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Neighbors Growing Together | Nov 24, 2017

Paying for 1949 health care

By Deborah D. Thornton | Nov 29, 2012

Recently I found a 1949 pamphlet, “How Shall We Pay for Health Care?” The options were clearly outlined on the cover: The family could send their money directly to the doctor, or they could send it to the big building with columns and a flag – which would then send it to the same doctor. Published by the Public Affairs Committee, Inc., articles in the pamphlet were written primarily by two key players in the 1949 national health-care debate.

Oscar R. Ewing headed the Federal Security Agency, controlling Social Security and the Public Health Service, and was a long-time Truman policy advisor, serving as Vice Chairman of the Democrat National Committee. He was the lead official in the Truman administration supporting nationalized health care, arguing that inability to afford care resulted in a “barrier of formidable properties between the doctor and his patient.” Nationalized medical care, funded by a 3 percent payroll deduction on incomes up to $4,800 and paid equally by the employer and employee, would be able to “cover all services and prevent, diagnose, and cure,” all diseases. This system would result in full coverage for almost everyone, but “no major increased burden on the national economy.”

A national committee would advise government on the broad standards, while local committees would determine the “fair scale of fees” to be paid. Doctors could charge on a service-provided basis or by the number of patients seen, with a limit on how many patients. The patients would choose their own doctor – an important concern even in the 1940s. This system would have the “same amount of paperwork” as insurance companies. Ewing claimed that the administrative overhead would be no more than 7 percent of the wage deductions.

There would be a means test, with the government paying for the poor. Ewing’s estimate was that the cost to cover these people would be only 14 to 25 percent above the payroll tax. The government would provide these additional funds (from where he did not say….). Ewing admitted that the services offered would have to be determined by “what we’re willing to pay” to cover the unemployed, indigent, and bad risks. Though the terms rationing and death panels were not used, the issues were the same as today. What services, at what cost? Ewing later became the main proponent of Medicare.

Dr. George F. Lull was Secretary of the American Medical Association (AMA), a Major General in the Army in the Medical Department, and an Assistant Surgeon General. The AMA was opposed to Truman’s legislation, instead favoring the expansion of medical facilities, increased numbers of doctors, and continued expansion of voluntary health insurance, including a “service card” proposal similar to proposals of today. Lull’s concerns included the “hampering and destroying of the professional freedom” of doctors, and the potential for political control of health care decisions by 400,000 – 500,000 new government workers. Many problems Lull cited remain today – patient confidentiality, limited choice of physicians, number of patients seen, panel practice, and government approval of procedures.

The cost estimates Lull offered were significantly higher than those quoted by Ewing, requiring the payment of “six percent initially and as much as eight to ten percent,” in payroll taxes, on top of social security and federal income taxes.

The partisan differences expressed by participants were quite as strong as those today and were referred to as “violent differences of opinion.” Sixty-three years later many problems have been substantially addressed – including elder care (Medicare), indigent care (Medicaid), general infant and mother mortality, and rural access. The vast majority of Americans have health-care insurance – yet, the push for nationalized health care continues. Concerns about government control and bureaucracy, cost of care versus the care provided, who decides what care is received, and patient/doctor independence are still critical.


— Deborah D. Thornton, Research Analyst, Public Interest Institute, Mount Pleasant


The views expressed in this column are those of the author and not necessarily those of the Public Interest Institute. They are brought to you in the interest of a better informed citizenry.


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