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The author would like to thank Brian Balogh, Bernard Carlson, Lou Galambos, Deborah Stone, and Lawrence Brown for offering comments and encouragement to strengthen this article. The editors of this journal, Dan Carpenter and Elisabeth Clemens, and two anonymous reviewers provided insightful feedback that helped me clarify several points of analysis. However, the remaining flaws are my own. I would also like to thank the Miller Center of Public Affairs, the John E. Rovensky Fellowship in American Business and Economic History, and the Bankard Fund for Political Economy Fellowship for providing funding to support my research and writing.
During the post-WWII period, when most policymakers had accepted capitalism but nonetheless engaged in robust battles over where to draw the boundaries of that system, trade and professional associations provided a critical nexus connecting political conflict, social objectives, and market structure.1 Politicians and federal administrators shaped the economy not only through formal rules and regulations but also through informal authority, using policy debates to influence consumer values and producer goal-setting. Trade and professional associations acted as two-way conduits that allowed private interests, in one direction, to influence political agendas and, in the other direction, to translate lessons learned from the federal political realm into marching orders that guided ground-level market organizations.2
In the case of health care, the American Medical Association (AMA), which represented physicians, and the Health Insurance Association of America (HIAA), which represented for-profit insurance firms, pursued political strategies that created a distinct approach to "private" medical care--a high-cost, corporate model based on insurance-company funding and management.3 Financing care through insurance-company products has become so deeply embedded in health care provision that many scholars have forgotten that other paths were possible.4
During the first half of the twentieth century, insurance-company funding was but one model in an assortment of private approaches to prepaid health care. However, AMA leaders feared the corporate organization of medicine and fought all financing experiments. Calls for federal health care reform during the 1930s and 1940s finally forced organized physicians to soften their resistance to all forms of medical prepayment. The AMA approved health insurance, but only plans underwritten by insurance companies.5
Despite the growth of voluntary insurance, private interests...