The Time Is Right to Organize for
Single Payer

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 product.

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 alone.

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 public solutions.

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 United States.


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