Monday, March 1, 2010

Health Care Reform: Is it actually "socialism"?

Okay, I'm way behind in posting this. I actually had most of this written last November, but life took me on a detour. I have a little energy tonight (surprisingly, my three-year-old son didn't sap all of it), so I'm posting.

With the U.S. Congress (and public) still embroiled over the health care bill, it’s time that I finally get around to posting about this perspective on national policies accused of being socialist.

Here’s the tie-in with agricultural policy, as I see it: Supply management policy – with its regulation of production and prices – was not about socialism. Instead, that policy was the outcome of competing political-economic interests trying to ensure profitable production.

In particular, southern planters growing cotton were hardly socialists. They were simply large landowners trying to cope with a chronic problem of overproduction and low prices. They saw supply management policy as protection against vagaries of the market economy. They were “Capitalists Against Markets.” (That is the title of Peter Swenson’s book comparing national policy formation in the US and Sweden.)

This same kind of analysis is useful in exploring health care reform. Take, for example, Clinton’s attempted health care reform in 1993-94. Two health care issues became central in the early 1990s: universal coverage and cost containment. (Sound familiar?) Health care costs were rising, and tens of millions of people were uninsured. But, these conditions had existed to a greater or lesser extent for decades. Something else put health care reform at the forefront of US politics in the early 1990s.

An important coalition emerged to support an increased government role in health care: a cross-class coalition between workers and industry. Labor unions and many large businesses (such as Bethlehem Steel, Lockheed, Chrysler, Xerox, and Westinghouse) formed the National Leadership Coalition for Health Care Reform (NLCHCR), which was a leading advocate for health care reform at the time. This organization advocated for government-mandated employer-provided health insurance. (That’s right: many businesses were in favor of some kind of national health care system.)

In addition, more than half of CEO’s for Fortune 500 companies favored a government mandate for all employers to provide health benefits. And, the U.S. Chamber of Commerce supported government-mandated employer health benefits.

Why did some business advocate expanded government action in health care?

First, rising health costs fell heavily on business, especially large employers. In 1988, for example, Chrysler famously spent more on health care than on steel: $600 million per year on health care; $600 per car.

Second, there were an increasing number of strikes and labor conflicts over health care.

Third, international competition likewise encouraged some US companies to favor an expanded role for the government in health care, because other nations – Germany, Japan, France, etc. – provide health care for all workers.

In the early 1990s, then, health care reform was not really about socialists pushing for government control of the market economy. Instead, there were large companies whose economic interest in controlling health care costs – especially insurance premiums – prompted them to favor a greater role for government in health care.

Why, then, did Clinton’s health care reform proposal fail? See my next post, which I hope will not take another three or four months...

By the way, much of the information for this post came from an article written by Peter Swenson and Scott Greer, "Foul Weather Friends: Big Business and Health Care Reform in the 1990s in Historical Perspective," in Journal of Health Politics, Policy and Law, Vol. 27, No. 4, August 2002, pages 605-638.

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