Chapter 6: Escape from the Corporation

Medicine finally lost there battle to maintain "autonomy" as corporation entered medicine in the 20th century.

The Beginning: Industrial Organization
By the turn of the 20th century, there were several signs that foreshadowed the plausible creation of group medical practices. Two major changes brought about this belief: first, different industrial organizations had began contracting doctors to provide care for their employees; second, technology and specialization had increased exponentially, which could allow different medical professionals to come together and work under one roof. Many physicians, as always, were against corporate intervention in medical practice because it took away direct control physicians presently enjoyed in their profession. But, as Starr States, some physicians "viewed these organized health services, particularly the private multispecialty clinics, as hargbingers of a new order of medical care." However, even though many advances in medicine easily pointed to this step forward, such organization of medicine did not occur. Why is this? Starr provides several answers to this question by looking at different aspects of medicine between 1900-30.

First, Starr looks at "company doctors and medical companies." As stated in the previous paragraph, many industries were now contracting physicians to provide care for their patients. The first industry was railroads, who contracted physicians to treat industry-related injuries. Soon, these physicians were providing regula rmedical care to employees as well. Additionally, some industries even built their own hospital facilities for their employees.

Of course, private practitioners were against industries contracting medicines. Physicians did recognize the need of such contracting in remote areas where hospitals and health care was less available. However, overall, many physicians and "[medical societies] regarded [contracting doctors] as a form of exploitations because it enabled companies to get doctors to bid against each other and drive down the price of their labor." Thus, much opposition against company contracting came about.

"Acceptable" Corporate Influence
There were other forms of corporate interference in medical practice; but physicians were not against all such forms. First, there was the creation of health insurance. However, physicians were not against health insurance because it still allowed private doctors to obtain different patients. The second form began when private, profit-making companies began contracting groups of doctors to provide c"commercial" medicine. However, such practice was quickly barred by a series of legal decisions that said providing commercial medicine was "a corporation could not be licensed to practice and that commercialism in medicine violated 'sound public policy.'"

In the end, corporation in medicine did not flourish. First, "once [such corporations were] blocked from regulating medical decisions, they would note asily have found other ways to cut costs and achieve any price advantage over solo practitioners." Second, private doctors could work for many hours, while corporations could not require their physicians to work similar hours in fear of being oppressive. Many other reasons also contributed to the failure of corporation in medicine.

Consumer's Clubs
The next type of corporate intervention that began in the 20th century were consumer's clubs. Several "fraternal orders" sprung up in the 1900's that offered life insurance and even aid for the sick and poor. These groups were popular amongst immigrant communities, which provided a large pool of new possible members. Additionally, there were two other types of contract practice -- other private clubs organized by doctors and work/shop organizations.

These societies paid physicians low rates (about $1-2) to provide care to their members. Some physicians were not against contract medicine because it still provided care for patients and reasonable pay. And, although it may take away some business from private practice, hospitals or dispensaries were much worse "abuses" because they provided free care. However, most physicians were against contract medicine; especially the AMA, which "could see 'no exonomic excuse or justification' for lodge practice, objecting to the unlimited service for limited pay and the 'ruinous competition' it 'invariably' introduced."

Despite these critiques, contract medicine was almost essential for young doctors that used this business to "break into the field." Understanding that these societies did allow young physicians a stepping stone into the field, many physicians recognized that these groups could not be attacked at the current time. But, soon contract medicine filtered away as volunteer hospitals, etc. began providing care to a larger groups of people.

Private Group Practices
After looking at contract medicine, Starr continues on to the origin of private group practices. Group practice began with the Mayo Clinic in Rochester, Minnesota. One man and his two sons, all of whom specialized in surgery, first began their own practice here. As their notoriety increased, they began serving more and more patients -- soon they were doing about 3000 operations a year. Thus, they decided to bring in other physicians to work under them. As diagnostic tools increased, they brought in other technicians -- such as lab workers. Soon, they had established a huge clinic that provided a multitude of services. Following the example of the Mayo Clinic, many others sprung up across the country. Most, like the Mayo Clinic, were started in small towns where other large hospitals or health care services were unavailable.

The clinics had a definite class structure, both between physicians and other workers. Owning physicians were at the top, and generally around 46 years old, while employeed physicians were around 34. Unfortunately, the hierarchies created many problems. Physicians working at the "lower tier" would become upset and would have to be moved up in position. Oftentimes, these physicians were given some ownership. Other problems, such as economic conflicts, even caused some group clinics to break up.

Furthermore, as specialization and technology increased, individual doctors or hospital provided services that group practices offered at competitive prices. In the end, group practices seemed to filter away.

Why didn't corporste enterprise last?
After looking at group practice, Starr goes on to look at why there is no corporate enterprise in medical care. Case and point, physicians don't like third party interference in their practice. Furthermore, they "oppose any one else, such as an investor, making a return from physicians' labor."

The main point I took away from this section was when Starr stated that "My argument here is that the profession's success ine stablishing its sovereignty in medical care depended on the banishment of profit-making businesses from medical education and hospitals as well as from medical practice itself." At first, I did not understand this statement -- how did banishing profit-making businesses from school have anything to do with medical practice itself?

But, if you remember, medical schools were once popping up around America at alarming rates and almost spitting out under-qualified "physicians" at an even higher rate. Different schools recognized the need to control medical education. Curriculum and graduation requirements became harder and the programs, itself, became longer. Ultimately, medical schools could not exist as for-profit organizations, and reverted to non-profit organizations. Without any money-making goals, these institutions could focus on simply education physicians to the best of their capabilities.

Similarly, if physicians can exert similar control on other aspects of their profession, they can ensure that one goal, their own autonomy, is ensured.

By not allowing medicine to become a "corporate enterprise," physicians also protected their autonomy when it came to division of labor. As I've stated many times already, specialization and technology increased enormously at this time. With these changes, came a large number of new medical professionals, such as diagnosticians. Adding to existing medical workers, such as midwives, this created a lot of competition for physicians. Yet, because physicians did not allow corporate enterprise to enter their field, physicians retained their autonomy and were able to continue working as they wished. As Starr states, "As in other industries, the management of the enterprise might have sought to take away from the workers control over the division of labor, which physicians retained through the system of professional sovereignty."

Eluding Corporation
Thus, in the end, physicians were able to elude the ways of the corporation. I want to now try and make a comparison between what happened at the beginning of the 20th century, to what is now happening at the beginning of the 21st century. Like then, technology and specialization is increasing at amazing rates. New medical fields are opening up, making way to new jobs. However, the major concern how is not to dodge corporate medicine, but so-called socialized medicine. Starr states near the beginning of this chapter, "The dislike of physicians for socialized medicine is well known, but their distaste for corporate capitalism in medical practice was equally strong." I don't know if this statement is true, but I am sure that physicians are trying just as hard as their predecessors to bar third party involvement in their practice.

This is very apparent in the article Doctors Rally Against Democrat-led Health Care Reform from the Atlanta Journal Constitution. The author states, "The doctors, many who donned their white lab coats, said the legislation would create a huge government bureaucracy over health care that would come between them and their patients." Sound familiar? Yes, the same vehement argument against third-party intrusion that reappears in this chapter of Starr's book. It seems physicians have not lost their fervor in the past 100 years.

However, I believe that health care reform may be near this time around. The House has passed their own form of the health care reform bill, and the Senate is set to discuss their own rendition. Only time will tell whether or not physicians can maintain their "autonomy" this time around.