[The following is a chapter from Book Two of The Social Transformation of American Medicine and should be seen as a piece of a larger puzzle. Throughout the entire work I am concerned with the origins of the social and economic structure of medical institutions. One of the problems is the historical selection of organizational forms: why hospitals, clinics, public health agencies, medical schools, or, in this case, private health insurance and prepayment plans assumed distinctive organizational forms in the United States.
These issues come up in the context of a more general argument about the development of the medical profession and its relation to the broader society. Book One deals with the initial loss and later recovery of professional authority, status, and control of the medical market between the late colonial period and the early twentieth century. The final chapters of Book One analyze the rise of organizations impinging upon private physicians (hospitals; public health institutions; corporations, fraternal societies, and private clinics) and try to account for the professions success in escaping both corporate and governmental control.
Book Two then turns to the struggles over the politics and business of medicine in the twentieth century, from the debate about compulsory health insurance through the growth of corporate health care today. The first chapter, “The Mirage of Reform,” tries to explain the failure to pass a government health insurance program first during the Progressive era, again during the New Deal, and once again under President Truman. In the process of discussing these developments between 1915 and 1950, I try to delineate the changing political and economic forces that shaped the debate. Then, in the chapter below, I turn to the system that appeared in place of a public program and try to account for its organization.]