Chapter Thirteen. The Futility of Physical Controls

USince we Nazis are convinced that we are right, we cannot tolerate anybody who contends that he is right. For if he too is right, he must be a Nazi, or, if he is not a Nazi, he simply is not right." Dr. Goebbels. C HAP T E R T H I RT E E N The Futility of "Physical" Controls T shortcomings and abuses of the compulsory system mean that the public is endangered by deterioration of the medical services and that the costs of providing them are threatened with skyrocketing. For both reasons, controls are needed. SUBSTITUTES FOR THE The most effective control is the PRICE MECHANISM price mechanism, of course. But that is eliminated from the outset. Common sense would indicate that at least some degree of control should be applied, by way of pricing the benefits it distributes, if only in the form of deductibles. They are applied generally in the French and Belgian schemes, except in distress cases and long sicknesses. The panels in Switzerland collect 10% to 20% deductibles from the beneficiary who himself does not pay.for the services. (Swiss panel managers get a commission on what they collect.) The Swedish free panels shift 25% of the expenses onto the patient. Other countries, except Britain under Bevan, use the device for restraining the demand for one kind of service or another. 1 But the deductibles do not accomplish their purpose. To be politically expedient they have to be too small. And experi ence shows that small deductibles create a tendency on the part of the beneficiaries to compensate for their "loss" in some service by trying to grasp more in some other. What is even worse, the technique of partial charges violates the basic prin ciple of medical security: to relieve the financially weak patient. He has to pay his share and may not be able to do so.

112 113] THE FUTILITY pF "PHYSICAL" CONTROLS' Nor do the deductibles correct the· basic difficulties of the system. Once the patient has, paid the charge for his sickness ticket or his share in the doctor's fee, there is nothing to restrain him from staying s~ck as lo~g< as the doctor agrees-provided he does agree-which is what happensJor reasons discussed in the foregoing chapters. The French system tries to check this abuse by restricting the validity of the patient's first two sickness certificates to eight days each. Result: the first two certificates are made out, as a common practice, for eight days each. Another planned substitute for the "invisible hand" of the price mechanism consists in refusing to pay ,cash benefits for the first few days-as a rme three days. Even the British free-for-all plan retains this delay-device. The delay is four days in Spain, five in Greece, six in Australia, and seven in the British' (1) ruled zone of Germany. But it is negative in New Zealand where cash benefits may be d'l.ted back to the first of the month. The imposition of a waiting period has some value as a deterrent, but again, it may induce the patient to stay sick longer than he would otherwise /so as to "get something out of it."

From Bismarck to Bevan,health politicians realize that only a system that does not charge the rpatient is a full-fledged political asset to its promoters. Especially so, when the bene ficiaries share in the payroll taxes which'finance the scheme when they feel that they have "paid;' in advance. That leaves physical controls as the way out, just as ration ing is the logical sequel to price fixing. And both have to be enforced by police methods. PHYSICAL CONTROL Physical restraints on the demand for -BY CHICANERY medical services are common to almost every scheme. In the panel sys tems, they may start at the outset: when the patient applies fora sick,ticket. This should be a pure formality. But the trouble of going repeatedly to the panel office, having the proper papers prepared and being kept waiting each time, may be a mild' deterrent. At any rate, the Austrian panel bureaucracy has developed quite a technique of deliberate chicanery and time-wasting so as to deter the would-be paCOMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 114 tients or to test their patience. The pattern finds imitators in other bureaucracies. In France and Belgium, red-tape in col lecting.the bills which the patients have paid themselves helps to exasperate the public and to save money for the panels. In other schemes, over-crowded doctors' officeskeep some patients away or drive them into becoming paying customers-a sort of a black market in doctors.

POLICING BY In a.French provinc~al city, the leading caisse GENDARMES officIal made the pomt: the Frenchman fears nothing but the gendarme. The point was that inspectors are needed to check on the patients, lest they "cheat." The point holds beyond France. The method orig inated in Germany, where for a long time the panels have been keeping on their payrolls agents to check whether the sick stay in their homes and in bed, if that was the doctor's order, or do house or garden work, or take a walk. Whether German or French, the patient need not admit the agent into his home; but then, he loses automatically his current claim on benefits. In Belgium, each "violation," including drunken ness, is "punished" by the loss of rights on health care for specified periods. In fact, a special plain clothes police. is being developed, an extra-legal onc, that scarcely could do without spying and snooping. How could it check but with the aid of neighbors and informers?

The respective scheme administrations are proud of this technique and its success, admitting its inability to cope with short maladies. Obviously, it takes time to put the agents into motion when their number must be limited for financial rea sons alone. No panel can afford more than a few. Britain is one of the countries where such policing is not as yet applied. But it would be remarkable if the elaborate controlling, check ing, policing and snooping used to supervise price-fixing, mate rial allocation, and similar regulations should not be extended to the medical field. If the Minister of Food (Mr. Strachey, a former communist) has his private police force, why should the far more powerful (and equally radical) Minister of Health be worse off? Note, in passing, that drunkenness is no sickness in at least three schemes, the German, Danish and Belgian, which raises a fine point in medical administration. But perfect silence reigns 115] THE FUTILITY OF "PHYSICAL" CONTROLS on ·this subject in the :innumerable rules, regulations, ordi nances and circulars of the French and British schemes. In both, alcoholism constitutes a.heavy item of the total'cost.

It goes without saying~at·police99n~rols are. most fully developed and' most ruthlessly applied"by the Soviets. "All operations in connection with social insurance' must be carried out incomplete conformity with the prescribed budget." The ·July, 1937, Bulletin of Central Committee of Communist Party, announced that persons infringing upon the "plans" of the social insurance fund "will be subject to serious punishment in a criminal sense." M. Gordon _(Workers Before and After Lenin, p. 304), who has collected the data on the social prac tices of the Soviets in the 1930's,further points out: "To make certain that the social insurance,physiclans did not show undue s~pathy for 'loafer~' and 'idlers' they were instructed not to exceed the prescribed routine in their attendance upon patients. According to the regulations, the doctor has the,rightto issue tickets of admission to the hospital for not: more than three days at anyone time; in case of complications or a crippling accident, for not more than ten days. Permission to remain in the hospital for more than ten days can only be granted on the authority of the chief of the medical staff or advisory com mission."

CONTROLLING THE The ,Austrian panels have initiated a DRUG "SPECIALS" tec¥ique of controlling the pharmaceutical expenses. The so-called specials-the new, expensive and specific drugs-are one item in prescriptions'that make the scheme officials'hair stand on end: hormones, salvarsans, vitamins, insulins, sulfa drugs, penicil lins, streptomycins, other antibiotics, carbazones, amino acids, antihistaminics, etc. New ones come up almost weekly and are especially expensive while they are new. But just then they are fashionable and most attractive to theexperimentally-mind~d doctors-most convenient and time-saving, too, since they im ply less. mental effort in diagnosis than carefully considered prescriptions. They are most in demand by the public itself, thanks to the wide publicity they. usually enjoy (which holds also for the popular laxatives). As a matter of fact,many . scheme patients consider themselves poorly treated if they do not get three or· four medicaments prescribe~ at eachvisit-: COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 116 and judge the doctor accordingly. What the Austrians started in 1928, the rule of the economicprescription,has had medical rather than economic significance. A list of authorized specials was drawn up, and the use of those unlisted forbidden. Obvi ously, the doctors' hands thereby were bound. But the .financial result has been virtually nil.

LIMITING Financially more effective,..and medically PRESCRIPTIONS far more damaging, is the G.er~an method of so-called regular prescrzptzons. After decades of bickering about what the doctor might or might not prescribe, his freedom to prescribe was finally established in 1935-under Hitler! It turned out to be a Hitlerite type of freedom. The general practitioner is permitted to prescribe each quarter up to a total of 4.50 marks per patient, equivalent before the last war to less than $2.00 ($1.00 by now). If one patient gets less, that much more is available for some other, and vice versa. Similarly, specialists have their "regular" quarterly pharmacy allowances (regelbetrag) per patient: 3.50 marks for surgeons, 4.75 marks for dermatologists, etc. The insane fare best: they may enjoy 5.50 marks worth of chemicals. If the result is insufficient medication, that is. just too bad. Naturally, at the beginning of the quarter, the doctor is more generous and may give way to demands. By the end, he will be cutting corners. Constantly, he will be in conflict with his patients and with his own conscience as to what is necessary and permissible. He also will have a nice bookkeeping job on hand, checking on everyone of the remedies prescribed to each and every patient. If he makes a mistake, he is liable for the excess, unless he obtains the O.K. of panel officials to whom the compound designations may be so many Greek words (but they learn fast) .

Sooner or later, every scheme is impelled to economize on the pharmacists' bills-eutting down on the doctors' freedom in writing prescriptions. The Austrian device of "filtering" the special pharmaceuticals is a popular one with the bu reaucracies. In most countries, the prescribing of expensive medicaments is dependent on advance consent of the lay officials or of governmentally engaged scheme doctors.

117 ] TH"E .FUl'ILIl'Y OF "PHYSIOAL" CONTROLS COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 118 gaged in endless accounting and elaborate bargaining pro cedures with the schemes. The former cost each member of the trade about 2% of his gross intake. In this respect, France is again the exception. Thanks to the system of "direct" pay ment by the customer, who then has to collect at the caisse,the pharmacist like the doctor in' France is saved the trouble and cost of additional bookkeeping and of continuous collective dealings with the scheme. When compulsion is introduced or greatly expanded, the drug business booms. Governmentally paid British drug sales jumped by about 50% in the First Year of Mr. Bevan who has stopped the doctors' dispensing-practically ruining the grossly underpaid rural doctors-so as· to bribe the chemists into cooperation. Not only more medicine is being prescribed for more people but also more expensive types of medicine. (See Chapter VI.) But private sales decline. They did so in Ger many between 1913 and 1928, from 65% to 51%of total sales.

The declinemust be much sharper currently in Britain. There, a minority of chemists are losing business, while those in fac tory areas are gaining. For all of them, the honeymoon with the scheme never lasts. COMPETING SELLERS The auxiliary industry, like the vs. BUYING MONOPOLY main profession, finds itself faced with an overwhelming monopoly backed by the state. No trade association or cartel can match that power, least of all a competitive industry. The German panels have forced down the pharmacists' throats a 7% all round cut on the sales' gross of common drugs, plus extra re bates. Other bureaucracies resort to arms-length bargaining in which the monopolistic buyer is likely to get the better deal. Cheaper prices for drugs and appliances would be an ad vantage from the consumer point of view if it were not for drawbacks. The pharmacies try to take out on the private patients what they lose on the governmentalized prescriptions.

In Switzerland they are encouraged to do so. In any case, the tendency to substitute cheaper ingredients obtains; to use autsimile recipes, next best to those prescribed; or to sell in "bulk": 50 aspirins where 10 would do ("we are out of smaller packages"). Who will check each time whether the iodine119 ] THE FUTILITY. OF "PHYSICAL" CONTROLS calcium solution is 10% or5%?Theznonopolist's chiseling is countered in kind, legally or otherwise. There isJittle.economy achieved, but the seed of added troubles is sown. Additional controlsare ~~"I:)~~"9~~~',~~rmadsts' organiza tions'are supposed to police fneirownmembers. Governmental inspectors examine and test ·the formulas and their handling. Everywhere, the bureaucracy exerts .pressure to reduce pre scription fees, to·use cheaper compounds, to eliminate propri etary drugs or trade name bra.nds, and to substitute as much as possible their ingredients, this to the detriment· of manufac turers and of private research activities. "Averaging up" of prescriptions is another device to cut down on the profits of the chemist who has no recourse to ·the courts.

Except in France, where the patient pays directly, the phar macists have to wait as much as six months to get their money, thus tying up their capital and losing interest. What that may lead to was graphically illustrated in Belgium. Last May, the central fonds national d'assurance maladie-invalidite notified the pharmacists' organization that it was unable to balance the accounts·'for the first part of the year. In other words, when worst comes to worst, the scheme defaults on the bills for medicaments and appliances. The position of the auxiliary trade in Belgium is' especially precarious because of the large number of competitors: some 3,300 shops in a country with ten million population which is more per capita than anywhere else in Europe. The conflict between the Belgian scheme and the apothe caries has a further and most instructive aspect. One .by one, the panels or their federations either open· their own outlets or make special deals with individual pharmacists who become their official 'outlets. The majority of the trade thus risks being gradually squeezed out of business. Nationalization of the trad~, step by step, is the prospect. That certainly is one of the expressed or implied ideals of Political Medicine .. It is implied' also in the new British scheme's promise to open government-owned medical centers which are to includepbar macies.· The recently (October .1949) reelected socialist regime of Norway is seton introducing a governmental mon opoly.of the importation and distribution of drugs.

COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 120 WHAT TO DO Most ·schemes do not own their own ABOUT HOSPITALS? hospitals, although many of them experiment with financing panel sanitoria, children's homes, etc. In Russia all, in Britain the bulk of them, are nationalized. On the Continent, they are pre dominantly municipal or charitable institutions, while a sub stantial number operates as private enterprises. In Germany and Central Europe, the leading clinics are parts of the gov ernmental but autonomous universities. Most schemes have contractual arrangements with the public institutions, some times even with the private ones, to which they send their patients and pay the current price. The patients are placed in a regular ward, ·usually designated as third class, and are treated exactly as the rest, which means the poor relief level. They are no better off than they used to be before compulsion, at which time they had to pay for hospital care only if they had· the means to do so. Often they are worse off, due to over crowding. In most countries-not in Britain-scheme patients can transfer to the second class by paying the difference in price.

Under the compulsory plan, hospitals, whether nationaljzed or not, get a tremendous influx of patients. People who normally would stay at home, even in maternity cases, take advantage of the scheme. They do so especially under the new "security" schemes which are far more liberal than the "insur ance" plans of old. The management of a French provincial hospital told this writer that before the 1945 "reform'; they practically never had farmers' wives as lying-in guests. Doctors unload· their patients in proportions as never before. Sick chil dren are sent in so as to save the family the trouble of caring for, and the doctor (under the capitation system) of visting, them at home. The adverse moral and even medical effects of over-hospitalization have been much discussed in the re spective countries. In most schemes, hospital costs rise faster than any others, excepting those for dental care. (See Chapters VI and VII.) The compulsory plans are largely responsible for this: they provide "easy money" that perlnits the public hospitals to carry on in an irresponsible fashion. In France as well as in Britain-the two western countries in which health security has fully replaced health insurance-public wards charge more 121] CONTROLS p~r bed ,than .do ,most of'.the,'pri~ate,·nursing,homes. 'This is remarkable in view of the fact that the latter are·less crowded, offer better service and pay their' own employees higher sal aries,than do' the 'former. Actually, the exploitation and low pay of nurses and other auxiliary personnel in many European public hospitals are appalling. As one example, the remark ably well-kept municipal hospital of Chartres, France, has a separatebuilding"for infectiouscases,'of .all kinds. When I visited it,' fifty-odd patients were served by.one single nun-, day and night. The average montWy pay of trained nurses amounts ,to ,the,equivalent of less than $80'in ,England and to about $35 in France, but nuns receive,'a monthly $6 arso.

Small' wonder that shortage of 'qualified personnel plqgues the""hospitals, in spite,of a substantial supply from religious orders. In Paris, untrained servants do'much of the "nursing." HOSPITAL In Britain, under Bevan, medical ap NATIONALIZATION pointments in the nationalized hospitals have been "promoted" into the sphere of politics. Internally, hospital managements so far areunfet tered, but with their current iCOSts running out of hand. In return for expropriating the bulk of the hospitals' funds, and in the face of solemn promises to expand the facilities ofwhicb they are in dire need, the government has greatly curtailed, by 912 million pounds, the ,modest capital expenditure pro gram of the hospitals, for 1949-50, even in cases where such 'expenditure would have resulted in reducing the operating costs.4 On the Continent, the scheme administrators have" no direct influence on the hospital systems. In France, they watch eagerly the latter's records in low efficiency and high costs, especiallyunder the assistancepubliqueof Paris (that "lost" one day the linen reserve of 90 establishinents): a daily ward rate per bed of $5 to $7, or double the cost of a single room and ,mealsin an averageParisianhotel.In the meantime,the panels send their control-doctors into the hospitals to check whether or not the panel patientsareover-staying. 5 When the government takes over,the hospitals, their man agement is soon'snarled up in red tape. Reports from New Zealand tell the story of endless investigations.and delays on every' detail, such as acquiring vacuum ,cleaners, repairing COMPULSORY MEDICAL CARE AND THE WELFARE STATE [ 122 roofs, etc. Similar difficulties begin to show up under nation alization in Britain.

BUREAUCRATS AS The last word in control is-controlling MEDICAL EXPERTS the doctor directly. Almost all methods enumerated so far imply just that, if only by curtailing his prescriptions. But the problem is to supervise his entire practice so as to eliminate irregular certifications. To do so, Continental bureaucrats (outside France) have ap pointed themselves as medical experts who argue with the practitioners about the feasibility of or need for keeping the patient in bed, providing hydrotherapeutic or ultra-violet ray treatment, putting a diabetic on insulin or merely on adiet, etc. Some of the control methods of the lay bureaucracy have been mentioned. A most "subtle" technique is the statistical. The big panels in Switzerland, as an example, keep elaborate books in which each doctor's performances are itemized and summed up month for month. A statistical average is drawn from the number of consultations, house visits, therapeutic treatments, per patient, as well as for pharmaceutical and hos pital bills, etc. The doctors whose bills rise above the average are called on the carpet. If they do not conform to the aver ages, they risk losing the privilege of treating panel patients.

That such pressure to conform is not to the benefit of the patients has been emphasized by no less an authority than Dr. Saxer, the president of the Swiss government's Social Security Department in Berne, in conversation with this writer. This goes to show that not all government officials are "bureaucrats." The same gentleman expressed his frank satis faction over the fact that the Swiss people had refused, by referendum, to submit toa federal compulsory scheme. DOCTORING Obviously, only a doctor can technically THE DOCTORS "control" another doctor. Every compulsory set-up develops a hierarchy of control doc tors. The total number of permanent and temporary "trus tee doctors" (vertrauens-aerzte) in Western Germany is esti mated to be between 6,000 and 7,000. THey are not supposed to interfere with the practicing doctor but "only" to decide on "material" expenses, hospitalization and cash benefits in par ticular-the things that matter.

123] THBFUTILITY OF "PHYSICAL" CONTkOLS More than 700 doctors .a:r;e in France at present on perma nent, official·appointments. If the practitioner .and.the official \doctor disagree, independent specialists are called in to arbi trate. The officiallyengaged medecin connseillerhasto concur withtheprivatemedecin traitant in'every case of long malady, and on such other· occasions as the panel management may deem fit. The patient's doctor .. is· under the.control of another doctoron whoseloyaltythe schemeis dependent. The conflict of fiscal vs. medical interests was highlighted last April·by the widely publicized cas~· of a "non-curable" French worker: physiciansin charge proposed to carry on.treating a fractured leg, but the doctors of the caisseinsisted on amputation to save the~cost of a long treatment. The patient's suicide ended the controversy.6 CONTROL OVER All schemes keep the dentists.under con DENTISTS tro!. They could wreck the Treasury, ·as the .·late Professor A. Epstein, a foremost advocate of social securityin this country, has put it, comment ing on a study of the potential cost in providing dentalcare.7 Under the Bevan scheme, the dentists have to ask permission from a Dental Estimate Board.for every single.operation. This Board scrutinizes every instance involving major dental appli ances, about one~third of all cases. It passesjudgment on some 30,000.daily applications, employing 700 clerks, 8 dentists among them. Obviously, the control can not be but nominal.

The results are·so·far a substantial delay in dental care but no noticeable check on its total cost. On the· Continent,. deduct ibles, the subs~tutes for the. price .mechanism,·produce more savings and less bureaucratic waste than is the case under the British technique. The German method of restricting the expenditure on dental care to a limited sum per. patient each year-in·Holland and Denmark·to a nominal amount-predominates in Northern and Central Europe. In Hungary, the dentist's servicecostsnothing, but· the patient has to pay the full.price of all materials used in his mouth. The French and Belgian practice consists.inleav ing the decision on·each dental case that involves a major bill to the local panel,· that argues it out with the patient, while smaller bills are reimbursed, minus the usual 20% deduction.