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Insurance Against Tuberculosis
LEE K. FRANKEL
NEW YORK
Reprinted from the Transactions of the Sixth Annual Meeting of the
National Association for the Study and Prevention of Tuberculosis

INSURANCE AGAINST TUBERCULOSIS
BY LEE K. FRANKEL
NEw York
THE specific question which has been put to me by the Secretary of the
National Association for the Study and Prevention of Tuberculosis is the
following: Is it possible to devise a system of insurance in the United States
which will undertake to compensate individuals who may be afflicted with
tuberculosis, insure them the means of livelihood during their illness, and pro-
vide necessary treatment in Sanatoria, etc.? The paper will confine itself
to this specific proposition, indicating incidentally the methods in vogue in
other countries. -
The proposal of an insurance against tuberculosis is not altogether novel
in the United States. In a paper read by the writer before the New York State
Conference of Charities and Correction in 1901, entitled “Coöperation and
Health Insurance for Consumptives,” the effort was made to illustrate what
was being done in Germany to care for individuals afflicted with tuberculosis,
and to point out the preventive measures which had been introduced through
the German system of insurance to prevent invalidity resulting from this disease.
Attention was called in this paper to the fact that Mr. Frederick L. Hoffman
had presented a paper at the British Congress on Tuberculosis in July, 1900,
in which he arrived at the conclusion that it would be financially impossible
and otherwise inexpedient for so-called industrial insurance companies to erect
and maintain Sanatoria for the treatment of tuberculosis. It was Mr. Hoff-
man’s opinion that it was not within the range of remote possibility that
industrial insurance companies would become interested in the Sanatorium
treatment of their consumptive policy-holders. It may be mentioned here
that at the same meeting referred to Sir John Burdon Sanderson, speaking on
the same topic, expressed his belief that an insurance system, such as had been
developed in Germany, was not practicable in either England or America,
and indicated that whatever steps might be taken in the direction of insur-
ing individuals against tuberculosis would have to be accomplished through
some voluntary insurance Scheme.
2 INSURANCE AGAINST TUBERCULOSIS
It is interesting to note in this connection that since Sir John Burdon
Sanderson's utterance on this question, England has taken two exceedingly
drastic steps in its social legislation, similar to those previously instituted in
Germany and in other European countries. We need only mention the work-
men's compensation act, which, in its final form, makes it obligatory upon
employers throughout England to indemnify employees for industrial accidents,
and the even more radical legislation, under which old age pensions are guar-
anteed to English workmen at a certain age and under certain limitations. It
should, furthermore, be mentioned, merely as a commentary on the above
opinions, and as an indication of the rapid growth and change of sentiment in
the United States, that a fraternal insurance order, the Modern Woodmen of
America, has established a sanatorium for the treatment of its tuberculous
members; that another order, the Arbeiterring, and a labor union, the Brooklyn
Federation of Labor, have the erection of Sanatoria in contemplation, and that
even an industrial insurance company, the Metropolitan Life Insurance
Company, has made application to the Insurance Department of New York
for the erection of a sanatorium in which treatment may be given both to
employees and to policy-holders. In pursuance of this thought, the same in-
dustrial insurance company is organizing a nursing service for its sick industrial
policy-holders, with special reference to their care if afflicted with tuberculosis.
In addition, it is distributing literature to its policy-holders calling attention
to the nature and cause of tuberculosis, its prevention, and cure. -
Medical authorities on the subject of tuberculosis have likewise been insis-
tent upon the development of some plan which might insure treatment of tuber-
culosis to workmen and others. In a paper presented by Dr. S. Adolphus
Knopf on “Life Insurance in its Relation to the Prevention of Tuberculosis”,
at the meeting of the American Association of Medical Examiners in Atlantic
City, N.J., in June, 1909, this important matter was adverted to, and the same
authority has in his recent publication, and in other pamphlets, laid stress
upon the necessity of such a scheme for the comprehensive eradication of the
white plague. At the meeting of the International Congress on Tuberculosis
held in Washington in 1908 papers were presented by German authorities, who
had been actively engaged in the tuberculosis campaign, illustrating the
methods in vogue in that country, and showing how such an insurance plan
tended not only to the reduction of mortality from the disease, to the limitation
of the period of illness, but, of more importance, demonstrated the preventive
measures instituted under such insurance schemes for the prevention and the
eradication of the disease.
LEE K. FRANKEL 3
PRESENT METHODS OF TREATMENT, PREVENTION, AND
CURE IN THE UNITED STATES
From the standpoint of a wise public policy, there are inherent objections
to the method in vogue in the United States for the eradication of tuberculosis,
and even against the methods in use for cure and treatment. While the recog-
nition of tuberculosis as a social disease is comparatively recent, the knowledge
that it is not only preventable, but curable under certain conditions, has spread
rapidly. The application of this knowledge has become the task of individuals
and associations in many cities and towns. For those who are in a position
to pay, Sanatoria have been erected in which the best and most approved treat-
ment can be obtained. The peculiarity of the disease, in that it requires not
days or weeks, but months and even years for its cure, makes such a course
impossible for the great mass of workingmen and women in the United States.
It can safely be stated that in a comparatively small percentage of instances
is the workman afflicted with consumption able, out of earlier savings, to
support his family, and at the same time pay for treatment in the average
sanatorium, conducted for the purposes of profit. To overcome this difficulty,
public-spirited individuals have constructed Sanatoria as philanthropies, in
which treatment for tuberculosis is given either at a comparatively low cost,
or free of cost to individuals unable to pay.
Following in the wake of private beneficence, a number of States have
erected Sanatoria for the cure of indigent and semi-indigent citizens, in which,
similarly, treatment may be obtained either without cost or at a nominal
cost. The disadvantage of any such plan rests upon the fact that inherently
the workman is a Self-respecting individual who does not desire to be
considered an object of charity. For this reason he refuses to become the
beneficiary of a philanthropic enterprise which, in its last analysis, borders
on the charitable. It is admitted by public and semi-public hospitals, mana-
gers of Sanatoria, and dispensaries, that not all tuberculous individuals are
reached by them, notwithstanding efforts made to supply proper treatment.
In many instances this is due to fear on the part of the afflicted individual;
to a dislike to have his affliction become known, and even to unwillingness
on his part to believe that he is a sufferer from tuberculosis. Physicians and
social workers who have had experience with this class will testify that there
is a repugnance on the part of workingmen and women to accept treatment
which puts them in the same category with the pauper and the vagrant.
Instances could be cited where treatment in public hospitals has been deliber-
ately refused by tuberculous patients because of unwillingness to come in
4 INSURANCE AGAINST TUBERCULOSIS
contact with a degraded element, who frequently, through viciousness, intem-
perance, and vagrancy, have become tubercular and incidentally public
charges. Knowledge on the part of the sufferer that he is classified with
the derelict, the incompetent, and the shiftless frequently repels him from
making use of agencies at hand either under the auspices of private or public
benevolence, in which treatment may be obtained.
If a comprehensive movement for the cure and prevention of tuberculosis
is to be brought about which is to be of service to all consumptive individuals
in the community, and which shall be ethical, such a movement must be based
on the principle that treatment shall be given, not as a privilege, but as a
right; that it shall be offered not as an act of charity, but as a benefit, to
which the recipient is entitled, having made contributions prior to his illness
to the fund from which the benefits are paid. In substance, that the move-
ment shall be based upon insurance principles, and not upon public benefi-
cence or private good will. -
In its essentials, insurance of any kind depends upon the willingness of
individuals to contribute to a common fund to be utilized for the purpose of
protection, against death, sickness, accident, invalidity, old age, or any unfore-
seen contingency. The individuals constituting such a group, technically, the
insurance company, or association, realize at the time they join that for the
payments which they make they will be entitled to certain benefits when certain
contingencies arise. This, in a nutshell, is the fundamental difference between
the benefits of insurance and the gifts of philanthropy. The one must be
accepted as a favor; the other may be demanded as a right.
VOLUNTARY INSURANCE AGAINST TUBERCULOSIS
Any discussion of insurance against tuberculosis in the United States
must be based on the possibilities of developing an insurance plan which
shall be voluntary in character. It has been assumed by legislators and
others that any scheme which involves obligation or compulsion would be
obnoxious to the underlying principles of the constitution; that proposals
leading toward a compulsory plan would not receive consideration at the
hands of legislators, or even, if such legislation might be effected, its subse-
quent enforcement would be impossible.
In the logical development of the question the possibilities of existing
insurance companies would be the first to be considered. At the outset,
it may be stated that there is no fundamental reason why private insurance
companies, either stock or mutual, industrial or ordinary, should not under-
take to insure their policy-holders against tuberculosis, that is, to insure them
LEE K. FRANKEL 5
treatment and other benefits in case they are afflicted. As an academic insur-
ance proposition, such a Scheme involves only the question of the amount of
premiums to be charged the respective policy-holders. As a practical propo-
sition, it would in all likelihood be found that the cost to the policy-holders
would be high and might even be prohibitive. The difficulty lies primarily
in the fact that an insurance company advertising to insure its policy-holders
against tuberculosis would inevitably have what in insurance parlance is
called an adverse selection. In other words, the individual with good ancestry
and family history, who found himself in excellent condition of health and
who had the impression that there was little likelihood of his becoming
afflicted with tuberculosis, would have little desire or inclination to become
a policy-holder. On the other hand, in a voluntary company, the policy-
holders would be made up largely of men and women who had reason to
believe that they had an inherent predisposition toward the disease; that
past illnesses and present state of health might make them liable to be afflicted
with tuberculosis in the future, or that they were already on the road to become
sufferers.
An insurance Company undertaking to insure policy-holders against tuber-
culosis could in a sense protect itself against this adverse and invidious selection
in certain definite ways: I. It might require all applicants to submit themselves
to a rigid medical examination, and in this wise it could exclude all who could
not conform to certain medical standards. 2. It might require all policy-
holders to pay premiums for a definite specified time—say, six months, a year,
or even two years—before they would be eligible to the benefits offered in the
contract. 3. It might limit the benefits given during the earlier years either to
reduced amounts or to treatment for a shorter term. While such a scheme may
suffice as an insurance proposition purely, it would not accomplish the end
desired in the treatment of tuberculosis as a social disease. The very process
of exclusion above outlined would remove from the activities of such an in-
surance company individuals most likely to be afflicted with tuberculosis,
would stop treatment at the time when it was most desirable that it be continued
and, by limiting benefits other than treatment, such as, for example, the
support of the individual’s family during the period of illness, would only
accentuate the social conditions which retard recovery.
Ordinarily, associations and insurance companies who undertake to
insure their members and policy-holders against sickness must contend with
the evils of simulation on the part of their members, which greatly increases the
expense to the organization. The loss arising from this source would probably
be negligible if such an insurance company would confine itself to tuberculosis
6 INSURANCE AGAINST TUEERCULOSIS
only and not extend its field of activity to other illnesses. Tuberculosis, today,
is a fairly well-defined disease, and its diagnosis can be made by the average
practitioner. Simulation, for this reason, would be limited in extent, and, as
a matter of fact, an insurance scheme against tuberculosis would differ from
insurance schemes against general sickness in that it would be the aim of the
insurance company or association to give treatment even where the diagnosis
was in doubt. It is possible that the cost of administration in an insurance
company or association, national in character, would be higher than in a local
one. It appears likely, from the experience obtained, particularly in Germany,
as indicated hereafter, that the development of sickness insurance in the United
States, and, in particular, of insurance against tuberculosis, which shall give
treatment during illness to the beneficiary, and cash benefits for the support
of his family during his illness, will evolve through local organizations, rather
than through State or national associations.
Insurance against tuberculosis through voluntary associations may be con-
sidered from another viewpoint. It is well accepted today in European legis-
lation, and beginning to be recognized in the United States, that industry is
chargeable to a certain degree with accidents occurring therein, and that the
employer should assume certain responsibility in meeting claims for indemnity
arising from industrial accidents. As a result of this theory, European coun-
tries have departed from the old employers' liability theory, with its doctrine
of contributory negligence, assumption of risk, etc., and in their legislation
have adopted either a plan of workmen’s compensation or of insurance against
accidents for workmen without requiring proof on the part of the latter that
injury was caused by the employer’s negligence. This theory has been ex-
tended in certain countries not only to include industrial accidents, but occu-
pation diseases, and compensation is granted for the latter as well as the former.
It would not be stretching this theory too far to assume that in certain
instances tuberculosis may be considered an occupation disease. Long hours
of work, not under the best Sanitary conditions, frequently bring about a con-
dition where the individual is readily susceptible to the germs of tuberculosis.
It may be contended that along with accidents, industry should be held liable
for tuberculosis arising through it. The modern trend of a more highly devel-
oped social instinct in industry leads to the assumption that it would not be
amiss or out of place for employers of labor to coöperate with their workmen
in devising schemes of insurance which shall guard them against tuberculosis.
In many large industrial enterprises this attempt is already being made, through
the organizations of sick benefit Societies whose purpose is to give medical and
other assistance to their sick members. Large labor organizations in the
LEE K. FRANKEL 7
United States make provision for members who become ill, and, as stated above,
have even gone so far as to establish Sanatoria for their treatment.
An enlightened public sentiment could probably be aroused through a
persistent social campaign, which would materially increase the number of
employers of labor willing to join with their employees in meeting the cost of an
insurance scheme against tuberculosis. Through the medium of associations,
such as the National Association of Manufacturers, who are studying the possi-
bilities of a voluntary organization, made up of members of the association to
insure indemnity to their workmen in case of accident, it may be possible to
develop a similar insurance Scheme against tuberculosis. There can be no
objection to such a scheme. That its benefits would be far-reaching there can
be no doubt. Its inherent shortcoming would be the one demonstrated by the
experience of European countries. Wherever voluntary systems of this kind
have been introduced, either through the industries themselves, as has been
frequently done, or with the coöperation and subsidy of the State, in no case
have they reached the great masses of men and women. Where there are in-
telligent direction and conscientious and altruistic employers, or where there
is an organization of labor, competent to deal with the situation, it has been
found practicable to extend material benefit in sickness to thousands of work-
ingmen. But the small employer with limited financial ability has not been
influenced, nor has the unorganized and unskilled laborer been provided for.
The value of any scheme of insurance against tuberculosis, since it is a social
disease, readily transmissible, lies not so much in being able to insure a selected
number of individuals, but in the development of a comprehensive plan which
shall undertake to insure all individuals and to guarantee them treatment if
they become ill. It is only through such a comprehensive scheme that we may
hope to realize the belief of authorities on the subject that tuberculosis may
eventually be eradicated. It should be remarked here that at the International
Congress on Social Insurance held in Rome in 1908, it was the consensus of
opinion of the delegates from the various European countries present, and it
was freely admitted even by those who, for years, had been exponents of volun-
tary insurance, that all efforts to reach the mass of the people through any
voluntary insurance scheme had been unavailing. Even the delegates from
Italy and France, who for years had firmly and persistently opposed the intro-
duction of the principle of compulsion, freely admitted their conversion, since
voluntary insurance had been found insufficient to meet the needs of the great
public of working people in their respective countries.
This naturally brings us to the question of a compulsory system of insurance
against tuberculosis. In Europe, particularly in the Germanic countries, com-
8 INSTURANCE AGAINST TUBERCULOSIS
pulsion is not a code of mandatory laws, but the highest development of an
ethical principle. “Compulsion”, or preferably “obligation”, in Germany
and Austria, in Luxemburg, and in some of the other more northern countries,
implies the recognition of a responsibility which rests on all citizens alike;
namely, the responsibility of providing against the ordinary risks of life.
Compulsion, as understood by the more enlightened in these countries, is not
coercion. It is not a policeman with his club. It is not a form of benevolent
paternalism foisted on an unwilling public by the powers that are made possi-
ble by centuries of education in military discipline and obedience.
Mandatory legislation is not an attribute of a monarchic or despotic form
of government. It is known even in a republic. In fact, it is fundamental in
our theory of government that the minority must bow to the will of the majority
in all that affects the common welfare. The essential difference between the
United States and countries in which compulsory insurance has obtained a
foothold is the absence of recognition of any need for this form of protection
for its inhabitants, and particularly for those nearest to the border-line between
economic dependence and economic independence.
In certain instances we have adopted the compulsory principle in our own
legislation. Under the laws of nearly all States the support of wife and children
is made obligatory on the husband and father. Deliberate neglect of this
obligation is classed as a misdemeanor and in one State, at least, neglect to
support and abandonment of children by the parent have been made a felony.
There are many statutes which direct the acts a citizen may perform, but there
are as many others which explicitly forbid other acts of commission or omis-
sion. The police laws of most States restrict individual action within certain
definite limits, and forbid voluntary initiative which may adversely affect
public health, public Safety, or the public weal. Laws are being enacted daily,
miscalled socialistic or paternal, which on closer analysis are found to be no
more than an expression of intention on the part of the State to safeguard the
welfare of all citizens, irrespective of their economic status.
Fundamentally, no more than this has been done in Germany and other
European countries which have introduced compulsory insurance. These
have recognized that there are risks in life, common to all workmen, which it is
impossible for the individual workman alone to make provision against. Only
by the transfer of this risk from the shoulders of the one to the backs of the many
and by placing the burden of cost where it should rest, even though this involve
the industry itself, can equilibrium be maintained. In other words, where we,
after an observation of a century, and England for several centuries, have
grudgingly admitted the desirability of protection through insurance, and
LEE K. FRANKEL 9
through legislation have permitted individuals to avail themselves of the bene-
fits of it, Europe, as typified by Germany and her sister States, has boldly
declared the urgent need of this protection, not for the few, but for all of its
working population, and by legislation has required its workingmen to partake
of it, and its employers to bear their just share of the cost.
At the time the sickness insurance law was introduced there existed in
Germany hundreds of small sickness insurance societies, which were taken into
account by the law and were utilized as the vehicles through which sickness
insurance might be afforded to workingmen. The remarkable development
of thirty years has shown that, contrary to expectation, sickness insurance can
be the best administered not through small organizations, but rather through
large centralized societies, which have within themselves the power to bring
about efficient administration to create machinery to prevent simulation, to
give necessary treatment, and to develop preventive measures. This growth
of the last thirty years is mentioned here particularly for the reason that the
results obtained will probably point a way to similar movements in the United
States. The experience which Germany has obtained through the conduct
of its sickness societies can today be availed of by other countries. The ex-
perience of Leipzig and Dresden is valuable material and a guide to American
cities. It will not be amiss to devote a portion of this paper to a slight explan-
ation of what these cities are doing.
In each of the above cities there is at present but one sickness insurance
Society. In each instance the society is an aggregate of Smaller ones which
have been consolidated and centralized into one compact organization. The
society collects from employers the necessary premiums, both the employer
and employee contributing to the same. When sickness occurs among the
members, the Society provides medical attendance, medicine, Surgical appliances,
and, if necessary, treatment in hospitals, etc. In addition, it gives sick-
ness benefits to the family of the member, dependent upon the premium
payments which are based upon the member’s earnings.
Naturally, under the head of sickness insurance tuberculosis has been
one of the most important questions confronting the Society, and it is fair to
say that the question has been promptly and properly handled. The effort
is made to reach every case of incipient tuberculosis as it arises. In the
realization that he is entitled to treatment each workman a member of the
club avails himself of his rights, knowing that he will be given immediate
care and attention, and that, incidentally, should he be required to go to a
sanatorium, his family will be looked after. Every effort is made on the
part of the society in connection with the invalidity insurance department
IO INSURANCE AGAINST TUBERCULOSIS
to prevent a sick member from becoming incapacitated, since, if this occurs,
it means that a pension must be granted during the period of disability.
To prevent this and to restore the member to economic efficiency at the
earliest date the Society does not hesitate at radical measures. Members
may be sent to health resorts and even to other countries if such treatment
spells cure, at the expense of the society, all with the thought of restoring the
individual to health at the earliest possible moment. Similarly, in con-
nection with the invalidity department, sanatorium treatment is given for
all consumptive members, and, it should be repeated again, this treatment
is given not as a privilege, but as a right of the member based upon the fact
that he has been a contributor to the society’s funds.
In the realization that the prevention of tuberculosis means more than
treatment the society, which includes members not only within the corporate
limits, but in the Suburbs, carries on an extensive campaign in the direction
of the prevention of tuberculosis. Lectures are held at periodic intervals,
literature of all kinds is distributed, and exhibits, showing the nature, char-
acter, and methods of the prevention of the disease are permanently estab-
lished. The physicians who work for the Society are expected to report
every case in which they find the patient to be suffering from incipient tuber-
culosis, or where they suspect the disease may develop.
It may be of interest to cite some of the statistics of the society, particularly
as they will bear upon the question of the introduction of similar organi-
zations in the United States. The Leipzig sickness insurance club was
organized as early as 1887, absorbing and displacing about twenty Smaller
societies. From the beginning, its jurisdiction was not confined to the
limits of the city itself, and today its operation extends to the 42 suburbs
within a radius of six kilometers. Its membership at the close of 1908 was
161,051, of whom approximately one-third were women. Of the total num-
ber, 15,000 were voluntary members. Nearly every industry or trade is
represented. The management, in spite of the large membership, is demo-
cratic. As in most local Societies, directors are elected at a general meeting
held once a year.
Among other benefits, the members receive the following:
I. Free medical attendance from the first day of sickness, together with
medicines, trusses, crutches, and other such appliances.
2. In case of disablement, cash benefits up to as high as fifteen marks
per week for a period of thirty-four weeks, beginning after the Second day.
3. In place of the foregoing, free treatment in a clinic, hospital, or home
LEE K. FRANKEL II
for convalescents. In this case a cash benefit is given the patient’s family
equal to two-thirds of the usual cash benefit.
4. Free medical attendance and medicines to families of members for
a maximum period of thirteen weeks.
In the year 1908 free medical attendance and its benefits were granted in
70,703 separate cases of illness. The total number of days of sickness was
1,697,796, an average of twenty-four days for each sickness; 5708 sicknesses
were under four weeks’ and 1290 over four weeks’ duration; Io,006 members
received treatment in hospitals at the expense of the Society; 41o physicians
are employed, each member being permitted free choice among them, unless
he requires attendance at his home, when the physician practising in the
neighborhood must be selected. In addition, the Society employs 137 special-
ists, 23 dentists, 55 druggists, and 20 opticians. The Society has at its disposal
three convalescent homes, one of which, at Augustusbad, contains 200 beds.
Of special interest is the Society’s campaign of prevention among its
members, aimed especially at tuberculosis. The physicians employed by
the society are instructed to report the origin, treatment, and process of each
case of tuberculosis under their care, and to notify the management of all
cases which would seem to require Sanatorium treatment. Of I390 tuber-
culous members in 1908, 745 were thus taken care of. In a remarkably
large percentage of cases either a complete or partial cure has been effected.
The society has at its disposal a day camp in the woods of Stotteritz, a
suburb of Leipzig. Railway fare to and fro and luncheons are supplied by
the society. -
The disbursements for the year 1908 were as follows:
MARKS PER CENT
Medical attendance- - - - - - - - - - - - - - - - - - - - - - - - - I,4I5,324 2I-5
Medicines and appliances.... . . . . . . . . . . . . . . . . 68o,887 IO.4.
Cash benefits to members.... . . . . . . . . . . . . . . . . 2,672,868 40.6
Cash benefits for families of members. . . . . . . . . . I59,345 2.4.
Cash benefits for women after confinement..... I24,74I I.9
Funeral benefits---------------------------- I55,813 2.4
To hospitals, Sanatoria, etc... . . . . . . . . . . . . . . . . 608,637 9.3
Managing expenses------------------------- 573,336 8.7
Other disbursements. -- - - - - - - - - - - - - - - - - - - - - - I86,407 2.8
Total.--------------------------------- 6,577,378 IOO.o .
Of possibly even more importance is a study which has been made of the
mortality and morbidity of the Leipzig Society by the Imperial Statistical
Department. These studies comprise four large volumes of statistics, and
were carried out in the usual exhaustive manner in which German investi-
gations are undertaken. It is impossible to reproduce more than a few of
I 2 INSURANCE AGAINST TUBERCULOSIS
these figures, which will bring out most pertinently one of the conclusions
arrived at above, namely: the adverse selection which is made against a
Society working on a voluntary plan. The department made a separate study
of the male and female members, and of those insured under the obligatory
law and those who insured themselves voluntarily. The compulsorily insured
hereafter will be designated as Group A, and the voluntarily insured as
Group B.
Of the males insured in Group A, 347,725,923 days at risk were considered,
which, divided by 365, gave 952,674 individuals under observation for a period
of one year. In this group, 376,809 cases of illness occurred, or 39.6 cases
and 854.9 days of illness for every Ioo members. The deaths in this group
numbered 7228, or 765 per Ioo,000 members. Only 1.2 per cent of the mem-
bership was under fifteen years of age; over 91 per cent. was between fifteen
and fifty years of age.
For male members in Group B, 15,976,508 days at risk were studied, giving
43,771 individuals under observation for a period of one year; 34,370 cases
of illness were Cared for, giving 78.5 cases and 2860.2 days of illness for each
Ioo members. The deaths numbered I426, or 3258 per Ioo,ooo members.
It will be seen from these figures that the number of cases of illness, days of
illness, and the number of deaths were much higher in Group B than those
in Group A.
The same fact holds true for the women members. The days at risk in
Group A were 94,747,306, and in Group B Io,420,266, representing 259,582
and 28,549 individuals respectively. Cases of sickness in the former were
Io8,524, and in the latter 19, IoS. Calculated on the basis of Ioo members,
this gives cases of sickness in Group A, 41.8 and in Group B, 66.9. The days
of illness per Ioo members in Group A were Iogo.3, and in Group B 2439.
Even more illuminating are the deaths. The total number of deaths among
women in Group A was 1380 and in Group B, 450, or per Ioo,000 members,
532 for Group A and 1576 for Group B. The above statistics are for all
forms of illness occurring during the period of observation.
Among the male members who were insured in Group A, 7345 cases of
tuberculosis were found, and among those insured in Group B, 1389. Days
of illness from tuberculosis in Group A were 591, IIo, and in Group B, 133,938,
giving a duration in Group A of 80.5 days and in Group B of 96.4 days. Deaths
from tuberculosis in Group A numbered 2220, and in Group B, 510. On
the basis of Ioo,000 members, there were 771 cases of illness in Group A and
3173 in Group B. The days of illness in Group A numbered 62,047, and in
LEE K. FRANKEL I3
Group B, they numbered 305,997, whereas deaths per Ioo,ooo members in
Group A were 233 and in Group B, II65.
Statistics for women members are as follows: Number of cases of tuber-
culosis among those insured in Group A was 1637, and in Group B, 445.
In Group A the days of illness were 131,882; in Group B, 37,574. The
duration of illness in Group A was 80.6 days; in Group B, 84.4 days. Deaths
in Group A were 549 and in Group B, 175. On the basis of Ioo,000 mem-
bers, the cases of illness in Group A were 631, and in Group B, I559. Days
of illness were 50,806 in Group A, and I31,612 in Group B. Deaths in Group
A were 211; in Group B, 613. -
It appears evident, from what has been said regarding the development
of the Leipzig insurance scheme, that a plan of insurance which requires all
individuals to become participants in the scheme lends itself most readily to
a comprehensive development not only for treatment, but for prevention of
sickness and of tuberculosis in particular. This fact is given even greater
weight by the statistics cited, showing the additional expense per member
which is imposed upon any voluntary organization by reason of the adverse
Selection which is made against it by its members. Naturally, cost is an
important item in the consideration of any insurance scheme. Where this
cost is distributed over the population generally, it falls with comparatively
little weight upon each individual in the group. Where the cost rests upon
the shoulders of a few, who by a process of self-selection are individuals more
apt to become afflicted with tuberculosis or with disease, as is evidenced by
the returns from the Leipzig Society, the cost to each individual may become
prohibitive.
European experience has demonstrated, at least to the satisfaction of
experts in that country, that only a compulsory plan fully covers the situation.
It does not seem at all likely that any such scheme can be introduced into the
United States, even assuming that the constitutional problems involved could
be overcome. It is the belief of able legislators and lawyers that there are
features in our constitution which would prohibit any scheme of insurance
compelling either the employer or the employee to pay definite premiums for
such insurance. It is believed that any such regulation would conflict with
the proviso in the constitution under which the property of an individual may
not be taken from him without due process of law. On the other hand, it is
equally true that this provision in the constitution as applied to a compulsory
insurance plan has never been the subject of judicial review, and until it is
presented before a court of last resort, no definite statement can be made
as to whether a law, such as is suggested, would be constitutional or not.
I4 INSURANCE AGAINST TUBERCULOSIS
Aside from this fact, however, it is questionable whether thinking people of
the United States would desire legislation along compulsory lines. The
entire tendency here has been to allow individuals a certain amount of free
choice, and not to introduce more paternalism into the government than abso-
lutely required. - -
If compulsory legislation, such as has been adopted by Germany, is, there-
fore, not a matter of the immediate future, the thought naturally arises
whether a compensatory principle, such as has been suggested in case of
industrial accidents, might not be applied to cases of tuberculosis arising
through industry. If it can be demonstrated that, to some extent at least,
tuberculosis is an occupation disease, that it results from excessive hours of
labor, from unsanitary conditions in workshops, mills, and factories, from
devitalization due to insufficient wages, there might be good reason for attempt—
ing legislation which would impose upon industry through the employer,
compensation to workmen for the consequences of industry which bring
about tuberculosis. It is, however, still a question whether even the principle
of compensation for industrial accidents, as recently developed in bills pre-
sented in certain State legislatures, would be more constitutional than the
principle of compulsory insurance. We shall probably have to wait for the
enactment of workmen's compensation legislation before we can determine
whether tuberculosis may be included therein as an occupation disease.
There remains to be considered in what way voluntary schemes can be
developed which will, to a greater extent than at present, assist in insuring
individuals against the ravages of tuberculosis. Admitted, at the outset,
that such a scheme has decided limitations, in that it will not reach the great
bulk of workingmen and women, as has been amply demonstrated in other
countries, it must not, therefore, be assumed that, by reason of this failure,
efforts to extend voluntary insurance should not be developed as fully as
possible. Existing agencies, such as labor unions, fraternal orders, establish-
ment funds, and insurance companies can materially enlarge their present
sphere of activities by adding to the sick or death benefits which they give
special treatment for consumptives, either through physicians, nurses, or in
sanatoria. Whether cash benefits can be given during invalidity is a question
of obtaining a morbidity experience, and the ability of the members or policy-
holders to meet the necessary charges. In addition, any of the above-men-
tioned agencies may coöperate with antituberculosis associations in the United
States, or on their own initiative may undertake a campaign of education to
instruct their constituencies regarding the care and prevention of tuberculosis.
Sickness insurance even on voluntary lines has had but very limited develop-
LEE K. FRANKEI, I5
ment in the United States, aside from sporadic efforts made by labor unions,
fraternal orders, and mutual benefit societies connected with industrial estab-
lishments. Any concerted or comprehensive attempt to introduce sickness
insurance is as yet unknown. Any such effort on the part of a municipality,
such as has been developed in Leipzig, Dresden, and Vienna, has not even
been thought of in the United States. It is true that the splendid develop-
ment in these cities is primarily due to the fact that the majority of members
of the sickness Societies are required by law to be insured. It may be assumed,
however, in view of the enlightened public sentiment developing in the United
States and the efforts that are being made on all sides to fight tuberculosis,
that municipalities and towns might organize similar insurance Societies
either against sickness generally or tuberculosis in particular. There are
reasons to believe that cities, through taxation, might accomplish the same
results as those obtained in Leipzig and Dresden. The right of a municipality
to tax its citizens is not denied. It is not stretching the imagination too far
to suppose that a municipality might impose a tax upon its citizens, which
tax should be used specifically for the cure of sufferers from tuberculosis,
and to carry out preventive measures for the eradication of the disease. Such
a tax might be imposed on the basis of wages, and be apportioned among
employers and employees on the assumption that industry to some extent
is responsible for the spread of tuberculosis. The taxes thus collected might
be set aside in a special fund to be administered by a board of directors made
up of representatives of labor and capital, similar to the organization of the
Leipzig sickness Society. The problem of the care, treatment, cure, and
prevention of tuberculosis would be placed in the hands of the board of directors.
Many of the Suggestions in this paper may still appear visionary, and in
all probability there is little likelihood of their development in the immediate
future. Many of them were thought visionary in Europe thirty years ago,
and yet today they are accepted without cavil and are in working operation
in many countries with the approval of governmental officials, employers,
and workmen alike. The day must come when they will receive recognition
in the United States. The day has gone by when social problems may be
considered purely from the standpoint of philanthropy. It is contrary to an
orderly scheme of things to permit individuals to work under evil conditions,
to receive insufficient wages, to subject themselves to disease, and to expect
that they shall be satisfied, when they suffer from accident or disease, to receive
as a privilege the dole which charity or philanthropy is permitted to hand to
them. Germany realizes that the State has distinct obligations toward its
citizens. Not the least of these is protection against the risks of life and
I6 - INSURANCE AGAINST TUBERCULOSIS
health incidental to our complex industrial development. It is realized that
the workman alone cannot protect himself against the contingencies of life,
particularly against sickness, accident, old age, and unemployment, and that
opportunity must be given to him, through some insurance plan, to realize
that these contingencies, when they arise, will not deprive him of the means
of livelihood. Tuberculosis as a social disease must be considered as one of
these contingencies. As a social disease, it is recognized that its causes in
many instances are obscure; that its effects are far-reaching and affect not
only the individual, but the community.
That it is possible to devise an insurance scheme to meet the exigencies
arising from the results of the disease there can be no doubt. Of more
importance, however, is the conception that in such a scheme there shall be
the opportunity to prevent tuberculosis. Precisely what system may be
finally adopted in the United States is still problematic. That the subject
is worthy of the consideration of the best minds and the best thought goes
without saying.
DISCUSSION ON DR. FRANKEL’S PAPER
Mr. Frederick L. Hoffman, Newark, N. J. : The relation of life
insurance to tuberculosis was quite fully discussed before this Association
in 1905 in an address by Dr. Arnold C. Klebs, of Chicago, to which I was
requested to reply. In the mean time I have had occasion to discuss the
subject at the Philadelphia meeting of the International Tuberculosis
Congress, and subsequently Dr. S. Adolphus Knopf has summarized his
views and conclusions on “Life Insurance in Its Relation to the Preven-
tion of Tuberculosis” in an address before the Association of Medical
Examiners. Dr. Frankel reëmphasizes the conclusions of Dr. Klebs and Dr.
Knopf,” and apparently it is his view that the German Government system of
insurance alone offers a practical Solution. To a certain extent he is fully justi-
fied in his praise of so-called German Government insurance, which, however,
it is necessary to keep in mind, is not insurance in the true sense of the term,
but rather a modified system of poor law administration, on the one hand,
and a modified employers' liability law, on the other. The relation of this
system of so-called insurance to the campaign against tuberculosis is rather
involved, and not easily made clear to those who are not thoroughly familiar
with the nature and function of a paternal government. Since the German
Government insurance system is really a Social institution, much can be done
* Medical Record, August 21, 1909.
LEE K. FRANKEL I'7
in the direction of aid and relief through insurance institutions which would
otherwise require to be done through the poor law administration or private
charity. The heaviest burden under the German system of government
insurance is the guaranteed support, in the event of invalidity or incapacity
to work. Manifestly, the duration of such incapacity may extend over a long
period of time. It is a widely variable element, which makes it extremely de-
sirable to make use of every possible agency or method to reduce preventable
sickness to a minimum. The case is totally different with life insurance Com-
panies, which guarantee only the payment of a definite sum in the event of
death. To life insurance companies the problem amounts simply to the
question as to whether the cost of the necessary treatment will be returned to
them by premium payments which they otherwise would not receive. Differ-
entiating between industrial and ordinary insurance, it is obvious, in the case
of the former, that the premiums, and the sums of insurance involved, are
entirely too small to make it possible for a company to extend the required
amount of financial aid to policy-holders suffering from tuberculosis and in
need of adequate treatment for the required period of time. Estimating that
the average length of treatment is not less than ninety days, and that it will
cost on an average $1.5o a day, it is clear that it will take about $135 to pro-
vide treatment, which would be practically the full amount of the average
adult industrial policy. It requires no discussion to make it clear that no com-
pany would be able to advance the full value of a policy, even though the results
of the treatment could be guaranteed, which, of course, is impossible. How
far it would be possible to develop a special form of tuberculosis insurance,
under which, by the payment of an extra premium, a person could insure for
a sum sufficient to furnish sanatoria treatment, is an open question. Aside
from technical difficulties, it is also an open and important question whether
the public at large would become interested in a special plan of insurance of
this kind, since the much greater risk of personal accident liability has not
been sufficient to develop personal accident insurance to any considerable
extent among workingmen engaged in more or less dangerous trades. The
most serious objection, however, is the practical certainty of adverse selection,
in that applicants for tuberculosis insurance would be primarily of a class more
or less predisposed to the disease. -
While, in my opinion, it would not be expedient or practicable to develop
a special form of tuberculosis insurance, it requires to be stated that efforts
in this direction have been made by several foreign companies, to which Dr.
Frankel did not call your attention. The experiments are new, but at least
one of them is of particular interest. The Trygg Life Insurance Company,
I8 INSURANCE AGAINST TUBERCULOSIS
which is the largest industrial insurance company in Sweden, at the suggestion
of Dr. V. Berglund established a tuberculosis insurance branch somewhat
after the following plan: In return for an extra premium the insured is
conditionally entitled to a sum of 250 crowns ($64.5o), payable in cash, or
Sanatoria treatment for an equal amount. The sum paid is considered an
advance on the sum insured, or, more properly, a lien on the policy to the
amount stated. The policy must have been two years in force if without
medical examination, and one year if with medical examination. The extra
premium charge at ages under twenty-five is fifteen cents a week for every
$250 of tuberculosis insurance, ten cents a week at ages twenty-five to thirty-
five, and five cents a week at ages thirty-five and over. Tuberculosis insurance
in this company must be taken out in connection with regular insurance.
When a policy has been in force for a period of years there is a readjustment
and, in the event that no Sanatoria treatment has been required, the amount of
regular insurance is increased accordingly. The company has protected itself
against extraordinary losses by the precaution that the amounts may be
reduced if the claims should prove too heavy, but it has subsidized the tubercu-
losis branch by a special fund out of its surplus, so that this contingency is not
likely to arise.
In actual practice tuberculosis insurance has not met with the approval
anticipated from the industrial population. According to the last report,
very few persons had actually taken advantage of the plan.
The similar experience of a company in Finland, the Kaleva, has also not
been satisfactory. It is also understood that a Dutch company has under-
taken this form of insurance, but without much practical success.
Dr. Frankel has referred to the success of the Federated Insurance Insti-
tutions of the Hanse Towns, but you, of course, understand that these institu-
tions fall within the scope of Government insurance, and that they are not
operated upon a commercial basis. The results which have been achieved
have unquestionably been of great benefit to the members, but it has never
been maintained that the undertaking has been a financial success. The
financial success would, under the German system, however, be a matter of
secondary consideration, for the Government considers the whole system of
insurance a social institution, involving State duties of protection, ameliora-
tion, and relief. A few figures regarding the Hanseatic institutions may,
however, be of interest. s
In 1908 there were 4593 applicants for medical or other treatment, and of
this number 2658 were males and 1935 were females. Since it was established
in 1891 there have been 37,230 applicants, of whom 21,308 were favorably
LEE K. FRANKEL I9
considered, while the others, for various reasons, were declined or refused
treatment. Of the 21,308 members accepted for medical or institutional
treatment, 13,692, or 64.3 per cent., suffered from tuberculosis of the lungs,
and I2Oo, or 50.6 per cent., from respiratory diseases. Of the 15,584 members
declined, 9589, or 61.5 per cent., Suffered from tuberculosis and other lung
diseases, so that a very considerable number, for reasons not precisely stated,
were refused treatment and became a charge upon the community at large or
their own financial resources.
The expense of treatment in these institutions has been fairly high, by
German standards, and the average cost per diem for a case of Sanatoria
treatment on account of tuberculosis in 1908 was 5.68 marks ($1.35) for males,
and 4.34 marks ($1.03) for females. In the aggregate the net expense incurred
on account of medical and institutional treatment during 1908 was 697,200
marks ($165,933.60). The results, on the whole, may be said to have been
satisfactory, and a considerable proportion of the members were restored to
normal wage-earning capacity. The data, however, are not as conclusive as
would be desirable.
What is being done in this respect by German Government insurance
institutions is not being done by a single German life-insurance company.
They have thoroughly considered the matter, but have come to the conclusion
that, for financial and other reasons, it would not be compatible with the nature
and purpose of their institution to combine philanthropy with business. It
requires no involved statistical or mathematical considerations to prove that
the treatment of life-insurance policy-holders suffering from tuberculosis would
not be possible except in return for an extra premium, the cost of which would
probably be excessive. The experiment of the Trygg, to which reference has
been made, proves that the necessary extra premium, even for a very modest
amount of sanatoria support, would be quite considerable. Policy-holders
for large amounts can, of course, make use of the paid-up value of their Con-
tracts to secure proper sanatoria treatment at their own expense. The Small
average amount of industrial policies would not permit of this being done.
As I had occasion to say in my address before the London Tuberculosis Con-
gress in 1901, the industrial companies would not be able to recoup themselves
if they were to advance to policy-holders suffering from tuberculosis the neces-
sary amount required for institutional treatment. It is also extremely doubtful
whether even the best possible treatment would secure the required financial
results, which may be expressed in an after-lifetime of Sufficient duration to
return in premium payments the average cost of Sanatoria treatment. This is
not the object of the German Government or the compulsory Social insurance
:
2O INSURANCE AGAINST TUBERCULOSIS
institutions, which combine accident and sickness insurance with invalidity
and old-age pensions, and other social benefits comprehended more or less
erroneously under the term insurance. It cannot be too often repeated that
what the German Government does in this respect is not being done by a single
life insurance company in the German Empire.
One of the most serious problems which would confront a life insurance
company would be the difficulty of exact diagnosis. When it is considered
that a negative bacteriological test of the sputum does not prove that the
patient is not tubercular, we are confronted by the difficulty of finding other
adequate tests to prove the presence of the disease which would entitle the
applicant to institutional treatment.
Dr. Frankel has referred to the British Workmen's Compensation Act
of 1906, and the fact that the act includes compensation for certain forms of
industrial diseases. Unfortunately, one of the most important of these diseases,
that is, fibroid phthisis, is not included within the operations of the act. The
law-makers of England were naturally reluctant to include compensation for
industrial lung diseases, because the burden would have been an extremely
heavy one upon English industry. At the same time it would seem but simple
justice that if compensation is proper for lead-poisoning, anthrax, glass-
blowers’ cataract, and other occupation diseases, pecuniary compensation
should also be made to those who, as the result of continuous and considerable
exposure to industrial dust, die prematurely from fibroid phthisis or tubercu-
losis of the lungs. It may also be argued that the high degree of consumption
frequency in certain trades could be materially reduced by preventive methods
which would largely eliminate industrial lung disease and make compensation
unnecessary. In a measure this would conform to the practice of the German
compulsory accident and sickness insurance system, which is scientifically co-
ordinated to deliberate efforts at accident and sickness prevention. More
good would result from an intelligent and rational administration of factory
laws and sanitary improvements in industry than from the most skilfully
devised system of workmen's compensation, or workmen's insurance, as the
case may be.
The causes and conditions responsible for an excessive death-rate from
tuberculosis in industrial pursuits require to be determined with greater
accuracy than has heretofore been the case, and in this respect life-insurance
companies have a distinct public duty to perform. Mr. Frankel has referred
to the elaborate and thoroughly scientific investigation into industrial mor-
tality and morbidity by the Leipzig Communal Sick Fund, but he failed to
point out that the investigation was the result of a special grant by the German
LEE K. FRANKEL 21
Imperial Parliament of about $80,000. The entire investigation was placed
in charge of the Imperial German Statistical Office, which acted in coöpera-
tion with the Imperial Board of Health, and, of course, the administration of
the Leipzig Communal Sick Fund. The investigation included 1,284,576
persons exposed one year to the risk of sickness and death, and the results of
the investigation are presented in four elaborate volumes, which include every
essential aspect of the whole problem of industrial mortality and industrial
disease. We have nothing to correspond to this investigation in this country,
neither on the part of government nor on the part of life insurance companies,
and while the fundamental data for an identical investigation are wanting,
it is, nevertheless, true that a vast amount of useful material is available which
is not being utilized, as it is the duty of government and of insurance companies
that it should be. When we have an appropriation in this country of Say
$1,000,ooo for a qualified statistical investigation into the essential facts of
industrial sickness and industrial mortality, we shall have the first contribu-
tion of real knowledge which is so imperatively required as a basis for a better
understanding of the facts that are required to be made known.
While it is not the duty of life-insurance companies to undertake practically
hopeless experiments in a field which is essentially that of philanthropy, they
have a broader and a larger duty to perform in contributing the results of their
experience to the general fund of common knowledge on the Subject of human
mortality in its particular relation to Social condition, habits, physique and in-
dustrial pursuits. The companies in their archives have vastly more useful
data than any State or nation, because of the fact that their records cover
a continuous period of observation from the time of entry to the date of exit,
while in all public vital statistics only the single fact of death is made a matter
of record. The companies know the facts of family history, of personal
physique, of bodily temperature, pulse, occupation at entry, occupation at
death, and many other important and Suggestive elements which are not
available for the population at large. In life-insurance experience it is pos-
sible to coördinate a large variety of facts, such as the relation of occupa-
tion to physique, or of family history to cause of death, or of locality to the
duration of life, etc., but no such investigation in its entirety is feasible for the
population at large. Strictly scientific contributions of this kind, combining
the medical, statistical, and actuarial functions, would constitute the most
useful contribution which the companies could possibly make to the cause of
preventive medicine. No doubt the companies might go further and aid in
the instruction of policy-holders in the essentials of preventable diseases,
particularly tuberculosis, by means of educational literature, lectures, letters,
22 INSURANCE AGAINST TUBERCULOSIS
etc., and I introduced a resolution practically to this effect, which was unani-
mously adopted by the London Tuberculosis Congress of 1901. There are,
however, great practical difficulties in solving the problem of effective educa-
tion of policy-holders, but in any event a determined effort in this direction
may be made at comparatively Small expense. No company, however, would
be warranted in making experiments in special branches of insurance as long
as the evidence is wanting that they are really required as a public necessity,
and that they give reasonable promise of satisfactory results. I repeat that
the experiments that have been made in the field of tuberculosis in Sweden,
Finland, and Holland have not furnished proof that such insurance is really
desired at the premiums necessary to make it financially possible, and I repeat
further that no German private life insurance company, operating on the
mutual or stock plan, industrial or ordinary, has followed the German Govern-
ment insurance institutions in granting facilities for the institutional treatment
of tuberculosis. It seems to me that the system of German Government
insurance on a compulsory basis is so entirely inapplicable to American Con-
ditions—and will be for many years to come—that it serves no practical purpose
to discuss its provisions, although the results, of course, have considerable
social and economic interest. What we require most in this country at the
present time is more information and really accurate and conclusive data
regarding the true rate of mortality and sickness from tuberculosis in industry,
and I am aware of no institutions in a better position to aid the cause of
tuberculosis prevention in this respect than the ordinary and industrial life
insurance companies of this land.
The Chairman: Will Dr. Knopf speak on this subject?
Dr. Knopf, New York: I am not a life-insurance expert. All I
can say is that I have seen in Germany wonderful results of the insur-
ance companies which are under State Supervision, and which have led
me to believe that it would be a great blessing to our country if we
would have some similar provision. While I firmly believe what Mr.
Hoffman said, that it is a good thing to make investigation,--it is a
good thing to find out exactly why we have so much tuberculosis among
certain type of workingmen,_I believe it is equally good to take care of
those already afflicted, and if we can do that by Some insurance Scheme,
it will be of incalculable benefit to humanity at large. I once before
attempted to suggest to some companies to insure at least the children,
and I believe if such a thing could be done, they would perhaps never
develop tuberculosis. I believe we must pay more attention to the rising
generation and to the men and women, particularly to the mothers. If we
LEE K. FRANKEL 23
succeed by some insurance scheme in including the children, whether of tuber-
culous parents or not, -whether this can be done by compulsory method or
not I am not prepared to say,+I simply wish to express my firm belief that
insurance against tuberculosis must come, is bound to come, if we ever hope
to eradicate the disease from our midst.
Dr. Charles Rayevsky, Liberty, N. Y.: In regard to this sort of
insurance by fraternal organizations, some three years ago I studied the
statistics of the Workmen’s Circle and I found that this organization had
about 1% tuberculous members per thousand. When they accepted my
scheme looking to the insurance against tuberculosis, and announced that
they were about to organize a Sanatorium, the membership greatly increased,
but, with it also increased the rate of tuberculous members. They now have
about 2% per thousand. The scheme is that each member shall pay 60 cents
per year insurance against tuberculosis. From a membership of Iooo you
have $600, and these $600 will represent fifty-eight weeks of treatment, as
each member is entitled to twenty-six weeks’ free treatment. This institution
is now being run only for about six months. As far as I am informed, these
figures cover the expense perfectly. I do not know how private Corporations
would do it, but it seems to me that through fraternal organizations it is a very
feasible thing to ask this kind of insurance, and I would like those that can do
something through the fraternal organizations to try to do their best.
Dr. Woods Hutchinson, New York: I think in one respect we all must
have been conscious of a feeling of disappointment and regret from the dis-
cussion which was an argument between these two experts on the subject of
insurance against tuberculosis, namely, that the voluntary insurance com-
panies as at present organized are entirely either unable or unwilling to
undertake any insurance against tuberculosis. How much of that is due to
the inherent nature of the case and how much is the attitude of the Societies,
I think is an interesting problem. -
I must frankly confess that it has seemed to me for a number of years that
our life-insurance companies have not been paying their just share of the ex-
pense of the improvement of the health of the community. We in the medical
profession have been lowering death-rates, we have lowered the life-insurance
companies’ morbidity and increased longevity, and yet we are still paying for
protection upon tables computed from forty to sixty years ago.
Now the companies take the position that inasmuch as they cannot imme-
diately recoup themselves out of the payments of the individual policy-holders,
it is utterly impossible for them to do anything toward insurance against
tuberculosis. I do not think that this is good public policy, with all due
24. INSURANCE AGAINST TUBERCULOSIS
respect to such companies, nor a broad-minded, intelligent, philanthropic
view to take of the situation. They have been reaping all the benefits of the
work that the community and the medical profession have done, and have
returned nothing to either the community or the medical profession for it;
and now because they cannot instantly recoup themselves, they practically
decline to consider such a proposition as this. It may be that they could not
get it back out of the individual policy-holder, but I should like to see the matter
studied out more carefully and scientifically, and from a broader and less
selfish point of view.
I join with Mr. Hoffman in the wish that the masses of statistical material
hidden in the archives of the companies could be secured for publication.
But, for several reasons, there will be difficulties in the way that will not be
readily overcome. However, the darkest hour is just before the dawn, and
if the companies are either unable or unwilling to undertake this insurance,
then it seems to me it will have to be done by the community as a whole, and
I think the community is preparing to do this.
I had occasion to look into the matter a year or more ago as to the probable
expense of an extermination campaign in New York city, and after carefully
working out the number of consumptives in the community, the number of
beds required to treat them, the length of time required for treatment, and esti-
mating the amount of new infection that occurs every year from varying causes,
it appeared that a sum of less than four dollars per capita for each inhabitant
of the community would provide beds to care for all cases, and that a tax of
little more than a dollar per capita per annum for five to ten years would take
care of the cases, care for the family, and put the disease in a process of ex-
termination. The communities cannot do this if they take the attitude
assumed by the insurance companies, and if they did, we might just as well
drop our campaign at once.
Of course, we have made wonderful progress, but at the same time there
is an enormous amount of work yet to be done. We have 22,000 beds for the
care of consumptives, and that is a fine, imposing figure, but it amounts to
but about 5 per cent. of the total number of consumptives in the United States.
The provision is utterly inadequate, and until we force the matter as a commun-
ity and as a whole and assume the expense necessary to isolate the advanced
cases, we shall simply continue the process that is now going on in New York
city, of burying every year Io,000 persons from tuberculosis and having two
new cases for every one we bury. Ten thousand deaths and 20,000 new cases
has been our program for the last six years. Every advanced case we place
in a tuberculosis home prevents two new cases, and we must direct our efforts
LEE K. FRANKEL 25
to these advanced cases. The funds of the community are abundantly ade-
quate and ready to be used for this purpose. .
Of course, any good thing that we want to do is unconstitutional in the
opinion of eminent lawyers, but it does not make any difference whether it is
unconstitutional or not; it is going to be done within the next fifteen or twenty
years, and some way will be found to evade the provisions of the constitution
if such evasion be necessary. Heretofore the activities of our legislators have
been directed chiefly toward the safeguarding not of human rights, but of
human property, and by that system of public policy 5 per cent. of the Com-
munity have been enabled to gather up the property of the community at the
expense of the other 95 per cent. Now we are entitled to regain our share,
and the share of this generation and of future generations, by taxation of these
accumulations of wealth, and we can do it through the government and as a
mass, and have the disease exterminated inside of twenty years.
Dr. Edward O. Otis, Boston: It may not be known that two years ago,
I think it was, the legislature of Massachusetts passed an enabling act
which permits the working-people of Massachusetts to be insured at different
savings banks throughout the State at practically the cost price, the State
furnishing the medical examiner. This scheme was promoted and carried
through by Mr. Brandeis, and I had the pleasure of listening to his exposi-
tion of it, and, if I am not mistaken, he stated that the ordinary insurance
people made about 500 per cent. on their policies, or at least a large per cent.
above the cost. Now, if that is the case, it seems to me that it might be possible
for the insurance companies to use a part of that amount of gain in treating
their cases of tuberculosis, as has been suggested.
Hugh F. Fox, Plainfield, N. J. : There was one statement which was
made by Dr. Frankel in his most interesting paper, which I think should be
qualified. It would be unfortunate to allow the impression to go out
from this meeting that people who are cared for in our public hospitals
are regarded as belonging to the pauper class. The whole trend of the move-
ment for the proper treatment of defectives, and of all those whose physical
condition constitutes a menace to society, is to provide for their care by the
State or municipality. In all departments of this work we are urging the
State, the county, or the municipality to do its full duty by making adequate
provision for all such cases, and are insisting that the individual has the right
to demand such treatment if his condition is such as I have described. The
logical outcome of this eventually must be to make such treatment Compulsory.
The most important next step in this antituberculosis movement is to get the
26 INSURANCE AGAINST TUBERCULOSIS
State or county and the municipalities to recognize their responsibility by
providing adequate treatment.
Just a word on another point. At a meeting which was held recently,
under the auspices of the National Civic Federation, to discuss the report of
the Employers' Liability Commission in New York, the statement was made
that the United States Steel Company, which employs 200,000 men, had paid
$1,000,000 during the past year in settlement for accidents to its workingmen.
ASSuming that this statement is correct, and estimating the average per capita
annual wages at $800, the increased cost of labor to the United States Steel
Company which resulted from these settlements is o.625 of I per cent. Let
us suppose that the Company, under its proposed plan of caring adequately
for its men in case of accident or sickness, found it necessary to spend five
times the sum that it spent last year as compensation for accidents (which
seems most improbable), the result would make the added labor cost 3.125
per cent. But the cost of labor in relation to the finished product which is
turned out by the Steel company is probably not over 20 per cent., so that the
increase in the cost to the consumer, even on the liberal basis of our calculation,
would only be o.625 per cent. After all, it is the consumer who must ulti-
mately foot the bill, and it is doubtful if an increased cost to the consumer
of a trifle over } of I per cent. would cause a ripple of disturbance in the
industrial world. As a matter of business, and in the interest of industrial
efficiency, who would question an increase of even I per cent. in the cost of
production, if this would provide adequately against the hazards of misfortune
which the workingman has to face in the way of accident or illness?
While insurance against tuberculosis might be impracticable from the
Standpoint of an insurance Company as a profit-making proposition, its feasi-
bility is worth considering from the industrial standpoint. The industry
could well afford to carry it on a coöperative basis.
Dr. Frankel : I have but very few words to add. I think, for the
sake of record, it should be mentioned in connection with the Leipsic insur-
ance Scheme of which I spoke, which is a scheme for sickness insurance
including tuberculosis, that the institution is perfectly solvent. I received
this morning, before leaving my office, the report for the year 1909, which
shows that they disbursed last year over 6,ooo,000 marks for the care of
their sick members, which practically all came from contributions, that is,
in the shape of premiums or dues, half of which were paid by the workingmen.
It is not a charity at all. In addition to that, they have accumulated quite a
large reserve, and it is a pure insurance proposition.
I think there is nothing more interesting in this connection, bearing out
LEE K. FRANKEL 27
particularly what Dr. Hutchinson has said, than that this is a question of
discounting the future. To my mind the most interesting statement in the
report is not in the text, but in the diagrams. Whereas the society has shown
Constant increases in disbursements for benefits, physicians, and Sanatoria,
the actual disbursements from year to year for death benefits are today just
one-half what they were twenty years ago. In other words, they are bringing
out what I have endeavored to show in my paper, namely, that insurance
against tuberculosis eventually means lower mortality and lower cost for death
benefits. * -
I hardly felt that my paper would be so badly misunderstood as it was by
Dr. Hutchinson in assuming that I said a life-insurance company was either
unfit or unwilling to undertake work of this kind. I am perfectly convinced,
with Mr. Hoffman, that there are certain very distinct scientific rules that have
got to be laid down for the guidance of an insurance company in precisely the
same way as rules must be laid down for the guidance of a banking institution.
An insurance company must go along Safe lines, not only because it may wish
to do so, but because the law compels it to do so. If they were to act otherwise,
they would be called up very shortly by all the insurance commissioners in
the United States. But that this problem can be worked out in connection,
not necessarily with a life-insurance company, but that a scheme can be de-
vised to insure individuals not against tuberculosis only, but sickness generally,
I am quite positive.
I want to mention another word for fear there might be a misunderstanding.
I had hoped that this might not come up in a discussion this evening, but the
insurance Companies do not make 5oo per cent. On their policies, and I am
afraid that the speaker got that confused with the fact that the Metropolitan
Life Insurance Company will return to its policy-holders during the present
year over $5,000,ooo in voluntary bonuses by reason of the fact that within the
last few years their mortality has been lowered, carrying out the very thing
that Dr. Hutchinson suggested.
I repeat what I said in my paper. The form in which insurance against
tuberculosis will develop is still problematical; whether it will be done by
communities, by organizations, in municipalities or townships, I am not pre-
pared to say. Whether it may be necessary to have mandatory legislation
or not, I am not in position to say. My contention is that, except under com-
pulsion, no comprehensive scheme of insurance can be developed that shall
include every individual in the community and that shall lead eventually to
the eradication of disease. After all, that is what we wish to do.