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(More customer reviews)In ORIGINS OF AMERICAN HEALTH INSURANCE, John Murray tackles a big question: Why doesn't the United States have universal, government-provided health insurance? Murray approaches this question historically and focuses on a critical period in the American past, the Progressive Era (1900-1914). During this period, the United States probably came as close as it has ever come to creating a state-sponsored health insurance program. For most historians and students of the U.S. welfare state, the question of why the United States does not have universal, state-provided health insurance reduces to, Why were Progressive Era reformers unable to secure passage of such a program?
The standard answer to this question is that a combination of special-interest groups that included labor unions, big business, organized medicine, and the insurance industry defeated proposals for government insurance. Because this unholy alliance stood to lose from government-provided health insurance, its members organized to defeat and suppress the will of the electorate. In this standard story, the typical voter wanted some sort of government insurance because the existing modes of providing for workers in times of illness consisted of a patchwork of disorganized, underfunded, and largely ineffective industry- and union-backed sickness funds.
As Murray points out, though, the traditional story line has a number of problems, not the least of which is the fact that whenever government-provided insurance programs were put on referendum ballots, they were resoundingly defeated. Murray's primary area of focus, however, is not politics but economics. In particular, he analyzes the efficiency and effectiveness of privately provided sickness funds. For the people enrolled in them, sickness funds gave financial support to the afflicted worker and the worker's family. Although Murray is not the first scholar to consider the efficacy of these funds, he is among the first to consider them using the tools of modern economics, which leads him to radically different conclusions. His careful econometric and statistical analyses show that privately provided sickness funds worked reasonably well and protected a broad swath of the industrial labor force.
One of the book's most admirable and compelling aspects is the respectful way Murray treats those with whom he disagrees. In this way, ORIGINS OF AMERICAN HEALTH INSURANCE is a model of balance and thoroughness. Unlike much of the literature on the Progressive Era and universal health care, Murray's book actually takes seriously the ideas and arguments of all participants, whether they comport with his ideological priors or not. If you want a balanced treatment of Progressive Era politics, this book is a great place to start. Murray also writes very well, weaving historical narrative, econometric analysis, and economic theory together into a coherent argument. I was particularly impressed with the way he uses labor mobility to explain the concept of tax incidence and then builds on this explanation to highlight the hidden costs of universal health care.
--Excerpt from a review by Werner Troesken (The Independent Review, Fall 2009)
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How did the United States come to have its distinctive workplace-based health insurance system? Why did Progressive initiatives to establish a government system fail? This book explores the history of health insurance in the United States from its roots in the nineteenth-century sickness funds offered by industrial employers, fraternal organizations, and labor unions to the rise of such group plans as Blue Cross and Blue Shield in the mid-twentieth century. Historians generally view the failure to establish universal health insurance during the first half of the twentieth century as an indicator of the political clout of insurers, employers, unions, and physicians who thwarted Progressive efforts. But the explanation is actually simpler, John Murray contends in this book. Careful analysis of the workings of industrial sickness funds suggests that workers rejected plans for compulsory state insurance because they were largely content with existing private plans. Murray revises our understanding of the evolution of health care insurance in the United States and discusses the implications of that history for the ongoing debates of today.
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