Health Thomasson, Melissa. (2002). From Research Proposal

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327). In short, the system 'worked' at this time for patients, hospitals, insurance companies, and the government.

Blue Cross plans also benefited from special state-level legislation that allowed them to act as nonprofit corporations, to enjoy tax-exempt status, and to be free from the usual insurance regulations. Physicians, although they initially opposed all forms of health insurance, created Blue Shield in deference to the demand for Blue Cross insurance, and in fear of more government regulation if some costs were not borne by the industry (Thomasson, 2002, p. 237-338). World War II wage and price controls also meant that one of the primary incentives employers had to attract scarce reserves of high-quality employee was offering benefits, including health insurance (Thomasson, 2002, p. 240).

Supply and demand of services and labor thus both conspired as corollary historical forces to increase the prevalence of private insurance in the American model. The improved quality and supply of healthcare drove up demand and prices, which caused individuals to seek healthcare insurance. Physicians, in response to employer-created insurance, began to provide their own plans.

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Insurance plans made it favorable for hospitals to increase their supply of patients, and employers could attract scarce labor by offering insurance.

However, there is one problem with Thomasson's article -- were these innovations not present in at least some European countries, which also presumably experienced improved medical care, scarce labor during the war, and similar increases in costs of care. Were there not also potential savings for consumers and hospitals, based upon volume 'sales' of insurance-bearing patients to in-network providers? Without some comparison of conditions abroad in nations that did adopt government models, or more heavily subsidized forms of care, although Thomasson's explanation is persuasive and lucid in isolation, it is hard not to wonder if cultural resistance to government intervention in the U.S. might not play a role. Yet government intervention was more welcome in the 1930s than in the 1990s, when single-payer insurance was rejected by the U.S. government. The explanations for the resistance to widespread government support for healthcare in the U.S. during the Great Depression and World War II….....

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