Good Health for America? By: Gorsky, Martin, History Today, 00182753, Feb2010, Vol.
60, Issue 2
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Today's History America has struggled to reform public healthcare for over 100 years and now
has a byzantine, costly system controlled by powerful, money-hungry interest groups. Martin
Gorsky wonders whether President Obama can deliver reform
When Barack Obama swept to power in November 2008, he seemed to promise a new start for
domestic politics in the United States. High on his agenda was reform of the healthcare system,
widely considered to be expensive, underperforming and unfair. America was spending a huge
proportion of its national wealth on medical care — 15 per cent in 2005, compared with eight per
cent in Britain and 11 per cent in France. Vet unlike European countries with universal coverage,
around 46 million US citizens lacked any health insurance. With Obama's thumping majority and
a tide of goodwill towards him, expectations of change were high.
Since then reform politics have been a rollercoaster ride. The presidents proposals had three
basic goals: regulation of the private insurance market, a 'public option' of a state-run health
insurance scheme and more compulsion on employers and individuals to purchase coverage.
However, the plan quickly generated huge controversy with opponents saying it was tantamount
to Soviet-style Communism. For European observers, long accustomed to tax-funded national
health services or state-mandated social insurance, this is rather baffling. Why should so many
Americans believe universal health coverage poses a fundamental threat to their liberty and why
has it been so hard for Obama to deliver his legislation?
History can help us understand the choices which led the US to such a different approach to that
of Europe. A useful concept in thinking about this is 'path dependency', the idea that decisions
taken early on can significantly constrain possibilities for change later in time. With this in mind,
we can look at why national health insurance was rejected by Americans from the early 20th
Statutory sickness insurance originated in Germany in 1883, devised by civil servant Theodor
Lohmann and implemented by the 'Iron Chancellor' Otto von Bismarck. The principle was that
health coverage became obligatory for particular groups of waged workers, financed by
employer contributions and employee payroll deductions. Bismarck's goals in delivering welfare
benefits were partly to enhance the efficiency with which 'human capital' was managed in an era
of dynamic industrial expansion and partly to head off the appeal of socialism. As the system
proved broadly successful, other countries began to consider their own versions of it. In Britain it
was adopted in 1911 as part of the Liberal welfare reforms, which also included unemployment
insurance and old age pensions.
In America, proposals for blue-collar health insurance were made in the 1910s by the American