Sunday Excerpt: The Hidden History of American Healthcare

Why sickness bankrupts you and makes others insanely rich

The Hidden History of American Healthcare

America, the Land of the Sick

America is the only developed country in the world that doesn’t recognize healthcare as a human right, the only country with more than two-thirds of its population lacking access to affordable healthcare, and the only country in the developed world that has, since its founding, continuously enslaved and legally oppressed and disenfranchised a large minority of its population because of their race.

Prior to the “Trump Depression,” roughly 60 percent of Americans would have had to take out a loan or otherwise borrow or beg for money to deal with a single, unexpected $1,000 expense[i]; the number now is probably closer to 80 percent of Americans who can’t handle such a hit and is higher still for minority communities.

Yet copays and deductibles when a person gets sick averaged $1,318 in 2015, when the Kaiser Family Foundation did a comprehensive survey of Americans, up from $548 just 10 years earlier.[ii] This strikes minorities particularly hard, which, it turns out, is not an accident.

The simple fact is that, were it not for slavery, white supremacy, and the legacy of “scientific racism,” America would have had a national, single-payer healthcare system in 1915, just 31 years after Germany put into place the modern world’s first such program.

At the center of the effort to prevent a national healthcare system—or any form of government assistance that may even incidentally offer benefit to African Americans—were Frederick Ludwig Hoffman and the Prudential Life Insurance Company, which promoted his “science based” racial theories to successfully fight single-payer health insurance.

Frederick Ludwig Hoffman Makes a Discovery

Racism is the main reason that America doesn’t consider healthcare a human right and provide it to all citizens, as does every other developed country in the world. Racist whites, particularly in the South, have worked for over a century to make sure that healthcare is hard for Black people and other minorities to get.

And their biggest ally, their founding spokesperson in the post–Civil War era, their biggest champion right up to the 1940s, was a man that most Americans have never heard of.

In 1884, 19-year-old Frederick Ludwig Hoffmann left Germany for America after failing at a number of job attempts and being rejected for the German Army because he was “physically deficient” and frail, standing five-foot-seven and weighing a mere 110 pounds. He arrived in New York with $4.76 in his pocket, speaking “not a word of English” but determined to prove wrong his mother’s assessment that he was a “good-for-nothing.”[iii]

From this humble beginning, Hoffman went on to become one of America’s most influential statisticians and analysts of public health, making numerous consequential discoveries about how industrialization was killing American workers.

He dropped the last n in his last name, became so fluent in English that his accent was nearly indistinguishable, and married into an upscale Georgia family. By 1920, he was an American citizen, vice president of America’s largest insurance company, and a national authority on the now-discredited pseudoscience called scientific racism.

In 1908, his article “The Mortality from Consumption [tuberculosis] in the Dusty Trades,” published by the US Department of Labor, produced the first national efforts to reduce lung damage in the workplace. He also published the first work (1915) linking tobacco to lung cancer.

From this, he became vice president of the National Tuberculosis Association (today known as the American Lung Association) and later demonstrated the connection between exposure to asbestos and the disease that killed my father, mesothelioma (a bit of data that asbestos companies worked to keep hidden for the next 80 years).

In 1913, Hoffman wrote a seminal paper on the relationship between workplace pollution and cancer, which led him to cofound the American Society for the Control of Cancer (known today as the American Cancer Society). In 1937, he extended his research beyond the workplace and published Cancer and Diet: With Facts and Observations on Related Subjects, a book correctly pointing out the correlation between poor nutrition and cancer that is still in print at a dense 767 pages, mostly of statistical analysis between dietary habits and rates of disease.

His cancer research was so extensive and detailed (he concluded that diets heavy in processed foods and animal products produced higher cancer rates) that Adelle Davis—whose books were my mother’s nutrition guru in the 1950s and ’60s—became an early “convert” and “a devotee of Frederick Hoffman.”[iv]

But Hoffman’s most controversial lifelong obsession was with the relationship between disease, race, and society.

On one of his first trips to Georgia, he wrote, he came across a book by Dr. Eugene R. Corson, a Georgia obstetrician, titled The Vital Equation of the Colored Race and Its Future in the United States.[v] It was apparently an updated or shortened version of Corson’s widely read “The Future of the Colored Race in the United States From an Ethnic and Medical Standpoint,” published in 1887 in the New York Medical Times.[vi]

This was just after the failure of Reconstruction, and a widespread topic of speculation, particularly in the South, was whether Black people would soon outnumber white people in that part of the country. The Ku Klux Klan and others calling for wholesale slaughter and suppression of Black people claimed that they were more likely to have larger families because they were “more prolific,” code for “excessively sexual,” a charge that had persisted from the earliest days of slavery and led to the murder of Emmett Till (among others).

However, the “scientific” racists of the day, like Corson, thought differently. Corson led a movement suggesting that people of African ancestry, now lacking the protective womb of slavery, would die out for the simple reason that the Black race was inferior to whites.

Corson acknowledged the Klan’s argument that “the simpler the organism, the simpler the genesis and the greater the prolificness.” But, he said, white people would prevail because they were less likely to die of disease, citing Herbert Spencer’s “Theory of Population Deduced from the General Law of Animal Fertility.”[vii]

While Black people might have more children, Corson wrote, white people would still outnumber them because Black fecundity “is more than compensated for by the ability [of white people] to maintain individual life.”

Enslaved people from Africa had found themselves in a civilization “of which [they are] not a product” and thus were less likely to be successful in “the struggle for existence.” Therefore, Corson wrote, Black people “must suffer physically, a result which forbids any undue increase in the race.”

The discovery of this theory, called the racial extinction thesis, electrified Hoffman, and he spent the rest of his life promoting it, while campaigning to stop any sort of movement toward a national health insurance program that might prevent or slow down the extinction of Black people in America.

Race Traits and Tendencies of the American Negro

In August 1896, the American Economic Association published a book that represented a turning point in Frederick Hoffman’s life and sealed the fate of single-payer health insurance in America. It was Hoffman’s magnum opus, summarizing decades of compiled statistics on Black versus white mortality, proving, according to Hoffman, once and for all, that for Black people, “gradual extinction is only a question of time.”[viii]

In Race Traits and Tendencies of the American Negro, Hoffman set out not only to repeatedly make and statistically prove the above claim, but also to prove that anytime white people tried to help Black people, particularly by offering them healthcare services, the result was disaster for both.

Noting that “the Negro has failed to gain a foothold in any of the northern states,” Hoffman wrote, “he is in the South as a permanent factor . . . with a tendency to drift into the cities, there to concentrate in the most undesirable and unsanitary sections . . . and the evil effect will be more felt by the cities which are thus augmented in population of an undesirable character.”[ix]

In great detail, Hoffman spent about 300 pages documenting, with exhaustive tables and statistics, the fact that Black people were more likely to die as a result of everything from malaria to tuberculosis to childbirth.

And it was all because of their race.

“The decrease in the rate of increase of the colored population has been traced first to the excessive mortality, which in turn has been traced to an inferior vital capacity. . . . This racial inferiority has, in turn, brought about a moral deterioration . . . sexual immorality . . . diminished social and economic efficiency . . .”

And that represented a danger to white people, Hoffman wrote.

The participation of freed Black people in the contemporary labor pool and in society overall, he wrote, “in the course of years must prove not only a most destructive factor in the progress of the colored race, but also in the progress, social as well as economic, of the white race brought under its influence.”

Slavery had actually been good for Black people, Hoffman believed, and the abolition of slavery at the end of the Civil War was only going to speed up the demise of that race.

“Nothing is more clearly shown from this investigation,” he wrote, “than that the southern black man at the time of emancipation was healthy in body and cheerful in mind. He neither suffered inordinately from disease nor from impaired bodily vigor.”

But with abolition, former slaves were “tending toward a condition in which matters will be worse than they are now, when diseases will be more destructive, vital resistance still lower, when the number of births will fall below the deaths, and gradual extinction of the race will take place.”

While Hoffman pioneered linking causal conditions such as asbestos and carcinogen exposure to sickness, he was so blinded by racism that a modern reader of his book constantly finds himself shouting, “But these things are also true of poor whites! These are caused by discrimination and poverty!!”

At the time, though, the vast majority of white Americans agreed with him. He was echoing the white cultural and scientific consensus of the late 19th and early 20th centuries when he wrote, “Given the same conditions of life for two races, the one of Aryan descent will prove the superior, solely on account of its ancient inheritance of virtue and transmitted qualities which are determining factors in the struggle for race supremacy. The lower races, even under the same conditions of life, must necessarily fail because the vast number of incapables which a hard struggle for life has eliminated from the ranks of the white races, are still forming the large body of the lower races.”

And, according to Hoffman and the other white “scientific racists,” the problem wasn’t just physical inferiority. The deepest “problem of the Negro,” Hoffman wrote, was moral: “All the facts prove that a low standard of sexual morality is the main and underlying cause of the low and anti-social condition of the race at the present time. . . . The conclusion is warranted that it is merely a question of time when the actual downward course, that is, a decrease in the population will take place. In the meantime, however, the presence of the colored population is a serious hindrance to the economic progress of the white race.”

For those well-intentioned white people who wanted to help out the people who were a mere generation or two away from slavery, Hoffman (and his colleagues, including the Prudential Life Insurance Company) had one simple bit of advice: Don’t even try.

From Scientific Racism to Libertarianism

In 1980, David Koch famously ran for vice president of the United States under the banner of the Libertarian Party, an organization founded a few decades earlier by big business to give an economic rationale and political patina to their simple theory that economics were more important than democracy, and the quality of life of working people should be decided in the “free marketplace” instead of by unions or through democratic processes via government regulation.

In this, Koch and his Libertarian friends were echoing Frederick Hoffman.

In his 1896 book Race Traits, Hoffman laid out his “scientific” assertion that when government steps in to help people, it invariably ends up hurting them instead. Not only should there be no government assistance given to help African Americans recover from three centuries of property theft, forced labor, and legal violence, but it is scientifically wrong to even consider the idea.

White people and government programs to better the lives of Black people, Hoffman wrote, deserve “the most severe condemnation of modern attempts of superior races to lift inferior races to their own elevated position.” The damage done to Black people by offering them any sort of help, government assistance, or even a minimum wage, he wrote, is “criminal” behavior for a “civilized people.”

Hoffman pointed to Native Americans to prove his point. “Few races have made such a brave struggle for their own preservation; few races can boast of so high a degree of aboriginal civilization. . . . An iron will can be traced upon the countenance of nearly every Indian of note.”

But it was government help, Hoffman wrote, that destroyed the American Indian.

It wasn’t “adulterated whiskey nor the frightful consequences of sexual immorality, spread around the forts and settlements of the whites,” that was “sufficient” to destroy Native Americans. It was charity.

“The most subtle agency of all,” he wrote, sounding like Ronald Reagan or David Koch, “governmental pauperism, the highest development of the theory of easy conditions of life, did what neither drink nor the poisons of venereal disease could do, and today the large majority of the tribes are following the Maories and Hawaiians towards the goal of final extinction.”

White Americans rationalized their brutality toward Native Americans and African Americans by saying that it was simple evolutionary biology: only the strong survive, and when the weak are allowed to propagate, it weakens the overall human race.

“Easy conditions of life and a liberal charity are among the most destructive influences affecting the lower races,” Hoffman concluded, “since by such methods the weak and incapable are permitted to increase and multiply, while the struggle of the more able is increased in severity [by the increase in taxes and regulation].”

And it’s not just charity. “All the facts prove,” Hoffman wrote, “that education, philanthropy, and religion have failed to develop [among Black people] a higher appreciation of the stern and uncompromising virtues of the Aryan race.

“Instead of making the race more independent, modern educational and philanthropic efforts have succeeded in making it even more dependent on the white race at the present time than it was previous to emancipation.”

Free education—as any Libertarian can tell you—is more dangerous to the souls of people than slavery. And free healthcare is even worse.

Sounding like a modern-day acolyte of Ayn Rand, Hoffman wrote, “Instead of clamoring for aid and assistance from the white race, the negro himself should sternly refuse every offer of direct interference in his own evolution. The more difficult his upward struggle, the more enduring will be the qualities developed.”

And, like Ayn Rand, David Koch, and Ronald Reagan, Hoffman believed that these were eternal truths independent of race.

“No missionary or educator or philanthropist extended aid or comfort to the English peasant class during its darkest days, to the earliest settlers on the coast of New England, or the pioneer in the forests of the far West. . . . [I]t is extremely rare to find a case where easy conditions of life or liberal charity have assisted man in his upward struggle. Self reliance . . . must be developed, and thus far have not been developed by the aid of charity or liberal philanthropy.”

This libertarian ideal is still pervasive in our modern fragmented healthcare system, and in the midst of the COVID-19 crisis in 2020, it resulted in thousands of daily American deaths, disproportionately hitting racial minorities.

From Scientific Racism to “No Compulsory Healthcare!”

The “compulsory health insurance” (what today we’d call Medicare for All) movement of the early 20th century was as much (and possibly more) about getting paid sick leave as it was about covering doctor visits and hospitalization, because healthcare was so cheap that an unpaid week at work was a bigger hit to the wallet.

But workers wanted both.

The most successful effort of the era came out of an organization that a small group of progressive economists put together in 1905 and 1906, known as the American Association for Labor Legislation (AALL).

Their initial efforts were directed at paid sick leave, workers’ compensation insurance, child labor laws, and workplace safety standards. To that last end, they were actively using the kinds of statistical analysis that Frederick Hoffman had both used and popularized to do everything from laying out his theories on race to showing an association between tobacco use and lung cancer.

Hoffman joined the AALL to promote their efforts.

A charitable reading of his motivations was that his statistical research on workplace phosphorus poisoning and lung disease overlapped with their efforts, and they were an organization that, at that time, was held in high regard. He did, after all, consider himself—and was, in a very real way—a major force for reform in public health and workplace safety arenas.

A less charitable motivation is posited in Daniel T. Rodgers’s 1998 book Atlantic Crossings: Social Politics in a Progressive Age.[i] Rodgers wrote, “On the AALL social insurance committee, he became the [Prudential] company’s mole. . . . Hoffman took credit for blocking the drafting of any resolutions at the AALL’s social insurance conference in 1913. During the framing of the association’s model health insurance bill, he dragged his feet, obstructed, pressed in vain for company initiatives in the medical insurance field, and informed his employers—more and more certain that public health insurance was ‘distinctly pernicious and a menace to our interests.’”

Despite Prudential and Hoffman’s efforts, government-funded health insurance was gaining popularity in America (and being considered or adopted in Europe).

In 1912, Theodore Roosevelt made a third-party bid for the presidency, forming the Progressive Party (with its Bull Moose logo), and called for “the protection of home life against the hazards of sickness, irregular employment and old age through the adoption of a system of social insurance.” Jane Addams (Hull House founder), dressed in suffragette white, seconded Roosevelt’s nomination to wild cheers and applause; Roosevelt rallies routinely drew tens of thousands of people, and more than 200,000 people showed up in Los Angeles to support him and the party.[ii]

Roosevelt’s endorsement of “social insurance,” including health coverage, both reflected and reinforced a growing national sentiment, and in 1915 the AALL called for every state to support a program of health insurance. Prudential hadn’t yet gotten into the business of insuring health (they would in 1925), but they could see the writing on the wall.

What finally blew up Hoffman’s support of the AALL apparently had to do with a system of insurance that had started in the late 17th century in the United Kingdom to cover fire losses and had gradually grown to include other forms of protection.

It was called mutual insurance and was unique from Prudential’s model in that the companies were owned by their policyholders instead of traditional corporate stockholders.

In this regard, mutual insurance companies ran much like employee-owned co-ops and lived in the nonprofit world both practically and philosophically. They also had lower operating costs, as they didn’t have to shovel wheelbarrows of cash to their stockholders and senior executives.

America had a tradition of mutual insurance that started in 1752 with a company known as “the Philadelphia Contributionship for the Insurance of Houses From Loss by Fire.” Its founder was Benjamin Franklin and it still exists; the idea of mutual property and casualty insurance companies grew from there across the states and around the world.[iii]

In 1916, the AALL endorsed health insurance provided through a network of local and statewide mutual companies and called for those policies to also provide a small death benefit to cover funeral costs, which would have competed directly with the funeral coverage that was Prudential’s main cash cow.

Hoffman wrote to the company, “We, of course, cannot compete with Compulsory Insurance, including a death benefit of, say $100.”[iv] He then resigned “in disgust” from the AALL and begin a campaign, sponsored by Prudential, to stop nonprofit, state-funded health insurance.

Hoffman and Prudential weren’t alone in their concern: the Insurance Federation of New York told their members, “This is only the entering wedge; if once a foothold is obtained it will mean attempts to have such State Insurance of all kinds including fire.”[v]

The AALL produced model legislation that was taken up in 1916 by eight states, including California and New York, the former via a ballot initiative and the latter in the New York legislature. In addition to calling for policies that would pay all costs of healthcare, the AALL’s legislation called for up to 26 weeks of paid sick leave.

Picking up steam, the American Medical Association endorsed the AALL’s model legislation as well. The battle was joined.

Prudential Helps Kill America’s First Healthcare for All Campaign

Hoffman’s Prudential-sponsored campaign to prevent any state from adopting a statewide nonprofit health (and death benefit) insurance program went into overdrive through 1916–1920. He traveled to Germany several times to chronicle, in minute detail, the failings of the kaiser’s system that had been operating since 1885.

Prudential, in 1905, had been swept up in New York’s Armstrong Investigation, and so, as historian Beatrix Hoffman (no relation to Frederick) wrote, “[b]ecause of their industry’s public image problems, insurance executives knew their opposition to compulsory health insurance would be perceived as brazen self-interest.”[vi]

They needed a front man, and the guy who was famous for discovering the causes of numerous public health crises was perfect. Thus, Frederick Hoffman became the most well-known face of a massive, multiyear effort to stop the AALL’s campaign. He was remarkably effective.