REPORT

Investigation into the Operation

of the

British Health Insurance Act

William T. Ramsey

Chairman of the Health Insurance
Commission of Pennsylvania

in company with

Ordway Tead

Expert Investigator

FOR THE

PENNSYLVANIA HEALTH INSURANCE COMMISSION

OF 1920

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Preface

T N submitting* this report, the undersigned desire to call attention
to two facts: (1) the field inquiry consumed only one month,
July, 1920; (2) the method of inquiry was therefore necessarily
confined to reading all available documents and to the interviewing
of over fifty representative persons in London, Manchester and
elsewhere, including government officials, employers, union officials,
friendly society officers, commercial insurance company officials,
insured workers and doctors.

The Chairman of your Commission was accompanied to England
by Mr. Ordway Tead, a professional consultant in labor problems,
who was retained to do the specialized work involved in such an
investigation, and to formulate the findings. Since at practically
every interview both of us were present, not only did we have
the advantage which comes when two people are seeking the facts
instead of one, but the observations and conclusions here set forth
are those of both the Chairman and the investigator. It was the
easier for this agreement to be reached because the outstanding-
facts about the English situation soon become apparent to any
honest and unbiased observer.

The study in England was prefaced by as full a reading knowl¬
edge as possible of the details of the health insurance legislation,
although this had resulted in no settled conviction as to the working
of the act. The inquiry was conducted with thoroughly open minds,
without preconceptions, with a sincere desire to get the whole truth.

Moreover, special pains were taken before leaving this country

to communicate with prominent individuals known to be deeply
interested in health insurance either because of their advocacy or
_ their opposition. Letters of introduction were obtained equally
j from both groups and the special effort throughout our visit was
< to search out and interview those in England who were opposed
to the act. It may be said in passing that the active opponents to
it are very few, and many, if not most, of the persons whom it was
suggested that we see by those on this side of the water known to

be most critical of health insurance, turned out to be in general
favorable to health insurance and only critical of the present act in
some of its details.

In short, no step was omitted that would assure our hearing
all the adverse things that could possibly be said by well-informed
English subjects about the working of the act.

The result may be unsatisfactory to those who desire unqualified
statements of approval or disapproval. For the conclusions reached
in this inquiry are not unqualified. They indicate a degree of suc¬
cess and a degree of what is less failure than confusion of purpose,
which has necessarily resulted in gradual but important changes
in the insurance act and in the other public health legislation as
well.

This kind of a qualified conclusion will be seen to be inevitable
by all who realize that social institutions develop experimentally.
The value of this investigation for America is thus the greater
because England’s experiments need not be repeated in every par¬
ticular. They can and should be used as the basis for wiser meas¬
ures designed specifically to meet American conditions and needs.

September 15, 1920.

William T. Ramsey,

Chairman of the Commission.

Ordway Tead,

Expert Investigator.

I. Introduction

1. Summarized Conclusions

HE investigation into the operation of Health Insurance in

A Great Britain which was undertaken at the request of your
Commission, was designed to find the degree of success attending
the operation of the present act, to discover the attitude of the
various affected groups toward it, and to consider as far as possible
the extent to which it might be applicable to American conditions.

It may be said at once that in the main and considering the
handicaps and obstructions suffered during five years of war the
act is in reasonably successful operation and is beginning to produce
some of the benefits that were initially urged in its behalf.

In the second place the affected groups in the community
are now working the act with a remarkable degree of co-opera¬
tion and with an all but universal recognition of the value of
the legislation. Few in the community would seriously advocate or
even contemplate its repeal or withdrawal. The tendency and
common desire is in quite the opposite directions to make the
act in fact as well as in name a national act which will really
assure good health throughout the country.

In the third place, as this report will presently develop, it is
highly probable that much may be learned from the failures and
the shortcomings of the present operation; and any rigid copying
of the British act would certainly be quite unwarranted when the
peculiar conditions under which it has developed are understood.

Points at which the British experience can most certainly provide
a useful warning are the following:

1. The cash benefits should not be paid through approved so¬
cieties but through local bodies publicly constituted.

2. The cash benefit should be at least 50 per cent of wages.

3. The medical benefits should not be limited to the insured
workers, but should extend to their families.

4. Hospital care, consultant services and specialized diagnostic
facilities in the form of clinics and laboratories should not be left out
of the plan, but should be incorporated as part of the medical benefit.

This report will amplify and explain the above statements. It
will be exceedingly difficult to offer anything like statistical proof

of them because to a considerable extent that does not exist. At j|
every turn and in respect to every problem we were repeatedly told ]
“ You know, during the war it was impossible to do that, etc.,” or,

“ The experience of the war years would really vitiate any figures|
we might offer.” Hence, while we have sought figures wherever 1
possible, we have even more sought the considered opinions of rep¬
resentative and typical spokesmen of the government’s administra¬
tive staff, employers, trade unions, approved societies, panel and
general doctors and insured workers.

2. Purpose of the Act

It is first necessary to consider what the act was intended to do.

It was advanced by Mr. Lloyd George in 1911 to some extent for
political reasons, and also to meet the conditions revealed in the
reports of 1909 Poor Law Commission. It was originally intended
to carry insurance against sickness and death to workers and their
dependents through state organized funds. But because of the
strength of the commercial life insurance companies and of the
“ friendly societies ” (working-class mutual benefit societies) the
death feature was omitted and these organizations were allowed to
become the agents for administering the cash benefits. And because
of the work and expense involved the dependents were excluded
(except in the case of the maternity benefit for the wife of the
insured man).

The act was designed to be a preventive of ill health and a
means of alleviating the destitution which it brought. If “ pre¬
vention ” is taken to mean discovering from the records of
sickness its incidence in particular trades and local areas, with
special study and treatment to reduce that incidence where it
is excessive, little has been done. But if prevention means also
making it easy for all working people between 16 and 70 to
consult a doctor as soon as they begin to feel ill or whenever
they are too ill to go to work and therefore want to be certificated
for cash benefits by their doctors who must consequently ex¬
amine them, then the amount of preventive work has been
tremendous. Hundreds of thousands of persons, it is universally
agreed, seek medical advice now who would not have afforded
it before; and they seek it promptly. They seek it, as the'
doctors told us, at a stage when the length and seriousness of
the illness can usually be reduced. The fact that there are
roughly twice as many visits paid by doctors now as there were

before the act was in force may be taken to prove not that there is
twice as much illness or unnecessary visitation, but that people
see the doctors as soon as they feel indisposed, and that many people
now secure medical attention who never got it prior to the act. As
a doctor put it to us, “If three men come to me two of whom have
little or nothing the matter with them, and the third is in the early
stages of some serious disease, all three visitations are justified.”

As to the other purpose of the act, the relieving by cash bene¬
fits of destitution due to sickness of the wage-earner—the situation
has been so profoundly changed by the war that accurate statements
are difficult. The cash benefit, even as increased by recent legisla¬
tion, is so small as compared with wages that in cases of prolonged
sickness the need of some larger degree of outside assistance is still
necessary. The act does not provide a large enough cash benefit to
remove the possibility of destitution resulting from the wage-
earner’s sickness. Due to a combination of causes, however, the
amount of actual destitution is less in England (July, 1920) than
before in recent years. It is, for example, generally admitted that
wages have in most cases risen to a degree that has made provision
out of wages for more food and for illness more likely than in pre¬
war days. Especially have the unskilled workers improved their
status in this respect.

II. Brief Description of the Act

T HE original act of 1911 was amended at various points in
1913, 1918 and 1920. Since the report of the previous Health
Insurance Commission of Pennsylvania 1 contains an admirable out¬
line and summary of the provisions of the basic legislation, it is only
necessary to mention below the essential features of the present law
and regulations. Many minor provisions have intentionally been
omitted in the interest of clarifying the main points.

1. Contributions

Men pay 10 pence (20 cents) a week, of which the employer
pays 5 pence and the worker 5 pence. To the amounts thus col¬
lected the state adds an amount equal to 2/9 (two-ninths) of the
total.

1 Report of the Health Insurance Commission of Pennsylvania, January,
1919.

Women pay 9 pence (18 cents) a week of which employer pays
5 pence and the worker 4 pence. To the amount thus collected the
state adds an amount equal to % (one-fourth) of it.

These contributions are payable in respect to practically all
manual workers, and all non-manual workers whose income falls
below £250 per year ($1,250).

Other citizens may join as “ voluntary contributors,” but since
no medical benefits are available for them they pay a reduced con¬
tribution.

The contributions are made through the employer who buys
special stamps at the post office. These he is required to affix
weekly to the card of each employee as in evidence of payment.

If the employer has more than 100 employees he may stamp the
worker’s card half yearly with one lump sum, high-value stamp
representing the total amount of the combined contributions. These
cards are at each six months’ interval given to the individual work¬
ers who send them to their respective “ approved societies ” (pres¬
ently defined) which in turn use them as evidence of payment to
get the proper funds credited to them by the Government. The
approved societies then distribute fresh cards to the employers with
whom their members are at work.

2. Cash Benefits

The man who is certificated by the doctor as “ incapable of
work” because of some specific illness is entitled to 15 shillings
($3.75) a week after a three-day waiting period, which payment
may continue for twenty-six weeks. And for continued disability
thereafter he gets 7 shillings 6 pence ($1.88) a week so long as he
is incapable of work.

The benefit for a woman worker is 12 shillings ($3.00) with
the same disability benefit as the man’s.

To be eligible for these benefits the worker must have paid con¬
tributions for 26 weeks; and he is deemed to be in arrears in his
contributions if they are not made for at least 48 weeks in the
insurance year. When in arrears the worker is notified and has
three months’ grace in which to become fully eligible by the payment
of a fixed sum depending)upon the length of the arrears period; and
if that is not paid he is eligible for benefits at a lowered rate.

A married woman worker is entitled to 40 shillings ($10) at
confinement. The wife of an insured man is entitled in her own
right to the same amount when confined; and if both husband and
wife are working, two maternity benefits are paid.

The cash benefits are usually paid through the local officer of
an approved society upon presentation to the society of the medical
certificate from the worker’s doctor and also in many cases after a
visit from the society’s sick visitor.

3. Medical Benefits

Every insured person is entitled to medical attendance through¬
out his illness provided it is service that can be rendered by a general
practitioner of ordinary skill and capacity. This service does not,
however, include the services of a doctor at times of confinement of
an insured woman or of the wife of an insured.

The sanitarium benefit heretofore providing hospital care for
tuberculous insured persons, is to be withdrawn after 1920 for
reasons which will be presently considered.

Medical benefit also includes the free provision of the familiar
drugs and medicines and of a stated number of medical and surgical
appliances such as bandages, etc.

There is no statutory provision for hospital treatment,
nurses, dental treatment, medical attendance upon the dependents
of the insured, specialists’ advice or medical care at confinement.

4. Administration of Cash Benefits

There are the following general types of carrying funds which
the insured person may join:

An approved commercial insurance company.

An approved friendly society.

An approved trade union.

An approved establishment fund.

In addition, there is a class called deposit contributors, who
belong to no society, but hold their own cards and buy stamps for
themselves at the post office. Their contributions are only avail¬
able in benefits to the amount of their own and their employers’
payments; there is no sharing of the risk with the members of any
group.

The worker has the option of choosing his approved society; and
he may not transfer except at stated intervals and on payment of
two shillings.

The approved societies are not profit-making bodies and they
do not pool their funds. Each fund is supposed to carry its own
burden of sickness and the idea has been that if any society accu¬
mulated a surplus, that value would be available for larger benefits

to the members of that society. A valuation was to be made every
five years to determine the condition of the funds; but owing to
the war the first valuation is only now being brought to completion.
The results of it will not be published until early in 1921; but they
will probably show a considerable variation in surpluses. 2

5. Administration of Medical Benefits

The local doctors who desire to practice under the act—that
is, do the medical work for the insured—are contracted with by
a local insurance committee, which is the representative administra¬
tive and supervisory body of each local area in respect to the
medical side of the act. Doctors are now paid at the rate of 11
shillings per year per person on their “ panel.” However, in Man¬
chester and Salford, although the total sum of money available to
be used in payment of the local doctors is allotted at this rate, the
individual doctor is paid on a visitation basis on a scale locally
agreed upon.

Complaints of inadequate or unsatisfactory medical service are
supposed to be brought to this insurance committee; and if there
is a real case against a doctor there is an investigation and final
decision by a body of inquiry composed of three doctors and a
barrister.

Up until now if there has been doubt about the certification by
a doctor of an insured person, the approved society has usually
employed its own medical referee to give an opinion. Under the
latest amendment thirty state referees have now been appointed
to look into doubtful cases.

In order to assure a reasonable division of work and proper
service to each individual, the size of the panels is now to be
limited to a maximum of 3,000 persons, with authority in the local
insurance committee to restrict the number further where they so
desire. In the London area, for example, the panel of any indi¬
vidual doctor may now be only 2,000. In Manchester, on the other
hand, it may be 3,000. As a matter of fact the great majority of
panels are less than 2,000 in number.

2 Interim Report by the Government Actuary upon the Valuation of the
Assets and Liabilities of Approved Societies as of December, 1918.

6. Financial Arrangements

The explicitly recognized expenses under the act are the follow¬
ing:

1. The cash benefits.

2. Payment to doctors at the rate of 11 shillings per person per year.

3. Administration expenses of approved societies at rate of 4 shillings
5 pence per person per year.

4. Administrative expenses of insurance committees.

5. Payment for drugs on basis of an agreed schedule of prices.

6. Administrative expenses of Ministry of Health including indoor and
outdoor staff.

7. Reserve Fund.

8. The contingencies fund.

9. Women’s Equalization Fund.

10. Central Fund.

(The last four funds are explained later.)

To meet these expenses there are available the three-fold con¬
tributions, and sundry parliamentary grants which have been called
for as special problems have arisen.

7. National Administration

The central administration which includes allocation and
handling of accounts, inspection of operation of the act by em¬
ployers, insurance committees and approved societies, issuance of
regulations, stamps, cards, etc., is vested in a department of the
Ministry of Health.

The actual arrangements with local doctors and the actual pay¬
ment of cash benefits is, however, left to the several local agencies
above described.

III. Other Public Health Legislation

N O adequate picture of the working of the act is possible
without mention of the public health measures which are
simultaneously provided.

In 1919 the Ministry of Health was organized “ for the pur¬
pose of promoting the health of the people ” of Great Britain.
Under it are now grouped for purposes of co-ordination the
following administrative duties:

1- Those of Local Government Boards pertaining to Public Health.

2. The administration of the National Health Insurance.

3. Supervision of work of Board of Education for expectant and nursing
mothers and of children up to five.

4. Supervision of work of same body in respect to medical inspection and
treatment of school children.

5. Supervision of midwives.

Under other recent enactments, provision is already made by
most local authorities with the aid of special grants from Parlia¬
ment for treatment of tuberculosis, venereal diseases, medical and
dental work for school children, maternity and infant welfare
centers.

The situation is well summarized in the following paragraph:

“ (1) Before birth the expectant mother may be dealt with by the local
Health Authority ( i.e ., the Town or County Council, or District Committee),
under the Notification of Births (Extension) Act (Child Welfare).

“ (2) At birth there may be in attendance either a midwife provided by
the Local Authority or a panel, or private medical practitioner.

“ (3) From birth till five years of age is reached, the child again comes
under the Child Welfare Scheme of the Local Authority.

“(4) Between five and fourteen years, the child comes under the medical
inspection scheme of the Education Authority, but if treatment is required
that may be obtained from the family doctor or through a voluntary or
charitable agency, or through clinics provided by the Education Authority.

“(5) From fourteen to sixteen years there is no public provision of any
kind for medical treatment, but the young person, if seeking employment in
a factory, will be examined by a certifying Surgeon appointed by the Home
Office.

“ (6) From sixteen years of age till the end of life, the man or woman,
if employed, comes under the Insurance Acts, and receives Medical Benefit
through the Insurance Committee.” 3

The doctors engaged on full or part time under one or another
of these provisions probably total several thousand, and are thus
in fact the members of an embryonic national medical service.

In addition to the above provisions it should be explained that
the Local Poor Law Guardians also have their own medical and
hospital provisions for destitute persons of any age. But it is now
proposed and contemplated that all of this work shall be taken over
and done under the local authorities, which will mean the final
abolition of the Poor Law administration in so far as it constitutes
a distinct branch of the medical service.

It is significant to point out in connection with all of this
legislation that the tendency is definitely toward separating
from the insurance act all special medical treatment and toward

3 A Public Medical Service, by McKail & Jones, 1919.

providing on a universal public health basis those medical
services which are not' readily available through a general
practitioner. This is the meaning of the removal of tuberculosis
and venereal disease treatment from under the act; and of the
institution of maternity centers and care for all mothers under
an act of 1918. And it is not unlikely that in the next few months
the Government will bring in a bill on the hospital question which
will at least provide state payment for insured persons in hospitals
and possibly for all regardless of whether they are or are not in¬
sured.

In short, the insurance act has been one of the potent in¬
fluences in rallying public attention and support to a consistent
and complete program of public health administration. And the

Ministry of Health will undoubtedly in the next few years extend
the scope and improve the quality of the medical services available
for all the people. To this extent the insurance act has unques¬
tionably been an aid in the direction of fundamental preventive
medicine.

Having given this brief sketch of the framework of health in¬
surance legislation and administration, it is necessary next to con¬
sider its actual operation.

IV. The Act in Operation

1. Contributions

T present there is little if any objection to be found to the

ii. compulsory collection of contributions, except from those
who believe that the contributory principle is less sound or less
economical than the non-contributory—believe, namely, that cash
subventions as well as medical service should be provided directly
out of taxes.

It appears to be widely understood that in whatever way im¬
mediate expenses are met, it is ultimately industry itself from which
the cost is met. Whether the contributions are direct by assessment
or indirect from taxation, the income out of which payment comes
results from the productivity of industry and agriculture. And it
is not generally felt to be a matter of primary moment to argue

whether the contributions at least for the medical service should
be secured in one way or another. 4

On the other hand, it is true that the present contributory
method of collecting the funds out of which the cash benefits
and the medical benefits are paid, lightens the burden of direct
taxation and is not felt to be an onerous burden by any indi¬
vidual employer or worker. From the point of view of adjusting
the Government’s public health budget to its available income
resources, this consideration becomes, of course, of almost de¬
termining importance. It should be clear, however, that if we
in the United States elect to proceed by the contributory plan or
by public grants, there is some substantial expense involved.
Good health can be bought only and as soon as we are willing
to pay the price.

As to the administration for collecting the benefits, the work
and confusion are now reduced to a minimum. Yet it is useful to
consider further (1) the method of collection and (2) the cost of
collection.

If the contributory idea is to prevail, there must of course be
some definite evidence of payment which is readily available for
the employer, the insured, the approved society and the govern¬
ment. The stamped card was only adopted after the most pro¬
longed consideration; it is admitted to be a clumsy method, but
no satisfactory substitute has yet been found which will apply to
all cases. It is still conceivable, nevertheless, that a simpler method
might be used for all but the most irregular and shifting types of
work where, because the worker is constantly moving about, it is
hard for him to have at all times evidence of his standing as to
payment.

The method of lump-sum stamping at the end of each six
months obviates much clerical work. The machinery of collection
may thus be said to be running as smoothly as could be expected
in a huge system comprehending 15,000,000 people and ranging
from scrubwomen who come in by the day to highly skilled artisans
and clerks whose income is regular.

4 A valid criticism may be made, however, against the restriction of the
benefits to a limited number. Sir Arthur Newsholme, Medical Officer of the
Local Government Board, says, for example, in a recent volume (Public
Health and Insurance , Johns Hopkins Press, 1920) : “ On the point of equity
it must be admitted that any system of so-called insurance which, like that of
the English act, excludes a large proportion of the population who, while
paying in taxes in aid of the insured, require but do not receive their benefits,
is contrary to the principle that any expenditure of Government funds should
ensure to the whole commmunity in need of the provision in question.”

Nevertheless, thoughtful administrators of the act, including
such persons as approved society secretaries, government inspectors,
the best doctors, etc., call the whole stamp machinery into question
—at least so far as the contributions are made to affect eligibility
for medical attention. They point to the difficulties created by
loss of cards by workers, agents or approved societies, by failure
to stamp cards, failure to pay arrears. They point to the large
amount of time and money required to hunt down (1) the loss or
error in one card, (2) to be sure that employers are regularly
stamping the cards, (3) to be sure that workers are technically
eligible for benefits to which they are entitled or which they mani¬
festly should have. In the Government’s own inspecting staff an
enormous amount of time is certainly spent straightening out irregu¬
larities in regard to contributions.

The cost of contributions and collection is negligible as far
as the individual employer is concerned. The administrative
expense of bookkeeping entries and stamping is surprisingly small;
and the employer’s share of the contributions is usually not over
one per cent of the payroll. For example, in one store with over
7,000 employees not more than the equivalent of the full time of two
clerks is devoted to the health insurance details. In one factory
with about 800 workers about half the time of one clerk was used.
In general this cost would come to not over one-tenth of one per
cent of the payroll. The testimony of employers was therefore
unanimous that the expense of the act to them was not a factor
of any importance.

From the public point of view, however, the total expense of
securing the contributions is undoubtedly great when all items in
the account are considered—inspection, printing, postage, handling
of stamps and cards by employers, approved societies and govern¬
ment officers. And that irregularities regarding contributions and
stamping should ever deprive the insured of medical treatment is
surely a denial of the whole idea of assuring good health among
the workers. It frequently happens, moreover, that the worker
whose contributions are not in good order, will be the very one
who needs most not only the medical but the cash benefit as well.

In short, the conditions determining the eligibility for cash
benefits may also disqualify the worker from benefits on the
medical side. This inter-relation seems to have little to com¬
mend it from the public health point of view. There should, it
would seem, be no question from the public health point of view

of eligibility for medical benefit. Any person needing medical
attention should be able to have it.

2. Cash Benefits

The cash benefits, even as now increased, is in most cases such
a small fraction of the possible wages that it is decidedly inadequate
to protect the income and living standard of the insured during
illness. It is generally conceded that the benefit should be less than
wages, but a cash benefit which is 50 c /o of wages is the very least
that should be considered if a real subsidy is intended. Yet with
a wage level for men workers today of between three and a half
and five pounds a week (from $17.50 to $25.00), the weekly cash
benefit of $3.75 is less than 25 per cent of wages.

The small size of the present cash benefit not only auto¬
matically brings malingering to a minimum, but, as several
doctors said, the sick worker often returns to work before he
should. Even unskilled workers are in many cases able to earn
as much in one or two days' work per week as they could get from
the whole week's benefit. The problem from the point of view of
malingering only becomes difficult in cases of irregular work,
where the worker may not have regular weekly employment and
thus may normally get wages which do not exceed the usual benefit.

The promptness with which cash benefits are paid appears to
vary greatly with the efficiency of the approved society. The best
organized societies unquestionably pay claims promptly upon their
receipt. Delay may be due to many causes, principal among which
are the question in the mind of the society as to the validity of the
medical certification, and (in the case of commercial companies)
transfer of agents with whom the insured thus gets out of touch
and therefore does not know where to submit his claim.

The cash maternity benefit is undoubtedly the most popular
and the most valued. The money is now paid directly to the
woman beneficiary and the testimony is general that in ninety-five
cases out of a hundred, the money is used to help in defraying the
expenses of confinement. It assures that the mother takes care
to have a qualified midwife in attendance at the confinement. And
the latter is sure to be on hand since she knows that the money for
her fees is available. Moreover, the midwife is now f required in
case of any complication to call in a doctor whose attendance fees
are paid by the local authorities under the maternity provisions legis¬
lation of 1918. Indeed, now' that there is in most local areas some

follow-up work with expectant mothers (as a Public Health Pro¬
vision), the likelihood is even greater that the maternity benefit will
be wisely expended.

The maternity benefit is not, however, adequate to cover all
the charges incident to confinement. The nurse’s or doctor’s fees
usually take all or nearly all of the benefit, which leaves the other
expense to be otherwise met. There is therefore a demand, espec¬
ially in labor circles, for the payment of a larger amount which
will be more in the nature of a maternity endowment paid to all
mothers.

There is also on the part of organized labor a definite sentiment
favoring the addition of a funeral benefit for the deceased worker.
The demand for this will undoubtedly be strengthened by the recent
governmental inquiry into the operation of commercial insurance
companies, which found that in one large company over 40 per
cent of the insurance policies lapsed with consequent advantage to
the companies and no return whatsoever to the insured; and found
also that “ though practically every person in the wage-earning class
is insured at some point of his life, at) least 30 per cent of the deaths
among that class are uninsured at death.” 5

Indeed the departmental committee of inquiry intimated that “ it
might be practicable to propose a funeral benefit to be administered
under the National Health Insurance System.”

3. Medical Benefits

As already suggested, the existence of free medical service for
all insured persons means that many now go to doctors who did not
do so before and go at the earliest signs of illness. Everyone agrees
that this is an incalculable benefit, the good results of which in a
better level of health cannot fail to materialize.

It should be pointed out, however, that the medical service
which is available is neither thorough nor exhaustive; nor is it
expected to be under the terms of the act. If a doctor finds
that a case requires an operation, or he is uncertain of the proper
diagnosis, he must now have recourse to hospital and consult¬
ants whose services are not required to be available to him or
to the insured under the act. It has happened fortunately up
until now that the voluntary hospitals (supported by private
subscription and by the free work of their medical staffs) have
stood ready to supplement the work of the general practitioner

6 Industrial Insurance Companies and Collecting Societies, Cd. 614, 1920.

to the extent of their facilities. In this way, hospital service has
been usually available, although it has never been guaranteed,
never been completely adequate in the urban districts, always
been dependent on private charity and subject in no way to any
control by the patients or by the public health authorities. It is
one of the anomalies of the act that its success on the medical
side depends upon access to hospital and consulting facilities
which have asi yet no organic relation to the rest of the scheme.

Now that the hospitals are on the verge of insolvency, the Gov¬
ernment is being obliged to consider relating them to the insurance
provisions more formally.

Much attention was given in our investigation to the quality
of medical service given. While accurate general statements
are difficult to make, it is probably fair to say that the workers
of England are on the whole now getting more and better medical
service than they ever did before the act. It has to be remem¬
bered, however, (1) that under the act every registered general
practitioner has always been eligible to become an insurance
doctor, simply by making application; (2) during the war a
great many of the best practitioners were in army or navy service;
(3) the act only requires such treatment as “ can consistently with
the best interests of the patient, be properly undertaken by a prac¬
titioner of ordinary professional competence and skill.” (Medical
Regulations.)

These three facts alone go far to account for much of the
criticism which has been leveled at the quality of medical work
given under the act. Moreover, the doctors were at first hostile to
or suspicious of the act. Today this is not true. Out of between
20,000 and 23,000 doctors (how many of these are only consultants
and not supposed to do insurance work is difficult to find out) who
are in active practice, over 14,000 are on the panels.

Criticism of the medical service has fastened on the danger of
“ lightning diagnosison the distinction made in attention given to
panel as against non-panel patients; on the difficulty of lodging
complaint against a doctor; and on the fact that the best doctors do
not become insurance practitioners. There is undoubtedly con¬
siderable basis for some of these criticisms or they would not be
repeated so often. But the testimony is on the other hand con¬
vincing that medical service is better now, barring the handicaps of
war just noted, than it ever could have been before for thousands
of persons. Now that the number of patients per insurance doctor
is to be limited and the doctors are finding their panel practice in

most cases so remunerative, the reasons for inferior service will
be reduced. The doctors are and will be increasingly anxious to
keep the good will of the insured and of the insurance committee
as well.

The Scotch Health Insurance Commission which until July,
1919, administered the act for Scotland says in its latest report
that “ very little reliable evidence has emerged of neglect of duty
on the part of insurance practitioners or of any real ground for
loose general charges of inefficiency. Dissatisfaction with a
limited service and agitation for an extended and complete
medical and institutional service must not be founded on as a
condemnation of the present insurance scheme but rather as an
indication that it has resulted in increased appreciation of the
importance of a great development of medical services in the
interests of the national welfare.” (Boldface ours.)

Invidious distinction between panel and non-panel patients
is undoubtedly still made; but it is generally considered to be
decreasing. The feeling of inadequacy in the attention received
appears to be a social as much as a medical matter. In those
cases where the insured person does not use his panel doctor, but
goes to another physician and pays a private fee, the person is
usually in the ranks of the clerical workers who still feel a certain
class superiority to manual workers and therefore to panel doctors
who treat manual workers.

The real reason for inadequacy of treatment is affirmed by
the best doctors in England to be due rather to inadequate medical
education and insufficient opportunity for special diagnostic assist¬
ance from which insured and non-insured suffer alike. Opportun¬
ities for study after the doctor leaves medical school are meager;
his opportunities for consultation with other practitioners and
specialists are not well organized; access to laboratories is not as¬
sured.

An offset to this as well as to other shortcomings of general
practitioners’ service, is increasingly being resorted to in the form
of partnerships of insurance doctors. These partnerships are of
from two to six men, each of whom has his assigned hours at the
offices and also naturally has some diseases on which he is more
of a specialist than his colleagues. Under this arrangement the
insured are certain of a doctor being at hand all the time, yet each
individual doctor has free time for study and recreation. The terms
under which these partnerships work are governed by regulations
of the Ministry of Health, so that the danger of any abuse of the

plan is slight. Indeed, such arrangements appear to be officially
encouraged. Similar results are to a certain extent obtainable where
an insurance doctor hires an assistant to help him.

The medical services under the act are, it should be emphasized,
specifically planned on the theory that only general practitioners’
services can at this stage be given. Tuberculosis care, for example,
except for domiciliary treatment, is now removed from the act and
entrusted to the local authorities. The insurance doctor is not sup¬
posed to have to treat venereal cases, which also go to a local clinic.
Nor is the insurance doctor expected to take maternity cases unless
he so elects. But he is supposed to be able to diagnose and treat
the usual complaints and to act as a clearing house for sending
special case& to the necessary agency. It is in his home contacts and
constant knowledge of the family that his value lies. The policy
thus exemplified seems to argue for more adequate statutory pro¬
visions to correlate general and specialist advice.

The question of determining eligibility for medical benefit
reveals the anomaly of trying to adhere strictly to the insurance
principle in the provision of medical treatment while at the
same time trying to make the physicians’ services as fully available
to all as possible. Loss of one’s medical card, failure to pay a
sufficient number of weeks’ contribution or failure to “ sign on ”
to a doctor’s list, may temporarily make it difficult if not im¬
possible for one to be eligible for medical attention. Testimony
is general, however, that a person needing treatment is likely
to get it regardless of his legal status under the act. And this
seems natural. The only real evidence which it should be neces¬
sary to give as to eligibility for treatment is increasingly seen
to be the need of treatment.

This principle does not apply as yet, however, in the case of
attention needed by the dependents of the insured. They must pay
for their service; and, as would be expected, the workers of a
family go to the doctor on the slightest provocation, while the non¬
insured persons will wait until illness becomes serious and therefore
doubly difficult to cure. Yet even here the tendency is for the
insurance doctor in his home visits to consider the troubles of other
members of the family in which situation the fee, while important,
is not the primary consideration. And without a great deal of
bother the visiting insurance doctor can often direct a non-insured
sick person to the service of local doctors available under special
provisions for the tubercular, for maternity cases, school children’s
cases, etc.

Decision as to the eligibility of the insured for benefits in doubt¬
ful cases is now in an unsatisfactory state, since the standards of
different approved societies vary so greatly and their method of
iocal follow-up are so different. As it is, if the approved society
doubts the validity of a claim it usually sends its own doctor or
referee to see the patient, advising the local doctor of the step and
asking for his help. This intervention is usually welcomed and the
necessity for a second diagnosis is so far recognized by all that
thirty referees are now included as salaried doctors under the act.
Indeed, it is not inconceivable that the time may come when there
will be one doctor to give medical advice and a wholly different one
to authorize the certification for cash benefits. It is felt by many
that there is much to commend such a separation of two quite
different functions.

It is in fact difficult to tell in many cases whether incapacity
for work really exists. The border line cases are many, especially
where there is a tendency to diagnose illness as “ general debility ”
and “ anemia.” In such cases it will be seen that there are two
points of view at work and they perhaps form a wholesome cor¬
rective to each other. There is the point of view of the approved
society anxious to suspend payments as soon as that can be justi¬
fied; and there is the point of view of the insurance doctor who
usually sees the need, especially with “ run down ” persons, of a
prolonged rest without worry and under wholesome conditions. It
is admittedly hard to reconcile these points of view where the sur¬
rounding conditions, economic and otherwise, are constantly work¬
ing to negative the efforts of the doctor. Truly preventive work
in many cases requires more than cash or medical benefits. It
requires more food and better-cooked food, more fresh air, more
quiet, no worry, etc. Failing these, cash benefits and bottles of
medicine or tonic may be poured out unceasingly without apprecia¬
ble results.

It should be noted, in short, that under any act it will be difficult
in certain cases to define when the person is sick; and it will be
necessary while giving medical service without stint to use care
in paying cash benefits for these border-line instances of incapacity
or valetudinarianism.

This is, of course, an aspect of the problems of malingering.
There is undoubtedly some of this kind of unconscious malinger¬
ing which has to be guarded against; and the use of referees
under the act is essential to keep this at a minimum. It is also
necessary to this end to have the administration of cash benefits

in the hands of a local agency which can really be in intimate
touch with the beneficiaries.

At present there is the further safeguard of weekly certification
for cash benefits by the doctors (except in chronic cases where the
approved society agrees to accept a bi-weekly or monthly certifica¬
tion).

Apart from these comparatively exceptional border-line cases,
the amount of deliberate malingering is agreed by all to be
negligible. Indeed, as a problem of practical administration, it has
hardly to be reckoned with.

4. Extension of Medical Benefits

The Government health insurance budget of 1914 contained
estimates for the services under the act of referees, consultants
and nurses. It is therefore fair to say that, although the war
prevented the addition of any of these services, they were con¬
templated as parts of an adequate plan. It is probable that within
the next year the Government will again introduce plans to aid
in the provision of hospital beds, consultants’ services and perhaps
nurses 5 services. Already one of the approved societies with a
membership of over 300,000 gives dental treatment free to the
insured.

There is considerable demand in labor circles for the extension
of medical benefits to the families of the insured. It is recognized
that this would entail a larger contribution, but it would be pro¬
portionately less than the amount necessary to protect the men
alone.

This demand reaches its logical culmination in the stand of the
Labor Party for a national medical service under which medical
attendance would be available—much as education now is—for
anyone who wanted it. The distinction should be noted, however,
between a “ state medical service ” and a “ national medical service.”
Under the former all doctors would be full time salaried servants
of the state. The advocates of such a plan are naturally few.
Under the latter the state would rather aim to build up and provide
such medical service as was needed to assure the public health;
leaving to private, individual and voluntary attention the doctors
and patients who did not choose to receive the benefits of the public
service, just as now public education is available for all unless the
individual chooses to substitute a competent private school.

The Association of Approved Societies, including some of the
largest friendly society and trade union approved societies to
which belong some six million insured, has also recently come
out for nationalizing the medical service in the sense used above
as the most satisfactory way of getting medical attention for all
with as little red tape as possible.

The doctors as represented by the British Medical Association
are opposed to the idea of a national medical service, although
they recognize and approve the tendency of the state to provide
certain consulting and specialist services in the hospitals on a salary
basis as well as for the local authorities to make the medical provi¬
sions which they do. 8

It is, indeed, a fact which no one in England ignores that wholly
apart from the insurance, there are today several thousand whole
or part time doctors in the salaried employ of one or another gov¬
ernmental body; and the number is constantly increasing. If the
insurance doctors are included in this number it would total close
to 18,000 doctors. * 1 2 3 4 * * 7 When applications were sought for the thirty
referees posts to be filled this summer there were over 1,300 ap¬
plicants; which certainly indicates no great reluctance on the part
of doctors to accept a salaried position with the government.

6 The following quotation from an article on “ The Future of the Medical
Profession ” in the British Medical Journal for October 19, 1918, indicates
quite typically a prevailing view among many thinking doctors as to the types
of medical service which they would like to see available:

“What, then, should be the profession’s constructive policy? In formu¬
lating this it were well shortly to consider the basis, or bases, on which the
profession renders service to the community at present, and these services
can be classified under four heads, according as they are rendered, under con¬
ditions of:

1. Salaried service, whole time or part time—for example, public health
appointments, tuberculosis appointments, school medical appointments, etc.
(military medical services are not under consideration). These are conditions
of “ State Medical Service.”

2. Part time contract service—for example, national health insurance
work.

3. Voluntary service—for example, work done at charitable hospitals.

4. Individual service—for example, private practice. This can be divided
into two heads, according as it deals with (a) general work, (b) consultant
and specialist work.”

7 “ The majority of the medical profession in Great Britain is engaged in
either whole-time or part-time service for the state or for local authorities.
Of the 24,000 medical practitioners in England and Wales, some 5,000 are
engaged as poor-law doctors, some 4,000 or 5,000 in the public health service,
possibly 500 in the lunacy service, some 1,300 in the school medical service,
and smaller numbers in various other forms of medical service for the state.
This is exclusive of the general practitioners who undertake contract work
under the National Insurance Act, and who cannot fall far short of three-

fourths of the total membership of the profession. It should be noted that
many doctors held several appointments.”— Public Health and Insurance, by

Sir Arthur Newsholme, page 83.

There is also an association of about 500 doctors actively in
favor of a national medical service.

These facts are dwelt upon at length because this particular
problem is significant for America as illustrating how a situation
was not fully faced at the outset. Whether Great Britain was
to have an insurance plan for dealing with health or a public
health program supplemented by cash benefits, does not appear
to have been candidly considered by the initiators of the legisla¬
tion. As a result, the experiments have conclusively shown the
need for making whatever medical provisions are offered uni¬
versally available without regard to the industrial status of the
citizen, his income limit, or his standing in a scheme of cash
subventions.

In solving this problem serious consideration has to be given
to the attitude of the medical profession itself. Its co-operation
is manifestly essential to any plan the community decides to
undertake. But that co-operation can so easily extend over into
dictation that the experience of England is a useful warning.
The outstanding features of any plan to be adopted should be
offered to the medical profession for an opinion and for sug¬
gestion as to ways and means. But it will be a serious mistake
to allow those who are accustomed to think that they “ have a
vested interest in ill health,” to dictate how much or how little
medical service the community shall provide for itself on a public
and universal basis. On that matter of fundamental policy which
is really the first problem to be faced in working out a plan for
health insurance or other public health provisions, the doctors’
advice should not be final, as they are likely to have a too
ex parte view. It is true of the doctor’s relation to the state,
as of the relation of other professional experts, that when basic
policies are being determined “ the expert should be on tap
but not on top.”

Contrary to the usual impression in America, however, the
doctors are not today opposed to the British act. Quite the
opposite is the fact. They realize and state freely that “ the
doctors are better off under the act than they were before. They
have an assured regular income and no bother with collections.”
As one doctor in a peculiarly influential position said: “ The
doctors could not be pried loose from the act with a crowbar.”
Such remarks should not be taken to mean that doctors feel that
they have a sinecure under the act. But it has brought a degree
of economic independence in the profession, which is unprece-

dented, and has served as a spur to better workmanship and to
the enlistment in the profession of more young men and women
than the medical schools have ever before had. The fact that
the doctors have a small organization which is actually a trade
union, and another large and powerful body which is to all
intents and purposes a professional union, and that both of these
organizations represent the doctors in collective bargaining with
the government, should not lead to the conclusion that there
is an absence of co-operation in these official relations. This
fact does, however, point strikingly to the importance of having
groups of officials both in the actual governmental administra¬
tion and in the local areas strong enough to carry on the inevita¬
ble bargaining process in a way calculated to assure that the
rights of the tax payer (that is, everyone) and of the patient are
protected.

In saying that the doctors are today favorable to the act we do
not, however, ignore the opposition which exists especially to cer¬
tain details of the present administration. The greater part of the
practitioner’s contact with the Government comes through his rela¬
tions with the local insurance committee (upon which the doctors
have of course at least three representatives). And it is inevitably
true that varying standards and regulations should be set by these
committees. This may give rise to legitimate annoyance as may
also the regulations which may be imposed from the office of the
central administration in the Ministry of Health. But it would be
wrong to think that such regulations are imposed without oppor¬
tunity for conference. There is a National Advisory Committee
upon which the doctors are represented which considers just such
matters as these .

Moreover, when all is said, two facts have to be remembered:
Some degree of oversight of the work of the individual doctor
is surely in the public interest; it is only important to be sure
that it is an oversight exercised reasonably and tactfully. And,
secondly, the English doctor does not have to become an in¬
surance doctor unless he so elects. And even when he does, his
private practice is still open to him to any extent which his strength
enables him to carry it. His panel practice, however, need be as
large and no larger than he desires, since he does not have to take
an insured person upon his list unless he wishes to. Over 14,000
doctors did not willingly “ subjugate themselves to the state ” or to
the insurance patients, nor would they if the relationship was irk¬
some, continue so to do for eight years. The fact is that once the

arrangement was entered into the doctors did not on the whole find
it onerous, unduly inquisitorial or destructive of their freedom. As
pointed out in the footnote on page 23, they recognize the need for
a variety of types of medical service, all of which should be avail¬
able both to the public and to the individual doctor who is choosing
a congenial type of professional activity.

Medical opposition to the health insurance idea in our own
country fastens to some extent on the idea that the “ contract ” with
the Government involves an ignominious, subordinate and undignified
relationship of the doctor to the rest of the community. Nothing is
further from the truth if the British experience can be taken as
proof. It is, of course, true that when this contractual relation¬
ship is established many points have to be made explicit which as
between the doctor and the private patient have been largely implicit.
But to this no conscientious physician can have or in England does
have objection. For example, the contract requires that the physi¬
cian’s services shall be available under the following terms:

“ A practitioner is required to attend and treat at the places, on the
days and at the hours to be arranged to the satisfaction of the Committee,
any patient who attends there for that purpose, but he may with the consent
of the Committee, which shall not be unreasonably withheld, alter the places,
days, or hours of his attendance, or any of them, and shall in that event
take such steps as the Committee considers necessary to bring the alteration
to the notice of his patients.” s

In this as in its other provisions it is fair to say that the
contract is only laying down for all practitioners a standard of
professional obligation which all good doctors already adhere to.
Indeed, to that extent and in this respect the act has unquestionably
leveled up the standard of medical service which is given in Eng¬
land; and to this there can certainly be no honest objection.

In short, the contract is a necessary device for defining the extent
to which the Government and the insured patient may call upon the
doctor in return for a prescribed sum. That this should lower the
dignity of the doctor’s status is no more thought of today in Eng¬
land than it would be thought of in any way compromising to pro¬
fessional integrity to take the oaths of allegiance, etc., necessary to
becoming an army doctor.

5. Administration of Cash Benefits

The cash benefit is administered through the approved societies,
except in the case of the 300,000 “ post office contributors,” who

8 Manchester Insurance Committee—Terms of Service for Insurance Prac¬
titioners, January 31, 1920.

may collect through the local post offices benefits to the amount of
their contributions.

A brief explanation of the machinery will serve to show the part
played by these societies. They are the official carriers. A worker
must join one of them (or become a deposit contributor at the post
office). He then receives from his society a stamp card, which he
gives to his employer to stamp as evidence of payment by him of
contributions for himself and his employees. These stamp cards,
one for each six months, are returned to the worker at the end
of the half yearly period; who in turn sends his card to his approved
society, which credits him with the payment and presents the cards
to the Government as evidence of the collection.

When the worker wants cash benefits he gets his medical certifi¬
cate of illness from his doctor, and sends it along to the approved
society, usually by presenting it locally to an agent, who forwards
the claims.

Since the approved societies are organized in different ways—
some in local lodges, some in central organizations with merely local
agents— the promptness with which claims are settled, the standard
of eligibility for benefit, and the thoroughness with which a local
visitor investigates each case, in addition to forwarding the doctor’s
certificates to the central office, vary greatly.

Moreover, since each worker may join any approved society he
wishes, it is not unusual to find in one shop workers who belong to
from twenty-five to fifty different approved societies. It is the mul¬
tiplicity of societies which makes it necessary and convenient to use
the stamped cards as evidence of payment. And when it comes to
payment of benefits, this multiplicity may make it necessary for the
agents and sick visitors of a great number of approved societies to be
visiting in the course of one day in the same street or even in the
same house.

The frightful waste to which this overlapping leads is at once
apparent. So important a feature of the act are these approved
societies, however, that further discussion of them is postponed to
a separate section.

As already intimated, the diversity of standards set up by the
approved societies means that some societies are making every effort
to curtail payments while others are giving benefits almost without
question. The element of control which is counted on by the central
governmental authority to keep the payment of benefits within rea¬
sonable limits is provided by considering each society’s finances

autonomously. The act provides that the surplus of any society
(as determined by the government valuation taken every five years)
shall be available for increased benefits for the members of that
society. These increased benefits may be in the form of either cash
or medical benefits. Whether or not this provision has acted as
an effectual check upon liberality of payments, is doubtful. For
the government, although careful in its inspection, has on the other
hand made special and additional financial provisions for societies
which become insolvent.

Another provision relating to the control of approved societies’
administrative expenses says that if they go above 5 shillings per
person per year there shall be an assessment upon the members of
that fund or their benefits may be correspondingly reduced.

There has been some criticism on the score of delay in payment
of cash benefits. There is undoubtedly some ground for this com¬
plaint, although here again much of the criticism can be explained
in terms of the disorganized clerical staffs of the approved societies
during the war (e. g., one large society lost 100 men clerks the day
war was declared). Or, in the second place, delay in settlement is
frequently to be explained because of some irregularity in the pre¬
sentation of the claim for which the approved society is not respon¬
sible. Here again the machinery of the stamp cards causes con¬
fusion, as for example, when the worker unwittingly gives his card
to the agent of a society to which he does not belong and the card
is put aside by the agent or lost in the offices of his company.

In general, however, the largest carriers, especially the
friendly and big trade union societies, pride themselves upon the
efficiency of their office organization and the promptness with
which claims are paid. It was the usual thing in a number of the
societies visited, to have all the claims received in a morning’s
mail handled and dispatched the same day. Testimony is gen¬
eral, however, that the commercial companies which are acting
as approved societies are the least satisfactory carriers from the
point of view of prompt payment—due perhaps less to intention
than to the fact that the health insurance is only incidental to
their profit-making business.

It may be said, in short, that most of the administrative difficulties
surrounding the present method of paying cash benefits are not
inherent parts of a soundly-organized insurance plan, but they are
inherent parts of a method of paying through approved societies

such as England felt compelled to resort to because of the strength
of the commercial insurance companies and friendly societies.

6. Administration of Medical Benefits

Because it seemed expedient to work the cash payments through
approved societies and because they had available no adequate
administrative machinery for the provision of medical treatment, it
was necessary for England to set up separate machinery for the
administration of medical benefits. The country was therefore
divided into about 150 local areas, in each of which an insurance
committee was created, the membership of which is representative
of the different interested groups. This insurance committee makes
the contracts with the local doctors who are to serve in that area.
It also decides how many insured persons may be on the list of any
one insurance doctor, although a maximum of 3,000 persons has
now been set by the Government. This committee, moreover,
handles the transfers of insured persons from the list of one doctor
to another; receives and deals with complaints against the insurance
doctors; makes the payments to the doctors; and makes arrange¬
ment with local druggists for the provision of drugs.

The means at the disposal of these committees for dealing with
inferior or inadequate medical service are by no means completely
satisfactory, but are being constantly improved. The limitations
of the size of the panels is universally felt to be desirable, as is also
the use of official referees, who will now necessarily work in close
conjunction with insurance committees.

Actual formal complaints against insurance doctors by insured
persons are remarkably rare, due perhaps rather to the cumbersome¬
ness of the machinery and the difficulty of proving a case, than to the
absence of criticism. And it frequently works out in practice that
the insured persons complain to the approved society with which
they feel on better terms than to the insurance committee; and the
approved society then handles the complaint if it is serious. If the
insurance committee finds that there are grounds for the complaints
which it receives, it may discipline the doctor in any one of several
ways, the most drastic of which is to cancel his contract.

In such a case, however, the doctor has the right to appeal to a
disinterested local body composed of three medical men and a bar¬
rister as chairman.

To safeguard the interests of the insured person who would
assure himself of satisfactory medical service, the following
methods are provided: He has free choice of doctors; the

chance periodically to change his doctor; and the right to com¬
plain to an authority,—the local insurance committee.

In practice, the first provision—free choice of doctors—means
today as much, if not more, actual freedom in selection than
obtained before the act was passed. For in the great majority of
cases those doctors who were already practicing in industrial or
agricultural centers became insurance doctors. And in some dis¬
tricts the assurance of a fixed income from insurance practice has
meant that additional doctors have been attracted there to practice.

The clamor for “ free choice of doctors ” was not one, however,
which was or is raised by the patients, although it goes without
saying that the most successful medical work depends upon a condi¬
tion of personal confidence between doctor anVl patient. But there is
very much less interest on the part of the insured persons in exercis¬
ing a free choice than was anticipated. The great problem has,
indeed, been to get workers to indicate a preference for some doctor,
in order that they may be assigned to a place on that doctor’s list.
It is a further consideration that the free choice may take place on
a capricious basis. Mention was frequently made of cases where a
popular doctor on a convenient corner had larger panels than he
could handle properly, while better doctors, who were less genial or
lived on a side street, had less to do than they could take care of.

Once the insured person is on a given doctor’s list and finds the
medical service unsatisfactory (even though there may not be suffi¬
cient ground for official complaint), he may apply for transfer to the
list of another doctor. Such transfer may take place at th.fend of
any six months’ period; or, if the original insurance doctor also
signs the application, the insured may transfer at once. Manifestly,
however, the latter condition is difficult to fulfill; and the former is
resorted to in surprisingly few cases.

7. Payment of Doctors

The basis for the payment of doctors is 11 shillings ($2.75)
per insured person per year to which in the rural areas are
added mileage fees for distances of over two miles to the
patients’ homes. A doctor with a thousand persons on his list
would thus have an assured income of about $2,750. (This
would mean over $3,000 if considered from the point of view of
the comparative purchasing power of money in England and
in America) to which would be added his fees for private prac¬
tice. It is admitted by doctors and affirmed by all observers
that the doctors are thus better off under the act than they ever

were before. They do not have to worry about collecting fees
from panel patients; they get their insurance income at regular
intervals of three months; they are virtually guaranteed an income
dependent upon the size of the panel. Now that the practice of
doctors working in partnership with several colleagues is being
extended, the time on duty is being divided up in a way to make
the amount of work necessary to earn a comfortable living exceed¬
ingly reasonable, leaving time for study and recreation.

Some trouble still arises about the number and identity of
insured persons on a doctor’s list but difficulties on that score
are being reduced. The doctor is paid on the basis of a list
made up in advance, and if there are transfers or movement of
persons an adjustment is effected at the end of the period. Here
again it seems true that doctors are on the whole less particular
than they used to be about being sure that the patients whom they
treat are on their own panel. If the visitor to a doctor’s office
needs attention he is likely to get it; or he is sent where he can
get it.

The present so-called capitation basis of payment has the effect
of making it an object for the doctor to keep his insured patients
well and of getting them well as quickly as possible. Of course,
there is also possible the view that since the fee is assured the
service will not be so good. Undoubtedly, instances to illustrate
both tendencies could be cited. But on the whole it is agreed that
the capitation basis is the most satisfactory.

In Manchester and Salford, the doctors originally objected to
the capitation plan and a basis of payment for services rendered
was adopted. A similar plan started in four other localities has
been dropped. The plan provides a scale of fees for different types
of visit and a full record by the insurance doctor of services ren¬
dered by him. The records pass through the hands of a committee
of doctors to see that there has not been excessive visitation and
the payments are then made. The total fund from which payment
comes, however, is determined on the capitation basis; that is, it is
as many times 11 shillings as there are insured persons in the
entire district; so that no doctor gets more in the long run than
he would in any other district—unless he happens to be working
in an area where the rate of sickness is constantly excessive. Since
the total resources are thus limited, it has thus far under the visita¬
tion basis been necessary at every settlement to discount the doc¬
tors’ claims for remuneration. The result naturally is that the good
doctors who find their bills discounted because their colleagues have

been doing too much visiting and are thus making large claims,
inquire into the type of medical service being rendered. Whether
the reason for this discounting of claims is that the scale of fees
for the several services is high or that the doctors do too much
visiting, it is impossible to say. The doctors themselves, however,
and others in the Manchester district, believe in the system and
say that it works to satisfaction. It has the good result, they con¬
tend, of paying for work done and thus encouraging good work
where it is needed. Not the size of the panel, but the rate of sick¬
ness should in this view determine the payment.

The capitation basis, however, is clearly the simpler of the
two; requiring less check and oversight, and giving the benefit of
a guaranteed amount of income and of freedom to give all the
medical attention necessary without thought of seeming to “ over-
visit.” And in the last analysis the kind of medical attendance
given is determined more by the education and morale of the pro¬
fession than by the method of compensation.

The English experience in administering medical benefits
thus confirms the case for (1) local administration of the medical
service; (2) for a uniform basis for contracts with the local
doctors in all districts; (3) for a uniform basis for certification
as to physical condition justifying cash benefits; (4) for medical
referees; (5) for co-operative use of local diagnostic clinics.

8. Drugs

A prescribed number of drugs and medical appliances are avail¬
able free on prescription from the insurance doctor. These pre¬
scriptions when filled are forwarded to the insurance committees
who make the payments to the local chemists whom they have ap¬
pointed to fill the insurance prescriptions, on the basis of charges
which have been agreed to between the Government and the national
pharmaceutical organization.

In the event that a doctor is found to be giving too many pre¬
scriptions or those calling for too expensive drugs for which equally
good but cheaper substitutes are available, he may be brought before
a committee of doctors to explain his conduct.

In practice, however, the administration of the drug provisions
of the act gives rise to little difficulty and is considered to be run¬
ning smoothly. Criticism under this head—as with the other fea¬
tures of the act—fastens rather upon the small number of items
and appliances made freely available to the insured as their
statutory right.

9. Approved Societies

The use of the approved societies as carriers of the cash
benefits has been an expedient but in many ways unfortunate
procedure. Certainly no other country seeing the extra expense,
duplication and over-lapping caused by the present system should
think of resorting to this method of handling the cash benefits.

There are now over 900 approved societies and there were at
one time over 2,000, many of which have been consolidated with
other funds.

Each society, of course, has its own central office, its own local
agents and sick visitors. Accounts must be kept for it separately
in the Government offices and there must be individual supervision
of their activities. Some societies select their risks; others admit
every applicant. There is comparatively little segregation of risks
by occupation and no segregation by residence. The statistics
which would show the incidence of sickness by occupation and
locality are thus especially difficult to get.

In short, the whole approved society machinery is a fine example
of what to avoid.

Indeed, there are not lacking signs that the English themselves
would be glad to be rid of them and to administer the insurance
through one national fund. The valuation of approved societies
which is now nearing completion will undoubtedly reveal wide dif¬
ferences in the amount of surplus which will be available for in¬
creased benefits in the several societies. If it comes about that some
of the strongest commercial companies and friendly societies are
in a position to offer larger benefits than many of the other societies,
there will undoubtedly be considerable objection from the trade
unions. And it is openly hinted even in official quarters that in the
event of such a wide discrepancy being revealed, the agitation for
one national fund as the carrier would be very active.

Certainly the warning was again and again repeated to us: “If
you go in for health insurance, don’t have anything to do with
approved societies.”

10. Hospitals

As already stated, no hospital treatment is given under the act.
The doctor who wants his patient to have institutional care must
get him into a voluntary hospital. Of late years this has been in¬
creasingly difficult because of a shortage of beds and now also
because the hospitals are financially embarrassed. Costs have more

than doubled, former contributors are now taxed so heavily that
they do not give; contributors from among the “ new rich ” have
not yet materialized. As one advocate of privately supported hos¬
pitals naively remarked to us: “ We expect that in another ten

or twelve years the new rich will get the habit of giving and then
the hospitals will be all right/’

But meanwhile frantic efforts are being made to keep the hospital
doors open at all; and those who are planning the public health pro¬
gram of the country, see that a wholly new way of meeting the
problem is essential. It is possible that the Government will in the
near future abolish the poor law hospitals and make their beds
available for use by the local authorities. It is also possible that
the Government will subsidize the hospitals on the basis of the num¬
ber of beds used by insured patients. If some such arrangements
as this are made, it will be then necessary to take steps to pay the
hospital doctors who now give their services; as it is clear and right
that if the hospitals are to be paid for their work for the insured,
the consultants should be paid also.

This is an admittedly transitional time in respect to hospital pro¬
visions, and those who are anxious to see adequate provision made
as soon as possible with no suggestion of charity about it, are advo¬
cating that the hospitals be operated as public institutions. This will
undoubtedly come in time, although the Minister of Health has
officially stated that this is not the present Government program.
Nevertheless the trend is already toward wholly publicly supported
institutions for tuberculosis and maternity; and a good number of
municipalities have their own general hospitals.

At the end of August of this year (1920), the Minister of Health
introduced a bill which is likely to become a law, which aims to
make a beginning at public support and control of the hospitals.
The proposed legislation gives power to county authorities to supply
and maintain hospitals, to contribute to hospitals, to undertake the
maintenance of any poor law hospitals in their areas, to provide
ambulance service. It also gives these authorities power to raise
the necessary funds.

The element of national control begins to enter, for contributions
out of county funds to voluntary agencies are only allowed “ on
such terms and conditions as may be approved by the Minister.”

This legislation is obviously a temporary and temporizing manner
of dealing with the shortage of hospitals, since it puts the whole
financial burden on the counties while making possible a beginning
of national oversight. Still further legislation from the national

point of view is thus needed, and is probably contemplated in con¬
nection with a bill to transform the poor law institutions into general
municipal agencies.

11. Tuberculosis

At present provision is made under the act for the sanatorium
treatment of insured persons having tuberculosis. This arrange¬
ment will be discontinued after the year 1920, not because it is no
longer needed, but because it is felt that the local authorities can
handle this disease better and more adequately. For then the whole
population will be considered at once from the point of view of
institutional care of tuberculosis, rather than be treated in two
groups—the insured and the non-insured. Domiciliary treatment
for this disease remains, however, the duty of the insurance doctor.

Admittedly the present provisions are too few; almost every in¬
surance committe has a waiting list for sanatorium treatment. To
pass on to the local authorities the work of maintaining all the sana¬
torium beds necessary for tuberculosis will, therefore, not solve the
problem. As was said above with relation to general hospitals, it
will be necessary in the immediate future for the Ministry of Health
in conjunction with the local authorities, to adopt a policy which
will really promise to cope with this enormous problem.

Interesting experiments are being made in the organizing of self-
supporting farm colonies for tuberculosis patients who have had
sanatorium treatment but who will be much safer and healthier if
they do not immediately return to the cities. One of these colonies
just out of Cambridge in Cambridgeshire may be mentioned as
deserving additional study at the hands of those in this country
who are carrying on the community’s attack on this scourge.

12. Nursing

No nursing services are provided under the act although as
already pointed out they were contemplated in 1914; and will in all
probability sooner or later be added. The nursing situation, like
that of the hospitals, is admittedly unsatisfactory and in a transi¬
tional state.

Nursing services are now provided by “ local authorities in con¬
nection with Tuberculosis and Infant Welfare, by Parish Councils
for the supervision of children under the Children Act, by Educa¬
tion Authorities in following up the recommendations as to treat¬
ment made by School Medical Officers, and by various voluntary
agencies. With such a plethora of authorities it is to be expected

that it will frequently occur that two or more nurses will at one and
the same time be visiting the same family/’ 9

It will thus be seen that some districts are adequately staffed
while others are not; and that there is needed a proper coordination
of national and local policies which will make universally available
in a public way the services needed.

13. Prevention and Research

The claim that health insurance means a new awareness of the
value of preventive medicine has on the whole been substantiated
in the experience of Great Britain, although the developments have
perhaps been in unforeseen directions.

It may be fairly said that the Ministry of Health which was
created in 1919 grew not only out of a knowledge of the need for
co-ordination of medical efforts, but also out of the fact that a
unified national health program and administration was shown
to be necessary to national vitality by the health insurance and
by the army draft.

It is also true that since the insurance act was passed,
measures have been adopted for providing separately for
venereal disease, for tuberculosis, for maternity and child welfare.
How much of a causal relation exists between the needs revealed
by the insurance act and the inception of these services, it is
impossible to say. But it is certain that, now health insurance
is a fact, there is a new impetus and eagerness to attack the
hospital, nursing, dental and sanatorium problems on a public
and fundamental basis. It is also true that the demand for a
constructive policy worked out under a national medical service is
greater than it would have been today had there been no insurance
act. And the doctors have certainly come a long way toward their
new attitude regarding preventive medicine, toward clinical co¬
operation and toward regarding themselves as custodians of the
health of the community as well as the curers of its ills. This
change of outlook, this invaluable educational process, can be
ascribed almost wholly to the experience they have gained in work¬
ing the insurance act.

It is, moreover, now widely realized that the tuberculosis as well
as other sickness cannot be greatly reduced until the housing prob¬
lem of the country is seriously faced on a large scale.

It was to have been expected, however, that the records of
sickness would reveal local problems and occupational exposures
which needed special attention. Medical records were required of

*A Public Medical Service, by David McKail and William Jones.

the insurance doctors until the war when they were abandoned,
and only at the present time is attention being given to devising a
record card that will be of value. For it is admitted by all that the
pre-war records were practically valueless as disclosing the in¬
cidence and nature of the country's sickness.

In short, after eight years of the insurance act, there is not a
definite body of knowledge as to which localities, trades or age
groups experience which particular kinds of illness. But here again,
extraordinary as this omission seems, it must be remembered that
through five war years the doctors who remained in civil life hardly
had time to see all the patients who needed attendance to say
nothing of trying to keep individual records.

On the side of research the results, although only indirectly
attributable to the health insurance, have been most valuable. A
Medical Research Committee was organized at an early date after
the act was passed; and during the war that committee became
the official research body of the Government under which worked
the Health of Munitions Workers’ Committee and others. Its find¬
ings, reported in full in special monographs and in its very inter¬
esting annual reports, have been of great medical value; and the
chief problem, as was pointed out by the secretary of the Committee,
is to get the information obtained by research quickly into the
hands of all the general practitioners of the land.

So important has become the work of this Committee that it
has now become the Medical Research Council, removed from
under the jurisdiction of the Ministry of Health (for reasons which
seem to the outsider hardly sufficient), and placed directly under
the Privy Council.

On the whole, considering the intervening problems, the work
of fostering preventive measures and research has gone well;;
although it is a matter of great regret that the original form of
medical record keeping was not well enough designed to be of per¬
manent use, and that the body of existent records is so meager.

Not the least significant of the preventive influences which have
been set in motion are two reports, one by Sir George Newman,
Chief Medical Officer of the Ministry of Health, on “ An Outline
of the Practice of Preventive Medicine;” 10 the other the Interim
Report of the Consultative Council on Medical and Allied Services
on the “ Future Provisions of Medical and Allied Services.” 11

10 Cmd., 363.

n Cmd., 693. This, and the report referred to in footnote 10, may be
ordered by the code numbers given at a nominal cost from H. M. Stationery
Office, Imperial House, Kingsway, London, W. C. 2.

These reports have had a wide reading and are in harmony
on their major recommendation, although the latter carries its con¬
structive proposals into greater detail. They emphasize the strategic
place in a national public health program of:

1. The general practitioner as the first and major point of contact with
the people;

2. The primary (or local) health center as the unit of local medical
work especially on its diagnostic and specialist side although the members of
the clinic would be largely local general practitioners;

3. The secondary (or district) health center with salaried specialists
and consultants having necessary hospitals and laboratories;

4. A number of supplementary services and special hospitals;

5. A better integration of medical education with the day-by-day work
of the general practitioner.

Their conclusions as to general principles and as to methods of
carrying them into practical effect seem to your investigators to be
sound and to warrant the further study of your Commission. Two
copies of each accompany this report.

14. Insurance Finances

The sources of income for the insurance expenses are the
following:

1. Contributions of employers and employed.

2. Contributions of the State under the act.

3. Supplementary Grants of Parliament for Women’s Equalization Fund;

and for the Central Fund.

4. Parliamentary Grants as follows:

a. Medical Grants in Aid (under Act of 1913).

b. Special Grants in Ministry of Health Budget for Central

Administration.

c. Special Grants for Expenses of Insurance Committee.

The sources of expenses under the insurance act are as
follows:

1. Cash Benefits.

2. Doctors’ Fees.

3. Administration Expenses of

a. Approved Societies.

b. Insurance Committees.

c. Central Administration.

4. Drug Fund

5. The Reserve Fund

6. The Contingencies Fund.

7. Women’s Equalization Fund.

8. Central Fund.

In explanation of the above two paragraphs it will be useful
to describe those funds not already explained.

The Reserve Fund is set up to enable the insurance fund to
pay for the sickness of the older members. The statutory contrib¬
utions are based on the sickness rate of 16 years of age and until
there has been one complete generation contributing under the
act it is necessary to create a reserve to meet the increased incidence
of sickness of the older members admitted at the start. The fund
is based on a complete payment by 1950.

The Contingencies Fund is created for every approved society
to meet any extraordinary demands that might arise.

The Women’s Equalization Fund is to pay for the high incidence
of sickness of married women workers, which the societies have
found it necessary to provide for.

The Central Fund is to provide for those cases where an ap¬
proved society shows a heavy and extraordinary deficit.

The moneys available from each contribution are divided as
follows for men:

Pence

Sickness Benefit . 3.02 (per cap. per week)

Disablement Benefit . 1.11

Maternity Benefit .68

Medical Benefit . 1.92

Expenses of Administration .94

Total . 7.67—7 2/3 pence.

To Benefit Fund (including administration) .7-2/3

To Contingencies Fund and Central Fund . 2/3

To Redemption of Reserve Fund Value .1-2/3

lOd.—total of
employer and employees’
contribution.

But the expenses under the act, in addition to requiring 2/9 of
the expense of benefits to be borne by the state, necessitate other
appropriations.

The increased doctors’ fee now makes necessary a special Ex¬
chequer grant. The amount of this grant in 1919 was £3,000,000;
but the 1920 figure will be considerably higher.

The Women’s Equalization Fund comes from an Exchequer
grant of £280,000.

The expenses of administration in the Ministry of Health come
(as far as can be roughly estimated from the 1920-21 budgets) to
something over £400,000.

The statement given below will indicate in an approximate
way only the aggregate sums involved in the insurance plan for
the year 1920.

Approximate Balance Sheet of Receipts and Expenditures for the Opera¬
tion of the Act (1920) 12

Receipts

Expenses

Contributions of Em¬

Benefits (cash and medi¬

ployers and Employees

£29,800,000

cal) .

£28,700,000

State Grant including

Supplementary Medical

Supplementary Grants

(1919 basis) .

3,100,000

on Women’s Equaliza¬

Central Administration..

400,000

tion .

6,900,000

Contingencies Fund.

1,800,000

Supplementary Grant for

Reserve Values .

1,500,000

Medical Services
(1919 basis) . „.

3,100,000

Reserve Surplus .

6,000,000

Interest on Cash Re¬

serves .

2,000,000

£41,800,000

£41,500,000

A rough check of this balance sheet is obtained by making a com¬
parative study of the Estimates of 1920. These show that the expense of the
act to the Government and payable out of the exchequer is between eleven
and twelve million pounds for the year. Such an amount added to the
receipts of the act from the contributors roughly balances the total expense
of the act.

Another sidelight on the cost of the act was supplied by the
figures of Dr. Addison, the Minister of Health, in reply to a ques¬
tion in Parliament on July 19, 1920. He said that since the incep¬
tion of the act the total cost was in round numbers 190 million
pounds. Of this amount 99 million pounds had gone in benefits;
expenses and administration had taken 25 millions; and there was
a balance in reserve of 60 millions.

About 12 per cent, he said, of the receipts from contributions
went to the approved societies for their expenses of adminis¬
tration.

As far as it is safe to draw any conclusions from the above
figures, they indicate that to provide medical service for about
15 million people and cash benefits to the amount of something
over 15 million pounds, the yearly Government expenditures
is about 12 million pounds and the cash contributions of employer

“This statement aims to give only the most general approximation of
receipts and expenses. It includes a figure for the supplementary medical
grant which is probably much too low owing to the fact that the 1920 medical
oayment is at the new rate of $2.75 per insured.

and the workers are something over 29 million pounds. And it
has so far cost one pound for administration for every four pounds
expended on benefits.

It would seem to be fair to draw the conclusion that for the
benefit of 15 million peoples’ health, about 205 million dollars (in
terms of American currency) per year is being spent; or between
$13 and $14 per insured person per year. If these figures are at
all accurate, the total outlay appears large for the benefits received.

In a careful study of “A Public Medical Service” (Allen &
Unwin), 1919, made by a Glasgow doctor and the Clerk of the
Glasgow Insurance Committee, the case is set forth with a con¬
vincing show of accurate statistics for a truly public medical service
(cash benefits excepted), which would cost between 12 and 13
shillings per person per year—or a little over $3. The additional
cost necessary to pay cash insurance claims would certainly not
amount to over $5 (probably $4 would be much more nearly a
correct figure on the basis of the amount of the English benefits) ;
making a total cost of less than $10 per capita for medical and
institutional treatment available for the entire population with
the addition of cash benefits of the amount specified in the British
act.

These figures are introduced as being in no sense exact or con¬
clusive. But they are believed to indicate that the present methods
of an insurance scheme with duplicating approved societies,
elaborate doctors’ panels, government inspecting agencies and small-
scale private druggists, create a variety of channels for small wastes
and leakages, which in the aggregate amount to an unwarrantedly
high expense for the value received.

Moreover, it is obvious that the method of financing the
measure has now departed (if indeed it ever was so financed)
from an insurance basis. Special funds are created and new
costs are added with no regard to the amounts originally made
available. This is not said in objection to the present method
of financing by supplementary grants. But it is a further point
in the evidence that the tendency is increasingly away from an
insurance and toward a public health basis of finance, so that the
funds are made available on a basis of public need rather than
solely on a basis of joint contribution and a pooled risk.

V. Conclusions

T HE general conclusions reached by your investigators were
somewhat summarily stated at the outset. But it may not
be out of place to consider finally some of the more specific results
of the British experience from which America might especially
profit.

A. The application of the insurance method to the provisions
of medical, hospital and nursing facilities is a clumsy and indirect
way of making sure that the public health is being fostered and
conserved.

The tendency is a wise one which brings a separation between
the medical services which should be universally available and the
cash benefits which might remain on an insurance basis.

On the other hand, it is undoubtedly true that the immediate
expense to the public treasury can be kept considerably reduced
by securing payment for the medical services out of the fund
created by the joint contributions.

And it is further true, not only in England but wherever
health insurance has been instituted, that the working of the
insurance has supplied the great education to all groups in the
community but especially to the doctors, as to the necessity for
. a more extensive public health program.

Hence, as a practical matter, the incorporation of the medical
benefits into the insurance act is probably a wise step coupled
with which should be the extension of these benefits under the
act to all dependents.

B. The public health provisions of the community should as
soon as possible include the following:

Medical attendance for all sick members of the community who
desire it (including general practitioner and consultant services) :

Institutional treatment including hospitals, sanataria and con¬
valescent homes;

Medicine and medical appliances;

Dental treatment, nursing; and

All medical services incident to maternity.

These provisions should be available on a basis of joint state
and local support with the actual administration of the work as
the responsibility of the local health authorities, who would be so
organized or reorganized as to be able to include the above services
under their care.

Plans for the relation of local to district medical facilities have
' been admirably worked out in one or two English counties and their
method of organization suggests a model for careful consideration.

As illustrative of the method there in use, the plan given below 13
is valuable:

1. The authority for carrying out the scheme will be a Board
consisting of representatives of the County Council and of the
General Hospitals.

2. The General Hospital areas shall be those shown on the
sketch plan, subject to such modifications as experience shall show
to be necessary.

3. In each Hospital area an Advisory Committee shall be
formed of members of the Hospital Staff and Medical Officers in
charge of the out-stations, whose duties will embrace—

a. Ensuring that all treatment given at the out-stations is

effective, and

b. Advising the Board of Representatives on all medical

matters, including all difficulties arising in connection

therewith.

4. The situation of the out-stations shall be as shown on the plan
and where practicable shall be established in connection with the
Cottage Hospitals. They will be opened in the order decided by the
amount of work likely to be done at each and will be arranged to
meet the circumstances of each particular area, being larger and more
completely equipped in the denser localities than in the more scattered
areas.

5. The out-stations will be provided and equipped by the
County Council.

6. The uses of the out-stations are primarily for examination
and out-patient treatment in connection with—

a. Venereal Diseases,

b. Tuberculosis,

c. Ex-service Men,

d. School Children,

e. Maternity and Child Welfare,

for which provision has been made at the public expense. They
will also be available for other conditions for which provision
may be made in the future, and may be used by the Medical Officers
for insured persons and general hospital cases, by arrangements
with the County Council.

7. The Staff will be—

a. Medical

(1) A regular staff consisting of local practitioners
appointed as medical officers by the Board of Repre¬
sentatives.

(2) A consultant staff consisting of—

(a) Visiting Staff of the General Hospital.

(b) The Tuberculosis and Venereal Disease

Officer of the County Council.

b. Nursing

(1) District Nurse

J * Report of County Medical Officer on Health to Gloucestershire County

Council, June 4, 1919.

(2) Masseur and Masseuse )

(3) V. D. Orderly and Nurse ( peripatetic

8. The Out-stations will be opened—

a. Weekly at a convenient hour, on a fixed day, for atten¬
dance by the medical officer, or oftener if necessary for
the work of the County Council.

b. Periodically, for attention by members of the Visiting
Staff, and by the Tuberculosis and Venereal Disease Officer,
by arrangement.

c. As often as may be necessary for intermediate treat¬
ment by the Nursing Staff.

d. At such other times for the convenience of the
Medical Officer in seeing his own patients and hospital cases,
by arrangement with the County Council.

9. A register shall be kept of all attendance in a book provided
for the purpose, and a case file kept for each case containing such
simple notes as may be necessary for the medical history of the
patient.

It should be pointed out that such proposals as these do not
involve the idea of a universally state-employed medical service.
Your investigators believe that the idea of such a service is repug¬
nant to the great majority of physicians and patients, and that the
best results, at least for some time to come, are obtainable in other
ways. For example, the general practitioner who is to be available
to give public medical service to any comer, would (as now) go upon
the Government’s list and have assigned to his care those families
who elected to have him as their physician. He would then be paid
on a capitation basis. If any individual feels that he would get
better service by going to a doctor who is not on the public list,
or by paying a public practitioner in his other capacity as a private
doctor for the service he gets, he is at liberty to elect either of
these alternatives. And the doctor meanwhile has whatever spur
is provided both by the opportunity of getting on in the public
service or of making good in private practice.

In short, there would be necessary the employment on full
or part time (as at present with the insurance doctors) by the
public health authorities of a constantly increasing number of
general practitioners and specialists, thus accelerating an exist¬
ent tendency. But there would still be the widest possible lati¬
tude for those persons who chose to secure their own medical
and institutional care, and for those doctors who preferred on
whole or part time, to carry on private practice.

Moreover, the existence side by side of a considerable amount
of both public and private practice would undoubtedly react whole¬
somely on each, keeping initiative, energy, professional ambition and
a spirit of public service alive and growing.

In short, the medical benefits under an act should be as
liberal as possible, including the maximum of institutional pro¬
visions as well as general practitioners' care, and all treatment
should be carefully co-ordinated to bring into effective use for
the insured and his dependents all local and all state facilities.

C. Having made medical provision available for all insured and
their dependents, it would still be necessary to make provision on a
compulsory insurance basis for payment of cash benefits to workers
when they are unable to work and secure wages.

All employed persons should be required to insure in a state
fund out of which cash benefits would be paid during incapacity
due to illness.

D. Cash benefits should be at least 50 per cent of wages.

E. The administration of cash benefits should be decentralized
on the disbursement side on a geographical basis, but centralized on
the collection side, so that the Fund would be pooled and the risk
distributed over an entire state. Benefits should be paid through a
local agency, which would be in the control of representatives of the
affected groups.

F. The cash maternity benefit should not be administered on
an insurance basis, but should be universally available and should be
of an amount to cover fully the expenses of confinement. There is
much to be said for a policy which makes of this benefit a maternity
endowment of an even more substantial amount.

Medical service should be freely available for all maternity cases.

It is recognized that these conclusions may seem to your Com¬
mission to extend into a larger field than that of the immediate
inquiry. They are, however, the conclusions to which your investi¬
gators were led in an honest and wholly unprejudiced effort to
discover the good and the bad in the English act, from the point of
view of its furtherance of the public health and from the point of
view of its availability for American uses.

It may, of course, be necessary for each separate community
to make the same social experiments and learn by the same
mistakes. It is to be hoped, however, that this is not true; that
it is possible for one community to build upon the experience of
another. And the experience proves, as your investigators read
the evidence, that the acute necessity for greatly developing the
public medical facilities of the state should be recognized, and
set apart from and in addition to any insurance provisions. The
two are not mutually exclusive. They are supplementary. But

the proper and wise development of the public health services will
and should modify the kind of insurance plan which is adopted.

Your investigators recognize fully the painful fact that those
forces which have for various reasons been in opposition to the
introduction of health insurance into America, have taken the
line that “ prevention ” rather than insurance is the method to
pursue. Where this position was simply taken to delay matters
and “ preventive ” was simply a plausible cant phrase with
which to oppose any governmental action, the opposition has of
course been sinister to a degree.

But this fact should, nevertheless, not be allowed to lead to a
slighting of the immediate value and need of aggressively preventive
work. Hence, if we are to meet that opposition most effectively
we might well take up the slogan:

Medical and institutional service freely available for
all employed persons and for their families, with cash
benefits for physically incapacitated workers out of a
fund created by joint contributions, and with the
strengthening and co-ordinating of the federal, state
and local public health activities on behalf of children,
mothers, the subnormal and abnormal, the aged and
those suffering from all infectious diseases.

It is not a question of prevention or insurance. It is—when all
elements in the problem are faced at once—a question of assuring
simultaneously adequate medical service, prevention and cash sub¬
vention. And there is no good reason why these three aspects of
a public program should not be developed together. Certainly to
allow the advocacy of one to be used as a basis for opposition to
another is unscientific and short-sighted.

This report will certainly be construed wrongly if it is taken to
be unfavorable to health insurance in general or to the British act in
particular. It aims rather to give a discriminating statement of the
extent to which insurance has been able to carry out the original
promises and purposes of its proponents.

The British Health Insurance Act has been a distinctly for¬
ward step in social legislation. It is, however, to be hoped that
your Commission will see its way clear to favoring a program
at once more thorough-going, far-reaching, economical and
scientific, which will, however, include an application of the
insurance idea in its legitimate sphere.

Appendix

Persons Interviewed in Course of Inquiry into
British Health Insurance

Mr. W. A. Appleton, secretary, General Federation of Trades Unions; Mr. John
Baker, secretary, Iron & Steel Trades Confederation; Mr. Barlow, assistant secretary,
Workers’ Union; Dr. Ethel Bentham, panel doctor, London, Member Labour Party
Committee on Public Health; Mr. George P. Blizard, insurance expert (former secretary,
Labour Party Committee on Public Health); Miss Margaret G. Bondfxeld, secretary.
National Federation of Women Workers; Mr. G. A. Stuart-Bunning, secretary, National
Federation of Sub-Post Masters; Mr. G. W. Cantor, insurance executive of Union of
Post Office Workers; Mr. A. S. Cole, Peek, Frean & Co., Ltd., London; Dr. Alfred Cox,
secretary, British Medical Association; Mr. Wm. Cramp, assistant secretary, National
Union of Raihvaymen; Mr. G. W. P. Epps, Government Actuary’s Office; Dr. Letitia
D. Fairfield, medical officer of London County Council; Sir Walter M. Fletcher,
secretary, Medical Research Council; Mr. Thomas Foster, building trades employer,
Bromley, Lancashire; Mr. I. G. Gibbon, administrative official in Ministry of Health;
Mr. E. Hackforth, administrative official in Ministry of Health; Mr. R. W. Harris,
administrative official in Ministry of Health; Mr. Frank Hodges, secretary. Miners’
Federation of Great Britain; Mr. D. J. Jenkins, insurance executive, Iron & Steel Work¬
ers, Approved Society; secretary, Association of Approved Societies; Miss Eleanor T.
Kelly, employment manager, Debenham & Co.; Dr. Wm. Kerr, medical officer of' London
County Council; Mr. F. Kershaw, insurance executive, National Federation of Women
Workers; Mr. James P. Lewis, executive officer. Hearts of Oak Benefit Society; Mr. E.
J. Lidbetter, Bethnal Green Poor Law Union; Mr. Thomas Lilly, clerk, Manchester
Insurance Committee; Mr. McFarlane, divisional inspector. National Health Insurance,
Manchester District; Sir Charles Macara, cotton manufacturer, Manchester; Mr. A. B.
Maclachlan, administrative official in Ministry of Health; Mr. J. S. Middleton, assistant
secretary, British Labour Party; Mr. Miller, insurance executive, Workers’ Union;
Miss Murby, inspecting staff, National Health Insurance; Sir Thomas Neill, president.
National Amalgamated Approved Society; Dr. Charles A. Parker, consulting physician;
Dr. Marian Phillips, women’s organizer of Labour Party; Mr. Charles G. Renold,
firm of Hans Renold & Co., Manchester; Dr. Harry Roberts, panel doctor, London; Dr.
Meredith Roberts, administrative official in Ministry of Health; Mr. D. A. Rushton,
editor, National Insurance Gazette; Mr. Samuel Sanderson, secretary, Insurance Section,
Amalgamated Association Card, Blowing and Ring Room Operatives; Mr. Sharp, Harrods’
Department Store, London; Mr. Robert Smith, insurance executive, Cooperative Whole¬
sale Society Approved Society; Mr. H. O. Stutchbury, administrative official in Ministry
of Health; Mr. Fred Thomas, Amalgamated Weavers’ Association; Mr. John Turner,
secretary, National Amalgamated Union of Shop Assistants; Miss Ward, inspecting staff.
National Health Insurance Dept.; Mr. Warren, insurance executive, National Amalga¬
mated Union of Shop Assistants; Sir Alfred W. Watson, government actuary; Mr. &
Mrs. Sidney Webb, economists, members 1909 Poor Law Commission; Dr. A. Welpley,
secretary, Medico-Political Union; Dr. J. S. Whitaker, administrative official in Ministry
of Health; Mr. H. L. Woolcombe, secretary, London Charity Organization Society.