006, Americans spent an estimated $6,714 per capita on health care, while Canadians spent US $3,678. A 2007 review of all studies comparing health outcomes in Canada and the U.S. found that the quality of care in Canada is at least as good as that in the U.S.

Ironically, when asked whether the U.S. has the best health care system or if other countries have better systems, 45% said that the U.S. system was best and 39% said that other countries' systems are better. Belief that the U.S. system is best was highest among Republicans (68%), lower among independents (40%), and lowest among Democrats (32%). A 2008 survey of over 2000 doctors published in Annals of Internal Medicine, shows that physicians support universal health care and national health insurance by almost 2 to 1. A CBS News/New York Times poll taken in April 2009 found that health care is the most important issue after the economy, and that 57% of Americans are willing to pay higher taxes for universal health care, compared to 38% that are not. Also 54% of Americans feel that providing health insurance for all is more important than the problem of keeping health costs down (49%).

On March 22, 2010, one day after the health reform bill was passed by the US House, a Gallup/USA Today poll found that 49% of Americans thought the bill was a “good thing,” 40% said it was a “bad thing” and 11% had no opinion. As this bill is allowed to be tweaked by addressing the problems of costs by getting away from "fee for service" and paying doctors to keep their patients well (Mayo Clinic model).

In time, we will see March 22, 2010 as the beginning of a new way that health care can to be managed for the betterment of citizens and business alike.

The ‘‘Patient Protection and Affordable Care Act’’ is historic, all right. Mar 22, 2010 will go down in history, along with Dec 7, 1941, April 12, 1861, Sept 11, 2001, and especially Nov 7, 1917.

Already American corporations have found they’ll have to “take charges” of about $2B this year because of rules in the bill (which contains the word “penalty” or its derivatives 194 times). More will figure this out in the days ahead

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