David J. Gary

History 81000

Summary for 4/24/06 

Colin Gordon, Dead on Arrival: The Politics of Health Care in Twentieth-Century America, Princeton University Press, 2003. 

      Colin Gordon, a history professor at the University of Iowa, has written a book that attempts to answer one of the most vexing questions in modern American politics: why does the United States not have a national health insurance system like most of the developed world? To answer in brief, Gordon paints a bleak picture of doctors, insurers, and employers using their clout to advance their policy interests in a unique American governmental system that is especially susceptible to financial interests. He says national health insurance was “dead on arrival” because of “the privileged status of economic interests in American politics” (p. 1). Gordon says the flow of money and the pull of lobbyists from these interests were able to play on the fears that universal health coverage would erode the power of individual choice, uplift “undeserving” racial groups, and emasculate the husband/father as the provider of a family wage. The flip side of this power of private interest was the weakness of health care reformers and their inability to overcome the obstacles of financial interest despite opinion polls that showed strong public support for universal health coverage. Reformers became fragmented and were overwhelmed by private interest’s resources.

      Gordon claims that private interests are magnified over public interests in the realm of health care because it was the only arena of social provision where private providers, consumers, and intermediaries were entrenched before national reforms were contemplated. No private claim was at stake when the federal government created the pension and unemployment insurance system of Social Security in 1935, but with private money at stake in the area of health insurance, reformers were undercut by the larger resources of those private interests. This influence encouraged the growth of employment-based benefits as an alternative to universal coverage. Gordon goes on to claim that this alternative reinforced long-standing patterns of racial and gender discrimination in such a way that even reformers rarely challenged the premises of Jim Crow or the family wage in health policy.

      Beginning with the early reform movement of the Progressive era, Gordon touches upon all the major events in the governance of health care up to the failed nationalization plan of President Bill Clinton in 1994. This includes: the failed American Association for Labor Legislation’s bid for sickness insurance in 1914-1920, the under-funded 1921 Sheppard-Towner Act for maternal health that was phased-out by 1929, the failure of Social Security-based health insurance in the 1930s, the huge spike in private employment-based benefits beginning in World War II, the failed attempts to correct the health insurance gap in Social Security through the Wagner-Murray-Dingell bill from 1939-1949, the “medical McCarthyism” that painted universal health care as evil socialism in the 1950s, the passage of Medicare and Medicaid in 1965, the attempts to cut health costs in the stagnant economy of the 1970s through the invention of the health management organization (HMO), the lack of interest during the Reagan administration of the 1980s, and the cumbersome Clinton health plan that met defeat in 1994. Each of his seven chapters is divided into different topics (for example, race) and each topic is explored in detail from the Progressive era to the Clinton health plan. This cyclical structure gives information to the reader in a piecemeal fashion, making a full understanding of a time period hard to grasp until the end of the book. That being said, it would not have been possible to make each chapter into the study of a decade because Gordon’s main focus is on the 1930s-1960s, the period when reforms seemed most promising. My criticism on Gordon’s structure is only minor, as he put together a lucid, encompassing argument on a complicated subject in 300 pages.

      Gordon sets the stage in chapter one, where he provides an overview of the history of health care from 1910-2000. Chapter two examines how employment-based health insurance became a political alternative to universal health care. He says it was a workable political solution, but a failed practical alternative as it left behind many parts of the population. While white-collar workers became the foundation of employment-based health insurance, Gordon is more interested in the collective bargaining of workers here. He claims “[t]his was the frontier on which the parameters of private insurance were contested and defined” (p. 46). Employers were willing to give this coverage to their workers because it reinforced loyalty to the firm and also kept the government from getting involved in their business operations. Before group claims came about through the non-profit Blue Cross and Blue Shield in the 1930s, health insurance barely existed, with unions and fraternal organizations picking up small parts of the bill, but scarcely covering most workers. Private group insurance policies also began in the 1930s, but really took off because of World War II. Since labor agreed to a no-strike policy and regulated wage scale during the war, it could only bargain for benefit improvements. Employers were willing to provide these benefits as government rules allowed them to deduct the cost of these benefit plans from their tax bill. This trend continued after the war as the concept of a full employment economy was thought be a panacea to the quandary of universal coverage. Labor was willing to accept private benefits because it was clear that there was no political push for a universal health care system.. Insurers liked the new situation because it opened up a new market of insurable groups of employees. This system gave those with jobs coverage, but left behind those who needed public assistance. Minorities had fewer opportunities for good jobs and women were forgotten as men were supposed to provide a family wage to support their dependents. The powers that be felt this system was beneficial to them and it became entrenched.

      Chapter three looks at the difference between contributory insurance and charity. Gordon says employment-based care has always been considered more legitimate than charity assistance. The dilemma of universal coverage has always been how to pay for it. Reformers wanted to create some sort of contributory system through a tax, like Social Security, but opponents feared that benefits would not be matched to contributions and that those least deserving would flood the system and force those who pay taxes to finance the health care of the poor and undeserving. The solution that emerged was government coverage for children, veterans, the indigent, and the elderly under Medicare and Medicaid, while private insurance kept the best insurance risks for workers. Gordon says that the push for universal coverage took a step back by this fragmentation of the populace. For example, as the elderly became covered under Medicare, they had less of an incentive to get involved in the creation of a universal health system. The system that was created reinforced deserving coverage, Medicare, and stigmatized undeserving coverage under Medicare.

      Chapters four through seven are the driving force of Gordon’s book. It is in those chapters that he flushes out his argument and explains the political influence of interests. Chapter four examines the peculiar growth of the state in tandem with an anti-state mindset. Opponents of universal coverage demonized state intervention, claiming universal coverage would lead to socialism or communism, which was understood as un-American. Gordon shows that the opponents of national health care were more in tune with the political language of McCarthyism, which was used as a club to the proponents of reform.

      Race is the central focus of chapter five. Gordon takes a strong stand when he says “[t]he American welfare state has always been, at root, a Jim Crow welfare state – disdainful of citizenship claims of racial minorities, deferential to a southern-controlled Congress, and leery of the racial implications of universal social programs” (p. 172) Segregation persisted in medicine and hospitals longer than in any other public institution or facility. He says that is because Southern Congressman pushed for local control of any federal expenditure and because the agricultural jobs usual given to racial minorities excluded them from Social Security and Medicare. This pushed Southern, and later Southwestern, leaders into a partnership with doctors, employers, and insurers to keep racial minorities excluded from the health system.

      Chapters six and seven drive home the ability of private interest groups to gather resources to overwhelm the proponents of health care reform and form what Gordon calls a “corporate compromise” (p. 211). The antagonists of these chapters are the American Medical Association (AMA), a conservative organization of doctors that in effect drowned out the voices of reformers and their allies, and to a lesser extent the American Hospital Association and the Health Insurance Association of America. The AMA took the lead in fighting reform and wanted to avoid any government capping of fees. They were worried the government would dictate the price of health care and raised millions of dollars to fight off the various reform proposals. The AMA became well-connected with politicians, printed vast amounts of material to keep the discussion one-sided, and, as an important licensing organization, forced doctors to go along with their agenda. Reformers, in contrast, could not raise money to print materials, were fragmented by the peeling away of groups through piecemeal reforms like Medicare and Medicaid, and could not tap into a party system that pushed winning elections over creating programs. Gordon stresses the weakness of the Democratic Party and organized labor, especially after the Vietnam War and inflation effectively undercut the possibility of universal coverage.

      Gordon’s book is a damning critique of the power of private interest to quell

public desire. After the continuous failures of health reform, Gordon predicts the future of universal coverage will remain elusive despite public support.