Marcela Alshon (6:07)

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Clem Whitaker (6:55)

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Marcela Alshon (7:00)

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Sally Helm (8:18)

Navigating today's health insurance system in the United States is, as we all know, a lot. Two thirds of Americans are covered by private insurance, usually through their employers. They still have to make a lot of complicated decisions about what kind of coverage to get. And then there's the other third of the population who are covered by government programs like Medicare or Medicaid, or who have no insurance at all.

Marcela Alshon (8:42)

I think the hallmark of the American medical system and the way that we've designed our insurance is complexity.

Sally Helm (8:53)

Marcela Alshon is a medical doctor and an economist at Harvard University. Her recent work has focused on the history behind that complexity. She said when she started, she assumed that today's private insurance system came about basically because it was the most efficient.

Marcela Alshon (9:09)

Solution, that private health insurance was simply better, more efficient, more equitable. Somehow the outcome of a competitive process never did. I think it was the outcome of an interest group.

Sally Helm (9:28)

That interest group is the ama, the American Medical association, which Alshon is a member of. Today, just 15% of doctors are members. But back in the 1930s, the AMA was very powerful. It represented a lot of doctors. And those doctors were living in a new world. Their profession had recently taken some big steps forward.

Marcela Alshon (9:54)

Well, one of the things that changed was technology. Nothing spurs innovation like the existential threat of war.

Sally Helm (10:02)

As destructive and horrible as it was, World War I also led to major medical progress during the interwar period.

Marcela Alshon (10:11)

That continues an improvement in hygienic standards, in anesthesia, in surgical techniques. And all of these things made it such that the general practitioner could no longer master all of the various facets of medicine.

Sally Helm (10:29)

Yep. Medical knowledge is expanding, and that means that people have to start specializing in particular fields. These doctors are called specialists, ophthalmologists, gynecologists, dermatologists.

Marcela Alshon (10:44)

And so you have the rise of the specialists. We see their wages, their incomes rise, which makes sense.

Sally Helm (10:52)

They have really valuable skills and knowledge. And these highly paid professionals start joining the American Medical association to band together and protect their interests and maybe their increased salaries. Okay. Also during the interwar period, in 1935, President Franklin Delano Roosevelt is still trying to navigate the United States out of the Great Depression. He's made progress through his New Deal programs. First, he focused on financial reform with new agencies like the securities and Exchange Commission, the SEC to regulate stock trading, and the Federal Deposit Insurance Corporation, the fdic, to protect the money in people's bank accounts. Now he is ready to launch the second New Deal. He wants this one to focus on improving individual American lives. That includes the Works Progress Administration, the wpa, to give people jobs, also Social Security to support Americans after retirement or if they're unable to work. And Roosevelt is thinking about this new idea, a government health care guarantee, national health insurance. Doctors, as we have learned, are alarmed that the government wants to get into their domain.

Marcela Alshon (12:13)

That's now seen as an encroachment on both the physician's ability to set their own prices and for the clinician to make decisions.

Sally Helm (12:25)

Alshon says these fears aren't necessarily justified.

Marcela Alshon (12:29)

It's not a foregone conclusion that just because these were prices set by the government that physicians wouldn't have any say in what those prices were. In fact, you know, negotiations between physicians and the government is typically what occurs in most other countries.

Sally Helm (12:50)

But the AMA in 1935 doesn't want to take that chance. After that emergency meeting, the special session in Chicago, doctors send a flood of telegrams to the White House. Those highly paid specialists and regular community doctors, too, they say, do not do this. All this back and Forth is happening behind the scenes. The White House report the doctors got their hands on is never published. But soon enough, Secretary of Labor Frances Perkins warns her boss against moving forward with this healthcare plan. She argues that bundling it with Social Security could tank both. FDR drops it in 1935. National Health Insurance is not brought to a vote at this time. Americans are mostly paying out of pocket for their medical costs the way they'd pay for anything else. There are other kinds of insurance, home insurance, car insurance, life insurance. But as far as health insurance is concerned, the closest thing that exists is that way to pay in advance for a hospital stay.

Marcela Alshon (13:57)

These were prepayment hospital plans. You don't see the word insurance in that title.

Sally Helm (14:05)

One of the earliest examples of this kind of plan is called Blue Cross might sound familiar. Its origins go back to 1929, when some Dallas school teachers strike a deal with Baylor University Hospital. For a fee of $6 per year, the teachers would receive a prepaid 21 day stay in that hospital.

Marcela Alshon (14:24)

It only covered room and board. That's all that hospital insurance would cover.

Sally Helm (14:29)

It's a way for people to get some peace of mind and for hospitals to make money. The idea spreads. Hospitals are happy to say, yeah, we'll collect this money now, and hopefully this all adds up to less than we'll ultimately spend on patients. That is, of course, the basic concept of insurance. And over time, the idea starts to naturally spread.

Marcela Alshon (14:53)

That's where you started to see local and state medical associations come out and say, well, let's try and have our own product.

Sally Helm (15:02)

Associations of private doctors create their own prepayment plans too.

Marcela Alshon (15:08)

California was the first mover in this. The California Medical association started California Physician Service, which eventually became known as Blue Shield. And their idea was essentially they didn't want the government involved and they could see that the population was demanding something, and so they established their own physician service.

Sally Helm (15:31)

They started up in 1939, charging group members $1.70 a month. And people pay. The Depression is still fresh in their minds. They don't want to risk not being able to afford the care they need. By 1940, over 20 million Americans have some kind of health coverage. But for now, national health insurance is not on the agenda. Roosevelt has other things on his mind.

Marcela Alshon (15:59)

You know, obviously World War II Europe was a distraction, but the war might.

Sally Helm (16:05)

Also be the reason he ultimately tries again.

Marcela Alshon (16:09)

There was evidence to suggest from this large survey of draft registrants that about one third of the draft registrants were unfit to fight because of their medical situation. So I think that survey did motivate him. And he also felt that the New Deal really wasn't completed.

Sally Helm (16:32)

In the end, though, instead of a third New Deal, Roosevelt aims for a different sequel, a second Bill of Rights.

Marcela Alshon (16:40)

Under which a new basis of security and prosperity can be established for all.

Sally Helm (16:47)

FDR outlines this second bill of rights in his 1944 State of the Union address. It includes the right to have a job, the right to have enough food and clothing and recreation, the right to a decent home, and the right to.

Marcela Alshon (17:02)

Adequate medical care and the opportunity to achieve and enjoy good health.

Sally Helm (17:11)

But Roosevelt himself dies the next year before any of this plan gets passed. But then things start to get moving in California. In the fall of 1944, California Governor Earl Warren is hospitalized with a kidney infection. While recuperating, he starts reflecting on the cost of health care. While he could afford this treatment, the average family might be devastated by a medical emergency. In his State of the State address the following January, he announces that California will be creating its own compulsory health insurance plan. And keep in mind, it's normally Roosevelt Democrats who support this kind of idea, but Warren is a Republican.

Marcela Alshon (18:00)

I think the motivation behind Earl Warren's interest in this is much more related to his own medical care issue with the kidney infection and not really realizing the high cost of medical care up until that point.

Sally Helm (18:17)

The California Medical association, the cma, a chapter of the ama, they are very concerned, and they turn to outside help. A company called Campaigns, Inc. It's operated by a husband and wife, Clem Whitaker and Leon Baxter.

Marcela Alshon (18:37)

She worked at the Chamber of Commerce at a local municipality. He had been a former editor, and they saw an opportunity.

Sally Helm (18:43)

Whitaker and Baxter launched their company in 1933, creating campaigns to support or oppose various political causes. They pull out all the stops, and their aggressive tactics are perfect for a place like California.

Marcela Alshon (18:58)

Obviously, with Hollywood and advertising, the media was well developed. But that's for goods and services or movies or whatnot. What if you used all of those types of persuasive messaging for policymaking?

Sally Helm (19:14)

Campaigns Inc. Is the first political consulting firm in the country. In their first major campaign, they're paid to undermine author Upton Sinclair's run for governor. They get MGM to produce fake newsreels with interviews of actors playing vagrant Sinclair supporters. They say California will be filled with these kinds of people if Sinclair wins. It's one of the first filmed attack ads in the history of American politics. Upton Sinclair loses, and Whitaker and Baxter keep sharpening their playbook.

Marcela Alshon (19:50)

I think the quote is that, you know, a wall goes up when you try to make Mr. And Mrs. Average American citizen work or think. The average American doesn't want to be educated, he doesn't want to improve his mind, he doesn't even want to work consciously on being a good citizen. But there are ways you can interest him in a campaign pain that we have ever found successful. You can put up a fight or you can put up a show.

Sally Helm (20:18)

So after Earl Warren announces his plan, the California Medical association comes to Whitaker and Baxter and says, can you help us defeat this? They say, oh yeah.

Marcela Alshon (20:31)

They kind of had a little vendetta against Earl Warren. He had used them briefly in his campaign for governor and then was turned off by some of their tactics and release them. So they were very happy to be hired by the California Medical association to not only go against Governor Warren's bill, but also to promote private or voluntary health insurance. In particular the cps, the plan by the California Medical Association.

Sally Helm (21:01)

Yet they're essentially advertising private insurance. The thought is the more Californians sign up for the doctor backed plan, the less demand there will be for a.

Marcela Alshon (21:11)

State plan, especially when it's paired with the very persuasive Massachusetts. They worked a lot with local newspapers.

Sally Helm (21:20)

Whitaker and Baxter buy ads in 400 newspapers to advertise something called Voluntary Health Insurance Week. They came up with it themselves, but they made it look really official.

Marcela Alshon (21:31)

They asked local towns and mayors to declare, you know, Voluntary Insurance Week. And they would do an enrollment drive in that community and they would help provide all of the pamphlets and the flyers and everything.

Sally Helm (21:46)

One of these flyers is titled the Health Question and it shows a scared family in a scary forest surrounded by skeletons, except instead of teeth, the skeletons have the word bill in their mouths, referring to the health insurance bill that Governor Wharton wants to pass. They also create pre written postcards that constituents can send to their representatives. Certainly we don't want to be forced to go to a state doctor, the postcard reads. That system is part and parcel of what our boys are fighting overseas. Let's not adopt it here. In 1945, Earl Warren's bill fails by one vote. Around the same time on the national stage, President Harry Truman is trying to carry on Roosevelt's legacy. He's even presented his own health care plan which had a 59% approval rating. But it ultimately gets killed in Congress.

Marcela Alshon (22:47)

Everyone thought this issue was dead in the water. Roosevelt died. Roosevelt was the real threat. It seemed like Harry Truman was definitely not going to win in 1948.

Sally Helm (23:02)

But then, defying all odds, Truman does win. You may have seen the famous photo of him holding up a copy of the Chicago Daily Tribune, which had already printed an issue with the headline Dewey Defeats Truman.

Marcela Alshon (23:16)

And so here you have a staunch supporter of national health insurance who, shockingly, is elected, and that precipitates this crisis for the ama.

Sally Helm (23:29)

Just days later, the AMA calls Whitaker and Baxter. We know about the work you did in California. Now we want you to change the minds of the entire.

Clem Whitaker (23:50)

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Clem Whitaker (24:48)

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Sally Helm (25:20)

After Harry Truman is elected, unexpectedly, the AMA gets ready for a fight.

Marcela Alshon (25:27)

It's a self described Armageddon moment. It's described in that way by the AMA president.

Sally Helm (25:33)

An Armageddon moment. Now, the AMA has gone through these panics before. In 1935, in 1944. But this is different. Truman has Congress. He doesn't have a depression hanging over him or a war. And America's closest ally has just passed their own version of this program. The National Health Service, or nhs.

Marcela Alshon (25:59)

The United Kingdom is our legal and our cultural forefather. It's an English speaking country in Europe. So that's terrible news for the ama.

Sally Helm (26:12)

But they have a secret campaigns inc. Whitaker and Baxter get right to work.

Marcela Alshon (26:18)

They move their office from Sacramento to Chicago.

Sally Helm (26:22)

That's where the AMA is headquartered and.

Marcela Alshon (26:25)

Launch what they call the National Education Campaign.

Sally Helm (26:28)

But the National Education campaign isn't really.

Marcela Alshon (26:32)

Educational based on their own stated playbook. They're not about informing individuals about what is this new thing that we call voluntary health insurance, what's the price, who's covered, what services, eligibility, etc. No, they're going to go out and say national health insurance or as they call it compulsory health insurance is socialism. But they don't have a lot of time so they use what they have readily available which is the 70% of physicians that are part of the AMA.

Sally Helm (27:09)

70% of all the doctors in the country getting them to push private insurance over this government plan that will be crucial to the AMA's project.

Marcela Alshon (27:20)

You have to have the trusted messenger, right? Well these trusted messengers were deployed to sell insurance. Doctors selling insurance in their office, getting their patients to enroll.

Sally Helm (27:33)

Clem Whitaker himself meets with doctors en masse railing against socialized medicine. He tells 200 assembled doctors in New England compulsory health insurance will mark the beginning of the end of free institutions in America. Whitaker and Baxter give doctors a pamphlet to hand out to their patients. The voluntary way is the American way. There's a giant bald eagle on the front.

Marcela Alshon (28:00)

Gotta have the eagle and the menacing slogans. You know a message from your doctor if you want to protect yourself and your family and liberty. Read inside this indictment of socialized medicine.

Sally Helm (28:11)

They know what buttons to push.

Marcela Alshon (28:14)

Fear. Fear is going to move people away from state sponsored health insurance, compulsory health insurance and going to increase take up of this substitute private health insurance.

Sally Helm (28:31)

Whitaker and Baxter also use the mass media running AMA approved ads in newspapers. And they work out partnerships with companies that have nothing to do with medicine, convincing them to put AMA messaging in their advertisements. Everything from farming to banking to clothing. They'd work it in like we like taking orders from our customers but not from the government. So support voluntary insurance. They are successfully tying this healthcare fight to huge ideological fights in the country. Making this all about freedom. The White House basically has no response. To be fair, nothing like this campaign had ever been seen before.

Marcela Alshon (29:17)

Truman was caught a bit flat footed because I don't even think the government fully understood the breadth of the campaign.

Sally Helm (29:26)

Truman is furious about how Campaigns Inc. Is talking about his plan. He says quote, nothing in this bill that came any closer to socialism than the Payments the American Medical association makes to the advertising firm of Whitaker and Baxter to misrepresent my health program. But the die is cast. In 1952, the Republican Party adopts the AMA's stance on national health insurance.

Marcela Alshon (29:57)

We see Republicans in Congress shifting the way they speak about insurance. It looks much more aligned with the AMA propaganda.

Sally Helm (30:07)

And later, in 1952, Republican Dwight D. Eisenhower hour wins the presidency. And that's the end of Truman's national health insurance plan. The AMA campaign lasted three years. Marcella Alshon's work has focused on quantifying the impact that Whitaker and Baxter had in killing Truman's legislation. And she found that the impact was substantial. People exposed to the campaign seemed to be more likely to sign up for private health insurance. Public opinion shifted too. When Truman first announced the plan, about 60% of people supported it, according to Gallup. By 1953, it's only 30%. And soon Gallup stops asking the question entirely. For the ama, the battle is won. Universal healthcare comes up many more times in American history. Lyndon Johnson creates Medicare and Medicaid. Richard Nixon attempts to pass a paid federal health care program. And in 2010, Barack Obama signs the Affordable Care Act. Today's American health care system is complex and for many people, extremely hard to navigate. Alshon says the system would likely shock those early AMA members, those Doctors from the 30s, 40s and 50s whose lobbying helped pushed the country down this road.

Marcela Alshon (31:35)

I don't think they ever could have imagined the juggernaut that would kind of be released and unfold does now the US Healthcare industry. And it's become, you know, an industry.

Sally Helm (31:49)

A very expensive industry.

Marcela Alshon (31:52)

We spend on average about $15,000 per person per year. It's an enormous cost. It's one out of every $5 of our GDP. We spend so much more than any other country. And our outcomes are, I think, on many outcomes, lackluster.

Sally Helm (32:09)

The ama, which still represents hundreds of thousands of American doctors, has weighed in on this issue. Their stance today is we're for coverage for all Americans through a combination of private and government backed insurance plans. They've also called for improvements to the Affordable Care Act.

Marcela Alshon (32:27)

Even long lived organizations, they are comprised of people. And if people change their views, those organizations can change.

Sally Helm (32:39)

It's still a far cry from Roosevelt's or Truman's calls for national health insurance. And the terms freedom of practice and freedom of choice still appear in AMA literature. Alshan says a better functioning health insurance system would improve the lives not just of patients, but but also of doctors.

Marcela Alshon (32:59)

Knowing that they didn't have to fight so hard just to get the MRI covered or that medication prescribed. There's many different ways to do it, but having a much more rational system that is more about delivering care and less about reducing costs and increasing revenues. I mean, that would be a game changer. Foreign.

Sally Helm (33:30)

Thanks for listening to History this Week, a Back Pocket Studios production in partnership with the History Channel. To stay updated on all things History this week, sign up@historythisweekpodcast.com and if you have any thoughts or questions, send us an email@historythisweekistory.com Special thanks to our guest, Marcela Alshon Angelopoulos, professor of Public Policy at the Kennedy School of Government at Harvard University and a Professor of Public Health at the Chan School of Public Health at Harvard. Her working paper on this topic is titled why doesn't the United States have National Health Insurance? The Role of the American Medical Association. This episode was produced and sound designed by Ben Dickstein. It was also produced by me, Sally Helm for Back Pocket Studios. Our executive producers are Ben Dickstein and David Weisbord from the History Channel. Our executive producers are Eli Lehrer and Liv Fiddler. Don't forget to follow, rate and review History this Week, wherever you get your podcasts and we'll see you next week.