The historical logic of national health insurance: structure and sequence in the development of british, canadian, and u.s. medical policy*

Studies in American Political Development, 12 (Spring 1998), 57–130. Printed in the United States of America.

JACOB S. HACKER
Yale University

The Historical Logic of National Health Insurance: Structure and Sequence in the Development of British, Canadian, and U.S. Medical Policy*

Government-sponsored health insurance is a central pillar of the modern welfare state. In advancedindustrial democracies, public spending on medical care accounts for an average of 6 percent of gross domestic product (GDP), making it the largest category of social spending after public pensions.1 Despite the popularity and resilience of established health programs, however, the introduction of government-sponsored health coverage has been highly controversial everywhere. Few social programs involvethe state so directly in the workings of the economy and the practice of a powerful profession. Few entangle the interests of so many diverse and resourceful groups. And few cast in such stark relief the ideological principles at stake. Although the participants in conflicts over health policy have differed from nation to nation, no country has acquired national health insurance without a fierce andbitter political fight. Yet, as similar as these conflicts have been, they have not resulted in the same outcome in all nations. Although Canada and the nations of western
*For helpful comments on the manuscript, I thank Peter Hall, John Kingdon, David Mayhew, Theodore Marmor, Theda Skocpol, and especially Paul Pierson. Oona Hathaway supported my efforts with her usual congenial mix of love,advice, and patience. I am also grateful for the thoughtful and detailed responses of two anonymous reviewers and for the assistance of the journal editors. An earlier draft of this essay was delivered at the 1997 annual meeting of the American Political Science Association, where it was commented on by Eric Einhorn and Sven Steinmo. 1. Computed from Organization for Economic Cooperation andDevelopment, The Reform of Health Care Systems: A Review of Seventeen OECD Countries (Paris: Organization for Economic Cooperation and Development, 1994), 38. The comparison with pensions is made by Karl Hinrichs, “The Impact of German Health Insurance Reforms on Redistribution and the Culture of Solidarity,” Journal of Health Politics, Policy and Law 20 (1996): 653–87. 1998 Cambridge University PressISSN 0898–588X/98 $9.50

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Europe all guarantee universal health care, the scope, content, and time of passage of their programs vary considerably. Under the pioneering leadership of Chancellor Bismarck, Germany established the first system of compulsory sickness insurance in the late nineteenth century.2 In 1911, Britain followed Germany’s lead and created a nationalcontributory program for manual workers. By 1948, however, it had abandoned the German model to become the first western government to adopt a program of free and universal entitlement to publicly provided medical care.3 Canada, by contrast, did not establish a nationwide insurance program until 1957, and then, in keeping with provincial developments, only for hospital care. When Canada finallyconsolidated its comprehensive insurance program in the early 1970s, it followed neither German nor British precedent but instead allowed the provinces to be the sole insurers for most medical services. The United States, of course, does not have national health insurance despite recurring political debates over the subject. In 1965, President Lyndon Johnson and his allies capped off a long,ideologically charged battle for government health insurance with the passage of Medicare for the elderly and disabled and Medicaid for segments of the poor.4 But all subsequent efforts to extend coverage to the remaining uninsured, including the campaign launched by President Bill Clinton in 1993, ended in failure. What explains the contrasting fate of national health insurance in different nations?...