June 21, 2005

Who Killed National Health Insurance?

So it only took me, oh, two whole months, but I finally got around to finishing Jill Quadagno's excellent book, One Nation Uninsured: Why the U.S. Has No National Health Insurance. It's a little thin on the details—sadly, no in-depth explanation as to why the Clinton health care reform spluttered out in here—but it gives a useful historical overview of the struggle over national health care. Fun, fun. But let's cut to the chase: Why doesn't the United States have universal health insurance, when just about every other OECD country does? Well, after reading the book, here are six big theories:

1. Fear of socialism: Maybe Americans are different from our neighbors abroad and have a special dislike for state-run programs. There's something to this: opponents of national health care have made a lot of headway by raising the specter of socialism against various attempts at reform: from their defeat of the AALL campaign in the 1910s to the AMA's mobilization against Harry Truman's national health care plan in the 1940s to the backlash against "government-run" HillaryCare in the 1990s. (Even John Kerry's health care reform got tarred with the "government takeover" brush last year, and it was scary enough that he needed to respond.) But why then, Quadagno asks, did Medicare pass, when it too was labeled "statist"? One answer might be that the mid-1960s was a relatively unique time when federal intervention had won newfound legitimacy—thanks to the passage of the Civil Rights Acts—and the specter of socialism was no longer as strong as it was in, say, the 1950s. So it's a theory to keep in mind.

2. Weak labor movement: The labor movement here in the United States has been, on average, much weaker than that in other countries. For one, it has never really had its own party. (By European standards, the Democrats are a sad-sack excuse for a labor party, and that's even more true historically.) Meanwhile, union infighting during the first half of the 20th century meant that there was never a unified labor movement for national health care; union leaders like George Meany and Samuel Gompers preferred to secure health care benefits through collective bargaining agreements with large corporations, rather than going through Congress. Meanwhile, in the late 1960s, the AFL-CIO got too distracted and failed to back Ted Kennedy's national health care proposal to the hilt, and in the 1990s was too embittered by the NAFTA battle to support Clinton fully. On the other hand, when organized labor threw its full weight behind disability insurance and Medicare, both got both passed, so perhaps a more focused labor movement would have brought national health insurance to this country. Perhaps.

3. Racial politics. This is probably a major reason why the United States has a less redistributive welfare state overall than other OECD countries (see Alesina, Glaeser and Sacerdote). And it helps explain the failure of health care reform too. The main factor here is that Southern Democrats from the 1930s through 1960s were unwilling to support any health care program that was run by the federal government; after all, that would put Congress in a position to enforce racial integration in hospitals. Couldn't have that. (Notably, the Southern Democrats did not block disability insurance in 1956, which was designed to be run by state health departments.)

4. Structural explanations: Quadagno doesn't really discuss this one, but as we know, it's hard to get stuff passed in the United States: we've got a lot of checks and balances in Congress. Meanwhile, let's not forget that our representatives are elected by winning pluralities in geographically-based districts. As such, they have infinitely more incentive to favor spending programs that are geographically targeted and local—yes, the sweet smell of pork—rather than universal benefits that affect the entire country. That means that Congress as a whole will be, by design, less concerned with national health care. But heh, longtime readers are probably sick of hearing me harp on this subject, so I'll let it go for now.

5. Path dependency: Ah yes, "path dependency" is a big one, and Quadagno only touches on this briefly. There are certain "accidental" features of history which have sent the United States down certain paths that then became ingrained over time. For example, the fact that we happen to have an 18th century-era constitution obsessed with property rights—something few, if any, of the other OECD countries have—meant that our courts have traditionally been more hostile towards welfare states than those abroad. And small differences can accumulate over time. During the Progressive Era, the Supreme Court helped to constrain pushes for broad-based social insurance, which in turn helped private insurers step in and fill the void, and those private insurers metastasized and grew powerful over time, thus opposing national health care.

Meanwhile, the "accidental" fact of World War II led many companies to compete for workers by offering health benefits—since wages were frozen during the war—which in turn enticed unions into trying to bargain for better benefits directly rather than push for a national health program. And the passage of Medicare in 1966 helped siphon off senior citizens who might otherwise have been a powerful ally in a push for, say, comprehensive single-payer health care in the 1970s. Certain policies and accidents of history create strange, and sometimes enduring, legacies.

6. Special Interests: This is Quadagno's preferred explanation. "[E]ach attempt to guarantee universal coverage has been resisted by powerful special interests who have used every weapon on hand to keep the financing of health services a private endeavor." First it was doctors, then it was the insurance industry, now it includes the pharmaceutical industry. Only when these interests have been divided and conquered has real health care reform passed. Insurance companies supported disability insurance over the protests of the AMA. Both hospital administrators and insurers again left the AMA hung out to dry in the Medicare battle. But in the 1970s, the insurers gained new allies—including the National Federation of Independent Businesses—to thwart reform. I like this explanation: As I've said before, the only way I see national health care getting passed today is if reformers split the opposition. Maybe placate large businesses and Big Pharma while attacking private insurance. Or something. But you can't go up against everyone at once: that's what Clinton tried to do and got himself kicked in the teeth.

Now the sad part is that nearly all of these factors are alive and well today, except perhaps racially-based opposition to universal health care. (And I'm not even sure about that one: nativism and hostility towards immigrants, after all, played a huge role in both the battle over Clinton health care and welfare reform.) So the prospects for national health care look severely daunting, and unlike some liberals, I don't think it's possible to wait around for a health care crisis to hit—in fact, I don't think that crisis will ever hit; even if premiums do skyrocket out of control and businesses start pushing their employees off of their plans, I'm guessing that demand for comprehensive change will likely be diverted by piecemeal reforms enacted by Congress. Throw the rabble a scrap or two and they'll stop clamoring for revolution. But really, single-payer won't magically appear one day; reform will only come after a long, hard slog right through the obstacles listed above.
-- Brad Plumer 3:50 AM || ||