The American Medical Association’s (AMA) crusade against national health insurance was a landmark in the history of the welfare state. Often described as both bitter and brilliant, it is widely considered to be one of the most effective public relations operations in modern American politics.Footnote 1 Spearheaded by the pioneering political consulting firm Whitaker and Baxter, the AMA’s 1949 campaign—then the most expensive in American history—distributed over 100 million pieces of literature in its first year alone.Footnote 2 Meanwhile, the Committee for the Nation’s Health (CNH), the underfunded pro-reform lobby aligned with the Truman Administration, struggled to compete. With a shoestring budget of barely $100,000, the CNH was overwhelmed by the AMA’s multimillion-dollar operation.Footnote 3
According to most accounts, the AMA’s actions transformed President Truman’s proposal for publicly funded health care into a “bogeyman” by teaching Americans to fear the specter of socialized medicine and contributed to the failure of the United States to adopt national health insurance.Footnote 4 By the campaign’s conclusion, the AMA had not only succeeded in defeating national health insurance but had solidified its reputation as a powerful political force dedicated to protecting the financial interests of physicians.Footnote 5 Yet this singular focus on the AMA’s opposition to government-funded health care has obscured a critical aspect of its strategy. The AMA’s campaign was as much about persuasion as it was about resistance. It was not simply a campaign against public health insurance but a campaign for private health insurance. One of the AMA’s most ambitious objectives was to actively promote private, physician-backed insurance programs and enlist doctors as advocates for the so-called “voluntary way.”
Rallying under the slogan, “The Voluntary Way is the American Way,” doctors were instructed to display campaign materials in their offices. Local medical societies received radio talking points and prewritten speeches for community events, and allied professionals, such as dentists and pharmacists, were enlisted to spread the good news about private health insurance.Footnote 6 Physicians were even encouraged to include stickers on invoices reminding their patients to “Ask Your Doctor … Ask Your Insurance Man About VOLUNTARY HEALTH INSURANCE.”Footnote 7
The scale and sophistication of this campaign marked a decisive turning point for the AMA and accelerated its transformation into a more conventional interest group. In the early twentieth century, the organization had primarily focused on consolidating physicians’ professional authority by setting standards for medical education, specialty training, and accreditation. It had long avoided direct political lobbying and viewed advertising with suspicion because it feared that such activities might compromise the professional autonomy of physicians.Footnote 8
By the late 1940s, however, the AMA had fully embraced political advocacy and launched one of the largest and most sophisticated issue campaigns in American history. What explains this dramatic shift? Why did a traditionally cautious professional society, largely led by elite physicians, launch a massive and highly coordinated public relations effort?Footnote 9 And why did the promotion of private medical insurance—a model the AMA once viewed with suspicion—become central to its strategy? Understanding this shift is essential because of the broad scholarly consensus that the widespread adoption of private health insurance fundamentally reshaped American health policy and contributed to the long-term defeat of national health insurance.Footnote 10
Most explanations for the rapid expansion of private health insurance emphasize a combination of wartime economic policies and shifting labor incentives. During World War II, federal wage stabilization measures prevented companies from raising salaries to attract workers, but nonwage benefits, such as employer-sponsored health insurance, remained exempt. Recognizing an opportunity, many large employers began offering health benefits as a recruitment tool to strengthen worker loyalty while keeping labor costs stable.Footnote 11 At the same time, medical advancements increased public demand for modern treatments, even as rising costs made out-of-pocket care increasingly unaffordable.Footnote 12 These pressures created fertile ground for private health insurance to expand, particularly through employer-based plans.
Yet as Christy Ford Chapin has argued, the AMA’s support was crucial in solidifying private health insurance as the dominant model. Initially skeptical, AMA leaders ultimately concluded that private insurance offered the greatest security for physicians by allowing them to maintain professional autonomy and fee-for-service payments.Footnote 13 Between 1945 and 1950, Blue Cross, which covered hospital services, and Blue Shield, which insured physician services, more than doubled their enrollments, transforming private insurance into a well-established system backed by most state physicians’ associations.Footnote 14
Although structural factors such as wartime labor policies contributed to the rise of health insurance, I argue that the AMA’s aggressive campaign played a decisive role in accelerating its expansion.Footnote 15 As Figure 1 illustrates, enrollment in medical insurance lagged significantly behind hospital and surgical coverage.Footnote 16 Once the AMA began to actively promote Blue Shield and other physician-backed plans, enrollment surged in the late 1940s and early 1950s.
Figure 1. Private Health Insurance, 1940-1955.
Source: Leon Applebaum, “The Development of Voluntary Health Insurance in the United States,” Journal of Insurance 28, no. 3 (1961), 25.
This suggests that the AMA’s decision to promote rather than merely tolerate private health insurance may have contributed to its wider availability beginning in the late 1940s. Even if, as some scholars contend, Truman’s national health care plan was unlikely to pass, it nonetheless provided the impetus for the AMA to persuade state-level medical societies and member physicians to expand Blue Shield plans.Footnote 17 The public relations strategies designed by Whitaker and Baxter were particularly important in expanding coverage beyond industrial workers to reach middle-class professionals and small business owners. Shifting our focus from what the AMA opposed to what it promoted reveals this deeper strategic objective.Footnote 18
Drawing on records at the California State Archives, I explain how elite physicians collaborated with Whitaker and Baxter to create an aggressive campaign that was directed at convincing both their fellow doctors and the American public of the benefits of private medical insurance.Footnote 19 State-level innovations, especially in California where Whitaker and Baxter’s first mass campaign for “voluntary” insurance was launched in 1945, also played a significant role in developing a strategy to promote private health plans. Ultimately, the AMA’s efforts culminated in one of the most significant public relations campaigns of the twentieth century and helped to ensure that the “voluntary way” would remain the American way.
I begin by examining the origins of the AMA’s campaign by focusing on the efforts of the California Medical Association (CMA) to prevent the implementation of publicly financed health care. As I show, this initiative was driven by both a desire to preempt state-sponsored health insurance and a recognition of the growing demand for affordable medical care. Section two considers Whitaker and Baxter’s early efforts to fight Governor Earl Warren’s 1945 proposal for tax-supported health insurance in California. I then explain the internal debates at the AMA over the development of nonprofit medical insurance plans and how the AMA could best combat the proposals for publicly financed health insurance. The fourth section describes Whitaker and Baxter’s campaign against national health care and the decision to center their efforts around the promotion of private health insurance. I conclude by considering the long-term implications of this campaign for American health care policy.
1. Early Threats and the Rise of California Physicians’ Service
In the 1930s, advances in medical science, widely celebrated in the media, led to a dramatic increase in demand for health care. Hospital admissions alone grew from 6.9 million in 1935 to 9.2 million in 1940.Footnote 20 This surge in demand, however, brought new concerns about rising medical costs and the need to expand access to care.Footnote 21 For many Americans of this era, medical expenses had become a heavier financial burden than lost wages, and hospitals began seeking more stable ways for their patients to pay for the increasingly expensive care.Footnote 22
Two distinct models of health insurance began to emerge in response. Commercial insurers were initially reluctant to enter the health insurance market, citing concerns over moral hazard and financial risk. When they did begin offering health coverage, they focused on indemnity insurance, which reimbursed policyholders for medical expenses up to a specified limit, rather than directly covering services. They also saw success by bundling health insurance with other products, such as life insurance, for their larger clients.Footnote 23 This cautious entry often involved adding medical expense riders to existing accident and disability policies before eventually offering stand-alone hospitalization and surgical plans.Footnote 24
In contrast, nonprofit Blue Cross plans provided “service benefits” that covered the costs of hospital stays directly. To avoid the financial reserve requirements imposed on insurance plans, Blue Cross of New York successfully lobbied for an exemption from these obligations.Footnote 25 By 1939, twenty-five other states had passed similar laws, allowing Blue Cross to operate without the capital reserve requirements of conventional insurers.Footnote 26
Blue Cross quickly rose in popularity during the mid-1930s as the economy started to recover from the Great Depression. Its growth accelerated during World War II, when some employers began providing health insurance as a fringe benefit.Footnote 27 The introduction of health insurance not only expanded Americans’ access to advanced hospital services but also stabilized hospital revenues.Footnote 28 In 1937, Blue Cross only had about 600,000 members across 30 plans, and commercial insurance indemnity plans covered around 2 to 3 million people. By 1940, 12 million Americans had some form of health insurance, and roughly half were enrolled in Blue Cross.Footnote 29
Despite the growth in hospital coverage, insurance for physicians’ services was extremely rare by the end of the 1930s. This gap in coverage largely stemmed from state laws that prohibited prepayment plans sponsored by nonphysicians. Even physician-sponsored plans were rarely approved.Footnote 30 As a result, although hospital care became more accessible through Blue Cross and commercial insurance, Americans had few options for covering physicians’ fees.Footnote 31
Although the AMA remained resistant to insurance plans for doctors’ services, California began to emerge as a pioneer in health care delivery. Physician groups in the state frequently challenged, and at times defied, the AMA’s rigid guidelines. During the 1920s, pioneering clinics began to experiment with group practice models that allowed several different specialists to provide comprehensive care. By the end of the decade, health care organizations like Ross-Loos in Palo Alto and Kaiser Permanente in Oakland began offering prepaid physicians’ services. Such innovations, however, met with fierce resistance from the established medical community, occasionally leading to the expulsion of their members from county medical societies.Footnote 32
California doctors faced an early challenge to their authority in 1939 when Governor Culbert Olson proposed a compulsory health insurance plan designed to cover low-income residents. Early reports that the California legislature was favorably considering Olson’s plan led the CMA to convene a special meeting of its House of Delegates to agree on a response. On one side were physicians who thought that a state-managed plan might provide more consistent payment for their services. On the other side were those who favored the creation of a prepaid insurance system that would be managed by the CMA itself.Footnote 33
The choice was put in stark terms by Lowell Goin, the CMA’s president: “If we are to discard, however unwillingly, the traditional fee-for-service basis of payment, we must substitute something for it,” Goin told California physicians at their annual meeting in Monterey. “Our alternatives seem to be public or state medicine on the one hand, and periodic prepayment plans on the other.”Footnote 34 In adopting the prepayment strategy, the CMA chose to embrace a model opposed by many in the AMA’s top leadership, including Morris Fishbein, the influential editor of the Journal of the American Medical Association. Although the AMA had approved the creation of prepayment plans sponsored by medical societies the previous year, Fishbein sent representatives to California to lobby against the plan, marking the beginning of an increasingly toxic relationship with the CMA.Footnote 35
Despite any concerns California doctors might have had about the AMA’s stance, they overwhelmingly voted in favor of Goin’s plan to establish a prepaid plan under the CMA’s control. On February 2, 1939, the California Physicians’ Service (CPS)—the nation’s first Blue Shield plan—was created under the leadership of Ray Lyman Wilbur, the past president of the AMA and, at that time, the president of Stanford University.Footnote 36 In a rhetorical sleight of hand that demonstrates how controversial the notion of insurance was among physicians, the architects of CPS rejected any suggestion that it was a “voluntary health insurance scheme,” preferring to label it “a means of defraying the cost of medical and surgical services on a monthly or other periodic budgeting basis.”Footnote 37 This was also because CPS, like Blue Cross, wanted to avoid being classified as an insurance company, which would have required significant financial reserves. Despite initial objections from California insurance regulators, the state courts ultimately affirmed that CPS was not in the insurance business.Footnote 38
This hastily developed plan drew criticism from Paul Dodd, a prominent health economist at UCLA, who argued that it adopted “most of the inherent shortcomings in voluntary insurance” and placed organized medicine in a “highly monopolistic position.”Footnote 39 In 1939, this criticism may have been beside the point. As one observer later noted, the plan’s primary purpose was “to forestall the passage of state legislation calling for state-wide prepaid medical insurance and they didn’t expect it to succeed.”Footnote 40
But the California physicians pressed ahead with their nonprofit prepayment plan even after Olson’s bill was defeated at the legislature.Footnote 41 The initial cost ranged from $1.20 to $1.70 a month, depending on the extent of the coverage. Eligibility was limited only to Californians earning less than $3,000 per year. Just five months after its creation, it could count five thousand participating physicians.Footnote 42
Despite the low costs and early interest from physicians, patients were less enthusiastic. After a full year of operation, CPS only managed to enroll 20,000 patient subscribers. As Howard Hassard, the long-time attorney for CPS (later Blue Shield of California) later explained, “Almost every physician signed up, but the public didn’t buy it: California Physicians’ Service found it extremely difficult to get the public to buy its product. People just weren’t accustomed to the idea of prepaying the cost of physician services.”Footnote 43
During its first three years of operation, the CMA remained a vigorous supporter of the plan, declaring in 1941 that “the future of voluntary health insurance is assured, provided only it be given a genuine opportunity to show its worth.”Footnote 44 But problems began to multiply as CPS expanded. After establishing a medical clinic in San Diego to serve a federal housing facility for war workers, CPS was forced to suspend operations in 1943 because few residents were willing to pay the $5 monthly subscription fee.Footnote 45 After four years of operation, CPS had enrolled only 88,000 subscribers, or about 1.2% of California’s population.Footnote 46
The political implications of CPS’s lackluster performance were not lost on the CMA’s leadership. Rather than acknowledge that many members of the public found the plan too expensive, CPS’s problems were blamed on a “lack of cooperation” by California physicians. “Their weaknesses,” argued the plan’s executive director, “are seized upon by opponents to a physician-sponsored plan as being evidence that the physicians themselves do not support their own program, and this is very damaging when it is brought up under the right circumstances.”Footnote 47 More troubling, perhaps, was the finding in an internal CMA report that described how subscribers “felt themselves discriminated against in certain doctors’ offices.”Footnote 48 The report ominously warned that if CPS patients felt they were second class, it was “simply an invitation to that subscriber to embrace federal medicine.”Footnote 49
Internal dissent among physicians further complicated CPS’s position. By 1944, the CMA was facing a rebellion from many of its own doctors over its low fees, which threatened CPS’s political viability as an alternative to publicly funded health care. To shore up support, the CMA issued a strong retort to some San Francisco Bay Area physicians who had refused to continue their participation in the CPS program. “Resistance to all change will kill, not preserve, private practice,” the CMA reminded the protesting physicians. “If we want to be engulfed and to lose all private practice, then by all means let us take the myopic view that all that we have to do is to sit tight and defend ‘private practice.’”Footnote 50
2. The Campaign against Public Health Insurance in California
While the CMA grappled with internal dissent and the political ramifications of CPS’s performance, an unexpected challenge arose from the newly elected Republican governor, Earl Warren. In 1944, after a severe kidney infection, Warren began considering a state health insurance plan for California to address the financial effects of medical emergencies. For Warren, the increasing costs of sickness required the state to move beyond the “haphazard efforts” of charitable programs.Footnote 51 In January 1945, he announced a publicly financed health care program, undeterred by warnings that the CMA would oppose it.Footnote 52 Despite this—or perhaps because he believed public opinion was firmly on his side—Warren chose to move forward with a plan similar to the one proposed by Olson just six years earlier.Footnote 53
Warren justified his decision in part as a response to the slow growth of CPS, using it as an example of how “voluntary systems, desirable as they may be, cannot in and of themselves keep pace with public need and with the crying demands of our people.”Footnote 54 Although the Governor seemed to believe that California physicians would eventually acquiesce to state-financed medical care, he later recalled in his memoirs that, just days after the bill’s introduction, “the State Medical Society met in Los Angeles and all but declared the plan to be the work of the Devil.”Footnote 55
The CMA soon found itself in a precarious position. In major cities like Oakland and Sacramento, many doctors either refused to participate in CPS or did so only reluctantly, fearing that even a physician-managed plan might erode their professional autonomy.Footnote 56 Faced with mounting political pressure and internal discontent, the CMA hired Clem Whitaker and Leone Baxter, the husband-and-wife team that ran Campaigns, Inc.—widely acknowledged as the first professional political consulting firm in the United States—to develop its campaign against Warren’s plan.Footnote 57
This choice would have far-reaching consequences. In the 1940s, there was no organization quite like Campaigns, Inc., and it quickly emerged as a dominant force in California politics.Footnote 58 Unlike traditional lobbyists, Whitaker and Baxter believed that the key to winning political battles lay not in backroom negotiations but in shaping public perception. “Our conception of practical politics is that if you have a sound enough case to convince the folks back home, you don’t have to buttonhole the Senator,” Baxter once explained to a gathering of public relations professionals.Footnote 59 Even their critics were quick to admit that these “talented hucksters” had found a winning formula.Footnote 60 “Humdingery and dynamite” was how Arthur Schlesinger, Jr., who grudgingly acknowledged Whitaker and Baxter’s talents, would later characterize their tactics.Footnote 61 Yet the firm’s true innovation may have been to recognize, as Whitaker frequently emphasized in his writings and speeches, that “You Can’t Beat Something with Nothing.” Any successful campaign, in other words, needed to present citizens with a clear and compelling choice.Footnote 62
California offered especially fertile ground for the emergence of professional political consultants because of its size and direct democracy system of propositions and initiatives—a legacy of the state’s strong Progressive movement. This offered many opportunities for well-financed campaigns that demanded specialized expertise in organizing, petitioning, and messaging. Furthermore, the absence of strong and disciplined political parties in California created an opportunity for private consultants to manage political campaigns designed to harness the power of mass communications and speak to voters individually.Footnote 63
From the very start of the campaign in 1945, Whitaker decided that the doctors must put most of their emphasis on CPS as a voluntary alternative to state-financed medical care.Footnote 64 “I think wide-spread voluntary health insurance is the answer,” he reportedly told the CMA’s leadership.Footnote 65 He also stressed the need for an “an aggressive, affirmative campaign throughout this year and next, to develop and expand California Physicians Service.”Footnote 66 Using a strategy that would eventually be embraced at the national level, CPS instituted a in-house public relations department to visit physician offices to explain the plan, to encourage physicians to discuss CPS with their patients, and perhaps most importantly, to ensure that CPS subscribers were not discriminated against by member physicians.Footnote 67
The campaign materials they developed reflected Whitaker’s emphasis on promoting the voluntary nature of CPS. As Figure 2 shows, one flyer, titled the “5th Freedom,” promised its readers that voluntary health insurance was “the latest, perhaps the greatest, of all this State’s proud achievements.” This freedom, the flyer continued, “is the Freedom of the average man from the hovering fear of economic disaster, when illness or accident strikes him or his family. It is guaranteed by VOLUNTARY Health Insurance—established, efficient, serving all California with economy and experience.”Footnote 68 Along with millions of similar mailers, Whitaker and Baxter purchased 70,000 inches of advertising space in papers throughout California in just three months in 1945.Footnote 69
Figure 2. “The 5th Freedom.” A pamphlet from the California Committee for Voluntary Health Insurance.
Source: Box 5, Whitaker & Baxter Records. Courtesy of the California State Archives.
Whitaker and Baxter also sponsored a speakers’ bureau of physicians and their allies who could fan out across the state to deliver speeches prepared by Campaigns, Inc.Footnote 70 Pharmacists, veterans, and even doctors’ wives were enlisted in this effort. One Whitaker and Baxter form letter written to the women’s medical auxiliary implored them to “learn the A, B, C’s of the very potent arguments FOR Voluntary Health Insurance and AGAINST Compulsory Health Insurance.”Footnote 71
Whatever momentum Earl Warren had was soon lost, and the California Assembly’s Public Health Committee voted 7-3 against sending his bill to the floor. After this victory over the immediate threat of public health insurance, Whitaker and Baxter doubled down on their strategy to promote CPS. In a report to the CMA council, Whitaker noted that the campaign had “progressed from a defensive position to offensive action.”Footnote 72 The firm provided ghostwritten addresses for delivery to county medical societies that explained how California physicians had won the battle but not the war. In these appearances, the speaker was instructed to declare, “If we are to beat compulsory health insurance—on any permanent basis—we can only beat it, in my opinion, by giving the people what they want and need: Voluntary health insurance.”Footnote 73
By 1946, with the campaign in full swing, Whitaker and Baxter developed a new radio drama called California Caravan that began as a quick 15-minute program offering dramatic stories from California’s pioneer history. It soon expanded into a 50-minute program that was offered on 400 stations including the American Broadcasting Company, which had recently been spun off from NBC. Not long after its launch, the show was attracting 635,200 listeners and, at the height of its popularity, reached more than 900,000 viewers every Sunday.Footnote 74 For its first five years, the program was wholly sponsored by the CMA and its advertisements focused primarily on convincing the listening audience to buy private health insurance.Footnote 75 One commercial that aired in December 1946 reminded its listeners “that adequate, prepaid, budget-basis medicine … yes, ADEQUATE HEALTH PROTECTION, costs just about what the average man spends for cigarettes!”Footnote 76
The campaign culminated with Voluntary Health Insurance Week, a series of promotional events that included speeches and events in each of California’s 58 counties. These were backed by the local county medical societies and sold as “a constructive, continuing campaign of sound public education, of sound public relations and advertising, of sound salesmanship—until the job is done and the VOLUNTARY Health Insurance principle is firmly established.”Footnote 77 For this purpose, the CMA encouraged local newspapers to think of “tie-in copy” from local businesses to accompany the 100 inches of space Whitaker and Baxter already planned to purchase.Footnote 78 Advertisements for Voluntary Health Insurance Week eventually appeared in 450 papers in 34 counties, and mayors in more than 100 towns made official proclamations announcing Voluntary Health Insurance Week.Footnote 79
Physicians themselves were always the most important salesmen of the campaign. “Past experience has shown that the local doctor actually does not know his own strength when it comes to affecting opinion through education in local affairs,” one leading physician wrote in state’s medical journal.Footnote 80 As a way to recruit more doctors to actively campaign for CPS, they were also offered the opportunity to enroll their own families in the plan, which was considered “an important step since it familiarizes the physician, his family and his staff with the advantages of C.P.S.—what the membership card means in time of prolonged illness or unpredictable accident.”Footnote 81
By almost any measure the campaign was a smashing success. Since “medicine’s Pearl Harbor day”—the name given by Whitaker and Baxter to mark the date Warren announced his plan—CPS’s membership grew from 125,000 to over 600,000 and private health insurance coverage in California surged overall, more than doubling to cover 5 million residents.Footnote 82 Summarizing the campaign after three years, Whitaker told the CMA, “Today, there are very few critics of medicine in California who would have the temerity to say: ‘Why don’t doctors do something about the problem?’ Doctors have done something about the problem … and the people know it! That is, without doubt, the biggest factor contributing to your improved position in the battle to save your profession.”Footnote 83
Over the course of the campaign, the CMA had invested $367,470 to purchase nearly 40,000 inches of advertisements in 420 newspapers, which was supplemented by an additional 30,000 inches of promotional material sponsored by a coalition of local businesses. Given this level of advertising, it is easy to understand why the newspaper editorial boards opposed to Warren’s plan had increased from 100 to 432.Footnote 84 By 1948, as the campaign began to wind down, the CMA was ready to declare victory. Warren’s health care plan did not even make it out of committee in 1946 and was effectively dead by 1948.Footnote 85
Although they celebrated this win in California, Whitaker and Baxter would soon test their strategy on the national stage. In 1948, John Cline, the former president of the CMA, would recommend that the AMA hire Whitaker and Baxter to conduct a very similar campaign as it geared up to oppose Harry Truman’s plans for national health insurance.
3. The AMA’s Public Relations Offensive
While the CMA was fighting its battle against publicly funded health insurance in California, significant developments were also unfolding at the federal level. In 1939, Senator Robert Wagner (D-NY) introduced a plan for federal funding to expand health care services in the states. This initiative laid the foundation for the Wagner-Murray-Dingell bill, introduced in 1943 by Wagner, Rep. John Dingell, Sr. (D-MI) and Senator James Murray (D-MT), which proposed mandatory worker contributions to fund a system of medical and hospital insurance under the Social Security Act.Footnote 86
By 1943, however, the AMA’s stance on private prepaid health care had evolved considerably, shifting from cautious acceptance to full endorsement. In fact, the AMA began to actively encourage its local and state medical societies to develop their own prepayment options, leading to the creation of Blue Shield to coordinate physician-controlled insurance plans.Footnote 87 Over the next several years, twenty-five new plans were launched, and by January 1945 approximately 1.8 million people were covered under medical society plans.Footnote 88 The sudden shift did not go unnoticed. Albert Maisel, a prominent investigative journalist of the era, described the AMA’s reversal as “a wild run for the opposite goal posts,” which he called “complete and breath-taking.”Footnote 89
Franklin Roosevelt’s death left Harry Truman with the responsibility for drafting a national health care plan.Footnote 90 In 1945, he set the stage for a renewed push for health insurance when the new president endorsed the Wagner-Murray-Dingell bill in Congress and brushed off claims that this was a form of “socialized medicine.”Footnote 91 Although public sentiment leaned toward approval, the support was hardly overwhelming. This is less surprising than it may seem because the bill only provided health benefits to those covered by Social Security, which at the time included just over half of the American workforce.Footnote 92 Nevertheless, the administration’s proposal remained more popular than the medical society plans. The results of a July 1945 poll showed that 52% favored the public plan, whereas only 33% preferred the medical society plans.Footnote 93
This overall preference for the Wagner-Murray-Dingell bill may have been due to the limited knowledge and exposure most Americans had to medical society plans. Despite their robust growth in the mid-1940s, membership was concentrated in a small number of states. By the time of Truman’s message, about one-fourth of all subscribers were enrolled in the Michigan plan alone and half of all subscribers could be found in just four states.Footnote 94
To make Americans and physicians more broadly familiar with these plans, the AMA needed an aggressive public relations strategy to reshape the national conversation on health care. By 1940, 66.8% of American physicians were members of the AMA, giving the organization an unparalleled grassroots network with trusted voices in communities across the country.Footnote 95 Yet despite its vast reach and professional authority, the AMA had struggled to convert this influence into sustained political power in Washington.
The trouble was that the AMA’s approach to public relations during the New Deal and immediate postwar period was both reactionary and clumsy. Members of Congress were largely unimpressed by the AMA’s aggressive lobbying efforts against national health care proposals, many of which had little chance of passing. Lacking serious professional guidance, physicians often exposed their lack of policy knowledge and sophistication by opposing bills that had not even been introduced and sending barely disguised form letters to their representatives in Congress.Footnote 96
Since the 1930s, the National Physicians’ Committee for the Extension of Medical Service (NPC), although officially a separate organization, had effectively served as the AMA’s lobbying arm and advocated for Republican candidates and against national health care. Drawing its funds primarily from the pharmaceutical industry and supported by contributions from 22,000 doctors, the NPC spent $905,359 on various campaigns to sway public opinion and oppose the Wagner-Murray-Dingell health reform proposals. However, with clumsy copy like “Do You Want Your Own Doctor or a Job Holder?” the NPC’s ham-fisted campaign was far less sophisticated than Whitaker and Baxter’s efforts in California.Footnote 97
In 1943, the AMA’s House of Delegates established a Council on Medical Service and Public Relations, ostensibly to study trends in medical care programs. In practice, however, the council was charged with encouraging every state medical society to develop its own voluntary health insurance plan.Footnote 98 Despite the establishment of this new office, there was a divide between those who advocated for a more aggressive stance and those who believed the organization should remain focused on its professional, scientific, and educational pursuits.Footnote 99
As late as mid-1945, the AMA’s board of trustees still insisted that its newly established Washington office should avoid attempts to influence legislation. Yet as national health insurance gained traction, support for this cautious approach began to waver.Footnote 100 Advocates for a stronger response, like Lowell Goin—an architect of CPS—urged the Council on Medical Service and Public Relations to adopt a more assertive stance, encouraging it to become “the voice of American medicine.”Footnote 101 In December 1945, Goin’s efforts began to pay off, when the AMA passed a resolution not only accepting but actively endorsing the development of prepayment plans.Footnote 102
Even as most AMA delegates embraced a more aggressive public relations strategy, voluntary health plans—the product the Council on Medical Service was charged with promoting—continued to struggle. Dr. Sidney Garfield, the medical director for Kaiser Permanente, called them “miserable failures,” because they did not provide preventative medicine and were too expensive.Footnote 103 Although this assessment was certainly an exaggeration, the plans did struggle to expand beyond urban areas with large bases of industrial workers.
By 1946 thirty-three states had at least one medical society plan, but participation was uneven, and enrollment was concentrated in a few regions.Footnote 104 Only four states—Michigan, Washington, Massachusetts, and California—had enrollments over 200,000, and Michigan, with over 850,000 enrollees, was by far the largest. Although the initial challenge had been to encourage medical societies to create plans, the Council on Medical Service reported in July 1946 that “the big problem is to devise ways and means for increasing enrollment.”Footnote 105 The trouble was that the Council on Medical Service and the AMA had no authority to demand that the state medical societies promote their plans. As one AMA official complained to a reporter, “The states just go their own merry way and some of them aren’t going much of anywhere.”Footnote 106
One of the biggest challenges was gaining the trust and support of thousands of physicians in each state, a necessary element for any plan that sought to be comprehensive. The variation in physician participation could be substantial. For example, in 1946, Iowa’s plan had a participation rate of only 33%, whereas in Delaware every physician was a cooperating member. It was generally recognized that local medical societies needed to take the lead by actively promoting the plan to their member physicians.Footnote 107
The reasons for nonparticipation varied. In some instances, resistance came from “a few prima donna specialists,” but in most cases, doctors were simply unaware of or unfamiliar with the plan.Footnote 108 More troubling for the AMA were public opinion studies that suggested that many Americans doubted whether physicians would ever fully support medical plans. As one pollster warned Medical Economics in 1946, “Private plans will do well to publicize any success they have, for nearly a fifth (19 per cent) of the public now think that many doctors would not cooperate in private plans, and consider this the strongest argument against such plans.”Footnote 109
In 1946, the AMA established the Associated Medical Care Plans (AMCP) to coordinate the increasing number of medical society programs.Footnote 110 The name “Blue Shield” was developed largely to simplify marketing efforts, because it was a memorable name that could be used to advertise the state medical plans nationally.Footnote 111 But the AMA’s acceptance of Blue Shield plans was ambivalent at best, and in 1947 the AMA even forced the AMCP to move out of its Chicago headquarters.Footnote 112 For its part, the AMCP complained about the “half-hearted support” some medical society plans were receiving from physicians.Footnote 113
To create a comprehensive public relations strategy, the AMA hired Raymond Rich Associates, a major New York public relations firm.Footnote 114 After five months of study, Rich issued a report that was highly critical of the AMA’s efforts to expand its Blue Shield programs, noting that “the fact that relatively so little is yet being done to promote these modern measures reveals amazing shortsightedness.”Footnote 115 Rich recommended a large and coordinated public relations campaign and suggested refocusing on the AMA’s scientific work. He also proposed a clearer separation between the AMA as a scientific organization and advised giving more responsibility to the Council on Medical Service for promoting medical society insurance programs.Footnote 116 But after just a year, Rich resigned, citing the AMA’s refusal to provide sufficient funds for the campaign.Footnote 117
By 1948, fully 40% of Americans had hospital insurance, but only 23% had coverage for surgical procedures, and just 9% had coverage for outpatient physicians’ care.Footnote 118 It was this number that the AMA was most concerned with increasing. In a 1948 speech, Paul Hawley, a retired general and the newly appointed director of the Blue Cross and Blue Shield commissions, put the matter in existential terms. “Since it is impossible for voluntary plans to survive if and when national compulsory health insurance comes, we are going to have one or the other types of prepayment health insurance—not both,” Hawley told a meeting of state medical society officers in Chicago. “So the future of the voluntary plans depends entirely upon preventing the enactment of national compulsory health insurance legislation.”Footnote 119
As he began his reelection campaign in 1948, Truman continued to advocate for national health insurance. In January, he commissioned Oscar Ewing, the newly appointed head of the Federal Security Administration, to develop a comprehensive report on American health care. Ewing delivered his report, “The Nation’s Health—A Ten Year Program,” in September 1948, which painted a stark picture of health insurance coverage across the states and highlighted the inability of private health insurance to serve people and areas most in need.Footnote 120 Ewing also predicted that “voluntary” insurance programs would only ever be able to cover half the population.Footnote 121
In his final major campaign speech of 1948, Truman vowed that national health insurance was imminent, “because the Democrats are going back in power, and we are going to see that we get it.”Footnote 122 Defying the odds, Truman stunned political observers by securing a victory in the presidential election, and the Democrats reclaimed control of Congress. With this unexpected triumph, the prospect of publicly funded health insurance once again came into focus.
4. Whitaker and Baxter’s Campaign Against National Health Insurance
Truman’s unexpected reelection sent the AMA into a panic. Although an editorial in a leading industry journal thought the situation wasn’t “totally black,” the consensus was that physicians would need to dramatically expand access to medical insurance and provide more options for low-income groups.Footnote 123 In December 1948, the AMA’s House of Delegates enacted a $25 special levy on each member to build a $3.5 million war chest directed at combatting what they termed “the enslavement of the medical profession.”Footnote 124 But if the Truman administration was threatened by the these actions, Oscar Ewing, at least, was not impressed. “If their cause is good, they don’t need three and a half dollars,” he remarked. “And if their cause is no good, ten times three and a half million dollars won’t enable them to fool the American people.”Footnote 125
It wasn’t just money that gave the AMA an edge, however. Unlike many labor organizations, whose members were primarily concentrated in major industrial states, physicians were esteemed figures in nearly every community. This widespread, localized presence gave the AMA a powerful grassroots network. Yet even with these major advantages, the AMA faced significant challenges in mounting a campaign of this scale, especially since Raymond Rich Associates had resigned the previous year.
The NPC, which had historically managed the AMA’s political attacks on national health insurance, quickly proved inadequate for the task. As Cold War tensions escalated, the NPC drew heavily on anticommunist rhetoric, portraying national health insurance as a dangerous step toward state control. Yet the NPC’s early efforts to denounce Truman as a socialist who planned to destroy American freedom generated more sympathy for the president than opposition to national health care.Footnote 126 As one piece in Harper’s dryly noted, “A nation’s liberties would seem to depend upon headier and heartier attributes than the liberty to die without medical care.”Footnote 127
The NPC provoked even more controversy after it distributed a pamphlet to all the AMA’s member physicians that included a letter from Dan Gilbert, a notorious right-wing evangelical minister who had associated with pro-Nazi American groups prior to the war. The letter, which began “Dear Christian American,” was touted by the NPC as “one of the few really vital pronouncements of the age.”Footnote 128 It included a fabricated quote from Lenin where he supposedly expressed his belief that “Socialized medicine is the keystone to the arch of the Socialist state” and concluded with a stirring call to action, urging “Christian believers everywhere to work and pray that our beloved land may be delivered from the blight of this monstrosity of Bolshevik bureaucracy.”Footnote 129 Such inflammatory rhetoric generated a furor among American physicians, and the Journal of the American Medical Association quickly published an editorial stating that the Gilbert letter had been circulated without the consent or knowledge of any officials at the AMA.Footnote 130 The NPC was quietly disbanded less than a year later.
Now in need of a new organization to take charge of their planned campaign against national health insurance, Elmer Henderson, the president of the AMA, turned to Whitaker and Baxter on the advice of John Cline, the CMA’s former head. “California doctors were the only ones with any experience fighting compulsory health insurance,” Cline later recalled, and the AMA’s leadership concluded that “it would take longer for a national company to learn the problem than for Whitaker and Baxter to expand to national scope.”Footnote 131
Some early press accounts, however, were quite critical of the AMA’s new political posture. Democratic newspapers like the Fresno Bee thought that the campaign was “largely going to consist of the medical profession talking to itself.”Footnote 132 Others recognized that the campaign would likely be influential but thought the AMA was debasing the profession. “It was good enough for the railroads and the brewers and the utilities, and it was good enough for the holy art of healing,” one critic sarcastically noted. “Whitaker & Baxter, loaded with the assessment money, set out to do for America what they had done for California.”Footnote 133
In January 1949, the Chicago office of the AMA’s National Education Campaign launched with a staff of 37 employees. As they began to develop their strategy, Whitaker and Baxter closely followed the playbook that brought them so much success in California. Whitaker frequently referenced the CMA’s success against Warren and highlighted the fact that the campaign in California led to a substantial increase in CPS enrollment.Footnote 134 The campaign blueprint that Whitaker and Baxter prepared in January 1949 left no doubt that the promotion of private health care plans would be at its center.Footnote 135 Although they acknowledged that defeating the immediate legislation was critical, the ultimate goal was to end the demand for compulsory insurance by promoting “Voluntary Health Insurance systems.” As they explained to the AMA, they were going to do everything possible “to acquaint the American people with the desirability and the availability of prepaid, budget-basis medical care.”Footnote 136
The AMA’s messaging relentlessly reinforced the idea that voluntary health care was not just better—it was inherently more American. Campaign materials framed public health insurance as an intrusive, bureaucratic threat, while depicting private insurance as a safeguard of individual freedom. One of the most striking visual elements of the campaign was Luke Fildes’ painting, “The Doctor.” As Figure 3 illustrates, the image—a solemn, caring physician at a sick child’s bedside—was repurposed to reinforce the idea that that medicine, when done “The American Way,” would “keep politics out of this picture.” Speaking to the Illinois State Medical Society in May of 1949, Whitaker asked for their help in displaying the Fildes poster in 100,000 doctors’ offices in America. “When that poster is on display,” he told the Illinois physicians, “it should mean that no patient ever will leave that office before the doctor has taken a minute or two of his time to tell the story of Compulsory Health Insurance—and the disastrous results it would bring, if enacted in this country. It should mean, too, that every patient who needs Voluntary Health Insurance will be encouraged by the doctor to get the type of coverage that best suits his requirements.”Footnote 137 At the June 1949 AMA convention in Atlantic City, “The Doctor” lined the highways leading to the city. It was hung even more prominently as an enormous backdrop to the convention hall stage.Footnote 138
Figure 3. “Voluntary Health Insurance—The American Way.” A flyer from the AMA’s National Education Campaign.
Source: Box 10, Whitaker & Baxter Records. Courtesy of the California State Archives.
Another campaign brochure, “The Voluntary Way in the American Way,” accounted for nearly a quarter of all mailings that were distributed by Whitaker and Baxter.Footnote 139 This pamphlet presented a stark contrast between national health insurance and private medical benefits. It framed compulsory health insurance as leading to substandard care and higher taxes, whereas voluntary health insurance was portrayed as not only more effective but better aligned with American values of freedom and choice.Footnote 140
Similar to the tactics used in California, the campaign capitalized on the prominent position physicians held in most communities. Whitaker advised each county medical society to pass a firm resolution against compulsory health insurance within 60 days. Immediately after that, he suggested that the president of each society should inform their respective district’s members of Congress of this position. Furthermore, the firm recommended identifying the personal physicians of every member of Congress and instructing them to “send a personal letter to his patient, the congressman, telling him of the danger of socialized medicine, and asking for his help in defeating any compulsory health insurance program which may be submitted.”Footnote 141
Whitaker and Baxter also recognized the persuasive power of personal influence. They knew patients might be more open to their campaign messages if these came directly from their physicians. Eager to prompt local physicians to engage in political discussions with their patients, they supplied a set of stickers for doctors to affix to all outgoing bills. Although Whitaker and Baxter made the strategic decision never to directly name President Truman in any of their campaign materials, the stickers carried a direct request for their patients to write to their representatives in Washington.Footnote 142
Taking another page from the California campaign, Whitaker and Baxter were quick to leverage favorable press coverage and worked to boost its influence. When Collier’s magazine featured a supportive article on CPS, for example, Leone Baxter promptly transformed the article into a pamphlet for nationwide distribution.Footnote 143
A stark imbalance in resources further tilted the scales in favor of the AMA. The pro-administration group, the Committee for the Nation’s Health (CNH), struggled to compete financially with the physicians’ resources. In 1949, CNH managed to raise $104,000, with approximately $98,000 allocated for operational costs, a figure that was dwarfed by Whitaker and Baxter’s $1.5 million campaign budget. At one point, CNH intended to ask national health insurance supporters to contribute 25 cents as a 1:100 match to the $25 donations made by AMA physicians, but President Truman refused to endorse the plan.Footnote 144 With limited funds, CNH relied heavily on labor organizations to disseminate its message.Footnote 145 The CNH materials, however, could not compete with the emotionally charged mailers produced by Whitaker and Baxter. Pamphlets like “Are Blue Shield Plans Satisfactory?” and “Record of the American Medical Association”—a discussion of the AMA’s evolving views on health insurance—largely failed to capture public attention.Footnote 146
The disparity in resources might have been less of a problem if President Truman had taken a more aggressive approach in promoting the health insurance proposal. In 1949, Ewing and several labor leaders certainly expected Truman to lead a stronger campaign. Truman’s efforts, however, were largely limited to his communications with Congress, and he rarely used press conferences to advocate for the issue.Footnote 147
The outcome was predictable—and it was far from a fair contest. The public primarily heard favorable messages from Ewing and through the CNH’s modest publicity efforts. In contrast, Whitaker and Baxter distributed 41.3 million pieces of campaign material. Consequently, public support plummeted, with opinion polls showing a drop from 58% to 36% by 1949.Footnote 148
By 1950, the campaign had produced 43 different publications and had sent nearly 100 million pieces of literature.Footnote 149 Perhaps most important, Whitaker claimed that voluntary health insurance systems had enrolled 9 million new members over the course of the campaign.Footnote 150 Although the campaign for voluntary health care would continue for another year, the AMA and Whitaker and Baxter were ready to declare victory.
Writing to the AMA membership in 1950, Whitaker and Baxter acknowledged that national health care was no longer politically viable but encouraged physicians to double down on the expansion of voluntary alternatives. “This is a year for positive, vigorous action which will prove that the medical needs of America can be met under the Voluntary System,” they wrote.Footnote 151 In a form speech, designed to be delivered by doctors to their local medical societies, they urged physicians to emphasize the further expansion of private health care plans. “No task is more important in 1950 than to tell the people the dramatic success story of the Voluntary Plans,” the text said. “If that story is told widely and effectively enough, it is a sound prediction that Voluntary Health Insurance will be protecting more than half of the American people by the end of this year—and the case for Government medicine will be vanishing rapidly into thin air.”Footnote 152
In the 1950s, the AMA shifted its campaign to directly target the most prominent proponents of national health care. This, too, proved to be successful. Senator Glen H. Taylor of Idaho and Senator Claude Pepper of Florida both lost their primaries in the spring of 1950. Although Truman began a whistlestop campaign to lobby for national health care, his efforts were abruptly halted by the outbreak of the Korean War in June 1950. With the public’s attention now focused on foreign policy and military mobilization, the path to achieve national health care became even more narrow. After a disappointing showing in the midterm elections of 1950, Truman changed his strategy and began to advocate for a less comprehensive plan to provide public health insurance for the elderly—the policy that would become known as Medicare under Lyndon Johnson 15 years later.Footnote 153
5. Conclusion
Scholars have long recognized that the widespread adoption of private health insurance was a major reason why national health care failed to take root in the United States. Yet despite extensive research on the AMA’s influence in shaping American health policy, the significance of its campaign against national health insurance has often been misunderstood. Previous studies have largely focused on the AMA’s professional power and its overt resistance to government intervention in health care, but this work has underestimated the influence of the looming threat of public health insurance on the AMA itself.
In this article, I have argued that the transformation of the AMA’s approach to political advocacy and its embrace of private health insurance was central to the development of American health care. After years of resistance—or, at best, skeptical tolerance—of medical insurance of any kind, in the 1940s the AMA and some of its primary state medical societies launched a mass campaign to aggressively promote medical insurance to its member physicians and the public. This strategy, under the careful direction of Whitaker and Baxter, was instrumental in facilitating the adoption of private health insurance, which ultimately shaped the American health care landscape for decades to come.
To be sure, Truman’s proposal may have been unlikely to pass even if the AMA had not launched its multimillion-dollar campaign, but the threat provided the impetus for the AMA to increase pressure on state medical societies and physicians to expand Blue Shield plans. The Wagner-Murray-Dingell bill also offered an opening for some physicians to push the AMA to operate as a more traditional interest group that actively engaged in politics to protect doctors’ financial interests.
By the early 1950s, the AMA had done far more than defeat Truman’s national health insurance plan; it had fundamentally reshaped how Americans understood health care. The “voluntary way” became the “American way” in large part because of its sophisticated and expensive effort to convince physicians as well as patients to adopt private health insurance. Through Whitaker and Baxter’s relentless public relations efforts and grassroots physician mobilization, the AMA successfully embedded the idea that private, physician-controlled health insurance was not only preferable but inherently “American.” This framing proved remarkably resilient. Years later, during debates over Medicare, the Clinton health care plan, and the Affordable Care Act, the ideological battle lines drawn in the late 1940s continued to shape the national discourse on health care.
