A Cure for Doctors' Bills

The medical profession sees the writing on the wall.

Uncounted numbers of men and women in the United States are suffering from the present chaos in medical service. And not only the layman faces difficulties and problems; physicians—all but the most successful few—suffer from the same causes. Let it be understood at the start that no complaint is here brought against medical science or those that practise medicine. The medical profession deserves a tribute of respect, not only for scientific discovery, but for its application to the relief of human misery.

It is not the science of medicine from which we suffer, but rather a seriously faulty organization of medical service. Our complaint is against the system, or the lack of it, by which we are served with medical care. The organization of medicine is as far in the rear of progress as its technique is in the van.

Let us put the case in personal terms. The story is simple and easily told; it can be repeated by the hundred in every community. No doubt, if the intimate facts about all his patients were known, every doctor would find more than one example of it in his own practice. Let us assume that a typical victim speaks his mind openly:­

‘I am insured against almost every contingency of modern life except the one most likely to occur. As a matter of fact that crisis has already occurred, twice, and I am no better equipped to meet it again than I was before it first happened. I lie awake at night pondering how to get out of the trouble I have already stumbled into, and I worry even more about the trouble that may be lurking just around the corner.

‘I find peace of mind in knowing that if someone runs into my car and tears a fender off I can stand the expense. My insurance company will pay the bill. The same thing is true of fire. If my house burns down I am guaranteed the funds with which to rebuild. If I should come to die I should have the satisfaction of knowing that my life insurance policies will at least keep the family from the poorhouse.

‘But if I or any member of my family should have another serious illness I doubt if I could ever be rid of the debts with which my life would be burdened. I cannot understand why society has not devised some method by which I and millions like me may be assured in advance that we can meet the costs of illness. After all, I am more likely to be sick than to suffer by fire or be robbed or lose my life. Why can I not be protected where protection is most likely to be needed?

‘I should not speak with such feeling were I not faced with doctors’ bills amounting to $3000 which I must meet out of a yearly salary of $9000, almost all of which is needed to meet the ordinary running expenses of the family. One of my children had a mastoid operation recently after a long spell of scarlet fever, and as a result of the strain my wife developed an ulcer of the stomach which required much nursing and hospital care. Before that there had been no major illness in the family for ten years. Most of my savings had been used to pay for our house. And now, in less than a year, what little money I had accumulated is gone and I am seriously in debt.

‘Where can I find financial protection against future illness? I have taken out sickness insurance for myself, but at best that only affords partial protection. Policies are not issued to children, and for women they require almost prohibitive premiums. Even the policy I now hold guarantees only one half of my salary during incapacitation.

‘One thing I am sure of: This question must be answered by someone. Too many people are asking it to be denied for long. If the doctors fail to find an answer themselves, someone else—or the government—will.’

Vary the income figures anywhere between $5000 and $25,000, change the doctor’s charges in somewhat corresponding ratio from $500 to $5000, and shuffle the names of the diseases or accidents from which the complainant suffers, and you have the history of thousands of families of moderate means. I know I speak for a large majority of them when I say that we should much prefer that the doctors themselves undertake the solution of the problem. We doubt our own ability to do it, and most of us share the American prejudice against state socialism in any form—including state medicine. But in spite of these reservations, we, as parties of the second part to every doctor’s treatment, claim the privilege of offering our advice.


Some of us who have observed recent developments of organization both within and without the medical profession are impressed with the possibility of piecing together into a unified programme of medical service methods which have been used with conspicuous success in several fields of. modern life. The three essentials of such a programme are (1) group practice, (2) periodic medical examinations, and (3) the insurance principle of dividing the risks into charges that are fixed and regularly paid. We suggest what might be called ‘medical guilds’ as a possible combination of these three in a workable whole.

‘Group practice,’ as it is called, has recently made impressive progress. Especially in the Middle West, groups of doctors have combined to offer more or less complete medical service, and many of these groups have achieved conspicuous success, both therapeutic and financial.

The Mayo brothers’ clinic at Rochester, Minnesota, is perhaps the most widely known of these group-practice units. The two famous surgeons have brought together an association of doctors who together are capable of treating all the major types of illness, and who are provided with ample facilities. Patients at the Mayo Clinic have the services of a wide range of specialists who unite in the treatment of each individual case. Each patient is the patient of the entire clinic, although he may need the services of only two or three of its staff.

According to a recent survey of group practice by C. Rufus Rorem, there are about sixty such groups now operating in the United States, each generally composed of ten to twenty physicians. Most of them are found in states west of the Mississippi, while Minnesota and Texas are credited with more than any other states. The structure and origins of the groups differ, but usually their aim is common: a single service to the patient and a joint income to the participating physicians, with consequent reduction in overhead costs. In a Southern city a well-known surgeon formed a group of associated doctors because he saw the advantage of utilizing specialists in his diagnosis before operating. In a Western city an obstetrician joined forces with a general practitioner, a gynecologist, and a nose and throat specialist, who together pooled their resources. A surgeon and several others were later incorporated in the group and a hospital was built. In another town of 30,000, sixteen doctors with their personal funds and some commercial borrowing put up a building with equipment costing $200,000 and now operate as a unit.

In some cases the associated doctors employ on salary other physicians, not formally members of the group, to supplement the services offered. Income may not be divided equally among the members, but in any case the proportion is naturally determined in advance. Often a business manager is employed to supervise, under the direction of the members, purchasing, bookkeeping and billing, collections, credit investigation, and the maintenance of the physical property. Sometimes the manager is a physician, but usually a layman with outstanding business experience and executive ability.

It is not hard to see why group practice is meeting a definite demand. Thoughtful people in general as well as unlucky patients have been distressed by some of the effects of specialization. It is a too frequent experience for a man in sickness to be sent wearily from one doctor to another for various ills the treatment of which is now highly specialized. We visit the dentist to-day, we went to the nose and throat doctor yesterday, and to-morrow we go to the specialist in gastric disorders. The dentist advises X-rays which must be taken at an office down town, the throat doctor prescribed a complicated spraying apparatus sold by a druggist on the East Side, and the stomach specialist will undoubtedly advise tests at a West Side hospital. In each case, our history and that of our families will be recorded in great detail by each doctor concerned, to be filed by three different systems in three different places—not to mention the records of the family physician who treats us for less specialized ills such as measles and pneumonia.

We have often yearned for the old family doctor who could do the whole job himself; but we know well that division of labor was as necessary in medicine as in the making of shoes or automobiles. We begin to see in well-rounded group-practice units, however, the possibility of a return of the old family doctor in a new and cooperative form. We should like our family doctor to be the general diagnostician and directing head of such a group. We should feel a comfortable sense of security in the knowledge that no matter what ills befell our families we could find expert care through such a multiple extension of this personality and skill, and at a minimum of effort on our part.

It is natural to suppose that the doctors who form these groups find a great advantage in the closeness of professional contacts that is brought about. Certainly consultations must be facilitated, and it must be no small advantage that the records of each case are accessible to all at the push of a button.

But on the economic side the advantages of group practice are even more obvious—for doctor and patient alike. Through the joint ownership of plant, equipment, and clerical forces, great savings are made in operating costs, which can be shared by the patients in reduced fees. Dr. Rorem’s studies show that patients of doctors united in association pay less than 40 per cent of the amount they would have paid to independent practitioners for the same services. When the group owns its X-ray and analytical laboratories, its examination and operating rooms, its hospital facilities and its record files, the expense to each doctor is greatly reduced. At the same time, the efficiency of each of these subsidiary services is increased through direct control by the doctors who use them.

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