The Approach That Damned the Report

The Report noted that most physicians were in private practice and each individual physician was responsible for the quality of services he rendered. It also noted, however, that new ways to provide care were emerging.  The first was the rapidly expanding medical sciences, which would lead to a greater need for specialization and a division of labor. This also created some problems: “Many patients now go directly to independent specialist without first consulting a general practitioner. This practice increases the complexity and the cost of medical service and tends to relegate the family physician to an unimportant place.

“….A second development is the increase in the capital investment required for the study, diagnosis and treatment of disease. Many of the practitioners who work alone are unable to afford the costly and varied equipment necessary for diagnosing and treating all illnesses; nor do they have the time to become proficient in its use….A solution for these difficulties lies in the organization of general practitioners and specialists into groups for achieving the benefits of closer professional relations and economical use of equipment and assistant personnel.”  (CCMC op.cit. pg 44-45)

The Report cited its studies that found care would be more economical in groups.  It would improve contracting with hospitals and purchasing equipment. It would stimulate ‘competent management’ of personnel and stimulate professional growth and development. Younger physicians would benefit from association with more mature colleagues. It also indicated that group practices would “break down the separatist habits of thought and action which beset the specialist….” (CCMC op.cit.)

The Report did caution, however, that group practices could become so large that patients, and even some practitioners could become “cogs” in a machine.  Some physicians may lose their “initiative and energy,” and the older practitioners might lord it over their younger colleagues, which could cause power plays between the older and younger practitioners. 

To combat those problems, the Report suggested seven standards for a group practice. 

1)      General Medical Care:  A group would include general practitioners as well as specialists.

2)      Coordinated Diagnosis and Treatment:  “The members of the professional group should coordinate their service and pool their knowledge so as to give each patient the best diagnosis and treatment possible.”  (CCMC op.cit. pg 47).

3)      Individual Responsibility:   The group should hold some particular physician responsible for the care rendered to each patient. This physician should be chosen by the patient or chosen for him at his request.  It should be the physician’s duty to interpret the findings made by any other physicians consulted. Continuity of relationship, year after year, between the patient and the physician should be strongly encouraged

4)      Promotion of High Standards:  Systematic procedures should be carried on by the group for the professional stimulation of members and  the maintenance of high standards of work.

5)      Association with a Hospital: Whenever possible, the group should be associated with a hospital, often constituting its professional staff and preferably, having offices in or adjacent the hospital building. In any event, the same group of doctors should be responsible for the care of patients in office, home and hospital.

6)      Professional and Lay Participation: Where groups associate with a voluntary or governmental hospital, the board of trustees of the hospital will usually continue to carry the financial responsibility and exercise general administrative supervision. The professional group, however, should have the definite control professional policies and procedures and full opportunity to discuss with the lay group those problems in which professional and administrative questions are intermingled.

7)      NonProfit Character: The danger which physicians and dentists principally fear, namely that of lay groups organized for profit will control medical practice, is a real one. Such groups, they believe, will place the practitioners in subservient positions, will deny them proper equipment and professional opportunities, or in other ways will prevent them from rendering service of a high quality. Such groups add to the cost of service without contributing any essential element which cannot be provided equally well by non-profit professional or community groups. It is far better for the organizing activity, the capital investment, and the assumption of financial risk to come from non-profit community, religious or governmental hospitals or similar agencies. The Committee believes that lay groups organized for profit have no legitimate place in the provision of this vital public service.”  (emphasis theirs)  (CCMC op.cit.47-48)

Distribution of Costs:  Noting again that the most fundamental problem of medical costs was their uneven distribution among the public.  The cost of illness cannot be planned advance in a fee for service system. They can only be planned, the Report indicated if medicine was practiced in a group model. “On a group basis, however, both the incidence of illness and the probable cost of its care can now be predicted with reasonable accuracy.

“Inevitably the Committee has been led to the conclusion that the costs of medical care should be distributed over groups of people and over periods of time.  There are two major methods of distributing costs: insurance and taxation. Both of these methods are now in use but not sufficiently to prevent these costs from being a burden to most person and impossible to pay for many. ….Extension of either method, therefore, may be effected by widening the scope of the medical services, by increasing the population group covered, or by a combination of these two procedures.”  (CCMC op.cit.)

The Committee saw insurance as a way to cover medical costs. It did not see it as covering lost wages.  There was no worker’s compensation in 1929.  But they did address issue of wage-loss by noting that all other nation’s that provided health insurance also provided cash benefits for loss of wages.  The Committee noted, however, that in their studies, serious difficulties emerged when the administration of cash benefits were united with the provision of medical care, because the cash paid depended on a medical certification of the existence and degree of the disability.  A physician, therefore, would be placed in the awkward position of having to balance the desire of the group to limit the payment and the desire of the individual to maximize the payment.  While the Committee did not make recommendations in this area, it did stress that this need must be addressed. 

Despite the Report’s call for a form of insurance, they did not advocate for health insurance companies.

Insurance Companies.  The participation by commercial insurance companies in the forms of insurance against the costs of medical care which are recommended in this report would, the committee believes, tend to increase the costs and not to improve the quality of service….arrangements will be more satisfactory to all parties, if, in financial matters, the practitioners can deal directly with patients or their representatives, than if they must deal only through an intermediate business agency. Administration by private insurance companies would largely, if not entirely, forfeit the most important element in the establishment and maintenance of quality, namely: effective professional participation in the formulation of policies.”  (CCMC op.cit. pg 50-51)

It appears the Committee while favoring some kind of social insurance, wants the ‘insurer’ to be a medical group practice and hospital or a community.

The radical element of their recommendations—salaried physicians in group practices tied to a specific hospital was one of the reasons for its eventual demise.  For an account by one of the funders:  The Milbank Memorial Fund, see their Centennial Report, and their comments on the CCMC starting on page 13.

 Have a wonderful Thanksgiving.  We will resume publishing on December 2.

Coming Next Week:  Taxation and the Planning and Coordination of Service

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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