A COUNTRY DOCTOR'S REFLECTIONS ON MEDICAL ECONOMICS

...Not the least of these has been the increasing pressure pushing the medical profession toward socialization...

...I have tried to discuss some of the basic economic situations that have developed in the field of present day medical practices...

...But if we are going to set it at a level higher than a free economy can support, then obviously subsidization is necessary...

...By thus limiting risks, private enterprise has been able to sell limited insurance at a very, reasonable price...

...If this is true, organized medicine will some day be faced with the clear choice of either accepting mediocre standards of practice in order that private enterprise might survive, or of maintaining the traditional highest possible standard, even though it would mean a maximum amount of government participation...

...Even though the costs are high, Americans will continue to demand these services whether they can pay for them or not...

...Clinic...

...This, then, brings up the delicate question of subsidizing medical students, which is merely a counterpart to the question of subsidizing medical schools and which would lead inevitably and logically to subsidized medical practice...

...Thus, it has been authoritatively estimated that a cash outlay of $44,000 is involved in training a doctor through four years of premedical work, four years of medical school, and four years of postgraduate work...

...before the present inflationary spiral, the cost of training a single medical student was estimated at $13,356 for the four year course...

...2. Our increasing population— particularly in the old age group...

...This threat has given major impetus to the "serious shortage of doctors" school of thought...

...If he is wealthy, the chances are that he will be something less than willing to put in the long tedious years of training that are required to become a doctor...

...It is futile to talk about a "doctor shortage" without first defining the standard of practice involved...

...There is no argument over the principle, but there is bitter controversy over the degree of its application...

...The internship year is still nonproductive financially, although it is not as costly as the other years, because usually the intern is furnished his room, board, and laundry, and, occasionally, a small stipend...

...But a young man with no financial resources is almost hopelessly lost...

...It is interesting to note that even the most conservative elements in organized medicine are not demanding less government participation...

...This sort of thinking leads to endless argument...

...At any rate, it is an admirable start...

...It requires not only building of costly schools, hospitals, and laboratories, but also the hiring of highly trained teachers in such numbers that the medical student can receive more individual training than a student in any other field...

...While this was particularly true up until ten years ago, the last decade has brought about a definite change...

...Only about 25% of this is contributed by the state...

...We must realize that even in this bountiful land, we still have extremes in standards of practice...

...But is it enough...

...The supply of medical service, unlike the demand, can be accurately measured...

...Under the presently favorable economic circumstances, he can meet the situation in proportion to his willingness and ability to work...

...We must understand that social forces stem from human needs, while economic forces stem from human means...

...He would be placed where his services were most needed and he would do his work, not in competition for money, but in competition for excellence—perhaps...

...Eventually, he finds himself doing mostly minor medicine, first aid, and an occasional home delivery...

...If the doctor elects to get further training and goes into a three year, or longer, residency, he still does not make enough money to keep alive and must go further into debt each year...

...This is not an encouraging picture for the prospective medical student...

...Indeed, the American Medical Association has recently tried to halt the trend toward government financing by forthrightly offering $500,000 to the medical schools to tide them over...

...As the retailer of medical service, the private practitioner is faced with the economic problems common to all business men...

...We Americans have developed a desire for the luxurious as compared with the adequate...

...Medical education is expensive— by far the most expensive educational procedure in our educational system today...

...Whether it will remain possible for private enterprise to carry on in time of depression remains to be seen...

...II This is only half the picture...

...Profit is a precarious thing...

...It seems to me that it is not only unfair, but socially unwise, to close the doors of the medical schools to well-qualified and willing students, merely because they have no private financial means...

...2. The doctors engaged in active practice...

...The point could easily be reached where the practice of medicine as a private enterprise would become an economic impossibility...

...In addition to this, there is always the question of postgraduate training after the internship...

...3. The private hospitals...

...Tuition money from the student averaged about $2,000 over this period, leaving the school to raise over $11,000 from other sources...

...He studied medicine at Wisconsin and Harvard, served his internship at the Cleveland City Hospital, filled a one-year appointment as medical fellow at the Mayo Clinic, and then in 1941 became associated with the Monroe (Wis...

...Certain weaknesses have become apparent even in this, our day of greatest prosperity...

...On the other end of the scale, we have the large university and private clinics with all the means of modern medicine available...

...This may, in a sense, represent what may be called the "luxury practice," but one must never forget that what is considered a luxury today may be considered a necessity tomorrow...

...And if he does go on his own, he is reminded at every turn that he is doing work of a lesser standard than he was taught to do...

...Medical schools do not train men for this type of general practice...

...And each increase in cost tends to weaken the position of private enterprise...

...This has been called "The American Way" by organized medicine...

...Hospitals limit him to minor practice, and even the townspeople often bypass him when they consider themselves confronted with a major problem...

...Now the law of demand and supply works best in a free market for a free commodity...

...The demand for medical service is highly variable because of the "human element" that unpredictably mixes true medical needs with psychological desires...

...If he has barely enough financial resources to scrape through the training he wants, he is faced with the specter of the starvation years in practice, along with further expenditures for equipment and overhead that will have to be borne even in the unproductive years...

...Rather, they tend to emphasize that the isolated general practitioner is a jack of all trades, but a master of none...

...The other half has to do with the medical students themselves who must finance their share of their medical education...

...But there is also the infinitely elastic demand for medical care in the non-serious diseases such as the common cold, psychosomatic states, etc...

...He has to consider his costs, the investment in training, his daily overhead, and his provision for the future...

...With the present tense world situation, and the rapid re-expansion of our armed forces (along with the threat of a possible atomic war), the potential demand for medical service threatens to rise to a fantastic level...

...Obviously, either one or both could bring him economic disaster...

...So far, organized medicine has successfully resisted the more radical steps such as compulsory health insurance, but the basic social and economic pressures are still very much with us...

...Yet it is important that medical schools emphasize this part of their responsibility to society almost as much as they emphasize teaching...

...Many city governments have gone into the hospital building programs and a few private organizations have done so too, particularly the Catholic Orders...

...It is here that the demand may vary all the way from the adequate to the maximum...

...These policies do not cover the unlimited risk of catastrophic illness, nor are they designed to be of much help to the aged and chronically ill...

...But there is no denying the fact that supply ran behind demand...

...But this is just a drop in the bucket, since in 1948 there was a total deficit in the medical schools in the country of close to $10,000,-000...

...There has developed another struggle between those in the profession who would look to the federal government for financial aid, and between those who insist that the government should have no more part in the training of doctors than it has at present...

...If we take a minimum basic figure of $1,500 a year that the student requires for tuition and living expenses, he will have invested a minimum of $9,000 in training by the time he gets his degree...

...The most difficult part of the problem, of course, is to establish the standard of medical practice, which is influenced by every advance in scientific knowledge...

...They must find enough money not only to pay for their tuition, but also to pay for living expenses while they study...

...But we must understand this insurance for what it actually is...

...The postgraduate student, again, could be picked, not from those who could afford it, but from those who are best qualified to use the additional training...

...Without going into detail on the other two points, I should point out that the care of the increasing number of aged people in our country is far more a social and nursing problem than a medical one...

...The terms of measurement are manpower and equipment...

...Like all large institutions, they must have a definite percentage of their beds filled with patients before they can meet their overhead...

...Is it any wonder that this type of life holds very little attraction for the young doctor...

...Like any other commodity, medical service is basically regulated by the law of demand and supply...

...IV Over a period of years, hospitals have been notoriously poor financial investments from the ordinary viewpoint of the private enterpriser...

...We simply cannot think of modern medical practice in terms of the 1915 standards any more than we can think of modern transportation in terms of the Model T Ford...

...Hence, the higher the standard, the greater the pressure for increasing socialization of medical practice...

...to become a doctor...

...These groups are: 1. The medical schools along with their teaching hospitals and students...

...During the past ten years, there has been another demand for medical services that was largely unforeseen in the early thirties...

...With the exception of 30 months of wartime naval service in the South Pacific he has practiced continuously in Monroe (population 6,500), which lies in the heart of Wisconsin's richest farmland...

...But it is a viewpoint that must be considered...

...But now the costs of medical education have increased to such an extent that even tax money and social contributions are no longer adequate to maintain the medical schools at their present level, to say nothing of permitting expansion...

...And to go a step further, we have the standards of the armed forces which require six doctors for every 1,000 men, about four times the average doctor-patient ratio existing in civilian population...

...To put it more specifically, we must first determine the standard of medical practice that will satisfy human needs...

...We cannot predict what will happen in time of depression, but this much appears obvious: The closer we come to the highest standards of practice and its maximum distribution, the harder it will be for private enterprise to survive...

...Then we must balance this with the economic means available...

...This is a relaDR...

...However, most medical schools are requiring three years of premedical work instead of two, and many are even insisting that four years of premedical work should be taken before entering medical training...

...III Just where are we going to set our standards...

...Thus Americans have become acutely aware of the importance of specialists, hospitals, laboratory procedures, and new drugs in the modern practice of medicine, and they have come to regard them, more or less, as necessities...

...But in order to understand how this medical service becomes available, it is vital to consider the inter-related production and distribution problems of three different groups...

...It is plain that finances will have to come from some source other than the American Medical Association if the schools are to continue their present standard of teaching...

...As far as medical practice is concerned, there is a "controlled" market wherever the government participates...

...There is, of course, the statistically predictable portion of practice having to do with births, deaths, and known incidences of the major diseases...

...Until we can properly assay and balance these two forces, all our controversies over socialized medicine will remain meaningless...

...It is possible to go through pre-medical school, medical school, and an internship in seven years...

...Even as basic economics is the science of wealth, its production and distribution, so the field of medical economics is concerned with the science of a specific type of wealth, namely, medical service...

...they are rather demanding that it increase no more...

...As far as the threat of atomic war is concerned, it would seem that other counter measures are of vastly greater importance than increasing the number of doctors...

...Even though society contributes more than $11,000 toward the training of each student, the student, him" self, must furnish an even greater amount in order to live, pay his tuition, and pursue his studies through his premedical and medical school years...

...Suppose we stop long enough to define medical economics...

...There is one thing more— the field of general practice must be well defined...

...These organizations are faced with the ever increasing cost of maintenance and equipment, and even though they are for the most part considered nonprofit and are, therefore, tax-exempt, they still have the same basic problem of overhead as any organization run for profit...

...But the demand has been created, and if at any time private enterprise falters, the transition to government insurance will be a simple matter...

...This may run from three to five years...

...Yet for reasons which we shall presently discuss, this relatively free market is definitely tied to the "controlled" market...

...In 1948...

...LESLIE G. KINDSCHI has studied economics as well as medicine...

...Hospital insurance and health insurance have played increasingly important roles in the past ten years...

...Moreover, medical schools must maintain a large research program, which is also extremely expensive...

...There is, for example, the heroic figure of the general practitioner in the poor and isolated area who must practice his medicine largely from his little black bag without benefit of laboratory, x-ray, or readily available hospital facilities...

...The dearth of physicians in the small community is an inevitable development of our times...

...This difference is actually society's contribution, and comes from taxes or private gifts...

...There has been a marked shortage of hospital beds, and most institutions have been able to pay their way very well, as well as to go ahead with plans for expansion...

...The standard is rising, and, unfortunately, so are the costs...

...Rather, the schools and hospitals must train men for this type of practice, and the communities must give them the tools they need, as well as the economic support...

...tively free market in which the law of demand and supply can operate...

...In a free economy, the medical standard is automatically set by the economic factors involved...

...He would not have to worry about his overhead, his net income, or his retirement, and from a professional standpoint, this would seem ideal...

...And it is here that the amount of money in the consumer's pocketbook can in large measure regulate the size of the demand for medical service...

...This demand has come from the armed services and the Veterans Administration hospitals...

...The term "socialized medicine" has acquired so many shades of meaning that it has all but lost its rhetorical usefulness...

...Under these circumstances, the general practitioner will again assume his rightful place in our society...

...The only genuinely important argument is the first...

...As a principle, this has long been accepted, as evidenced by the tax-supported medical schools, hospitals, and public health services...

...But there still remains a large field of private practice in which doctors can offer their services to the consumer for a price...

...Nor is this the entire picture, since each year the doctor spends in training, he is sacrificing income that might be his if he were working at another job...

...Private enterprise can survive in the future only as long as it can meet the standard with low cost for the consumer and • satisfactory profit for itself...

...The student is trained by specialists rather than by general men of rich experience, and, consequently, lacks the confidence necessary to go on his own...

...When the first impact came during World War II, it was met in stride and adjustments were made wherever necessary to provide for adequate medical services to both the armed forces and civilians...

...Under such a program, the medical schools would pick their students without regard to their financial resources, and the student could devote full time to his medical studies...

...The wide acceptance of the insurance principle in the field of medical care is, I believe, significant...

...So, while it is possible'for a man to start in premedical school and finish his internship in a period of seven years, many men have spent from twelve to fifteen years in training before entering practice...

...Thus, voluntary insurance may in reality be paving the way for government insurance...

...And this brings us immediately to the question, "Are there enough, too few, or too many doctors...

...Of course, the finished trainee would not be a free agent...

...I believe that no one will dispute either the desirability or necessity for this governmental participation...

...He majored in economics at the University of Wisconsin and then worked in his father's leather firm before deciding...

...Most of the arguments offered in proof of the doctor shortage can be classified in three categories: 1. The dearth of physicians in small communities...

...Expansion plans, however, in the past four years have been much more expensive than they had ever been before...

...But what would happen if the demand for medical services were to decline, or if the number of doctors were to increase...

...3. The threat of atomic war...

...Leslie G. Kindschi THE PAST 20 years have set in motion many deep-seated forces influencing the basic structure of American civilization...

...But under any circumstances we must define it in terms of government participation in medicine...

...The cost of hospital beds has risen from approximately $5,000 to $15,000 and up...

...Again, it all depends on the standard of medical care one chooses to set up...

...In the past, there have always been some students who have "worked their way through schoo" but the wisdom of this has always been open to question, since it lessens the energy they should be putting into their training, , and thereby reduces its value...

...To conceive of making the education of medical students a free enterprise project we have only to remember the pre-1910 diploma mills where emphasis was placed on profit rather than on the training of good doctors...

...Call this what you will—progress, improved standard of living, or plain extravagant foolishness — the fact remains...

...No entrepreneur in his right mind would consider this a good investment, so the funds for this hospital expansion have had to come from either government or social sources...

...Increasing the number of doctors and forcing the excess into rural areas is definitely not the solution to this problem...