A little over a hundred years ago a considerable number of the mutual aid societies began to offer medical care to their members. The way they did this was to hire a doctor on salary, and he would then provide basic medical services to all of the members of the order.
As David Beito tells us in his wonderful book, From Mutual Aid to the Welfare State, this became a very popular aspect of becoming a member of a fraternal society. So how do you think such a thing was received publicly? It was, of course, lambasted as evil. And who was doing the lambasting? Why, the medical profession of course (or at least their mouthpieces). The reason they were hated all boiled down to the fact that by being willing to work on a contract basis and not on a fee-for-service basis, that they would be putting pressure on normal doctor incomes, and as part of this argument they were charged with practicing quack medicine.
For example, in 1904 the Pennsylvania Medical Journal argued that the “club doctor must be shut out of the profession.”
Now I am not qualified to assess how good the medicine was that they were practicing, but I am qualified to know that the evidence seems to suggest that visiting all kinds of doctors in the past may have been hazardous to your health. But consider that treatment was happening 110 years ago. How much has changed? Imagine I ran a large company and decided to hire a doctor to work for me, who was neither accredited by the AMA nor had his own practice, and we paid him $200,000 per year to treat all of our employees, would this be permitted? OK, what if he were an AMA member? Is it even possible for me to do this?
How about if my wife and I open up a retail medical clinic that not only treats the typical walk-in customers, but also helps in the treatment of certain chronic conditions, and we do this on a subscription basis, would this be permitted?
Beito tells us lots more about how much medical delivery experimentation happened during that time and how popular it was. For example, in Seattle in 1906, he estimated that 20% of Seattle’s adult males were covered by something like “Lodge Practice” via voluntary fraternal organizations. He also shows how most of the lodge doctors had in fact obtained state certification and he provides enormous detail on how the lodges had strong incentives to monitor the quality of care and service these doctors provided.
Beyond this, the lodge practice became prominent for their ability to deliver preventive medicine. If lodge members paid on a fee-for-service basis they would have incentives to “under”utilize the doctor, when they had a doctor “on-call” it turned out they regularly took measures that modern practitioners suggest are important for disease prevention. I’d note that I do not have any evidence that this actually prevented disease, just that the practice of preventive medicine emerged spontaneously as did ways of serving a good slice of the population with the medical services that were available at the time. And as Beito notes, there was a fantastic degree of experimentation and differentiation of the medical services provided across different fraternities as well as outside of them — enabling individuals to sample medical choices as consumers, figuring out where and when to patronize various doctors to suit their differing needs.
Of course, for those folks interested in cartelizing medicine and in stifling innovation in the delivery of basic services, this could not stand. Many professional medical societies took vows to blacklist any physician that took a lodge contract (so much for the Hippocratic Oath). For example, Beito tells us that in 1913 members of the medical society in Port Jervis, NY “refused to consult with him or assist him in any way or in any emergency whatever.” And in the Journal of the American Medical Association in 1914 we see written, “there is scarcely a city in this country in which medical societies have not issued edicts against members who accept contracts for lodge practice.” What is most shocking or saddening perhaps is that even the religious hospitals were in on the game. For example, St. Peters was a Catholic hospital in Montana that refused to perform a surgery on a patient because the doctor he had contracted with to perform the surgery at the hospital was once a lodge doctor to two different fraternal societies.
In addition to the direct efforts of the cartel to stop the lodge practice from expanding and succeeding, Beito ends his terrific chapter with another sad tale, one that is repeating itself today in modern medicine. I will quote him in full here:
Lodge practice was also a victim of an overall shrinkage in the supply of physicians due to a relentless campaign of professional “birth control” imposed by the medical societies. In 1910, for example, the United States had 164 doctors per 100,000 people, compared with only 125 in 1930. (wintercow: it is estimated that physician income increased by up to 41% between 1916 and 1919 alone) This shift occurred in great part because of increasingly tight state certification requirements. Fewer doctors not only translated into higher medical fees but also weaker bargaining power for lodges. Meanwhile the number of medical schools plummeted from a high of 166 in 1904 to 81 in 1922. The hardest hit were the proprietary schools, a prime recruiting avenue for lodges.
That last sentence reminds me of the contempt that proprietary educational institutions are being met with. Like the emergence of universal literacy before the advent of public schooling, we also see that in a world with limited regulation (and 1/14th the income) “we” were making considerable progress in the delivery of medical care to all kinds of citizens, not just the wealthy. That was the essence of fraternalism. Like helped like. That is far different from the model of “charity” that some people advocate today, where those who are worse off helped those who were not. The story is far richer than I can paint here, but keep in mind that the ideas that are being floated around today as reasons for health reform were being actively worked on over 100 years ago, with no state assistance in sight. What other industries have demonstrated an inability to address their most fundamental problems for over a century, all the while more money is being dumped into the very system to solve such problems. Perhaps finance. I wonder what that has in common with medicine?