Interest groups, ideology, and indirect lobbying: The rise of private health insurance in the United States

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This study examines the rise of private health insurance (PHI) in the United States in the post-World War II era (1946-1954). We examine the role of the American Medical Association (AMA) which financed a campaign against national health insurance (NHI) directed by the country's first political public relations firm, Whitaker and Baxter (WB). The AMA-WB Campaign had two key components: (1) physicians who would endorse private health insurance (PHI) to patients; and (2) newspaper advertising that described PHI as “freedom” and “the American way." We bring together archival data from several novel sources to assess whether the Campaign was effective. we find that areas more exposed to the Campaign experienced sharp declines in support for NHI and increased enrollment in PHI. A one standard deviation increase in AMA-WB Campaign exposure is associated with a 2.3 percentage point increase in PHI enrollment on average, per year, or 2\% of the increase in the post-Campaign period. We also find effects on physician financial contributions to the Republican presidential candidate in 1952 as well as on policy debates from the Congressional Record. These findings suggest the rise of PHI in the U.S. was not solely due to price controls, collective bargaining, or favorable tax treatment. Rather, it was enabled by an interest group financed Campaign that used ideology to indirectly lobby policymakers by persuading ordinary citizens.