The AMA and its part in the debate, part 1

One of the players in the current health care debate and in every other health care debate in the history of this country is the American Medical Association. In 1847 the AMA was set up by Dr. Nathan Davis of New York. Dr. Davis’ idea was to set up a governing body to improve and standardize medical training which was both rudimentary and inconsistent at the time. In the interest of improving this training Dr. Davis formed the AMA and by the early 1900’s it was the recognized authority on medical practices and training for physicians. By 1899 the AMA set up the Committee on National Legislation, one of the first lobbying groups in Washington, and began to work to influence all government legislation having to do with healthcare. By this time the AMA was also the accrediting organization for medical schools, hospitals, and all manner of health care services and therefore was a force to be reckoned with as a political entity from this point on.

Health care in the United States has a long history of being a private concern between the physician and his patient and the AMA has been an assertive protector of this type of system from its inception. As an organization originally set up to improve health care by controlling and standardizing training practices and circulating educational information to both doctors and the general public the AMA has also evolved into a powerful political organization that first and foremost protects the interests of its member physicians. If there is any doubt about where the interests of the AMA lie, one has only to look at the history of its actions to understand the reality of the situation.

The AMA has been an outspoken and vigorous opponent of health care insurance since the very first plans were formulated in the early twenties. Two things drive this opposition according to the AMA. First, there is the fear that insurance will interfere with the patient-physician relationship which the AMA holds sacrosanct. Second, there is the fear that physicians will lose the ability to charge fees on an individual basis. Physicians, with the AMA’s approval, have long charged different rates for different patients based upon the individual’s ability to pay for such services. Group health care insurance plans have tended to set costs across the board and have the added effect of forcing physicians to compete with each other on a cost basis much like every other industry in a free market society. The AMA has opposed all such setting of costs from the very beginning. One may accurately surmise which of these two problems that the AMA is more concerned with by the actions they have taken to defend them.

As a professional organization open only to members of the industry it is hard to argue against the supposition that the AMA is a guild. The AMA in effect is a union of doctors which has repeatedly shown its first interest is the protection of its member’s financial interests. As I discussed in an earlier post about the health care plans, the Blue Shield plans were formed largely in response to Blue Cross plans that the AMA perceived as threats to its members ability to price discriminate. In 1934 the AMA adopted a set of ten principals that were to be the guiding factors in physician’s health care plans. One of the prime considerations of these principles was that physicians would be in charge of all such voluntary plans and that the AMA would retain control of such plans in the future. The overwhelming consideration in these efforts was an attempt to retain control of pricing for medical services which the AMA has consistently insisted should not be subverted by competition or “socialist” government and private based plans that would set prices by controlling where patients would receive services and seeking out the best prices accordingly. The AMA has used this term repeatedly in every campaign they have launched throughout the last century to retain price controls in the hands of physicians. As we shall see, it is a consistent theme adopted by what is inarguably a union of doctors in order to protect them from competition. It is a little ironic that they should be allowed to use a term that is such an anathema to free markets to protect themselves from the competition that is the core principle of free markets without being called to answer for it but history has shown that this is a recurring process.

The first efforts at organizing a national health care policy occurred in the early 1930’s and were soon an integral part of the New Deal policies of the Roosevelt administration. In June of 1934 Roosevelt formed the Committee on Economic Security to study problems relating to the economic security of individuals and report back on their findings by December of that year. The committee was charged with studying all manner of insurance policies and their possible impact upon the financial health of individuals in the United States. The country was still in the throes of the worst economic depression that had at that time been visited upon this country and people wanted to find ways to keep such a collapse from happening again in the future.

Most of the members of this committee were convinced that rising health care costs and the obvious inability of most consumers to withstand the financial costs of any sort of long term health problem were a danger to almost every US citizen. Several members of this committee had extended experience with the American Red Cross which was inundated with health care requests from the lowest tier of society in the country at the time and were convinced that the only course available to take care of such problems was a form of governmental health care. There was no argument on the committee that a form of government health care was not needed to provide care for Americans who could not otherwise afford it but there was concern that there were other more pressing economic issues that should be dealt with first; such as unemployment insurance and crop insurance for failing farms. Several of the committee members also argued forcibly that the AMA would fight any governmental health care program with all the means at its disposal, which were considerable.

As it turns out, they were exactly right. The AMA immediately spearheaded a national campaign against government involvement in any sort of nationalized health care plan as the first step in a “socialist” movement dangerous to US national interest. Roosevelt was besieged by requests from the AMA to appoint organization members to any board that would consider health care reforms and widespread campaigns financed by the AMA began railing against the takeover of health care by a “socialist” agenda aimed at the collapse of the free enterprise system itself. If this sounds familiar, it is much the same logic that is being used today to lambast the supporters any sort of government involvement in health care issues. Precisely because the AMA was so opposed to any such reform in 1935 the administration dropped its push for health care reform even though every study done at the time pointed out that it was the only possible way to take care of large scale health care problems at the time.

Since there was no organized support against the AMA’s views health care reform was tabled in favor of other reforms that did have organized lobbies. The AMA’s concern was that government health care would effectively set prices for their member’s services. It would in essence force doctors to compete with each other for government care contracts. While competition is the very nature of free enterprise it is an anathema to the AMA and always has been. This is fairly simple to understand if we remember that the AMA is a union of doctors organized for the interests and in the protection of doctors. Any system that forces doctors into a free market system wherein they have to compete like every other industry for customers is bad news to the AMA.

In 1936 a report was released by the National Health Care survey, a group formed by the federal government to study health care issues. It was the first comprehensive report on the state of medical care in the United States ever published. The results of this study were comprehensive and far reaching. The survey’s findings were significant. According to the survey the rich get sick much less often than the poor. These numbers were further broken down by dividing acute illness and chronic illness. The poor were 47% more likely to get an acute illness and 87% more likely to get a chronic illness. The poor also were shown to stay sick longer than the rich, 63% longer for those on public relief programs. There was a definitive division between those on relief programs and those who were not as far as if they received medical treatment at all for illnesses of a week or longer with 30% of those on relief receiving no care at all for such problems. Upper income families were shown to avail themselves of 46% more doctor’s visits per illness. Some of the darker findings of the survey reported that annual mortality rates in the US were higher than any other civilized country in the world and that infant mortality rates were higher than in any other industrialized nation at the time. The final part of the report stated that a large proportion of the population had no financial cushion to pay for the rising costs of health care.

While none of this information was surprising, it was enough of an impetus to push Congress into an effort at rectifying the problem which eventually resulted in the introduction of the Wagner Bill in Congress on February 28, 1939. The Wagner Bill touched off widespread debate and committee hearings in Congress but was immediately targeted as a “socialist” agenda by the AMA. The AMA formed the “National Physicians’ Committee for the Extension of Medical Services” to combat the bill. It seems that this committee for the extension of medical services actually was a lobbyist group with the express purpose of defeating the Wagner bill while offering little or nothing in the furtherance of actual services but this is a closely followed pattern that the AMA has historically used to protect its interests. The Wagner Bill lost impetus with the coming of WWII and a shift in government’s interests but the AMA’s committee offered exactly zero solutions to the problem; it simply faded away into obscurity when the bill which it was formed in opposition to died.

As WWII started to wind down and the country’s focus shifted from the international scene back to internal policies the health care debate began again. The Social Security Board who had been deeply immersed in home-front mobilization efforts during the war had also not been entirely free from health care concerns during this same period. By 1942 reports from this board began expressing the view that health care reform was needed and later that same year Congress organized Emergency Health Care Services for the lower four grades of dependents of American servicemen. The EMIC (Emergency Maternity and Infancy Care) was seen by many as a stopgap measure needed for the inevitable implementation of a national health care system for citizens unable to pay for modern medical care and most people believed it was the first step in this process.

By 1943 as the tide of war began to shift the US government was swept with enthusiasm for wholesale governmental social welfare programs such as those being espoused by our allied partners in the war. The Beveridge Report formulated by a British committee formulated for advancing new social welfare programs received widespread support and acclaim in the US at the time and talk began anew of a new national health care plan that would make medical care a reality for all in the United States.

On the heels of this reports circulation in the United States the Wagner-Murray-Dingell bill was presented in Congress in June of 1943. Mobilization of lobbying groups against this bill was quick with the well organized AMA taking the lead with its National Physicians' Committee for the Extension of Medical Service at the head.

It was joined in this fight by a revitalized Insurance Economics Society of America group that was actually a consortium of private insurance concerns who were beginning to be powerful players as the spread of private insurance usage subsidized by state legislatures had become a booming business by then. The Pharmaceutical Manufacturers' Association which was something of a union of drug manufacturers also joined in efforts at defeating this bill as it too was afraid of open competition in the market and was notoriously alarmed at the prospect of the government setting prices on drugs as a part of a national health care effort.

In the face of such organized opposition the bill died in committee. At the time, the Roosevelt administration was lukewarm on a national health care policy so it was another case of an organized lobbying effort succeeding due to the lack of an opposing organized force. It is worth noting here that the overriding concern of each of the opposition forces against the bill was financial. The AMA has always protected profit of its members over and above any other principle and the other two groups in this effort had profit margins as their only concern in this issue as well. While most experts and virtually all reports agreed that health care reform was necessary, the sticking point was as to who would control the reforms and the AMA and its allies have consistently insisted upon control of pricing as the first principle in their opposition to all such government reforms.

By 1944 Roosevelt’s view of the situation had begun to change. In election campaigning in that year he began to move toward an endorsement of nationalized health care. He urged an Economic Bill of Rights under which "the right to adequate medical care and the opportunity to achieve and enjoy good health" and "the right to adequate protection from the economic fears of old age, sickness, accident, and unemployment” would all be sheltered by Social Security. Following his re-election in that year and after the end of the war in 1945 he proposed a personal sponsorship of such a plan in a budget message of January of that year. He reiterated these views in his 1945 state of the union address and promised to get back to Congress on these issues in the near future. Unfortunately, Roosevelt died in office before these proposals came out. His successor, Harry Truman, promised to push for these same reforms and the opposition began to line up against him.

The next three years were full of acrimonious debate in Congress and across the nation on the issue as opponents of health care reform lined up to fight government involvement. The AMA declared all out war on the premise of government healthcare. After Truman was unexpectedly re-elected in 1948 the AMA’s House of Delegates met to in December and voted to charge each of its members an additional $25 to avoid “enslavement of the medical profession”. A prominent public relations firm was hired to spearhead the advertising campaign and some 4.5 million dollars was appropriated by the AMA to fight the passage of any bill having to do with government involvement in the health care system. A highly organized propaganda campaign was organized in specific reaction to the new administration sponsored Wagner-Murray-Dingle bill which organized mass media, vast speechmaking efforts, and congressional lobbying against the bill.

While public opinion polls had in 1948 shown 70-79% approval for government reform of the health care bill, the public campaign by the AMA and its allies began to have an effect. The gist of the campaign focused on three issues. First, the AMA and its supporters suggested that the US at the time enjoyed the highest standards of medical care the world had ever known at the time. While this was not true according to health organization reports, it was trumpeted loud enough and long enough that people began to believe it. Medical standards in this country and everywhere else in the world with pure capitalist systems have always been based upon the care that individuals could afford and under the American system most of the country could not afford the best care so the averages for American health care standards necessarily suffered in comparison to many European countries where nationalized health care had already seen widespread usage. While the AMA’s publicity program admitted that there were deficiencies in the system it insisted that these were greatly exaggerated in the face of directly opposing information from the National Health Surveys conducted at the time.

Second, the AMA and its allies claimed the National Health Insurance would lead to federal control of all medical care, which would undermine the system of free enterprise that the system was based upon. This is a claim that is universally made even today in such discussions even though the AMA and the medical profession in this country has been completely isolated from the free enterprise system since the inception of the AMA in a flagrant and self-serving manner that has been pointed out in numerous instances in this post. Every political action that the AMA has sponsored has been aimed at the elimination of competition which is by any understanding of the term one of the basic tenants of the free market system. For the AMA to claim that government intervention in health care would undermine the free market there would have to be a free market to start with and this is categorically not the case in our current medical system or in the one that existed in 1948.

Third, the AMA and its allies suggested that government intervention would necessarily drive the cost of health care up; probably beyond the ability of American citizens to pay for it. As an adjunct to this argument the AMA began pushing for the spread of private health care insurance programs provided of course that doctors maintained control over all billing practices so that they could continue to set rates without being faced with competition. One can argue that private enterprise and the free market are the best controls for cost but not if the free market is eliminated from the field; which is exactly what the AMA and private insurers in collusion have managed to do in this country since the turn of the century. Judging from the runaway costs that this collusion have fostered in the industry in the ensuing 60 years it is hard to make this argument intelligently today but it is still being made in much the same manner as if we haven’t already seen health care costs explode in such a manner that no one can afford health care without insurance.

If any or all of these arguments sound familiar that is because they are still being used today in our current debate about health care. Very little has changed on this front besides the undeniable fact that health care is now impossible to afford without insurance. Still, the argument in the late forties was swung even further to the side of those against National Health Care by the great bogeyman of free enterprise; socialism and its more fearsome cousin communism. As the battle lines began being drawn in the debate organized labor and social security administration stalwarts joined the issue on the side of governmental health care for the public.

In the face of these reactions other issues began to color the debate against these organizations. The Alger-Hiss trials began and exposure to communist threats within branches of the US government and organized labor began to lead to suspicions of motives. China fell to the communists soon afterwards and Russia exploded an atom bomb of their own as the lines between Eastern Europe and the US began to be drawn ever more definitively. The charge of socialist tendencies took on more sinister overtones in the face of these developments and the AMA and its supporters used fears on this front to drive their point home more forcefully. The McCarthy hearings hysteria began to gather public notice and dominate the news and it was relatively easy to use these fears to squash the efforts to nationalize health care. By 1952 it was evident that Truman had lost his battle to nationalize health care and the AMA had won.