Deadly Spin (10 page)

The magazine didn’t disclose the name of the retired executive for whom this mansion was built, but it was common knowledge in the executive suite at CIGNA who lived there. It was the company’s former chairman and CEO, Wilson Taylor, whose salary in 2000, his last year with the company, was twenty-four million dollars—which doesn’t include the additional millions he reaped from stock options and deferred compensation.

When I read that article and saw the stunning pictures of Taylor’s new place, it became clear to me, in ways that it hadn’t before, that people enrolled in CIGNA’s insurance plans had actually helped pay for that twenty-four-room stone manse with its seventeenth-century Spanish columns and its impossibly French kitchen.

Furthermore, I could now see clearly, those people in Wise County would not have had to stand in line in the rain for hours to get care in animal stalls if so much of the money Americans spend for health care didn’t wind up in the pockets of insurance company executives and their Wall Street masters.

C H A P T E R   V

Health Care History, Reform,
and Failure

U
NLIKE
developed countries that took deliberate action at their highest levels to create the national health care systems they currently enjoy, America largely forfeited the development of its system to private, financially motivated interests from the very beginning. The result is that universal health care is available today in every industrialized nation except one—ours. (It’s also available in many developing countries.)

As another consequence, these powerful special interests became so entrenched in our nation over the years that almost no president was able to overcome their organized opposition to reform until now, the sole exception being Lyndon Johnson—whose administration, in a historical breakthrough, saw the 1965 creation of two government-run programs, Medicare and Medicaid. The reform bill that Congress passed in 2010 is potentially far-reaching, but lawmakers gave up on the idea of creating a new government program—the public option—because of opposition from the insurance industry.

Before I detail for you how the health insurance industry and its allies waged their ongoing fearmongering and misleading campaigns against recent reform, let’s pause to look back in history. And while doing so, let’s chant the old axiom: The more things change, the more they stay the same.

There is little in the newest rounds of deceptive PR and advertising efforts that is different from the strategies of antireform campaigns in America’s past, and this includes the very language and the illusion of spontaneous “grassroots” uprisings, which have been employed by the special interests of every era.

A vivid example is Ronald Reagan’s participation in the American Medical Association’s famous propaganda campaign against early Medicare legislation in 1961. The AMA cloaked this effort, called Operation Coffeecup, in a low-key shroud fronted by the association’s own Women’s Auxiliary, whose members invited their friends and colleagues to about three thousand neighborhood kaffeeklatsches across America. Once confined and regaled with hospitality, guests were entertained further by their hostesses, who played a professionally cut vinyl LP titled “Ronald Reagan Speaks Out Against
SOCIALIZED MEDICINE
.”

In an eleven-minute impassioned plea on the disc, Reagan railed against Medicare as “socialism” and argued that it was the “foot in the door” to a totalitarian takeover of everything we knew. After doctors were subdued, he warned his mostly female listeners, big government would eventually come after America’s children: “And pretty soon your son won’t decide, when he’s in school, where he will go or what he will do for a living. He will wait for the government to tell him where he will go to work and what he will do!”

He urged his coffee-sipping listeners to write their local congressmen to oppose any government intrusion into the free-market health care system and concluded, “Write those letters now. Call your friends and tell them to write them. If you don’t, this program, I promise you, will pass just as surely as the sun will come up tomorrow. And behind it will come other federal programs that will invade every area of freedom as we have known it in this country, until, one day … we will awake to find that we have socialism. And if you don’t do this, and if I don’t do it, one of these days, you and I are going to spend our sunset years telling our children, and our children’s children, what it once was like in America when men were free.”
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Although it lobbied openly in Washington and elsewhere, the AMA made no effort to claim this campaign. Instead, it made every effort to keep the sponsorship under wraps in an extremely slick PR ploy for its day. The AMA wives and other recipients of the LP were not allowed to broadcast it commercially, and they were encouraged to make the entire letter-writing campaign resemble a gigantic groundswell of antisocialist sentiment. There were conflicting claims later about the number of letters that resulted, but nobody disputes that the result was substantial.

Reagan was eventually “outed” that summer by the mainstream media for his partnership with the AMA, and the credibility of the overall campaign (which featured “antisocialism rallies” in several states) was called into question, but Reagan’s effort served as a tremendous personal boost to the then B movie actor and General Electric TV host’s political career. Some Reagan biographers credit this episode as the beginning of his ascent to the White House.

Although Medicare’s proponents eventually won, another thing is certain: The Reagan LP previewed the exact talking point language used to provoke fear over the subsequent five decades about “the sunset of America” if any real health care reform should pass at the federal level. Sarah Palin even quoted from Reagan’s disc during her Republican nomination acceptance speech in 2008.

It shouldn’t be surprising how effectively this “paranoid style” continues to work in American politics. Pulitzer Prize–winning historian Richard Hofstadter coined this term in his 1964 book,
The Paranoid Style in American Politics
, which attempted to explain the McCarthy era. The message from our contemporary right wing is the same as the one Hofstadter wrote about nearly half a century ago. The view, he said, is that “old American virtues have … been eaten away by cosmopolitans and intellectuals; the old competitive capitalism has been gradually undermined by socialistic and communistic schemers; the old national security and independence have been destroyed by treasonous plots, having as their most powerful agents not merely outsiders and foreigners as of old but major statesmen who are at the very centers of American power. Their predecessors had discovered conspiracies; the modern radical right finds conspiracy to be betrayal from on high. Important changes may also be traced to the effects of the mass media.”

HEALTH CARE IS DIFFERENT IN ISOLATION

There is a strong element of historic reality supporting this schizophrenic American thinking. While Europe had had nothing but entrenched monarchies and/or strongly centralized, warmongering (or cowering) governments, America was coping with a totally opposite set of problems, most of them derived from its strongly decentralized government—namely slavery, secession, civil war, reconstruction, and unbridled expansionism—when the abstract idea of national health care reared its head in the late nineteenth century.

Actually, as an infant republic, the United States had earlier mimicked European nations by starting one of the world’s first government health programs. President John Adams signed a bill in 1798 establishing the Marine Hospital Service, a federal network designed to care for seamen, who paid twenty cents a month to belong and have access to a group of hospitals in U.S. seaports. The MHS eventually evolved into today’s Public Health Service, a major part of the Department of Health and Human Services, headed by the surgeon general.

But if you weren’t a seaman, organized health care simply didn’t exist for you during the next century—except for a few sporadic experiments that dot the history books, mostly as footnotes. For example, there was Massachusetts Health Insurance of Boston, organized in 1847 and usually credited as being our first “sickness” insurance; a French mutual-aid society (la Société Française de Bienfaisance Mutuelle) that in 1853 began offering prepaid hospital care in San Francisco, a system closely resembling that of HMOs today; and, in the decades following the Civil War, a number of mining, industrial, and railroad companies that began providing on-site doctors for workers who prepaid with deductions from their paychecks.
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World health care changed abruptly and forever in 1883 when one of history’s most unlikely people, Otto von Bismarck, founder of the German Empire and known as the Iron Chancellor, ordained the world’s first “compulsory sickness insurance” as part of his political effort to develop a strong working class as the foundation of a strong Germany. Although he is remembered in this country mostly as the strong militarist and nationalist that he was, Bismarck also went on to create the world’s first social security retirement system in 1889—arguing that “people who know they are cared for are the best building blocks for a strong nation.”

The irony today of detractors calling national health care “socialist” must certainly have Bismarck spinning in his grave. It is no paradox that he and those who followed in his footsteps established European health systems as extremely conservative antisocialists—they were catering to the working classes as leverage against their joining true socialist and labor movements of the day. Strong conservative governments in Europe called this “turning benevolence into power”—a strategy generally credited with creating the social welfare measures that actually kept Communism from becoming a dominant force.

Similar health care systems followed in Austria in 1888 and in Hungary in 1891. After their success was evident, another round of reform brought compulsory sickness insurance to Norway in 1909, Serbia and England in 1911, Russia in 1912, and the Netherlands in 1913. France and Italy adopted different approaches, subsidizing mutual-benefit societies that workers formed among themselves. Others, like Sweden, Denmark, and Switzerland, chose instead to give strong financial assistance to voluntary funds, beginning in 1891.
3

Because of its uniquely decentralized government and lack of any need (yet) for antisocialist political paranoia, the United States simply rode out this period of health care history, no one pushing the agenda. Instead, another American phenomenon, for-profit life insurance, gained ground, with a boom in the sale of weekly-premium policies that provided lump payments at death, which could be used to pay for final care and burial. Exploiting the fear of a “pauper’s burial,” these policies were sold by aggressive people who also collected the cash premiums—ten, fifteen, or twenty-five cents a week—to fuel a highly profitable industry that boasted a staggering 60 percent administrative cost (yes, only 40 percent of premiums actually went to benefits). Thus was a new American personage created, the insurance agent. Metropolitan Life and Prudential Insurance Company led an explosion so great that by 1911 Americans were spending about as much ($183 million) for this product as Germany did for its health system that year.
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AMERICA’S FIRST “EUROPEAN INVASION”

It wasn’t until 1906 that the first national noises were made in the United States for actual health insurance. That year, the American Association for Labor Legislation (AALL) was established at the University of Wisconsin by a group of academic reformers that included prominent economists of the Progressive Era. Among their chief supporters on the political side was President Theodore Roosevelt, who often paraphrased Bismarck by saying that “no country could be strong whose people were sick and poor.” But Roosevelt had his political agenda full with reforming basic capitalism in the Progressive mold—a far bigger necessity at that time—and he never got around to health care before leaving office in 1909, thus becoming the first president (of many) in that category.

Health insurance advocates got a major boost when Roosevelt came out of retirement, bolted from the Republican Party, and ran as a candidate for the Bull Moose Party in the election of 1912. Many historians say it was the high-water mark for Progressivism, arguing that Roosevelt’s defeat by the conservative Democrat Woodrow Wilson left a void in the kind of presidential leadership needed to enact social welfare programs. Perhaps so, but AALL tried to carry out an ambitious reform strategy—and, in so doing, became the first reform victim of its own political naïveté, not to mention the first reform casualty of the same fearmongering propaganda that has been echoing ever since.

AALL and its allies from the Progressive Era did have one major textbook success with their efforts during the years of the Wilson administration and World War I. They lifted the abstract idea of universal health care to an unprecedented level of popular acceptance in this country and provoked a feeling by many citizens that it was imminent—only to be savagely frustrated and thwarted. This familiar cycle would be repeated four more times during the twentieth century—the next time, during Franklin Roosevelt’s New Deal era; after that, under President Harry Truman; in the early 1970s, when Watergate killed more than a presidency; and lastly, during the Clinton health-plan debacle of 1993–94.