American Health Care Blues: Blue Cross, HMOs, and Pragmatic Reform since 1960 (review)

Blue Cross and Blue Shield plans have played an influential, even an essential role in the history of health care in the United States since the 1930s. Collectively, they are an American phenomenon—a huge enterprise with shifting public and private goals over time, now rocketing into privatization, profit-making organization, and managed care.

Since 1960, the Blue Cross conglomerate has wrestled with the need for organizational adaptation in the changing climate of health financing, competition by other insurance corporations, and rising health-care costs. A key issue has been Blue Cross involvement in setting up health maintenance organizations—to which there was initially considerable resistance, nicely portrayed in this book. Irwin Miller, professor of health administration at Governors State University, worked on HMOs at the Blue Cross Association in the 1970s, between periods of academic work. His work is gritty and grounded, thoughtful and critical. One gets a vivid sense of the players, the speeches, and the endless meetings—of the resistance of organizations to change, and the skills of leaders who can achieve it.

The book has two purposes. It is a valuable study of the recent organizational policy and leadership of the “Blues,” and essential reading for students of managed care. But it is also designed as a study of leadership. Miller draws on the ideas of John Dewey, Philip Selznick, and other students of organizational leadership and change. He presents the shifts in Blue Cross policy (away from its long commitment to “community service” as an ingrained corporate ideal, toward a service-delivery, market-model, brand-name-oriented business) as a history of pragmatism—specifically, of pragmatic leadership.

A study of leadership must concentrate on leaders. The hero of this book is the charismatic, daring, and politically adept Walter McNerney—Miller calls him swashbuckling—who became president of Blue Cross in 1961 at the age of thirty-six. McNerney shepherded the organization through Medicare and into HMOs, among his many achievements. In 1981 he clashed with his board for the last time, and resigned. Much of the book focuses on his style and methods through a tumultuous period for the organization. His successor, Bernard Tresnowski, is described as more of a consensus-builder. If one of McNerney’s major tasks was to ally the Blues with the federal government, Tresnowski’s was to place them as a major player in the private insurance market. The latest president, Patrick Hays (1995), leads an organization that has become a vast purveyor of managed care.

The focus on Deweyism is sometimes overdone, particularly in the early part of the book—but it grew on me as the book progressed. One of the fascinating things about writing the history of health care in the 1990s is the lack of plausible philosophical frameworks. Miller is right to imply that a commitment to ideological positions, as a basis both for historical argument and for action in the present, is less useful than it once was; as examples he cites studies that assume that national health insurance is coming (or should), or that the corporation is coming (and privatization is the answer), or that the medical profession is gaining ascendancy or going downhill. Similarly, there are few utopian positions that make current intellectual sense. Concepts such as communitarianism, the “market,” or the reinvention of government may be appealing fantasies, but there are evident problems of how we might get from here to there. Pragmatism is a useful hook to link past and present.