SESSION 23. Public and private health insurance in historical perspective: between competition and complementarity

23. Public and private health insurance in historical perspective: between competition and complementarity.

Margarita Vilar Rodríguez (Universidade da Coruña)
Jerònia Pons Pons (Universidad de Sevilla).


The literature has established the historical creation of two basic models of public health insurance system in developed countries: one inherited from the Bismarck system, based on funds from contributions, and the other derived from the National Health System, based on universalist principles and, to a large extent, public funds. Not all countries joined this process at the same rate, and moreover the two categories have not remained stable or homogenous over time, which has given rise to a situation that is more complex than that reflected by these two theoretical models. In Europe, from a historical point of view, and although with significant variations in each case, the public systems of health insurance coverage generally prevailed. These models based on public insurance, however, contrast with other countries, such as the United States, where the population’s medical care has been covered by private insurance companies; a system considered by some authors to be more expensive in the long run due to its high cost, fragmentation and anti-democratic corporate structure. In these countries, the private interest groups involved in this process gained ascendancy over medical professionals and the politicians in government, thereby consolidating a system of private coverage.

On the other hand, private health insurance has become increasingly important in recent decades in the countries with public health insurance systems due to the economic crisis, which has led to waves of privatisations and a crisis of the welfare state. As a result of this process, some countries have a private health insurance that complements the public coverage. This means that the private sector offers services already provided by the compulsory system, but with additional advantages such as shorter waiting lists and other benefits and conveniences. In other countries, private health insurance plays a supplementary role by covering services and specialties excluded from the basic state package (e.g. Denmark, Hungary and the Netherlands). Finally, in some countries, private insurance provides substitute cover for people excluded from the system due to various factors, such as level of income or type of work (e.g. Germany). In general, the causes of the growth of private health insurance are very heterogeneous and a result of historical evolution, the power of different interest groups and the public policies implemented. Its increasing importance, however, is a common trend in all countries.

The main objectives of the session will be the creation of private and public health insurance schemes, an analysis of the financial, medical, institutional, political, cultural and social factors that determine their creation and the conflicts generated in their development until each country establishes its own public or private model. Contributions in historical perspective are welcome from all disciplines and geographical areas.


Paper 1

The International Labour Organisation, Health Risks and Universal Coverage, c.1930-2000.

Martin Gorsky (London School of Hygiene and Tropical Medicine)

Francois Ewald has argued that one way of understanding the modern welfare state is as a transfer of risk, from individual to social responsibility via no-fault insurance, pooled costs and actuarial calculus. At the turn of the twentieth century, this process was led by nation states, mostly in the advanced industrial economies, though initially with ambivalent reactions from working-class movements. By the interwar period however, labour was reconciled to the benefits of social security, particularly in the face of economic depression. The extension of social welfare legislation had also ceased to be a predominantly endogenous process occurring within nation states, but was now also a transnational phenomenon in which the diffusion of knowledge and ideas through policy-learning and the activities of epistemic communities played a part.

The subject of my paper is the efforts of one such vector of diffusion, the International Labour Organisation (ILO) to extend medical care under social security. I discuss this in terms of both its central function, of brokering and monitoring international conventions, and of its officials’ role in advocacy and technical assistance. The arc of the narrative is one of ‘rise and fall’. It begins in the interwar period, with its early, poorly supported, conventions on sickness insurance, then discusses the universalistic, expansive vision that emerged in response to the mid-century crisis, consolidated in the Philadelphia Declaration (1944). By 1952 this vision was drastically diluted, both by oppositional interests among the rich nations, and by low and middle-income countries concerned that it was Western imposition. Up to the mid-1970s the ILO’s work was characterized by ‘gradual universalism’. From Geneva officials conceptualized and evaluated comparative health systems, and gave technical assistance in post-colonial settings, though the challenge of covering workers in the informal sector loomed large. Through the late-1970s to 1990s the ILO became increasingly marginalized, as the tenets of structural adjustment stalled the spread of statist health systems, and the World Bank and OECD captured the policy discourse. However, the ILO’s technical experts made important practical contributions to establishing or refashioning universalist systems in settings like Thailand and Eastern Europe. In the process though, it abandoned its strategic preference for ‘national health service’ systems in favour of the now dominant ‘co-operative pluralistic’ model, in which some individual responsibility for the risk of sickness remained a reality for many.


Paper 2

Between competition and complementary. The role of the «seguro». The cultural construction of health insurance in the second half of the 20th century.

Josep Barceló-Prats (Universitat Rovira i Virgili)
Eduardo Bueno-Vergara (Universidad Miguel Hernández)
Josep M. Comelles (Universitat Rovira i Virgili)
Enrique Perdiguero-Gil (Universidad Miguel Hernández)

The healthcare provided by the public system in Spain was commonly known as the “Seguro” until the 90s of the last century, and this name is still used by the elderely. The “Seguro”, was the Compulsory Health Insurance (Seguro Obligatorio de Enfermedad, SOE) launched in 1944 by the Francoist regime to provide basic healthcare to blue and white-collar workers with low salaries. Over the years it was extended to larger sectors of the population. At first, the system provided primary healthcare, free access to drugs, delivery care and surgical operations, but later the health services offered by the “Seguro” increased. The establishment of this healthcare system was accompanied by a specific terminology to name health premises, their organization and management addressed to obtain the population compliance. The implementation of Social Security maintained the kind of healthcare offered previously by the SOE.

Our aim in this paper is to analyse the impact of the “Seguro” in the process of medicalization of the Spanish society and its relevance in the configuration of new cultures of health and diseases. The “Seguro” generated a new cultural way to manage disease, centred in healing and not in prevention. Although the system had low quality, it allowed access to healthcare to sectors of population that previously had to turn to poor relief, charities, private health insurances or private medicine. Free access to drugs, laboratory tests, delivery and surgery operations and, later, hospitalization for non-surgical reasons were available for the workers covered by the scheme and their families. The healthcare offered by the “Seguro” change dramatically the doctor-patient relationship, the use of medicines, and the shared way to understand health and disease in the context of the relevant social and economic changes Spain was under went from 1960s onwards. The population developed new therapeutic itineraries, a new popular medical culture and a peculiar way to assess its healthcare “rights”.


Paper 3

Cultural Values in Canadian Health Insurance.

Ceilidh Auger-Day (University of Saskatchewan, Canada)

In Canada, early 20th-century commercial life and accident insurance reflected the values of a young country (often dominated by English-speaking Protestant settlers) attempting to establish itself as an industrial and independent nation. Working men with wives and children were by far the most common holders of health-related insurance, and it was accordingly seen as a responsible ‘masculine’ initiative.  But Census records suggest that patterns of buying insurance did vary from this dominant form in select communities, demonstrating that the values of work and family that resonated so loudly both among insurance industry management and in the contemporary larger culture were not inherent to insurance itself or universal within Canada. In the few Indigenous communities in which insurance was as common as in surrounding settler communities, for instance, buying patterns were completely different: wives and female children were as likely as—and sometimes more likely than—husbands or adult sons to hold insurance in their own names. The traditional ties between recognized work and insurance were also largely missing. Similarly, certain non-English speaking communities of immigrants eschewed insurance entirely or, like the French Roman Catholics in Quebec, started internal trends (such as insuring their children) that remained rare (and frowned upon) among more prevalent English-speaking policyholders. This paper will explore some of the cultural implications of this value-laden financial product in Canada, both before and during the introduction of provincially-administered workers’ compensation systems in the 1910s and 20s that caused the private industry to expand and diversify substantially.


Paper 4

Health insurance in context – health insurance in Germany in the 20th century between private and public, patients and physician, politics and profit.

Axel C. Hüntelmann (Berlin)

Healthcare today seems caught between too much and not enough. On the one hand, there are swollen national health budgets, massive hospital and medical technology costs, big pharma, and an ever-growing market of medical products and services; on the other hand, lack of access to healthcare can be found across the globe, as can political challenges of resource allocation, ethical dilemmas of “rationing,” and the search for solutions of cost reduction, more equal distribution, and efficiency between the poles of government regulation and market principles. The public health insurance – as part of a social security system in the German Empire in the 1880s – had been installed to diminish private health risks of the individual (worker). If the paterfamilias became ill, even less severe diseases could drive families into poverty. So the health insurance was intended to cover medicine, hospital stays and should continue pay to allow the sick some days of for recovery. In the first years the model was limited to workers and to a small part of the population. Within the next decades, more and more groups had access to public health insurance and, in addition, more and more service had been provided. As a consequence, the cost for health care increased rapidly and even despite the insurance premiums arose constantly, since the 1930s the overall system was likely to collapse. Since the 1960s some major reforms had been carried out and since the 1970s reform followed on reform to prevent the system from collapsing, without permanent success. Regardless the money spent – it was not enough. As a result, many efforts were made to reduce costs for health care and public health in Germany since the 1980s – mainly targeting the budgets of hospitals and services to patients In the paper I will analyze how health insurance – once invented to cushion private and personal health risks – have become a risk on its own: increase health expenses threaten hospitals, the national budget, and public and private health insurance companies. On the other hand also the patient and contributor runs the risk that even he or she is paying high premiums, health services – once included in the public health scheme – have to be paid for separately. Insofar, health insurance constitutes a risk for the patients, hospitals, health insurance companies, the national budget, and health politics.


Paper 5

Developingprivate and public healthcoverage in France : a democratic challenge for the IIIrd Republic.

Sophie Delbrel (University of Bordeaux, France)

The French system of Social Securityisborn at the end of the Second World War. It has been builtveryquickly, between March 1944 and October 1945, thanks to accumulatedexperiences. In this respect, the development of the healthcoverage (and its gaps) under the IIIrdRepublicwas a source of inspiration, besideEuropeanexamples. The IIIrdRepublic, indeed, hadlooking for a system of healthinsurance able to give satisfaction to the most part of the population.

Since 1875, when the Republicwasadopted, the great challenge was to convinceworking classes thatitwouldbe for them the best politicalregime. That wasnecessarybecause of the universalcharacter of the suffrage (neverthelessitremained a male suffrage). At this time, working classes have bad living conditions. Then an increasing part of politicswonder about the social question. A crucial answer to this question is the healthinsurance, whichseems to bea first concreteneed of working classes.

At the beginning of the IIIrdRepublic, the sicknessriskismainlycovered by FriendlySocieties. But, even if theyentirelyparticipate in republican perspectives, in factthey are not successful. So, for people who are not able to pay a doctor or to buymedicines, itbecomes urgent to find a solution. This aspect might have manyeffects, becausethinking the healthinsuranceapartfrom the private initiative is arevolution. It meansthat an otherview, differentfrom the Civil law, is not only possible, but alsodesirable. It wouldbe the way to givesense to the Brotherhood, the third official principle (besideFreedom and Equality) : at this time, the sucessful idea is Solidarism. Thus, the first public healthcoverageiscreated in 1893, in favour of French people « withoutresources ». The new system of assistance isstrictlylimited, but itdefinitivelydisrupts the way to think about the healthinsurance. By a symptomaticway, thislaw setting up the Free Medical Assistanceannounces the evolution of the healthcoverage in France. Some of itsmechanisms are stillusedtoday, with for exemple theUniversal HealthCoverage, createdin 1999.

Beyond, the birth of a public healthcoverage modifies relations between the State and the doctors, and alsobetweendoctors and patients. By thisway, it changes concepts of care, and later the functioning of hospitals. This evolutionisverysignificantduring the wholeIIIrdRepublic, whereasitmeets a cultural question, the one of secularism : how takingcare withoutreligious institutions ? A second great challenge, after the First World War, willbe to put on compulsoryinsurances, in order to generalize the healthcoverage. On this point, the politicaldeterminationwill have to be as heavy as for the Free Medical Assistance. The reluctance is important, not onlyfromemployers but alsofromwage-earners and trade unions. Therefore, building a real healthcoveragedespite oppositions form the common point of the successive legislators.

The paperwill have the objective of understanding French specificities of the healthinsurance : why the weight of the State issoheavy, even if the main part of the healthcoveragedepends on private institutions. It will stress legal contradictions (between the Civil law and the Social lawwhichis building step by step) and theirovertakingbecause of the expectancies of the whole society. It mightbeseen as a form of pragmatism. On this point, the IIIrdRepublicsucceeds to free itselffrom the traditionalway to thinkfreedom : freedomgetsthroughdignity, consequently a protection isnecessary.That isagreat innovation for French people.


Paper 6

Health coverage in Spain in historical perspective: thethin red line between private and public.

Margarita Vilar Rodríguez (University of ACoruña)
Jerònia Pons Pons (University of Seville)

The international historiography has highlighted the participation of the public and private sectors in management, financing and coverage as one of the key factors for classifying health care models. However, this differentiation is not so clear in some countries, such as the case of Spain, where there is a close relationship, sometimes more of collaboration and at other times more of competition, depending on the historical period, between the public and private health sectors. Starting from this context, this paper analyses this complex relationship, in Spain, in a long-term perspective. Four stages can clearly be distinguished in this process. First, the stage prior to the passage of compulsory sickness insurance, where a mixed economy of welfare prevailed. Second, after the implementation of the SOE (seguro obligatorio de enfermedad – compulsory sickness insurance), where the state required the collaboration of the private sector due to the lack of infrastructures, financing andhealth care professionals. Third, the passage of the basic law of Social Security in 1963 (which entered into force in 1966) opted for promoting state health coverage, but its success was once again limited by a lack of resources. Fourth, the introductionof the General Health Law (1986), now under democracy, designed a priori a health system of universal coverage and state management and provision. The state, however, reserved a group of privileged clients for the private sector, including the military, civil servants and judicial officials. Moreover, regulations passed in subsequent years (which established the guidelines for the implementation of the 1986 law) once again demonstrated that the close historical relationship between the public and private health sectors persisted through complex collaboration agreements such as foundations. The cuts in public health expenditure in the last decades of the twentieth century boosted the market share of private health care.


Paper 7

E pluribus unum? Forging a public-private health insurance system in the Netherlands.

Robert Vonk (National institute for Public Health and the Environment, Maastricht University)
Roland Bertens (University Medical Center Utrecht)

This paper aims to analyse the historical dynamics of change in public-private health insurance systems. During the twentieth century, the Dutch health insurance system evolved into a complex amalgam of Beveridgian, Bismarckian and private insurance schemes which is often applauded as the result of a ‘consensus democracy’. Both the complexity and the measure of democratic debate, however, often resulted in ‘lethargic’ policy-making, as well as a constant struggle over regulation, compulsion, risk segmentation and, perhaps most importantly, the question of power.Using the conceptual framework of incremental institutional change(i.e. layering, conversion, drift and displacement) and institutional logics, this paper will discuss how the state gainedmore and more control over health insurancewithout effectively nationalizing it. During the first half of the twentieth century a strong coalition of liberals, religious conservatives, physicians, insurance companies and health care organizations kept the state at bay in health insurance.After the Second World War, the government choose to rely on layering and conversion, using corporatist instruments and the cooperation and self-regulatory power of professionals and the market (physicians, insurance companies) to create a system that offered universal access.This delicate equilibrium started to drift during the 1970s, due to rising costs and deteriorating solidarity. Ironically, from the 1980s onwards, the state was the foremost champion of ‘market-driven’ reform, while commercial health insurance companies were heavily opposed to it. Not without reason, since the introduction of managed competition was backed by the reassertion of regulatory authority and a strengthening of statist power – given the government more direct control over ‘private’ health insurance than it ever had before.


Paper 8

România. Leaving behind the Semashko model.

Felicia-Cătălina Apetroi (University of Seville)

The Romanian health care system is a social health insurance system that has remained highly centralized despite recent efforts to decentralize some regulatory functions. From the 1960s to the 1990s, the health status in Romania has steadily declined in some respects. At the beginning of this period, Romania was comparable in many important respects to western European countries. Since then, a tendency of relative and absolute decline prevailed. In 1949, the Law on Health Organization of the State was passed and there was a gradual transition to a Semashko health system. This was based on the principles of universal coverage and free access at the point of delivery. The main features of the Romanian health care system during these four decades were: government financing, central planning, rigid management and a state monopoly over health services. Although there have been many changes since 1949, it was not until 1978 that a new health law was developed. The Semashko health care system in pre-1989 Romania was typical of central and eastern European countries. Central to this system was the state providing services to all members of society, leaving little or no choice to the user but seeking to achieve a high level of equity. The year 1997 represents an important milestone for the Romanian social health insurance system: the promulgation of the Social Health Insurance Law, which proposed to implement the Bismarck insurance model, with compulsory health insurance, based on the principle of solidarity and functioning within a decentralized system.

Key words: Semashko model, health care system, financing
JEL classification: B15, H10, I18


Paper 9

Public and Private Health Insurance in Hungary in a Historical Perspective.

Balázs Tőkey  (Eötvös Loránd University)

The main goal of my presentation is to give a short overview about the history and the future of public and private health insurance in Hungary. The Hungarian public health insurance is based on the Bismarck system, but there are some important differences between the Hungarian and the German public health insurance. Eg. The Hungarian one is a mandatory system for every body – no one can opt out – and is much more centralized than the German system. However, we can say that the Hungarian private health insurances are totally different than the German private health insurance system. The substitute and supplementary private health insurances built on a reimbursement modell are the most importantones in Germany. In contrast the Hungarian private health insurance system is built on the so called duplicated private health insurances following the in-kind modell. It means that Hungarian private health insurances are much closer to the Spanish than the German one despite that the Hungarian public health insurance system is much closer to the German than the Spanish one: as we mentioned before both the Hungarian and German public health insurance system follow the Bismarck modell, but the Spanish public health system is much closer to the Beveridge modell. I hope that examing the history of the Hungarian health insurance system can help us to find an explanation for this interesting contradiction.


Paper 10

Health insurance and the construction of health and sickness in early twentieth-century Sweden.

Liselotte Eriksson (Umeå Centre for Gender Studies, Umeå University)
Frida Skog (Centre for Demographic and Ageing Research, Umeå University)

During the nineteenth and early twentieth centuries, Swedish health insurance societies played a key role in protecting the working-class population from the economic risks associated with sickness, old age and death. This paper analyses the preventative health work of Swedish health insurance societies expressed in journals published by health insurance societies during the period 1900-1950.
Preliminary results show that health insurance societies argued that the increase in reported morbidity taking place in the early twentieth century, was due to a general eugenic degeneration of the population due to changed living conditions and habits in general. Swedes were turning sicklier and weaker; the journals therefore informed how to stay healthy by e.g. avoiding alcohol, eat certain foods and attend to personal hygiene. It was also recommended to remain in the countryside since the industrial society destroyed the health and morals of the individual. While the journals were widely distributed and read, the way in which health insurance societies came to define and construct the idea of “health” and “sickness” had wider societal implications than merely reducing health insurance claims for health insurance societies.