Government and Public Health in America

Government and Public Health in America

Ronald Hamowy

How involved should the government be in American healthcare? Ronald Hamowy argues that to answer this pressing question, we must understand the genesis of the five main federal agencies charged with responsibility for our health: the Public Health Service, the Food and Drug Administration, the Veterans Administration, the National Institutes of Health, and Medicare. In examining these, he traces the growth of federal influence from its tentative beginnings in 1798 through the ambitious infrastructures of today – and offers startling insights on the current debate.

Chapter 5: Medicare

Ronald Hamowy

Subjects: economics and finance, health policy and economics, politics and public policy, public policy, social policy and sociology, economics of social policy, health policy and economics


* In June 1883, Otto von Bismarck, then Chancellor of a newly united Germany, was successful in gaining passage of a compulsory health insurance bill covering all factory and mine workers. This, together with a series of reform measures including accident insurance, disability insurance, and an old-age bill, formed the core of Bismarck’s state socialist policy that was crafted both to outflank the entrepreneurial class and the liberal, laissez-faire party it supported and to detach labor from the social democratic left.1 The original Act was later amended to include workers engaged in transportation and commerce and, in 1911, was extended to almost all employees, including agricultural and domestic workers, teachers, actors, and musicians.2 The motives that impelled the German government to enact a compulsory, state-run medical insurance law were not inconsistent with the views of most social reformers of the period, who regarded a powerful, centralized, bureaucratic state as capable of being a kind and beneficent institution. Bismarck’s attempts to enact his social insurance bill did not, of course, go unopposed. A substantial portion of the imperial and Prussian bureaucracy held strong freemarket views and resisted the Chancellor’s attempts to introduce measures that so dramatically intruded into the marketplace. However, the opposition to Bismarck’s program proved unsuccessful and his victory encouraged reformist elements in other countries to agitate for similar legislation. As a consequence, compulsory national health insurance was hailed throughout Europe as a model of progressive legislation and, over the course of the next 30 years, was emulated by a...

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