The Social Transformation of American Medicine by Paul Starr

Author:Paul Starr [Starr, Paul]
Language: eng
Format: epub
ISBN: 9780786725458
Publisher: Basic Books

The Depression, Welfare Medicine, and the Doctors

Increased state and federal financing of medical services for the poor originated inadvertently and inconspicuously during the Depression. It was a hidden consequence of the failure to develop a health insurance system that would have covered the middle class and the poor alike.

The fall in personal incomes after 1929 severely curtailed the use of medical services by the poor. In ten working-class communities studied between 1929 and 1933, the proportion of families with incomes under $150 per capita had increased from 10 to 43 percent. Families whose incomes had dropped from over $425 in 1929 to less that $150 per capita in 1933 called upon physicians only half as often as did families whose incomes remained above $425 per capita throughout the entire period.99 A 1938 Gallup poll, asking whether people had put off seeing a doctor because of the cost, found that 68 percent of lower-income respondents had done so, compared with 24 percent in the upper-income brackets.100

Less use of medical services and reduced ability to pay meant lower incomes for physicians. According to one study, the average net income of doctors in California fell from approximately $6,700 in 1929 to $3,600 in 1933. Nationally, according to Kuznets and Friedman, private practitioners had lost 47 percent of their 1929 incomes by 1933. A 1933 government survey compared the ratio of bills unpaid six months or more to the total number of accounts receivable for the same period for different types of creditors. The delinquency percentage for department stores was 8.9 percent; for grocery stores, 24.7 percent; for landlords, 45.1 percent; for dentists, 55.6 percent; and for physicians, 66.6 percent.101 Not only were patients seeing doctors less often; they were paying their doctors’ bills last.

Hospitals were in similar trouble. Beds were empty as utilization fell, bills were unpaid, and contributions to hospital fund-raising efforts tumbled.

So private physicians and private charities simply could no longer afford to meet the demand for free services. For the first time, they asked welfare departments to pay for the treatment of people on relief. Before the Depression, medical care had been a minor function of welfare agencies, but now it grew in significance. Beginning about 1930, medical care became recognized in many localities as an “essential relief need.” Many cities and a few states gave beneficiaries a right to needed service at public expense; increasingly, welfare agencies provided supplemental payments to help defray medical costs. As federal and state relief funds became available, local hospitals and social agencies began to charge welfare departments for services previously rendered free, so the cities could get reimbursed and shift costs to the state or federal government. This system of welfare payment for medical care was seen as a temporary expedient, but it continued after the Depression ended.102

Yet another federal program helped pay for medical care in the farming areas of the country. In 1935 the Resettlement Administration began to set up and subsidize cooperative medical prepayment plans among the poor farmers it was assisting.

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