The Day After Medicare Passed.

Posted on | October 31, 2019 | Comments Off on The Day After Medicare Passed.

The Signing of Medicare, July 30, 1965. Independence, Missouri.

Mike Magee

As Democratic candidates continue to debate how best to accomplish universal health coverage and variations of Medicare-for-all, it is useful to recall that the battle for the original Medicare didn’t end with the signing ceremony. The following account is excerpted from CODE BLUE: Inside the Medical Industrial Complex.

July 30, 1965, was a day for celebration. It was Johnson’s choice to celebrate it in Independence, Missouri, with Harry and Bess Truman at his side. In his remarks, LBJ said, “It was really Harry Truman of Missouri who planted the seeds of compassion and duty which have today flowered into care for the sick and serenity for the fearful…Many men can make many proposals. Many men can draft many laws. But few… have the courage to stake reputation, and position, and the effort of a lifetime upon a cause when there are so few that share it….Perhaps you alone, President Truman – perhaps you alone can fully know how grateful I am for this day.” Truman, ever modest, relied, “You have done me a great honor in coming here today. You have made me a very, very happy man.”

As Johnson flew home that day, he certainly knew that the success of Medicare was by no means assured. The Administration had only 11 months before the program would go live. President Truman had his Medicare card, but none of the other 19 million recipients did. The scope of the communications and public education challenge had no precedent. Johnson gathered his troops and told the Health, Education and Welfare Secretary John Gardner, “If you miscalculate we’re going to look like the worst kind of damned fools.”

As difficult as it would be to create the systems that would support the new national program, LBJ was even more concerned about two other challenges – doctors threatening to boycott the program and Southerners threatening to resist the ordered de-segregation of their local hospitals.

Part of the reason that Southern legislators had fought tooth and nail to avoid Federal control of health insurance payments for the care of the aging population was that they knew that if Washington paid the bill that Washington would set the rules. Across the South, hospitals continued to maintain segregated rest rooms and segregated floors and wards designed to separate black and white populations. The passage of the Civil Rights Act in July, 1964, had sent a clear warning. Title VI of the bill stated, “No person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, denied benefits of, or be subject to discrimination under any program receiving federal assistance.” After formal review by the Justice Department, then HEW Secretary Anthony Celebrezze had informed the Senate that, “The matter has been explored by the Department’s legal staff…I am advised, therefore, that the new hospital insurance program will be subject to the requirements of Title VI.”

As a result, all hospitals, as they applied for their federal Medicare certification, had to prove that they no longer segregated patients. Johnson took no chances, deploying 1000 federal inspectors across the country to ensure that the letter of the law was being implemented. Even with this, 10 months after Medicare had been signed into law, and a month or two before launch date, half the hospitals inspected in 12 southern states were still non-compliant. Johnson called a special Cabinet meeting and then directed Vice-President Humphrey to communicate with every mayor in the non-compliant Southern cities and simply, one way or another, get the job done. By May 23, 1966, all hospitals were compliant except in four southern states – Alabama, Louisiana, Mississippi, and South Carolina. By July, they were clearly heading in the right direction, though 320 hospital had not yet completed the conversions. Though some would still lag behind on the day Medicare went live on July 1, 1966, all would soon comply.

At the same time the Administration was waging that war, they were focusing on herding in non-compliant physicians. Johnson saw this challenge as one only he could address. As the Senate was closing in on final approval of Medicare, in early June, 1965, AMA president James Appel called the White House to request a meeting with the President. The meeting was scheduled on June 29th, the very day that the Senate would vote their final approval of the Bill. When the delegation arrived with Dr. Appel in the lead, Johnson began by reading them verbatim from the proposed Bill: “Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided”. He then reviewed the use of Blue Cross and private insurance “intermediaries” to administer the program thus keeping government at arm’s length. He spent the next half of the meeting “hugging” the doctors, thanking them for their service, day and night, to patients “like his daddy”; expressing respect and gratitude for their devoted and selfless service; and finally asking whether they’d he able to help him round up some doctors to address the pressing needs of the Vietnam people that he had observed first hand.

The response was unconditional from the doctors. They were at the President and the nation’s service. Johnson then immediately pivoted, calling for “a couple of reporters”, who arrived quickly on cue. Johnson praised the doctors and their leaders by name, and the reporters not surprisingly, wanted to know what the AMA intended to do about Medicare. Would they support it? Johnson interrupted, visibly shocked by the question. “These men are going to get doctors to go to Vietnam where they might get killed…Medicare is the law of the land. Of course they’ll support the law of the land. Tell him, you tell him.”, he said pointing at Appel. Appel, confirmed their support, stating modestly, “We are, after all, law abiding citizens.”

Johnson then left the doctors with his ace health policy leader, Wilbur Cohen, with instructions to work out the details with the AMA. With a pledge in hand to not “interfere with the patient-physician relationship”, and confirmation of cost plus reimbursement for the doctors and inclusion of hospital doctors under Part B, as well as some adjustments to disease specific areas, the AMA left with what they needed – an explanation to their more conservative members for their willingness to cooperate with the Administration on this heinous new law.

At the September AMA House of Delegates meeting, The AMA top exec proclaimed, “I think it is fair to say that (we)…succeeded in bringing about at the White House level a series of ‘improving amendments’ which…should allay the fears of the profession.” No doubt the successful laying down of arms by the organization who had been fully engaged, for two decades, in preventing exactly what they were now endorsing, owes much of its explanation to President Johnson’s skill, commitment, and above all, persistence. As an example of the final trait, consider the telegram Johnson sent to the AMA president, after having secured their support, timed to arrive dramatically at the AMA’s National Convention gathering in Chicago. One week before the actual launch of the program on July 1, 1966, the message read:

“ON JULY 1 THE MEDICARE PROGRAM WILL BECOME A REALITY…PERHAPS NEVER – EXCEPT IN MOBILIZING FOR WAR – HAS THIS GOVERNMENT MADE SUCH EXTENSIVE PREPARATIONS FOR AN UNDERTAKING…WE SHALL CONTINUE TO SEEK YOUR COUNSEL IN THE MONTHS AHEAD – AND WE SHALL BE AVAILABLE TO EVERY DOCTOR AND EVERY HOSPITAL OFFICER TO DEAL WITH ANY PROBLEM THAT ARISES.”(60)

The implementation was not perfect, but considering the size of the challenge, amazingly smooth. There were no major organized doctor protests or hold-outs. And physicians like my father soon came to appreciate Medicare as a highly reliable payor, which, in the years to come, in general, would deliver much better payment across the board then private insurers did. Further, as my mother and father aged, and moved from the provider to the consumer ranks, they found Medicare enrollment to be a great relief, highly responsive to their needs, and with none of the “trickery” that they had been employed over the years by private payers attempting to limit their outlays in response to legitimate claims of enrollees in an attempt to maximize their profits.