"Socialized Medicine": 1974 Version

“The time is at hand this year to bring comprehensive, high quality health care within the reach of every American. I shall propose a sweeping new program that will assure comprehensive health insurance protection to millions of Americans who cannot now obtain it or afford it, with vastly improved protection against catastrophic illnesses."

One could be forgiven for thinking that is a quote from President Obama, but it’s not. 

It was Republican President Richard M Nixon at his 1974 State of the Union Address. 

Nixon had been an advocate for a national health care plan for a long time.  His first attempt was in 1947 as a Congressman from California.   Apparently watching two of his brothers die at a young age (7 and 22), and seeing his family suffer from the financial devastation related to his brothers illnesses must have provided motivation for his efforts to reform health care.

Nixon’s healthcare reform proposal was very similar to the current “ACA” plan, ie Obamacare, except that it had many stronger requirements, like requiring that all employers, not just large ones, provide insurance to their employees.  It truly was a universal coverage plan.

The 1974 Democrats offered up a health care plan as well.  It was a “Single Payer” taxed based plan that was sponsored by Ted Kennedy.   Think of it as Medicare that everyone could get into.   

Apparently, the idea of reforming health care had broad bi-partisan support.   Just about everyone who knew anything about healthcare and the budget understood that the cost increases were on an unsustainable path.  The question was not whether to reform health care but how to reform it.  

This, of course, is when the insurance and medical industry lobbyists and PR machines got involved.

“Socialized Medicine”, “Govt Takeover of Health Care” and, of course, “Death Panels” were used over and over again by the PR machine to demonize the plans.

And the congressional money spigot was turned on as well.  The insurance and medical industries had a lot at stake and there were votes to buy.

Of course, neither reform bill passed.  Nixon’s was killed due to high inflation, unemployment and Watergate while Kennedy’s plan lost momentum (see above re socialism).  

Nixon’s prediction came true.  Health care costs continued to increase – putting America at economic disadvantage vs the developed world while the lack of access to health care continued to endanger American citizens.

In 1974, health care costs totaled 7.7% of GDP.  Today, those costs are approaching 18%

Or put a different way, in 1974 health care cost the average US family $436 a year.   Today that is about $8500 a year.  

Frankly, our version of health care is a threat to American economic security.  Our businesses cannot be competitive in the global marketplace with our uncompetitive  and oppressive health care costs.  If you are a business owner, you already know this.

Which is why we need to reform health care.  Nixon knew it as well as every President, and Presidential candidate, since Nixon. 

But only one President was able to get it done. 

Which brings us to “Obamacare”

Yes, it’s ugly.  Yes, the political process we all had to go through to get it was miserable.  Yes, it’s far from perfect and still needs a lot of work. 

It is, however, much better than “before Obamacare”.

While I’m not a fan of increasing taxes for anyone, the .9% tax on incomes over $250K seems like a small price to pay for expanding access to health care to over 25 million people  - including to our own friends, neighbors and family members.  I’m also very glad that my secretary, who is a breast cancer survivor, will have guaranteed access to health insurance if she ever had to change jobs

I’m also glad that my kids won’t have to live in a society where access to life saving health care services is dependent on whether or not one has a job at a particular moment in time – especially in what is likely to be an uncertain economy for the foreseeable future.  I know my job is not guaranteed and it is certainly possible that without Obamacare my family could be without access to health care solely based on the financial health of my company – which is never certain.

It still has its problems though.  It cost far, far too much and has too much waste due to the incredible complexity of employer based private insurance.  I once calculated that the we, citizens of the United States, spend more on health care as the rest of the 29 countries in the developed world combined  – despite only having about 1/3 of the population.  

I also calculated that if we had changed to single payer health care like Canada did in 1971 that we would have saved about $12.2 trillion dollars over those 40 years.

The way I look at it, our current system of employer based insurance places US companies and employers at an undue economic disadvantage to foreign companies – which is yet another reason why so many companies are leaving the US for those countries where health care costs are lower.  The only long term option that can help us control costs, in my opinion, is a single payer system – similar to Canada’s model.  Obamacare is a bridge to that model.

Quick story – I once had lunch with a half dozen colleagues from Canada and we compared notes on what we were paying for health care.  I was paying about 4 times what they were – can you imagine what I could have done with that all that money?  Instead of sending it to the bureaucrats over at United Health Care in California, I probably would have spent it on a new deck or updated bathroom - putting a few local construction companies to work.

Socialized Medicine - It's a job creator!