Medical Service Corporations in the State of Washington: A Study of the Administration of Physician-Sponsored Prepaid Medical Care [Reprint 2014 ed.] 9780674423671

Citation preview

Medical Service Corporations in the State of Washington A Study of the Administration of Physician-Sponsored Prepaid Medical Care

Medical Service Corporations in the State of Washington A Study of the Administration of Physician-Sponsored Prepaid Medical Care

George A. Shipman Robert J. Lampman S. Frank Miyamoto Institute of Public Affairs University of Washington Seattle, Washington

Harvard University Press Cambridge 1962

© Copyright 1962 by the President and Fellows of Harvard College All rights reserved

Distributed in Great Britain by Oxford University Press, London

Library of Congress Catalog Card Number: 62-8185 Printed in the United States of America

Contents

Introduction. Chapter I.

1 Origins of Washington's County Medical Service Plans Administration of the County Plans

7 11

The County Plans and Other Health Insurance Agencies

17

Historical Background of King County Medical Service Corporation

22

Chapter V.

Administration of the King County Medical Service Corporation

33

Chapter VI.

Survey of King County Plan Subscribers

54

Chapter VII.

Utilization of Physicians' Services in Home and Office

Chapter II. Chapter III. Chapter IV.

Chapter VIII. Chapter IX.

Utilization of Hospital Services Charges for Health Goods and Services

Chapter X. Chapter XI.

Subscriber Attitudes

Chapter XII.

Historical Background of Okanogan County Medical Service Corporation Administration of the Okanogan County Plan Utilization, Costs, and Attitudes under the Okanogan County Plan

Chapter XIII. Chapter XIV. Chapter XV.

Physician Attitudes

Summary and Conclusions ν

60 69 81 93 101 118 122 131 135

Contents Appendix Appendix Appendix Appendix Appendix Appendix

A. B. C. D. E. F.

Appendix G.

Methodology Survey Questionnaires King County Plan Exclusions Representative Fees, King County Plan Cost-free Services King County Plan, Supplementary Tables Okanogan Plan, Supplementary Tables

146 159 192 195 196 200 211

Charts Figure 1. Figure 2. Figure 3.

Medical Service Corporations in the State of Washington King County Medical Service Corporation Organization Chart (August 19, 1958) Number of Hospital Days Per 100 Persons, by Age and Sex, Boeing and Non-Boeing Samples

vi

10 35 72

Tables 1. C o u n t y medical service corporations in the state of W a s h ington 2. M e m b e r s h i p in King C o u n t y Medical, by type of contract

13 48

3. Scope of coverage f o r physicians' care in different contracts, K i n g C o u n t y Medical 4. Enrollees in contract groups with "regular," " t r i m m e d , " and "limited" exclusions, K i n g C o u n t y Medical 5. Boeing and non-Boeing families, by sex of family head

51 56

49

6. Boeing and non-Boeing families, by f a m i l y income

57

7. Boeing and non-Boeing families, by occupation of principal family e a r n e r

58

8. Types of coverage of Boeing and non-Boeing individuals, by sex

59

9. N u m b e r of h o m e and office calls per person, by age and sex, f o r Boeing and non-Boeing samples 10. N u m b e r of h o m e and office calls per person, by family income, f o r Boeing and non-Boeing samples 11. N u m b e r of h o m e and office calls per person a m o n g nonBoeing families, by family size 12. Estimated percentage of persons w h o did not see a physician during the survey year, f o r Boeing and non-Boeing samples 13. Per cent of persons having h o m e or office calls f o r any illness, m a j o r illness, and minor illness, f o r Boeing and nonBoeing samples 14. Per cent of persons having h o m e or office calls, by family income, f o r Boeing and non-Boeing samples 15. Per cent of persons a m o n g non-Boeing families having h o m e or office calls, by family size 16. Probable effects on h o m e and office calls of shifting to extended coverage 17. Calls per person and per cent with n o calls, f r o m selected studies 18. N u m b e r of hospital admissions per h u n d r e d persons, by age and sex, f o r Boeing and non-Boeing samples 19. N u m b e r of hospital admissions p e r h u n d r e d persons, by family income, f o r Boeing and non-Boeing samples 20. N u m b e r of hospital admissions per h u n d r e d persons, f o r obstetrics, surgery, and other reasons, f o r Boeing and nonBoeing samples 21. Average length of stay per admission, by age and sex, for Boeing and non-Boeing samples

vii

61 62 63

64

65 66 67 68 68 69 70

71 71

Tables 22. Number of hospital days per hundred persons, by age and sex, for Boeing and non-Boeing samples 23. Surgical procedures per hundred persons, by age and sex, for Boeing and non-Boeing samples 24. Surgical procedures per hundred persons, by family income, for Boeing and non-Boeing samples 25. Probable effects on hospital admissions of shifting to extended coverage 26. Probable effects on hospital admissions for surgery of shifting to extended coverage 27. Probable effects on hospital admissions for "other reasons" of shifting to extended coverage 28. Probable effects on total hospital days of shifting to extended coverage 29. Probable effects on number of surgical procedures of shifting to extended coverage 30. Hospital admissions and days per hundred persons, f r o m selected studies 31. Total family charges, by type of service, for Boeing and nonBoeing samples 32. Total family charges, by type of service and sources of payment, for Boeing and non-Boeing samples 33. Per cent of families with high and low total charges and out-of-pocket costs, for Boeing and non-Boeing samples 34. Percentage distribution of total charges and out-of-pocket costs for Boeing and non-Boeing samples 35. Total family charges, by sources of payment and family income, for Boeing and non-Boeing samples 36. Mean charges per person, by age and sex, for Boeing and non-Boeing samples 37. Mean charges per person, by sources of payment and family income, for Boeing and non-Boeing samples 38. Mean charges per person, by type of service and sources of payment, for Boeing and non-Boeing samples 39. Average premiums per family and per person, by income, for Boeing and non-Boeing samples 40. Probable effects on charges per person of shifting to extended coverage 41. Variations in charges per person associated with selected variables 42. Variations in charges per person associated with extended coverage versus in-hospital coverage, by income, sex and marital status, with family size and age controlled 43. Variations in number of hospital nights and in number of doctor calls associated with extended coverage versus inhospital coverage, by income, sex, and marital status, with family size and age controlled

viii

73 74 74 75 76 77 78 79 80 82 82 83 84 84 85 86 86 86 88 89

90

91

Tables 44. Charges per person and per cent paid by plan, from selected studies

92

45. "In general, from your experience, do you think that the fact that you have health insurance affects the doctor's attitude towards you in any way?" (Question 5 3 ) , for Boeing and non-Boeing samples

94

46. "During 1956, have you felt at any time that you (or a member of your family) should have seen a doctor, but didn't do it?" (Question 5 4 ) , for Boeing and non-Boeing samples

95

47. "During 1956, has any doctor recommended some medicine or treatment or operation to you (or any member of your family) that hasn't been carried out?" (Question 5 5 ) , for Boeing and non-Boeing samples

96

48. Families with extended coverage for all members, having it available for those not covered, and desiring it where not available, for Boeing and non-Boeing samples 49. Things "liked most" and "disliked most" about health insurance, for Boeing and non-Boeing samples

98

50. "Suppose you could get some kind of health insurance that would cover all of the medical expenses you (and your family) might have in the future, so you wouldn't have to worry about cost. Does such insurance seem like a good idea for your own family, or are you just as well off without it?" (Question 5 6 ) , for Boeing and non-Boeing samples

99

51. "About how much would you be willing to pay each month for such insurance for you and your family?" (Question 5 6 ) , for Boeing and non-Boeing samples

99

52. "What has been the effect of the Bureau upon the quality of medical care?" (Question 2 5 ) , for K C M physicians, according to their satisfaction with the fee schedule

102

53. "It is often stated that medical insurance results in more hospital admissions, longer stays, and more surgical procedures. Do you feel that this is the case?" (Question 7 ) , for K C M physicians

103

54. " I f you feel that greater use is associated with medical care insurance, check the one of the following statements with which you agree." (Question 8 ) , for K C M physicians

103

55. "Would you say that subscribers and their covered dependents under K C M contracts have a tendency to demand more medical and hospital services because they are insured?" (Question 2 3 ) , for K C M physicians, according to satisfaction with fee schedule

104

56. " I f 'Yes' [to Question 23], do you think this demand indicates unnecessary utilization?" (Question 2 4 ) , for K C M physicians, according to satisfaction with fee schedule

104

57. " D o you think that having hospital or medical care insurance affects the patient's attitude or behavior in any way?" (Question 9 ) , for K C M physicians

105

ix

96

Tables 58. "If your answer to No. 9 is 'Yes,' check as many of the following as you agree with" (Question 10), for K C M physicians 59. "With regard to insurance of medical care would you prefer your patients to have a service or an indemnity plan?" (Question 15), for K C M physicians, according to satisfaction with fee schedules 60. "Comparing commercial insurance companies with physician-sponsored organizations like KCM, which do you prefer to deal with?" (Question 16), for K C M physicians, according to satisfaction with fee schedule

106

61. "Would you favor the situation where all subscribers are given the option of buying extended medical service protection (home and office calls) for their dependents, as is now true of Boeing workers?" (Question 34), for K C M physicians, according to satisfaction with fee schedule

108

62. "Does the Corporation involve you in what you regard as unnecessary 'red tape'?" (Question 30), for K C M physicians, according to satisfaction with fee schedule

108

63. "Do you feel that the present fee schedule set by the Bureau is satisfactory as it relates to your practice?" (Question 31 ), for K C M physicians

109

64. "Do the participating physicians have an adequate voice on policy questions in the Bureau and the Corporation?" (Question 35), for K C M physicians, according to satisfaction with fee schedule

112

65. "Is there any group of people who are generally left out of voluntary health insurance coverage which you think should be covered? (Check if group should be more adequately covered.)" (Question 13), for K C M physicians

113

66. Number and percentage of sample families for whom interviews were not completed, by reason for noninterview, for Boeing and non-Boeing samples

152

105

106

67. Number of persons receiving "cost-free" services, by agency paying for the service, for Boeing and non-Boeing samples 68. Summary of utilization of cost-free services, for Boeing and non-Boeing samples

198

69. Summary of utilization of cost-free services, by income level, for Boeing and non-Boeing samples

199

70. Number and per cent of families, by family size, for Boeing and non-Boeing samples

200

71. Number and percentages of individual members of subscriber families, by age and sex, for Boeing and non-Boeing samples 72. Number and percentages of individual members of subscriber families, by income and sex, for Boeing and nonBoeing samples X

196

201

202

Tables 73. Percentage distribution of persons in Boeing subscriber families by type of coverage of each individual 74. Percentage distribution of persons in non-Boeing subscriber families by type of coverage of each individual 75. Number of hospital nights per hundred, by family income, for Boeing and non-Boeing samples 76. Average length of stay per admission, by family income, for Boeing and non-Boeing samples 77. Percentage of total charges by type of service paid by insurance, by family income, for Boeing and non-Boeing samples 78. "During 1956, have you felt at any time that you (or a member of your family) should have seen a doctor, but didn't do it?" (Question 5 4 ) , for Boeing and non-Boeing samples 79. "During 1956, has any doctor recommended some medicine or treatment or operation to you (or any member of your family) that hasn't been carried out?" (Question 55), for Boeing and non-Boeing samples 80. "Suppose you could get some kind of health insurance that would cover all of the medical expenses you (and your family) might have in the future — so you wouldn't have to worry about cost. Does such insurance seem like a good idea for your own family, or are you just as well off without it?" (Question 5 6 ) , for Boeing and non-Boeing samples 81. "Suppose you could get some kind of health insurance that would cover all of the medical expenses you (and your family) might have in the future — so you wouldn't have to worry about cost. Does such insurance seem like a good idea for your own family, or are you just as well off without it?" (Question 56), for Boeing and non-Boeing samples 82. "Are all members of your family covered by K C M extended coverage (home and office calls)?" (Question 4 9 ) , for Boeing and non-Boeing samples 83. "About how much would you be willing to pay each month for such insurance that would cover all of the doctor and hospital bills, the cost of medicines, and other medical expenses for you and your family?" for Boeing and non-Boeing samples 84. Okanogan sample, by age and sex 85. Okanogan County Plan payments for hospital service 86. Okanogan County Plan payments for physicians' services 87. Okanogan Plan unit schedule of payments to physicians 88. Okanogan Plan monthly premiums (dollars)

XI

203 204 204 205 205

206

206

207

208

209

210 211 212 213 214 215

Medical Service Corporations in the State of Washington A Study of the Administration of Physician-Sponsored Prepaid Medical Care

Introduction

The county medical service corporations in the state of Washington are non-profit, voluntary health insurance organizations sponsored by physicians. This study of the Washington medical plans was undertaken in the belief that in their experience may lie an effective, acceptable approach to comprehensive prepaid medical care. The twenty-three Washington county service corporations offer prepaid coverage throughout substantially all of the state, some serving contiguous counties. Each plan is, in effect, sponsored by its county medical society. For limited purposes the plans are confederated into a statewide organization, but each retains full policy and operational control. While two county plans administer only statewide contracts, all follow the same basic principles. An integral feature of their programs is the provision of physicians' care in the home and office as well as in the hospital for subscribers, generally on a service or paid-in-full basis. Some of the plans offer home and office care for subscribers' dependents as well. Of great importance to the medical profession, these plans have retained the usual structure of private medical practice, including free choice of physician, sponsorship and control of the plan by the medical profession, and fee-for-service payment of physicians by the plan. Judged by the criteria of solvency and durability, the record of the medical service corporations is a good one. Nevertheless, their experience has largely been ignored by organized medicine nationally (or at best regarded with curiosity or skepticism), although the patterns established in Washington may have promise for expansion and adoption in other areas.

1

Medical Service Corporations This study surveys all of the Washington plans, but it analyzes in detail the King County Medical Service Corporation and the Okanogan County Medical Service Corporation. These two plans operate in diverse, contrasting areas. King County is a compact urban area with a present population of about 925,000. The principal sources of subscribers to its medical plan are industrial firms, including the giant Boeing Airplane Company, and governmental units, including the University of Washington. As the largest medical plan in the state (and the second largest on the West Coast), King County Medical Service Corporation provides an opportunity to study a "big" prepaid medical care program. The Okanogan County Medical Service Corporation, on the other hand, serves a rural area somewhat larger than the state of Connecticut with a population of only 30,000. Each of the bureaus selected for study has a history of successful operation. In addition, each maintains adequate records for detailed analysis of its operations. Through the analysis of these two independent plans, operating at the extremes of urban and rural settings, this study portrays the working of the physician-sponsored medical service system in the state of Washington. The distinctive characteristics of the plans, then, offer one center of interest. They are significant, too, because of the way in which they have developed over the years as generally accepted links in the relationships of physician and patient, physician and physician, and hospital and patient. In essence, they mobilize the familiar modes of practice' and physician-patient relationship, the shared health care needs of various groups, and a simple understandable technique of prepayment. The operating structure rests upon voluntory contractual commitments. In practice, the arrangement substantially eliminates most economic barriers to health care utilization by subscribers, without imposing any significant change in the established forms of utilization and medical practice. Newness has been accomplished without conscious resort to novelty. Change has evolved without threat to the human and professional values deeply held by the participating groups. At a time when concern is widespread about financing health care for the population as a whole, and when nearly all forms of health insurance are growing at a dramatic pace, the experience of these two plans may bring a helpful perspective to the assessment of alternative approaches. In such an assessment, they are worthy of note in several respects. For one, the

2

Introduction medical profession has a leadership role and controlling responsibility. F o r another, local management and control enable the plan to adapt itself to the special needs of the communities it serves. Both the underlying values and the mode of action are integral to the American culture. This way of dealing with community needs may have realistic applicability elsewhere in the nation. In a still broader perspective, these plans are significant explorations into the area of public needs. The need for assured access to competent health care without economic barriers to utilization has been a perennial issue of public policy for some fifteen years. If past experience in other fields is any guide, it can be estimated that health care will eventually become a governmental responsibility to one or another degree, and in one or another form. The nature of the government role is still uncertain. It might be a regulatory one; health care plans might then be regulated as undertakings vested with the public interest. Again, health care plans might be utilized as agents to serve particular groups, as to an extent they already are with military dependents, veterans, and assistance recipients. These are groups for whom the public has assumed some degree of responsibility on other grounds, but presumably the agent capacity could be expanded far beyond its present scope. It is not difficult to visualize governmental action aimed at stimulating the growth of health care plans, providing them with financial reinforcement, and thereby encouraging them to assume risks that would otherwise appear prohibitive. T h e plans may in this way become quasi-public agencies. T h e years ahead may disclose any combination of these and other forms of governmental action to accomplish objectives of public policy. This does not argue that any particular or additional type of health care should become a governmental function, but it does recognize that, for all practical purposes, the concern is already in the public domain. T h e hope is that future steps will be taken with full and intelligent account of accumulated American experience. There are strong reasons for urging that development of universal health care be essentially evolutionary, a natural, rationally guided outgrowth of background and experience already accumulated in the field. In this context, the Washington plans have wide experimental significance. Their accomplishments, their experience, their strengths, their weaknesses, may well be weighed in the larger balance of pub-

3

Medical Service

Corporations

lie policy. So tested, does the method they have pioneered promise an effective way of assuring health care for large segments of the national community? Are they a uniquely American means for accomplishing, by voluntary action and by cooperation and contract, a public objective, one that might by other means be tightly institutionalized in formal bureaucratized practices? Such formal institutionalization could produce far-reaching changes in patterns of medical practice, the role of the profession, and the mobility of the patient in securing satisfying care. In this study, the purpose is to lay the basis for objective understanding and critical appraisal. The plans are evaluated in the context of their specific objectives. Projection of the method beyond its present scope is not attempted at this time. Such a projection would constitute another study, a comparative analysis of alternative approaches to meeting health care needs. The larger implications nonetheless remain. The analysis is based upon data and observations gathered from 1957 to 1959; references to the plans' "present" stage of development apply to that period. Since the plans, as social organisms, are not static, however, but change even while observation is under way, no recording of data can remain wholly accurate. Specific developments subsequent to the period of analysis cannot be reflected in the study, but the study does attempt to identify and explain the dynamic forces at work during the study period that have given these plans their ability to anticipate and adjust to change. The study is the product of many interrelated, mutually supporting efforts. Of the research staff, three senior members had primary responsibility. They were Robert J. Lampman, Ph.D., now Professor of Economics at the University of Wisconsin, S. Frank Miyamoto, Ph.D., Associate Professor of Sociology, University of Washington, and George A. Shipman, Ph.D., Director of the Institute of Public Affairs, University of Washington, and director of the study. Professors Lampman and Miyamoto assumed leadership in the study of utilization, cost, and attitudes of subscribers and physicians. Professor Shipman was responsible for the study of policy formation and administration. Intimately affiliated with the senior staff at every step was Odin W. Anderson, Ph.D., Research Director of Health Information Foundation. He was in effect a consulting member of the group. Garland A. Haas, Ph.D., was administrative officer of the project, and in addition was primarily responsible for the

4

Introduction field work in Okanogan County. Fremont J. Lyden, M.P.A., Ph.D., analyzed the program operations of the King County Medical Service Corporation, and assisted in the synthesis of the final report. Joseph A. Hearst, Ph.D., analyzed the background and development of the King County plan. Dan Mackey, M.P.A., and Robert Small, M.P.A., undertook much of the administrative analysis. Special acknowledgment goes to the Washington Public Opinion Laboratory, and particularly to its associate director, Mrs. Edith D. Rainboth, for conducting the survey of subscribers in King and Okanogan Counties. Invaluable cooperation came from many persons. Physicians in both counties were generous of their time and support. Special appreciation is due Shelby M. Jared, M.D., Medical Director, Mr. George La Fray, Manager, King County Medical Service Corporation, and Mr. H. Tom Thorson, Manager, Okanogan County Medical Service Corporation. Their interest and enthusiastic assistance provided not only essential access to the operations of their plans, but invaluable insights and interpretations as well. Mr. John Steen, manager of the Washington Physicians Service, provided much comparative information upon the various county plans. Administrative personnel of both plans cooperated at every step. Grateful acknowledgment is due George Bugbee, President of Health Information Foundation, for his sympathetic understanding of the many research problems encountered, and, again, to Odin W. Anderson, Ph.D., Research Director of the Foundation. Dr. Anderson's contributions reinforced every aspect of the study. All staff members are deeply grateful to William T. Reich, Ph.D., who brought his special competence to preparation of the final manuscript, and whose editorial contribution cannot be overstated.

5

CHAPTER I

Origins of Washington's County Medical Service Plans

Early in the present century physicians in Washington watched a unique form of contract medicine develop as a result of a workmen's compensation law and the working conditions peculiar to the lumber camps, railroads, and mines of the Northwest. Before passage of the Washington Workmen's Compensation Act in 1911, employers in these industries assumed responsibility for medical care for accidents that took place on the job. Because many working sites were in isolated mountain areas, the employer usually hired a doctor to care for these accident cases and maintained a small hospital — little more than a first-aid station — in the camp. Often, the employer also arranged for a hospital in a town "down below" to care for more seriously injured workers and those ill or hurt in nonindustrial accidents. The employee purchased a "hospital ticket" from his employer for fifty cents a month or so, which he could exchange for services at the hospital. Under the workmen's compensation act, the cost of care for employees injured in industrial accidents was paid equally by employees and their employer to a state insurance fund. With the consent of a majority of his workmen, however, an employer could "enter into written contracts with physicians, surgeons, and owners of hospitals operating the same, or with hospital associations, for medical, surgical, and hospital care to workmen injured in such employment," and many did. Frequently, these arrangements with physicians and hospitals to furnish industrial accident care were broadened to provide

7

Medical Service

Corporations

medical care also for nonjob accidents and illness. A physician who obtained contracts for a number of large groups was virtually assured of substantial financial reward, because most of these groups consisted of rugged young adult males who were excellent insurance risks. As the state of Washington became industrialized and more densely populated, the original reasons for contract medicine disappeared. With improved transportation, miners and loggers could live with their families in town and commute to work. However, contract medicine continued to grow. Some doctors started making supplemental contracts for the care of workers' families. Frequently they negotiated these contracts through the employers, who collected their employees' contributions by payroll deductions. In general, however, family coverage was not widespread until after the organization of the county medical service bureaus. Some medical contractors soon found it profitable to employ other doctors and to provide nursing and hospital facilities through clinics or "medical bureaus." One of the earliest clinics, the Western Clinic and Hospital Association, was established in Tacoma in 1912. At about the same time a single Tacoma physician had industrial contracts requiring his services simultaneously in ten different communities. To provide these services, he hired other physicians, becoming more of a broker of medical services than a practicing physician. As might be expected, laymen also became active in these financially attractive entèrprises. Some clinics and doctors employed laymen to solicit contracts, paying them a portion — often as much as 25 per cent — of the gross income from the contract. Laymen sometimes organized and managed clinics as well. One, a Mr. L. G. Prendergast of Tacoma, opened a clinic in Seattle which contracted to give medical and hospital care for a monthly fee. As early as 1917 various groups of physicians felt that contract practice placed other physicians at a disadvantage and was inimical to high standards of medical practice. Contract coverage removed a segment of the public as potential patients, threatening the ability of other doctors to make a living. For many years in Grays Harbor County, for example, two contractors had 90 per cent of the available employed persons under contract. The greater the number of workers covered by these contracts, the more imperative it became for other physicians to engage in contract medicine for survival. The

8

Origins

of Washington's

County

Medical

Service

Plans

constantly increasing competition eventually made many of the contracts unprofitable. Soliciting and underbidding reduced income greatly. Despite this, physicians continued to seek contracts, however, since providing care for the employees frequently led to their securing the employees' families as private, full-paid patients. A second and more significant complaint was that contract medicine often lowered standards of medical care. The more care that a physician gave to a patient under contract, the less, proportionately speaking, would be the physician's return. If, in addition, he referred a patient to a specialist, he had to pay for the referral out of the contract fee. Most important of all, it was argued that this form of contract medicine accorded the patient no freedom of choice in the selection of his physician, impairing the relationship that should exist between a doctor and his patient. The American Medical Association Code of Ethics provided that while contract practice per se was not unethical, it became unethical if it included ( 1 ) either a direct or an indirect solicitation of patients, ( 2 ) underbidding on a contract, ( 3 ) interference with reasonable competition in a community, or ( 4 ) prevention of free choice of a physician by the patient (Sec. 3, Article V I ) . The adoption of this Code of Ethics by various county medical societies in Washington gave formal expression to local criticism of contract medicine. Many Washington physicians urged the establishment of contract medical and hospital service arrangements under the auspices and control of the state medical association or the county medical societies, in order to eliminate the objectionable features of private contract practice. Eventually, the county medical societies took the lead in developing medical service bureaus. The first permanent successful medical service bureau sponsored by a local medical society in the United States was the Pierce County Industrial and Surgical Bureau, formed in Tacoma in 1917. Its early growth was slow, but the bureau survived and has operated successfully since its inception. Other county medical societies established medical service bureaus early in the Depression; in Whatcom County in 1932; in Chelan, Cowlitz, King, Lewis, Skagit, Spokane, Thurston, Walla Walla, and Yakima Counties in 1933; in Grays Harbor County in 1935; in Clark and Mason Counties in 1936; and in Snohomish County in 1937. After the end of the Second World War the establishment of a state medical welfare program for public assistance recipients through a health insurance

9

Medical

FIGURE 1.

Service

Corporations

Medical Service Corporations in the State of Washington

mechanism — the first such arrangement in the United States — gave the impetus for the formation of other county bureaus.1 Eight additional county medical bureaus were incorporated after the war, so that most of the state is now covered by twenty-three county medical service plans (see Figure 1 ) .2 1

See Odin W. Anderson, Prepayment of Physicians' Services for Recipients of Public Assistance in the State of Washington (Bureau of Public Health Economics, Research Series N o . 4 ) , School of Public Health, University of Michigan, A n n Arbor, 1949. 2 T w o plans, those in Y a k i m a County and Cowlitz County, presently limit their operation to the administration of state public assistance care and to participation in statewide programs such as the Western Washington Laborers Contract and the Medicare program.

10

C H A P T E R II

Administration of the County Plans

Organization The county medical service bureaus are organized in one of two ways. 1 Four counties have both a "medical service bureau" and a "medical service corporation." The remaining counties use a single organization, variously termed "corporation," "bureau," or "association." All operate under the Health Contractors' Enabling Act of 1947 as nonprofit charitable entities.In counties with both organizations, the medical service corporation is a nonprofit corporation which contracts with the physician members of the bureau for their services. The bureau in these counties is an unincorporated association of those members of the county medical society who have service agreements with the corporation. This complex arrangement was believed legally advisable when these county plans were established. In counties that have only a bureau or corporation, the physicians who participate in the plan have individual contracts with it, but have no separate physician organization. In both popular and professional parlance the county plans are referred to almost universally as "bureaus." The chief policymaking agency of each bureau is a board of directors or board of trustees of from three to twelve members, elected by the members of the county corporation or bureau. The trustees also represent the participating physicians in matters of medical practice that may be affected by the operation of the plan. The four 1 This chapter is derived in large part from answers to a questionnaire sent to the managers of the 23 county bureaus. (This questionnaire is reproduced in Appendix B.) - Revise Code of Washington 4 8 . 4 4 . 0 1 0 - 0 6 0 .

11

Medical Service

Corporations

counties that have both a bureau and a corporation have a comparable number of doctors on the boards of both organizations. In only two of the bureaus do any lay members participate in policy formation. Okanogan County's board of trustees is composed equally of physicians and laymen; Spokane County has a citizens' advisory board of three members. Each bureau is administered by a bureau manager who is appointed by and is responsible to the board of trustees for the bureau's financial, actuarial, public relations, and sales activities. The bureau manager in turn appoints the other members of the bureau administrative staff. In sixteen bureaus the board of trustees also appoints a physician medical director or a medical board to review procedures of the bureau that might affect the practice of medicine. Granting authorizations for such services as elective surgery or physiotherapy and reviewing expensive or unusual procedures are ordinarily functions of the medical director. Physician participation in the bureaus is high. In the state, 2,066 of the 2,276 members of all of the county medical societies participate in their local bureau program. Since the county society total includes retired members, psychiatrists, members of the state university medical school faculty, and other physicians not in private practice, it is apparent that virtually all eligible physicians participate in the plan sponsored by their medical society. Only four county plans honor bills for participants without M.D.'s — optometrists, chiropodists, osteopaths, or physiotherapists. The service agreement between the medical service corporation or bureau and the physicians is actually an agency contract in which the physician appoints the bureau his agent to offer his services to its subscribers and agrees to accept the fees fixed by the corporation, "without any charge to the patient." The contract obligates the participating physician to furnish medical care to any subscriber of the service corporation who applies to him for service. Each plan pays physicians according to its own fee schedule, usually determined by the participating physicians. Payments to physicians vary from 65 to 100 per cent of the conventional fee schedule. Administrative costs of the bureaus range between 5 and 14 per cent of subscriber premiums. The average is 9.8 per cent. Twelve bureaus maintain reserves, either retaining a set percentage of premiums or prorating their payments to physicians until final costs are determined. Bureaus that maintain reserves do so to meet the costs

12

Administration

of the County

Plans

of unusual utilization, such as a seasonal increase of sickness or epidemics, future claims or claims being settled for which liability has not been determined, and contract obligations in case of dissolution. Enrollment

and

Programs

The bureaus vary considerably in size, ranging up to over 200,0 0 0 enrollees in King County (see Table 1). The total enrollment of the twenty-three plans is 540,563 (January 1, 1 9 5 8 ) . In addiTABLE 1.

County bureau Benton-Franklin Chelan Clallam Clark C o l u m b i a Basin Cowlitz Grays Harbor Jefferson King Kitsap Kittitas Lewis Mason Okanogan Pacific Pierce Skagit Snohomish Spokane Thurston Walla Walla Whatcom Yakima Total

County medical service corporations in the state of Washington

Year founded 1949 1933 1946 1936 1954 1933 1935 1947 1933 1946 1945 1933 1936 1946 1948 1917 1933 1937 1933 1933 1933 1932 1933

Population of a r e a served a 83,400 54,700 27,600 103,300 48,700 62,500 55,700 9,300 773,900 84,200 21,600 43,800 15,400 34,000 16,700 301,700 59,600 131,500 328,400 47,200 44,700 73,600 147,300 2,578,800

Enrollment (Jan. 1, 1958)"

Per cent of population enrolled

1,878 5,560 10,594 5,443 (4,000)

2.2 10.1 38.4 5.2 8.2

c

C

9,600 2,636 226,629 16,832 (500) (13,000) 4,935 7,619 (500) 67,446 11,594 27,686 97,503 7,193 3,527 15,888 C

540,563

17.2 28.3 29.3 20.0 2.3 29.7 32.1 22.4 3.0 22.4 19.5 21.1 28.9 15.2 7.9 21.6 C

d

2Ö9

" Sources estimated county populations figures by the State Census Board (April 1, 1955). b Plan enrollment figures for January 1, 1958, by Washington Physicians Service. Those in parentheses were estimated by W.P.S. c Operation limited to the administration of state public assistance care and to participation in statewide programs. d Does not include the welfare recipient monthly average of 82,700.

13

Medical Service

Corporations

tion, about 80,000 recipients of public assistance are covered by bureau programs. Subscribers constitute two thirds of the statewide enrollment, dependents, one third, although this ratio varies considerably from bureau to bureau. All the bureaus offer a group plan for subscribers and their dependents. In most plans the smallest group that can qualify for coverage is five. Generally, all eligible members of groups up to and including ten persons must participate before the plan will negotiate a group contract. (Some bureaus require only 90-per-cent participation of groups of less than twenty-five persons.) For larger groups, 70 to 75 per cent of those eligible must participate. More than half the bureaus enroll non-employee groups — seasonal workers, professionals, members of clubs, granges, and cooperatives — but do not encourage or solicit such participation. Most plans have no upper age limit for group enrollees, although a few have initial enrollment limits of sixty-five to seventy years, and a few do not cover subscribers' dependents above an age limit. Minimum age limits vary from fourteen days to ten months. Children who live at home and who are under nineteen generally qualify as dependents. Virtually all bureaus offer to their group contract subscribers hospital services, physicians' services in the hospital, and physicians' services in the home and offices. Dependents' benefits are often more limited. While nine bureaus provide complete physician services in the home and office for at least some of their groups, the others offer home and office services only for fractures and removal of tonsils and adenoids. Some bureaus have introduced co-insurance features — generally a charge of one or two dollars for each physician's call — for dependents or for subscriber and his dependents. Almost all of the bureaus exclude treatment for occupational injuries, tuberculosis (treatment after diagnosis), mental illness, drug addiction, and congenital defects. Treatment of chronic conditions is covered after a waiting period of six months to a year, removal of tonsils and adenoids is covered after six months, and operations and treatment for sterility after a year. Dentistry, plastic surgery for cosmetic reasons, eye glasses, and orthopedic appliances and braces are generally excluded. Maternity benefits are provided under most group contracts after a waiting period of ten months to a year. Some bureaus limit the number of days of hospitalization coverage allowed for maternity; others have maximum monetary allowances

14

Administration

of the County Plans

for both physician and hospital services for obstetrical cases. All but two counties cover ambulance services for subscribers (paying from $8 to $35 per condition). Some bureaus do not pay for ambulance services for dependents. None of the bureaus includes any allowance for prescribed medicines, although some cover medicines administered in the doctor's office. All bureaus pay for medicines administered in the hospital, usually to some maximum (from $50 to $300). Only one bureau sets no time limit on either physician services or hospital services for group subscribers. The remaining bureaus have limitations ranging from sixty days to one year. Hospital services for dependents are limited to from thirty days to six months, physicians' services from six months to one year. All bureaus provide renewable benefits to subscribers. Only five bureaus set subscriber income limits for service benefits under their basic group contracts. These limits range from $7,200 to $8,400. Basic group contract premiums for a family of five range from $10.40 to $17.15 per month, averaging $16.25. Most of the bureaus offer non-group contracts, at least to those formerly under a group contract. Approximately 35,317 subscribers and dependents were covered by individual contracts throughout the state (September 1957). Benefits for individual subscribers are more limited than those for group members. Only three bureaus include extended home and office care for dependents. Three do not provide such care for either dependents or subscribers. Approximately half the bureaus that offer individual enrollment set subscriber income limits of from $6,800 to $7,200. The upper age limits for non-group subscribers and dependents range from sixty-four to seventy-five years, the lower age limit from thirty to sixty days. The few bureaus that permit continuation of individual coverage after the maximum age limit has been reached offer catastrophic coverage only, at a higher premium. Exclusions under individual contracts are comparable to those of the basic group contracts. Maternity provisions also parallel those allowed under the group contracts. Ambulance allowances are included in individual contracts. Medicines administered in the hospital are paid for by the bureaus; allowances range from seventy cents a day to a maximum of $75 for any illness or treatment. Time limitations upon both hospital services and physicians' services are substantially the same as those under group contracts. 15

Medical

Service

Corporations

Premiums for individual plan contracts range from $7.25 to $15.25 a month for a family of five. Three bureaus include co-insurance features. One requires both the subscriber and the dependent to pay two dollars for each home or office call. Two others require a five-dollar payment for any home or office treatment received during a month. Bureau Managers' Evaluations of the County Plans To obtain assessments of the individual plans, each bureau manager was asked what he personally considered to be the inherent strengths and weaknesses of the bureau system. The evaluations of the various managers differed at times, as would be expected, but the following summary of their views still characterizes the attitudes of the plan managers toward the county system. The strengths of the system indicated most frequently were ( 1 ) the service nature of the plans, which, it was felt, allowed the physicians more flexibility in the use of diagnostic and surgical procedures than did the indemnity pattern of private insurance companies; (2) their local sponsorship and control, allowing doctors to pattern their plans to meet locally defined medical responsibilities and encouraging them to participate and cooperate because of their financial interest in the plan; and (3) their nonprofit professional sponsorship and control, which made more of the premium dollar available for actual medical and hospital care than would otherwise be possible. The same features that were seen as strengths of the system were, as so often happens, also seen as the sources of weakness. The inherent weaknesses cited by various bureau managers included ( 1 ) the localized control, creating lack of uniformity among independent bureaus and disadvantages in competing with statewide private agencies; ( 2 ) the failure of some physicians to support the plans, weakening their cooperative basis and their representation to the public as physician-sponsored organizations; (3) the reluctance of the medical profession to promote or advertise the bureau system, handicapping the managers in their efforts to inform the public about the plans; and (4) over-utilizai ion of services by some patients and physicians as a result of the service philosophy and benefit structure, causing increases in the costs of programs (considered one of the lesser problems).

16

CHAPTER III

The County Plans and Other Health Insurance Agencies

Over the years coordinated activity and informal cooperation have developed among the bureaus. Much of this activity has been formalized through the Washington Physicians Service. On the regional and national level, of greatest importance to the bureaus are their relationships with the Western Conference of Prepaid Medical Service Plans and with the Blue Shield organization. All the bureau managers in the state have, in addition, organized themselves into a Bureau Managers' Association and hold regular meetings and workshops to discuss common problems. This group, in cooperation with the Washington Physicians Service, also recruits and trains bureau managers. Washington Physicians

Service

The Washington Physicians Service is descended from a state medical bureau created by the county bureaus in 1933 to coordinate their policies and activities and to represent them in legislative and other statewide matters. The state medical bureau, organized as a charitable or nonprofit corporation, was also authorized to develop statewide medical service contracts, to establish new local medical service bureaus, and to define the service area of each bureau. The state bureau was relatively inactive until the end of World War II, when the state welfare recipients' health care program assumed larger, and more positive, proportions, the Veterans' Administration expanded its program for the care of ex-servicemen, and labor 17

Medical Service Corporations unions expanded their activities in the field of health and welfare benefits. In 1944, to provide for the indemnity aspects of the contracts of all the county bureaus and to insure the legality of their operations, the Washington State Medical Association organized a second statewide corporation, the Washington Physician Service Corporation. This was solely an insurance corporation, organized under the insurance laws of the state, and owned by the physicians of the local bureaus. It could operate for profit and could pay dividends on its stock. During the period of its existence, it was said to be the only physician-owned insurance corporation in the United States. Passage of the state Health Services Act in 1947 made this corporation unnecessary since, under the new law, its functions could all be performed by the state medical bureau. The Physician Service Corporation was abolished in May 1951 and its functions transferred to the Washington State Medical Bureau. At the same time, the state medical bureau was reorganized as a nonprofit medical care agency under the new law and its name changed to Washington Physicians Service. The Washington Physicians Service is directed by a board of trustees of nine physicians, elected for three-year terms. The voting strength of each county bureau in the Washington Physicians Service is determined by the number of physicians participating in the bureau. King County has eight votes; Pierce and Spokane Counties have two each; other bureaus have one each. The Washington Physicians Service serves as "agent" for the county bureaus for a commission ranging from 1 to 2 per cent, depending on the type of contract. At the present time it administers a number of statewide contracts, including the state's indigent medical care program, the Medicare Plan of the United States Armed Forces, the Veterans' Administration contract, and several labor union health and welfare programs. The procedure followed in administering statewide contracts varies. In a labor union health and welfare medical program which involves more than one county, Washington Physicians Service collects the premiums from the health and welfare fund trustees and distributes them to the bureaus providing service. Similarly, under the Medicare program, physicians submit their statements of service rendered to servicemen's dependents to their bureaus, which forward them to the Washington Physicians Service. Washington Phy-

18

County

Plans and Other Health Insurance

Agencies

sicians Service pays the physicians and is reimbursed by the government. The Washington Physicians Service also underwrites the contracts of the county medical bureaus for services to subscribers who are outside their bureau's jurisdiction when they need services. Washington Physicians Service thus assures subscribers' medical and hospital care away from home. The arrangements also enables the county bureaus to fulfill the reinsurance requirements of the state insurance law covering reimbursement for services given by physicians or hospitals not under contract of agency with a subscriber's county bureau. Western Conference of Prepaid Medical Service Plans The Western Conference of Prepaid Medical Service Plans was established in 1948 when the leaders of the medical profession in the West recognized that prepaid medical care programs in Washington and the other western states were being seriously handicapped by a lack of cooperation and interchange of information. These medical leaders, convinced that the western states' development in prepayment was far in advance of that of other regions, believed that many common problems of western plans could best be solved by a regional approach. The conference was born at an informal meeting of twenty physicians and plan executives. Today, some forty doctor-sponsored prepaid plans, extending from Hawaii to Wyoming and from the Mexican border to western Canada, make up the Conference. These plans have a total membership of close to fifteen thousand doctors and three million subscribers. The Western Conference has no permanent officers, paid employees, or central office. All of its activities are conducted through committees and an annual meeting (called the Conference) of representatives of the participating plans. Until 1953 participation in meetings of the Conference was limited largely to members of the constituent plans. Since 1953, however, when the Conference established a Permanent Committee of Plan Administrators, it has sought advice, guidance, and criticism from those not directly involved in managing prepaid plans. Meetings of the Conference have been addressed by labor union representatives, practicing actuaries, medical economists, and management consultants. Soon after the Western Conference was formed, it began working toward eliminating the loss or diminution of benefits that often oc-

19

Medical Service Corporatións curred when subscribers moved from the jurisdiction of one plan to that of another. Without a transfer agreement between plans, a service plan subscriber who moved to a different area and joined a new physician-sponsored plan was often subjected to all the waiting periods and other restrictions a new enrollee would face. Although a few plans had informal transfer agreements, no acceptable principles of transfer had been established for the plans of a broad region. The problem of transferability was approached on the national level by the Blue Shield Association through attempts to offer uniform benefits and formation of the Blue Shield Insurance Company. The western medical service plans felt the problem might be solved regionally with less formality. In addition, adoption of the Blue Shield Transfer Agreement would not answer the needs of the Western Conference completely, since most of the medical service bureaus in Washington and a few in Oregon were not Blue Shield plans. By the 1953 meeting of the Conference all participating plans had subscribed to a transfer-of-membership agreement that assured continuity of coverage without loss of original membership date to subscribers who transferred their coverage from one plan to another. Since the Conference is an informal confederation, the basis of this arrangement ( and all other interplan agreements reached by the Conference) was mutual trust and understanding. The Western Conference next sought an arrangement for the exchange of benefits on a service basis rather than on an indemnity basis in the western area. This objective was realized when the western plans adopted a Service Benefits Agreement at the 1954 meeting of the Conference. This agreement extended service benefits on a paid-in-full basis to members from one plan area who required treatment in another plan area. For a number of years the Conference discussed the possibility of a uniform contract for the whole area of the Western Conference. In 1954 it approved a resolution instructing the Permanent Committee to prepare an actual contract to be submitted to the forty member plans. This contract, which provides basic benefits for interplan or interstate groups, has been agreed to by all of the medical service bureaus in Washington, although some of the other plans in the Conference have not yet approved it. Other problems, of course, remain to be solved, some of them outgrowths of the uniform contract. But the Western Conference

20

County Plans and Other Health Insurance Agencies has already played an important role in furthering common action among member plans, including the Washington county bureaus. Blue Shield and Blue Cross The medical service corporations in King County, Chelan County, and Kitsap County are the only county bureaus in the state now affiliated with the national Blue Shield system. One other bureau, Clark County Physicians Service, insures some of its hospital coverage through Blue Cross. The fact that all the Washington bureaus other than Clark underwrite hospital coverage themselves is virtually unique among the nation's medical care plans. It stems undoubtedly from the very early development in Washington of plans sponsored by physicians, preceding the advent of separate hospitalization programs.

21

CHAPTER IV

Historical Background of King County Medical Service Corporation

Private contract practice had existed in King County for many years before the 1930's, but it was not until its great increase early in the Depression that the County Medical Society took action against it. In February 1933 the County Society appointed a committee to study the problems created by contract practice and determine how the Society could eliminate the pre-emption of groups of patients by doctors, eliminate competitive bidding for patients, and restore to patients their right to choose their own physicians and change physicians without having to pay twice for care. The committee recommended that the Society end private contract practice among its members. It recommended further that the physicians of King County form an organization to provide contract medical care to low-income groups. There were serious difficulties in such an undertaking, however. For one thing, forming a company to furnish cash indemnity medical care insurance required, under Washington statutes, a deposit of $125,000, no substantial part of which was available. Secondly, an unsuccessful medical service bureau for low-income families sponsored by the County Society years earlier had imposed financial liabilities on its members, and the Society was reluctant to risk repeating that experience. To meet these difficulties, the Society's legal counsel recommended establishing an autonomous nonprofit, nonstock charitable

22

Historical Background

of King County

Corporation

corporation that would act as agent for local physicians and hospitals who agreed to furnish care under contracts it offered. Since the contracting corporation would not be the employer or "principal" of the physicians, it would also not be liable for malpractice by individual physicians nor would it violate the Medical Practice Act by selling professional services. As there was no legislation bearing directly on this method of furnishing care at the time, the recommendation was based on study of decisions of the Washington courts. When the counsel's suggestions were taken before the Society, a number of members, joined by the Executive Secretary of the American Medical Association, Dr. Morris Fishbein, who was present, strongly opposed the idea except as a temporary measure. Dr. Fishbein warned, in fact, that the plan would be acceptable to the A.M.A. only as a temporary device to meet specific emergency conditions. After a heated discussion of the issue, the Society unanimously adopted the motion that the King County Medical Society approve the formation. . . . of such a permanent organization to promote medical, surgical, and hospital service for people in the low wage income groups, to which none but members of the King County Medical Society shall be admitted as participants, and that such an organization shall be entirely divorced from the King County Medical Society as a body. Two separate organizations were formed in April 1933. The King County Medical Service Corporation was established as the legal entity and the operating organization. The King County Medical Service Bureau, not incorporated, was formed as a voluntary association of all physicians who had service agreements with the Corporation. The Bureau adopted as its primary aim "cooperation with the King County Medical Service Corporation." Its principal function was expected to be the election of a Medical Advisory Committee to adjudicate disputed charges to the Corporation by participating physicians. Almost immediately it acquired by convention the additional function of nominating informally each year an additional member to be elected to the Corporation.

1933 to World War II Four hundred physician-members of the King County Medical Society agreed immediately to provide service to the service corpora-

23

Medical Service Corporations tion's subscribers without charge to them beyond their monthly payments to the Corporation. Each doctor consented to accept as payment in full the fees fixed by the medical director of the Corporation. Seven Seattle hospitals entered into similar contracts with the Corporation. The Corporation was financed by an advance of $ 10 from each of the four hundred doctors who signed its contract. Buying office machinery and necessary supplies exhausted the fund, and the Corporation actually began its operations with a deficit. (The contribution of the doctors was refunded in 1937.) As the fee schedules of existing bureaus were not considered applicable to King County, the Corporation adopted the State Industrial Insurance Fee Schedule, which ran slightly below the usual fees for private patients in King County. Despite the hopes of the founders, it proved impossible to pay more than 40 per cent of even this reduced fee schedule for two years. In 1935 the percentage was increased to 50 per cent. It remained at that figure until World War II, when it was raised to 90 per cent. To build reserves thought necessary against epidemics, unsound contracts, and unforeseen contingencies, physicians joining the bureau were required to pay an entrance fee (conceived as matching the contribution that those who were already participating had made to the reserves by accepting less than full payment for their services). By 1935 this entrance fee was $100, deducted from the first few Bureau checks due the new participant. Later this entrance fee was abolished. The Corporation's original contract offered physicians' services in the hospital, home, and office for the subscriber, and services in the hospital for the dependents of the subscriber. It also provided drugs to subscribers, but this service proved extremely difficult to control, and by 1937 only drugs furnished by a physician in his office (or by the hospital) were included in the contract. The initial contract provided service benefits for hospital care, based on a collective agreement negotiated with the Seattle Hospital Council. When hospital costs rose sharply in the mid-thirties, both the Corporation and the hospitals became dissatisfied with the contract, and it was abrogated. The Corporation negotiated indemnity agreements with individual hospitals in its place. As these contracts are based on the average cost of care in a four-bed ward, they can be considered a type of service contract. The Corporation signed its first contract two months after its for-

24

Historical Background

of King County

Corporation

mation (June 1933). This contract, with the North Bend Timber Company, remains in effect today, although its initiation presented some difficulties. The Corporation was unwilling to write contracts providing home and office care for dependents, feeling they might prove very costly. However, several North Bend doctors were already providing contract care to families of these workers and were unwilling to terminate their contracts. To avoid offence to subscribers and doctors, as well as possible suits over contract terminations, the Corporation utilized an "extraordinary" procedure. Funds previously paid to the contracting doctors were paid instead to the sales manager of the Corporation, who, functioning as both the receiving and disbursing agent for these family arrangements, gradually liquidated all of them. The public received King County Medical enthusiastically from the beginning, and the Corporation grew at a steady rate. By 1935, it covered close to 30,000 individuals, and by 1940, the last year before defense contracts accelerated its growth, it had enrolled just over 40,000 subscribers and dependents. During the same period the County Society was consistently successful in ending private contract practices in King County, as successive doctors canceled their contracts or transferred them to the Corporation. Some relinquished these contracts reluctantly, but most doctors yielded to the persuasions of Bureau members, the Corporation, or the Society. One individual outside the profession sued the Society and the Corporation over termination of certain contracts, but the Washington Supreme Court upheld the right of the Medical Society to force termination of these agreements.1 As an aftermath of this case, the Society modified its by-laws to provide penalties — "censure, suspension, or expulsion" — for any physician who undertook contract practice without the specific approval of the Society. In 1940 it formally requested twenty-two physicians to end their practice of "private" contract medicine. Eighteen of them did. Two others resigned from the Society, and one refused to abrogate his present contracts but agreed not to institute new ones. The remaining member of the group took a militant view of his right to practice in any form he pleased and was expelled from the Society. The 1940 action of the Society effectively ended for several years the threat of professionally directed prepaid medical care 1

Porter vs. King County Medical Society, et al., 186 Wash. 410 (1936).

25

Medical Service

Corporations

plans not under the sponsorship of the medical profession collectively. These actions of the Medical Society greatly benefited King County Medical, since they placed the Corporation in a position of virtual monopoly. Significant changes in physicians' attitudes toward the Corporation also took place during this period. The majority of doctors recognized that the organization was a permanent one, since the growing demand in King County for medical care insurance would make it virtually impossible to terminate the Corporation even if that were desirable. During the same period the American Medical Association modified its views on medical care insurance and, although it indicated some reservations about such schemes, took the position that the Corporation was operating within the standards of professional ethics. The satisfaction of local physicians, which reflected both the financial success of the Corporation and the doctors' belief that it assisted (or, at least, did not hinder them) in maintaining professional standards of care, undoubtedly influenced the A.M.A. The War Years World War II brought an unexpected degree of financial success to King County Medical, as well as unexpected problems. The growth of defense establishments in the Puget Sound area and the signing of contracts with several government agencies raised the number of subscribers sharply at a time when the military services were calling many physicians. The Bureau modified its requirements for participation by practitioners to meet the emergency, admitting doctors who were not members of the Medical Society or lacked the requisite time in practice. At the same time, the Corporation expanded the benefits available to its subscribers, despite the limiting effects of the war. Although no contract changes took place during this period, contract provisions were interpreted more broadly by the officers screening claims. This development appears to have been the result of a new cloud on the medical horizon: closed-panel plans sponsored by industries. Some companies engaged in the war effort, feeling that their employees were not receiving adequate medical care, had set up closedpanel plans to furnish care to them and their families in clinics and hospitals. The best known of these was the Permanente Plan, established in California by the Kaiser Corporation. The King County Society, like medical societies over the country, considered these plans

26

Historical

Background

of King County

Corporation

a serious danger to the "free" practice of medicine and to physiciansponsored medical care plans. King County Medical met the threat by broader and more flexible interpretation of existing contract provisions. Under other circumstances such an extension of coverage might have threatened the financial position of the Corporation. Under the unusual situation of the time, it did not. The bulk of the persons covered were defense workers — many of them single males. Their lower utilization enabled King County Medical to offer more care for less cost. Funds accumulated so rapidly, in fact, that the Corporation was able to raise the proportion of the unit fee schedule it paid to 90 per cent. Almost coincidentally, the development of the closed-panel clinics apparently ended almost all opposition on the part of physicians to the continuance of the Corporation. The Postwar Period At the end of World War II King County Medical was firmly established and financially secure. Even the loss after V-J Day of some 20,000 subscribers ("laid-off" at the shipyards, Boeing Airplane Company, and other defense establishments) failed to shake the Corporation's position; approximately 70,000 persons retained coverage. It quickly recovered the loss and continued its steady rate of growth. A more serious problem in this postwar period was created by the dissatisfaction of many Bureau physicians with the plan. Physician criticism focused principally on the following aspects of the Corporation's operation. 1. Service benefits. The doctors had undergone a period of good experience in the handling of patients carrying indemnity contracts with private insurance companies. 2. Increasing controls over doctors. These were held to impair the relationship between the patient and physician. 3. Coverage for high-income persons. Although willing to accept what they considered to be substandard fees for low-income groups, physicians objected to the inclusion of high-income individuals and families in the plan. 4. The fee schedule and the practice of prorating payment. In addition, some practitioners questioned the relationship between the Bureau and Corporation, suggesting that the trustees and members of the Corporation were overconcerned with the plan as a

27

Medical Service

Corporations

business and did not give sufficient weight to the professional views of the Bureau members. Others objected to the Corporation's building its own hospital, which it had done with Federal financial support, believing that it represented a waste of "their" money. A more substantial group criticized the refusal of the board of the new hospital to permit doctors who had not been specifically approved by its staff access to its facilities. Since specialization of practice was one criterion for admission to practice in the hospital, probably a majority of the physicians were denied the use of a hospital that they believed they owned. 2 For several years, meetings of both the Corporation board and the Bureau membership were devoted to discussions of these problems. Members of the Corporation appeared before meetings of the Bureau to explain Corporation policies — as did representatives of the hospital. Some of the more critical individuals were elected to positions on the Bureau and Corporation boards. Between the end of the war and 1949, several functions of the Corporation board were assumed by the Bureau board, including the processing of applications of new members. (Although final action still lies in the hands of the Corporation trustees, they rarely reverse recommendations of the Bureau.) The Bureau also assumed a larger role in disciplinary procedures and in the formulation of policy. In all, the Bureau established itself as the accepted channel for communication between the Corporation and participating physicians. As a further step, in 1950 the Corporation board of trustees was expanded from five to seven members to give it a more representative character. (A suggestion that it be expanded still more was rejected, since it was feared that too large a body would not be effective.) Other modifications in relationship were made and the effort to alleviate criticisms continued. Although some discontented elements still exist, the dissatisfactions that crystallized after the war actually brought the Bureau and the Corporation much closer together and led to greater understanding between the two. While the Corporation was meeting its problems with Bureau members, a new challenge from without appeared in the Group Health Cooperative of Puget Sound, organized by leaders in granges, labor unions, and consumer cooperatives. In the fall of 1945 the Cooperative bought the capital stock of Medical Security Clinic, 2 The Corporation's ownership of the hospital was terminated by the sale of the property in 1957.

28

Historical Background

of King County

Corporation

Inc., acquiring ownership of industrial contracts which grossed about $300,000 annually and a fifty-five bed hospital in Seattle valued at $140,000. Both the Medical Society and the King County Medical were apparently willing to allow the Cooperative to provide health care to its own members but wanted it to discontinue industrial contract practice. This, however, the Cooperative was unwilling to do. In line with the rules it had adopted in 1937, the County Society refused to admit to membership the approximately twenty doctors practicing under the Cooperative, on the grounds that they were engaging in unauthorized contract medicine. The Medical Society placed other impediments in the way of Group Health, denying its physicians access to consultation and excluding them from use of hospital facilities. This treatment of the Group Health Cooperative finally culminated in a suit against the Society, the Corporation, and the Bureau, started in 1949 and finally decided late in 1951. 3 The Washington State Supreme Court found the activities of these organizations monopolistic and directed them to cease opposition to the Cooperative, the Society to admit the physicians of the Cooperative to membership, and all to withdraw other discriminatory practices against the Cooperative and its physicians. The loss of its monopoly position and the establishment of Group Health Cooperative as a potent competitor led King County Medical to further liberalization of its policies. For instance, the Corporation raised its salary limitations for service plan subscribers, largely in order to compete successfully with Group Health for higher-salaried groups. The number of persons covered by King County Medical contracts jumped from approximately 70,000 in 1945 to 130,000 in 1950. Many persons now connected with the plan feel that it really came to maturity during this postwar period. The upsurge in enrollment forced the Corporation to adopt a more businesslike structure and introduce greater efficiency to its operations. Concurrently with the Cooperative, another threat appeared. For some years, starting in 1939, bills were introduced into Congress that would have instituted some form of national health insurance. 3

Group Health Cooperative of Puget Sound vs. King County Medical Society et al., 39 Wash. ( 2 d ) 586 ( 1 9 5 1 ) . The basis of the complaint of monopolistic practices rested upon the allegation that the Society, in concert with the Corporation and the Bureau, was attempting to restrict contract practice to the single Society-sponsored arrangement and to penalize any physicians who were engaged in contract practice through any other organization.

29

Medical Service

Corporations

These efforts were not regarded very seriously by the medical profession until 1948, when a great number of bills embodying compulsory health insurance were introduced in Congress. The most carefully prepared of these was the Wagner-Murray Dingell bill, and it was against this that doctors leveled their most effective opposition. As in other parts of the country, the dangers posed by proposals of a compulsory system also led the medical profession of King County to give much greater support to its own voluntary plan than before. Shortly prior to the threat of national health insurance, a series of decisions of the National Labor Relations Board had made health and welfare benefits bargainable issues in union negotiations, and in 1949 the Federal courts ruled in the Inland Steel and W. W. Cross cases that unions could negotiate pensions and group insurance programs with employers.4 Organized labor made health insurance a major collective-bargaining issue in 1949 and 1950. These developments were also regarded by the medical profession as a threat to such organizations as King County Medical because insurance companies, not previously serious competitors in this field, now were assured a sufficient spreading of risk over the covered group to remove the dangers of "adverse selection." King County Medical suddenly found itself facing an entirely new set of competitors, well financed and experienced in related fields. With these threats came the possibility of local regulation of the plan. In 1947 the Washington State Legislature enacted a statute, the Health Care Services Act, which placed health care plans like King County Medical under the supervision of the Insurance Commissioner and directed them to submit financial reports to the state.5 This law also empowered the Insurance Commissioner to make reasonable regulations to aid the administration of the law. Although this latter provision has never been implemented, it remains a means by which medical care plans could be closely regulated. The legislation did not change the existing structure in any way and, in fact, afforded a legal blessing of the Corporation's and Bureau's activities, 4

Inland Steel Company vs. NLRB, 170F (2d) 247 (1948), certiorari denied, 336 U.S. 960 (1949); W. W. Cross & Company vs. NLRB, 174F (2d) 875 (1949). See also Potlach Forests, Inc. vs. International Woodworkers of America, 108 Fed. Supp. 906 (1951), affirmed 200F (2d) 700 (1953). 5 Sessions Laws, 1947, C. 268. Revised Code of Washington 48.44.010060.

30

Historical Background

of King County

Corporation

but its very enactment was regarded by some physicians as a first step to government control. Although no one of these factors seriously endangered the efforts of the Corporation (and the 1947 act of the Washington legislature was welcomed by some segments of the medical profession as a wise proviso), they represented in the eyes of doctors an unfavorable change of the climate of opinion affecting medicine. The response to these "dangers" by the Corporation was complex. When rising costs made it necessary to raise the plan's monthly contract rate from $1.75 per subscriber to $3.50 in 1947, the Corporation concluded that it had to develop a more expanded plan of medical care to maintain public support. On October 1, 1948, it canceled all existing contracts and submitted a new contract embodying wide modifications to covered individuals and firms. While these changes did not affect the basic nature of the contracts, the new agreement extended care by physicians, changed the rates covering treatment in hospitals, and modified several restrictive practices of the past. These revisions made the plan sounder financially, as experience had revealed certain minor risks, and made it more appealing to the public. Almost all subscribers accepted the new contract. In further reaction to the various threats, the doctors simultaneously began a fairly intensive public relations program. Public leaders (that is, government officials, labor leaders, business and industrial executives) were given access to the Corporation. Some were invited to attend meetings of the board of trustees. "Getacquainted" dinner meetings were arranged with leading physicians and members of the Corporation and business and union leaders. In general, much more information about the plan was disseminated to the public. In another effort to build wider appeal, King County Medical offered separate contracts for individuals (non-group subscribers) for the first time. During the first year it enrolled 3,700 individual subscribers, 60 per cent of them transfers from group plans, 40 per cent new subscribers. The plan improved its group contracts by increasing the number of medical and surgical benefits offered, reducing waiting periods, reducing exclusions, and extending the benefits it offered dependents. A notable example of this was the family plan coverage first offered to the hourly employees of Boeing Airplane Company in 1955. The family plan represented a great advance over preced-

31

Medical Service

Corporations

ing practice because it afforded extended coverage not only to the subscriber, but also to his family. Previous contracts had covered only doctor's services in the hospital and hospital services for the dependents of the subscriber. The Boeing Family Plan contract was a losing one for the plan in 1955, and control measures had to be introduced to keep care within the limits that the payments would cover. The control measures introduced were relatively simple at first, but the continued higher utilization under the contract (especially among the family members) led the Corporation to introduce a first-call deductible provision when the contract was renewed in February 1957. The competition of private insurance companies forced the Corporation to offer still other coverage. Since insurance companies offered comprehensive "packages" including not only the usual medical insurance and so-called "catastrophic" coverage but life insurance as well, the Corporation teamed with other insurance companies to offer life insurance and, by reinsuring its risk, also offered "catastrophic" or "major medical" coverage. Catastrophic coverage, indemnity contracts (offered to persons whose salaries are over the service limit of $7,200), and individual contracts have all shown a faster rate of growth than have group contracts in recent years and have contributed a large proportion of the Corporation's net reserve. The Corporation's enrollment continued to grow as well. In January 1958 the number of subscribers and dependents was 226,629, as noted earlier. In 1940 approximately one person in twelve in King County was covered by the Corporation; by 1958 more than one person in four was covered.

32

CHAPTER

V

Administration of King County Medical Service Corporation

The Present Administrative

Structure

The King County Medical Society, instrumental though it was in founding the Corporation, does not participate actively in its administration today. The Society's former role has been assumed by the Medical Service Bureau, the unincorporated association of those Medical Society members who have service agreements with the Corporation. The Bureau, in effect, provides the medical staff to fulfill the contracts entered into by the Corporation and represents the participating physicians in their relations with the Corporation. More than 1 , 0 0 0 of the 1,229 members of the County Medical Society were members of the Bureau at the end of 1957. The officers in the Bureau consist of a president, a president-elect, and a secretary, all elected for a one-year term. These three officers, with two other elected physicians, form the governing board of trustees. All five trustees are elected for one-year terms and may be re-elected. Although nominations come from the floor at the Bureau's annual meeting, the board'of trustees itself and the Bureau's medical advisory board constitute an unofficial nominating committee. The board of trustees, which meets monthly, approves applications of physicians for Bureau membership and has the power to revoke Bureau membership. The trustees also act in an advisory capacity to the Corporation trustees upon such matters as the fee schedule, covered or excluded conditions in the various Corporation contracts, and subscriber income limits, as well as professional controls.

33

Medical Service

Corporations

The Bureau's medical advisory board consists of seventeen Bureau members. Three are general practitioners; the other fourteen represent the specialities recognized by the Bureau: anesthesiology, dermatology, eye, ear, nose and throat, gynecology-obstetrics, internal medicine, neuro-surgery, ophthalmology, orthopedics, pathology, pediatrics, plastic surgery, radiology, surgery, and urology. Advisory board members are elected annually by the membership of the Bureau. Nominations are normally made by the board of trustees and the advisory board. No advisory board member may be a trustee of either the Bureau or the Corporation; however, the medical director of the Corporation serves ex officio as the non-voting chairman of the advisory board. The advisory board meets monthly. It considers, for example, exceptions to the regular fee schedule, questions of professional conduct, and proposals for revising the fee schedule. The conclusions of the advisory board amount to recommendations to the Corporation board of trustees. The advisory board also screens applications for Bureau membership, and it plays a very important role in the handling of disputed physician claims. The Medical Service Corporation is a nonprofit charitable corporation. It has no capital stock; its members may not receive compensation for any services rendered; its assets would revert to the County Medical Society for charitable purposes in case of liquidation. The purpose of the Corporation is epitomized in its articles of incorporation. To secure to individuals, including low wage earners, and to their families, health services, including the benefits of medical and surgical care and treatment, hospitalization and nursing of which many such individuals and their families have heretofore been deprived. This Corporation may adopt any means which are reasonable, proper, or necessary to carry out the foregoing purpose . . . The Corporation has thirty members, consisting of the surviving original incorporators plus those who have been elected to membership. These members elect a board of trustees consisting of seven members serving staggered five-year terms. In formal authority this board operates the Corporation; in actual practice, all matters affecting medical practice are substantially controlled by the Bureau's trustees and medical advisory board. The president of the Corporation board of trustees is charged

34

Administration

of King County

Corporation

with the general management of the Corporation and with the execution of its policies. In actual practice, this function is performed by the medical director, who heads the internal organization as a whole and serves as the chief of its medical department. The Corporation's policy dictates that medical decisions affecting participating physicians must be determined by a medical expert or a medical CORPORATION BOARD OF TRUSTEES

MEDICAL DIRECTOR

BUREAU BOARD OF TRUSTEES

MEDICAL ADVISORY COMMITTEE

* Medical Director, General Manager, Sales Manager, Public Relations Director, Statistician F I G U R E 2.

King County Medical Service Corporation Organization Chart (August 19, 1958)

committee. The medical department is essentially the director's staff arm. An assistant medical director acts as an intermediary between the Corporation and participating physicians by interpreting the medical aspects of cases in terms of contract obligations (that is, reviewing any doctors' invoices with unfamiliar medical terminology or any not consistent with the fee schedule). A general manager is responsible for all administrative operations that do not involve matters regarded as "medical" in nature. Reporting to him are five department heads: a sales manager, public relations director, comptroller, office manager, and medical department supervisor. In addition to the five line departments, the organization has a statistician with two clerical assistants. As charted in Figure 2, the lines of responsibility appear clear and the functions mutually exclusive. During actual operation, however, personnel often cross these lines and become part of coopera-

35

Medical Service Corporations tive team relationships. The central importance of the medical history records in the processing of collections and claims makes this inevitable. The result, in this relatively small, compact organization, is increased personnel efficiency rather than any serious confusion in assignment or responsibility. The work force adjusts fluidly to the demands of the moment. A formal description, as of any one moment, therefore, no more than approximates the actual pattern of organization. The hospitals providing services for KCM subscribers also must be considered in the administrative pattern. Hospitals bill King County Medical for their services to subscribers; King County Medical pays the amount set by its subscriber contract, and the hospitals bill the subscribers for the balance. The plan's general manager and the supervisor of the hospital invoice audit section maintain regular contacts with hospital personnel, but King County Medical develops its contracts covering hospital services independent of the hospitals. It is influenced, but it is certainly not governed, by the actual rates prevailing in the hospitals. The doctors in the Bureau and Society would undoubtedly strongly oppose giving the hospitals any role in policymaking. A final segment of the institutional pattern, and one representing a significant potential influence, is the subscriber public, or rather publics. Unlike the clientele of private insurance companies, they live in a definite and limited geographical area. Communication among them, while difficult, would be possible. With some degree of organization and aggressive representation they could exercise a strong influence over the scope and kinds of benefits provided by the Corporation contracts. At the present time, however, the subscriber community as a whole is not a significant determinant of policy. The 13,600 subscribers holding individual contracts have little bargaining power. The major pressure to extend desirable coverage to them stems from members of enrolled groups who want to be assured of continued coverage if they leave the group. Similarly, the 2,600 group subscribers covered under reimbursement contracts (for those earning over $7,200) have little direct influence on plan policy. However, when employed groups negotiate with the Corporation, they do not subdivide themselves by income, so that the group's desire for the best possible coverage benefits those with reimbursement contracts. The groups covered by group service contracts vary in influence.

36

Administration

of King County

Corporation

The voluntary, single purpose groups that negotiate in their own behalf are the least influential. In several instances, where neither a union nor the employer takes a leading part, the plan's own sales and service personnel actually provide the organizing leadership. Some of the groups represented by employers have greater negotiating power. When the employer pays all or part of the premium, he is often active in order to secure his "money's worth." In addition, firms with positive personnel programs may become aggressive negotiators in their employees' interests. The most influential groups in bargaining are those represented by the labor unions, who negotiate with employers for health coverage as part of a package of employment "fringe" benefits. The influence of the individual union depends partly upon the number of potential, or actual, subscribers it represents. The Boeing hourly workers, who in 1957 numbered nearly 35,000 subscribers (with their covered dependents, over 65,000), form a group of critical importance. The enrollment or the possibility of the loss of so large a number of subscribers presses the Corporation to special efforts, and contracts with groups like these are most likely to incorporate new provisions. Not only does the plan derive financial strength from enrolling the large union-represented groups, but its failure to retain these groups could result in the introduction of an alternative type of coverage (for example, a Permanente type plan) that would be unacceptable to the medical profession. The Corporation will not, however, accept any avenue of extension. It has, for example, resisted including in contracts the services of practitioners other than doctors of medicine. It also once rejected a potentially lucrative contract with the Teamsters Union over the issue of lay representation on the Corporation board of trustees. There seems to be little inter-union collaboration in negotiating efforts. The Seattle Central Labor Council might provide a communications center, even a power center for this kind of influence. In fact, the efforts of the Corporation to use the Council to encourage widespread affiliation with the plan risks the development of just such a power center. So far, however, the Council has shown no interest in identifying itself with any particular health plan. It is sympathetic to the Corporation as a community undertaking and supporting in an informal way, but it officially supports free competitive bidding among the various plans. Altogether, the context in which the plan operates shows three 37

Medical Service

Corporations

major centers of power. At one extreme are the physicians, the suppliers of service. At the other are the subscribers — too amorphous an entity to exercise substantial power except for the large, unionrepresented groups, groups whose withdrawal from coverage would be seriously damaging to the plan's finances and prestige. The Corporation staff stands between these extremes, seeking to fit the two not wholly compatible interests into a pattern of health care that is sufficiently satisfying to the medical profession and employed groups to assure the plan's stability and, if possible, sound growth. In the course of the plan's operation, there has developed a set of attitudes and conventions that are shared by the administrators and the physicians, and are at least accepted by the more influential bargaining representatives of the covered groups. There results a discernible belief and value system that supplies the personality complement to the readily observable organic system of interpersonal and intergroup behaviors. In this way, the plan, as a social organism, has developed attitudes, values, and beliefs that add up to an image of itself in its professional, business, and community roles. For purposes of further discussion, these personality factors are attributed to the plan in its organic state. Policy Formation The three major areas of concern to the policymakers of the King County Medical Service plan are medicine, business, and internal operations. As has been suggested, the plan's physicians generally regard all matters of medical practice as their exclusive concern. Medical questions are decided principally by the feelings and interests of the participating physicians, expressed through the trustees and advisory board of the Bureau and the trustees and medical department of the Corporation. Questions of the eligibility of practitioners to participate in the plan, the relationship of general practitioners and specialists, relationships among the specialities, and reviews of X-rays, electro-cardiograms, and reports of pathology are considered wholly within the medical sphere, as are matters of professional supervision and discipline. The medical groups also initiate changes in the fee schedule, determining the relative values of the services it includes. However, the schedule of fees is a business concern as well, because the plan's income must be sufficient to support the desired schedule. Special appeals for benefit awards beyond the limits of contractual liability often originate within the 38

Administration

of King County

Corporation

medical group, but final disposition may involve business policy because of the effect upon the resources of the Corporation. Some concerns of the physicians originate outside the area of medical policy. For example, changing the maximum income limit for service contracts is a business question, but physicians regard it as having strong medical implications. Also, public relations activities are developed elsewhere, but the medical group monitors the program because of its conviction that these activities should reflect ethical standards acceptable to the profession. Determining how reserves are to be invested, a business matter, is always acted upon by the trustees of the Corporation, apparently because of a special interest in investments by some practitioners. Questions of medical policy circulate freely among the trustees and advisory board members of the Bureau, the trustees of the Corporation, and the members of the medical department. When medical questions originate within the profession, they are usually brought to common attention through the Bureau. Questions originating within the Corporation are transmitted from the medical department to the Corporation trustees, with the Bureau leadership generally involved before final action. Formal, final action on any question is taken by the Corporation trustees, but the actual decision of the issue is usually concluded by the medical people who are most concerned. Business policy, set by the Corporation's top management, is essentially non-medical Corporation policy: the design of contract provisions (including scope of coverage, exclusions, waiting periods, and time limitations) and the pricing of contracts are primarily business concerns. The use of such mechanisms as first-call deductibles and purchased "requests for treatment" are not regarded as medical matters. Underwriting practices and the analysis of experience are considered business concerns only. Bargaining with union representatives of the plan's own clerical employees is exclusively a business matter. Whether an issue is finally determined by the management group or becomes a question for the trustees to consider depends on the degree of involvement the medical representatives feel, and this feeling of involvement apparently varies from occasion to occasion. Usually the issue is communicated to the Corporation trustees for their information and formal approval. The plan's middle management group is concerned largely with operational routine and the assembling of experience in handling

39

Medical Service

Corporations

work processes. Its decisions are limited to contract interpretation within the context of well-recognized standards, procedural direction of work, the recruitment and supervision of clerical personnel, work assignments, equipment utilization and the like. Information it develops regarding cost trends and related matters is generally transmitted to top management without recommendations for action. The operations group feels the impacts of both medical and business decisions if these necessitate changes in methods, but it is not generally consulted in advance about what administrative implications changes in contract provisions may have. These questions are considered by the top management of the Corporation largely as incident to the financial implications of the changes. Altogether, an undesirable pattern of policy roles emerges. Because the Bureau trustees and advisory board and the Corporation trustees are physicians, they concentrate attention upon questions affecting medical practice. Their interest in medical policy ranges from the broadest questions to specific decisions of the medical department. The Corporation trustees are less concerned, however, with business matters; generally they ratify recommendations of Corporation top management. The limited scope of interest on the part of the trustees devolves a large area of policy responsibility upon the staff group of the Corporation. Because this group includes both medical and lay administrators and because they collaborate closely, business policy is formulated with attention balanced among medical implications, public relations, sound financing, and operating feasibility. Administrative

Processes

As in any medical care plan, the principal activities in King County Medical Service Corporation are developing contracts, enrolling subscribers, collecting subscriber payments, and paying physician and hospital claims. The sheer volume of keeping records and processing claims for ovei 200,000 enrollees requires regularized procedures to insure the continued flow of work and maximum consistency of results. The formation and expression of plan policies can best be seen, of course, in the plan's less routinized functions, particularly in contract development and enrollment.

40

Administration

of King County

Corporation

Contract Development Formulating the contract provisions under which subscribers will be enrolled includes determining the groups to be offered coverage, specifying inclusions, exclusions, and limitations of care, and establishing rates of subscriber payment. Increasingly, the plan must keep step with its competitors. As might be expected, this is a matter of modifying existing contract terms as circumstances make changes desirable. The plan has an understandable reluctance to experiment very widely. Subscribers and physicians alike become habituated to a set of "ground rules" covering utilization. When the plan first offered subscriber contracts, almost no guides were available to show how prepaid care could be rendered at any estimated cost. Consequently, the early trustees relied mainly upon guesses and inspiration. To avoid liability for care that might have been delayed pending coverage, they established waiting periods. They regarded chronic conditions as probable causes of high cost, and excluded them. They regarded some types of care, such as plastic surgery for cosmetic purposes, as not really necessary care at all, and excluded them also. Altogether, they wanted to offer care for conditions that could be cured by fairly definite therapy and sound medical practice. In this way they developed contract coverage, and with time the provisions acquired prestige and status. To depart from any one of them required convincing reasons that the advantages would outweigh potential risks. However, over the years significant changes were introduced, some the result of competitive pressures, some because the original provisions proved too awkward to administer, and some because there was general agreement that they made little difference. What policy attitudes underlie the evaluation of contract provisions today? Many of the plan's views remain unchanged. When a new group is brought under coverage, the plan assumes that a period of high utilization may occur. Consequently, it sets waiting periods to prevent utilization of some services and to accumulate working funds to cover expensive procedures like deliveries and major surgery. Also, the plan still feels that essentially elective care should not be financed from the pooled contributions of the group. Conditions that occasion long, continued, almost open-ended care — mental illnesses, tuberculosis, and malignancies — are regarded as unmanageable in a prepaid plan, as is protracted care for any

41

Medical Service

Corporations

diagnosis, even though the condition is relatively sub-acute. The plan believes that the accessibility of the care it provides encourages a good deal of minor, even unnecessary, utilization. It regards such mechanisms as first-call deductibles and charges for "requests for treatment" as deterrents to use that protect the interests of other subscribers. Finally, it sees a category of conditions to be the responsibility of parties other than the subscriber himself — industrial accidents, illnesses covered by workmen's compensation, illness or injury in military service, conditions customarily receiving public care, self-inflicted or induced conditions, or injuries for which a third party may be liable. In the last instance, the subscriber's claim is subrogated to the plan. Dominating all thinking in the plan are four controlling attitudes or values. First and probably of greatest importance is the belief that the plan must uphold the ethics and the responsibility of the medical profession. Second is the belief that the plan's objective is to assure needed and by and large routine care; insurance against major or catastrophic risks is not the central objective. In this sense the plan is offering prepaid care rather than health insurance. The idea that some conditions or types of care may not be "insurable" is not heard. Any medical need that the profession customarily meets should, as a matter of principle, be covered by prepayment. Excluded are only those for which a manageable method of coverage has not yet been devised. Third, the plan is deeply conscious of its nonprofit nature and community role. The trustees of the Corporation and the Bureau and the members of the medical advisory board, all serving without compensation, feel they are performing a community service. This sense of community responsibility leads the plan to make sound, conservative use of its funds to avoid leaving the community unable to finance the care that a major epidemic or similar catastrophe would require. A fourth value, pervading all others, holds that the plan should grow. This is less an interest in eliminating competition than a conviction that the plan has a special responsibility to express a set of ideals and ethics and must make its services available to all people who need its benefits. Policies regarding the coverage of subscribers are animated by these four basic values. The most important immediate influence on the plan is competition with other forms of coverage. The plan regards private insurance companies as its primary competition, with Blue Cross secondary. The pressure is to offer better coverage

42

Administration

of King County

Corporation

at a more attractive cost than the commercial carriers. The commercial venture is seen as a potential threat to the capacity of the medical profession to maintain its desired freedom in medical practice. The view is expressed, for example, that the private companies' schedule of indemnity payments could easily become, with a high proportion of patients covered, a mandatory fee schedule imposed upon the profession by wholly extra-professional influences. The commercial carrier also, it is believed, determines subscriber benefits less by medical needs than by the possibilities for corporate profit. Subscriber desires are another strong influence, closely related to competitive pressure. However, the plan goes considerably further toward giving subscriber groups the coverage they want when their desires are deemed to reflect a genuine health need. Then, subscriber desires coincide with the drive to build a broader, stronger plan. The principal restraining influence is the fear that new types of coverage may have harmful financial and administrative consequences. The administrative process by which contracts are developed is well understood within the plan. Ideas for the development of coverage come from several sources. The sales and service force, in touch with the subscriber groups, performs an intelligence function, learning attitudes and interest, sifting information, and communicating to top management. The management staff, particularly the medical and executive director and the general manager, have their own contacts with representatives of the larger and more important subscriber groups. Internally, ideas and suggestions may flow from the review of experience, particularly with regard to the utility of specific contract provisions. Final policy decisions are made by the administrative staff group, with the two senior officers exercising primary influence. The board of trustees is kept informed; on any policy change that affects medical practice its approval is obtained. In most instances, however, the important consideration is to keep the trustees well informed so that they, as physicians, can interpret the plan's policies to all participating practitioners. Enrollment The plan's policy regarding the enrollment of new members may be characterized as a community service, rather than a sales promotion approach. It makes its services available to groups and individuals, but considers an aggressive sales policy contrary to its insti-

43

Medical Service

Corporations

tutional purpose. This policy undoubtedly reflects the fact that sales promotion and advertising are unethical in the practice of medicine. The nonprofit nature of King County Medical also acts as a deterrent to a positive sales policy. The plan does recognize, however, that to meet community needs it must at least make organized groups aware of its services, and it must offer services on terms comparable with those of other prepaid medical plans and of private insurance companies. Consequently, the organization has a sales and service staff of eight representatives who service continuing group contracts and contact potential subscriber groups. In the process of enrolling a new group, the sales representative first determines the general characteristics of the potential group — its number, age-sex composition, and so on — and ascertains the types of coverage and monthly payment it desires. If a group's needs cannot be fitted to the provisions of a standard contract, an underwriting committee, consisting of the medical director, the general manager, the sales manager, the public relations director, and the chief statistician, determines what deviations from standard contract terms are advisable to meet the desires of the group. The chief statistician may develop an actuarially sound rate by evaluating the cost experience of several comparable subscriber groups. Contracts for the vast majority of the plan's 1,700 groups follow standard contract policy, with only the variations that are necessitated by the groups' special utilization characteristics. About 200 contracts — those for large, usually union, groups — receive special treatment. Some of these, particularly the Boeing contract and the Western Washington laborers contract, become special policy matters. Proposals are developed and negotiated to meet the special interests of these groups ( and the competition ). As a result, these contracts are most likely to carry new and experimental provisions. Successful cost experience may justify the later extension of some of these developments to the smaller, less influential groups. In any case, the sphere of policy formation is essentially the negotiation of a few large, prestige contracts. In some of these, the senior officers of the Corporation may participate. Usually the negotiating process is completed without involving the action of the trustees, but exceptions do occur. Any new provision of major significance is referred to the trustees, particularly if some aspect of medical practice is involved. For example, the proposal to cover the dependents of Boeing employees for office and

44

Administration

of King County

Corporation

home calls was acted upon not only by the trustees but was also referred to the whole membership of the Medical Service Bureau. The initial negotiation period is the usual time for the group subscribers to voice their desires and for the plan to respond to any competitive pressures. These pressures, particularly the ones felt in seeking major union contracts, are the most compelling influences toward the continuous reconsideration of plan policies. The enrollment of individual subscribers differs markedly from that of groups. While the Corporation takes positive action to enlarge its group enrollment, it makes no effort to secure individual enrollment. The most apparent reason for this dual policy is economic. Individual contracts are thought more likely to attract high utilization subscribers and therefore to raise problems in applying the shared risk principle. Individual enrollment policy is also affected by the ethical code of the medical profession regarding advertising. "Selling" a prepaid medical plan to an individual is thought closer to commercializing the doctor-patient relationship than is enlisting an organized group to pool its resources for prepayment. Individual enrollment follows these procedures. When a potential subscriber inquires into prepaid medicine by letter, telephone, or a personal visit to the King County Medical office, he is provided with an application, a health statement form, and literature describing the alternative individual plans available. Applicants transferring from a group plan to an individual contract are not required to submit the health statement if they have been covered for at least a year. (In these cases the applicant's medical history card provides the basis for evaluating risk. ) The supervisor of the individual plan department reviews each application for completeness and considers the applicant's health statement or medical history card. If any question of risk appears, he forwards the application to one of the assistant medical directors for review.'Applications are rarely denied, but waivers are written into contracts if the applicants appear to be bad risks for certain coverage. The plan requires a medical statement rather than a physical examination because it believes the latter would deter enrollment. Furthermore, the Corporation need not honor claims arising out of pre-existing conditions not indicated on the health statement, although it recognizes that such disclaimers are sometimes difficult to apply.

45

Medical Service

Corporations

Collection of Subscriber Payments Prepayment is made monthly, either by the subscriber (individually enrolled) or by a group representative (from payroll deductions or subscriber payments). Since eligibility for coverage in the succeeding month is contingent upon prepayment, requests for service, particularly hospital and surgical care, may be seriously delayed if there is any apparent lapse in payment. In view of this, the Corporation's collection procedures are geared to expedite recording of subscribers' payments when received. Payment of Professional and Hospital Claims Perhaps the most significant administrative procedure performed by the plan is processing claims, since the satisfaction of subscriber and doctor alike depends on it. The procedure is administratively significant also because it accounts for the largest single portion of administrative costs. Over fifty clerks and two supervisors are engaged full time in processing claims. Professional claims processing involves determining eligibility for treatment, auditing claims, and reviewing and paying claims. The present claims procedure is a combination of manual and IBM operations. Efforts to redesign the process in order to eliminate manual operations are under way. The hope is that electronic data processing, together with the use of an identification stencil by the subscriber, can simplify and accelerate the handling of claims for professional services under the service contracts. At the same time, data on utilization can be obtained as a direct by-product. In the case of reimbursement contracts, however, where the volume of claims received is much smaller, more extensive use of data processing would probably not prove feasible. The processing of professional claims is now more time consuming than any other administrative procedure. Mechanization through the use of electronic data processing would appear to be a logical step for any organization this large and characterized by significant routine work processes. Hospital claims processing differs somewhat from professional claims processing. The Corporation has a special hospital claims section with six clerks supervised by a registered nurse. Each clerk is permanently assigned to audit the claims of certain hospitals. In this manner contact is maintained with the hospital personnel who process plan claims. The plan provides hospitals with a form for

46

Administration

of King County

Corporation

submitting claims, but many hospitals use their own invoice forms. The mechanization proposed for processing professional claims would probably be unfeasible for hospital claims, since the volume is not as great and the information required on the hospital invoice (including enumeration of drugs used, X-rays, lab procedures, and so o n ) is much more involved. In the past hospitals have raised some questions about the plan's procedure for authorizing hospital admission of its members since authorization was sent by mail, and the patient was frequently discharged by the time the hospital received the authorization. Clearances are now handled by telephone. Cost and Utilization Analysis Since King County Medical contracts are based on a shared risk principle, the organization must be able to evaluate its cost and utilization experience. The agency's use of the I B M process in its primary administrative procedures makes available a large variety of statistical data for analysis. Furthermore, a statistician was added to the staff in 1957 to develop these data into a form usable for evaluating contract experience. However, the utility of the monthly cost summaries is questionable. The mass of statistics compiled is difficult to analyze and the summary is not available for use until approximately forty to sixty days after the period it covers. Plan executives regard the annual summaries as more useful, but thus far no system has been designed for analyzing the data of these reports either. An actuarial firm employed by King County Medical developed an analysis of hospital and professional costs per member-month for the Boeing contract for one month in 1955, and the King County Medical statistician has since developed membermonth costs for some other contracts. There is no clear consensus yet, however, on what types of unit costs provide meaningful bases for evaluating experience. The cost summaries will naturally have limited utility until some specific criteria are developed for constructing the cost components of a contract. Prepayment

Program

Although the Corporation has several hundred different contracts in effect, all represent variations of a basic group plan that provides service benefits for medical care and partial indemnification of hospital bills. The three primary means of varying this basic plan to 47

Medical Service

Corporations

meet the needs of different contracts have been through changes in scope of coverage, exclusions, and deterrents. Variations from the basic plan have also been developed for non-group members and for subscribers whose income is more than $7,200 per year. Monthly rates of payment also vary among group contracts with different provisions and among individual contracts with the same coverage. Group Contracts As Table 2 shows, 87.8 per cent of the Corporation's subscribers and dependents are enrolled in group plans. Practically all, over TABLE 2.

Membership in King County Medical, by type of contract Per cent of total enrollment

Type of contract Group

87.8

Service Regular group service Health-and-welfare negotiated (except Boeing hourly) Boeing hourly employees Special Contracts (school athletics, police pension, etc.) Reimbursement Regular group reimbursement Special Ά ' and executive group

24.2 24.6 30.5 5.1 0.2 3.2 12.2

Individual Service Individual service Individual service (preferred) Boeing retired workers

4.8 6.0 0.3

Reimbursement Individual reimbursement

1.1

96 per cent, of these group enrollees have some type of service contract. Boeing hourly employees alone comprise about 30 per cent of all subscribers and dependents enrolled. Other groups enrolled under health-and-welfare negotiated contracts and the plan's regular group service contracts each constitute another 25 per cent of the plan's membership. As would be expected, the contracts with these groups represent the most comprehensive coverage the plan offers (see Table 3).

48

TABLE 3.

Scope of coverage for physicians' care in different contracts, King County Medical

Contract Regular group service Subscriber Dependent

Scope of coverage Home, office, and in-hospital care. In-hospital care, home and office care only for accidents and t. & a.

Health-and-welfare negotiated (except Boeing hourly and concrete products subscriber) Subscriber Home, office, and in-hospital care. Dependent In-hospital care, home and office care only for accidents and t. & a. Boeing hourly and Concrete Products Subscriber Home, office, and in-hospital care. Dependent Home, office, and in-hospital care (with first-call deductible). Regular group reimbursement Subscriber Home, office, and in-hospital care. Dependent In-hospital care, emergency room care, and X-ray and laboratory charges for accidents. Special Ά ' and executive group Subscriber Home, office, and in-hospital care. Dependent In-hospital care, home and office care (including X-ray and laboratory charges) only for accidents and t. & a. Individual service Subscriber Home, office, and in-hospital care. Dependent In-hospital care, emergency room care. Individual service (preferred) Subscriber Home, office, and in-hospital care. Dependent In-hospital care, home and office care only for accidents and t. & a. Boeing retired workers Subscriber Home, office, and in-hospital care Dependent (with first-call deductible) to maximum of 15 calls per year. Individual reimbursement Subscriber Home, office, and in-hospital care. Dependent In-hospital care, home and office care (including X-ray and laboratory charges) only for accidents and t. & a.

Medical Service

Corporations

The Boeing hourly workers' contract provides extended coverage (including home and office calls, in-hospital physicians' services, and hospital care) for both subscribers and dependents. Most other groups receive extended care for subscribers and more limited care (home and office care only for accidental bodily injury and for tonsils and adenoids, in addition to physicians' services in the hospital and hospital care) for their dependents. Various co-insurance features and deterrents to over-utilization distinguish different King County Medical group contracts. All group service contracts except that of the Boeing hourly workers require the subscriber and his dependents to present a request form when applying for medical care. The regular request form, issued without charge by the employer or group representative at the employee's place of business, serves other purposes besides identifying the subscriber to the doctor as a paid-up member. Since these forms are issued only to those actually utilizing services during the month, they give the plan a record of enrollees using services during that period. The request form may also be used by the employer to establish employee eligibility for sick leave. Since a subscriber must decide in advance to see a doctor and then obtain his request for treatment, the request is thought to discourage impulse visits. While the larger percentage of group service subscribers use regular request forms, some 20 per cent must obtain "special" requests for treatment at their place of employment. These cost from one to two dollars, the amount varying in different contracts. A special request covers one call only; additional forms must be obtained for subsequent calls. There is no indication from the subscribers' survey that needed care is restricted by the use of this co-insurance device, but some subscribers resent this indirect method of increasing their prepayments. Two large groups — those covered by the Boeing hourly contract and the King County Concrete Products contract — have a first-call deductible provision for dependents. Except for laboratory and X-ray services and treatment for accidental bodily injuries, the subscriber must pay for his dependents' first home or office call. The deductible provision was introduced when experience indicated that extended family care coverage increased utilization by dependents. This control device enabled the plan to offer extended coverage to dependents without unduly increasing the monthly payment rate. 50

Administration

of King County

Corporation

Although exclusion provisions are combined in many ways in different contracts, they fall into one of three broad patterns, referred to by plan personnel as "regular," "trimmed," and "limited" exclusions. "Regular" exclusions, the most restrictive, exclude treatment for various conditions (insanity, venereal diseases, chronic alcoholism, attempted suicide, and so on, and occupational, athletic, or military injuries), establish waiting periods for surgical care (ten months for major surgery, six months for tonsils and adenoids), and exclude chronic or pre-existing conditions (defined as those for which the patient has been examined or treated within three months before joining the plan). TABLE 4.

Enrollees in contract g r o u p s with " r e g u l a r , " "trimmed,"

a n d " l i m i t e d " exclusions, King County M e d i c a l

Contract

Per cent with "regular" exclusions

Per cent with "trimmed" exclusions

Per cent with "limited" exclusions

Regular group service Health-and-welfare negotiated (except Boeing hour-

0.5

99.5

0.0

iy) Boeing hourly employees Regular group reimbursement Special Ά ' and executive group Individual service Individual service (preferred) Boeing retired workers Individual reimbursement

33.4 100.0

23.7 0.0

42.9 0.0

45.0

0.0

55.0

41.0 40.0 0.0 0.0 12.0

0.0 60.0 100.0 100.0 88.0

59.0 0.0 0.0 0.0 0.0

Contracts with "trimmed" exclusions follow the same general pattern but are less restrictive (for example, they permit treatment for venereal diseases, chronic alcoholism, and attempted suicide and cover pre-existing conditions). In contracts with "limited" exclusions the provisions are similar to those with "trimmed" exclusions except that, for example, waiting periods for surgical care have been eliminated. 1 As Table 4 shows, virtually all of the regular group service contracts contain "trimmed" exclusions, while many negotiated group service contracts (including the Boeing hourly contract) contain the more restrictive "regular" exclusions. 1

See Appendix C for complete statement of exclusions.

51

Medical

Service

Corporations

Only 3.4 per cent of the Corporation's enrollees have group reimbursement contracts. These contracts generally parallel the service contract covering the other employees in the same company. Most of them provide extended care for subscribers and limited home and office care, as well as in-hospital care, for dependents. They contain either the "regular" or "limited" pattern of exclusions, more commonly the latter. Individual Contracts Some 12.2 per cent of the plan's enrollees insure themselves and their dependents with individual plan contracts. Over 90 per cent of these people have service contracts. Individual plan service contracts provide dependents with only in-hospital care or limited home and office as well as in-hospital care. The latter is more common, but the subscribers with individual plan service contracts make up the largest single block of the Corporation's members who have only in-hospital coverage for dependents. This circumstance is undoubtedly accounted for in part by the weak bargaining power of the individual subscriber. Only the contract for Boeing retired workers provides individual coverage comparable to that of the group service plans. These subscribers and their dependents are covered for home and office care (with a first-call deductible) up to a maximum of fifteen calls per year. The majority of individual service contracts provide for extended care for the subscriber and either limited home and office and hospital care or only hospital care for dependents. Individual service contracts most often contain "trimmed" exclusions. No deterrents are placed upon utilization of medical and hospital care in the individual service contracts except in the case of the Boeing retired workers' contract, which carries the previously noted deductible provision. Individual reimbursement contracts cover only about 1 per cent of the plan's total membership. These contracts provide limited home and office as well as in-hospital coverage for dependents. Most individual reimbursement contracts contain "trimmed" exclusions. In summary, contract variations can be understood in terms of, one, scope of coverage, two, deterrents to over-utilization, and three, exclusions. Each of these variables relates to the group and individual plan characteristics of plan contracts on the one hand and to service and reimbursement characteristics of such contracts

52

Administration

of King County

Corporation

on the other. Monthly rates of payment will also vary both from one type of plan to another and for individual contracts under one particular type of plan on the basis of the dollar allowances for hospital room and board. No pattern emerges for relating these variables to the different types of plans. Their use is best understood as a means of accommodating the services desired by a group to a subscription rate the group is willing to pay. Some general tendencies in the negotiation of contracts are discernible: more extended coverage and lower exclusions are becoming characteristic of all types of plans, increasing utilization of deterrents accompanies the extension of coverage, and the large, organized groups tend to spearhead the movement toward greater coverage.

53

CHAPTER VI

Survey of King County Plan Subscribers

How well do the Corporation policies already described — particularly the extension of coverage to include home and office calls — satisfy its enrollees and the physicians who furnish its services? Specifically, what use do subscribing families make of medical and hospital care under the plan? What does health care cost these families? What part of health service costs are met by the plan? How do enrollees and physicians view the plan? To answer these questions, in this study we analyzed the utilization, costs, and attitudes of those enrolled in the plan and the attitudes of participating physicians, drawing data from samples of plan enrollees and a sample of participating King County physicians. A detailed account of the methodology of the survey is given in Appendix A. The study of physician attitudes is described in Chapter XI. Survey Method Two samples were drawn from the plan's subscriber lists, one of subscribers enrolled under the Boeing Airplane Company hourly workers contract and a second of all other subscribers under group contracts with the Corporation. Since the main impact of the extended benefits policy occurs in families with more than one member, subscribers who formed single-person families were excluded from the Boeing sample. However, single subscribers were retained in the second sample to show the effect of plan coverage on all types

54

Survey of King County Plan

Subscribers

of families and to provide a basis for comparison with other surveys of urban insured families. The samples included 361 Boeing subscribers and 383 subscribers other than Boeing employees. The samples were drawn from subscriber lists in April 1957. In May the plan reported a total of 113,919 subscribers (with dependents added, the total plan enrollment was 215,407 persons). The sampling universe, however, excluded those enrolled under atypical contracts: group reimbursement and individual contracts, contracts for physicians and their families, contracts for police pensions, and special contracts for those engaged in school athletics, as well as Boeing salaried workers not under the contract negotiated by the union. The subscribers remaining numbered 81,999 (72 per cent of the total of 113,919). Of these, 34,545 were Boeing subscribers and 47,454 were not. Because the subscriber lists were made out for separate contract groups, it was possible to isolate the desired contract groups and, by serial random sampling, to draw the desired percentages of the Boeing and non-Boeing groups. To confine the study of the Boeing group to multi-person families, subscribers who reported no other family member or dependent at their residence were removed from the sample. Similarly, subscribers whose records indicated that they had not been covered for twelve months were excluded. Budgetary reasons forced one other major restriction on the sampling. A strictly random sample would have resulted in drawing people residing at widely scattered points in King County, with correspondingly expensive interviews because of travel time. The sample was restricted to families residing within certain broad areas that appeared representative of residential districts in Seattle and King County. Although the original samples were of subscribers, not of families or households, the survey gathered data on all members of the subscribers' families. (See the definition of the family in the methodological appendix.) We find no reason to doubt that a random sample of subscribers yielded a random sample of those families in the area having at least one plan subscriber among their members. The one source of distortion in the family sampling resulted from the fact that some families had more than one subscriber to the plan. These families, and multi-employee families in general, were likely to be over-represented in the samples. The interviews were administered by the Public Opinion Labora-

55

Medical Service

Corporations

tory of the University of Washington. Each required one hour, on the average. For each family and its members, information was collected concerning background characteristics, utilization of health services, expenditures for health services, and attitudes toward health insurance and the King County plan. The utilization and cost figures obtained in the interviews were checked, whenever possible, against the financial records of the Corporation.

Family Characteristics The sex of the family head was predominantly male in both samples, but the non-Boeing sample had a significantly larger proportion of female heads. Even with single-person families excluded from the non-Boeing group (these were largely single women), the non-Boeing group still had a higher proportion of female heads, probably due to the difference in occupational groups forming the samples. (See Table 5.) Sixteen per cent of the non-Boeing families TABLE 5.

Boeing and non-Boeing families, by sex of family head

Single-person families Sex Boeing Total Male Female Non-Boeing Total Male Female

No.

Per cent

Multi-person families No.

Per cent

0 0 0

0 0 0

361 345 16

100 96 4

61 20 41

100 33 67

322 296 26

100 92 8

were one person units. Boeing families averaged 3.5 persons per family, non-Boeing families 2.6 persons. When single-person families were excluded from the latter sample, the median family size was 3.0. Fewer of the multi-person non-Boeing families had children under eighteen. Among families with children, the modal number was two children in both samples. Family heads in the non-Boeing sample were considerably older, had more education, and had higher incomes. One third of the nonBoeing families reported incomes above $7,500 (Table 6 ) . Very few "low-income" families appear in either sample. Only 4 per cent

56

Survey TABLE 6.

of King County

Plan

Subscribers

Boeing and non-Boeing families, by family income Non-Boeing families b

% b

Total income (dollars)

Boeing families a

Singleperson

Multiperson

Under 2,000 2,000-2,999 3,000-3,499 3,500-3,999 4,000-4,499 4,500-4,999 5,000-5,499 5,500-5,999 6,000-7,499 7,500-9,999 10,000 and over N o report Total

0 2 10 16 24 44 61 50 75 56 18 5 361

3 8 14 7 12 5 4 5 3 0 0 0 61

1 8 10 13 13 28 41 32 67 74 29 6 322

Boeing median family income: $5,725. Non-Boeing median family income: $5,830 (multi-person family median: $6,330).

of all enrollees in both samples combined were in families with incomes under $3,500. While the principal earners in most of the Boeing families worked for the Boeing Airplane Company, as expected, principal earners in the non-Boeing families were scattered in a more typical way among private employers, government, and "in own business." The majority of the non-Boeing family heads worked in nonmanufacturing industries. A little over half were in "services" and "wholesale and retail trade." As Table 7 shows, a third of the principal earners of the nonBoeing group were "craftsmen and foremen" or "operatives," and another third were in the clerical and sales categories. The occupational distribution of the non-Boe'ing subscribers was similar to that of King County as a whole, according to the 1950 Census. Characteristics of Individual Family

Members

Although the subscriber was the basic sampling unit and data were gathered by subscriber families, many analyses were made of individual family members. All tabulations for individual persons were cross-classified against five major variables: the sample group 57

Medical

Service

Corporations

TABLE 7. Boeing a n d non-Boeing families, by occupation of principal family earner

Boeing Occupation Professional and semiprofessional Proprietors, managers, and officials Clerical workers Salesmen Craftsmen, foremen Operatives Service workers Laborers Retired

No.

Non-Boeing

Per cent

No.

Per cent

24

7

40

10

14 42 2 221 38 18 2 0

4 12 1 61 10 5 1

55 69 43 79 46 36 12 3

14 18 11 21 12 9 3 1

—

(Boeing or non-Boeing), sex, age, income, and insurance status. There were 1,336 individuals in the Boeing sample, 1,135 individuals in the non-Boeing. The proportion of males and females was approximately equal in each sample. The individuals in the Boeing sample were substantially younger than those in the non-Boeing sample. The median age of Boeing enrollees was 24.4, of non-Boeing, 36.9. The age distribution was not significantly different for the two sexes. The distribution of individuals by total family income did not differ markedly from the distribution of families by income. It is clear that the low-income families included fewer individuals, while families with incomes above $6,000 included a greater number of individuals, particularly in the non-Boeing sample. All subscribers in the samples received extended coverage — that is, insurance coverage for home and office doctors' calls as well as for hospital and surgical costs. In the Boeing contract, extended coverage was available to dependents also. As Table 8 shows, 92 per cent of all individuals in the Boeing sample had this coverage. Most of the remaining 8 per cent (half of whom were children under six) had no health insurance coverage at all. With one exception, none of the non-Boeing group contracts provided extended benefits for dependents. Therefore, the 46 per cent of this group having extended coverage were almost entirely subscribers. (Twelve per cent of the non-Boeing sample had no health insurance, and 41 per cent 58

Survey of King County Plan

Subscribers

TABLE 8. Types of coverage of Boeing and non-Boeing individuals, by sex

Type of coverage

None Sex Total Boeing Non-Boeing Males Boeing Non-Boeing Females Boeing Non-Boeing

Hospitalization only

In-hospital physicians' care

No. Per cent

No. Per cent

No.

Per cent

95 134

7 12

1 16

—» 1

6 466

41

42 56

6 10

1 5

—* 1

3 194

35

53 78

8 14

0 11

—* 2

3 272

47

Extended physicians' care No.

Per cent

a

1234 519

92 46

a

627 305

93 54

a

607 214

92 37

» Less than 1 per cent.

had hospitalization coverage and coverage for physicians' care in the hospital.) In both samples combined, over 70 per cent of the enrollees had extended coverage. The dominant fact that emerges from these data on enrollment is that most plan subscribers insured their family members to the maximum of available coverage. Over 90 per cent of the family members had some health insurance. In the Boeing group almost all persons were under extended coverage. Among non-Boeing families where extended coverage was available only to subscribers, dependents were generally covered to the next fullest degree, with coverage for physicians' services in the hospital.

59

CHAPTER VII

Utilization of Physicians' Services in Home and Office

Calls per Person

How much utilization of doctors' services in the home and office occurs when a high proportion of health insurance enrollees are covered for these services? In the two samples of King County subscriber families, the average number of home and office calls during the survey year was 4.6 per person among Boeing family members (over 90 per cent of whom had coverage for these calls) and 4.2 calls per person among non-Boeing family members (almost half of whom had this coverage). Although the difference is not large, females had more home and office calls than males in both samples, as Table 9 shows. The difference in the number of calls of the two samples was principally in the number of calls for minor illnesses, particularly by females.1 Among Boeing family members, almost half of all home and office calls were for minor illnesses; in the nonBoeing group, only about a third. The number of home and office calls per person did not differ 1 "Major" and "minor" illnesses were defined in terms of the amount of care required by the condition, not its medical seriousness. Major illnesses were those requiring one or more nights in the hospital, a charge of fifty dollars or more, seeing the doctor five or more times during the year, or regular treatment of a chronic condition. Illnesses requiring less attention were defined as minor. These distinctions were adopted from Odin W. Anderson with Jacob J. Feldman, Family Medical Costs and Voluntary Health Insurance: A Nationwide Survey, New York, McGraw-Hill Book Co., Inc., 1956, p. 196.

60

Physicians' Services in Home and Office TABLE 9. Number of home and office calls per person, by a g e and sex, for Boeing and non-Boeing samples N u m b e r of calls per person For major illness

All calls Sex and age (years)

For minor illnessa

Boeing

NonBoeing

Boeing

NonBoeing

Boeing

NonBoeing

All persons

4.6

4.2

2.4

2.7

2.2

1.5

Males Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

4.4 3.8 3.9 3.9 5.0 4.5 7.1 5.3

3.9 3.0 2.5 3.1 3.0 4.3 7.6 5.9

2.3 1.1 1.5 2.2 3.2 2.9 5.1 2.9

2.4 0.6 0.8 2.1 1.8 2.5 6.3 5.0

2.0 2.7 2.4 1.8 1.9 1.6 2.0 2.3

1.4 2.4 1.6 0.9 1.2 1.9 1.3 0.9

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

4.9 4.6 3.6 5.3 5.4 6.6 6.1 4.6

4.5 4.9 1.6 3.9 4.4 4.6 6.5 10.1

2.6 1.1 1.4 3.0 3.0 4.6 4.3 3.5

3.0 2.5 0.3 2.0 3.2 3.3 5.0 8.9

2.4 3.5 2.2 2.2 2.4 2.1 1.9 1.1

1.5 2.5 1.4 1.9 1.2 1.4 1.5 1.2

• Physicians' calls for minor illnesses were collected for the last six months of the survey year and doubled.

consistently among family income groups (Table 10). Certainly there was no difference in the case of calls for minor illness. It is possible that per capita income would have provided a more active variable than family income, reflecting the importance of family size in use of services. Because the non-Boeing sample included one-member families, its utilization was also computed by family size, as shown in Table 11. The number of home and office calls per person was higher in one-person families; it was particularly high for single women. Comparisons of the two samples are therefore more meaningful if the one-person families are excluded from the non-Boeing data (single persons comprised 15.9 per cent of the non-Boeing sample). This exclusion would reduce the rate of home and office calls shown for the non-Boeing group in Table 9.

61

Medical Service

Corporations

TABLE 10. Number of home and office calls per person, b y family income, for Boeing and non-Boeing samples

Number of calls per person For major illness

All calls

For minor illness

Total family income (dollars)

Boeing

NonBoeing

Boeing

NonBoeing

Boeing

NonBoeing

All persons Under 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 and up

7.0 4.4 4.9 3.8 5.0

6.1 4.4 4.4 3.8 3.8

4.3 2.3 2.4 2.0 2.7

4.6 3.1 2.8 2.1 2.5

2.7 2.1 2.4 1.8 2.3

1.5 1.4 1.6 1.8 1.3

Males Under 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 and up

5.6 4.3 4.7 3.4 5.0

4.3 4.4 3.9 4.1 3.5

3.2 2.2 2.4 1.9 2.7

3.1 2.9 2.4 2.2 2.3

2.3 2.1 2.3 1.5 2.3

1.2 1.5 1.5 1.9 1.1

Females Under 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 and up

7.7 4.5 5.1 4.4 5.1

7.0 4.4 4.9 3.4 4.1

4.8 2.4 2.5 2.3 2.7

5.4 3.2 3.2 1.9 2.7

2.9 2.1 2.6 2.1 2.4

1.6 1.2 1.7 1.6 1.4

As the samples were drawn, the important difference between those with extended coverage and those with more limited coverage has to do with their subscriber or dependent status. Persons with extended coverage included a more than proportionate share of subscribers, since non-Boeing enrollees with extended coverage were virtually all subscribers. For the same reason, persons with limited coverage included a disproportionate share of dependents. Any difference in utilization between subscribers and dependents would therefore affect the differences between those with limited and extended coverage. Considering only persons with extended coverage, subscribers do have a higher rate of home and office calls than do dependents. For both samples together, males who are subscribers have a 4 per cent higher rate than do male dependents; female subscribers have a 23 per cent higher rate than do female dependents. The rates of those

62

Physicians' Services in Home and Office TABLE 11. Number of home a n d office calls per person among non-Boeing families, b y family size

Number of calls per person Number in family

All calls

For major illness

For minor illness

All persons Two Three or more

6.6 5.9 3.5

4.9 4.5 2.0

1.7 1.4 1.5

Males One Two Three or more

4.1 5.3 3.5

3.4 3.7 2.0

0.7 1.6 1.4

Females One Two Three or more

7.9 6.5 3.5

5.7 5.2 2.0

2.2 1.3 1.5

with extended coverage are therefore overstated to the extent that subscribers are over-represented in these samples. Enrollees with No Calls What is the rate of use of home and office calls, as measured by the proportion of users and non-users, in samples where 70 per cent are covered for these services. As Table 12 shows, some 26 per cent of the members of Boeing families and 37 per cent of non-Boeing family members had no home or office calls during the survey year, despite the absence of economic bars for those with extended coverage. As with the number of calls per person, a higher proportion of females had some home and office calls than did males. Thirty per cent of the Boeing males, but only 22 per cent of the Boeing females, had no calls. Thirty-nine per cent of the non-Boeing males, 35 per cent of the females, had no calls. The proportion of persons having fifteen or more calls ranged between 5 and 7 per cent in both samples, with no consistent pattern of difference between males and females. It therefore appears that the difference between males and females in the percentage having home and office calls occurs principally among persons having relatively few calls per year. There is little difference between the two samples in the proportion of persons having calls for major illness (about 24 per cent),

63

Medical Service

Corporations

TABLE 12. Estimated percentage of persons who did not see a physician during the survey year, for Boeing and non-Boeing samples Sex and age (years)

Boeing

Non-Boeing

All Persons

26.0

37.1

Males Under 6 6-17 18-34 35-54 55-64 65 and over

30.2 25.9 23.0 34.8 36.9 32.9 32.1

39.2 18.3 43.5 46.8 40.7 33.3 40.2

Females Under 6 6-17 18-34 35-54 55-64 65 and over

22.1 18.2 23.5 23.5 22.9 15.2 30.0

35.0 19.5 44.8 32.1 39.8 23.4 25.3

a

» The method of estimation was that described in Odin W. Anderson with Jacob J. Feldman, Family Medical Costs and Voluntary Health Insurance: A Nationwide Survey, New York, McGraw-Hill Book Co., Inc., 1956, p. 196, footnote.

as Table 13 shows. However, there is a big difference between the two in the percentage having calls for minor illness. Almost two thirds of the persons in the Boeing sample reported having had minor illness calls, while only about a half of the non-Boeing family members had calls for minor illness. Table 14 presents the proportion of persons having home or office calls compared according to family income levels. There is no clear correlation between the per cent of persons who had calls and the level of family income. Family size, however, does affect use, as we have seen. In the non-Boeing sample, the per cent of males who had some home and office calls was lower in one-member families than in families with two or more persons, particularly for minor illnesses (Table 15). However, the proportion of females having home and office calls was higher in the one-person families, particularly for minor illnesses.

Effects of Extended Coverage The number of home and office calls per person and the percentages with any calls can be compared by type of insurance coverage

64

Physicians' Services in Home and Office TABLE 13. Per cent of persons having home or office calls for any illness, major illness, and minor illness, for Boeing and non-Boeing samples Per cent having h o m e or office calls Kind of call

Boeing

Non-Boeing

All calls All persons Males Females

74.0 69.8 77.9

62.9 61.7 65.0

For major illness All persons Males Females

24.7 23.5 25.9

22.9 21.2 24.5

64.5 63.0 66.2

52.1 51.8 52.3

For minor illness All persons Males Females

a

' The percentage of persons having calls for major illness and for minor illness do not total to the percentage having calls for any illness because the percentage having calls for minor illness includes some persons who also had calls for major illness.

within the Boeing and non-Boeing samples. In both samples, however, those with no insurance (or hospitalization only) and with coverage for in-hospital physicians' care only (virtually all of whom are dependents) are distributed abnormally by age and sex. To control the effect of differences in age and sex distributions, standardized rates were computed. Using for the standard population the age and sex distribution of the two King County samples together, and applying the original rates of home and office calls, by type of coverage, to the standard population, new rates were computed which were free of the distributional effects of age and sex. The result is a fairly precise measure of the effect, on rates of home and office calls, of shifting from coverage for physicians' care in hospital to extended coverage. These calculations are shown in Table 16. The table shows, for example, that King County males under six years with limited coverage had an average of 3.2 home and office calls per person. In a normal male population 13 per cent are under six. Hence, in a normal population of 100 males with limited physicians' coverage, 42 home and office calls (13 times 3.2) are presumably needed by those in this age group. Males under six with extended coverage used

65

Medical

Service

Corporations

TABLE 14. Per cent of persons having home or office calls, by family income, for Boeing and non-Boeing samples a Per cent h a v i n g calls For major illness

All calls

For minor illness

Total family income (dollars)

Boeing

NonBoeing

Boeing

NonBoeing

Boeing

NonBoeing

All p e r s o n s U n d e r 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 a n d u p

76.5 62.2 66.1 55.2 57.2

60.6 49.7 48.5 51.2 48.7

38.2 26.7 25.7 21.9 21.2

36.6 23.5 23.1 16.7 23.8

50.0 47.6 51.1 43.9 48.2

39.4 36.6 35.6 41.2 29.6

Males U n d e r 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 a n d u p

66.7 59.0 61.5 50.9 52.8

60.9 48.7 46.3 51.1 45.4

33.3 25.0 25.5 19.4 21.5

47.8 20.5 22.4 16.0 21.4

50.0 47.9 46.5 41.2 45.1

30.4 39.7 35.8 42.0 27.8

Females U n d e r 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 a n d u p

81.8 65.1 70.6 60.0 61.9

60.4 50.5 50.8 51.4 52.3

40.9 28.3 25.9 24.8 20.9

31.2 25.7 23.8 17.4 26.4

50.0 47.4 55.7 46.9 51.5

43.7 34.3 35.4 40.4 31.6

» This table and Table 15 can be reconciled with Table 9, but not with Tables 12 and 13. In constructing this table and Table 15, physicians' calls for minor illness, collected for the last six months of the survey year, were doubled. This results in an understatement of persons having any calls and calls for minor illness, but it does not impair the comparability of the data across income classes or family size.

3.6 home and office calls per person, for a total of 47 calls, so that 5 additional calls would be associated with a change of coverage for that age group in a normal population of 100 males. The additional number of calls for all males would be 48 calls, an increase of 12 per cent over the 393 calculated for males with inhospital physicians' care only. Following the same method for females, including coverage for home and office calls, would increase the number of these calls 40 per cent.

66

Physicians' Services in Home and Office TABLE 15.

Per cent of persons among non-Boeing families

having home or office calls, by family size

a

Per cent having calls, by size of family K i n d o f call All calls Both Males Females For major illness Both Males Females F o r m i n o r illness Both Males Females

Three members or m o r e

One m e m b e r

T w o members

62.3 35.0 75.6

57.8 54.4 60.8

46.5 47.0

34.4 25.0 39.0

34.4 30.7 37.7

18.7 18.5 18.8

50.8 20.0

32.8 33.3 32.3

34.7 35.4 33.9

65.8

46.7

•• This table and Table 14 can be reconciled with Table 9, but not with Tables 12 and 13. In constructing this table and Table 14, physicians' calls for minor illness, collected for the last six months of the survey year, were doubled. This results in an understatement of persons having any calls and calls for minor illness, but it does not impair the comparability of the data across income classes or family size.

Comparisons

with Other

Surveys

The utilization of home and office calls by King County subscriber families can be compared with that found in surveys of other plans and populations. Table 17 shows the number of calls per person and the percentage of persons with no calls reported in three other plans that provide coverage for home and office calls and also among families with health insurance as reported in a nationwide survey. It is impossible, however, to draw conclusions from the differences and similarities that appear among the groups studied. The survey methods (and purposes) differed among the studies, and fundamental differences existed in the groups covered and the organization of practice among the plans surveyed, as well as in their geographical area. The most that can be said is that, first, in each of these plans in which the bulk of those surveyed had coverage for home and office calls, a substantial proportion of persons made no use of the covered services, and, second, the average number of calls made per person fell in the same range in all plans.

67

Medical Service TABLE 16.

Corporations

Probable effects on home and office calls of shifting to extended coverage

Total calls in standard population

Calls per KCM Person

Sex and age (years)

Per cent at that Difference Inwith Inage in hospital Extended standard hospital Extended extended coverage coverage population coverage coverage coverage

Males Under 6 6-17 18-34 35-54 55 and over Total

3.2 2.7 3.3 3.2 9.4

3.6 3.9 3.9 4.3 6.9

13 25 20 30 13

42 67 66 96 122 393

47 97 78 129 90 441

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Total

4.4 1.9 3.5 1.6 4.0 4.3 17.3

4.2 3.5 5.3 6.0 5.8 6.8 5.3

12 30 18 16 14 6 4

53 57 63 26 56 26 69 350

50 105 95 96 81 41 21 489

+ 5 +30 + 12 +33 -32 +48 * + + + + + +

3 48 32 70 25 15 48 139 b

» Difference in calls per person, for males, with extended coverage: + 1 2 per cent. b Difference in calls per person, for females, with extended coverage: +39.8 per cent. TABLE 17.

Calls per person a n d per cent with no calls, from selected studies

Plan and date of study Windsor Medical Services (1955) » Group Health Insurance (1957) \ b Health Insurance Plan (1957) / Nationwide Insured (1953) c King County Medical (1956) Boeing families Non-Boeing families

No. of calls per person

Per cent with no calls

4.2 6.0 5.5

32 26 25 36

4.6 4.2

26 37

» Benjamin J. Darsky, Nathan Sinai, and Solomon J. Axelrod, Comprehensive Medical Services under Voluntary Health Insurance: A Study of Windsor Medical Services, Cambridge, Harvard University Press, 1958. b Odin W. Anderson and Paul B. Sheatsley, Comprehensive Medical Insurance: A Study of Costs, Use, and Attitudes Under Two Flans, Health Information Foundation Research Series #9, New York, 1959. « Odin W. Anderson with Jacob J. Feldman, Family Medical Costs and Voluntary Health Insurance: A Nationwide Survey, New York, McGraw-Hill Book Co., Inc., 1956.

68

CHAPTER

Vili

Utilization of Hospital Services

Hospital

Admissions

T h e rate of hospital admissions a m o n g B o e i n g families was fourteen per hundred persons, a m o n g n o n - B o e i n g families ten per hundred. 1 ( S e e T a b l e 1 8 . ) T h e difference between the rates of the two samTABLE 18.

Number of hospital admissions per hundred persons,

by a g e and sex, for Boeing and non-Boeing samples

Admissions per hundred Age (years)

Boeing

Non-Boeing

All persons

14

10

Males Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

10 11 10 4 8 9 26 11

9 9 7 2 5 11 11 40

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

18 11 10 30 22 10 21 20

11 6 6 16 12 11 10 18

1

Hospital admissions are defined, following Anderson and Feldman, as requiring the occupancy of a bed and the maintenance of a hospital chart.

69

Medical Service

Corporations

pies is accounted for almost entirely by the greater number of admissions among Boeing females (eighteen per hundred). Even when admissions due to maternity are excluded, the rate for Boeing females (thirteen per hundred) is still considerably higher than for Boeing males (ten per hundred). In general, admission rates are highest for the young and the old, except for females in the eighteen to forty-four age brackets. TABLE 19. Number of hospital admissions per hundred persons, by family income, for Boeing and non-Boeing samples

Admissions per hundred, by total family income (dollars) Sex All persons Boeing Non-Boeing Males Boeing Non-Boeing Females Boeing Non-Boeing

Under 3,500

3,5004,999

5,0005,999

6,0007,499

7,500 and up

29.4 19.7

15.9 9.8

13.0 9.8

12.9 6.7

11.5 10.5

33.3 30.4

11.1 7.7

9.5 9.0

7.3 3.8

9.0 10.2

27.3 14.6

20.4 11.4

16.4 10.8

19.3 10.1

14.2 10.9

The rates of admission are strikingly high for persons in families with incomes under $3,500. (See Table 19.) Other income classes show no significant difference in admission rates. Admissions for obstetrics, surgery, and "other" purposes follow the same pattern. This finding may be due to the high percentage of those 55 years old and over in the income class of under $3,500 of both samples. For Boeing and non-Boeing females the rates of hospital admissions for obstetrics are 4.8 and 2.3 per hundred. The difference is doubtless largely a function of the different age and employment characteristics of the women in the two samples. Surgery is the dominant reason for hospital admission for both males and females, as Table 20 indicates. The rates of admission are higher for Boeing families than for non-Boeing, substantially higher for females than for males. Admission rates for other reasons do not differ significantly between the two samples or between males and females.

70

Utilization

of Hospital

Services

TABLE 20. Number of hospital admissions per hundred persons, for obstetrics, surgery, and other reasons, for Boeing and non-Boeing samples

Admissions per hundred Sex

Obstetrics

Surgery

Other reasons

All persons Boeing Non-Boeing

2.4 1.2

7.1 5.2

4.3 3.7

5.5 4.1

4.2 4.6

8.8 6.3

4.5 2.8

Males Boeing Non-Boeing Females Boeing Non-Boeing

TABLE 21.

4.8 2.3

A v e r a g e length of stay per admission, by a g e and sex, for Boeing and non-Boeing samples

Sex and age (years)

Length of stay (days) Boeing

Non-Boeing

5.1

6.8

Males Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

4.3 2.6 3.8 3.5 6.4 3.4 5.0 11.0

6.2 1.3 2.7 4.5 5.8 5.6 10.4 8.1

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

5.5 14.7 2.5 4.5 4.0 3.8 7.1 17.3

7.2 5.0 1.5 3.8 5.4 16.1 12.8 6.3

All persons

A verage Length of Stay The average number of days spent in the hospital per admission was 5.1 days for those hospitalized in Boeing families, 6.8 days for non-Boeing families. (See Table 21.) The length of stay of males

71

Medical Service

Corporations

was shorter than that of females in each sample, but Boeing family females had a shorter average length of stay than did non-Boeing males. Although there were exceptions in some age groups, length of stay generally increased with age. Number of days

Total

Under 6

6-17

18-34

35-44

45-54

55-64

6 5 & over

A g e in years

FIGURE 3.

Number of Hospital Days per 100 Persons, by A g e and by Sex, Boeing and Non-Boeing

Total Hospital

Samples

Days

The average amount of hospital use by Boeing and non-Boeing family members, measured by the number of hospital days per hundred persons, was almost the same: 70 and 67 days per hundred. (See Table 22.) As would be expected from their higher number of admissions and greater length of stay, females had a far higher number of hospital days per hundred than did males (see Figure 3 ). In the Boeing sample, as Table 22 shows, males spent 42 days per hundred in the hospital, while females spent 99 days per hundred. Among non-Boeing family members the difference was not as great, although non-Boeing males spent 54 days per hundred compared with 80 days per hundred for females. Surgical

Procedures

The number of surgical procedures per hundred persons was 12 among Boeing families, 7 among non-Boeing families, as Table 23

72

Utilization

of Hospital

Services

TABLE 22. Number of hospital d a y s per hundred persons, b y a g e and sex, for Boeing and non-Boeing samples

Sex and age (years)

Number of days per hundred Boeing

Non-Boeing

70

67

Males Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

42 28 38 15 49 30 130 122

54 12 15 9 28 63 117 328

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

99 163 24 134 90 39 152 347

80 31 8 61 64 174 133 114

All persons

shows. Surgery rates were higher for females than for males. In both Boeing and non-Boeing families surgery rates for males were highest for children and those in the age groups 55 to 64 or 65 and over, while for females surgery rates were highest for those 18 and over. For both males and females, the number of surgical procedures per hundred was generally highest in the lowest income group (Table 24). Effects of Extended

Coverage

Following the method explained in the preceding chapter, an estimate can be made of the hospital admission rates of a normal population shifted from limited coverage for physicians' care to extended coverage. Table 25 presents the projected rates of admissions per hundred persons. The over-all rate does not differ appreciably between the two types of coverage, although the population with extended coverage shows somewhat more admissions, amounting to an increase of 7 per cent for males and 12 per cent for females. This higher rate is accounted for by the higher rate in admissions for sur-

73

Medical Service

Corporations

TABLE 23. Surgical procedures per hundred persons, by a g e and sex, for Boeing and non-Boeing samples

χ and age

Surgical procedures per hundred

(years)

Boeing

Non-Boeing

All persons

12

7

Males Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

9 11 13 3 5 7 18 6

6 12 6 6 4 7 4 12

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

15 3 12 24 15 14 17 20

8 0 6 7 7 13 9 9

TABLE 24. Surgical procedures per hundred persons, by family income, for Boeing and non-Boeing samples

Surgical procedures per hundred, by total family income (dollars) 6,000- 7,500 7,499 and up

Sex

Under 3,500

3,5004,999

5,0005,999

All persons Boeing Non-Boeing

21 11

16 9

10 5

11

5

10 8

Males Boeing Non-Boeing

17 17

14 10

7 7

7 4

7 5

Females Boeing Non-Boeing

23 8

17

12 4

16 6

14 11

8

74

Utilization

of Hospital

Services

TABLE 25. Probable effects on hospital admissions of shifting to extended coverage

Admissions per 100 for K C M

pef

cent

atthat

Total admissions in standard population

Inage in InSex and age hospital Extended standard hospital Extended coverage coverage population coverage coverage (years) Males Under 6 6-17 18-34 35-54 55 and over Total

14.7 7.2 0.0 7.2 26.3

10.4 10.4 4.7 9.8 15.9

13 25 20 30 13

191 180 0 216 342 929

135 260 94 294 206 989

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Total

4.4 6.0 21.7 8.5 10.5 12.5 30.0

9.2 8.5 21.3 16.7 8.2 9.8 9.1

12 30 18 16 14 6 4

52 180 391 136 147 75 120 1,101

111 255 384 267 115 59 36 1,227

Difference

with extended coverage - 56 + 80 + 94 + 78 -136 + 60» + + + +

59 75 7 131 32 16 84 126 b

• Difference in admissions, for males, with extended coverage: +6.5 per cent. b Difference in admissions, for females, with extended coverage: +11.6 per cent.

gery in the normal population with extended coverage (15 per cent greater for males, 31 per cent greater for females, as Table 26 shows). Admissions for "other reasons" are 6 per cent lower for males with extended coverage, 9 per cent higher for females, as shown in Table 27. The effects of extended coverage on total hospital days can also be estimated. (See Table 28.) In a population with a normal agesex composition and extended rather than limited coverage, males would have 65 per cent fewer and females 26 per cent fewer total days in the hospital. The effects of extended coverage upon all surgical procedures, however, would be to increase these procedures 22 per cent for males and 100 per cent for females (Table 29).

75

Comparisons

Medical

Service

with Other

Surveys

Corporations

The same cautions presented in the preceding chapter apply to the hospital admission rates shown here (in Table 3 0 ) for other plans. A s the varying rates of admissions per hundred illustrate, studies of plans that offer similar benefits report substantially different use of some services. TABLE 26. Probable effects on hospital admissions for surgery of shifting to extended coverage

Admissions per 100 for KCM

pef

nt

atthat

Total admissions in standard population

Inage in InSex and age hospital Extended standard hospital Extended (years) coverage coverage population coverage coverage

Difference

with extended coverage

Males Under 6 6-17 18-34 35-54 55 and over Total

14.8 4.5 0.0 7.2 4.1

11.8 9.3 3.0 4.6 5.6

13 25 20 30 13

192 110 0 216 53 571

153 232 60 138 73 656

+ + + +

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Total

0.0 6.0 10.9 4.3 5.3 8.3 20.0

3.1 10.4 9.1 8.3 8.2 8.7 9.1

12 30 18 16 14 6 4

0 180 196 69 74 50 80 649

37 312 164 133 115 52 36 849

+ 37 + 132 - 32 + 64 + 41 + 2 - 44 +200 b

39 122 60 78 20 85 »

» Difference in admissions per hundred, for males, with extended coverage: +14.9 per cent. b Difference in admissions per hundred, for females, with extended coverage: +30.8 per cent.

76

Utilization

of Hospital

Services

TABLE 27. Probable effects on hospital admissions for "other reasons" of shifting to extended coverage

Total admissions in standard population

Admissions per 100 for K C M

Per cent Difference at that Inwith age in InSex and age hospital Extended standard hospital Extended extended (years) coverage coverage population coverage coverage coverage Males Under 6 6-17 18-34 35-54 55 and over Total

0.0 2.7 0.0 0.0 32.0

2.4 3.5 2.2 5.6 9.5

13 25 20 30 13

0 68 0 0 416 484

31 88 44 168 123 454

+ 31 + 20 + 44 + 168 -293 - 30»

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Total

4.4 0.0 0.0 2.1 5.3 4.2 20.0

6.2 1.7 2.5 5.5 0.9 3.1 0.0

12 30 18 16 14 6 4

53 0 0 43 74 25 80 266

74 51 45 88 13 19 0 290

+ + + + +

21 51 45 54 61 6 80 24 b

« Difference in admissions for "other reasons," for males, with extended coverage: — 6.2 per cent. b Difference in admissions for "other reasons," for females, with extended coverage: +9.1 per cent.

77

Medical Service

Corporations

TABLE 28. Probable effects on total hospital d a y s of shifting to extended coverage

Total days Days per in standard per cent KCM person population Difference at that Inage in Inwith Sex and age hospital Extended standard hospital Extended extended (years) coverage coverage population coverage coverage coverage Males Under 6 6-17 18-34 35-54 55 and over Total

0.15 .17 .00 1.50 6.80

0.18 .40 .16 .42 1.60

13 25 20 30 13

2 5 0 45 88 140

2 10 3 13 21 49

0 + 5 + 3 -32 -67 -91 *

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Total

0.17 .06 1.02 0.34 2.81 1.88 2.80

0.31 .25 1.00 0.93 .68 .97 1.00

12 30 18 16 14 6 4

2 2 18 5 39 11 11 88

4 8 18 15 10 6 4 65

+ 2 + 6 0 + 10 -29 - 5 - 7 -23 b

« Difference in hospital days per person, for males, with extended coverage: —65.0 per cent. b Difference in hospital days per person, for females, with extended coverage: —26.2 per cent.

78

Utilization TABLE 29.

of Hospital

Probable effects on number of surgical procedures of shifting to extended coverage

Total procedures in standard population

Surgical procedures per 100 for KCM

Sex and age (years)

Services

Per cent at that Difference Inage in Inwith hospital Extended standard hospital Extended extended coverage coverage population coverage coverage coverage

Males Under 6 6-17 18-34 35-54 55 and over Total

15 6 7 7 3

13 13 4 6 11

13 25 20 30 13

195 150 140 210 39 734

169 325 80 180 143 897

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Total

0 6 11 4 5 8 20

5 14 15 13 16 11 9

12 30 18 16 14 6 4

0 180 198 64 70 48 80 640

60 420 270 208 224 66 36 1,284

+ + +

26 175 60 30 104 163 •

+ 60 +240 + 72 + 144 + 154 + 18 - 44 +644 b

» Difference in surgical procedures per 100, for males, with extended coverage: +22.2 per cent. h Difference in surgical procedures per 100, for females, with extended coverage: + 100.1 percent.

79

Medical Service TABLE 30.

Corporations

Hospital admissions and days per hundred persons, from selected studies

Plan and date of study Windsor Medical Services G r o u p Health Insurance Health Insurance Plan Nationwide Insured King County Medical Boeing families Non-Boeing families

(1955) 8 (1957) 1 (1957) J (1953) c (1956)

b

Admissions per 100

Days per 100

18.6 11 6.3 14

159 87 41 100

14 10

a

70 67

Benjamin J. Darsky, Nathan Sinai, and Solomon J. Axelrod, Comprehensive Medical Services under Voluntary Health Insurance: A Study of Windsor Medical Services, Cambridge, Harvard University Press, 1958. b Odin W. Anderson and Paul B. Sheatsley, Comprehensive Medical Insurance: A Study of Costs, Use, and Attitudes Under Two Plans, Health Information Foundation, Research Series #9, New York, 1959. ° Odin W. Anderson with Jacob J. Feldman, Family Medical Costs and Voluntary Health Insurance: A Nationwide Survey, New York, McGraw-Hill Book Co., Inc., 1956.

80

CHAPTER IX

Charges for Health Goods and Services

What are the total costs for health care of families enrolled in a plan that provides relatively full protection against hospital and physicians' charges for the bulk of its members? Most important, how much of those costs does the plan pay? 1 Total Family

Charges

The average total value of personal health goods and services used annually by Boeing families was $355, by non-Boeing families, $279 (see Table 31 ). The difference is due to the larger size of the Boeing families (when family costs are reduced to per capita means, Boeing and non-Boeing family members use essentially the same dollar value of services). Over 40 per cent of the total value of personal health goods and services received by families was accounted for by physicians' serv1

Health goods and services are defined to include the services of hospitals, physicians and other medical personnel, and drugs, appliances, and other medical goods, whether paid for by the family or by health insurance, or other sources (casualty insurance companies, social insurance programs like workmen's compensation, public assistance programs, free or subsidized hospitals, or private charities). In this study it was feasible only to account for those goods and services payable either by the family or by health insurance. Every attempt has been made to "purify" the cost figures of any part of the bill paid out of the "other" sources and to isolate the record of utilization of goods and services thus financed under what are rather loosely entitled "cost-free" services. For estimates of the value of "cost-free" services, see Appendix E.

81

Medical TABLE 31.

Service

Corporations

Total family charges, b y type of service,

for Boeing and non-Boeing samples

Boeing Service Physicians' services Hospital Medicines Other goods and services All services

Charges (dollars)

Non-Boeing

Per cent of total

Charges (dollars)

Per cent of total

157 83 84

44 23 24

116 68 66

42 24 24

31 355

9 100

29 279

10 100

ices. Charges for medicines and hospital services, approximately equal, accounted for about 24 per cent each. For Boeing families, health insurance paid 51 per cent of the total charges for personal health goods and services; for non-Boeing families, 44 per cent was paid by insurance (see Table 32). For Boeing families, health insurance paid 75 per cent of the doctor bill, 59 per cent of the hospital bill, and 12 per cent of the bill for medicines and other health goods and services. For non-Boeing families the comparable percentages were 57, 70, and 8. TABLE 32. Total family charges, b y type of service a n d sources of payment, for Boeing and non-Boeing samples

Paid by family Service All services Boeing Non-Boeing Physicians' services Boeing Non-Boeing Hospital services Boeing Non-Boeing Medicines and other goods and services Boeing Non-Boeing

Paid by insurance

Charges (dollars)

Per cent of total

Charges (dollars)

Per cent of total

175 157

49 56

180 122

51 44

39 50

25 43

118 66

75 57

34 20

41 30

49 48

59 70

102 87

88 92

13 8

12 8

82

Charges for Health Goods and Services Health insurance significantly reduced the number of families with large out-of-pocket expenditure for health services. While 24 per cent of the Boeing families had gross charges of $495 or more, only 7 per cent had out-of-pocket expenditures that large. Similarly, 18 per cent of non-Boeing families had gross charges of $495 or more, while only 5 per cent had to pay costs that high themselves. Forty-nine per cent of the Boeing families and 55 per cent of the non-Boeing families paid from their own pockets less than $95 for all the health goods and services they used, as shown in Table 33. TABLE 33. Per cent of families with high and low total charges and out-of-pocket costs, for Boeing and non-Boeing samples

Per cent with high or low total charges

Per cent with high or low out-ofpocket costs

High or low amounts (dollars)

Boeing

Non-Boeing

Boeing

Non-Boeing

495 and over 0-94

24 22

18 38

7 49

5 55

Even more striking is the way health insurance lowered the proportion of families with large doctors' bills. As Table 34 shows, 32 per cent of the Boeing families (18 per cent of non-Boeing families) used $195 or more in physicians' services, but only 5 per cent of the families in both groups had out-of-pocket costs that high. Sixty-one per cent of Boeing families had no out-of-pocket costs at all for physicians' services. Similarly, only 3 per cent of the families in both groups had to pay hospital bills of $195 or over, although 15 per cent of Boeing families (11 per cent of non-Boeing) had total charges that high. The distribution of "medicine and other charges" was not significantly changed by health insurance for either group. Excepting the income group under $3,500, family health costs increased irregularly as income increased (Table 35), largely because family size increases with income in the samples. (Per capita charges showed little difference by income level.) There was no significant difference in the part of the medical bill paid by insurance among the income classes except for a relatively high share paid for families in the lowest income class. The dollar amount paid out-ofpocket by families rose, in general, with family income.

83

Medical Service

Corporations

TABLE 34. Percentage distribution of total charges and out-of-pocket costs, for Boeing and non-Boeing samples

Total charges

Charges (dollars)

Out-of-pocket costs

Boeing

Non-Boeing

Boeing

Non-Boeing

Physicians' charges None 1-45 46-94 95-194 195 and over

7 18 16 27 32

15 26 21 19 18

61 16 9 9 5

45 27 11

Hospital charges None 1-45 46-94 95-194 195 and over

62 5 6 13 15

75 4 3 7 11

67 13 10 6 3

83 7 4 3 3

Charges for medicines and other goods and services None 5 9 6 32 1-45 27 37 24 46-94 24 17 23 95-194 27 24 14 195 and over 17 13

37 19

12

5

10

21

11

TABLE 35. Total family charges, by sources of payment and family income, for Boeing and non-Boeing samples

Total family

Total

Paid by family

Paid by insurance

income (dollars)

Charges Per cent (dollars) of total

Charges Per cent (dollars) of total

Charges Per cent (dollars) of total

Boeing Under 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 and over

369 325 360 385 343

100 100 100 100 100

98 149 195 217 149

26 46 54 56 43

271 176 165 168 194

74 54 46 44 57

Non-Boeing Under 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 and over

250 209 306 287 310

100 100 100 100 100

106 128 180 164 178

43 61 59 57 57

144 80 126 123 132

57 39 41 43 43

84

Charges for Health Goods and Services TABLE 36.

Mean charges per person, by a g e and sex, for Boeing and non-Boeing samples Mean charges per person (dollars)

Sex and age (years)

Boeing

Non-Boeing 94

All persons

96

Males

76

83

66 63 52 82 79 170 147

49 39 58 59 102 157 231

116

105

82 57 164 140 97 150 259

72 35 99 104 136 147 198

Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over

Per Capita Charges Per capita charges were almost the same in the Boeing and nonBoeing groups: $ 9 6 and $ 9 4 , as Table 3 6 shows. Females had substantially higher charges than males in both groups. Age was also an important variable. Mean charges for males rose with age, although the age group under six years had a somewhat higher mean than the group for six to seventeen years. The pattern for females was similar, except for the high amounts in the child-bearing years of eighteen to forty-four. Per capita charges were highest in the lowest income group, lower across the middle and higher income groups (Table 3 7 ) . The proportion of charges paid by insurance followed the same pattern. The charges per person for each of the different services are shown in Table 38.

Premium Payments From the point of view of the subscriber, the cost of medical services must include payments that he makes through insurance premi-

85

Medical Service

Corporations

TABLE 37. M e a n charges per person, by sources of payment and family income, for Boeing and non-Boeing samples

Mean charges per person (dollars) Total

Total family income (dollars) Under 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 and over

Boeing 130 92 100 93 91

Paid by family

NonBoeing 155 89 95 84 88

Paid by insurance

Boeing

NonBoeing

Boeing

NonBoeing

34 42 54 52 40

65 55 56 48 51

96 50 46 41 52

89 34 39 36 38

TABLE 38. Mean charges per person, by type of service and sources of payment, for Boeing and non-Boeing samples

Paid by family

Total Type of service

Boeing

All services Physicians' services Hospital services Medicines and other goods and services

NonBoeing

Boeing

Paid by insurance

NonBoeing

Boeing

NonBoeing

96 42 22

94 39 23

47 11 9

53 17 7

49 32 13

41 22 16

31

32

27

29

4

3

TABLE 39. Average premiums per family and per person, by income, for Boeing and non-Boeing samples

Total family income (dollars) All Under 3,500 3,500-4,999 5,000-5,999 6,000-7,499 7,500 and over

Mean charge per family (dollars)

Mean charge per individual (dollars)

Boeing

NonBoeing

Boeing

NonBoeing

119 88 116 122 127 114

108 65 87 108 125 131

32 31 33 34 31 30

36 40 37 33 36 37

86

Charges for Health

Goods and

Services

urns. In Table 39 the mean premiums paid by families is reported: $119 for Boeing and $108 for non-Boeing. The variations within the samples are largely the result of the size of family and variables other than family income. As Table 39 also shows, the mean premium charge per individual is the same over the income classes. Only limited comparison can be made between the survey groups, since the figures reported include only the premium paid by the subscriber and not the amounts, if any, paid by the employer. For Boeing employees the entire premium for each employee's coverage (but not that of his dependents) was paid by the company. The patterns of payment for non-Boeing subscribers ranged from full payment of the premium by the employer to full payment by the employee. When the premium payments of the family are added to the cost of services paid by the family, the result is a fairly accurate statement of the out-of-pocket cost of medical care. The average out-ofpocket expenses for all individuals in both samples was about $80 for the survey year, the average per family about $270. Since the median income of all the families was $5,600, health goods and services accounted for 4.8 per cent of family income. Effects of Extended

Coverage

As with utilization of services, it is possible to estimate the effects of including home and office calls on the total health care costs of a normal population. Table 40 shows these effects on the mean charges per person. Males in a population with normal age-sex composition would have 16 per cent lower charges under extended coverage. Females would have 17 per cent higher charges. For the entire population there would thus be no change in total charges. As the preceding chapters have shown, the pattern of use of health services differs with extended coverage, but the cost of the entire health care "package" remains substantially the same. The careful reader will note that the analysis set out in Table 40 controls only for age and sex differences in response to the extension of coverage. It will also be noted that there are offsetting differences between the sexes and among the age groups. By use of multiple regression analysis it is possible to gain further insight into the response of various groups to the extension of coverage. Tables 41 and 42 show the results of such analysis.

87

Medical TABLE 40.

Service

Probable effects on charges per person of shifting to extended coverage

Charges per K C M person (dollars) Sex a n d age (years)

Corporations

per cent at t^at

Inage in hospital Extended standard coverage coverage population

Total charges in standard population (dollars) InDifference hospital Extended with coverage coverage coverage

Males Under 6 6-17 18-34 35-54 55 a n d over Total

55 40 36 96 360

60 64 68 81 169

13 25 20 30 13

715 1,008 720 2,880 4,680 10,003

780 1,600 1,360 2,430 2,197 8,367

+ 65 + 600 + 640 450 -2,483 -1,628

71 38 128 54 102 147 367

62 58 142 147 113 135 158

12 30 18 16 14 6 4

852 1,140 2,304 864 1,428 882 1,468 8,938

744 1,740 2,556 2,352 1,582 • 810 632 10,416

108 + 600 + 252 + 1,488 + 154 72 - 836 + 1,478

Females Under 6 6-17 18-34 35-44 45-54 55-64 65 and over Total

» Difference in charges per person, for males, with extended coverage: —16.3 per cent. b Difference in charges per person, for females, with extended eoverage: +16.6 per cent.

Table 41 presents the independent effects of a number of variables on total charges. For instance, it shows that larger family size, with all other variables held constant, is associated with slightly lower per capita charges than is smaller family size. Those personal characteristics that are associated with strikingly larger than average charges are low income, female sex, old âge, and married status. Extended coverage is found to be associated with the relatively small difference of $8. (See column 1 of Table 41.) Again we find evidence of a positive response for females and a negative response for males. (See columns 4 and 5.) Since low income and the married versus non-married status seem to be so important in the determination of total charges it was de88

a CO

m P»_

ε υ tu,

1

as Vi

Os

O (Ν

c i

•Ί;

I

o •η

as

tm TT

m

7 I

Λ> 2 ; 2 m —

NO

1

ON 1"o ©

-Û u

o TJ

J> -O o ' d o > TJ 4) *j

J) 0)

"Ό

l>

C. O M ^ O) α

c o (Λ ι* υ αι. υ CL

Vi

O ûjO u CO Λ o

"3 S

NO «o

o

-é I

Ό ω T3 C υ

u ω) CO ' ω >

χ tg

o o

co a> .•a & C L CO

e « ·Η ο % « ο Ε (Η ια ο M -Η S Os I. « Ό Ol Ρ Ό Η O -C C*. C O

10 ω

ί-

ff)

Ο 1

I«Λ ω D

cu

< o

σ

í CL CO 0 1

ίΟ Ζ

ο ζ • αϊ O œL·o •H o m o o 3 f m ^ jz c in τ) u * a, n) Β o rH

π M 3 Qi

α.

Enter F for female

Enter M for male

-

o

-φ

—•

es rn Ν

O "ri Ν

^ m Ν

m σ\ W

h ό ' «

Ν r Ν

η rn oo

0 Ζ

ON 00

—

oo

NO —

—I

00

s 8 =• s °> ¡ o. o « » 2 g> s i l •o ' 0) ü ¿ E 4) o υ £ g 5 ° c ® O 'S„ u g ì α> 3 ώ

8

sû O

fi ">

-O 3 O 'J

.· w "O c oυ O

I O 2 -O 3 g o o cΠ íχ— r 3 ÔS cg » ·: 3 í ~ O o 4) > o 1* Z Z *

o-c o

• Í l l 12 O * i = S i

* !

s, r i

3 « ü O _ U -C o 3 ¿ X _ ε o«> — o α ti«ι ·*• o. > c o * L= O J= o . O 5 E S< Eα

© © 00 O U

T3 C O

•o "5 O

.£ ® , 5

O)

C