Chapter Eight. A Medical Proletariat

C HAP T E R E I G H T A Medical Proletariat T doctors are,of course, the key figures of governmentalized medicine. The prime purpose is to procure their services and all that goes with them. Their honoraria alone, disregarding the dentists', constitute any where between nearly 50 per cent (in Switzerland) and little more than 15 per cent (in Britain) of the total cost. But far more is at stake. Being the focal point of medical procedures, the doctor directs the course. He decides who is sick and for how long, and. thereby determines the trend of cash benefits, the quality and quantity of pharmaceutical products, the need for hospitalization, X-ray, laboratory and hydrotherapeutical services, etc. Even the cost of administration is dependent in part upon the degree of control over the profession. And what is more important than all cost problems-the welfare of the patient is in the doctor's hands.

- Govemmentalized health servicessooner or later run into the iron curtain of mountainous costs. The easiest way out is to curtail honoraria, denouncing the doctors as profiteers. That mayor may not be true, but it is both popular and money saving. GERMAN DOCTORS' ~here wa~ no ser!ou~ medic~l opposi MISCALCULATION tlon t~ Blsma~ck s slckne~s lI!-surance when It went Into operatIon In 1884. Indeed, the profession was gratified. Legally it still was a gewerbe like any other, different from barbers in degree of education but subject to police regulations, especially to a tariff with minimum and maximum rates. Governmentaliza72 73 ] A MEDICAL PROLETARIAT tion raised the social level· of the profession by bringing it almost to the dizzy height of civil service status. Also, new vistas of financial and scientific progress·seemed to open..The radius of health care was.toext~n.d.on a broad front, medical studies to receive a greatithpetlls and encouragement.

Be it out of enthusiasm for the new idea or out of sheer sub ordination to the almighty Prussian bureaucracy, if not out of greed, the German doctors gave away their birthright and that of their patients from the outset. They did· not stand on the principle of professional secrecy, but tolerated from the very beginning the rule of panel employees over professional decisions. ·And they agreed on being paid by the pan~ls rather than directly by the patients. When they recognized the con sequences it was too late. At first the panels experimented with engaging physicians as poorly paid employees. This method had to be abandoned due to· the general malcontent and to the airing of corrupt practices-selling of jobs to doctors.l · The next step was to establish the free choice of the doctor by the patient, but only among doctors who entered into contractual relations with the individual panel. Any of them could do that. Otherwise medical practice was to be the same as in private, except that the fee was controlled by contract on the basis of medical per formances, the so-called attendance system. Naturally, the number of performances mounted as it did under the same provision of the Lloyd George system and tends to do under similar arrangements. even in Switzerland. The kassen retali ated by cutting the fees. The lower the fees, the greater was the incentive for the doctors to raise the number of attend ances. The· war was on.

To squeeze the doctors' fees at each contract renewal became a major job of the panels. They were at great advan tage in dealing with individual physicians. The latter organ ized a fighting trade union, the Hartmann Federation, in 1900. Collective bargaining-the very first in Germany-was to re place individual contracts. A further purpose of the Federation was to take out of the hands of panel administrators the arbi trary power of accrediting panel doctors. Free competition among physicians was to be·restored. .

COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 74 DOCTORS But that was just the beginning of the real bat MONOPOL;· tIe. By 1913, after a prolonged exchange of threats of strike, lock-out, boycott, etc., be tween .the Hartmann .Federation and the ·panels' association, the "Berlin agreement" was concluded. From then on, the number of accredited practitioners was to.be limited, such as to one general practitioner per 1,000 to 1,350 insured, and similarly, specialists. The patient could choose among panel doctors only. These were organized in a separate federation, the number one function of which became to regulate by red tape the accrediting of panel doctors-to block newcomers. The panels, too, insisted on restricting free competition: more .doctors mean more patients. The bulk of the profession itself was broken up into three classes with antagonistic interests: the so-called panel doctors, eligible to the insured, many of them retaining their private practice; the "trustee" doctors employed in a supervisory capacity; and the rest who practiced in private only and as occasional consultants of the panels. This last group of physi cians was largely responsible for the once renowned medical progress in Germany. Friction among these medical groups has become a standing feature of the system, in addition to the class warfare between the association of panels and the federation of panel.doctors.

Having become quasi-monopolists-· a role doctors· do not deign to assume-did not make the panel doctors any happier. Their incomes kept declining while the abuses were rising.2 The Great Depression was the proverbial "last straw." It ruined the doctors' bargaining position and opened the door for a radical reform. That was imposed finally by Bruning's emergency decrees, .especially the one of December 8, 1931. He was running the Reich by emergency decrees as a "con stitutional dictator," unwittingly preparing the ground for the real one. The main feature of the new system was·a quarterly capitation fee that was to set the pattern for Holland, Britain, etc. It had been applied by individual panels before, but be came mandatory with the BrUning reform and still is in force. The total capitation fee (pauschal-betrag) for all accredited doctors is being figured out by way of a complicated formula, based on the number of insured and the sum of contributions 75 ] A MEDICAL PROLETARIAT collected by each. panel, and· on a number of minor factors.

Presently, approximately 20 per cent of panel revenues is.·paid per quarter to each panel doctors' .federation that distributes the money among its members~ Fees of specialists and for spe... cialservices are deducted first .together with contributions to a pension fund for the panel doctors·(whQ are forced into early retirement) and a 2 per cent charge for the federation's own expenses. The rest is dividedamong the practitioners,which means to them never more, and often less, than a quarterly 4.20 marks per patient-the equivalent, before the Roosevelt devaluation, of about $1.00. Their special services are recog nized by the federation very reluctantly, if at all. Noone doctor is supposed to cut· too great a slice of the fixed total at the expense of· the others. The system has led to the unprecedented proletarization of the German profession,disregarding a small minority. Special ists receive such very moderate fees as 50 marks (nominally $12.00) for an appendectomy. But they fare better than the average practitioner who has ·to.·handle up· to 100 consulta...

tionsand visits a day-to make a living.. Even under the stable monetary conditions of the late 1920's, a doctor was paid, for 'a consultation, less than one-half of what a barber received for·a haircut. By this time, he is even worse off; remuneration rates are almost unchanged, while the mark's purchasing power has substantially depreciated again. DOCTORS' STATUS Beva1J.'sintention to reduce the profes UNDER BEVAN sion's status is quite apparent. In accordancewith the collectivist undertone of his scheme, most $pecialistsare to become employees of the governmentalized hospitals at moderate salaries. Appoint ments, promotions and special remunerations already are col ored by Party politics. .The specialists can choose to be part time .. employees and are then·Raid in proportion to the number of hours they devote to hospital work. Their regular basic pay for full-time staff work begins with an annual 1,400 pounds sterling or $3,900paid to those up to 31 years of age, and rises to about $7,000at retirement, with remuneration for "special merits" to a fractional number. 3 The specialists who used to.serve in hospitals for no pay which is characteristic of their attitude under the free enterCOMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 76 prise system-now receive a uniform per-hour fee without much regard to qualification, efficiency,knowledge or experi ence. They are pressed into the bureaucratic routine if they sign up for full-time with security of tenure and a seniority incentive. In any case, the nationalization of their function largely eliminates the private practice of.specialists, which is their major source of income. The beginner may be better off than before, and the untalented or shy may prefer the medi ocrity of safe tenure to the hazards of the market place. But the body of medical experts becomes an adjunct of the Ministry of Health, dependent for promotion presumably on good politi cal behavior rather than on accomplishment and the patients' satisfaction.

"Men who for many years," stated Time and Tide (London) "have been acknowledged by their colleagues as consultants and specialists now find themselves reduced to the rank of Senior Hospital Medical Officer with an income which is quite inadequate and with little hope of supplementing it from pri vate practice. Does the man on the stretcher know what the specialist will get for healing his wounds, treating his disability, saving his life or relieving his suffering? He will get fifteen shillings ($2.10). Take away income tax and he is left with seven and six-pence ($1.05)." If the specialist's chances are reduced to a modest, though relatively secure, economic existence-at the potential price of subordination to bureaucratic routine and political favorit ism-the general practitioner carries the full burden of the lowering of professional standards. He is on a yearly capita tion fee of nominally eighteen shillings ($2.52) per patient paid out of a pool of $112,000,000. But before distribution of the pool, mileage fees (about $5,600,000), fees for emergency treatments, a premium to provide for superannuation, etc., are being deducted.

Even with 3,000registered patients-almost 2,000 too many, from the point of view of medical responsibility, and a number considered to be greater than can be attended by the doctor of average physical or mental endurance-the doctor's gross annual income would be lessthan $7,600.But given the amount of paper form-filling involved, any such exceptionally "fortu nate" practitioner is in need not only of ample office space771 A MEDICAL PROLET ARIA l' in the right location-and of equipment, but also of full-time secretarial and assistantial aid,· the latter, at any rate, during his·vacation. All told, for a year or two,his net income before taxes perhaps might reach $5,090,but he could not keep uP.tpe tempo. of work neededwitllPu~s,e~i2u~L(;la~age to his profes sional self-respect and to nis~Health:~"l.'he .vast majority .has little chance of drawing that much. And few are lucky.enough to retain a share in the dwindling··volume of private practice.

It dwindles fora second reason: the fewer private patients, the higher the doctor's fee'to each. Excessivedemand on the doc tors' time reduces its availability and raises its price. In any case, the British practitioner's income depends on the number of patients who register with him. It bears no relation to the number of consultations and visits, to the amount of time and discomfort devoted to the individual case, to the ingenuity of his .art or of his science, to the success or failure of diagnosis and therapy-nor to the' patient's ability to pay. The pecuniary motive that provided a positive incentive for higher quality of performance is turned in the negative direction of driving for more patients and less "work" with each of them. The dentist is paid on a schedule that assumes his average prewar earnings as the equivalent of $4,500, at the latest pound-dollar rate, and actual chairside work as 35 hours per week,. adding a 20 per cent allowance for the rise in the cost of living. (Wages have risen 124 per cent.) Each individual performance has been timed and the remuneration fixed ac cording to the number of minutes it takes, practically ignoring such non-measurable, "capitalistic" standards as the effort, inventiveness, art,or risk-taking involved.4 As long as the orgy of tooth-pulling lasts, the dentists work overtime on overtime, putting patients in chairs side by side, but at least "earn well." True, their professional expenses are officially.estimated at 52 per cent of their income. Even so, they are making hay while the sun-Bevan's.miscalculation of the demandis shining. Gross earnings as high as $40,000 per annum occurred in sorne instances. But after ten'months of such bonanza, the Minister first decreed the confiscation'of all dentist incomes over apd above a gross of $17,.OOO~Later, this was changed to a 20 per cent cut across the table.

COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 78 DOCTORS' The experience of panel systems provides the INSECURITY lesson that unless the doctors are regimented, the schemes' costs of operation never can be controlled. And to be regimented they have to be pauperized. Mr. Bevan deserves the distinction of having clearly recog nized the inherent logic of the system and of having drawn the conclusion manfully. That his intention is to lower the eco nomic status of the profession so as to be fully able to control it is shown by some of his methods. They would be unintelli gible if looked at merely from the point of view of saving operating expenses. British practitioners used to provide for their own retire ment by selling their practices. The new scheme prohibits this once and for all. Physicians already practicing are compen sated, if they enter the new scheme, by an an~uity that repre sents, supposedly, the average capital value of their practice.

Henceforth, subterfuges, such as a doctor giving up his office space for the benefit of another, are to be punished severely. Evidently this has nothing to do with the quality or quantity of medical service. Why, then, the interference with elementary property rights, equivalent to prohibiting the sale of patent rights or of business "goodwill," all of which would be uncon stitutional in the United States? The reason should be ob vious: to compel the medical' man to seek a safe haven in government service for which a modest retirement pension will be provided. YOUNG DOCTORS' A further consequence is even more seri PROSPECTS ous. How should a young practitioner start his career? To hang out a sign and to wait for patients is extremely hazardous for anyone without ample means. Until the new scheme came in force, the young doctor either had enough means to buy an old colleague's practice or he could borrow from a bank, pledging his future income. Similarly, he could buy a partnership in a medical firm-which is now prohibited, too, except in the dying-out private practice-and be introduced to the patients by the senior partner. In either case, in due course, he would have liquidated his debt and become independent.

Now, he has to wait until a local executive council an nounces a vacancy and has then to apply. That he has to 79 ] A MEDIOALPROLETARIA'l' wait many moremonthsfotadecision<~~'(lJllinor detail. What matters. is that the local doctors tend. to exclude new .compe tition. Due to the narrowness of their own incomes and to their need for more patients, they tend to become a closed group, trying to keep out new competition. In all likelihood, the young doctor's· chances amount to an opening in some re mote area, with few patients, no private practice on the side and difficult living conditions. He may even run into the prob lem of finding space for his office and for his family, given the housing shortage and the embargo on.acquiring office space through the purchase of a practice. Outside of Russia, nowhere has the intentional strangula tion of the general practitioner gone so far as in socialist Great Britain. But.even in Russia, as elsewhere on the Continent, the poorly paid practitioner may suggest that his panel patient become a private patient. That, too, is prohibited in Britain.

As tothe young specialist in Britain,5 his chances are equally reduced unless he-enjoys a bureaucratic· existence and ·the political game. To start a new private practice is.virtually' out of the question. The same holds in many other compulsory systems. Wherever the doctor is being paid by the authorities and not by the.pati~nts, the outcome of compulsion is a set of fees that does not cover the .investment in expensive instru ments. This has an additional effect that could scarcely have been unintended: it forces the. patient .into governmentally controlled dispensaries which can afford the investment-at the taxpayer's expense.