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Medical Benefit



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UERMANY AND DENMARK



J. G. Gibbon



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THE LIBRARY

OF

THE UNIVERSITY

OF CALIFORNIA

LOS ANGELES



MEDICAL BENEFIT IN
GERMANY AND DENMARK



MEDICAL BENEFIT

A STUDY OF THE EXPERIENCE
OF GERMANY AND DENMARK




I. G. GIBBON, B.A., D.Sc.

AUTHOR OF "UNEMPLOYMEXT IXSURANCE "



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LONDON

P. S. KING & SON

ORCHARD HOUSE, WESTMINSTER

1912



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PREFACE



^ Germany has had a comprehensive scheme of com-

j^pulsory insurance against sickness since 1884: Den-

^ mark has had a comprehensive scheme of voluntary

g insurance against sickness since 1893. ^^ both

■^ countries sufficient time has elapsed for definite

results to crystallise, and careful study should yield

some interesting conclusions. In the present volume

I have endeavoured to set out the principal facts

respecting medical benefit under the insurance laws

^of the two countries, and to extract the lessons of

<* their experience.

o I have chosen Germany and Denmark as the field

UJ ...

° of study because in no other countries has insurance

against sickness been so widely extended, and because

they afford a contrast — insurance in the one being

compulsory, in the other voluntary. It is surprising

that this antithesis has not been more fully realised.

It offers an opportunity for research which is seldom

obtained.

2: I had originally hoped to have dealt with insurance

gin Germany and Denmark in all its aspects, in one or

^more volumes published at the same time. But as

V



vi PREFACE

I proceeded with the work the bulk of matter grew
large, and as the part dealing with medical benefit
was the most advanced, it was urged upon me that
there would be great gain in publishing that separately.
Something is lost by dealing with medical benefit
apart from other related problems of insurance. But
this loss is probably more than counterbalanced by
the advantage of early publication.

As in my previous volume dealing" with Unemploy-
ment Insurance, the present venture is strictly a
scientific enquiry. The excellence of practical
measures rests on the recognition, not only of the
scientific rights and wrongs of the problem treated,
but also on the limitations imposed by prevailing
notions and conditions. I have had too much experience
of practical administration not to realise the force
of the latter. But the former is equally imperative.
Just as in industry, so also in the world of social
affairs, rule of thumb is giving way to scientific
application based on methodical knowledge and solid
research.

Under the head of medical benefit, I have dealt
with questions relating to medical service, the pro-
vision of medicines and of other medical and surgical
requirements, and institutional treatment. All these
matters relate to curative treatment. In addition,
there is the important question of preventive treat-
ment. Much has been done in this latter direction
both in Germany and Denmark, in regard to tuber-
culosis especially. The subject is a large one,



PREFACE vH

requiring careful study, and I have considered it
better not to deal with it in this volume, the more
so that in Germany most of the preventive work has
been done, not by the sickness insurance societies, but
by the invalidity insurance authorities.

In the case of each subject with which I have dealt
separately in the present volume, I have stated first
the legal provisions relating to the subject, and what
has been the actual experience, in Germany and
Denmark. I have followed this up with a chapter
of conclusions, the reader thus coming on to the
conclusions with the facts of experience fresh in his
mind. Each conclusion is set out in the form of a
proposition, the method adopted in my book on
Unemployment Insurance.

The German insurance law has recently been in
the melting-pot, and a new law was passed in 191 1.
References are made in the text to provisions of the
new law : it has as yet only partly come into force.
The experience which is considered in this volume is,
of course, that under the old law.

In order to avoid cumbering the text with much
detail, I have relegated most of the statistics to notes
at the close of chapters. There are several appendices.
Especially instructive should be the appendices giving
particulars of the struggle between doctors and insur-
ance societies at Leipsic and Cologne, and the ap-
pendix giving a translation of the detailed regulations
of the Leipsic society as to the remuneration and
control of doctors. Other appendices contain in-
formation as to the medical arrangements made in



viii PREFACE

some towns, and as to the organisation and position

of the German doctors.

The conclusions are summarised in the last chapter.

The gist of the conclusions may be briefly stated

as follows : —

It is well that medical benefit should be provided
by insurance societies in kind and without the
interposition of an intermediate body.

Agreements as regards medical service are best
made between the societies, or a federation of
societies, and the doctors as an organised
corporate body. The doctors, in such a system,
undertake medical service as a corporate body.
More efficient service is likely thus to be obtained,
and the control of medical service is made easier.

Insured persons should not be restricted to some
one doctor but should be allowed to choose the
doctor by whom they will be treated.

Payment for medical service should be made in the
form of capitation payments by the societies to
the organised association of doctors, to be dis-
tributed by the association among the several
doctors accordinof to services rendered. Rates of
medical remuneration from the workincr classes
generally will rise.

Control of medical service should be exercised
chiefly through the organisation of the doctors.
The societies should restrict themselves mainly to
broad questions of policy and results, leaving most
of the details to the medical organisation. It
is desirable that societies should be assisted in



PREFACE ix

their work by competent confidential medical
advisers.

The provision of institutional treatment is essential
for adequate medical benefit. But treatment of
this kind is very liable to abuse and should be kept
within narrow limits. Its provision to any con-
siderable extent is not practicable to the lower
ranks of workmen without a large measure of
assistance.

The provision of medical benefit is attended with
grave dangers, especially of valetudinarianism — the
exaooreration of existing- ills or the imag-ining; of ills
that do not exist. Germany has not escaped this
danger, which has probably materially affected the
success of her insurance schemes. Circumspect
measures have to be taken if national health is
not to be cankered by this peril.

While the provision of all benefit on an insurance basis
is the ideal, there would be great advantage in
making each insured person pay out of his own
pocket for a small part of the cost of medical service
and medical and surgical requirements. Abuses
are checked by such a system. It affords a power-
ful lever for economy. It materially restrains
tendencies towards malingering, and more important
still, towards valetudinarianism.

Systematic measures should be adopted for educating
the insured public in matters touching health and
medical treatment. Thus alone can some serious
dangers be avoided and the full benefit of insurance
be received.



X PREFACE

The foregoing- is a brief summary of some of the
principal conclusions. They are set out at more
length in the last chapter of the book. In that
chapter all the conclusions reached in preceding
chapters are brought together, and endeavour is made
to discover whether there are any organic principles
underlying the whole. It is shown that there are such
principles. Thus, just as workmen find that in-
dividual provision against sickness is not adequate,
and that corporate provision, through insurance, must
be made, so likewise are doctors findino- that individual
provision in arranging terms and conditions of
medical service is no longer sufficient, and that in
this sphere also corporate provision must be made.
On the one hand, workmen organised in their
societies ; on the other, doctors organised in their
associations ; thus massed they can treat with each
other on equal terms and in the long run secure,
though doubtless not without occasional friction, not
only more equitable conditions but also more efficient
service.

The problems which cluster round medical service
are part of the general problems of modern conditions,
and are closely connected with the prevailing
tendency which runs in the direction of incorporating
individual action in that of the organised group. In
dealing with questions of medical service, we are
treating of a particular phase of some of the most
fundamental problems of social organisation. And,
dealing with them in relation to doctors, a class so
different in circumstances and character from the



PREFACE xi

ordinary workman, it has been possible to reach some
very suggestive conclusions.

I wish to express my deep obligations to the many
persons from whom I have received assistance in my
researches, and especially to mention — in Germany,
Dr. Zacher, one of the foremost authorities on
German insurance, who kindly read an early draft
of the book, and Herr Hansen, the principal official
of the invalidity insurance authority for Schleswig-
Holstein ; in Denmark, Miss Clara Black and
Dr. Wittrup, the government inspector of sickness
insurance, who read parts of the book dealing with
their country. I am indebted to Dr. C. J. Thomas
and to Mr. S. Stagg for reading the proofs and for
many suggestions. And I am especially under
obligation to Mrs. E. V. Kanthack de Voss, from
whom I have received most generous aid.

I. G. G.

September, 1912.



CONTENTS



CHAPTER PAGE

I. INTRODUCTORY — GERMANY . . . . i

II. INTRODUCTORY — DENMARK . . . . lO

III. INTRODUCTORY — MEDICAL BENEFIT . . -15

IV. CHOICE OF MEDICAL PRACTITIONER — GERMANY . 27
V. CHOICE OF MEDICAL PRACTITIONER — DENMARK . 40

VI. CHOICE OF MEDICAL PRACTITIONER — CONCLUSIONS . 43

VII. REMUNERATION OF MEDICAL PRACTITIONERS —

GERMANY . . . . . '53

VIII. REMUNERATION OF MEDICAL PRACTITIONERS —

DENMARK . . . . . • 1^

IX. REMUNERATION OF MEDICAL PRACTITIONERS —

CONCLUSIONS . . . . .81

X. CONTROL OF MEDICAL SERVICE — GERMANY . . I07

XI. CONTROL OF MEDICAL SERVICE — DENMARK . . 121

XII. CONTROL OF MEDICAL SERVICE — CONCLUSIONS . 125

XIII. MEDICAL AND SURGICAL REQUIREMENTS — GERMANY . 132

XIV. MEDICAL AND SURGICAL REQUIREMENTS — DENMARK . 148

XV. MEDICAL AND SURGICAL REQUIREMENTS — CONCLU-
SIONS ...... 154

xiii



PAGE



xiv CONTENTS

CHAPTER

XVI. INSTITUTIONAL BENEFIT — GERMANY . . . 162

XVII. INSTITUTIONAL BENEFIT — DENMARK . . . 181

XVIII. INSTITUTIONAL BENEFIT — CONCLUSIONS . . I92

XIX. INSURANCE AND PUBLIC HEALTH AUTHORITIES . 204

XX. GENERAL CONCLUSIONS . . . .211



APPENDICES

I. MEDICAL PRACTITIONERS IN GERMANY — ORGANISATION 22/

II. MEDICAL PRACTITIONERS IN GERMANY — NUMBERS, ETC.,

1885-I9IO ...... 231

III. CONFLICT BETWEEN SICKNESS INSURANCE SOCIETIES

AND MEDICAL PRACTITIONERS — LEIPSIC . . 236

IV. CONFLICT BETWEEN SICKNESS INSURANCE SOCIETIES

AND MEDICAL PRACTITIONERS — COLOGNE . . 24O

V. AGREEMENTS BETWEEN SICKNESS INSURANCE SOCIETIES

AND MEDICAL PRACTITIONERS — LEIPSIC . . 247

VI. AGREEMENTS BETWEEN SICKNESS INSURANCE SOCIETIES

AND MEDICAL PRACTITIONERS — MUNICH . . 268

VII. AGREEMENTS BETWEEN SICKNESS INSURANCE SOCIETIES

AND MEDICAL PRACTITIONERS — FRANKFORT-ON-MAIN 27I



CONTENTS XV

PAGE

VIII. AGREEMENTS BETWEEN SICKNESS INSURANCE SOCIETIES

AND MEDICAL PRACTITIONERS — STUTTGART . 275

IX. PARTICULARS RESPECTING TWENTY-EIGHT GERMAN

DISTRICT SICKNESS INSURANCE SOCIETIES . . 277

X. PARTICULARS RESPECTING SICKNESS INSURANCE

SOCIETIES AFFILIATED TO THE COPENHAGEN
FEDERATION ...... 279

XI. AGREEMENT BETWEEN THE FEDERATED SOCIETIES,

AND THE MEDICAL ASSOCIATION, OF COPENHAGEN . 285



INDEX . . . . . . .291



MEDICAL BENEFIT



CHAPTER I

Introductory

Before proceeding to deal with the many questions which
arise in connection with medical benefit, it will be well
briefly to sketch in the first two chapters the general
conditions with regard to insurance in Germany and
Denmark, so that those who are not already familiar with
the mam outlines of insurance in those two countries may
be able to place medical benefit in its proper setting. I
propose also to deal in a further introductory chapter
with some of the general questions which arise with
regard to medical benefit itself, leaving the succeeding
chapters free for more detailed matters.

GERMANY
The Insured

Insurance is compulsory both against sickness and
against invalidity and old age. Roughly, it may be said
that insurance against invalidity and old age has been com-
pulsory for all manual workers, and, if the income does
not exceed ;^ioo a year, for some other classes of workers,
such as foremen and commercial employees. Compulsory
insurance against sickness, under the old law, extended to
very much the same groups, with two large exceptions —
agricultural workers and domestic servants. " These classes

' Some particulars respecting the insurance scheme for domestic
servants at Hamburg, where they have been compulsorily insured under
a local law, are given in pp. 179-80.

2



2 MEDICAL BENEFIT

are brought within the scope of the new law. Under that
law also, the income limit below w^hich compulsion in
sickness insurance is enforced for certain classes has been
raised from ;^ioo to ;^i25 a year — much to the pertur-
bation of doctors.

The number of persons insured in 1909 was —

against sickness, over 13,000,000, being 21 per cent, of the

total population ;
against invalidity and old age, over 15,000,000, being 24 per

cent, of the total population.

In the case of sickness insurance this wide extension has
only been gradually attained, as will be seen from the
following figures, which show for a number of years the
percentage of the total population insured against sickness.
The first imperial compulsory insurance law came into
force in 1884 : —



Year.


Per Cent


1885


lO


1890


14


1895


15


1900


18


1905


20


I9IO


22



Certain classes of workmen who are not compulsorily
insured may insure themselves voluntarily under the laws.
Employers are not required to pay any contributions them-
selves in respect of persons thus voluntarily insured ; but
the latter, if granted an invalidity or old age pension, receive
the imperial subsidy for which the law provides.

With some exceptions, only persons employed can be
directly insured under the laws. The obligation to become
insured follows automatically on employment, and, generally,
a person has no claim to become even voluntarily insured
unless he is in employment. It thus follows that the wife
and children of workmen are not insured unless they are
themselves employed. But in the case of sickness
insurance the societies may, subject to certain conditions,
extend the benefit so as to include treatment for dependent



INTRODUCTORY 3

wife and children, and many societies do so. Women who
have been compulsorily insured against invalidity and old
age and cease to be employed on marriage are encouraged
to continue their insurance voluntarily. If they did not
continue their insurance, under the old law they were
entitled, subject to certain conditions, to have returned to
them one-half of the contributions paid in respect of them.

Organisation

The organisation of the insurance is very different in the
case of sickness, and of invalidity and old age.

Sickness : — The insurance is effected through local
societies of insured persons. To what society in the
locality a person belongs is determined primarily by his
employment. There are several different kinds of societies.
A list, with a description of each kind, is given at the close
of the chapter. Persons not otherwise insured became
members of the communal insurance fund, which was
administered by the communal authority.

It is important to note that a person has no choice of
society. His society is automatically determined for him
according to the place at which he lives or works and the
employment he follows. The only exception is that a
person who is adequately insured in a registered society —
similar to an English friendly society — is released from
other insurance. But he buys this freedom of choice by
bearing the whole cost of insurance himself : employers have
not been required to make any contributions in respect of an
employee insured in such a society.^

The average membership per society (excluding miners'
societies) in 1910 was 572. But a very large number of the
societies have quite a small number of members. The old
law only required a minimum of one hundred members in

, ' Under the new law, the employer in such a case will have to make
the usual payment to tlic insurance funds, but not to the credit of the
particular employee or his society. In the past it has been alleged
that in some cases workmen have found it easier to get employment
because insured in a registered society, the employer being thus
relieved of contributions.



4 MEDICAL BENEFIT

the case of district societies, and of fifty in the case of
estabhshment societies. The new law makes for larger
societies, and will cause the suppression of very many
small societies.

Each society is financially independent. It receives into
its own exchequer the contributions in respect of its
members, and has itself to meet all the liabilities. This
general statement is subject to qualification in the case of —

establishment and contractors' societies : the employer is

liable to make good deficits ;
guild societies : these societies are really part of the general

activity of the respective guilds, and the guild funds are

liable for deficits ;
communal funds : the communal authority is liable to make

good deficits.

Under certain conditions advances to cover deficits may
be recovered.

Invalidity and Old Age: — The empire is divided into
thirty-one districts, for each of which there is an insurance
authority. Each authority manages the insurance for all
the insured persons within its district.

With certain exceptions. For in addition to the thirty-
one district authorities there are ten special trade authori-
ties, for groups of railway-men, miners, and sailors : these
groups therefore do not come under the district authorities.

Each authority is a unit for administration and partly
for finance. As regards the latter, a large proportion of
the financial liability is pooled for the empire as a whole,
certain portions of the contributions of insured persons being
credited to a central fund and certain of the liabilities
debited to it.

Contributions

In the case of compulsory sickness insurance, the workman
pays two-thirds of the total contribution, the employer one-
third. The contributions are a percentage of the wages and
may vary within certain limits.

For compulsory invalidity and old age insurance, the work-



INTRODUCTORY 5

man and his employer contribute in equal shares. In this
case also the contributions are proportionate to wages.

Public Subsidy

The public authorities ostensibly do not grant any subsidy
towards sickness insurance. Actually, a large amount of
assistance is given. The insurance is supervised by the
local authorities. The cost of supervision is considerable ;
it is borne by the authorities. Communal authorities had
to make good deficits in the communal funds ; thus the
Hamburg authorities paid over _;^5oo in 1909, and have
had to make similar payments for many years. Nominally,
payments of this kind could be recovered from the com-
munal insurance fund. But often this was not likely to be
practicable. I Moreover, the cost of the administration of
communal funds was borne by the local authority.

More important still, a large amount of treatment is given
to insured persons in public hospitals, and the charge for
treatment is generally much below cost. This matter
is fully considered in chapter XVI.

In invalidity and old age insurance, the imperial govern-
ment contributes 50s. a year towards each pension, irrespec-
tive of its amount. In addition, certain expenses of
management and supervision are borne by the public
authorities, and some treatment to insured persons is given
at the cost of the invalidity insurance authorities in public
institutions at charges which are below cost.

Administration

Sickness Insurance: — The societies are self-governing.
The managing bodies are directly elected by the insured
persons and by the contributing employers, the number of
representatives chosen by each group being proportionate
to the contributions — that is, two-thirds by the insured, one-
third by the employers. The new law deviates from this
principle of representation in proportion to contribution in
that it gives the employers special powers in some matters.

The societies are under the supervision of local authorities.

' The total amount expended in assistance of this kind is not large.



6 MEDICAL BENEFIT

In communal insurance the insured had no direct voice
in management, the insurance being administered as part
of the ordinary business of the commune. Communal
insurance is to be superseded under the new law, and a
new kind of societies {Landkassc) is to be formed.

Invalidity and Old Age Insurance : — While the adminis-
tration of sickness insurance is strongly democratic, that of
invalidity and old age insurance is decidedly bureaucratic.
The insured and employers participate in committees of
management but their representatives are indirectly
appointed, and, while the insured are by no means excluded
from taking a part in the management, the actual adminis-
tration is mainly in the hands of officials.

Benefits

Sickness Insurance : — The societies are required by law to
provide — (i) medical treatment ; (ii) drugs, and spectacles,
trusses and similar requirements ; (iii) money benefit ; (iv)
confinement benefit ^ ; (v) death benefit. Instead of (i), (ii),
and (iii), a society may provide institutional benefit, with,
if the member has dependants, reduced money benefit.
Communal insurance funds were not required to provide
confinement and death benefits. Benefits are only directly
provided for persons actually insured, except that a society
may, by special regulations, extend certain benefits to
dependants of members. The confinement benefit which
societies are required to provide is therefore only for women
insured because they are themselves employed.

The benefit has now to be provided for a minimum period
of 26 weeks in case of need. Up to 1904 the minimum
period was 13 weeks.

It is important to note that persons suffering from
accident are entitled to receive benefit from the sickness
societies for (he first 13 weeks of disability.

Invalidity and Ohl Age InsitKince. — The benefits have

been —

I. An invalidity pension, in case of inability to earn one-
third of what is normally earned by a healthy person of
' Tlic new law provides for much more liberal maternity benefit.



INTRODUCTORY 7

the same station. The pension is given in the case of
permanent disabihty, and also of temporary disabihty
after 26 weeks of benefit from the sickness insurance.

2. An old age pension. This is given when the insured
person attains 70 years of age. A person may not at the
same time receive an invalidity and an old age pension.

3. Return of contributions (under the old law) subject to
certain conditions, to — (a) a woman when she married ;
(6) the widow (or widower in certain cases) or children
of a deceased insured person ; (c) an insured person
himself when he was compensated under the accident
insurance for permanent disability. The amount re-
turned was equivalent to what had been paid, or supposed
to have been paid, by the insured person himself — that
is, one-half of the total amount paid in respect of him.
In case (c) contributions might be returned in respect of a
person to whom a pension had been granted.



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