The Time Is Right to Organize for
by Colin Gordon
One for All newsletter / Health Care for All-California
(HCA-CA) , November 1998
[What Is a Single-Payer Health Care System? A single-payer
system ... creates a publicly accountable fund from which all
health bills are paid-to doctors, hospitals, pharmacies, etc.
Payments to the fund replace, for example, all health insurance
premiums and deductibles. It costs less. Everyone contributes
to the fund; everyone receives the same benefits; and everyone
has complete choice of provider.]
In 1948, California governor Earl Warren's hopes of passing
a state-level single-payer health plan were dashed by a public
relations campaign bankrolled by medical and insurance interests.
The American Medical Association wasted no time in retaining the
same PR firm to orchestrate a $1 million "National Education
Campaign" which was instrumental in the defeat of national
reform in 1949. Fifty years later the same script played out in
reverse. The insurance industry's infamous "Harry and Louise"
campaign signaled the end of the Clinton health care debacle;
scarcely a year later, the same advertising firm coordinated the
opposition to California's Proposition 186. The larger consequences,
in each era, were the same: Californians were left uninsured,
underinsured, or tenuously insured by a patchwork of private insurance
and job-based benefits. In every other industrialized democracy,
the postwar era saw health care become (like pensions or poor
relief) a basic right of citizenship; in the United States it
remained (like breakfast cereal or mufflers) just another consumer
Managed Care Is A Failure
There is, at the same time, an important difference between
the two eras. In the late 1940s, the health debate played out
against a backdrop of Cold War (which made it easy for opponents
to red bait reformers) and prosperity (which made it easy for
opponents to argue that private benefits could do the job). Fifty
years later we know better. Private health coverage peaked in
the late 1960s and never came close to its promise of universal
coverage--a failure acknowledged but only partially addressed
by the passage of Medicare and Medicaid in 1965. As postwar growth
slowed (and health costs spiraled), we learned that private provision
was both fragmentary and fickle. By the mid-1990s it was clear
that private health insurance would not, could not, and should
not be a surrogate for a national health system. However much
they disagreed over the philosophy of public provision, scholars
on the left and right agreed that single-payer health insurance
could unravel the existing tangle of public and private health
spending and cover the uninsured with the administrative savings
And yet the compelling logic of single-payer care did not
prevail in 1994 or 1995. For this, we can lay much of the blame
on the Clinton Administration which, in its eagerness to please
everyone, dismissed the single-payer option, invited medical and
business and insurance interests to write the legislation, and
then professed shock that the resulting monstrosity pleased no
one. In the short run, the 1992-1994 debate confused the public,
mobilized special interests, and doomed follow-up efforts at state
reform. In the longer run, however, it has also underscored the
logic and simplicity of the single-payer solution. As HMOs have
rushed into the vacuum left by federal failure, they have confirmed
our worst fears of administrative waste and intrusion. Most Americans
(as they have since the 1940s) continue to support serious and
substantial health care reform. Even those doctors who have historically
feared "state bureaucrats" coming between them and their
patients have been forced to admit that the private bureaucrats
are worse. And even those employers who have led the push for
"managed care" since the mid-1980s are beginning to
realize that the dollars saved on care disappear in the administrative
overhead of managing it.
In short, popular dissatisfaction continues to grow. The savings
of managed care are illusory. And many of the interests who have
scuttled reform in the past are starting to realize that they
have leapt from the frying pan and into the flame. In these respects,
the next few years pose an extraordinary opportunity for single-payer
advocates. As we turn our energies to this battle once again,
the history of American social policy offers two important lessons.
Popular Pressure Works
The first lesson is quite simple: popular pressure works.
Popular movements - including the Townshend pension movement,
Upton Sinclair's gubernatorial run in California, sporadic organizations
of the unemployed, and (most importantly) the emergence of the
modern labor movement--transformed the New Deal from a cautious
set of reforms into a watershed in labor law and welfare policy.
And popular movements--including the civil rights movement and
the welfare rights movement - broadened the vision of the Great
Society in the 1960s. While scholars disagree whether these political
responses were sincere efforts to expand social citizenship or
cynical efforts to contain dissent, they generally agree that
the reforms of 1935 or 1965 would not have been made had these
demands not been voiced.
Importantly, such popular mobilization not only puts pressure
on governments but on economic interests as well. After 1929,
for example, many prominent employers were struggling with private
benefit plans which they had set up in the 1920s as a way of building
loyalty and discouraging unionization. The Depression magnified
the demands on these programs and their costs, and many simply
abandoned their commitments. But others, hoping to both maintain
the benefits of "welfare capitalism" and spread its
costs to their competitors, supported state pension and unemployment
laws. Once some states passed welfare laws, employers in those
states too supported federal law as an escape from competitive
disadvantage. In each instance, popular demands foreclosed the
option of simply abandoning the entire patchwork of employment-based
programs and turned at least some employers into advocates of
Incremental Reform Doesn't Work
The second lesson is equally simple and compelling: incremental
reform doesn't work. Again and again, reformers hoped to get a
foot in the door by accomplishing some fragment of coverage, only
to find that strategic distinctions hardened into lasting political
assumptions about "deserving" and "undeserving"
citizens. Advocates of state aid early in this century used the
gambit of the "widow's pension" as an entering wedge;
in the long run this meant that the political claims of those
single mothers who were not widows remained weak and controversial.
Advocates of social security in the early 1930s used the gambit
of "contributory" social insurance to head off critics
of "the dole;" in the long run, payroll financing transformed
Social Security pensions and unemployment insurance into unassailable
entitlements, while the general revenue financing of Social Security's
other titles (most notably AFDC) left them open to attack. Less-than-universal
programs of social provision, as the American experience attests,
are more likely to shrink than expand.
The limits of incremental reform are even clearer in the history
of health policy. In 1935, the New Deal dropped health insurance
from Social Security's final draft and offered only scattered
public health provisions. Draft deferments during the Second World
War underscored a public health crisis but, aside from some provision
for veterans' care through the VA, the only meaningful postwar
reforms were a federal commitment to hospital construction (including
segregated facilities in the South) private insurance and tax
breaks for employment-based health drive home the s coverage.
Reformers understood and underscored the limits of private coverage,
but were able to do little more than fill in some of the gaps--most
famously with Medicare and Medicaid. Since the mid-1960s, reform
has been largely aimed at controlling public costs by tinkering
with Medicare and Medicaid or controlling private costs by facilitating
the emergence of "managed care" networks. In each instance,
the political solution at best perpetuated, and at worst magnified,
the uneven and tenuous nature of employment-based coverage. Basing
public policy on the assumption of private coverage, as our experience
from the 1930s to the present suggests, is like moving furniture
into a burning house.
Employers' Stake in Single Payer
How, then, should we apply the lessons of the recent and not-so-recent
past to a renewed campaign for single-payer health care? First,
we need to frame our efforts in such a way as to appeal to natural
and unnatural allies alike. Some employers have always been amenable
to the idea of socializing health care costs because a large chunk
of the nation's health bill is already rolled into the insurance
they buy for their employees. For these employers, health reform
has always been an all-or-nothing proposition; they either want
the freedom to abandon their commitments or the assurance that
all will share in the costs. We may not be able to sell such employers
on the inherent equity of expansive and universal social policy,
but we should be able to sell them on the prospect of substantial
administrative and actuarial savings.
Similarly, we should be able to reach out to some of the medical
profession. Behind the facade of the AMA, many doctors have always
supported a single-payer system. This rift has widened in recent
years as doctors have increasingly confronted the perverse priorities
and administrative excess of the HMO system. In many states, doctors
have led the charge for closer regulation of HMOs. And, in many
HMOs, doctors have taken steps towards collective bargaining,
a remarkable measure of their dissatisfaction with the "private
solution" of managed care. Again, we may not be able to sell
such doctors on the philosophy of public provision, but we should
be able to sell them on the relative autonomy it offers.
Second, we need to isolate insurers as opponents of reform,
and underscore the budgetary implications of single-payer provision.
In the wake of the Clinton plan, any notion that "managed
competition" among HMOs and "managed care" within
them will solve all our problems has virtually disappeared. HMOs
are firmly fixed in the public mind as either corrupt or callous.
Amidst the broad consumer and political backlash against HMOs,
the likelihood that insurance lobbyists could portray their interests
as the general interest is extremely slim. The argument that HMOs
are part of the problem and that incremental regulation of their
practices will accomplish little is increasingly compelling.
At the same time, the public's current opinion of private
insurance makes it easier to drive home the substantial savings
of single-payer provision. This has always struck me as both the
most important argument for a single-payer system and the hardest
one to make. Nearly two decades of Reaganomics or its equivalent
have conditioned voters to consider any new program as a drain
on the public purse and a threat to American competitiveness.
And, in a system of predominantly private or contributory social
provision, many resent their taxes being spent on someone else.
For those who understand the true costs and benefits of public
social provision, of course, such arguments are shortsighted.
But it is also important to be able to make this argument to those
who cling to the competitive or budgetary anxieties that are so
much a part of modern American political culture.
Under a single-payer system, quite simply, we would pay less
and get more. Business would pay substantially less: those currently
providing employment-based benefits would be relieved of their
costs, and the administrative waste of private insurance would
be redirected to care. Government would pay less because public
programs would cease to be the dumping ground for high risks.
A single-payer system would simply allow the state to reorganize
existing health expenditures toward substantial savings and broader
coverage. On balance, universal and equitable health care is actually
a competitive advantage.
Without popular pressure at the state level, we are likely
to stumble around an ongoing crisis of uneven coverage, inflation,
and capricious private insurance for years. With popular pressure,
however, we have a chance to focus the attention of voters and
doctors and unions and employers on the promise of a single-payer
solution to both the persistent problem of equitable health care
and its reflection in the current controversy over HMO practices.
As in the spread of social security law in the 1930s, legislative
innovation in one state could, in turn, act as an example and
a catalyst for state action elsewhere. The lessons of the 1 930s
and 1990s certainly suggest that this is possible. The waste and
neglect of our current health system demand that we try.
Colin Gordon teaches American History at the University of
lowa. He is the author of New Deals: Business, Labor, and Polities
in America, 1920-1935 (Cambridge University Press, 1994) and Dead
on Arrival: The Clinton Health Care Plan (Open Magazine, 1995).
He is currently working on a history of health insurance in the