Dollars, Doctors, and Disease

"Society must look forward to providing for health on the same basis as education, or else leave the medical profession in its present unfortunate plight."

A score of recent books, all of which might have been entitled Alice in Blunderland, have to do with the causes of our industrial depression. Why must so many thousands go hungry? Because we have produced too much corn and wheat, too many apples and potatoes, too much food of all kinds. Why must anybody suffer from cold? Because we have produced far too much coal and fuel oil, too much wool, too many woolen mills, too much clothing. Why must anybody live in shabby houses? Because we have surplus lumber, steel, copper, cement, hardware, and surplus carpenters, plumbers, painters, masons, architects, and contractors. But if we have surplus men and materials in one part of the country and not enough in other parts, why don’t we move the surplus to the parts where it is needed? The answer to that question is plainest of all. It is because we have too many railroads, too many ships, too many trucks.

Precisely the same conditions now affect the medical profession. At least one hundred thousand persons in the United States sorely need hospital care to-day, but are not getting it. Why not? The answer seems to be that only two thirds of the beds in our private hospitals are in use, and the hospitals do not know what to do with their surplus capacity.

At least fifty million persons in the United States whose teeth are decaying are not receiving adequate dental care. Why not? That is because this country leads the world in dental science and has tens of thousands of partially unemployed dentists.

Many millions of men, women, and children suffer from other preventable diseases. Why is nothing done about that? The answer is that the science of preventive medicine has made marvelous advances in recent years, and tens of thousands of competent physicians are eager to use their new knowledge and their idle hours to save humanity from needless suffering.

These are mad riddles of the Mad Hatter. The riddles and the answers provide another chapter for Alice in Blunderland.

Evidently, the problem of providing adequate medical and dental care for all the people is in one essential the same as the problem of providing adequate food, clothing, shelter, and transportation. The main question is how we are to enable the people to pay for the commodities and services which already we are fully able to provide. Under present conditions, the best medical care is available, where it is available at all, only to the very poor and the very rich. The Committee on the Costs of Medical Care, which has just published its final report, has shown wisdom, therefore, in centring its recommendations about that fundamental question. Already we have Doctors and Diseases in superabundance, and the supply of Dollars is wholly subject to human control. The main problem is to maintain, in the right channels, a sufficient flow of Dollars to enable the Doctors to deal adequately with the Diseases.


Six years ago, seventy-five leading citizens, both inside and outside of the profession of medicine, were consulted concerning this problem. They were virtually unanimous in favoring the organization of a committee to carry on a five-year programme of research in the economic aspects of medical care. A committee of fifty was appointed, representing the fields of private practice, public health, medical institutions, social sciences, and the public. A slight majority of this committee are doctors of medicine or doctors of dental surgery. Dr. Bay Lyman Wilbur, who is chairman of the committee, has a unique combination of qualifications for that position. As a former medical practitioner, as a former President of the American Medical Association, and as President of Stanford University and Secretary of the Interior, he well represents both the profession and the public.

The committee’s research staff, which has been maintained in Washington during the past five years, has produced twenty-six volumes. These volumes, dealing exclusively with facts, have been published by the University of Chicago Press. The value of these studies, regardless of the worth of the recommendations of the committee (to be discussed presently), abundantly justifies the committee’s expenditure of its own time and of its budget of seven or eight hundred thousand dollars.

The committee has been unable, however, to carry out certain lines of research, the importance of which has been revealed by its own investigations; and the committee goes out of existence the first of January. It is highly important that some other organization, formed for the purpose of promoting, coordinating, and making useful further research in this field, shall now take up the work. It is also important that some organization should endeavor immediately to promote demonstrations and experiments in various communities, in accordance with the major recommendations of the committee.


‘Why is the committee chiefly concerned with the costs of medical care?’ writes one of our critics. ‘The trouble is not chiefly economic. Who wants to visit a dentist, anyway? If the workers had more money, they would buy more candy, cosmetics, and chewing gum, but not more dental services. The main reason why they neglect their teeth is not lack of money.’

The researches of the committee do not support this contention. They show, on the contrary, that in the course of a year 90 per cent of the members of families which have incomes of less than $1200 receive no dental care whatever, whereas the figure is only 40 per cent among families with incomes of over $10,000. One member of the committee, Dr. Michael M. Davis, finds that, even in prosperous times, 61 per cent of working-class families in Boston, New York, and Philadelphia spend nothing for dental care. In this study, the causal connection between family incomes and neglect of the teeth is evident. Three fourths of the families with incomes of less than $100 spend nothing, while only one fourth of the families with incomes of $2500 a year spend nothing. The main trouble is not lack of intelligence, but lack of money.

In further proof of this conclusion, Professor Jessica B. Piexotto cites the expenditures of ninety-six families of faculty members at the University of California. All these families, undoubtedly, are fully aware of the importance of dental care; the struggling young instructors know as much about that as the old professors on full salaries. Yet here again the amount of dental care purchased varies directly with the salaries.

In the United States there is approximately one dentist to every 1800 persons. Since a single dentist, however, cannot render adequate service to more than 30 per cent of this number, about 70 per cent of the needed dental services, even in prosperous times, are not rendered at all. To-day the extent of the neglect is nearer 80 per cent. Certainly, any plan which overcame the economic causes of this neglect would more than double the number of persons who receive adequate dental care, no matter what the effect might be meanwhile on the consumption of candy, cosmetics, and chewing gum.


The reports of the committee show, with an almost incredible range of dependable facts, that failure to use our available knowledge and services causes a vast amount of preventable physical pain and mental anguish, needless deaths, and economic wastes. Present conditions call, not merely for a little improvement here and there, but for far-reaching changes.

The recent progress of the science of medicine has been little short of miraculous. Physicians and other men of science have shown an almost unparalleled professional spirit in making available, for the benefit of mankind, the results of their research in aseptic surgery, anesthesia, bacteriology, physiology, and radiography. Physicians as a body, especially family doctors, have shown a willingness to risk their lives and to serve suffering mankind without regard to money reward—a record which is scarcely equaled by any business, or even by any other profession. Yet in the distribution of benefits, medicine has made intolerably slow progress.

Under the prevailing form of medical service—private individual practice—more than 80,000,000 persons in the United States either do not receive the care which they need and which could readily be provided, or are heavily burdened by its costs. At the same time, many of the competent practitioner and agencies are underemployed and poorly paid. A barrier, mainly economic, stands between the doctors, dentists, and nurses who are able and eager to serve and the patients who are sorely in need of services. This is the conclusion reached by the committee after five years of research.

About 1,000,000 persons in this country provide medical care and depend upon it for their livelihood. There are nearly 7000 hospitals, with a total capacity of about 1,000,000 beds; 8000 clinics and out-patient departments of hospitals; 60,000 drug stores; and many state, county, and municipal health departments. These extensive facilities, however, are not distributed according to need: many communities are undersupplied, while many others have a surplus. For example, there is one physician to every 1431 persons in South Carolina, but one to every 484 in California. There are 19 dentists per 1000 of the population in Mississippi, but 101 in Oregon. Only half the counties in the United States have hospitals for general community use. There is also maldistribution as to type. For example, about 45 per cent of the physicians completely or partially limit their practice to a specialty, although the needs of patients might be met if only 18 per cent of the physicians were specialists.

Moreover, even in places where adequate medical care can be purchased, most of the persons in the lowest income groups do not get it. In spite of the large volume of free work done by hospitals, health departments, and individual practitioners, and in spite of the sliding scale of charges, it appears that each year nearly one half of the individuals in the lowest income group receive no professional medical or dental attention of any kind, curative or preventive.

Even more extensive is the failure of the people to benefit by preventive medicine. In any one year, fewer than 7 per cent of the population have a complete or even a partial physical examination. Public health services are also grossly inadequate. Less than 25 cents per capita is now spent for county and rural health work whereas the committee estimates that adequate services would cost not less than $2.50 per capita.

Then, too, much of the money that is now spent for medical care is spent to poor purpose. Of the $3,647,000,000 that is paid out each year, $125,000,000 is spent for the services of naturopaths, faith healers, and similar groups, and $360,000,000 for patent medicines. In the opinion of the committee, much of the $125,000,000 and virtually all of the $360,000,000 are wasted.

Another difficulty is that the patient does not know what he wants. How can he know? And even when he does know, he cannot tell where to find it. He may drift around or be sent around for weeks, from one specialist to another, all the while with decreasing funds and increasing pain.

‘Everyone,’ says Professor Walton H. Hamilton, a member of the committee, ‘has learned the knack of buying bread and shoes and houses. If he wants candy, coffee, or cigars; if his heart yearns for dancing, preaching, or faking, he gets just about what he asks for.’ Not so with medical care. The market for that is unique. The demand is for a necessity; failure in supply often means death; yet the patient who buys medical care in the open market runs serious risks. It does not come in standardized packages: there is no simple test of worth which the buyer can apply. As a result, medical care is now bought with little knowledge of its quality—often, too, with little knowledge of its price. The patient commits himself to an unknown course, in which one bill may merely breed others. The price does not behave the way prices behave in textbooks on economics.

Worse still, under the present ‘fee-for-service’ basis of private practice, the patient may fall into the hands of fee-splitting doctors, and thus be misled when he thinks he is getting honest advice. The objections to fee-splitting are that physicians thereby gain income without regard to their qualifications; patients are diverted by misinformation from the best specialists; the fee is usually exorbitant; men who thus buy and sell patients often perform unnecessary operations; and the fee-splitting surgeon is surrounded by paid solicitors, all greedy for money profit. The committee declares that fee-splitting ‘increases the cost of professional care, degrades the profession, and, in effect, puts the patient in the hands of the highest bidder.’

What every sick person needs, evidently, is a single agency, in one place, freed from every taint of commercialism, which will furnish him all the necessary information.


Even in the face of all these facts, however, the committee believes that the chief reason why the costs of medical care lie at the root of the problem is that the costs are uneven and unpredictable. The average cost per family means nothing as a practical matter. In one group of 9000 white families, the committee found that the collective expenses of 4 per cent of the families were as large as the collective expenses of 80 per cent. Of the low-income families, the expenses of 80 per cent were less than $60 per family per annum, while the expenses of 3 per cent were above $50. These high-expense, low-income families did not find their burdens bearable, merely because the average costs of medical care are not excessive for families with average incomes.2

The budgeting of family income, which has been encouraged of late years and has been facilitated by the use of installment payments, may assist families in planning for expenditures which can be determined in advance. But the unpredictable nature of sickness, and the wide range of professional charges for nominally similar services, render budgeting for medical care on an individual family basis impracticable. On the present fee-for-service basis, it is impossible for 99 per cent of the families to set aside any reasonable sum of money, with positive assurance that no more will be needed for medical care.

Another objection is that medical costs which are too high for many families to pay nevertheless do not guarantee high incomes to most of the practitioners. The total income of physicians in private practice is much less evenly distributed than the income of several comparable professions: actual net incomes are inadequate for large numbers of practitioners and more than adequate for others. For every physician who, in 1929, received a professional net income above $10,000, there were two who received less than $2500. The contrast is especially great, as everybody knows, between the incomes of general practitioners and the incomes of specialists. The committee concludes that no solution to the problem of medical costs can be reached through a reduction in the average of professional incomes.

Another difficulty in providing medical care is that the per capita income, even in prosperous 1929, was less than $700, and the income of half the families was less than $1800. Furthermore, the 123,000,000 human beings who need doctors and dentists and nurses are scattered over 3,000,000 square miles of territory. There are 20,000 persons to the square mile in Manhattan, and only one to the square mile in Nevada. Then, again, 10 per cent of those who need care are Negroes, and of these 23 per cent are illiterate. Still further to complicate the problem is a climate notoriously fickle, and a temperature which ranges from 119 degrees above zero to 45 degrees below zero. These difficulties are slight, however, compared with the fact that millions still believe in incantations as a cure for smallpox, or in other remedies of the same fascinating nature.

These, then, are some of the conditions which the committee had to take into account in formulating a plan for the satisfactory medical care of all the people and adequate means of payment for all the services. These conditions are the outcome of social evolution; they are not the fault of the medical profession or of any other group; they must, nevertheless, be faced.

The crux of the problem, evidently, is to bring Doctors, Dollars, and Diseases into such helpful and continuous contact with each other that the practice of medicine can keep pace with the science of medicine.


In its final report, the committee lists six essentials by which the value of any proposed plan must be judged:—

1. The plan must safeguard the quality of medical service and preserve the personal relationship between patient and physician.

2. It must provide for the future development of preventive and curative services in such kinds and amounts as will meet the actual needs of all the people, not merely their effective demands.

3. It must provide services on financial terms which the people can and will meet, either through individual or through collective resources.

4. There should be a full application of existing knowledge to the prevention of disease, so that all medical practice will be permeated with the concept of prevention. The programme must include, therefore, not only medical care of the individual and the family, but also a well-organized and adequately supported public-health programme.

5. The basic plan should include provisions for assisting and guiding patients in the selection of competent practitioners and suitable facilities for medical care.

6. Adequate and assured payment must be provided to the individuals and agencies which furnish the care.

Having spent five years in factfinding, and having agreed upon these six essentials, the committee was forced to recommend, as the only ultimate solution for the great majority of our people, group practice of medicine and group payment of medical services.3

The committee recommends that medical service, both preventive and therapeutic, should be furnished largely by organized groups of physicians, dentists, nurses, pharmacists, and other associated personnel. Such groups should be organized—and preferably around a hospital—for rendering complete borne, office, and hospital care. The form of organization should encourage the maintenance of high standards and the development or preservation of a personal relation between patient and physician.

The major recommendations envisage groups providing all the needed therapeutic and preventive medical and dental services, except care for tuberculosis, mental disease, or other conditions which have been accepted as governmental responsibilities. Thus, complete groups would contain physicians, — both general practitioners and specialists, — dentists, nurses, pharmacists, medical social workers, and all the needed technicians and assisting personnel.

It is clear that many groups in smaller cities and towns cannot afford the full-time services of specialists in each branch of medical practice. To obtain the less common specialized services, these groups should affiliate with larger centres, particularly with teaching hospitals and medical schools.

The committee recommends, further, the extension of all basic public health services, — whether provided by governmental or non-governmental agencies, — so that they will be available to the entire population. Primarily this extension requires increased financial support for official health departments and full-time trained health officers and members of their staffs, whose tenure is dependent wholly upon professional and administrative competence.

The committee also recommends that the costs of medical care be placed on a group-payment basis, through the use of insurance, through the use of taxation, or through the use of both these methods. This is not meant to preclude the continuation of medical service provided on an individual-fee basis for those who prefer the present method. Cash compensation for wage loss due to illness, if and when provided, should be separate and distinct from medical services.

It is unfortunate that the committee, having decided that some form of group payment is absolutely necessary, did not recommend compulsory health insurance; for nothing is more certain, in the whole wide range of the committee’s field of study, than that voluntary health insurance will not meet the needs of those who are in greatest need. It will not reach the unorganized, low-paid workers. It will not solve the problem of satisfactory care for all the people, which is the very problem the committee set out to solve. Already most European countries have abandoned voluntary systems in favor of compulsory systems. Yet only nine members of the committee declared themselves in favor of a compulsory system.


Nine other members of the committee, all doctors of medicine, are so far committed to the present fee-for-service system that they cannot bring themselves to sign even the moderate majority recommendation for the more extensive use, on a voluntary basis, of various methods of group practice and group payment. These nine members have presented a minority report.

The minority report states—what everyone must admit—that there are dangers in the proposed plan, and that the results, at least for some time to come, may be less satisfactory than the majority report leads us to expect. The minority members advocate continuous, complete service for chronic diseases, paid for on a yearly basis; the adoption of insurance methods only when they can be kept under professional control; and a change of emphasis in medical education, with a view to developing general practitioners and improving instruction in preventive medicine. On the other hand, the minority members condemn all schemes devised by laymen to exploit, for their own profit, the medical profession and the public; all ‘contract practice’ as usually carried on; and all forms of practice which make it difficult or impossible to maintain the personal relationship of physician and patient.

With all this, the majority members of the committee agree. These minority statements would have been incorporated in the majority report if they had been received by the editing committee in time. The differences of opinion, therefore, among the members of the committee do not cover as many points as the minority report seems to indicate.

All the recommendations of the minority members put together, however, promise little progress toward the provision of satisfactory medical care for all the people and satisfactory payment for all the services. The minority members evade the main issue—as, indeed, the other members do who refuse to endorse compulsory insurance or any other adequate plan for group payment. The minority members are essentially laissez faire economists. They insist that doctors be left alone to solve, in their own way, the problem which, after centuries of trial, they have been utterly unable to solve. In other fields of human endeavor, there is painful evidence that leaving each individual and each group alone to provide commodities and services in its own way, in pursuit of its own profit, fails to provide all the people with the food, clothing, and shelter which society, in the United States at least, is fully equipped to provide.

We learned this lesson long ago, as far as education is concerned; but the analogy between education and health is like a red rag to a majority of the medical profession. The trouble seems to be that it is a remarkably sound analogy. Certainly human welfare depends on the health as well as the education of all the people. These objectives cannot be attained if each member of society is allowed to be as ignorant and as sick as he pleases, or if each member who wants the help of a teacher and a doctor is obliged to pay for such help, without the aid of any method of group payment.

Education is now provided by group practice and group payment. Measures for achieving the same results in health are advocated by a majority of the Committee on the Costs of Medical Care. The minority report falls short of advocating an adequate plan either for group practice or for group payment. The majority report, it is true, falls short of advocating the use, at present, of adequate tax support or adequate insurance. The majority report does say, however, that ‘unless the national income increases so rapidly that many of the families at the lower end of the economic scale are enabled, on a periodic payment basis, to meet such costs, some method of tapping the combined resources of the population must be found.’

This is, in effect, an admission that society must look forward to providing for health on the same basis as education, or else leave the medical profession in its present unfortunate plight. Even the chairman of the minority committee admits that ‘a tide of public opinion inimical to the profession is rising which has already become a distinct menace.’ For the sake of both the profession and the public, the Dollars should be provided by collective action; the Doctors should be professionally in command; and thus the abundant resources, human and material, which are already at hand should be mobilized for the age-old battle against Disease.

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