Harry Truman’s Healthcare Plan and Our Current Sorry State

What President Truman tried to do and where we are today, by David Oshinsky for The New York Review of Books:

“Bow your heads, folks, conservatism has hit America,” The New Republic lamented following the 1946 elections. “All the rest of the world is moving Left, America is moving Right.” Having dominated both houses of Congress throughout President Franklin Roosevelt’s three-plus terms in office (1933–1945), Democrats lost their majorities in a blowout. Some blamed it on the death of FDR, others on the emerging Soviet threat or the bumpy return to civilian life following World War II. The incoming Republican “Class of ’46” would leave a deep mark on history; its members, including California’s Richard Nixon and Wisconsin’s Joseph McCarthy, were determined to root out Reds in government and rein in the social programs of the New Deal.

One issue in particular became fodder for the Republican assault. In 1945 President Harry Truman had delivered a special message to Congress laying out a plan for national health insurance—an idea the pragmatic and immensely popular FDR had carefully skirted. As an artillery officer in World War I, Truman had been troubled by the poor health of his recruits, and as chairman of a select Senate committee to investigate the defense program during World War II, his worries had grown. More than five million draftees had been rejected as “unfit for military service,” not counting the 1.5 million discharged for medical reasons following their induction. For Truman, these numbers went beyond military preparedness; they spoke to the glaring inequities of American life. “People with low or moderate incomes do not get the same medical attention as those with high incomes,” he said. “The poor have more sickness, but they get less medical care.”

Truman proposed federal grants for hospital construction and medical research. He insisted, controversially, not only that the nation had too few doctors, but that the ones it did have were clustered in the wrong places. And he addressed the “principal reason” that forced so many Americans to forgo vital medical care: “They cannot afford to pay for it.”

The facts seemed to bear him out. Close to half the counties in the United States lacked a general hospital. Government estimates showed that about $11 million was spent annually on “new treatments and cures for disease,” as opposed to $275 million for “industrial research.” Though the nation claimed to have approximately one physician per 1,500 people, the ratio in poor and rural counties regularly dipped below one per 3,000, the so-called danger line. On average, studies showed, two thirds of the population lacked the means to meet a sustained health crisis.

The concept of government health insurance was not entirely new. A few states had toyed with instituting it, but their intent was to replace wages lost to illness or injury, not to pay the cost of medical care. Truman’s plan called for universal health insurance—unlike the Social Security Act of 1935, which excluded more than 40 percent of the nation’s labor force, mostly agricultural and domestic workers. Funded by a federal payroll tax, the plan offered full medical and dental coverage—office visits, hospitalization, tests, procedures, drugs—to all wage and salary earners and their dependents. “Needy persons and other groups” were promised equal coverage “paid for them by public agencies.”

People would be free to choose their own doctors, who in turn could participate fully, partly, or not at all in the plan. Private health insurance programs would continue to operate, with policyholders required to contribute to the federal system as well—a stipulation the president compared to a taxpayer choosing to send a child to private school. “What I am recommending is not socialized medicine,” Truman insisted. “Socialized medicine means that all doctors work as employees of government. The American people want no such system. No such system is here proposed.”

It did him no good. At the first Senate hearing on the proposal, Ohio’s Robert A. Taft, . . .  known to his admirers as “Mr. Republican,” denounced it as “the most socialistic measure that this Congress has ever had before it.” A shouting match ensued. . . . Taft retreated, but not before vowing to kill any part of the plan that reached the Senate floor.

. . .  A predictable coalition soon emerged, backed by pharmaceutical and insurance companies but directed by the American Medical Association, which levied a $25 political assessment on its members to finance the effort. At its crudest, the campaign pushed a kind of medical McCarthyism by accusing the White House of inventing ways to turn a brave, risk-taking people into a bunch of “dainty, steam-heated, rubber-tired, beauty-rested, effeminized, pampered sissies”—easy pickings for the nation’s godless cold war foe. “UN–AMERICAN SYSTEM BLUEPRINTED IN THE KREMLIN HEADQUARTERS OF THE COMMUNIST INTERNATIONALE,” read one AMA missive describing the origins of Truman’s plan.

Precious freedoms were at stake, Americans were told: when the president claimed that medical choices would remain in private hands, he was lying; federal health insurance meant government control; decisions once made by doctors and patients would become the province of faceless bureaucrats; quality would suffer and privacy would vanish. Skeptics were reminded of Lenin’s alleged remark—likely invented by an opponent of Truman’s heath plan—that socialized medicine represented “the keystone to the arch of the socialized state.”

The economist Milton Friedman once described the AMA as “perhaps the strongest trade union in the United States.” It influenced medical school curriculums, limited the number of graduates, and policed the rules for certification and practice. For the AMA, Truman’s proposal not only challenged the profession’s autonomy, it also made doctors look as if they could not be trusted to place the country’s needs above their own. As a result, the AMA ran a simultaneous campaign congratulating its members for making Americans the healthiest people in the world. The existing system worked, it claimed, because so many physicians followed the golden rule, charging patients on a sliding scale that turned almost no one away. If the patient was wealthy, the fee went up; others paid less, or nothing at all. What was better in a free society: the intrusive reach of the state or the big-hearted efforts of the medical community?

Given the stakes, the smearing of national health insurance was not unexpected. What did come as a surprise, however, was the palpable lack of support for the idea. For many Americans, the return to prosperity following World War II made Truman’s proposal seem less urgent than the sweeping initiatives that had ended the bread lines and joblessness of the Great Depression. Even the Democratic Party’s prime constituency—organized labor—showed limited interest. During the war, to compensate workers for the income lost to wage controls, Congress had passed a law that exempted health care benefits from federal taxation. Designed as a temporary measure, it proved so popular that it became a permanent part of the tax code.

Unions loved the idea of companies providing health insurance in lieu of taxable wages. It appeared to offer the average American the sort of write-off reserved for the privileged classes, and indeed it did. Current studies show that union members are far more likely to have health insurance and paid sick leave than nonunion workers in the same industry. . . .

At about the same time, popular insurance plans like Blue Cross emerged to offer cheap, prepaid hospital care . . . . In 1939 fewer than six million people carried such insurance; by 1950, that number had increased fivefold. In the years after Truman’s plan died in Congress, the government filled some of the egregious gaps in the private insurance system with expensive programs for the poor, the elderly, and others in high-risk categories, thereby cementing America’s outlier status as the world’s only advanced industrial nation without universal health care. . . .

[In the United Kingdom, the National Health Service] succeeded because the Labour Party won a landslide victory in 1945 in a country battered by war and facing a bleak economic future—precisely the opposite of the American experience. Opinion polls in the UK showed strong support for a government-run system offering universal, comprehensive, and free health care financed by general taxation. But the threat of a physicians’ strike forced Labour’s health minister, Aneurin Bevan, to scrap the idea of turning doctors into full-time government employees. . . .

The UK excels in universal coverage, simplicity of payment, and protection of low-income groups. While the NHS remains quite popular, it also is seriously underfunded: the UK ranks dead last in both health care spending per capita ($3,900) and health care spending as a percentage of gross domestic product (9.6) among the six European nations [reviewed in Ezekiel Emanuel’s book Which Country Has the World’s Best Healthcare?] The most common complaints . . .  concern staff shortages and wait times for primary care appointments, elective surgeries, and even cancer treatments . . .  “The public does not want to replace the system with an alternative,” writes Emanuel. “All the public wants is a fully operational NHS.”

By contrast, the US health care system—if one can call it that—excludes more people, provides thinner coverage, and is far less affordable. It combines socialized medicine practiced by the Department of Veterans Affairs, four-part federal Medicare (A, B, C, D) for the elderly and disabled, state-by-state Medicaid for the poor, health coverage provided by employers, and policies bought privately through an insurance agent or an Affordable Care Act exchange—all of which still leave 10 percent of the population unprotected. . . . “The United States basically has every type of health financing ever invented,” Ezekiel adds. “This is preposterous.”

And extremely expensive. America dwarfs other nations in both health care spending per capita ($10,700) and health care spending as a percentage of GDP (17.9). Hospital stays, doctor services, prescription drugs, medical devices, laboratory testing—the excesses are legion. Childbirth costs on average about $4,000 in Western Europe, where midwives are used extensively and charges are bundled together, but close to $30,000 in the US, where the patient is billed separately by specialists—radiologists, pathologists, anesthesiologists—whom she likely never meets, and where charges pile up item by item in what one recent study called a “wasteful overuse of drugs and technologies.” There is no evidence that such extravagance makes for better health care outcomes. The rates of maternal and infant death in the US are higher than in other industrialized nations, partly because the poor, minorities, and children are disproportionately uninsured.

For head-spinning price disparities, however, nothing compares to pharmaceuticals. Americans account for almost half the $1 trillion spent annually for prescription drugs worldwide, while comprising less than 5 percent of the world’s population. It is probably [i.e. definitely] no coincidence that the pharmaceutical industry spent almost twice as much on political lobbying between 1998 and 2020 as its nearest competitor, the insurance industry. . . .


Whenever the president is asked why he wants to eliminate the Affordable Care Act (which means people with “pre-existing conditions” would no longer be protected, among other things), he says he’s going to announce a beautiful replacement for the ACA “in two weeks”. Or “next month”. It’s always in two weeks or next month. Reporters never press him for details, because they know he’s full of crap.

Una volta un truffatore, sempre un truffatore (once a con man, always a con man).

PS:  Ezekiel Emanuel says different countries do different things very well, but if he had to choose his personal favorite, he’d pick healthcare in The Netherlands, with Germany, Norway and Taiwan in the running.