THE FAILURE OF VOLUNTARY HEALTH INSURANCE

...Because insured members have had to pay about half of their surgical bills out of their own pockets, the United Auto Workers Union of Detroit has withdrawn from the Michigan Blue Shield...

...I feel restricted in the things I think I ought to do for my patients...

...It would be naive to expect the private insurance companies to sell complete health protection, for they could not then sell such a package to families with low incomes—at least a third of the population—unless the insurance companies received what they do not want: subsidies from the federal government...

...no extra charges to the consumer...

...Some of the plans, such as the St...

...While in medical school, and as intern and resident, the budding physician is brought up in a form of group practice, in constant stimulating association with experienced physicians, including specialists, and has full laboratory facilities available...

...If you are not too young, if you are not too old, if you can prove that you have no pre-existing defects, if you are white (when you live below the Mason-Dixon line), if you are fortunate enough to reside where there are doctors and hospitals, and if you have the money, you can secure, for a specified sum, specified cash payments to defray partially the" costs of some illnesses...

...Blue Shield Plans When Blue Shield joined Blue Cross about 15 years ago under the auspices of state medical societies, in a crusade to save American medicine from compulsory national health insurance, many Americans eagerly embraced Blue Shield in the hope that they would then get all-inclusive health and medical services at a price they could afford...

...The physicians are typically paid on a salary or session basis rather than fees-for-service...

...Nor is all harmony within the Blue Shield movement...

...Health Insurance Plan (HIP) In 1947, prompted by the late Mayor Fiorello LaGuardia, and aided by private philanthropy and city government subsidies, a group of representative leaders from labor, business, government, and the medical profession organized a non-profit group prepaid insurance project known as HIP...

...Of 67 Blue Shield plans across the country, 56 furnished only in-hospital care for dependents, eight plans furnished medical care, and two provided care in hospitals, homes, and doctors' offices...

...companies tends to keep premiums at a minimum...

...You are not even assured of a general practitioner, let alone a specialist...

...The time is now rapidly approaching when the federal government, by default, will have no alternative but to dictate a national health plan for the future—unless the medical profession fulfills its responsibility of leadership...

...Robert Novy, one of the pioneers of the Michigan Blue Shield, warned his colleagues that "The people are getting tired of listening to the quantitative success of the Blue Shield...

...and emphasis on early disease detection and prevention...

...To claim that the consumers' plans are contrary to the principle of free enterprise is to throw dust in the eyes of the people...

...He is the author of "The Tired Child," a contributor to Abt's "System of Pediatrics," and the author of many articles—popular and professional—on clinical research in fatigue of children and heart diseases of children...

...Another advantage in group practice lies in the emphasis usually paid to the preventive aspect of medicine and the early detection of disease...

...there is no one with whom to discuss my cases informally...

...Obviously the commercial companies make it easier for many millions of people to meet some of their hospital and medical expenses...

...The progress of the consumer-sponsored plans has been slow...

...The bread-and-butter medical needs of the whole family are rarely included...

...A 1957 survey by the New York State Committee for the Aged revealed that the sickness and injury rate among those over 65 years is the highest of any age group but that 66 per cent of these older persons have no health insurance protection...

...The influence of organized labor in the field of medical economics is attested to by the AMA resolution ". . . that local medical societies should refrain from applying punitive measures against labor health programs before making every effort to obtain the facts...

...They finance health education programs over radio and TV...

...Of the total number insured only about five per cent have comprehensive medical services and full financial protection for themselves and their families...

...The medical societies oppose these new experiments on specious grounds...

...that keen competition among hundreds of insurance DR...

...The pious claim that they are "social institutions interested in the welfare of the public" has a false ring...

...Among the new experiments along these lines, the following are making significant impacts upon the health of the nation, albeit still a small minority of the population: Labor Plans Since World War II, organized labor has become increasingly dissatisfied with the crumb benefits of the available health resources...

...Putting our total health into the hands of the commercial insurance companies is like setting the fox to watch over the chickens...

...Their primary purpose is to do what the commercial and Blue Shield plans fail to do: provide comprehensive and unlimited health care and medical services to American families regardless of race or economic situation...

...Just as collective bargaining has been largely responsible for rising wage schedules, so has it established a floor for health benefits for large numbers of workers...

...The doctor or the hospital may or may not charge more than the fixed cash benefit...

...As rapidly as they can, they are pointing their sights towards group medical practice...

...what is necessary is to improve the scope and quality of coverage...

...A good many members of the families of union members are also protected by such plans...

...Consumer Sponsored Plans Fifty-four prepaid group health insurance plans, with an enrollment of about five million persons, have come together as active or associated members of the Group Health Federation of America...

...Significant is the fact that only between 28 to 33 per tent of the total civilian health bill (this includes fees to private physicians), was paid by voluntary insurance plans...

...Hospital insurance last year reimbursed the patient an average of 70 per cent of his bill, Blue Shield and commercial insurance took care of from 50 to 75 per cent of his surgical expenses and about 30 to 40 per cent of obstetrical fees...

...But year after year, even though the necessary funds and the required administrative setup were available, they were unable to get a medical staff to operate it...

...Have these lay-sponsored plans lowered the standards of medical practice...

...Commercial Plans The post-war expansion of commercial health insurance plans has been spectacular...

...Although a few state medical societies have accepted a plan in which the member doctors are obligated to accept the scale of fees, the majority permits the doctors to charge patients their regular fees...

...The rapid growth of voluntary health insurance plans attests to their popularity and their usefulness, but the goal towards which the people, the medical profession, and the government should strive is the highest quality medical service with full preventive care for all Americans, on terms which they can meet without financial hardship...

...Through all these media, these companies purport to be social institutions, claiming that "in an overwhelming proportion of cases the policies prevent ill-health from causing the individual or the family any financial hardship...

...Finally, in 1957, they erected a million dollar health center even though they still did not have the medical personnel...

...if you have any of the early signs of cancer don't procrastinate...

...Surely all the people, not just the favored minority, have a legal and moral right to the best health package medicine can offer...

...Their pose as social benefactors, therefore, has limited validity...

...Having earned my living for more than 40 years by the fee-for-service solo system and having received additional income for more than 10 years from the Blue Shield, I might think it natural to give extra good measure to the claims of the Blue Shield proponents...

...It cannot be said that labor is not giving the commercial and Blue Shield plans a fair trial, for in 1953 it paid into these plans about 60 per cent of all the premiums...

...and that the trend in policies is towards removing the few restrictions on benefits as fast as can be done without inviting abuse...

...It is a paradox that the medical graduate thus brought up on group practice is expected to adjust himself overnight to professional work on the solo system...

...Blue Shield differs from the commercial plans chiefly in that it is nonprofit, medically controlled, and pays the costs of accidents and illness on a fixed fee schedule...

...Thirty-seven per cent of these plans exclude infants under two months, the period of highest mortality...

...what is particularly bad is that coverages of most of our plans are as inadequate and as unrealistic as those of the commercial carriers...

...Other limitations and exclusions include quarantinable diseases, congenital and pre-existing defects...

...The commercial companies have sold 63 million policies for surgical cash benefits, Blue Shield 42 million, and the independents five million...

...First, to gain a proper perspective of the significance of the impressive number of Americans enjoying some degree of health insurance protection, the bare statistics must be understood in terms of the cash benefits and medical services the people actually receive...

...The figure of 123 million represents the number of prepaid hospital insurance policyholders with or without any additional health protection...

...They provide and pay for a large share of their education...

...In a number of states laws have been passed at the instigation of medical societies prohibiting or handicapping consumer sponsored plans...

...And, finally, the opponents of the independent plans try to frighten the potential buyer by labeling them "socialized medicine," which to the uninformed connotes "government medicine...

...It must accept the challenge of present-day medical economics...

...As one spokesman candidly admitted: "The primary interest of these industries in the health of the people is the same as any other private profit making business...

...MAX SEHAM " A merica's health problem would be largely resolved," predicted a recent president of the American Medical Association, when 90 million people are enrolled in voluntary health insurance plans...

...In other words 4.9 per cent offer no medical benefits, 91.7 per cent only in-hospital, and only 3.4 per cent furnish complete coverage...

...The 47 million non-insured include the neediest, the old, the medical indigents, widows, marginal farmers, some racial minority groups, migratory workers and their families, and a broad range of working-class families...

...the medical society determines the rate and fee structures and the members of the society are paid directly by the Blue Shield fund...

...An inherent defect of Blue Shield lies in the fact that members of the medical profession are both producers and recipients of the financial benefits...

...Unfortunately most of the benefits are restricted to cash indemnity, with fee-for-service schedules overemphasizing hospital care...

...Some of these plans are partly on a cash indemnity basis, but the goals of the main organization are to provide comprehensive medical service through group practice...

...But they have no provisions in their policies for physical check-ups or for other practical preventive measures...

...They claim that "these lay-sponsored plans are unethical, will lower the standards of medical care and that they are 'socialized medicine.' " Is it unethical for the people through their own efforts to try to obtain more and better health security...

...The people make it legally possible for doctors to earn a living...

...In a 1956 survey of Blue Shield benefits, Agnes Brewster of the Social Security Administration revealed some startling figures...

...At lower cost to the consumer, without lowering the income of the participating doctors, HIP has demonstrated that under such a system the quality of care and the extent of coverage is on a par with what the private physician gives to his private patient...

...comprehensive service instead of cash indemnity...

...Nor does the claim that the "trend in policies is towards removing the few remaining restrictions on benefits" jibe with the facts...

...However, collective bargaining, in addition to providing funds, has had a considerable effect in needling the employers, the proprietary insurance plans, and the 60 million non-union workers in this country...

...Despite the huge sums available for optimum health security, there is a great deal of bungling, waste, and inefficiency because each union prefers autonomy, and because of ill-informed and occasionally corrupt leadership...

...Group Health of Minneapolis, one of the oldest and largest of the independents, for 15 years considered building a health center...

...Its benefits are everybody's business...

...They also provide many hospitals and practitioners added income...

...The fear of professional ostracism, of course, deters many young physicians from associating with these groups...

...This organization has headquarters in Chicago, keeps its members informed of current activities in the field, and provides significant annual conferences...

...Even more significant is the fact that both consumer and doctor have discovered that they have the same problems and aims, and that there is no good reason for a cold war between them...

...With this goal in mind, suppose we look at the extent to which the predominant voluntary health insurance plans have closed the gap between the best that medical science has to offer and the services being received by the majority of the people...

...They comprise today only about nine per cent of the total volume of voluntary health insurance...

...But if the improvement and expansion of coverage during the past decade is a yardstick of what to expect for the future, one is not justified in predicting that either Blue Shield or the commercial plans, under the present system of fee-for-service, will ever provide the maximum possible health security to the maximum number of people at a minimum cost...

...Louis Labor Health Institute, under a union of transport workers, have demonstrated by successful operation the inadequacies of older and more popular types of health insurance plans...

...Inconsistencies and contradictions were unwittingly revealed in their testimony before the Senate Subcommittee on Labor and Public Welfare in 1954...

...Although most of these plans are still suffering growing pains, they are at least determined to seek health frontiers which are far beyond those of the widely advertised plans...

...It must give up the fixed notion that doctors are omniscient and that no other group is entitled to help in solving the complicated and urgent problems of the people's health...

...Among the many obstacles they have had to overcome has been the opposition of organized medicine...

...But something went wrong...

...A slowly growing number are on full-time salaries...

...A. J. Hayes, president of the International Association of Machinists, warned a group of medical leaders that "Blue Shield has become a benefit plan for the doctors, not for the people...

...Doctors do not own medicine...

...The two age groups against whom both the commercial and Blue Shield discriminate most are the aged and minor dependents...

...But by their own admission, and by their very nature, they do not and will not furnish comprehensive coverage for the majority of the people...

...The house of medicine must rebuild and modernize...

...After eleven years of operation HIP now provides health security to about a half million people through a medical staff of more than one thousand general practitioners and specialists...

...The fact is that one of the purposes of this consumers' grassroots movement is to make it unnecessary for the federal government to do what the people, through their own efforts, can do for themselves...

...Of this number the commercial insurance companies insure 66 million, Blue Cross 53 million, and the independent plans, which include labor and cooperative plans and the Health Insurance Plan of New York, four million...

...They will expand and improve benefits only to the point where business ceases to be profitable...

...You have no assurance of high quality medical care...

...The commercial and Blue Shield plans talk preventive medicine: "See your doctor periodically...

...On the contrary, most of these plans give the public more comprehensive protection than the commercial or Blue Shield plans...

...The typical plan in this group is sponsored and financially supported by the people who receive the service, with the common objective of securing the best health service and the maximum financial protection against sickness costs...

...As one of the "fringe benefits" gained in collective bargaining, the unions' accumulated health and welfare funds now serve about 12 million union members through some form of health insurance...

...Almost every kind of medical and surgical service is available in homes, doctors' offices, and hospitals...

...Through group practice they can bring together in a single center the best resources and facilities...

...The majority of the staff maintains private practice...

...Under the fee-for-service system and the rising costs of medical care, Blue Shield found itself in the paradoxical situation where "dictates of actuarial soundness run counter to the dictates of human needs...

...and if segments of the medical profession persist in profiting from the ill-health of the American workers, then we must and will turn to a system of national health insurance...

...AAAX SEHAM has engaged in the private practice of medicine for 45 years and has served as clinical professor of pediatrics at the University of Minnesota for more than a quarter of a century...

...Independent Plans Dissatisfied with the slow progress and disillusioned by the broken promises of politicians, a grass-roots non-profit people's movement has developed in about 100 communities with an enrollment of close to five million persons...

...In collaboration with the Committee for the Nation's Health, the research staff of AFL-CIO has collected a volume of factual data from its members with which to measure the gap between the total health needs ol the workers and their families and the benefits they currently receive from existing plans...

...we should stop trying to compete with the commercial plans...

...The patient may or may not use the money to pay his doctor bills...

...Before organizing they carefully studied the commercial, Blue Cross, and Blue Shield plans...

...State and county medical societies have usually tried to prevent the establishment of such plans, often by threatening local doctors with suspension or expulsion ii they join...

...They give part time to a HIP group and are reimbursed usually on an hourly or session basis...

...The result was that instead of improving and expanding benefits as Blue Cross had, Blue Shield followed in the footsteps of the commercial companies and, with few exceptions, has ignored the needs of the people for genuinely complete coverage, including preventive services...

...They send speakers to medical conventions to sell their wares with the slogan, "If you do not do it the American way [voluntary] there is a great threat we shall have 'socialistic or communistic' medicine...

...what they want is better quality medical services and not cash indemnity...

...But their insurance policies have no provision for immunization against contagious disease nor for periodic check-ups...

...Now that more than 123 million are enrolled, has his prediction come true...

...As one graduate said to me, when he came back for post-graduate instruction, "I have a feeling of isolation...

...For more than twenty years organized medicine, by monopolistic practices and political maneuvering, has fought hopeful social experiments and promising health legislation...

...The promoters have spent millions of dollars flooding the homes of people and the offices of business men and doctors with persuasive literature...

...Experience with such progressive plans has convinced many employers that absenteeism has been decreased and production has been increased by comprehensive medical protection that suits the health needs and financial ability of employees...

...To be sure, many of the old line insurance companies have a long record of advocating preventive medicine and safety practices by publicizing good health habits, urging periodic health examinations, and financing some medical research...