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The Impact of Group Health Care Programs on Medical Practice
664 • TH E JO U R N A L O F TH E A M ERIC A N DEN TAL A SSO C IA TIO N
T H E IM P A C T O F G R O U P H E A L T H C A R E P R O G R A M S O N M E D IC A L P R A C T IC E
Francis T . H od ges, M .D ., San Francisco
W h at w ould happen to your presumably com fortable and stable econom y were you suddenly to be confronted with a long, serious, disabling illness, plus a bill for that illness o f over five thousand d ol lars? O n m e the effect w ould be p ro found. M y incom e w ould stop ; my over head w ould continue, at least until hasty stop-loss controls could partially stem it; and a flood o f m edical bills w ould wash away what small reserves I had been able to put aside. In brief, I w ould be in trouble. C on fined to a hospital bed, view ing my m ounting bills with m uch the same ap prehension o f a taxicab passenger w ait ing for the passage o f a slow hundred-car freight train. I w ould be changed sud denly from a secure and solvent m an into an anxious student o f bankruptcy stat utes. A nd , were I to be discharged from the hospital com pletely cured, m y fam ily could, conceivably, be faced with a far graver financial crisis than w ou ld b e en gendered by my death, since I carry an adequate life insurance program . It is usually the hardship case o f the modestly paid employee— the teamster or the waitress— we hear o f, and rightfully so. T h ere is no one, however, im m une to the costly drains o f illness, although m any o f us enjoy degrees o f security far beyond those o f the workers mentioned. M u ch is heard today o f the staggering costs o f illness. T h ey are high, and fo r a num ber o f reasons. In an inflationary econom y, health services and goods keep pace with the general rise in prices, al though ratios vary. Physicians’ fees, for exam ple, have not kept pace with labor costs, the price o f milk or new cars. T he physician’s share o f the health dollar is smaller than it was a generation ago, whereas the dental profession is reported as receiving a somewhat larger segment.
T h e hospitals’ share has greatly increased, and the increase has been in direct ratio to the increase in labor costs. T h e increasing costs o f illness, even though they m ay not have kept pace with inflation, have helped to focus the im pact o f sickness on the pocketbook. It is little solace to the m an on a limited budget to be told that costly m odern m edical p ro cedures have reduced the incidence and severity o f certain diseases making them less costly in toto than they were a gen eration ago. It is only partial com fort to know that today’s shorter hospital stay is often cheaper than hospital confine m ent in the days o f less effectual treat ment. T o d a y ’s worker is living in today’s econom y, w hich is a credit econom y. T o an ever larger degree, he is buying today what he will use today, and pay fo r to m orrow . W hether he buys a vacuum cleaner, a car, a h om e, or a trip to Eu rope, he can make a token dow n pay ment and enjoy a m ultitude o f goods and services long before he has a certificate o f ownership. Credit econom y has been shaping m edical and dental practices for several years past. This shaping, which began almost im perceptibly, has recently reached alarming proportions. I cannot alter this trend, neither can you, nor can our co m bined professions. In a dem ocracy, seg ments o f the populace d o not divert the tide. T h e y swim with it, or are swept aside by it. T h e professional man w h o gives m ore than passing attention to the alarm ing possibilities in the present situation must realize that he is part o f it, and that he must adjust to cop e with it. In the past, when living was simpler,
President, California Physicians Service.
SIXTH N A TIO N A L DENTAL H EALTH C O N F E R E N C E . . . VO LUM E 52, JU N E 1956 • 665
and when all but a few citizens operated on a cash basis, most people depended for security on a healthy, easily liquefied reserve. T h e strength o f the fam ily unit was the security o f that unit. Family se curity depended on the incom e o f the breadwinner and the nest egg saved from his earnings. T hen cam e life insurance, by w hich a m an w ithout that nest egg cou ld guarantee his fam ily some security from the day o f his first prem ium pay ment. Contingent on the regular pay ments o f a fixed prem ium , he was as sured that his w ife and children would be spared m uch o f the econ om ic tragedy caused by his death. From its inception life insurance has had its critics, some o f w hom protest that it is im m oral to provide protection fo r dependents on an installment basis and that this unsound principle will underm ine the character of the subscribers. L ife insurance is a part o f credit econom y, although at first glance it might appear to be the opposite. T h e owner o f a life insurance policy im m e diately becom es possessed o f that for which he will pay through the years. Throu gh that possession the intangible security o f today loom s larger even than the tangible, inevitable, return o f tom or row. As the demands on the incom e dollar for rent, clothing, fo o d , life insurance, education and recreation becom e greater, the incom e earner grows increasingly concerned over the rising costs o f illness and over the decreasing segment o f his dollar budgeted for those costs. Eating is a necessity, so too is clothing and shelter. Protection must be provided his family in case o f death— hence the need fo r life insurance. T h e fam ily must have ciga rettes and an occasional m ovie ticket, for life w ould be drab indeed w ithout some m inor pleasures. Because o f these chronic and urgent demands on the fam ily incom e, many wage earners fail to provide for illness. T hey rationalize this failure by arguing that they are not going to get sick. Other
people becom e ill. Careless people have accidents. Should some little illness o c cur, a visit to the physician will cost but five dollars and that can be paid out o f pocket w ithout affecting the fam ily budget. Stark reality, however, is chang ing the thinking and planning o f the m ore thoughtful breadwinners, and their concern is spreading to m ore people. U n ion agents must act daily in behalf o f some o f their members because o f illness or accident. M ost employers endeavor to offer some type o f m edical prepayment coverage. A n d although the individual worker m ay not be confronted with a $5,000 bill fo r illness, he knows someone whose future is m ortgaged because o f such a catastrophe. Credit econom y did not generate the idea o f sickness insurance, although ex tended credit plans accelerated the ac ceptance o f the idea and the desire for it. Devices fo r advance payment against the costs o f disease and injury, however, are not new. L o n g before Bismarck, thought by many to be the pathfinder o f such plans, m an strove to find a solution to the problem o f m eeting m edical cost. T h e efforts in this regard o f K u n g Fu T se o f ancient China may be cited. T h e m ost potent and oldest o f the se rious efforts o f the m edical profession to solve the econom ies o f the m edical-careseeking pu blic m ay be found in the State o f W ashington, where excellent bureaus, some o f w hich are n ow Blue Shield plans, arose because a captive m edical profes sion shook o ff the tyranny of an a ll-pow erful lum ber industry. Before the advent o f the bureaus, a large part o f the profes sion in that state was shackled by the lum ber com panies which em ployed phy sicians and dictated the conditions under which treatment cou ld be rendered em ployees and their families. T he Blue Shield m ovem ent was initi ated before W orld W ar II by the m edical profession through the association o f a num ber o f the nation’s service organiza tions fo r the purpose o f aiding the pub-
666 • TH E JO U R N A L O F TH E A M ER IC A N DENTAL A SSO C IA TIO N
lie to finance — through prepayment m ethods— the costs o f sickness and acci dents. A lthough the Blue Shield plan was inaugurated presumably to avert the trend toward socialism in m edicine, it sometimes has been accused o f being so cialistic itself. Blue Shield, follow ing the lead o f its sister organization, Blue Gross, has grown beyond all expectations. Thirty million Am ericans now benefit from its provi sions. M any o f these beneficiaries would be in sore financial straits if they had to defray the costs o f m edical services on a postpayment basis. As the present size, and the potentials o f prepayment m edical plans were not envisaged by the originators o f the plan, neither was its comprehensive coverage foreseen. Blue Shield’s original contract— a limited, neat, safe, little package— p ro vided the lower incom e earner, in a broadly based group, a strictly controlled list o f surgical benefits. Cautious planners interspersed the benefits with protective limitations, abuse controls and overuse deterrents. Individual coverage was haz ardous. M ed ical benefits were the excep tion. Fine print served to sober the sub scriber w ho had bought in g ood faith and enthusiasm. Regrettably, he becam e sus picious o f the proposal after examining the offerings o f com pletely sincere and idealistic leaders o f the m edical profes sion. T hose leaders soon learned that the subscriber was interested in far m ore comprehensive coverage than the original plan offered. H e did not desire islets o f protection in a vast sea o f risks. H e was even willing, in a num ber o f instances, to sacrifice the traditional free choice o f physician in order to purchase fuller p ro tection for himself and his family. C er tain closed-panel types o f m edical service organizations operate on this basis, al though where benefits are adequate, the Am erican citizen greatly prefers to choose his doctor. Programs for the prepayment o f sick
ness costs have grow n to such an extent that a majority o f the pu blic now is covered to some degree, in one form or another. M ore than fifty m illion A m eri cans are subscribers to the hospital bene fits o f the m any Blue Cross plans. M ore than thirty m illion Blue Shield bene ficiaries are protected by the 76 con stituent plans fo r physicians’ services. T h e com m ercial insurance companies underwrite many millions more in a great variety o f contracts. Closed-panel plans em brace approxim ately two m illion more. Irrespective o f the original reasons for offering the public facilities for the pre payment o f m edical costs, the people o f A m erica have shown that they like to pay their ow n way and that they are ready and willing to take advantage o f the facil ities offered. A lthough today’s credit econom y may have been a factor in stim ulating the vast growth o f prepayment m edical plans, this m ethod o f financingsuch costs stands on its ow n merits as good business. O n e o f the m ost popular types o f pre payment m edical care contracts now be ing offered provides both the Blue Shield and the Blue Cross services, in which varying degrees o f medical and surgical coverage are offered by Blue Shield, in the name o f its sponsoring physicians, and a fairly uniform type o f hospital coverage is offered by Blue Cross for the hospital organizations. By and large, these are service type plans, which guarantee cer tain m edical and hospital services, rather than fixed and limited indemnification. These are plans in which there is partici pation by the hospital and the medical professions, w ho, alone, can render the services guaranteed under the terms o f the contract. N o insurance com pany can promise these services, nor can it promise free choice o f hospital and physician. No insurance com pany can guarantee more than dollar paym ent on a fixed scale in accordance with a table o f benefits. T h e effect on m edical practice o f co m mercial insurance com panies’ health and
SIXTH N A TIO N A L DENTAL H EALTH C O N F ER E N C E . . . VO LUM E 52, JU N E 1956 • 667
accident contracts will n ot be discussed here. Such contracts are agreements be tween the negotiating com panies and the beneficiaries. T h ey involve the acceptance o f no responsibility by the hospitals or the physicians, and bind them in n o way. Physicians and hospitals are free to bill the patients in accordance with their usual fees, and they may or may n ot co n sider the reimbursement by the com pany as full paym ent fo r services rendered. T h e com pany is in the field for the pur pose o f making a profit, and usually does well. It is significant that Blue Shield-Blue Cross plans are operated on a not-forprofit basis. In fact, the actuaries and managers o f such plans are censured if profits are made. T h e im pact w hich this gigantic Blue Shield-Blue Cross dual facility has had on the practice o f m edicine was never visualized by . the originators o f the p ro gram. T h e original purpose o f the program was to salvage from the charity clinics, and m edical pauperism, the low wage earner, by enabling him to budget a few pennies daily while well, with w hich to defray the cost o f sickness sustained later. T h e low in com e earner was protected under this plan but his neighbor in a higher incom e bracket was not. H e too desired the same protection. T od a y, Blue Shield subscribers em brace a very large portion o f A m erica’s m iddle class p op u lation, including m any executives who insist on their right to the same benefits as their employees. Consequently the num ber o f participants covered is m uch greater than originally anticipated. In fact, in the State o f Delaware, 70 per cent o f the populace is covered. In M ichigan, over 50 per cent h old Blue Shield-Blue Cross cards. T h e sheer weight o f numbers cannot but affect the practice o f medicine in a num ber o f ways. A nother interesting developm ent has been the trend tow ard greater com pre hensiveness o f coverage w hich has re
sulted from the public’s desire fo r greater degrees o f security. M ost early Blue Shield plans and com m ercial insurance policies offered only surgical coverage. T od a y, a growing num ber o f plans allow hom e and office visits and other extended benefits. M edical coverage while hospi talized is almost universal now. Few o f the early Blue Shield plans p ro vided protection for dependents. W hen such protection was offered, benefits were sharply curtailed, in the belief that such coverage was actuarially unsound. This opinion has largely disappeared. T od a y most negotiators are certain to reject contracts w hich d o not include provisions for fam ily protection. Pioneering plans invariably offered only group contracts, as it was believed that only by spreading the risk over a large and well selected group cou ld some control over usage be maintained and soundness o f the program be assured. Subscription drives throw n open to all individuals w ould, it was predicted, result in a mass rush for contracts by the lame, the halt and the blind, fatally weighting the rolls o f the plan, while the young, robust and well w ould “ stay away in droves.” A few hopeful experimenters were not convinced that this w ould be the case, and they offered individual con tracts while their finance officers held their breath. T h e predicted cataclysm did not take place. Healthy, sound plans which provide individual contracts o p erate side by side with their group cou n terparts. T h e finance officers and the ac tuaries relaxed and went to work. N ot to stop leaks or to p lu g gaps but to plan lower prem ium rates and greater benefits. Individual contracts are now being o f fered by more and m ore Blue Shield plans. T h e am ount and the varied types o f coverage offered by today’s Blue Shield plans are in bold contrast to the sharply circum scribed coverage provided by the first o f such programs. Indigents, m igra tory workers, Am erican Indians, the el-
668 • T H E JO U R N A L O F TH E A M ERIC A N DENTAL A SSO C IA TIO N
derlv, college students, represent a few o f the groups that have proved to be natural subjects for the m odern flexible Blue Shield-Blue Gross contracts. A n d while the officers o f a Blue Shield-Blue Cross plan negotiate for coverage o f the employees o f a corner corset shop, or John D o e and his fam ily, they may simul taneously be negotiating a contract fo r a nation-w ide industry em ploying hundreds o f thousands o f workers. T h e m edical profession conceived and developed Blue Shield as a means by which the public could finance m edical and surgical costs easily and painlessly. In doing so, the profession voluntarily took u p on itself certain obligations and restrictions. It agreed to render specified services at fees within a restricted range. It accepted the responsibility fo r the suc cess o f the plan, its members underwrit ing losses that m ight occur. Frankly, the inauguration o f Blue Shield was an in novation for a profession known to be traditionally reactionary. Calamity h ow l ers within the profession forecast im m i nent disaster for all associated with the undertaking. T o be sure m edical practice is not the same as it once was, and prepayment o f m edical costs has aided in the change. But nothing is ever fixed in a changing world and all change is not necessarily for the worse. Let us examine some o f these changes. T h ere has tended to be a leveling o ff o f fees. T here is m ore frankness regarding m edical charges w hich form erly, fo r some reason, were a closely and jealously guarded professional secret. M odern m ed icine is tending to establish standard fees for standard services— a condition ac credited by the establishment o f Blue Shield plans. In some comm unities the establishment o f Blue Shield and the co n com itant establishment o f standard fees has proved embarrassing; largely because the fee scale was too low. Blue Shield is not cut-rate m edicine. O n ce fee sched ules are established they becom e known
and are accepted by insurance co m panies, the public, and even courts, as standard. It is o f little avail to protest that they are m inim um fees, and that they are for low incom e people. In those areas in w hich Blue Shield plans set un reasonably low fees, resentment on the part o f the profession resulted and at best only grudging support was given by physicians through a sense o f duty. In those communities in w hich the Blue Shield schedule o f fees were in some a c cord with the usual fees fo r the com m u nity, enthusiastic endorsement by the participating physicians resulted. Prepayment m edical plans are bring ing about another interesting develop ment— they are causing charity patients to disappear. In some communities there aren’t enough charity patients to serve as teaching material fo r m edical students. Form er charity patients are now proudly paying private patients in the waiting rooms o f private practitioners. Blue Shield and insurance com panies have enabled them to salvage their self-respect and to provide a substantial portion o f their physician’s incomes. These same pa tients are seeing, on a far m ore satisfac tory basis, the physicians o f their choice— often the same physicians w ho formerly served them without recompense. I f the econ om ic lift o f a five cent an hour raise to a group o f industrial w ork ers is measurable, a similar econom ic benefit to a com m unity must result from the establishment o f a Blue Shield-Blue Cross prepaym ent plan. Even in communities in which Blue Shield payments to physicians fall below the norm , many physicians agree that the certainty o f Blue Shield payments for services rendered beneficiaries o f the plan m ore than compensates fo r losses o cca sioned by bad accounts and ignored bills. Early planners of m edical and hospi tal prepayment programs wanted to re m ove the barriers that existed between the patient and his hospital and his phy sician and to establish an easily accessi
SIXTH N ATIO N AL DENTAL HEALTH C O N F ER EN C E . . . VO LUM E 52, JU N E 1956 • 669
ble road between them. In some com m u nities they actually constructed a high speed four-lane super-highway, devoid o f any restrictions. Some o f those early highways or prepaym ent plans were al most destroyed by the heavy traffic. Phy sicians were confronted with demands o f patients to be put in the hospital “ b e cause I need a rest,” or “ m y w ife’ s away for a while and I d on ’t cook. Besides you can run a lot o f tests while I ’m in. D o n ’ t spare the expense, doctor, I have Blue Cross.” O r “ d on ’t order the x-rays while I ’m up and about— I ’d have to pay for them. Put m e in the hospital, so they’ll be free.” “ These are m y rights. I ’ve paid for them .” It took physicians and p a tients, alike, a long time to learn that in telligent, not prodigal, use o f Blue Shield Blue Cross plans, meant greater benefits, broader service and m ore realistic fees. Plans in some states have failed because they were considered fair game fo r raids and b lood letting, rather than a valuable asset to patient, hospital and physician. Prepayment health insurance has placed a third party between the patient and the physician. But that party is not a governm ent employee. In the case o f Blue Shield, it is the physician’s ow n rep resentative, whose purpose is to aid, not hinder, the rendering o f m edical service. Blue Shield plans require some paper work, but less than is required o f insur ance reports. Blue Shield plans also pre sent certain o f the annoyances that occur when som eone outside the physician’s o f fice is concerned with the affairs within it. But such annoyances are not m ajor. M ost significant are the public relation benefits that have accrued to medicine as the result o f Blue Shield programs. Justly or not, m edicine fell into some d e gree o f disfavor with the public a few years ago. T h e m edical profession was supposed to be opposed to everything, in favor o f nothing, and reluctant to take leadership in the establishment o f m edi cal care program s fo r Am erican families. T he m edical profession answered by es
tablishing Blue Shield. T h e pu blic then began to realize that its physicians were concerned over their health problem s rather than with their pocketbooks. T h e advent and growth o f this physician-sponsored facility mark a great turning point in m edicine’s community-mindedness. T h e acceptance and endorsement o f Blue Shield by millions o f persons have not been lost on the m edical profession. T he shape and character o f m edical practice have been altered because o f that accept ance. M ost Blue Shield plans are o f the serv ice type. Service is the one m ajor item that an organization sponsored by phy sicians can offer. C om m ercial insurance companies can m atch all other benefits with the exception o f benefits resulting from nonprofit operation. A m edical serv ice plan has some o f the features o f a dem ocracy in w hich there is governm ent with the consent o f the governed. T he success o f such a plan depends on the support o f its physicians— those w h o ren der the services. A Blue Shield plan must have the hearty endorsement o f its m em ber physicians. It must provide w ide and realistic protection to its subscribers. It must guarantee realistic payments to par ticipating physicians, and its administra tion must interfere as little as possible in the normal practice o f medicine. Physicians have com e to accept prepay m ent as a reality, and the overwhelm ing majority o f the profession endorse it. W here there has been opposition to the service type o f prepayment m edical plan, the objection usually has been caused by the cut-rate or bargain basement type o f contract offered. T h e laborer is w orthy of his hire, and g ood m edical service co m mands a fair fee. Prepayment plans are established to facilitate payment fo r m ed ical service, not to cheapen its quality. C ontrol o f m edical practice must remain always in the hands o f the physicians and the establishment o f efficient d octor-spon sored, service-type Blue Shield plans in all Am erican comm unities will strengthen
670 • TH E JO U R N A L O F TH E A M ER IC A N DENTAL A SSO C IA TIO N
that control. W ary members o f the p ro fession w ho visualized a prepayment health plan as a bureaucracy which w ould stifle free m edical practice now recognize that it is an instrument by w hich they m ay retain control o f m edical practice, and preserve the freedom s w h ich are so essential in good m edical care. T h e ready acceptance by the public o f the offerings o f the m edical and hospital professions suggests that thus far the sur face has been little m ore than scratched. W ith a perfectly straight face, a form er Blue Shield executive has set up business in Southern California to underwrite prepayment veterinarian service for the domestic pets in that area. T hose who claim that m edicine, in establishing Blue Shield plans, has unlatched Pandora’s b ox must be shown that actually m edi cine has rubbed A laddin ’s lam p, and that an obedient genie awaits the wishes o f the profession to serve the pu blic m ore effectively. T o date, the genie o f the lam p has done little m ore than idly flex his muscles. His full strength can only be im agined. Not endow ed with selfish interests nor ulte rior motives, he exists to serve his masters. W hether he succeeds or fails depends on his directors. T h e practice o f m edicine must always
be kept on a personal basis. It must be kept on an individual, and a voluntary, basis. It must always be conducted on the basis o f pu blic service and with an under standing o f the needs and desires o f the public. I f dentistry, m edicine’ s allied profes sion, wishes to explore the possibilities o f a prepaym ent dental care program , there is a wealth o f experience, gleaned by m ed icine, available fo r guidance. Dentistry can follow the pathway which medicine has had to cut through the unblazed jungles o f inexperience. Indeed, dentist ry m ay even be saved from making some o f m edicine’s outlandish excursions into impassable territory. T h e outlandishness o f some o f these excursions is obvious now that broader, straighter roads have been established; therefore, it is hoped that dentistry will be tolerant when it follows in m edicine’s tracks. Should dentistry find a place in its practice fo r a prepayment plan, and I see no reason why it should not, members o f the dental profession must realize that the public wants such a plan— provided it is just and fair and efficient— and that it can be m ade just and fair and efficient by the application o f hard work and sound principles. 2299 N ineteenth A ven u e
D E N T A L H E A L T H C A R E P R O G R A M S F O R T H E H A N D IC A P P E D C H IL D
C. R . Castaldi, D .D .S ., M .S .D ., Indianapolis
T h e introduction o f the antibiotics and the developm ent o f new surgical technics, especially within the last decade, have greatly increased life expectancy. These and many other recent advances in the health sciences have had their most p ro fou n d effect on the lives o f children, especially those with severely handi capping conditions. Formerly, the dental health problem s o f such children were o f little o r no con
cern because their life expectancy was short. W ith m any o f them now living com paratively norm al lives, however, the dental profession is faced with the new responsibility o f providing necessary den tal services fo r these children. This re sponsibility should not be carried solely by those w h o have a special interest in
S u p e r v is o r , R ile y M e d ic a l C e n te r.
D e n ta l
C lin ic ,
In d ia n a
U n iv e rs it y
T H E IM P A C T O F G R O U P H E A L T H C A R E P R O G R A M S O N M E D IC A L P R A C T IC E
Francis T . H od ges, M .D ., San Francisco
W h at w ould happen to your presumably com fortable and stable econom y were you suddenly to be confronted with a long, serious, disabling illness, plus a bill for that illness o f over five thousand d ol lars? O n m e the effect w ould be p ro found. M y incom e w ould stop ; my over head w ould continue, at least until hasty stop-loss controls could partially stem it; and a flood o f m edical bills w ould wash away what small reserves I had been able to put aside. In brief, I w ould be in trouble. C on fined to a hospital bed, view ing my m ounting bills with m uch the same ap prehension o f a taxicab passenger w ait ing for the passage o f a slow hundred-car freight train. I w ould be changed sud denly from a secure and solvent m an into an anxious student o f bankruptcy stat utes. A nd , were I to be discharged from the hospital com pletely cured, m y fam ily could, conceivably, be faced with a far graver financial crisis than w ou ld b e en gendered by my death, since I carry an adequate life insurance program . It is usually the hardship case o f the modestly paid employee— the teamster or the waitress— we hear o f, and rightfully so. T h ere is no one, however, im m une to the costly drains o f illness, although m any o f us enjoy degrees o f security far beyond those o f the workers mentioned. M u ch is heard today o f the staggering costs o f illness. T h ey are high, and fo r a num ber o f reasons. In an inflationary econom y, health services and goods keep pace with the general rise in prices, al though ratios vary. Physicians’ fees, for exam ple, have not kept pace with labor costs, the price o f milk or new cars. T he physician’s share o f the health dollar is smaller than it was a generation ago, whereas the dental profession is reported as receiving a somewhat larger segment.
T h e hospitals’ share has greatly increased, and the increase has been in direct ratio to the increase in labor costs. T h e increasing costs o f illness, even though they m ay not have kept pace with inflation, have helped to focus the im pact o f sickness on the pocketbook. It is little solace to the m an on a limited budget to be told that costly m odern m edical p ro cedures have reduced the incidence and severity o f certain diseases making them less costly in toto than they were a gen eration ago. It is only partial com fort to know that today’s shorter hospital stay is often cheaper than hospital confine m ent in the days o f less effectual treat ment. T o d a y ’s worker is living in today’s econom y, w hich is a credit econom y. T o an ever larger degree, he is buying today what he will use today, and pay fo r to m orrow . W hether he buys a vacuum cleaner, a car, a h om e, or a trip to Eu rope, he can make a token dow n pay ment and enjoy a m ultitude o f goods and services long before he has a certificate o f ownership. Credit econom y has been shaping m edical and dental practices for several years past. This shaping, which began almost im perceptibly, has recently reached alarming proportions. I cannot alter this trend, neither can you, nor can our co m bined professions. In a dem ocracy, seg ments o f the populace d o not divert the tide. T h e y swim with it, or are swept aside by it. T h e professional man w h o gives m ore than passing attention to the alarm ing possibilities in the present situation must realize that he is part o f it, and that he must adjust to cop e with it. In the past, when living was simpler,
President, California Physicians Service.
SIXTH N A TIO N A L DENTAL H EALTH C O N F E R E N C E . . . VO LUM E 52, JU N E 1956 • 665
and when all but a few citizens operated on a cash basis, most people depended for security on a healthy, easily liquefied reserve. T h e strength o f the fam ily unit was the security o f that unit. Family se curity depended on the incom e o f the breadwinner and the nest egg saved from his earnings. T hen cam e life insurance, by w hich a m an w ithout that nest egg cou ld guarantee his fam ily some security from the day o f his first prem ium pay ment. Contingent on the regular pay ments o f a fixed prem ium , he was as sured that his w ife and children would be spared m uch o f the econ om ic tragedy caused by his death. From its inception life insurance has had its critics, some o f w hom protest that it is im m oral to provide protection fo r dependents on an installment basis and that this unsound principle will underm ine the character of the subscribers. L ife insurance is a part o f credit econom y, although at first glance it might appear to be the opposite. T h e owner o f a life insurance policy im m e diately becom es possessed o f that for which he will pay through the years. Throu gh that possession the intangible security o f today loom s larger even than the tangible, inevitable, return o f tom or row. As the demands on the incom e dollar for rent, clothing, fo o d , life insurance, education and recreation becom e greater, the incom e earner grows increasingly concerned over the rising costs o f illness and over the decreasing segment o f his dollar budgeted for those costs. Eating is a necessity, so too is clothing and shelter. Protection must be provided his family in case o f death— hence the need fo r life insurance. T h e fam ily must have ciga rettes and an occasional m ovie ticket, for life w ould be drab indeed w ithout some m inor pleasures. Because o f these chronic and urgent demands on the fam ily incom e, many wage earners fail to provide for illness. T hey rationalize this failure by arguing that they are not going to get sick. Other
people becom e ill. Careless people have accidents. Should some little illness o c cur, a visit to the physician will cost but five dollars and that can be paid out o f pocket w ithout affecting the fam ily budget. Stark reality, however, is chang ing the thinking and planning o f the m ore thoughtful breadwinners, and their concern is spreading to m ore people. U n ion agents must act daily in behalf o f some o f their members because o f illness or accident. M ost employers endeavor to offer some type o f m edical prepayment coverage. A n d although the individual worker m ay not be confronted with a $5,000 bill fo r illness, he knows someone whose future is m ortgaged because o f such a catastrophe. Credit econom y did not generate the idea o f sickness insurance, although ex tended credit plans accelerated the ac ceptance o f the idea and the desire for it. Devices fo r advance payment against the costs o f disease and injury, however, are not new. L o n g before Bismarck, thought by many to be the pathfinder o f such plans, m an strove to find a solution to the problem o f m eeting m edical cost. T h e efforts in this regard o f K u n g Fu T se o f ancient China may be cited. T h e m ost potent and oldest o f the se rious efforts o f the m edical profession to solve the econom ies o f the m edical-careseeking pu blic m ay be found in the State o f W ashington, where excellent bureaus, some o f w hich are n ow Blue Shield plans, arose because a captive m edical profes sion shook o ff the tyranny of an a ll-pow erful lum ber industry. Before the advent o f the bureaus, a large part o f the profes sion in that state was shackled by the lum ber com panies which em ployed phy sicians and dictated the conditions under which treatment cou ld be rendered em ployees and their families. T he Blue Shield m ovem ent was initi ated before W orld W ar II by the m edical profession through the association o f a num ber o f the nation’s service organiza tions fo r the purpose o f aiding the pub-
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lie to finance — through prepayment m ethods— the costs o f sickness and acci dents. A lthough the Blue Shield plan was inaugurated presumably to avert the trend toward socialism in m edicine, it sometimes has been accused o f being so cialistic itself. Blue Shield, follow ing the lead o f its sister organization, Blue Gross, has grown beyond all expectations. Thirty million Am ericans now benefit from its provi sions. M any o f these beneficiaries would be in sore financial straits if they had to defray the costs o f m edical services on a postpayment basis. As the present size, and the potentials o f prepayment m edical plans were not envisaged by the originators o f the plan, neither was its comprehensive coverage foreseen. Blue Shield’s original contract— a limited, neat, safe, little package— p ro vided the lower incom e earner, in a broadly based group, a strictly controlled list o f surgical benefits. Cautious planners interspersed the benefits with protective limitations, abuse controls and overuse deterrents. Individual coverage was haz ardous. M ed ical benefits were the excep tion. Fine print served to sober the sub scriber w ho had bought in g ood faith and enthusiasm. Regrettably, he becam e sus picious o f the proposal after examining the offerings o f com pletely sincere and idealistic leaders o f the m edical profes sion. T hose leaders soon learned that the subscriber was interested in far m ore comprehensive coverage than the original plan offered. H e did not desire islets o f protection in a vast sea o f risks. H e was even willing, in a num ber o f instances, to sacrifice the traditional free choice o f physician in order to purchase fuller p ro tection for himself and his family. C er tain closed-panel types o f m edical service organizations operate on this basis, al though where benefits are adequate, the Am erican citizen greatly prefers to choose his doctor. Programs for the prepayment o f sick
ness costs have grow n to such an extent that a majority o f the pu blic now is covered to some degree, in one form or another. M ore than fifty m illion A m eri cans are subscribers to the hospital bene fits o f the m any Blue Cross plans. M ore than thirty m illion Blue Shield bene ficiaries are protected by the 76 con stituent plans fo r physicians’ services. T h e com m ercial insurance companies underwrite many millions more in a great variety o f contracts. Closed-panel plans em brace approxim ately two m illion more. Irrespective o f the original reasons for offering the public facilities for the pre payment o f m edical costs, the people o f A m erica have shown that they like to pay their ow n way and that they are ready and willing to take advantage o f the facil ities offered. A lthough today’s credit econom y may have been a factor in stim ulating the vast growth o f prepayment m edical plans, this m ethod o f financingsuch costs stands on its ow n merits as good business. O n e o f the m ost popular types o f pre payment m edical care contracts now be ing offered provides both the Blue Shield and the Blue Cross services, in which varying degrees o f medical and surgical coverage are offered by Blue Shield, in the name o f its sponsoring physicians, and a fairly uniform type o f hospital coverage is offered by Blue Cross for the hospital organizations. By and large, these are service type plans, which guarantee cer tain m edical and hospital services, rather than fixed and limited indemnification. These are plans in which there is partici pation by the hospital and the medical professions, w ho, alone, can render the services guaranteed under the terms o f the contract. N o insurance com pany can promise these services, nor can it promise free choice o f hospital and physician. No insurance com pany can guarantee more than dollar paym ent on a fixed scale in accordance with a table o f benefits. T h e effect on m edical practice o f co m mercial insurance com panies’ health and
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accident contracts will n ot be discussed here. Such contracts are agreements be tween the negotiating com panies and the beneficiaries. T h ey involve the acceptance o f no responsibility by the hospitals or the physicians, and bind them in n o way. Physicians and hospitals are free to bill the patients in accordance with their usual fees, and they may or may n ot co n sider the reimbursement by the com pany as full paym ent fo r services rendered. T h e com pany is in the field for the pur pose o f making a profit, and usually does well. It is significant that Blue Shield-Blue Cross plans are operated on a not-forprofit basis. In fact, the actuaries and managers o f such plans are censured if profits are made. T h e im pact w hich this gigantic Blue Shield-Blue Cross dual facility has had on the practice o f m edicine was never visualized by . the originators o f the p ro gram. T h e original purpose o f the program was to salvage from the charity clinics, and m edical pauperism, the low wage earner, by enabling him to budget a few pennies daily while well, with w hich to defray the cost o f sickness sustained later. T h e low in com e earner was protected under this plan but his neighbor in a higher incom e bracket was not. H e too desired the same protection. T od a y, Blue Shield subscribers em brace a very large portion o f A m erica’s m iddle class p op u lation, including m any executives who insist on their right to the same benefits as their employees. Consequently the num ber o f participants covered is m uch greater than originally anticipated. In fact, in the State o f Delaware, 70 per cent o f the populace is covered. In M ichigan, over 50 per cent h old Blue Shield-Blue Cross cards. T h e sheer weight o f numbers cannot but affect the practice o f medicine in a num ber o f ways. A nother interesting developm ent has been the trend tow ard greater com pre hensiveness o f coverage w hich has re
sulted from the public’s desire fo r greater degrees o f security. M ost early Blue Shield plans and com m ercial insurance policies offered only surgical coverage. T od a y, a growing num ber o f plans allow hom e and office visits and other extended benefits. M edical coverage while hospi talized is almost universal now. Few o f the early Blue Shield plans p ro vided protection for dependents. W hen such protection was offered, benefits were sharply curtailed, in the belief that such coverage was actuarially unsound. This opinion has largely disappeared. T od a y most negotiators are certain to reject contracts w hich d o not include provisions for fam ily protection. Pioneering plans invariably offered only group contracts, as it was believed that only by spreading the risk over a large and well selected group cou ld some control over usage be maintained and soundness o f the program be assured. Subscription drives throw n open to all individuals w ould, it was predicted, result in a mass rush for contracts by the lame, the halt and the blind, fatally weighting the rolls o f the plan, while the young, robust and well w ould “ stay away in droves.” A few hopeful experimenters were not convinced that this w ould be the case, and they offered individual con tracts while their finance officers held their breath. T h e predicted cataclysm did not take place. Healthy, sound plans which provide individual contracts o p erate side by side with their group cou n terparts. T h e finance officers and the ac tuaries relaxed and went to work. N ot to stop leaks or to p lu g gaps but to plan lower prem ium rates and greater benefits. Individual contracts are now being o f fered by more and m ore Blue Shield plans. T h e am ount and the varied types o f coverage offered by today’s Blue Shield plans are in bold contrast to the sharply circum scribed coverage provided by the first o f such programs. Indigents, m igra tory workers, Am erican Indians, the el-
668 • T H E JO U R N A L O F TH E A M ERIC A N DENTAL A SSO C IA TIO N
derlv, college students, represent a few o f the groups that have proved to be natural subjects for the m odern flexible Blue Shield-Blue Gross contracts. A n d while the officers o f a Blue Shield-Blue Cross plan negotiate for coverage o f the employees o f a corner corset shop, or John D o e and his fam ily, they may simul taneously be negotiating a contract fo r a nation-w ide industry em ploying hundreds o f thousands o f workers. T h e m edical profession conceived and developed Blue Shield as a means by which the public could finance m edical and surgical costs easily and painlessly. In doing so, the profession voluntarily took u p on itself certain obligations and restrictions. It agreed to render specified services at fees within a restricted range. It accepted the responsibility fo r the suc cess o f the plan, its members underwrit ing losses that m ight occur. Frankly, the inauguration o f Blue Shield was an in novation for a profession known to be traditionally reactionary. Calamity h ow l ers within the profession forecast im m i nent disaster for all associated with the undertaking. T o be sure m edical practice is not the same as it once was, and prepayment o f m edical costs has aided in the change. But nothing is ever fixed in a changing world and all change is not necessarily for the worse. Let us examine some o f these changes. T h ere has tended to be a leveling o ff o f fees. T here is m ore frankness regarding m edical charges w hich form erly, fo r some reason, were a closely and jealously guarded professional secret. M odern m ed icine is tending to establish standard fees for standard services— a condition ac credited by the establishment o f Blue Shield plans. In some comm unities the establishment o f Blue Shield and the co n com itant establishment o f standard fees has proved embarrassing; largely because the fee scale was too low. Blue Shield is not cut-rate m edicine. O n ce fee sched ules are established they becom e known
and are accepted by insurance co m panies, the public, and even courts, as standard. It is o f little avail to protest that they are m inim um fees, and that they are for low incom e people. In those areas in w hich Blue Shield plans set un reasonably low fees, resentment on the part o f the profession resulted and at best only grudging support was given by physicians through a sense o f duty. In those communities in w hich the Blue Shield schedule o f fees were in some a c cord with the usual fees fo r the com m u nity, enthusiastic endorsement by the participating physicians resulted. Prepayment m edical plans are bring ing about another interesting develop ment— they are causing charity patients to disappear. In some communities there aren’t enough charity patients to serve as teaching material fo r m edical students. Form er charity patients are now proudly paying private patients in the waiting rooms o f private practitioners. Blue Shield and insurance com panies have enabled them to salvage their self-respect and to provide a substantial portion o f their physician’s incomes. These same pa tients are seeing, on a far m ore satisfac tory basis, the physicians o f their choice— often the same physicians w ho formerly served them without recompense. I f the econ om ic lift o f a five cent an hour raise to a group o f industrial w ork ers is measurable, a similar econom ic benefit to a com m unity must result from the establishment o f a Blue Shield-Blue Cross prepaym ent plan. Even in communities in which Blue Shield payments to physicians fall below the norm , many physicians agree that the certainty o f Blue Shield payments for services rendered beneficiaries o f the plan m ore than compensates fo r losses o cca sioned by bad accounts and ignored bills. Early planners of m edical and hospi tal prepayment programs wanted to re m ove the barriers that existed between the patient and his hospital and his phy sician and to establish an easily accessi
SIXTH N ATIO N AL DENTAL HEALTH C O N F ER EN C E . . . VO LUM E 52, JU N E 1956 • 669
ble road between them. In some com m u nities they actually constructed a high speed four-lane super-highway, devoid o f any restrictions. Some o f those early highways or prepaym ent plans were al most destroyed by the heavy traffic. Phy sicians were confronted with demands o f patients to be put in the hospital “ b e cause I need a rest,” or “ m y w ife’ s away for a while and I d on ’t cook. Besides you can run a lot o f tests while I ’m in. D o n ’ t spare the expense, doctor, I have Blue Cross.” O r “ d on ’t order the x-rays while I ’m up and about— I ’d have to pay for them. Put m e in the hospital, so they’ll be free.” “ These are m y rights. I ’ve paid for them .” It took physicians and p a tients, alike, a long time to learn that in telligent, not prodigal, use o f Blue Shield Blue Cross plans, meant greater benefits, broader service and m ore realistic fees. Plans in some states have failed because they were considered fair game fo r raids and b lood letting, rather than a valuable asset to patient, hospital and physician. Prepayment health insurance has placed a third party between the patient and the physician. But that party is not a governm ent employee. In the case o f Blue Shield, it is the physician’s ow n rep resentative, whose purpose is to aid, not hinder, the rendering o f m edical service. Blue Shield plans require some paper work, but less than is required o f insur ance reports. Blue Shield plans also pre sent certain o f the annoyances that occur when som eone outside the physician’s o f fice is concerned with the affairs within it. But such annoyances are not m ajor. M ost significant are the public relation benefits that have accrued to medicine as the result o f Blue Shield programs. Justly or not, m edicine fell into some d e gree o f disfavor with the public a few years ago. T h e m edical profession was supposed to be opposed to everything, in favor o f nothing, and reluctant to take leadership in the establishment o f m edi cal care program s fo r Am erican families. T he m edical profession answered by es
tablishing Blue Shield. T h e pu blic then began to realize that its physicians were concerned over their health problem s rather than with their pocketbooks. T h e advent and growth o f this physician-sponsored facility mark a great turning point in m edicine’s community-mindedness. T h e acceptance and endorsement o f Blue Shield by millions o f persons have not been lost on the m edical profession. T he shape and character o f m edical practice have been altered because o f that accept ance. M ost Blue Shield plans are o f the serv ice type. Service is the one m ajor item that an organization sponsored by phy sicians can offer. C om m ercial insurance companies can m atch all other benefits with the exception o f benefits resulting from nonprofit operation. A m edical serv ice plan has some o f the features o f a dem ocracy in w hich there is governm ent with the consent o f the governed. T he success o f such a plan depends on the support o f its physicians— those w h o ren der the services. A Blue Shield plan must have the hearty endorsement o f its m em ber physicians. It must provide w ide and realistic protection to its subscribers. It must guarantee realistic payments to par ticipating physicians, and its administra tion must interfere as little as possible in the normal practice o f medicine. Physicians have com e to accept prepay m ent as a reality, and the overwhelm ing majority o f the profession endorse it. W here there has been opposition to the service type o f prepayment m edical plan, the objection usually has been caused by the cut-rate or bargain basement type o f contract offered. T h e laborer is w orthy of his hire, and g ood m edical service co m mands a fair fee. Prepayment plans are established to facilitate payment fo r m ed ical service, not to cheapen its quality. C ontrol o f m edical practice must remain always in the hands o f the physicians and the establishment o f efficient d octor-spon sored, service-type Blue Shield plans in all Am erican comm unities will strengthen
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that control. W ary members o f the p ro fession w ho visualized a prepayment health plan as a bureaucracy which w ould stifle free m edical practice now recognize that it is an instrument by w hich they m ay retain control o f m edical practice, and preserve the freedom s w h ich are so essential in good m edical care. T h e ready acceptance by the public o f the offerings o f the m edical and hospital professions suggests that thus far the sur face has been little m ore than scratched. W ith a perfectly straight face, a form er Blue Shield executive has set up business in Southern California to underwrite prepayment veterinarian service for the domestic pets in that area. T hose who claim that m edicine, in establishing Blue Shield plans, has unlatched Pandora’s b ox must be shown that actually m edi cine has rubbed A laddin ’s lam p, and that an obedient genie awaits the wishes o f the profession to serve the pu blic m ore effectively. T o date, the genie o f the lam p has done little m ore than idly flex his muscles. His full strength can only be im agined. Not endow ed with selfish interests nor ulte rior motives, he exists to serve his masters. W hether he succeeds or fails depends on his directors. T h e practice o f m edicine must always
be kept on a personal basis. It must be kept on an individual, and a voluntary, basis. It must always be conducted on the basis o f pu blic service and with an under standing o f the needs and desires o f the public. I f dentistry, m edicine’ s allied profes sion, wishes to explore the possibilities o f a prepaym ent dental care program , there is a wealth o f experience, gleaned by m ed icine, available fo r guidance. Dentistry can follow the pathway which medicine has had to cut through the unblazed jungles o f inexperience. Indeed, dentist ry m ay even be saved from making some o f m edicine’s outlandish excursions into impassable territory. T h e outlandishness o f some o f these excursions is obvious now that broader, straighter roads have been established; therefore, it is hoped that dentistry will be tolerant when it follows in m edicine’s tracks. Should dentistry find a place in its practice fo r a prepayment plan, and I see no reason why it should not, members o f the dental profession must realize that the public wants such a plan— provided it is just and fair and efficient— and that it can be m ade just and fair and efficient by the application o f hard work and sound principles. 2299 N ineteenth A ven u e
D E N T A L H E A L T H C A R E P R O G R A M S F O R T H E H A N D IC A P P E D C H IL D
C. R . Castaldi, D .D .S ., M .S .D ., Indianapolis
T h e introduction o f the antibiotics and the developm ent o f new surgical technics, especially within the last decade, have greatly increased life expectancy. These and many other recent advances in the health sciences have had their most p ro fou n d effect on the lives o f children, especially those with severely handi capping conditions. Formerly, the dental health problem s o f such children were o f little o r no con
cern because their life expectancy was short. W ith m any o f them now living com paratively norm al lives, however, the dental profession is faced with the new responsibility o f providing necessary den tal services fo r these children. This re sponsibility should not be carried solely by those w h o have a special interest in
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