A history lesson in health care reform

President Barack Obama delivers a statement to the nation following the vote in the House of Representatives on health care reform -- March 21, 2010.

TEXT OF INTERVIEW

TESS VIGELAND: The interminably long stay in the waiting room is over for proponents of health care reform. Their doctor finally wrote a new prescription.

President Barack Obama: After a century of striving, after a year of debate, after a historic vote, health care reform is no longer an unmet promise. It is the law of the land. It is the law of the land.

Applause

President Barack Obama signed the sweeping health care bill on Tuesday, and then, as he tried to summarize the highlights of the plan, he urged all of us to do a little homework.

Obama: So I want the American people to understand it and look it up for yourself. Go on our Web site, Whitehouse.gov. Or go to any credible news outlet's Web site and look in terms of what reform will mean for you.

But if you don't have to time to read the bill's 2,400 pages, then this show is for you. We'll parse the major elements today: How the bill changes our health insurance system, what decisions you will need to make as health consumers and when all this starts to affect your wallet. We are skipping over the politics and diving straight into the practicalities.

But before we get too deep into the specifics, there's been a lot of talk this week about the historic nature of this bill. So we asked our health care reporter Gregory Warner to walk us through some of that history.


Knock on William Dubin's office

William Dubin: Come in.

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, but an amateur historian, he's got a book in his lap...

Dubin: Called "The 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

And Roosevelt came out 100 percent behind compulsory health care insurance. And his actual quote was "No country can be strong if its people are sick and poor."

Archival tape of Teddy Roosevelt's speech

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 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 now 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 1. America was about to go 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 Money.

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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