Health co-ops: Could they work again?
Michael R. Grey, chief of Medicine, Hospital of Central Connecticut
Posted: 30 October 2009
NEW BRITAIN — Before Medicare and Medicaid, the U.S. government embarked on a health-care initiative that, while relatively short-lived, proved pretty successful. As with many social initiatives, the program was born out of the Great Depression.
Not too many people know about the program. One who does is Dr. Michael R. Grey, chief of medicine at the Hospital of Central Connecticut. As well as being a physician, Grey is a medical historian, and author of “New Deal Medicine: the Rural Health Programs of the Farm Security Administration.”
It’s a good time to review the fruits of Grey’s research, as the country once again wrestles with the effort to revamp the nation’s health care system and the so-called public option continues to stir vigorous debate.
The public option is a government-run alternative to health insurance coverage. The aim is to cover the millions of Americans who have no insurance and those who are under covered. Proponents say it will increase competition and drive down costs, while critics say it will unfairly compete with private insurance.
“As a historian by training, I believe the past does inform what’s going on now,” said Grey, during a recent interview in his office at New Britain General, which along with Southington’s Bradley Memorial is part of the Hospital of Central Connecticut.
Grey’s research into health-care cooperatives run during the Depression started when he was a history of science major at Harvard. With the help from the clinical scholars program of the Robert Wood Johnson Foundation, the research led to his book.
The medical care program of the U.S. Department of Agriculture’s Farm Security Administration is far less known than the FSA’s program to document the Great Depression by employing such famed photographers as Walker Evans. The FSA was one of President Franklin D. Roosevelt’s efforts early in his first administration to use federal intervention to counteract the massive effects of the Depression.
From 1932 to 1947, the medical program targeted low-income farmers, sharecroppers and migrant workers in rural America, hard hit by the nation’s economic downturn.
Grey said his “ears picked up” recently when Sen. Kent Conrad, a North Dakota Democrat, proposed the creation of health-care cooperatives as part of the country’s current exploration of health-care options.
While the public option would involve making a government-run insurance plan, such as Medicare, available to all, a cooperative would allow individuals or groups to buy into a self-governing plan run by an association. Generally, the larger the cooperative the more influence it could have in securing a competitive deal.
The program run by the FSA during the Depression was government subsidizing a cooperative, to help make rural farmers more competitive, a commitment that led to medical coverage as well.
In Connecticut, health-care public options were in high profile during the last legislative session. The approved Susti Net program calls for a pooling of groups from a variety of sectors under a new, self-insured plan.
A health-care pooling bill, seen as a companion to Susti Net, failed to override a veto by Gov. M. Jodi Rell. That plan would have allowed municipalities, small businesses and non-profit organizations to join the state employees’ insurance plan.
The “towns were interested, the nonprofits were interested,” said House Speaker Christopher G. Donovan, D-Meriden, who championed the legislation. “The bigger the cooperative the better.”
In the early 1930s, the nation’s economy was in far more serious condition than it is now, with as much as 25 percent of the population out of work. Low-income farmers were particularly hit hard.
The FSA’s move toward health-care cooperatives was spurred when the agency discovered that half of the farmers who were defaulting on their loans were doing so because they were ill. It was decided that a healthy family was a better credit risk.
One lesson valuable today, Grey points out, is that medical health can have an adverse effect on economic health.
“That poverty and health are linked was discovered at the time of the Great Depression,” he said.
The program ultimately gave about 650,000 Americans in 36 states access to rudimentary medical coverage.
In many cases, said Grey, the arrangement was also a deal for doctors, because it gave them some payment where before there was none. Rural doctors earned about $3,500 annually, he said. The program paid them 65 cents on the dollar. “So, economically, it worked for doctors,” he said.
The program was not without its critics. There was opposition from the American Medical Association, which preferred things as they were and was wary of the federal government getting involved in health care and health-care insurance. Familiar criticisms included the conviction that government should not be getting between patients and their doctors, Grey said.
“Even back then, socialized medicine was used as a battering ram for any reforms that were proposed,” said Grey.
“In my opinion, it diverts attention from the problem we face in producing a system we can afford and provide good care,” he said.
Membership in the FSA program peaked in 1942. Ideological concerns, coupled with the advent of America’s involvement in the Second World War and a migration from agriculture to industry eventually led to the program’s end.
“The federal government’s foray into health-care delivery was not a wasted effort,” wrote Grey in an abstract that appeared in the American Journal of Public Health, in 1994. “By intervening directly in the provision of medical care services for underserved civilian populations, the government established a broad precedent. Not until the passage of Medicare and Medicaid, the creation of the Office of Economic Opportunity, and the neighborhood health center movement during the Kennedy-Johnson era would such a vast number of poor Americans gain access to medical care through lowered cost barriers.”
Submitted by Jeff Kurz on Fri, 10/30/2009 - 11:13
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