By Tim Louis Macaluso
City Newspaper (Rochester, N.Y.)
September 16, 2009

The national debate over health-care reform blazed through the summer with fiery town hall speeches and angry protests from both the right and the left. The far-fetched charges were nothing short of astonishing in their sheer absurdity and bitterness.

But wild-eyed fights over health care are nothing new in American politics. The struggle for universal coverage has been going on for more than 100 years, says Theodore Brown, a history professor at the University of Rochester. Brown has chronicled the history of health care in the US. He describes it as a long series of charge-and-retreat scuffles between liberals and conservatives that have led us to where we are now – with a costly, broken system.

Brown’s support of Representative John Conyers’ single-payer plan during an event at the Rochester Museum and Science Center earlier this year landed him on YouTube. The clip is called “A Century of Health Care Reform in 8 Minutes.”

At the turn of the 20th century, few Americans had health coverage of any kind. But as Great Britain and Germany began to experiment with government-run health care, Americans began organizing in favor of it, too. It was quickly squelched by opponents, however.

In a recent interview with City Newspaper, Brown said that meaningful health-care reform is only possible through universal coverage, ideally through a single-payer plan. Universal coverage would achieve two main goals: covering all Americans and reducing the cost of health care.

Brown said that health care is intrinsically linked to the US economy. Amorphous and fluid, health care is not only a sector of the economy, but it flows through and influences nearly all other parts of the economy. For the US to remain competitive, Brown said, health-care costs need to be controlled.

Democrats may have jumped into the latest health-care battle unprepared and too eager to appear bipartisan, he said. By not starting with a single-payer solution, Brown said, Democrats lowered the bar for compromise to the point where even a strong public option isn’t certain. The result, Brown said, could be a jumbled bill that achieves little, and pleases no one.

While he appreciated President Obama’s September 9 speech, its clear identification of the problems, and Obama’s willingness to confront truth-distorting tactics, Brown said that he is disappointed in the president’s plan. “I don’t believe that many of the reforms suggested will realize the savings or generate the revenues they are supposed to,” he said.

The following is an edited version of an interview with UR professor of history, Theodore Brown.

CITY: Can you give a brief history of health-care coverage in the US? Hasn’t there always been some resistance to it?

Brown:The effort to reform the American health-care system in the direction of more universal coverage where the government would play an important role as the financier and provider of care goes back over a century. Probably the first, most important moment was at the convention for the Progressive Party in 1912, which nominated Teddy Roosevelt. He broke with Republicans and he was running as a third-party candidate that had a major progressive platform. One of the planks on that platform was something called “sickness insurance.” At the time, it would have been a basic insurance plan.

There was a lot of support for this. A lot of organizations came on board. Even the American Medical Association was supporting it for a while.

A major turning point was 1917 to 1918, which involved the United States entering into World War I and the Russian Revolution. There were opponents [to the plan] all along, but they now beat the drum very loudly. This was the first tarring and labeling of the plan as socialistic and un-American.

In the period immediately after World War I, there was a major Red Scare and backlash similar to the post-World War II-McCarthy era. Much of the progressive-era plan fell through.

Truman became the first sitting president to strongly promote national health-insurance reform. Immediately after World War II, the American Medical Association, the insurance industry, and conservative politicians began to mobilize very strongly against Truman. He was a New Deal Democrat, and saw health-care insurance reform as a natural extension of the New Deal.

This was seen as a very dangerous step by the conservative forces and their allies. An incredible campaign was launched of deliberate obfuscation, mislabeling, and placing editorial cartoons. The AMA, to its great discredit, pioneered some of the techniques that have been perfected today. That then fed right into the Red Scare and McCarthy era. Essentially, those on the liberal end of the spectrum got scared off.

Unfortunately, I see a real parallel with what’s happening now with people getting scared away from the public option.

Why is health-care coverage important to a modern country? And assuming it is important, is it a right or a privilege?

My personal view is that it should be a right; that it should be a basic right of citizenship like public education, clean water, good air quality, and so on. Ethically and morally, I do think it is a right.

But it also makes eminent economic sense. It is the only wise way to organize and mobilize resources. Health-care costs are now something like 16 percent of the GDP, and going up. Soon the figure will be 20 percent. And there is no end in sight.

There was some enthusiasm for a single-payer plan earlier in the year. Now we’re into September and it’s not even discussed. What happened?

Well, it’s not completely gone. There’s been a lot of screaming going on, and those on the left backed away. They’ve gotten scared off, again.

I just read something this morning, an interesting strategy article that said the best way to have advanced a reasonable public option would have been to have the Democratic leadership come out strong for single-payer. Then the public option would have seemed more moderate and mainstream.

Some have even suggested that if you want to get single-payer passed, then we should opt for something like the VA system or the National Health Service of England.

But the center has moved to the right. And a lot of that has been engineered. And the Obama administration, in my view, has succumbed to that. They have backed away and backed away, instead of standing straight in the face of it.

Now, to your point about single-payer – it hasn’t disappeared. New York Representative Anthony Weiner has gotten the Democratic leadership to allow a floor debate on a single-payer bill. They have been introduced since the 1980’s, but they have never gotten out of committee. The single-payer bill, at its peak, had about 93 to 95 sponsors. Weiner has been very effective. He’s made the case and has apparently gotten time to debate this on the floor.

It will no doubt go down to defeat, but it will not go away.

Dissect some of the criticisms of the public option – that it will put private insurance companies out of business and that it will stifle innovation.

I think Obama said it very well back in July. He said, “What are they afraid of? If the private insurance industry does so well, then they should win hands-down.”

Are they afraid that the public option can deliver care as efficiently, and less expensively? Isn’t it the American way to have toe-to-toe competition?

Whether they will stifle innovation, this is another fabricated propaganda claim propagated by the pharmaceutical industry. The facts are that most of the so-called research and development funding [invested] by the pharmaceutical companies is trivial in comparison to the money the industry takes in profit, invests in marketing, and pays its senior management.

Fact two: A considerable amount of the research and development funding really comes from the National Institute of Health – the taxpayer.

And fact three: Many of the most recent innovations and advancements have come from Europe and Japan, where they have national health systems. The CAT scan, for instance, was developed in England.

These are lies that are repeated often enough to get people to believe them.

Is it possible to have reform without a public option?

There will be reform of some kind. We’ll have some tort reform to reduce the amount of litigation. Covering people with pre-existing conditions will probably pass. We’re already trending in that direction. And maybe there will be some portability of benefits.

Of course, these are all good things. But are they good enough? Or are they just taking the pressure off so the system doesn’t bubble over?

Will this change the trend in extraordinarily high health-care costs? No. Will it change anything fundamentally that leads to a more universal system that covers everyone? No.

How can we control costs, and what happens if we don’t?

If we don’t, we’ll go broke. More major industries will fail because the cost of continuing to try to provide health-care coverage for their workers is unsustainable – certainly not in a global market.

We know that we currently spend $300 billion a year for unnecessary overhead in health-insurance coverage – the high administrative costs, the marketing, and so on. We know that the Medicare system is a much more efficient and cost-effective system. There are some overhead costs, of course.

But one of the reasons that our current system is so incredibly expensive is because we duplicate and triplicate services. And we have to have these large billing departments in hospitals.

If you moved to a single-payer system, that move alone would save billions annually, which could be used to cover all of the uninsured without raising a single penny in taxes.

The Obama administration has painted itself into a corner. They say reform is going to cost $1 trillion over a 10-year period. My question is why? Because they are not going to a single-payer system, and they still have to factor all of those costs in to whatever they do.

Here’s the kicker: At minimal funding, the British system costs about one-third per capita of the US system. The Canadian system costs Canadians about half to five-eighths per capita of the US system. Yet, they cover everyone and the outcomes are much better. Their life expectancy and mortality rates are far superior to the United States. We pay much more and get far less. That’s the bottom-line reality.

Critics say that there is a conflict of interest in the current fee-for-service health-care system because outcome is secondary to the number of services rendered. But aren’t most industries concerned with how many widgets or services they can sell you?

Fee for service still controls a lot of doctor-patient interactions, but the difference here is that there are so many third-party insurance intermediaries, and a lot of the shots are called by the insurance companies – not by you or your doctor. So, your options are limited.

The most salient part of the whole health-care economic reality is that the third party wants to make a profit. We know the insurance industry is a massive and profitable industry. It’s almost a recession-proof business. And the way they make their money is you pay in via your premiums, and you presumably collect when your physician says you need care or treatment.

But the physician has to submit this for reimbursement to the insurance company that says “We’re only going to pay a certain amount,” or “We’re not going to pay anything at all,” or “We want another opinion.” It’s the hassle factor. They make their profit by taking in X and giving you back less than X.

Medical loss ratio is an insurance term. A medical loss defined by the insurance industry is what they have to pay out of every premium dollar they take in. If they take in $1 and pay 80 cents, the medical loss ratio is eight to 10. Think of what that means. In their minds, anything they pay in terms of medical care is a loss. I find that chilling, but it’s a reality.

Medicare has been characterized as corrupt, bloated, and an inefficient government-run system. But most doctors, nurses, and technical staff see Medicare patients, in addition to their private-insurance patients. Wouldn’t that make both systems corrupt and bloated?

Well, in fact, it’s much sparer in the government-run Medicare system.

But even with that, 59 percent of the members of the American College of Physicians polled still thought there would be less hassles and difficulties with a government-run system, and would prefer going to a Canadian-style system.

One of the great contradictions in this debate is the argument that we don’t want a government-run public option because that is socialized medicine. But Medicare-for-all would not be a socialized system. It would be a continuum of care across the age spectrum, keeping the system intact. It would be the same hospitals with the same medical staff.

Would there be a need for some type of supplemental insurance like there is with Medicare now?

I don’t see any problem with that. That’s the tendency in Britain and other countries. But the important thing is to not set them in opposition to one another and create a robust public plan that people can supplement if they want.

In terms of controlling costs, do the plans being discussed need more emphasis placed on preventative care?

That’s always a thorny issue. There are slow changes underway in that direction.

One important step taken by the Obama administration that has flown under most people’s radar is talk about reinstating the physician payment commission. Under Medicare, physicians are being paid for certain procedures. But the commission could add incentives for more preventive medicine. In Medicare, that’s already happening. But it should become more widespread.

Toyota is moving its US manufacturing plant overseas. It turns out overseas is really Ontario, Canada, where they don’t have to cover health insurance for their workers. Is there any way to separate the discussion of health-care coverage from the economy?

No, absolutely not. America has dug itself into a major hole. It’s made itself much less competitive because it has added health care to the cost of production. It’s part of our labor costs.

We’ve known for years that the economy and employment are being driven by small businesses, and now we’re entering the age of the independent contractor and telecommuter. How can health care coverage remain linked to the employer?

The country began to notice that this uninsured population really increased in the 1980’s. One journal described how it went from a dilemma to a crisis in the years that followed.

Fundamental changes in the American economy – moving jobs offshore, moving manufacturing from Democratic states like Michigan and New York to Southern states where there is no support for unions – all of these moves to increase profitability served to reduce the employment base for health insurance. And it has made this link between coverage and the employer base even crazier.

If the goals are to cover everyone, keep quality of care high, and costs down, what should President Obama tell Congress and the public?

The single-payer plan is the most feasible. My advice is to take the political risk. Make it a moral-ethical campaign.

If you asked anyone in 1950, particularly in the South, whether African Americans could be granted the right to vote and be elected into office, it was inconceivable. But we had something called the civil rights movement, which didn’t argue that it was economically wise or politically stabilizing. They made the claim, Dr. Martin Luther King and others, that it was a matter of human dignity. It’s just the right thing to do. And it mobilized change.

And I think there are enough people out there who see health care in a similar way, and who can be mobilized.