The Rise of Inverted Liberalism: 1935-1965

• In Event: The Expansion of Health Policy and Public Health: Historical Perspectives

Abstract

A consistent story told about the New Deal is that Americans failed to pass health care legislation. This story details how the Roosevelt Administration strategically bypassed health care reform due to opposition from key stakeholders, such as the American Medical Association, the American Hospital Association and key business interests, and concerns that this opposition would endanger other more important parts of the bill—namely old age social insurance (or what we now call Social Security). This telling is true, if we define health reform (or health legislation) as compulsory health insurance. However, if we look beyond this, then it is also terribly misleading to characterize the Social Security Act as doing nothing in the health care arena.
Many other scholars have discussed important “supply-side” health reforms, which built up the US health services system. They discuss how public health leaders behind these supply-side reforms were not interested in compulsory insurance—at least relative to health care infrastructure development. My contribution to this story is to point out that they avoided compulsory health insurance not only for political reasons, but also because public health reformers hoped publicly funded medical care could be a realistic alternative to compulsory insurance.
Although our historical renditions of the US failure to pass national health insurance tends to focus on the development of voluntary health insurance to explain why compulsory health insurance repeatedly failed, lost from view is the fact that people central to these decisions saw public health investments as a legitimate alternative to insurance—whether compulsory or voluntary. Indeed, public health state building created a logic, which strongly suggested that something akin to a national health service was imminent. Few espoused this logic explicitly—they didn’t call it a National Health Service, but something close “The National Health Program (NHP).”
In this paper I detail the development from 1935 to 1950 of a US national health system. For those who know the British National Health Service, where many health care facilities are publicly owned and providers on government salary, this term in the US context might seem particularly jarring. However, I purposefully use the term because many US public health reformers envisioned their investments in the health care infrastructure as providing some guarantee of access to care for all and believed this approach would provide more health improvements than investments in insurance. Because these expansions were lodged in the private voluntary sector and the government’s role intentionally hidden from public view, public health reformers lost control over the building of the health care state.
There was a brief period after the passage of the New Deal when leaders in the public health network—namely, those in the federal Public Health Service—attempted to lay bare the expansions in public medical services and to make more explicit the building of the NHP. Why they shifted strategy is unclear, but it seems from their writing and speeches that they believed the New Deal represented a new (and enduring) perspective regarding the role of government in health care—not among organized medicine or hospital administrators—but among the American people and state and local governments. They believed that not only would the American public come to believe Cooperative Federalism—the new form of Federalism that the New Deal promulgated—was appropriate, but that as the American public began to understand the role of government behind the health services they were already receiving, and would soon be receiving more of, they would be supportive. These were the heady days of New Deal liberalism, and as strong advocates of this approach and as leaders within a federated scientific agency, they were hopeful that this new political tide would last, and therefore supported an explicit discourse about what it represented.
Of course, we now know that the political forces shifted in the post-war period, McCarthyism took hold, and there was a concerted backlash against the New Deal. However, even if the political winds had not shifted, it is unclear whether their growth and reveal strategy would have worked. Part of the success of hiding growth for decades (detailed in Part I of Grogan’s book for the pre-New Deal period) was due to the use of two policy design mechanisms—federalism and private delegation and provision. The result of building a health service system in this fashion created enormous fragmentation and complexity even by 1940, which exacted its own political costs. Ironically, the political benefits of hiding growth allowed a government-funded system to emerge, but hiding growth under complexity and fragmentation made revealing the role of government to the American public extremely difficult.

Author

• Colleen M. Grogan, University of Chicago