international labour office

the organisation of medical care
under social security
a study based on the experience of eight countries
by milton i. roemer, m.d.
professor of public health university of california
losan

geneva 1969

STUDIES AND REPORTS
NEW SERIES, No. 73

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PREFACE
Since the Second World War there has been a dynamic expansion of existing
medical care schemes under social security programmes and this trend still continues in Europe and in Latin America. More recently new schemes have been
introduced, notably in some of the countries in Africa and Asia. Under such
schemes the range of persons protected, at first often limited to particular
categories of employees, has been or is being extended to all employees, or to
the whole economically active population, including the members of their
families. In some countries medical services are now available to all residents.
Various aspects of the changing patterns of medical care have been
studied by the World Health Organisation and other interested bodies and
persons and much has been written on this subject.J
The I.L.O., well aware of the rapid expansion of medical care schemes
throughout the world and the various ways and means by which different countries
endeavour to make the achievements of medical science generally available, felt
that the whole subject of the organisation of medical care under social security
was one which merited careful examination and critical analysis. Accordingly,
in 1966, it initiated a research project in this field to be carried out in three
stages.
First it was necessary to acquire a concrete and detailed knowledge of
the existing ways of organising medical care under social security schemes, the
historical and conceptional background of the schemes, together with their
particular problems, advantages and weak points and their repercussions on
the relationship between physicians and patients and between the medical
profession and the social security institutions or administrations. With this
in view the I.L.O. selected eight countries, whose systems might be considered,
on the whole, as representative of the most specific and important types of
organisation of medical care under social security, to participate in the project.
National experts were recruited from the countries chosen, together with a
1
Valuable studies relating to medical care within the framework of social security have
been carried out by the Permanent Medico-Social Committee of the International Social
Security Association and by the Regional American Medico-Social Joint Committee of the
Inter-American Committee on Social Security and the International Social Security Association.

ORGANISATION OF MEDICAL CARE

IV

reporter, and national monographs on the organisation of medical care within
the framework of social security were prepared.1
The second stage was to convene a meeting of the experts and reporter,
to discuss the substance of the question. Representatives of the World Health
Organisation and the International Social Security Association were also
present and made many useful interventions and constructive contributions to
the work of the group.
The discussion showed that economic development and progress in medical
science and techniques have not always been accompanied by the desirable
adaptations of the organisational structure of medical care schemes, which are
sometimes delayed owing to reluctance to abandon traditions and vested interests
in the status quo.
The third and final stage in the project was the preparation of the present
study by the reporter. The I.L.O. was fortunate in being able to recruit for
this task Dr. Milton I. ROEMER, a well-known international expert in the
organisation of medical care. The study reflects the different views and conclusions of the experts but it goes far beyond being a mere summary of the discussions during their meeting and the material contained in the monographs.
The author has made use of additional information on facts and trends and
of his own wide knowledge and has produced a critical and comprehensive
study on the subject, which is one of considerable general interest and of special
concern to those responsible for making policy on the organisation of medical
care under social security schemes, for drafting and applying the relevant
legislation and for providing the services.
Although Dr. Roemer has had some assistance from the I.L.O., which
publishes the study, responsibility for the views expressed therein rests with the
author.

1

Belgium (J. DEJARDiN) ; Canada (J. E. F. HASTINGS) ; Ecuador (C. ANDRADE MARÍN) ;
Federal Republic of Germany (F. KASTNER); India (V. N . RAJAN); Poland (B. KOZUSZNIK);
Tunisia (A. BALMA) ; United Kingdom (I.L.O. Social Security Branch). The monographs were
multigraphed in 1967 ; a limited number of copies are available in English and French from
the International Labour Office.

¿í&y^

CONTENTS
Page

Preface
Introduction

Ill
1

PARTI
GENERAL BACKGROUND
1.

Health Service Systems in Different Countries
A. Historical Evolution
B. Multiple Health Service Schemes
C. The Components of Medical Care

7
7
8
13

2.

The Health Aspects of Social Security
A. Contingencies Related to Health
B. Persons Protected for Medical Care
C. General Trends

18
18
20
21

3.

The Bases of Medical Care Organisation
A. The Social Setting of Medical Care Patterns
B. Basic Patterns of Medical Care Organisation : Indirect and Direct
C. The Countries Examined in This Study
D. Evaluation of Different Medical Care Patterns

24
24
27
30
35

. . . .

PART II
COMPONENTS OF MEDICAL CARE
4.

General Physician's Care
A. The Basic Issues and Problems
B. Indirect Pattern with Fee-for-Service Payment
C. Indirect Pattern with Reimbursement of the Patient
D. Indirect Pattern with Capitation Payment
E. Direct Pattern with Full-Time Salaries
F. Direct Pattern with Part-Time Salaries
G. Evaluation of the Different Patterns

43
43
45
50
52
55
63
65

5.

Specialist Care
A. The Importance of Specialisation
B. Ambulatory Specialist Services by the Indirect Pattern
C. Ambulatory Specialist Services by the Direct Pattern

68
68
69
72

VI

ORGANISATION OF MEDICAL CARE
r
I
D. Lln-PatientjSpecialist Services by the Indirect Pattern
E. In-Patient Specialist Services by the Direct Pattern
F. Evaluative Comment

6. Hospitalisation
A. Issues in Hospitalisation
B. Indirect Pattern of Hospitalisation
C. Direct Pattern of Hospitalisation
D. Evaluation of Hospitalisation Patterns

Page
75
77
78
82
82
85
88
92

7. Pharmaceutical Products and Appliances
A. Issues concerning Drugs and Appliances
B. Indirect Pattern of Drug Distribution
C. Direct Pattern of Drug Distribution
D. Evaluative Comment

98
98
100
103
106

8. Dental Care and Other Health Services
A. Dental Care by the Indirect and Direct Patterns
B. Services of Paramedical Personnel
C. Evaluative Comment

110
110
Ill
115

PART III
SPECIAL PROBLEMS
9. Prevention of Disease
A. The Basic Strategy of Disease Prevention
B. Disease Prevention under the Indirect Pattern
C. Disease Prevention under the Direct Pattern
D. General Comment

121
121
123
125
127

10. Safeguards for the Patient and Provider of Medical Care
A. Confidential Nature of Medical Information
B. Appeals by Patients and Providers of Care

129
129
132

11. Disability Certification
A. Importance of Medical Certification
B. Certification under the Indirect Pattern
C. Certification under the Direct Pattern
D. Invalidity Certification

137
137
138
139
140

PART IV
RESOURCE DEVELOPMENT AND ALLOCATION
12. Personnel Training and Selection
A. The Education of Health Personnel
B. Indirect-Pattern Countries
C. Direct-Pattern Countries
D. Medical Manpower Planning

145
145
147
150
153

CONTENTS

VII
Page

13. Health Facilities and Their Planning
A. Importance of Buildings and Equipment
B. Indirect-Pattern Countries
C. Direct-Pattern Countries
D. The Movement towards Régionalisation

157
157
159
160
163

14. Meeting Rural Health Needs
A. Special Problems of Medical Protection in Rural Areas
B. Health Measures for the Rural Populations in Industrialised Countries . .
C. Health Measures for the Rural Populations in Developing Countries . . .
D. General Observations on Medical Care in Rural Areas

165
166
168
171
174

PART V
QUALITY, COSTS AND CO-ORDINATION
15. Influencing the Quality of Medical Care
A. The Range of Influences on Quality
B. Methods of Influencing Quality under the Indirect Pattern
C. Methods of Influencing Quality under the Direct Pattern
D. General Observations on Quality Surveillance

181
181
183
188
194

16. Supporting and Controlling the Costs
A. Supporting the Costs of Medical Care
B. Controls under the Indirect Pattern
C. Controls under the Direct Pattern
D. Cost Sharing
E. General Comments on Cost Controls

198
198
200
201
204
207

17. Co-ordination of Health Service Schemes
A. The Importance of Co-ordination
B. Co-ordination within Social Security Systems

209
209
211

C. Co-ordination of Social Security Schemes with Other Public and Private Bodies

215

Public Bodies
Private Bodies
D. National Health Planning
E. Co-ordination at the International Level
Co-ordination between Countries
The Role of International Organisations in Co-ordination

215
219
221
223
223
225

Appendix. List of Bibliographical References
Index

229
236

INTRODUCTION

This volume examines the organisation of medical care within the framework of the social security system in different countries. There is a bewildering
variety of both medical care and social security systems in the world because
of the widely differing economic and political situations of individual nations.
To render the subject comprehensible in relatively brief form, the present study
will be devoted principally to experience in eight countries on which monographs were prepared by national experts appointed by the International
Labour Office.
The eight countries chosen were Belgium. Canada, Ecuador, the Federal
Republic of Germany, India, Poland, Tunisia and the United Kingdom. 1
This selection was made to illustrate a range of patterns of organisation of
medical care under social security. Occasional references are made to other
countries, but there is no attempt at a comprehensive world-wide review.
The present study is designed for two types of reader: persons administering the medical side of social security systems, who may seek knowledge of
experience in countries other than their own; and persons engaged in other
aspects of health service administration, who may not be familiar with the
operation of social security systems. The subject may also, however, be of
interest to national planning specialists or students, for the field of medical
care is a subject of general concern.
While there are, of course, many basic aspects of medical care programmes
under social security, such as the methods of financing or the determination
and scope of eligibility, the present analysis is confined to the organisation of
medical services and the methods by which medical care is supplied. The
objective is to gain an understanding of how the different programmes operate
at the point of delivery of services to patients. The subject is treated in five parts.
In Part I the general background is presented, with a review of the different
types of health service found in most countries and an examination of the
framework of social security into which each of these types fits. Next, the
1
The health services in Scotland and Northern Ireland, although set up by separate Acts,
are run on exactly similar lines to that of England and Wales; all details given in this volume
refer to the scheme in England and Wales, except where otherwise indicated.

2

ORGANISATION OF MEDICAL CARE

theoretical basis of this study is presented, for two basic categories of countries
—industrialised and developing—and two basic patterns of medical care
organisation—indirect and direct.
In Part II each of the technical components of medical care—physician's
care, hospitalisation, drugs, etc.—is examined with respect to the experience
of the eight countries. It will be seen that the medical problems of facilities
and personnel and the relationships between the latter and patients are very
different for each of the components and for each country. The same applies
to the administrative problems and their solutions. For each component an
attempt is made to discuss the general issues before examining the specific
experience within the different organisational patterns. Conclusions are then
presented on the advantages and disadvantages of the latter.
In Part III certain special problems are examined in greater depth. They
relate to disease prevention, safeguarding the personal rights of participants,
and certification of disability for receipt of cash benefits. All of these issues
require articulation of the medical care system with other organised programmes or processes.
Part IV discusses the role of social security systems in developing and
distributing the basic resources for medical care in a country, i.e. the various
essential personnel and facilities. A special aspect of distribution—the provision of services in rural areas—is examined in greater depth because of the
urgency of this problem in the developing nations.
In Part V the question of controls in medical care systems is examined
with respect to both quality and costs. The influence of larger forces in the
nation on these two important factors is also considered and methods of
co-ordination between different bodies are examined. Finally, there is a brief
discussion of co-ordination at the international level.
In all five parts an attempt is made to provide quantitative data on the
results achieved by various patterns of medical care organisation. Unfortunately, very little such data are at present available in a form that permits
comparisons between countries. Comparability requires reduction of actual
data to rates based on definite populations and adjustments for various demographic characteristics; it also requires uniform definitions of terms. In the
absence of comparable data, many of our judgments must be based on the
opinions of individual observers, such as were offered in the series of eight
national monographs and at the July 1967 meeting of the experts who
prepared them. To some extent, the judgments are based on the general
observations of the author of this volume.
One of the principal conclusions of this study should be stated here :
the objective evaluation of alternative systems of medical care organisation
requires a great deal more research. Investigations of various national experi-

INTRODUCTION

3

enees are needed, followed by careful statistical adjustments. The latter
must take into account the total social environment in which a programme is
organised, as well as the demographic features of the population. Only by
such research can firm conclusions be drawn on the wisdom of following one
course of action or another in any particular country.
The preparation of this volume has been a result of the efforts of many
persons. The authors of the eight national monographs are listed at the end of
the volume and their contributions at the meeting of July 1967 were extremely valuable in the interpretation of the experience gained with different
medical care systems. The contributions of Mr. R. MELAS of the International
Social Security Association and Dr. R. BRIDGMAN of the World Health Organisation were also invaluable.1 Finally, appreciation must be expressed to
officials of the I.L.O. for their extremely helpful review and criticisms of the
initial drafts of this study. Responsibility for errors of omission or commission,
however, must rest with the author.
Study of the social aspects of medicine along scientific lines is still in its
infancy. [73]2 Advice and opinions are common, but hard-headed analyses
are rare. The world presents a rich and varied laboratory for such analyses,
but these will take time and effort. In the meantime, countries—especially
the developing ones—must make decisions on how to proceed with the organisation of medical services for their populations. They have no time to wait
for the results of research and the reaching of unassailable conclusions. This
volume, it is hoped, may offer some provisional conclusions which might be
helpful to those responsible for organising health services until more farreaching investigations can be made. The organisation of medical care is,
in any event, a dynamic process and the lessons it can teach must be continually
relearnt.

1
The author of each national monograph attended the meeting, with the exception of
that author of the monograph on the Federal Republic of Germany, who was represented by
Mr. V. KRAUSS. Mr. B. ABEL-SMITH (United Kingdom) also attended.
2
The numbers in brackets refer to the List of Bibliographical References at the end of
this volume.

PARTI
GENERAL BACKGROUND

1. HEALTH SERVICE SYSTEMS IN DIFFERENT COUNTRIES
The pattern of organisation of health services in any country today is a
result of complex historical developments. It depends on the nature of
diseases, the technical developments of medical science, and the social, economic and political environment. It is small wonder that medical care organisation differs so greatly among nations.

A.

HISTORICAL EVOLUTION

In the countries of Europe, where scientific technology and industrialisation developed early, social organisation of medical services evolved at an
early stage. Even in Ancient Greece there were state physicians appointed to
treat the poor who were not slaves. In Ancient Rome there were valetudinaria
for slaves and hospitals for military personnel. In the early Middle Ages
feudal lords took some responsibility for health services to their serfs, but the
capacities of medicine were extremely limited and religious healing was more
important than scientific medical treatment. In the later Middle Ages the
Christian church organised hospitals for the sick and destitute and physicians
began to set up private practices in the cities. [120]
As industry developed in the late eighteenth and early nineteenth centuries
groups of workers and artisans organised mutual benefit societies for self-help
in time of sickness. Hospitals came to be supported and controlled by cities
and other units of local government; voluntary societies were established for
nursing the poor, the protection of children or combating prevalent diseases.
Public health agencies were set up to prevent the spread of communicable
disease. Responsibility for organised health services gradually shifted from
local communities to central governments. [114]
In Africa and Asia, with little development of indigenous science, the
local peoples depended mainly on the ministrations of traditional healers.
In India, China and elsewhere, a rich healing tradition had evolved, based not
only on empirical evidence, but also on a philosophy of the world. The health
service was provided on a one-to-one basis, without social organisation. The
colonial powers established hospitals, first for the army and the European

8

ORGANISATION OF MEDICAL CARE

settlers and later for the indigenous population. Eventually government service
systems were established in the colonies. In Latin America, the Catholic
church, which arrived with the Spanish and Portuguese conquerors, set up
charitable or beneficencia hospitals which dug local roots. Later, religious
missionaries from abroad also set up hospitals and dispensaries on several
continents. The great prevalence of infectious tropical diseases stimulated
special campaigns against mosquitoes and other vectors in many countries.
As the former colonies have attained independence, national systems of medical
care have been organised partly on the basis of inherited ones.
In the United States and Canada the medical care patterns of Europe were
rapidly adopted and within about two centuries had achieved an advanced
degree of development. After the American Revolution (1776) local governments in cities and states became important, organising hospitals, systems of
medical care for the poor, and eventually public health services to prevent
diseases. In the nineteenth century medical care insurance was organised for
selected industrial groups and in the present century the federal Governments
of both Canada and the United States became deeply involved in the organisation of many aspects of health services. [130]
The political developments in countries have, of course, had an enormous
influence on the organisational patterns of medical care. The French Revolution (1789) and the Mexican Revolution (1910) had replaced the power of the
church by the power of the State, which exerted an important influence on the
control of hospitals and medical care for the poor. In Germany in the 1880s
the battle of Bismarck against socialism led to the first national social insurance
scheme, which included sickness benefits. Other countries in Europe and elsewhere followed suit, as the concept of the welfare State gained political force.
The Socialist Revolution of 1917 in Russia led to a complete reorganisation of
the health services. In the United States and Canada the tradition of free
private enterprise has had a great influence in shaping the health services.

B. MULTIPLE HEALTH SERVICE SCHEMES

As new patterns of health service organisation evolve in a country the old
patterns do not necessarily die out. Instead, they usually continue to operate
with respect to certain sectors of the population or certain diseases. There
thus exists in most countries a variety of health service schemes operating side
by side. Traditional healers and schemes based on religious charity are supplemented by newer schemes based on social insurance or general control by
the government. The proportion in which these schemes exist differs greatly
among countries, but in the great majority there is a mixture. In a few coun-

HEALTH SERVICE SYSTEMS

9

tries, as we shall see, the various component schemes have been integrated with
a view to developing unified systems of health service.
It may be useful to examine principally these separate systems which can
be found—to one degree or another—in most countries.
Traditional Healers.
A large proportion of the population in most developing countries still
depend on traditional healers for their medical care. There are hundreds of
different types of healers, whose methods of treatment are based on various
combinations of religion, magic or empiricism. [99] They live close to the
people in the villages and their charges are relatively low. In the absence of
modern scientific medical services they are naturally used widely, but even when
scientific service is made available they continue to be used.
Charitable Schemes.
Based originally on church sponsorship, many hospitals provide service to
the poor under the control of charitable societies.

Over the years these have

often come to be subsidised and partially controlled by official bodies. Charitable dispensaries may also be operated for children and mothers. The funds
for such schemes are derived from donations, bequests, the proceeds of lotteries, etc. The schemes operate mainly in larger cities.
Special Government Schemes.
Government bodies operate medical care schemes at a number of levels.
Provincial or local governments may run special public assistance schemes for
the poor, including medical care. Municipal hospitals in the more industrialised
countries often cater exclusively for the low-income groups. Civil servants at
the provincial and local levels may enjoy special health protection at public
expense. Railways and semi-official corporations may also offer comprehensive
medical services for their employees.
The central government generally bears responsibility for military personnel
and sometimes for their dependants. Military veterans may also be entitled to
treatment of disabilities contracted during active service, and they may sometimes be treated even for disabilities due to other causes (as in Canada and the
United States). Dependants of military men may also receive medical care at
government expense.
The government may also take responsibility for measures to combat certain diseases of exceptional frequency and severity. In most countries mental
disorder is treated in special government hospitals. Tuberculosis has been so
serious a problem throughout the world that it, too, has become a public

10

ORGANISATION OF MEDICAL CARE

responsibility, often under agencies specially set up for the purpose. The same
applies to leprosy in tropical countries.
Public Health Schemes.
Organised efforts have been applied—usually later in the evolution of health
services—to the mass prevention of disease. In the more industrialised countries
the initiative has normally come from the local government, while in the developing countries—for reasons discussed later—it has come mainly from the central
government. Supervision of water supplies, sewage disposal, food distribution,
etc., is a basic objective. Other measures of environmental health are campaigns against insect vectors of disease (malaria, yellow fever, etc.), snails
(schistosomiasis), rats (plague) and other animal hosts. [112]
The prevention of disease among individuals, including immunisations and
periodic examinations of children and pregnant women, is also organised by
public health agencies. Education in personal hygiene is also important. Prevention of the spread of communicable disease involves some restriction of
personal freedom through measures of isolation and quarantine.
The scope of public health activities throughout the world has gradually
broadened. In the sphere of environmental health accident prevention and control of atmospheric pollution have been intensified. In the personal health
sphere early detection of chronic disease (cancer, diabetes, etc.), promotion of
mental health and health promotion among schoolchildren have been extended.
In the rural areas of both industrialised and developing countries the scope
of public health activities tends to be especially broad. While health centres
are constructed and staffed primarily for disease prevention, they also provide
ambulatory treatment for sickness. General hospitals have been and are being
established to serve large rural regions. In Africa, general hospitals are frequently operated by the public health authorities in the main cities as well. In
the health ministries of many of the developing countries there is a "preventive
side" and a "curative side", with the latter being responsible for operating a
network of regional hospitals and sometimes smaller local rural ones.
In certain countries ministries of health also carry other legal responsibilities, including the registration of medical and allied personnel, the technical
control of pharmaceutical products and the approval of hospital design and
construction. In general the scope of these responsibilities tends to be broader
in the developing countries where other medical care organisations are weaker.
Voluntary Health Insurance.
As noted earlier, the financing of medical care through insurance mechanisms started on a voluntary basis before it became mandatory under social

HEALTH SERVICE SYSTEMS

11

insurance laws. It is still widespread in the more affluent industrialised countries. It may be sponsored in various ways and may offer a wide range of
benefits.
While voluntary health insurance schemes were originally set up by workers
or groups of consumers, in North America they are now generally sponsored by
the providers of service (hospitals, physicians, dentists, etc.) or by commercial
insurance companies. The benefits tend to be limited to one or another element
of health service, such as hospitalisation, physician's care for hospital cases,
dental care, drugs, etc. Comprehensive benefits are offered more rarely. Even
in countries where a substantial majority of the population is covered by statutory social insurance, some middle-class sectors may be members of voluntary
health insurance schemes. [126]
Other Non-Governmental Health Schemes.
In addition to the organisms mentioned above, private citizen groups,
especially from the middle classes, may form organisations to tackle specific
health problems. Such voluntary societies organised home nursing services in
nineteenth-century England, and this type of non-governmental scheme is now
operating in many countries. Special societies for campaigns against tuberculosis, cancer, heart disease, crippling of children, mental disorder, alcoholism
and other serious affections are found all over the world. In many countries
the Red Cross or Red Crescent Society runs emergency services, including ambulances—sometimes with large government subsidies.
Private employers who organise certain health services for workers at
management expense must also be counted. These services may range from
health examinations and first aid to comprehensive medical care. In the developing countries, where other health services are inadequate, these employersponsored medical services on large plantations (coffee, sugar, tea, rubber, etc.)
or at isolated mines may provide a relatively high quality of care. Such services
have become mandatory on employers under the laws of many countries,
especially where large numbers of workers (e.g. over 100) are employed.
Social Security.
Medical care schemes under social insurance legislation are, however,
generally more important than the organised health services reviewed above.
Starting in the more industrialised countries of Europe, they have spread to all
continents, although in the developing countries they still cover only a small
percentage of the population. Under such schemes the costs of specified medical
benefits for designated persons are borne out of earmarked contributions (social
insurance premiums) by the beneficiaries themselves, their employers, or both. [49]

12

ORGANISATION OF MEDICAL CARE

The method of financing and administering medical care under social insurance legislation usually differs for different contingencies. There are separate
provisions for employment injuries (including occupational diseases), general
non-occupational sickness (in both worker and dependants) and maternity.
With all three contingencies there are generally both cash benefits and benefits
in kind, or medical services. As coverage has broadened, benefits have been
improved and more funds have been allotted to these schemes, the concept of
"social security" has evolved.
The patterns by which medical care is organised under various social security schemes display enormous variety. Under all of them, however, beneficiaries have a statutory right to certain services without appeal to charity or a test
of personal means. The characteristics of the different schemes will be the
principal subject of the rest of this volume.
The Private Sector.
There remains in every country, to some degree, a "non-organised" or private sector of medical care. (The traditional healers are also private, of course,
but here reference is made to the provision of modern scientific service.)
Although the bulk of medical needs in most countries are met, in some degree
or other, by organised schemes, even in the most highly organised countries
some small proportion of health services are supplied through the mechanism
of the free economic market. When medical care is less fully organised—e.g.
in the United States or Australia—a substantial sector of it is privately bought
and sold by individuals, the patient being protected by general legislation on
the registration or licensing of health practitioners and by various codes of
medical ethics.
Even in this private sector, however, the work of various personnel and
facilities has to be organised; this is the case in virtually all hospitals, voluntary
as well as governmental. Outside hospitals physicians may form private
"group practice" clinics. Societies of physicians, dentists or other individual
practitioners, moreover, subject their members to certain rules of professional
behaviour. Thus the range of purely individualistic one-to-one health service
is everywhere becoming very narrow.

In conclusion, it may be said that, while all of the eight patterns of medical
care discussed in this study recur to a certain extent in the great majority of
countries, in no two is the situation exactly alike. However, it is clear that,
whatever the pattern of medical care adopted, both the financing and the provision of services are becoming increasingly organised. [48]

HEALTH SERVICE SYSTEMS

13

This trend can be noted in the proportion of the population served by
various schemes and in the range of medical benefits offered. It leads to
varying degrees of "social control" over the actions of individual health personnel. As greater sectors of health need come under organised attack, moreover, the need to co-ordinate the various organised schemes becomes more
pressing, and as a result measures for their integration are being taken in many
countries.
In some countries the integration of schemes with separate historical origins may be described as a widening of the scope of "social security", which is
coming to be regarded as a general goal towards which various instrumentalities
of health service are a means. (Other aspects of social security are economic
security in old age, adequate income during unemployment, etc.) In other
countries the integration of the various health schemes may lead to the creation
of a "national health service". The present volume will use the expression
"social security" in two senses, depending on the context. Firstly, it will be
used to refer to the more restricted schemes providing medical care on the basis
of earmarked social insurance contributions. It will also be used to refer to
broader systems of medical care which have evolved from social insurance
schemes and which cover large populations as a statutory right.
C.

THE COMPONENTS OF MEDICAL CARE

Each of the health service schemes just reviewed has internal complexities
of its own. The services of many types of personnel and facilities may be involved, and the administrative arrangements may differ for each. To understand these administrative problems it is important to have a full appreciation
of all the elements of medical care required for coping with sickness.
The principal person responsible for diagnosing and prescribing the treatment of disease is the physician. The treatment itself is, however, often carried
out by a variety of other personnel. To acquire the competence to cope with
disease the physician must undergo a long period of higher education and
supervised experience, the details of which are prescribed in each country.
As medical science has become more complex, specialisation has developed,
particularly for the treatment of rare or serious illnesses. Yet the treatment of
the more common and milder affections also requires physicians, as does the
supervision of the patient's total health needs. This is done by a "general practitioner", "general physician", "family doctor", "personal physician" or "primary physiciar?\"a"s he has beerTvârîôusly called.' The place in which the
general physician sees his patient has an important bearing on how he works
and—in a medical care scheme—on how he is paid for his services. The
patient generally visits the doctor at his place of work, which may be a private

14

ORGANISATION OF MEDICAL CARE

"office" or "surgery", "dispensary", "health centre" or "clinic". Such service is
'usually described as "ambulatory care"! ff the doctor goes to the patient's
home—whether by request or by his own decision—he provides "domiciliary
care" or "home care". Finally, the patient may be seen in a hospital or similar
institution.
( Spécialists^may be of many types. They may specialise by organs of the
body (ophthalmologists, cardiologists, dermatologists), age groups (pediatricians,
geriatricians), sex (gynaecologists, obstetricians), special methods of diagnosis
(pathologists, radiologists), or special methods of therapy (surgeons, physiatrists,
radiologists). A doctor may choose a combination of these, specialising in
internal medicine and diagnosing and treating "non-surgical" diseases in
adults. There are also psychiatrists who specialise in disorders of the mind and
the emotional aspects of other diseases. Preventive and social medicine has
also become a speciality, dealing with populations as a whole rather than individual patients, and emphasising organised prevention as well as organised treatment of disease. All of these specialists (except perhaps the last) do much of
their work in hospitals, since this is where patients with serious, complex or
obscure diseases are often treated. They also see out-patients, however, either
in their own private offices or in organised ambulatory care centres.
Nearly all diseases are treated with chemical compounds, which have
from earliest times been handled by a designated profession. The pharmacist,
like his historical predecessor the apothecary, is skilled in preparing, storing
and dispensing drugs. He may operate an independent pharmacy or be engaged
in one attached to a medical facility. In organised medical care systems the
procurement of drugs invariably depends on the order or prescription of a
physician (sometimes a dentist), but all countries also permit people to purchase
certain drugs directly "across the counter" without medical prescription.
Since most pharmaceutical products are now compounded and packaged by
the manufacturer and may be easily dispensed, the role of the highly trained
pharmacist in an organised medical care system is a subject of controversy in
many countries.
Other commodities, such as special foods, bandages and other sickroom
supplies, are also prescribed by doctors"áñd are dispensed by separate personnel. Prosthetic appliances ordered by the doctor may require special skill
in the dispenser in order to fit them to the precise needs of the individual; this
applies to eyeglasses, hearing aids, braces, prosthetic limbs, crutches, catheters,
colostomy tubes, trusses, etc. In many countries technical personnel have been
trained to fit each of these appliances, and their services may have a place in
an organised medical care system.
The management of hospitals all over the world is a complex function.
The patient who is confined to bed must not only receive diagnosis and treat-

HEALTH SERVICE SYSTEMS

15

ment for his illness; he also needs food, clean surroundings and the satisfaction
of his physical as well as his emotional requirements. Hospital services therefore
need a wide range of personnel in addition to the doctor. Since these personnel must of necessity work as a team under supervision, it is the over-all
services of the hospital, rather than those of each technical worker in it, that
are ordinarily offered under a medical care scheme. Some systems of medical
care make an exception to this in that the in-patient services of doctors are not
included in the concept of hospitalisation.
The most important type of bed-care institution is the "general hospital",
where patients with a wide variety of illnesses are admitted. In all countries,
however, there are also special hospitals for certain diseases, such as mental
disorder, tuberculosis or leprosy, which are of high prevalence and which
demand special long-term forms of care. In addition there may be special
hospitals for short-term conditions such as maternity, for diseases of children,
for traumatic conditions, for acute infectious diseases, etc. As life expectancy
has increased, recent years have seen the creation of special hospitals or similar
institutions for the care of aged patients with long-term degenerative (noncommunicable) disease. Hospitals may also differ in the manner of their
ownership or sponsorship. Any of the above types of institution may be
controlled by units of government (central, provincial or local), by social
security organisations, by churches or other voluntary bodies, by industrial
enterprises or by private individuals. The relationship between hospitals and
medical care schemes can thus vary according to circumstances.
Another important branch of the health services is dentistry, which has,
for historical reasons, been assigned to a separate profession. UnhTce specialists
in other organs of the body, the dentist is usually approached directly by the
patient instead of on referral from a physician. He may be assisted by auxiliary
personnel, who do limited tasks (such as cleaning the teeth) under his direction or
who prepare dental prostheses. In a few countries "dental assistants" or "dental
nurses" are authorised to repair decayed teeth under the supervision of a dentist.
An important group among the hospital personnel are nurses, who are
trained to several levels ranging from simple short courses in a hospital to
advanced university studies. The latter type of nurse is often described as
"professional", in contrast to the more modestly trained nurses who are known
as "vocational" or "auxiliary". The precise functions of the nurse are extremely variable in different contexts, but in general she (they are nearly always
women) carries out the treatment orders of the physician. Within hospitals
the activities of nurses, as of other supporting personnel, are considered as an
integral part of the hospital service, except where extra nurses are engaged for
a private patient. The same applies to nursing services in health centres,
polyclinics or the offices of individual physicians. Some nursing care, however,

16

ORGANISATION OF MEDICAL CARE

may be rendered in the patient's home, and such "home nursing" services may
constitute a separate benefit in a medical care system.
There are other services carried out on the order of a physician which
require specially trained personnel. Among these are laboratory and X-ray
technicians, physical and occupational therapists, dieticians, medical record
librarians and a variety of clerks and aides. Psychologists may work under the
psychiatrist and opticians (lens grinders) under the ophthalmologist. Social
workers also contribute to the total care of the patient, especially by helping
him to adjust to his environment. Still other "paramedical personnel"
provide certain sectors of medical care directly to the patient witnorrt—the
intervention of a doctor. The optometrist or dispensing optician treats refractive disorders of the eyes, which are very common, and prescribes eyeglasses.
The podiatrist treats superficial disorders of the feet. The midwife attends
childbirth, either with or without medical supervision, depending on the country or locality.
The primitive healers who are found in great numbers in the developing
countries—and to some degree in all countries—rarely play any part in organised medical care schemes. There are, however, other types of healing practitioner, such as chiropractors and, in some countries, osteopaths, homeopaths
and naturopaths, who are not in the mainstream of scientific medicine but
hold to special theories of disease causation and therapy. While the scientific
medical profession generally frowns on such practitioners, they are permitted
to practise, and even to participate in statutory medical care, under the laws
of many countries.
In the developing countries, where the shortages of scientifically trained
physicians are severe, recourse is had to yet another type of health personnel
under organised medical care systems. This is the auxiliary health worker, as
distinct from the nurse, who usually works in rural areas and is authorised to
diagnose and treat disease on a rudimentary level. Such health workers
(usually men) already existed in the rural health services of Czarist Russia,
where they were known as feldsher; they are now incorporated in the organised
health services of many African and Asian countries. The tasks of supervising
these personnel, often from a distance, are obviously great.
Finally, there are numerous health personnel not involved in personal
medical care but associated with the purely preventive services. These include
sanitarians to help to maintain a clean environment, and health educators to
conduct health campaigns. Nurses, technicians and the other personnel mentioned above may also, of course, work in certain of the preventive services.
The wide range of technical functions performed by the health services
are obviously a far cry from the work of the traditional isolated doctor who
tended the sick. Although a high degree of co-ordination is manifestly required

HEALTH SERVICE SYSTEMS

17

if the health service is to be effective, some of the thorniest problems of medical
care schemes today spring from the anachronistic idea that health needs can
still be met within the framework of a simple and individualistic doctorpatient relationship.
Whether there is deliberate organisation of all these personnel and facilities
or not, the interdependence among them is very great. The tasks faced by
specialists depend largely on the decisions of general physicians. Drugs
dispensed or laboratory tests performed are, of course, ordered by doctors.
The general therapeutic burden of doctors depends in part on the effectiveness
of the preventive services. The work of diagnosis and treatment inside a
hospital depends on the procedures that have been followed outside it. A
major share of the costs of any medical care scheme are for drugs, hospitalisation
and other services, which the patient must ultimately pay for (through insurance
or taxes or by other means) even though he may not necessarily be responsible
for their incurment. [101]
The relationships between the above-mentioned components of health
services vary greatly from one country to another and according to the pattern
of medical care adopted. Within the framework of social security in particular,
patterns of medical care organisation depend very much on the supply and
circumstances of the various health professions, occupations and facilities
just reviewed.

2. THE HEALTH ASPECTS OF SOCIAL SECURITY
Social security systems arose as an alternative to other methods of meeting
the risks of living in an industrialising society. As long as the family unit
engaged in agriculture was the social and economic mainstay a sudden loss of
individual livelihood was not tragic; but when a factory worker lost his earnings
because of sickness, unemployment, old age or invalidity, he and his family
faced immediate hardship. Appeal to charity from the church or from friends,
or recourse to public assistance from units of local government, had been the
earlier solution to such crises. Organised self-help of groups of workers—first
through voluntary insurance and later through compulsory social insurance—•
offered a solution that was both more effective and more dignified. [33]
A.

CONTINGENCIES RELATED TO HEALTH

In a sense, all the contingencies for which social insurance was designed
to provide are related to health. The earliest to be covered by legislation in
most countries has been employment injury, with the worker being compensated
for the wage loss incurred through disability, sometimes for the "pain and
suffering" caused, and nearly always for the costs of necessary medical care.
The administrative arrangements for providing employment injury benefits
are of endless variety, and they are continually being changed by legislative
amendments. The trend has been towards wider definitions of injury related
to employment, including in many countries acute and chronic occupational
diseases ; at the same time wider categories of workers are being covered.
Sickness of non-occupational origin has likewise been dealt with under
two heads—compensation for the wage loss resulting from incapacity for
work, and provision of medical care. Cash benefits under sickness insurance
are just as important for maintenance of health allure "medîcâT benefits, for
loss of earnings can prevent a worker from buying the food, fuel and other
commodities essential to the health of himself and his family.
The effective operation of a disability insurance scheme requires to be
accompanied by some arrangements for medical care. For one thing, the
objective determination of disability is a medical task. In addition, the disabled
worker should obviously receive treatment to reduce the period of his disability

THE HEALTH ASPECTS OF SOCIAL SECURITY

19

to a minimum and restore his productive capacity. This is as important for
his personal welfare as for the solvency of the disability insurance fund. Prompt
treatment, moreover, is often necessary to prevent long-term invalidity or
even death.
Invalidity or long-term disability insurance is ordinarily financed and
administered by mechanisms separate from those which deal with short-term
disability. In a sense, long-term disability is like premature aging, since the
worker is withdrawn from employment and becomes socially dependent.
Invalidity must be defined in both economic and medical terms, since "incapacity to engage in any gainful activity" depends on the situation of the labour
market. The medical criterion for defining invalidity is that the worker is
presumably not subject to cure or rehabilitation, or at least not to a degree
sufficient to permit gainful work. Certification of invalidity therefore requires
very careful judgment. After such certification the incapacitated worker still
ordinarily requires medical care (either for the original disability or for disease
contracted subsequently to it), to which he may or may not be entitled under
the legislation of different countries.
Although maternity is not, of course, a sickness, for the working woman
it means a loss of earnings which may also be compensated for under a social
insurance scheme. To protect the health of the expectant or nursing mother
and the new-born baby, maternity benefits ordinarily include cash replacement
of the wages lost for several weeks before and after childbirth. The cost of"
the obstetrical delivery under proper conditions is also usually met, and a
layette is often provided for the baby. In most countries medical maternity
benefits are also provided for the non-employed wife of the insured worker.
Medical care for ordinary sickness is, of course, the social insurance
benefit most directly related to health. Because it involves much more than
cash payments, its administration is especially complex. The intricate relationships between the social security administration and the different health
professions and institutions have been worked out in a variety of ways.
There are other social insurance benefits which have indirect repercussions
on health. Old-age pensions enable the retired worker to live under conditions
less likely to aggravate the chronic disorders of later life. Survivors' benefits,
unemployment insurance and family allowances provide other demographic
groups with economic sustenance which is likewise essential for maintenance of
sound nutrition and health. Thus virtually all social insurance benefits have
a bearing, direct or indirect, on health. The specific benefits provided by medical
care schemes under social security should therefore be viewed in the over-all
perspective of health protection. [2]
Everything depends, however, on the number and proportion of persons
in a country who enjoy some or all of these forms of social protection. Unfor-

20

ORGANISATION OF MEDICAL CARE

tunately there are few countries in which all the forms of protection apply to
all persons. Ordinarily there are different definitions of persons eligible for each
of the forms of protection. Population coverage for different benefits in different
countries of the world is discussed in greater detail in many other documents of
the International Labour Office. [4] Here a few words may be said about the
general features of coverage for the specific benefit under study—medical care.
B.

PERSONS PROTECTED FOR MEDICAL CARE

As noted above, social security schemes for medical care have arisen as
a preferable alternative to other ways of meeting health needs. Initially,
coverage is statutorily limited to certain social or demographic groups, the
commonest policy being to begin with certain categories of industrial workers
(for economic and political as well as humanitarian reasons). Later, as experience is gained with operation of the scheme, in response to political pressure,
or as the economic situation of the country improves, the coverage is extended
to other population groups. [40]
The sequence in which coverage is extended to different groups of the
population differs from one country to another, but whatever the sequence
adopted the tendency has been to extend coverage gradually to higher-paid
(usually salaried) workers, government employees, agricultural workers, domestic workers, casual or seasonal workers, etc. After these, self-employed
persons, including farmers, shopkeepers, the liberal professions, etc., may be
covered. Coverage may be extended—often simultaneously with the above—
to dependants, pensioners, surviving widows and orphans, etc. Finally, the
indigent, unemployed, invalids, temporary visitors and the rest of the population may obtain protection.
The range of medical benefits may differ for the different categories of
beneficiaries, depending on the source and amount of the funds available, medical personnel and facilities, political considerations and other factors. When
medical resources are scarce priorities are often applied, preference being given
to insured workers rather than dependants, or industrial workers in cities rather
than agricultural workers in rural areas.
From the point of view of medical care organisation, the proportion of
a population covered by a social security scheme is important. If the proportion in any geographic area is small, arrangements for medical care can be made
using existing personnel and facilities. As the proportion increases, new
resources may have to be made available and special programmes organised to
ensure that the quality of medical service is maintained. Coverage of populations in rural areas invariably presents special problems both because of the
nature of the rural economy (especially as regards agricultural employment or

THE HEALTH ASPECTS OF SOCIAL SECURITY

21

self-employment) and because of the usual deficiencies of medical resources
in such areas. As universal coverage of a population is approached or reached,
the complete reorganisation of health services in the country may become
advisable in the interests of optimal efficiency, quality and economy.
As long as less than 100 per cent, of a population are entitled to medical
care under a social security scheme, there must be some system for establishing
a person's eligibility. This is usually done by issuing some sort of identity
card or booklet in connection with employment or other channels by which
insurance premiums are paid. Eligible persons must reregister in the scheme
periodically (at least annually). Actuarial considerations in a social insurance
scheme, moreover, may impose various requirements regarding the exact time
when a worker in "covered employment" becomes eligible for medical benefits.
The qualifying period can be several weeks or sometimes several months. At
the end of a period of eligibility, medical services that are in progress may be
continued for some weeks after general eligibility has officially terminated.
The details of qualifying conditions for medical benefits are often complex,
and they may require elaborate administrative procedures for their enforcement.
They are described in the eight national monographs on which this volume
is largely based, and in a number of I.L.O. reports. Although in true medical
emergencies eligibility requirements are often relaxed so that treatment is not
delayed, registration and qualifying procedures in a social security scheme can
be vexing from the purely medical point of view. From an administrative
point of view, one of the great advantages of universal population coverage is
the elimination of such procedures.
Even after eligibility for medical care under social insurance has been
established, further procedures may be necessary for the procurement of
specific services. In the Federal Republic of Germany, for example, the beneficiary must obtain a "sickness form" (Krankenschein) for presentation to the
doctor; it is valid for three montos, alter which another form must be obtained.
In some countries special authorisations are required for obtaining technical
services in short supply, such as dental care or rehabilitation therapy. In many
countries access to medical specialists and, of course, to hospital in-patient
care, requires referral from a general physician. Pharmaceutical products and
therapeutic appliances require medical prescriptions. These various restraints
are obviously needed not only to guard the solvency of social security funds,
but also for promoting a sound quality of service to the patient.
C.

GENERAL TRENDS

Since the trend of social security systems everywhere is to extend eligibility to increasing sectors of the population and to offer more comprehensive

22

ORGANISATION OF MEDICAL CARE

medical benefits, what, one may ask, is the value of clinging to any social
security scheme, with its restrictions on eligibility, the exclusion of certain
benefits, and all the rest ? If resources were not scarce, there might be little
justification for a social security scheme. But since nearly all resources—
especially those for medical care—are scarce, there is inevitably competition
for access to them. There is more basic competition for money, which may be
converted into one type of resource or another. This competition operates in
the sphere of government as well as in the free economic market.
The social insurance mechanism has the great economic and political
advantage of assuring aflowof earmarked funds for designated social purposes.
It means that those funds will be allocated, for example, for the medical care
of certain sectors of the population rather than for road building or for military
activity. It ensures that medical care will be rendered to certain persons (e.g.
production workers) whose health is deemed important for the general advancement of a nation. Regular funds under a social security scheme tend to have
greater long-term stability than those dependent on legislative appropriations
year in and year out. Additional stability is derived from a pooling of the
contributions of thousands of persons to cope with risks that cannot be predicted separately for each individual. The compulsory nature of social insurance
assures allocation of money for a provident social purpose before that money
can be spent on other purposes.
Economists have demonstrated that the ultimate source of social insurance
contributions is not the worker or employer who pays the premiums but the
final consumer of the products sold by the undertaking. Both the worker's
contribution and the employer's are derived from the income earned from sales.
Thus social insurance represents a way of tapping money from a wide market
of ultimate consumers (including foreign buyers of exported products) for a
designated benefit to certain workers and usually their dependants. [76]
At the same time, this channelling of money for the health benefit of an
insured population helps to build up general resources for medical care, which
might otherwise not be forthcoming at all. This is particularly the case in
Latin America, where the social insurance mechanism has led to a marked
improvement in the hospital resources of many countries which, for decades
before, had had only meagre facilities. In the short run there may seem to be
inequities in the reservation of high-quality hospitals for a selected population,
but in the long run the total national supply of hospital resources is improved.
Another aspect of the social insurance mechanism is that it gives the
consumer a say in top-level administrative decisions, either through designated
representatives or through an elected government. [134] Of course, there are
important scientific questions that must be decided exclusively by members
of the health professions, but medical service is a two-way relationship : many

THE HEALTH ASPECTS OF SOCIAL SECURITY

23

personal matters are involved in which the viewpoint of the patient must be
considered as well as that of the doctor, and medical care must not be dominated,
as it often has in the past, by the parochial interests of the health professions.
The tendency everywhere is for higher proportions of a country's population
to become protected by social insurance, and increasing shares of the costs in
many countries are derived from general revenues rather than from wage or
payroll deductions. Sometimes the costs borne out of the general revenue are
intended to pay for coverage of indigent persons or pensioners, sometimes to
support treatment of certain diseases deemed to be a general public responsibility (like tuberculosis or cancer), sometimes to cover a major share of general
hospital costs where these had formerly been a local government responsibility (as in the Scandinavian countries), and sometimes as a general subsidy not
earmarked for any particular purpose. Whatever the legislative provisions
may be, the trend toward supplementing social insurance funds out of general
revenues has widened the scope of the medical care scheme. [10]
As increasing proportions of the population are covered by social insurance,
a point is reached in some countries where it is administratively easier to combine organised efforts under a co-ordinated or unified authority. This was done
in New Zealand in 1939, in the United Kingdom in 1948, and in Chile in 1952.
In other countries, such as Cuba, Poland or the U.S.S.R., the same goal was
achieved following socialist revolutions. These integrated systems of medical
care are often referred to as "national health services", although none of them
is 100 per cent, comprehensive in coverage and benefits. The U.S.S.R. system,
for example, still requires the patient to pay for most out-of-hospital drugs,
and the United Kingdom system—with some exceptions—requires the patient
to pay for drugs, certain appliances and dental services. The Chilean national
health service does not yet cover some 25 or 30 per cent, of the more affluent
sectors of the population, and the Polish service still requires the rural population to bear a substantial share of the cost at the time of illness. The trend,
however, is clearly towards universal coverage of the population, paid for out
of earmarked contributions to the social security fund. [5]

3. THE BASES OF MEDICAL CARE ORGANISATION
Any medical care scheme, whether it is financed by social insurance or by
other methods, may offer services to people in a variety of ways. Medical
services are a complex mixture of outputs from the different types of skilled
personnel and facilities reviewed in Chapter 1. The precise manner in which
these resources are organised largely determines the quantity, quality and costs
of services received by patients.
To understand the influence of organisational patterns on the output of
health services, it is necessary to have a framework for analysis. In this chapter such a theoretical framework will be offered, with a brief description of each
of the over-all medical care systems under social security in the eight countries
selected for study. This plan is intended to facilitate the comparative evaluation
of the results of this system, according to certain widely recognised criteria. A
few words should first, however, be said about the social, economic and political
conditions in nations, for these are bound to influence any medical care system.
A.

THE SOCIAL SETTING OF MEDICAL CARE PATTERNS

In a rather over-simplified way one may classify the countries of the world
today as industrialised and developing. In the industrialised countries the
major share of the gross national product is derived from industrial production
in which scientific technology has been effectively used.
In the developing countries the greater share of the gross national product
tends to be derived from agriculture or raw materials. There is relatively little
mechanisation either in agriculture or in manufacturing, and human labour
accounts for most of the productivity. Incomes per head are low; for most of
the population they may be at a bare subsistence level. [84]
This obvious over-simplification must be further qualified for a proper
understanding of any particular country and especially for an appreciation of
how that country's situation influences the pattern of medical care organisation.
Within either of the two main categories of country political considerations
are important. The dominant political concept may favour free private enterprise and local autonomy, or it may favour planned production and centralised
government control. There are a number of gradations between these two

THE BASES OF MEDICAL CARE ORGANISATION

25

extremes as regards different activities, such as health service, education or
transport. Moreover, the features of a country's history very often have quite
a powerful effect on the form taken by the health services. In spite of these
reservations, some general observations may be made about the nature of the
various components of health services in the different types of country. These
will help us to understand the different patterns of organisation of medical care
under social security systems.
In the industrialised countries the medical profession has generally had a
long history, its numbers in proportion to the population as a whole are relatively large, and its traditions as a liberal calling are deep. Long before the
advent of social security schemes, the large cities and even the smaller towns
were served by doctors in private practice. The market for the sale of private
medical service—either through personal purchase or through voluntary
insurance—was relatively well developed. Legislation for the licensing of
physicians has long been in effect, and medical performance has been further
influenced by self-imposed ethical precepts. Specialisation in medicine is highly
developed. The nursing profession has evolved to carry out innumerable tasks
under the doctor's direction, and a wide range of technical and auxiliary
personnel have been trained.
Hospitals and other health facilities in the industrialised countries have
also been constructed on a large scale. All the main cities are served, as are
most small towns, and transport from rural districts is more or less feasible.
The hospitals have been built mainly by local bodies—religious, voluntary nonsectarian or governmental—and continue to be operated by those bodies. A
great variety of other voluntary bodies tackle specific health problems.
With notable exceptions in certain districts, the general level of literacy
in the industrialised countries is high. Local government tends to be strong,
and there are powerful pressures for local autonomy in the daily affairs
of living. People participate widely in various social welfare organisations,
and expectations for a steadily rising standard of living are high. Although,
of course, there are class conflicts which are expressed in the political arena,
gradual improvements in the life of industrial and agricultural workers tend to
soften their impact. [90]
In the developing countries, the general picture is very different. The
scientific medical profession has a shorter tradition and its numbers as a ratio
to population are much smaller. In several developing countries the supply of
doctors is so low as to make medical service completely out of the question for
the vast majority of the population. The doctors are heavily concentrated in
a few large cities, so that vast rural populations are totally outside the reach of
a single physician. The market of private medical practice is quite restricted,
confined usually to a minority of the population in the larger cities.

26

ORGANISATION OF MEDICAL CARE

The doctor's effectiveness in hospitals or outside them is further limited by
the lack of nurses and physicians. There is little specialisation, as the vast
majority of doctors are general practitioners. Since physicians are so few, a
much greater role is played by primitive healers. Private pharmacies are relatively important, since people go to them directly for medical advice as well as
medications. A large share of ambulatory care is provided in health centres
staffed by salaried personnel.
Hospitals in the developing countries are relatively fewer and less well
equipped than in the industrialised countries. The bed supply as a ratio to
population is much lower, especially in rural regions, where there are sometimes
no hospitals at all. While a number of fine hospitals have been built in recent
years, most of the existing hospitals were constructed in an earlier period when
large impersonal wards characterised hospital design. Most of the hospital
beds are under the control of central government bodies, and there is little local
autonomy.
The general level of education in the developing countries, like the income
per head, is low, so that social participation is not highly developed. Under
these circumstances central government tends to be far more dominant than
local. Voluntary health agencies exist, but they often depend on government
subsidy for their survival. There are pronounced class differences between the
peasantry, the urban proletariat, and the middle and upper classes, the last two
representing a relatively small proportion of the population as a whole. A
white-collar worker, for example, objects to being treated in the same hospital
as a manual worker—let alone in the same hospital room.
While over-simplified, these two pictures of the medical and social scene
in the industrialised and developing countries may convey the essential differences between them. The situation is, however, obviously not static. It is
changing rapidly as new technology and new social ideas are being introduced
in both kinds of country. Most of these changes come about gradually, through
economic and political processes, through dissemination of ideas between countries and through effective local leadership. Some changes come about by
revolution, however, when one class in a country wrests the central power from
another and the entire social framework is radically altered. In the past 50 years
social revolutions have taken place mainly in agricultural countries and have
led to large-scale national planning and relatively rapid industrialisation.
The extent of their territory and the size of their population may also
affect both industrialised and developing countries. A small country of either
type is faced with different logistic problems in providing medical care than is
a larger one. A very large country normally requires a second echelon of
government or even a third between central and purely local authorities. In
India and Canada, which have vast land areas, much authority is delegated to

THE BASES OF MEDICAL CARE ORGANISATION

27

the provinces, while in Ecuador and Tunisia government powers are more centralised. But a country's political system, however, may not necessarily be
determined by its geographical characteristics. The traditions and political
structure of Belgium, despite its small territory, have led to much local autonomy, whereas Poland, with a much larger land area, has great centralisation of
powers. In all countries, however, the problems of size and communication require administrative machinery at the community level where people are served.
B.

BASIC PATTERNS OF MEDICAL CARE ORGANISATION:
INDIRECT AND DIRECT

A general survey of the various medical care schemes under social security
in different countries suggests that two broad patterns can be identified—the
indirect and the direct. The organisation of medical care for a population
mainly through purchase of services from already existing personnel and facilities may be described as an indirect pattern of organisation. The providers of
service have retained their professional independence, but they enter into agreements to serve beneficiaries under specified circumstances. By contrast, under
the direct pattern of medical care, services are provided directly by the personnel
and facilities of the social security scheme itself. These resources are part of
the system and are controlled in their daily operation by a hierarchical structure.
These two broad patterns may have numerous variants, and a combination
of them may be found even in the same country with respect to the different
components of health service—physician's care, hospitalisation, drugs, etc.—
and different population groups—industrial workers, government employees,
miners, etc. The division chosen may, however, help us to classify the various
schemes so that their different results can be evaluated.
The indirect pattern has in the past usually evolved in the older industrialised countries where, as we have noted, a large "establishment" of private
professional personnel and autonomous local facilities already existed when
social security schemes werefirstlaunched. The direct pattern is more frequent
in the developing countries, where the basic medical resources have been relatively poor. In either type óf economy countries with more centrally planned
political structures are more likely to adopt the direct pattern. These generalisations require numerous qualifications in specific countries, however, and with
respect to specific health service components or population groups served.
This is particularly the case as regards the services of general physicians, but
it applies equally to specialist care, hospitalisation, drugs, dental care and the
other components of health service.
Thus, to assure general physician services under the indirect pattern, the
medical care agency makes arrangements for individual doctors already in

28

ORGANISATION OF MEDICAL CARE

private practice to serve designated persons. The forms of these arrangements
may differ. While the practitioner is a free agent and usually owns or rents
his quarters, he may sell his services by different mechanisms. The commonest
method is to charge a fee for each medical service performed; this is known as
the "fee-for-service" method. A specific price is charged for an office consultation, for a domiciliary visit, for an injection, for a proctoscopic examination,
lor the application of a splint, etc. There may be a uniform price or fee for
each item of service by all physicians, or the fee may beflexibleon the basis of
the "customary charges" of each physician, speciality qualifications or other
variables. It is common for the medical care agency (usually on negotiation with representatives of the private doctors) to publish a "fee schedule" or "nomenclature" recording these fees. Sometimes the fee schedule
simply lists units "of value, with varying weights for each medical procedure,
allowing the amount of money per unit to be redetermined each year under
changing economic circumstances. Such fee schedules may be followed in
the purely private practice of a doctor as well as in his relations to an organised scheme.
Fees may be paid in two different ways. They may be paid directly by the
medicsFéare agency to the doctor on behalf of the patient. Such "fee payment"
may constitute the full charge for the medical service or it may be a substantial
portion of the charge to which the patient must add a supplement. (This
"cost-sharing" mechanism will be discussed later.) Alternatively, the fee may be
a liabilityoFthe patient, who pays it to the doctor and then seeks reimbursement
from the medical care agency. This method may compensate the patient
completely for his payment to the doctor or only partially, depending on the
cost-sharing requirements and the degree to which the doctor abides by the
official fee schedule. In some countries this is known as the "indemnification
method" of medical care remuneration, and there are numerous variations in
reoperation. [60]
A method of medical remuneration less widely used than fee for service is
the "capitation method". Unlike fee for service the method can only really
operate in an organised scheme, for its workability depends on the correct calculation of the average cost per patient. Under the capitation method the doctor (or other provider of health service) is paid a fixed amount for each period
(usually a month) during which he takes responsibility for a patient. Each
doctor has a panel of, say, 2,000 or 3,000 persons whom he has agreed to serve,
so that this is sometimes called the "panel system". The capitation method may
impose a maximum size of panel for which a doctor may take responsibility,
in the interest of quality protection. Even where this method is applied, the
doctor may be paid special fees for selected services outside the ordinary range
of medical practice.

THE BASES OF MEDICAL CARE ORGANISATION

29

A third method of remuneration is by salary. Basically, the doctor or
other provider of health service is paid for the value of his time, regardless
of the number of medical acts performed or the number of persons under his
responsibility. This method is far more widely used in the direct pattern of
medical care organisation discussed below, but it may also be used in the indirect pattern. For example, it may be applied in a group practice clinic for the
remuneration of individual physicians, although the clinic as a whole is paid
by the fee-for-service or the capitation method. It may also be used in hospitals,
which engage doctors on a salary, while the hospital as a whole bears an independent or indirect-pattern relationship to the medical care organisation.
Salaries may be full-time or part-time, depending on the number of hours in
the day or week that the doctor devotes to the organised scheme.
These three methods of remuneration may be adopted, with some modifications, for other types of health personnel in a medical care scheme. Dentists,
optometrists and other health personnel having independent practices may
agree to serve designated populations by fee for service, capitation or salary.
The different methods may also, in a sense, apply to hospitals. The hospital
may charge a medical care scheme for each service rendered to a hospitalised
patient (fee for_se£vice), for each person hospitalised during a month or year
(capitalicen), or for readiness to serve any patient who comes over a period of
time (salary). Different accounting terms are applied to such hospital payment
methods, but the concepts are parallel.
This discussion of methods of payment for services in an indirect pattern
of medical care organisation is relevant not simply from the financial viewpoint,
but also because the different methods reflect different relationships between
personnel and facilities and the organised scheme and different forms of assumption of responsibility for patients. There is much evidence, moreover, that
the various means of financing discussed above create different incentives, each
of which encourages a certain type of medical performance. This is a complex
matter on which empirical findings will be reported in later chapters.
In contrast to the above "open" administrative system, the direct pattern
of medical care organisation is a "closed" system with its own internal personnel
and facilities. The physical facilities for both hospital and ambulatory care are
owned and controlled by the agency. The latter invariably possesses some
administrative framework designed to make the most efficient use of the resources. Under the indirect pattern, too, each hospital has its own administrative framework, but there is seldom an administration covering a network of
hospitals for a whole geographic region as under the direct pattern. In ambulatory service the differences are more striking, with the doctors and other
health personnel working in a smaller number of organised centres rather than
in multiple independent private offices.

30

ORGANISATION OF MEDICAL CARE

The method of remuneration of personnel under the direct pattern is nearly
always by salary, that is for the value of their time. Salaries are based on various
criteria of skill, training, experience, seniority and responsibility. With this
method the approbation of colleagues and superiors, rather than the attraction
of many patients, provides the incentive to diligent work. Higher earnings are
achieved not for quantitative output but for the general quality of services provided according to certain technical criteria. Indeed, when financial rewards
are not tied to each item of medical service provided or to each person on a
panel, performance becomes more generally influenced by the over-all organisational framework, on whose structural and functional soundness everything
depends. Under the direct pattern personnel may be employed on a full-time
or a part-time basis.
~
"
The~3iréct pattern may, of course, apply to dental, pharmaceutical, home
nursing and other health services. In fact, the integration of these allied services with those of physicians can be much closer than in the indirect pattern.
Thus a pharmacy or a dental unit may be part of a health centre or polyclinic,
where the personnel can keep in close communication with each other and where
the total needs of the patient can be met.
The entire pattern of direct medical care organisation may apply to systems
of social security which are financed by traditional methods. It is also found in
schemes coming under the wider definition of "social security" referred to in
Chapter 1—operated by central ministries of health and supported by general
revenues. In some countries a social insurance scheme may assure medical care
for its beneficiaries not by management of its own resources but by a general
contract with the ministry of health, which already operates a medical care
scheme under the direct pattern. This integration may have many advantages in
economy and speed of achievement of health, service objectives. Thus, the
direct pattern of medical care organisation may really be of two types : either
under the management of a social security scheme or under a contract with a
ministry of health. In either instance it is quite distinguishable from the indirect
pattern.
C.

THE COUNTRIES EXAMINED IN THIS STUDY

The eight countries examined in this study illustrate all the variations of
medical care patterns outlined above. In this chapter we shall confine ourselves
to a general review of the medical care schemes in each country, while the
details of specific components of service coming under social security systems
will be explored in the chapters that follow. 1
1
These capsule sketches are based on the eight national monographs referred to in the
Introduction.

THE BASES OF MEDICAL CARE ORGANISATION

31

Belgium.
This industrialised country of Europe demonstrates the operation of a
medical care scheme using the indirect pattern for all components of health
service. The great majority of the population are enrolled in local mutual
benefitj:ìr>f'iptip<!J as required by law, and these societies receive money collected in the form of social insurance premiums by the National Institute for
Sickness and Invalidity Insurance. The benefits are comprehensive. Protected
persons have free choice of any private doctor, either general practitioner or
specialist. Medical care is provided on a cost-sharing basis, with the patient
paying about 25 per cent, of the fee as listed on an official fee schedule, and the
balance of 75 per cent, being reimbursed by the mutual benefit society. Similar
arrangements apply to the procurement of dental care and prescribed drugs
obtained at private pharmacies. For hospitalisation there is no cost sharing,
and the local benefit society pays the hospital according to a negotiated per
diem charge. The patient has free choice of hospital and usually goes to one
where a private specialist attends him, though he may use a hospital with a
"closed staff" of salaried physicians. The hospitals are owned and operated by
voluntary bodies or local units of government. The whole system stresses local
autonomy of the providers of service and attaches great importance to the
privacy of the doctor-patient relationship. Mutual benefit societies are grouped
into federations along religious or political lines, but there is little integration
with the public health administrative structure of the nation.
Federal Republic of Germany.
Another form of the indirect pattern of medical care organisation is
demonstrated by this larger industrialised country of Europe, which pioneered
social insurance in the nineteenth century. About 87 per cent, of the population
are compulsorily registered in local sickness insurance funds which are regulated
by both national and provincial laws. General physician's care is obtained on
the "free choice" principle, but there is no cost sharing. Specialists are usually
seen on referral. The doctor is paid on a fee-for-service basis by his association
of doctors, which in turn is paid by the local sickness fund to which the patient
belongs. Similar arrangements apply to dental care and to prescribed drugs,
although the patient makes a small personal payment towards the cost of each
prescription. Hospitals are generally run by local governments and have
their own staffs of salaried physicians. The regulations governing the operation
of the whole system are rather intricate, and there are special provisions for
sickness funds covering different classes of persons (industrial workers,
farmers, miners, government employees, etc.). There are few relationships
between the sickness funds and the public health authorities. Controls over

32

ORGANISATION OF MEDICAL CARE

the quality and costs of care are exercised through various statistical systems
at the level of the Länder.
Canada.
In this industrialised but thinly settled country of North America there is
a national system of social security for general hospital care covering almost
the entire population. It is financed by federal grants to the ten provinces,
roughly matching funds which they must raise by taxes of some sort. The
hospitals operate autonomously under the indirect pattern. National and
provincial minimum standards are stipulated for hospital service, but this does
not usually include the services of physicians (except pathologists or radiologists who are employed by the hospital). In several provinces, however, there
are separate insurance schemes for physician's care—both ambulatory and
in-patient—and in one, Saskatchewan, insurance is obligatory for the entire
population. In the Saskatchewan scheme, free choice of doctor and fee-forservice payment are the rule, but specialists receive higher level fees only if the
patient has been referred by a general practitioner. The hospital insurance
scheme is administered nationally by the public health authority (Ministry of
National Health and Welfare), and usually by separate commissions in the
provinces, though in a few of the latter the Health Department is responsible
for hospital insurance administration. The hospitals are paid by the provincial
authorities according to a formula based partly on costs per patient per day
but mainly on the fixed costs of operation for the year.
United Kingdom.
This densely populated industrialised country was chosen for study because
it demonstrates a universal-coverage national health service offering wide
benefits, which evolved from a former social insurance scheme of limited
coverage and benefits. For general practitioner care it uses the indirect pattern
with capitation payment. For dental care, optician services and drugs the
indirect pattern is also followed, but with fee-for-service payment; the beneficiary shares some of the costs. Specialist care and hospitalisation follow the
direct pattern. The scheme is administered by three parallel networks of authorities, all of which are subordinate to the Ministry of Health. For ambulance services, home nursing, and all the community preventive services the
local public health autfiorities are responsible. A network of local Executive
Councils is responsible for general practitioner, dental, optical and pharmaceutical services. The hospital and specialist services, applying the direct
pattern, are administered by a relatively small number (14) of Regional Hospital
Boards with wide authority for both construction and operation of all types of

THE BASES OF MEDICAL CARE ORGANISATION

33

hospital, general and special, within their regions. Teaching hospitals affiliated
with universities, however, have separate Boards of Governors in England and
Wales. A small number of people seek care, mainly from specialists, as private
patients outside the National Health Service, but the vast majority have their
total health needs met within it.
Ecuador.
This developing country of Latin America has established a social security
system providing medical care for a small fraction of its population. Industrial
and related workers, amounting to about 5 per cent, of the population, are
served by a direct pattern in which both ambulatory and hospital services are
furnished from organised facilities owned and operated by the National Social
Welfare Institute. General practitioners and specialists are all on part-time or
full-time salaries, and they work in a network of health centres, larger polyclinics and hospitals. Drugs are provided at pharmacies attached to these
facilities. Controls over quality and costs are exercised entirely within the
system, which comes under the general supervision of the Ministry of Social
Welfare but is quite separate from the Bureau of Health. Some liaison is
maintained with the public health authorities, however, in preventive campaigns
and for the joint operation of health centres at certain rural locations. The
general supply of personnel and facilities in the country is relatively low, but
the beneficiaries of the social security scheme are served by much better ratios
of these resources than the rest of the population.
India.
This large developing country of Asia has launched a social security
scheme for 13 million of its 500 million population. Physician's care is provided
by the indirect pattern with capitation payment (in several of the large cities)
and the direct pattern with salaried personnel (in health centres elsewhere).
This is also the case for the distribution of drugs. In the direct-pattern areas,
however, the Employees' State Insurance Corporation (E.S.I.C), which
administers the scheme, does not employ the physicians and other personnel
itself, but contracts with the provincial public health authorities which engage
these personnel under the general civil service. Hospital services are also
offered under both direct and indirect patterns (though the areas in which
these are applied do not necessarily coincide with the corresponding areas for
general practitioner care). In the direct-pattern hospital areas E.S.I.C. builds
and runs its own facilities, and in the other areas it reserves beds in existing
public hospitals, paying for the care on a per diem basis. In an extremely poor
country like India, with a predominantly rural population and severe shortages

34

ORGANISATION OF MEDICAL CARE

of all health personnel facilities, the operation of the two organisational patterns
side by side gives valuable opportunities for comparing their relative effects.
In general it has been found that the exercise of cost and quality control is
more difficult in the indirect-pattern areas.
Tunisia.
As a small developing country in North Africa, Tunisia illustrates the
approach to the organisation of a social security medical care system taken
by a former colony which has won its independence. Certain government
employees had previously been protected by an indirect pattern of medical
care designed along the lines of the French system. In 1960 a scheme using
the direct pattern of organisation was launched for industrial and related
workers and their dependants, constituting about 14 per cent, of the population.
Rather than building its own facilities and engaging its own personnel, however,
the National Social Security Fund entered into a general contract with the
Secretariat of State for Public Health to provide comprehensive services. These
are given through the Secretariat's regional networks of hospitals and health
centres. The physicians are usually on full-time salaries in the hospitals and
part-time salaries in the ambulatory units. Drugs are dispensed at organised
public pharmacies, but the supply of dentists is too low to provide much dental
service. The over-all health resources of Tunisia are still very limited, but the
integrated approach described above has the effect of strengthening the general
health service system of the country while setting up a social security scheme
for a designated population. Although persons protected under the social
security scheme have priority attention in the Ministry's facilities, the rest of
the population is served by the same resources.
Poland.
This Eastern European country illustrates the approach of a fully socialist
nation, which completely reorganised its health service after the massive
destruction of the Second World War and following the reconstruction period
of 1946-50. Social security coverage, which was formerly restricted to certain
industrial workers, has now been extended to about 70 per cent, of the population, and all health services have been converted to the direct pattern under
the responsibility of the Ministry of Health and Social Welfare. A network
of provincial, regional and district hospitals and health centres is operated;
all preventive and curative services are given by a unified staff. There are
special clinics for children in the schools and for workers in the factories.
Protected persons receive all ambulatory and hospital care without payments,
except a share of drug costs ; non-protected persons obtain care at the same

THE BASES OF MEDICAL CARE ORGANISATION

35

facilities, but must pay about 50 per cent, of the estimated costs. All physicians
and other health personnel are salaried ; the obligatory working day for doctors
is seven hours, after which private practice is permitted. There is no financial
interdependence between the Central Insurance Board and the Ministry of
Health and Social Welfare. The latter is responsible not only for all health
services in the country, but also for the supervision of medical schools and
other institutions for training and research.
*

*

This extremely simplified review may be enough to show the essential
differences in patterns of medical care organisation among the eight countries
examined in this study. Within the broad outlines just sketched there are
many variations and exceptions. In a sense it is rash to attempt a general
description of the medical care system of even one country, let alone eight,
since each country has special arrangements for selected population groups,
selected geographical areas or certain types of disease. If we wish to plan
intelligently, however, some classification and analysis are necessary, given
the complexity of the subject, in order to compare the results achieved by
different approaches to medical care. The criteria for such classifications
will now be considered.
D.

EVALUATION OF DIFFERENT MEDICAL CARE PATTERNS

Evaluations require objective comparisons; only by such comparisons
can one conclude that one system is "better" than another under defined
circumstances and by defined criteria. The clinical scientist judges one drug
to be better than another, or one surgical procedure to be more successful than
another, by comparing the rate of recovery of cases treated by the two methods.
Medico-social research is more difficult, because the secondary variables are
more numerous and harder to adjust for, but the basic research methodology
is the same and certain criteria can still be posed forjudging the success achieved
by a system. Data corresponding to these criteria may be difficult to obtain,
but a number of types of measurements may be suggested, on some of which
comparative information may be available. [40]
Quantity of Services Provided.
The volume of various types of medical service provided under a scheme
may be measured. By calculating these as a rate in relation to population over
a given time period (e.g. medical consultations per 1,000 protected persons
per year), comparisons can be drawn between medical care systems. Such

36

ORGANISATION OF MEDICAL CARE

measurements may be tabulated for different classes of service—medical,
pharmaceutical, dental, hospitalisation, etc. Great caution must be exercised
when statistics are compared, for account has to be taken of the demographic
composition of the populations involved. The biological liabilities to disease
—quite aside from the medical care system—obviously differ from one age
group to another or according to different physical and social environments,
etc., so that comparisons must adjust for these before differences can be attributed to a pattern of medical care.
One cannot blithely conclude, moreover, that a higher rate of medical
services, even with all variables adjusted for, is evidence of a "better" result.
For some items it may have an opposite meaning—for example the rate of
performance of surgical operations of dubious value (such as suspension of
the uterus or tonsillectomy). In general, however, the quantitative rate of
services has significance for comparative evaluation, if properly interpreted.
In developing countries especially, where gross deficiencies in scientific medical
service are common, a higher rate of contacts between patient and medical
care provider is generally a positive sign.
Technical Quality of Services.
To some extent quantity of service also reflects quality, in that some
medical service is probably better than none. A more precise way of measuring
quality, however, is to determine the degree to which a specific service coincides
with the best application of medical science; such measurements may be
expressed numerically. There are numerous ways of judging quality, usually
involving the observations of acknowledged experts.
Quality of medical care may be measured at a series of levels, the details
of which will be considered in Chapter 15. A specialist in medicine, for
example, may usually be presumed to render a higher quality of service in his
field than a general practitioner. The use of laboratory and X-ray facilities
may generally be presumed to facilitate better-quality diagnoses. The ultimate
question, of course, is the recovery of the patient, but various prior links in
the chain of causation may be presumed to lead to a greater or lesser likelihood
of such recovery.
Personal Features of Services.
Medical care is an intimate activity, and the degree to which it meets the
purely personal needs of patients is important. A disease may prove to be
incurable on the one hand, or self-limited and spontaneously overcome on the
other. In either instance the feelings of the patient are important and he will,
for instance, appreciate a system which does not keep him waiting uncomfortably

THE BASES OF MEDICAL CARE ORGANISATION

37

for too long a time before he receives attention, which respects his human dignity,
and which allows him some privacy when he is in hospital. [31]
Such features of a medical care scheme depend in part on the amplitude
of facilities and the number of personnel. If a system is overloaded, there
may simply be too little time to treat patients with dignity. The operational
statistics in themselves, therefore, will give valuable indications regarding the
quality of personal service provided under a system.
Attitudes of Patients.
Whether the above information is available or not, data may be gathered
on the attitude of patients towards the medical care system. This may be done
by '.¿¿pinion surveys"—a rather expensive procedure—or by routine questioning
of the patients regarding their reactions after a period of hospitalisation or
other service. Attitudes may also be gauged from an analysis of specific
grievances that are presented.
It must, however, be recognised that attitudes, whether favourable or
unfavourable, may be influenced by features of the general environment over
which the medical care scheme has no control. A social security system that
is popular for larger political reasons may induce favourable attitudes towards
the medical care it provides, or vice versa. Moreover, the attitudes of patients
may not correspond to the judgment of experts on the quality of service.
Attitudes of Providers of Service.
The effectiveness of any medical care scheme depends on the diligent
efforts of doctors and other providers of service. Hostility towards the organisation may result in deficient care of beneficiaries. It is important, thefefore,
to include the attitudes of providers of service among the criteria for evaluating
the success of the system.
Attitudes of providers of service, like those of patients, may be ascertained
either by surveys or by tabulation of grievances. More often, however, they
are evident in the administrative relationships between the personnel and the
central authority running the scheme. Physicians, in particular, tend to guard
their professional independence jealously all over the world, and often enter
into conflict with any organisation that puts restraints upon them, even if
those restraints are clearly in the interest of promoting widely accepted scientific standards. Such restraints may operate under both the indirect pattern
of medical care and the direct pattern. While they tend to be more pervasive
in the latter, they may be more vexing in the former, since the physician who
practises independently is less in the habit of expecting restraints. Under
either arrangement, however, the attitudes of the providers of medical service
towards the system are an important criterion.

38

ORGANISATION OF MEDICAL CARE

Geographical Coverage and Medical Care.
Related to the first criterion (quantity of services provided) is the degree
to which a medical care scheme reaches persons living in remote geographical
regions. This criterion is particularly important in the developing* countries.
One system may be more effective than another in bringing services to people
living in isolated rural areas. The total rate of provision of medical services for
a population protected under a social security scheme may be high, but the
distribution of these services might be very uneven. Urban dwellers might
receive almost a luxury level of care, while rural dwellers might get services
only in dire emergencies.
Cost of the Service.
Consideration of cost is another important criterion. No country has
unlimited economic resources, and money spent on one purpose cannot be
used for another; if it is wasted on a medical care scheme some other social
goal may be obstructed. In most medical care schemes there are absolute
limits on the funds available, determined usually by forces outside the scheme—
competing demands in the social security system, other government requirements, the affluence of the total economy, etc. The practical question therefore
is: how much service, in quantity and quality, can be obtained for a given
expenditure ? Different patterns of medical care organisation may yield very
different answers. [11
~-^
The service in which unit costs are lowest does not necessarily give the
best results. Sometimes long-term considerations of future development may
dictate short-term over-spending. The need to remain on good terms with
other bodies may counsel a certain extravagance in spending, to enable a medical
care scheme to get started or move ahead. The weighing of these considerations is known as a "cost-benefit analysis", which every medical care scheme
must undertake, either by rule of thumb or as part of a preconceived plan.
Whatever the type of benefits concerned, their cost can be calculated and compared under different patterns of organisation.
Results in Terms of Health Status.
The final criterion for measurement, and the ideal one, is the success of
a medical care scheme in terms of the lives saved and the number of people
restored to health. Rates of death or disability must, of course, be adjusted for
the nature of the diseases diagnosed, for age and sex, for social environment
and for all the other factors that may influence health other than the nature
of the medical services themselves.

THE BASES OF MEDICAL CARE ORGANISATION

39

Unfortunately, such measurements are extremely difficult to obtain for
populations under a medical care scheme. The demographic data necessary
for proper statistical adjustments are often simply not available. In specific
disease categories (such as certain forms of cancer) one may compute comparative mortality rates, but not know whether the initial incidence of the disease
was the same in the two populations being compared. The infant mortality
rates may be compared in the populations served by two different medical care
schemes, but great statistical refinements are necessary to compensate for
differences in the environmental influences on infant health in the two populations. It is usually necessary, therefore, to be satisfied with more modest
measurements of the success of the medical care scheme as reviewed above,
but it is to be hoped that statistical measurements of the "end-products" of
medical service may become more widely used as data-collecting techniques
improve. [97]
*
* *
In practice, the application of any of the above criteria is always difficult.
Even if data are available on the services themselves, there are often gaps in
the data on the numerous secondary variables necessary for statistical adjustment. Moreover, definitions of even simple items, like a laboratory test or a
pharmaceutical prescription, are often not uniform for different medical care
schemes.
Many of the comparisons of experience in the medical care systems of
different countries in the chapters that follow, therefore, must rely simply on
the opinion of informed observers, buttressed only by very crude data. The
most significant questions for long-term health service planning are linked
with the choice between the indirect and the direct patterns of medical care
organisation. Yet many of the comparative data mentioned above apply to
the operation of the two different systems in very different types of countries.
In a few instances there is information on the operation of the two patterns
within the same country, and these are especially valuable.
It must also be realised that the different sectors of medical care often
use different patterns of medical care organisation. Sometimes the general
physician's services may follow the indirect pattern, while specialist services
follow the direct pattern, as in the United Kingdom. Within one general
scheme of social security an indirect pattern of hospital service may be
applied in one locality and a direct pattern in another, as in some of
the Latin American countries. Different patterns of organisation may also be
applied to different occupational groups, as in the Federal Republic of Germany, where the direct pattern is applied for miners and the indirect pattern

40

ORGANISATION OF MEDICAL CARE

for other workers. The existence of a number of different provincial medical
care schemes, as in Canada, may make any generalisation about a whole
country most hazardous.
In the chapters that follow, therefore, the main focus will be on the operation of different patterns of medical care organisation, rather than on the
various countries as such. Although the eight countries under study were chosen
because they represented different patterns of organisation, the different national
settings inevitably influenced the operation of a theoretical pattern, and one
must attempt to take account of this in evaluating results.

PART II
COMPONENTS OF MEDICAL CARE

4. GENERAL PHYSICIAN'S CARE
An analysis of the operation of different patterns of medical care organisation must begin with the services of the general physician, not only because he
represents historically the oldest component in the health service system, but
because he is still the keystone in the arch of medical care. In any of the
different patterns of medical care he is usually the point of contact with the
patient from which most (though not all) paths to other services originate, and
theoretically—if not always in practice—it is he who keeps a check on the
workings of the whole system with regard to a particular patient.
In this chapter we shall analyse the subject of general physician's services
within the different organisational patterns of medical care outlined in the last
chapter. The detailed schemes of organisation will not be described, since
these have been presented in the eight national monographs on which this
volume is largely based. We shall confine ourselves first to considering the
nature of certain issues and problems associated with general physician's
services, and next to examining the various experiences which shed light on
these in the context of the different systems and patterns. In conclusion an
over-all evaluation will be offered.

A.

THE BASIC ISSUES AND PROBLEMS

The key position of the general practitioner in the complex network of
health services raises numerous questions about his relationships with patients
and how he carries out his tasks; these questions are arising with ever greater
urgency as the number of medical and surgical specialities increases. They
must be faced in every pattern of organisation, although the answers, will, of
course, differ.
A prominent issue is that of "free choice", i.e. whether the pattern permits
the patient to select his personal doctor. The exercise of such choice is said
to be desirable to give the patient confidence, by enabling him to choose a
doctor whose personality is attractive to him or who is of the same ethnic or
religious background. Free choice in an open market might also be expected
to stimulate diligence in the doctor, in order that he might attract more patients.

44

ORGANISATION OF MEDICAL CARE

On the other hand, patients are subject to serious fallacies of judgment about
medical skills, and in many rural areas the question of "choice" is purely
theoretical, with only one doctor available or even none.
After the general physician is seen, the question arises as to whether the
circumstances promote an effective relationship with the patient, and whether
the physical environment and time available are adequate for the personal as
well as technical requirements of good care. The criteria of quality discussed in
Chapter 3 depend on many circumstances, such as technical equipment, record
systems, opportunities for consultation, etc. There are important differences
in the availability of such resources, especially between individual medical
offices and larger clinics or health centres where doctors may work.
The method of remuneration of the general physician may exert many
influences on his medical behaviour, some of them quite subtle. The fee-forservice system may encourage multiplication of services and discourage referral
to specialists. The capitation system may lead to perfunctory care and excessive referrals. The details of fee schedules may encourage certain types of
procedures (e.g. injections) because they yield extra rewards. Salaries may lead
to impersonality if the doctor feels he is working for the system rather than the
patient. [64]
Communication among doctors is important. The pattern of organisation
should promote exchange of information between general practitioners and
specialists, and in some circumstances it is preferable for the patient to have
direct access to a specialist without screening by a general physician.
In nearly all countries there are fewer doctors than ideally needed. Training a doctor is a costly social investment, so that in all countries it is important
to make efficient use of medical time. If possible, the pattern should conserve
the doctor's time for tasks requiring his skill, delegating appropriate clinical
and other simple functions to auxiliary personnel. Moreover, his time should
be fully utilised in the early years of his professional life without his having
to build up a professional reputation before patients will come to see him.
Certain types of medical service may be uninteresting or burdensome for
the doctor yet important for the patient. Preventive health examinations and
immunisations may not be given unless special arrangements are made. Domiciliary visits take a lot of time. Certifications of disability in a social insurance
scheme (see Chapter 11) may strain the relationships between doctor and patient.
It is important that the general physician's work programme should permit
him to carry out these tasks effectively.
These are some of the special issues relating to the services of general
physicians. The more general questions of costs, geographic coverage and
attitudes of the patients and providers of medical service, discussed in Chapter 3,
are equally relevant. The ultimate issue is whether the pattern of organisation

GENERAL PHYSICIAN'S CARE

45

of general physician's services is conducive to the effective performance of his
central and co-ordinating role in the modern complex of medical care. [68]
We shall first examine the experience in the indirect pattern of medical
care organisation as defined in the last chapter. Under that pattern, general
physician's care may be remunerated by—
(a) fee-for-service payment of the doctor;
(b) fee-for-service reimbursement of the patient; or
(c) capitation payment of the doctor.
We shall then examine the direct pattern of organisation, with the physician
paid by full-time or part-time salary.
B.

INDIRECT PATTERN WITH FEE-FOR-SERVICE PAYMENT

General physicians in the industrialised countries have traditionally
practised in independent private offices or surgeries. When social insurance
schemes were launched in those countries, therefore, it was natural that they
should have been built upon the existing arrangements for ambulatory medical
service.
Federal Republic of Germany.
This was the basic administrative decision in Germany, where the first
social insurance scheme providing medical benefits for general non-occupational sickness was enacted in 1883. Over the years, both the population
coverage and the range of medical benefits have been broadened. [22] The
detailed organisational patterns have, of course, also changed, but in one
respect they remain the same: namely enrolment in the system is dependent
on a sickness fund (Krankenkasse). There are at present about 2,000 such
funds in the Federal Republic of Germany, through which some 87 per cent.
of the population obtain general physician's care. The different types of fund
(depending on the insured person's occupation, location or other features) and
their mode of operation are described in the monograph on the Federal Republic
of Germany. In some sickness funds, such as those for miners, general physician's care is provided through organised health centres (the direct pattern),
but in the great majority it is provided through private physicians' offices.
In 1965 about 85 per cent, of Federal German medical practitioners in
independent practice worked for the sickness funds, although they were also
free to engage in private practice. For this work they are paid on a fee-forservice basis, although the exact process of remuneration is not so simple. The
sickness funds enter into agreements with associations of sickness fund practi-

46

ORGANISATION OF MEDICAL CARE

tioners and pay to these associations periodic lump-sum payments in proportion to the number of persons they cover and the estimated average cost of
care per person. The doctors' associations in turn pay the individual physicians a fee for each service rendered to a protected person. The exact relationships of physicians to the sickness funds vary according to the different
categories of such funds but, in general, the relationship is indirect, through
the associations of doctors to which the individual practitioner has a contractual
obligation and from which he receives payment for his services. If the money
available in a calendar quarter is not enough to pay all the bills submitted by
the doctors to their association, they must accept a proportionate reduction of
all fees payable during that quarter.
Although patients in the Federal Republic of Germany have free choice
of general physician, there are certain restraints on this freedom. To prove
their eligibility for care they must obtain from their funds a sickness form
(Krankenschein), which authorises all the care they need from one physician
for a three-month period (the latter period had previously been defined as a
"case of illness", but this should not be confused with the clinical definition
of a "case"). If care must continue beyond three months the patient must
secure another sickness form. Within a three-month period the patient may
change his doctor only if he can justify his wish to do so on specific grounds.
Moreover, if a doctor at a long distance from the patient's home is chosen and
a domiciliary call is made, the travel expenses in excess of those of a nearby
doctor who might have been chosen must be paid by the patient.
The rate of utilisation of the services of both general doctors and specialists has steadily increased over the years. This can be seen from statistical
data on the number of sickness forms issued, which rose from 75 per 100 members in 1888 to 150 in 1924, to 391 in 1951 and to 527 in 1963. (The number
of forms applies to the insured persons plus dependants, while the base of 100
members applies only to the primary breadwinners.) This increase—which
is seen throughout the world—is due to many reasons : aging of the population,
extension in coverage of pensioners, increased potentialities of medical science,
heightened sensitivities of people about the value of medical care, easier transportation or access to physicians, and other factors. At the same time there
has been a relative decrease in the proportion of services sought from general
physicians as compared with specialists, and an increased tendency of patients
to seek care at hospital out-patient departments where a wide range of specialists are usually available.
The general satisfaction of the inhabitants of the Federal Republic of
Germany with their medical care schemes has been shown by attitude studies.
In 1958 the Federal Ministry of Health conducted a survey of gainfully employed persons, asking how many would discontinue their insurance if it became

GENERAL PHYSICIAN'S CARE

47

voluntary; over 90 per cent, said they would continue it anyway. Another
survey made by independent social scientists in 1964 found the same positive
attitudes. In 1965 the financial ceiling for earnings of salaried employees
coming under the social insurance scheme was raised by a new law; despite
the fact that the law allowed these higher-paid employees to exempt themselves
by joining a private (non-statutory) sickness insurance body, less than 2 per cent.
chose this course.
In spite of this evidence of widespread approval, complaints are also
voiced. Perhaps the commonest has been that "insured patients are not so
well cared for as private patients". In previous years doctors maintained
separate waiting-rooms for insured patients—generally of lower social status
than private patients—but this is now seldom done. The medical profession
strongly denies this charge of discriminating practice.
However, there are important consequences of the indirect pattern of
general physician's care with fee-for-service payment in the Federal Republic
of Germany which are not revealed in attitude surveys among patients. The
patient may be pleased that the full costs of his care are met by the sickness
fund, but the volume of that care may be excessive and therefore ultimately
wasteful of the patient's money. An interesting study of 95 general practitioners in one large city of the Federal Republic of Germany in 1966 disclosed
that physicians serving a smaller number of sick persons during a calendar
quarter provide a higher number of specific services per persons served. Thus,
those doctors seeing 2,500 to 3,000 persons per calendar quarter provided
5.06 services per person, those seeing 1,000 to 1,500 provided 6.24 services
and those seeing under 1,000 provided 8.90. Since there is no reason to expect
the busier doctors to attract the less seriously ill patients (indeed, the opposite
might reasonably be expected), it would seem likely that the fee-for-service
payment is inducing the less busy doctors to increase their services as much
as possible in order to augment their earnings. Sickness fund administrators
in the Federal Republic of Germany often speak of the problem of the "patienthunting doctor".
In order to avoid loss of fee payments some general physicians do not
readily refer patients to specialists. When they do the specialists may repeat
laboratory or other tests done recently by the general physician at needless
expense to the sickness fund. Another problem in the Federal German system
is the maldistribution of doctors between attractive and unattractive cities;
in the latter the population may be inadequately served, while in the former
the relative abundance of doctors may lead to an unsound multiplication of
services.
The administrative efficiency of the Federal German system is under
constant stress because of the complex network of relationships between

48

ORGANISATION OF MEDICAL CARE

individual doctors, the doctors' associations, the sickness funds, the associations
of sickness funds, and various governmental supervisory bodies. While after
80 years of operation the whole system has achieved a certain organisational
flow, it must obviously require enormous managerial energy and bureaucratic
paperwork to keep it going. The recurrent negotiations of fee schedules
between the medical associations and the federations of sickness funds are a
burdensome task, sometimes requiring the appointment of special boards of
arbitration to bring about agreements.
Canada.
The indirect pattern of general physician's care with fee-for-service payment is also used in Canada. In the ten provinces of this federated nation
there are great differences in statutory provisions for medical care, the details
of which are described in the monograph on Canada. Here we shall confine
ourselves to the experience of one province, Saskatchewan, which has instituted
the most extensive social security scheme providing physician's services to the
population. For some years Canada has had a nation-wide hospital insurance
scheme and on 1 July 1968 a national health insurance plan for physicians'
services came into effect under legislation which authorises the federal Government to contribute towards the cost incurred by the provinces for provincially
operated insurance medical care services under schemes meeting prescribed
standards. At the outset two provinces participated in the plan for physicians'
services.
Under the Saskatchewan Medical Care Plan general physician services
are given mainly by private physicians in individual offices, although a growing
proportion—perhaps about 20 per cent, at the present time—are in private
group practice clinics. All licensed physicians participate, and the patient
has free choice of doctor. The method of remuneration is complex, since four
separate mechanisms exist, depending on the wishes of the doctor and patient.
This arrangement was not in the original law but was the basis of settlement of
a doctors' strike that ushered in the beginning of the programme in 1962. [23]
The payment methods for physician's services are as follows :
(1) fee payment by the official medical care agency, on submission by the
doctor of a bill for services rendered;
(2) fee payment by an intermediary non-governmental agency, with which
the patient must be registered, the agency receiving reimbursement from
the governmental medical care agency;
(3) fee payment by the patient, who then seeks reimbursement from the
official medical care agency according to a fee schedule;

GENERAL PHYSICIAN'S CARE

49

(4) payment of a salary to physicians who serve in isolated and thinly settled
areas.
Except for the last payment method, which is very rarely used, all the methods
of remuneration are based on the fee-for-service principle; the third method,
however, involves reimbursement of the patient which may not be equivalent
to the charges actually made by the doctor.
There is no question about the general popularity of the medical care
scheme in Saskatchewan. Although its introduction was beset with controversy, its support by all major political parties at subsequent elections is
evidence of its widespread appeal. The free choice of all licensed doctors
makes care available to a widely scattered population, with less travel than
would be necessary if services were concentrated in a smaller number of organised medical establishments. All the usual claims of effective doctor-patient
relationships under this pattern are made about the Saskatchewan service.
Nevertheless, there is evidence that the fee-for-service payment method
can lead to the performance of unnecessary medical services. A study of
elective surgical procedures in Saskatchewan hospitals, conducted in 1955,
showed a vast range of different frequencies of these procedures in various
localities of the province. For appendectomies, for example, the rate in certain
places was as much as 27 times higher than in others—a difference that could
not possibly be explained by objective illness rates; it could only mean that
certain physicians were far more prone than others to perform this operation,
for which a substantial fee is payable. Similar differences were observable
for tonsillectomies, another elective procedure, the medical value of which is
often questionable. On the other hand, for obstetrical deliveries or traumatic
cases—conditions in which the nature of the case rather than medical judgment
would determine a hospital admission—the range of rates in different localities
was much narrower, the highest being only three or four times as much as the
lowest. [103, p. 112]
The office facilities of many general physicians in Saskatchewan are very
modest. Often unaided by a nurse or technician, the rural doctor must do
routine clerical or laboratory tasks himself. Since he usually practises alone,
he does not profit from the intellectual stimulation of colleagues. A warm
personal relationship may be formed with his patients, but the doctor's knowledge must often become obsolete, since he is either unable or unwilling to
undertake postgraduate studies. As for administrative efficiency, it is evident
from the brief account of the various payment methods given above that
elaborate machinery has had to be devised in order to meet the demands of
private doctors in this indirect pattern of organisation.

50

ORGANISATION OF MEDICAL CARE
C.

INDIRECT PATTERN WITH REIMBURSEMENT OF THE PATIENT

In certain countries the private practice of medicine has been so firmly
entrenched and the desire for independence on the part of the doctor so strong,
that social security schemes providing general medical care have been organised
with even fewer economic ties between the doctor and the official insurance
fund than those described above. In such countries the general physician is
paid for his services not by a third party, but by the patient, who then seeks
reimbursement, usually partial, from the insurance fund.
Belgium.
The above-mentioned form of the indirect pattern of general physician's
care is illustrated in Belgium. [145]
About 90 per cent, of the Belgian population are members of several
hundred relatively small mutual benefit societies, which are organised into six
national federations along political, religious or occupational lines. Much of
the administration is done by the federations, but relations with protected
persons are maintained by the mutual societies, which serve as the insurance
carriers. With few exceptions, the various insurance carriers reimburse the
payment for 75 per cent, of the doctor's fee according to a negotiated "nomenclature" or fee schedule. The balance of 25 per cent, is not reimbursed and
constitutes the ticket modérateur which is intended to discourage the patient
from making excessive demands for care. (This policy of cost-sharing for
various sectors of medical care will be discussed more fully in Chapter 16.)
In order to protect the patient from having to pay more than 25 per cent.
of the actual medical charges, negotiations are held at the national level
between the National Institute for Sickness and Invalidity Insurance and the
Belgian Medical Federation on the details of the official fee schedule. These
negotiations have often been long and difficult, resulting recently in a threatened
strike of doctors prevented at the last moment only by the intervention of the
Crown. Basically, the medical profession bargains, of course, for higher fees
in the official schedule, while the social security authorities attempt to keep
their costs down by keeping fees at a moderate level.
The Belgian reimbursement pattern gives both patient and doctor considerable freedom. The patient may go freely to any doctor he wishes, and
change doctors at any moment. He may see a specialist with the same freedom
as he may see a general practitioner; referral from the latter is not necessary.
Such free access to specialists may be economically wasteful or may even delay
proper medical management; it is defended, however, on the ground that
general practitioners do not voluntarily make referrals because they do not
wish to lose the patient and the fees.

GENERAL PHYSICIAN'S CARE

51

The free choice principle is strongly guarded in Belgium on the ground
that it is essential to assure the faith of the patient in his doctor. In rural
areas, however, where the number of doctors is few, it has little meaning. For
specialists, as mentioned, the patient's judgment is seldom reliable and may,
for instance, be influenced primarily by considerations of personality or ethnic
compatibility.
The fee schedule is intended to reward doctors in proportion to the time
and skill required for specific medical acts. While this theory doubtless has
some validity, it also has serious drawbacks. It is difficult to keep the items
in a fee schedule up to date, with medical knowledge and techniques changing
every day. Moreover, some physicians may be induced, in uncertain situations,
to favour the rendering of those services that command higher fees. These
points are, of course, open to discussion, but they are supported by the observations of Belgian social security experts.
The cost-sharing provisions of the Belgian scheme impose an economic
burden on patients at all times, even though this burden may be justified by
the considerations to be discussed in Chapter 16. More serious, however, has
been the frequent tendency in the past for general physicians in Belgium (and
in France) to exceed the fees published in the official schedule. The reimbursement of the patient by the insurance fund at a rate of 75 per cent, of the officially
listed charge may therefore yield only 50 per cent, or less of the amount he
actually paid the doctor. These economic pressures can cause serious hardships, which almost defeat the whole purpose of social security. They lead to
periodic renegotiation of the fee schedules, acrimonious debate and many
administrative complexities in achieving new agreements between insurance
carriers and the medical profession. In 1966 a new agreement on the fee
schedule was concluded which requires each doctor to spend three-quarters
of his time (32 hours a week) in practice for which he charges the official fee,
while in the remaining hours of the week he may charge insured patients
higher fees. It is obvious that this policy must result in uneven quality of
patient care, but it appeared to be the only way to settle the bitter argument.
One of the concessions in the agreement, however, was a provision that
widows, invalids, orphans, and pensioners with low incomes are assured care
at the official rates, without any cost sharing.
Statistical data on the quantity and quality of service received under the
Belgian reimbursement pattern of general physician's care are not available,
but the high ratio of doctors to population and their relatively high average
incomes suggest that the volume of services provided is large. Judging by the
attitudes of patients, complaints about the quality of care—whether justified
or not—have been few, but complaints about out-of-pocket costs have been
frequent. The attitudes of physicians can only be described as hostile, though

52

ORGANISATION OF MEDICAL CARE

the flexible 1966 agreement did bring about a certain détente. It is evident that
the reimbursement pattern of general physician's care engenders many problems in return for the "freedoms" that it assures.
D.

INDIRECT PATTERN WITH CAPITATION PAYMENT

The indirect pattern of general physician's care under social security,
as noted in Chapter 3, need not apply the fee-for-service method of remuneration, although that has been the commonest form. In the United Kingdom,
the Netherlands, and to some extent in India, the capitation method has been
used, and its consequences are very different from those just reviewed.
United Kingdom.
Free choice of personal doctor is assured in the United Kingdom, as is
freedom to change doctors (at 14 days' notice). The selection of a particular
doctor places the individual on this doctor's '^panel", the size of which determines the doctor's monthly remuneration frorrTthe Local Executive Council
of the National Health Service. The general practitioner thus becomes a
personal health counsellor to the patient, his first source of attention when
illness strikes, and the channel of referral to specialists when necessary.
Since no fee is lost by referral of the patient to a specialist, such referral
is not discouraged as under the fee-for-service mechanism. On the other
hand, referrals may be excessive. The general practitioner in the United
Kingdom has sometimes been belittled as a medical "traffic policeman" who
directs any patients with a serious symptom to one or another specialist.
With such frequent referrals, the general physician may lose his medical acumen
and can easily fall into professional stagnation. When a patient enters hospital
the general physician loses contact with the case, receiving a report only on
the patient's discharge. In recent years, however, efforts have been made to
bring the general practitioner into more contact with hospitals, especially
their out-patient departments, in order to provide him with scientific stimulation
and broaden his knowledge.
Over the years, many critical studies have been made of general practice
in the United Kingdom, in response to complaints about its allegedly poor
quality from doctors and patients alike. In 1950 Dr. Joseph Collings studied
a series of general practices which he considered to be, on the whole, of very
poor quality, giving perfunctory and superficial care. [36] On the other hand,
Dr. Stephen Taylor in 1954 reported observations of a larger series of practices
and found great merit in the sympathetic, dependable and comprehensive
view taken of patients by the majority of general physicians. [133] It is generally agreed, however, that in relation to the technical resources available to

GENERAL PHYSICIAN'S CARE

53

specialists—usually in hospitals (see Chapter 5)—those of the average general
practitioner are meagre. His office or "surgery" is usually poorly equipped,
he has very little ancillary staff, and he is nearly always pressed for time.
To make an adequate living he takes, on the average, about 2,300 persons on
his panel ; with a heavy demand for service, including time-consuming disability
certifications, he can give very little time per patient, so that thorough diagnostic
work and judicious therapy are seldom possible.
Much of the difficulty with general practice in the United Kingdom is due
not only to the method of remuneration, but to its net amount. With relatively
low annual earnings, the general physician has not been able to afford to staff
and equip an office according to modern scientific standards. He is tied to his
practice day and night, week-in and week-out, and can seldom get away for postgraduate studies. All this, of course, is related to the amount of money that the
National Health Service is willing to allocate for the general practice sector, and
also to the over-all supply of physicians in the country.
It is not surprising, therefore, that over the years there have been debates
and special investigations of the conditions and remuneration of general medical practice in the United Kingdom. In the early years of the National Health
Service general practitioners tended to earn less than dentists who were paid
on a fee-for-service basis. A series of increases in the amount of capitation
payments have therefore been made over the years, the latest, a substantial one,
being in 1966. There have also been changes in the mechanism of remuneration,
including special allowances for general physicians based on seniority, location
in certain areas of need, postgraduate training, and practice in professional
groups ; extra payments, on a fee basis, for preventive services (immunisations
and prenatal care), for domiciliary visits at night, for giving anaesthetics, for
stopping dental haemorrhages, etc. ; and larger capitation payments for elderly
persons (65 years and over) who usually require more service. These new provisions are obviously intended not only to reward harder work, but also to
improve the quality of service offered by general practitioners.
In the original planning of the United Kingdom National Health Service
it had been intended to channel general medical practitioners into governmentadministered health centres. In these centres, while payment would still presumably be made on a capitation basis (rather than by direct salary), the doctors would be aided by numerous ancillary personnel, by scientific equipment,
and by close association with other physicians. For many reasons, however
—related both to the individualism of the doctors and the frugality of the
Government in constructing the centres—this general plan did not materialise.
Instead, some of the same objectives were achieved, perhaps at a more modest
level, through the voluntary formation of group practices by the doctors themselves. These group practices of general practitioners (unlike the United

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ORGANISATION OF MEDICAL CARE

States and Canadian pattern of group practices consisting of teams of specialists) permit engagement of ancillary personnel, coverage of one doctor's
work by another during holidays, some slight semi-specialisation (e.g. in child
care, minor surgery, etc.), and numerous other advantages of medical teamwork.
In addition to the recentfinancialinducements towards group practice mentioned
above, the Government had made special grants earlier for construction or
renovation of premises for the same purpose. Thus, small group practices of
general physicians, organised as private partnerships, have grown rapidly in the
United Kingdom, maintaining the "indirect pattern" of service in a slightly
modified form. It is estimated that a majority of general physicians are now
practising in such units or at least in some form of shared office facilities, rather
than on their own. In the last few years, however, interest in government
health centres has been renewed, and a number of these have been constructed
by local authorities which are renting space in them to individual doctors. [83]
Evaluation of the capitation payment method under the indirect pattern
has been attempted for many years, and is not easy. In contrast to the fee-forservice payment method for general physician's care, it is said to encourage
prevention of disease, rather than creating financial incentives for over-treatment. Attractive as this theory may be, however, there is little objective evidence
of it in practice; indeed, the recent introduction of special fee payments to
general practitioners for preventive services would seem to suggest that such
services are not spontaneously provided very often. On the other hand, the
capitation method clearly diminishes over-treatment and may even lead to
perfunctory care. The chief hedge against the latter is the doctor's interest in
keeping up the size of his panel, which might decline if patients became dissatisfied and transferred to other doctors.
The adequacy of a pattern of general physician's care, like that of the
United Kingdom, is also reflected by the proportion of purely private medical
care sought by the population ouside the social security systsm. A survey of
14,580 general practitioners in 1956 revealed that 36 per cent, of them engaged
in some partial private practice and 10 per cent, of these regarded private service as their principal activity. [131] It would appear, therefore, that certain
dissatisfactions with the public service exist—probably the long queues and
perhaps hasty attention in some places—leading patients to seek private care
and pay for it. However, studies of the attitude of the general population to
the National Health Service, made by mass opinion survey techniques, have
repeatedly shown a very high level of general satisfaction. It is significant that
political parties of all ideological shades have supported the Service, with only
minor changes being made (e.g. in cost sharing for drugs) as power has passed
from the hands of one party to another. Any substantial dissatisfaction with
the quality of care rendered by doctors in the scheme might be reflected by

GENERAL PHYSICIAN'S CARE

55

purchase of private medical care insurance, which is sold in the United Kingdom; only about 3 per cent, of the population, however, has chosen to buy
such insurance, and much of this is simply for amenity services in hospitals.
As for the attitudes of physicians in the United Kingdom National Health
Service, there has obviously been great discontent among general practitioners,
particularly when they compare themselves with specialists. They have protested
vehemently about the low rates of remuneration which have prevented them from
setting up better-equipped "surgeries". They have also objected to the fact
that their social status is lower than that of specialists. These dissatisfactions,
as noted above, have led to a series of improvements in the incomes and working
conditions of general practitioners. These reforms, which are promoting greater
harmony, are associated with an increased organisation of general physician's
care along lines that closely resemble the "direct pattern" of service.
Quantitative measurements of the volume of service provided by general
practitioners in the United Kingdom are also difficult to obtain and assess. If
comparisons are attempted between different systems—such as that of the
United Kingdom compared with that of Sweden or the United States—serious
problems arise as to the precise definition of a "unit of service", the samples
of populations to be studied, and so on. Some partial studies already made,
however, suggest that the beneficiaries of the United Kingdom National Health
Service receive a relatively high volume of ambulatory medical care—approximately five specific services per person per year—which compares favourably
with the reported experience of Sweden and also of the United States, despite
the latter country's greater wealth. [143] Even domiciliary visits, which might
be expected to be infrequent under the capitation method, are reported to constitute about 20 per cent, of general physician's services—a remarkably high level.
India.
The indirect pattern of general physician's care, with capitation payment,
is used also in part of the social security system of India. About half of the
13 million beneficiaries (insured persons, plus dependants)—principally those
residing in the large cities of Calcutta and Bombay—are served by the indirect
pattern or "panel system". Since the other half of the protected population is
covered by the direct pattern of general physician's care and the trend in India
is towards a predominance of the latter, the experience gained with each of the
two patterns will be discussed below and the contrasts between them explored.
E.

DIRECT PATTERN} WITH FULL-TIME SALARIES

The direct pattern of general physician's care in a social security system is
associated with very different conditions and consequences than the various

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ORGANISATION OF MEDICAL CARE

indirect patterns just reviewed. As observed earlier, it has been more frequently
applied in the developing countries of lower national wealth, but it is also
common in industrialised countries with socialist political organisation. Basically, it has meant the provision of ambulatory and domiciliary care by general
physicians attached to organised facilities operated by social security agencies or
other public authorities.
The direct pattern operates differently according to the way physicians are
paid within it. Salaries, or payment for time (rather than units of service
rendered or the number of persons on a "panel") are the usual form of remuneration. These may be paid for varying proportions of this doctor's time; for
the purposes of the discussion we may consider "full-time" as being six hours
a day or more under the official scheme (even if private practice is not prohibited), and "part-time" as being less than this. The full-time salaried arrangement for general physician's care is illustrated in the social security systems of
Poland, Tunisia and India.
Poland.
In Poland beneficiaries get general physician's care through a network of
polyclinics and health centres operated directly by the Ministry of Health.
Rural districts have different types of facilities than cities, and in the latter there
are different types of facilities for industrial locationSjjcJaQjols-aad-general communities. 1 In all of these establishments, however, there are general physicians,
supported by nurses and other auxiliary personnel. In the larger units there
are specialists, whose services will be discussed in the next chapter. The general
physicians are responsible for personal disease prevention services (immunisations, periodic health examinations, health education, etc.) as well as day-today primary treatment of the sick. [70J
Each protected person is assigned to the facility nearest to where he lives
or works, and receives his initial medical care from the physicians in it. Thus
free choice of doctor is restricted, but within a clinic the patient may choose
among the several general physicians stationed there. For justified reasons,
furthermore, a patient may transfer to another clinic from the one to which he
has been assigned, but this is seldom done. An experiment was recently
carried out in Warsaw, permitting utterly free transfer from a certain district
clinic; only 6 per cent, of persons chose to make a change and most of these
were due to extraneous factors like transportation difficulties, rather than dissatisfaction with the care they had been getting.
Patients requiring complex diagnosis or treatment are referred to a specialist in the same establishment or—if it is in a rural or small-town location
1
For a detailed description of the different types of ambulatory care facility see the
I.L.O. monograph on Poland.

GENERAL PHYSICIAN'S CARE

57

without the proper specialist—to the nearest establishment employing such a
specialist. Since no loss of fees is involved, there is nothing to prevent such
referrals, except perhaps the personal pride of the general physician or a lack
of good transportation. Medical certifications of disability are also made out
by the general physicians.
General physicians, as well as all other personnel in the Polish scheme,
are paid by full-time salary based on a mandatory service of at least seven
hours a day. They may, if they choose, work up to ten hours a day, with
proportionate increase in salary. Most doctors, however, engage in some
private practice during the hours beyond seven, an arrangement which is legally
permitted. Private patients come either from the approximately 27 per cent.
of the population not covered by the social security scheme or from more
demanding patients within the scheme. These private patients, however, must
be seen in a private doctor's office (often in the physician's home) and not
in the public facility.
The level of salaries paid to doctors depends on their seniority, responsibilities, training and other factors. Supplements are paid for work at rural
locations, to encourage settlement there. Bonuses are also paid to physicians
at industrial locations for low absenteeism records in factories; while this is
intended to encourage active prophylactic measures, it has also been found to
lead to abuses, such as under-reporting or even under-diagnosing of illness. As
in the U.S.S.R., over Éalf of the doctors are'women; *Tfié*averagê~"net salaries
of doctors from the social security scheme are lower than those of professional
personnel in most other ministries (e.g. education, architecture, transportation,
etc.), but it seems likely that private earnings constitute a substantial supplement
to their usual official incomes.
Tunisia.
In Tunisia the medical care scheme under social security has evolved
from former schemes established under French sovereignty. There are four
separate schemes for medical care (one of them forindustrial injuries).1 Our
discussion here will focus on the principal scheme, which was set up after independence (Act 60/30 of 14 December 1960) and which covers 622,000 persons
or about 14 per cent, of the population. Since one of the other schemes (established in 1951, before independence, by the French) covers civil servants and
goyernment employées, the principal scheme covers mainly workers in private
industry, excluding agriculture, and their dependants.
The direct pattern for general physician's care is used, with services provided through a nation-wide network of hospitals and health centres. The
1

See the monograph on Tunisia.

58

ORGANISATION OF MEDICAL CARE

National Social Security Fund did not, however, set out to construct and operate its own facilities for health service, but chose a solution deemed more
rapid and appropriate for a new country faced with enormous social and
economic problems, including extreme shortages of trained medical and allied
personnel. The Fund entered into a contract with the Secretariat of State for
Public Health, which already operated a network of facilities, for services to
its beneficiaries. The substantial payments made by the Social Security Fund
to the Secretariat of State enabled the latter to engage many more physicians,
to expand its facilities, and generally to improve medical care for the ultimate
benefit of the entire nation, as well as for the immediate benefit of the insured
population.
General physician's care, as other sectors of medical service, is provided in
government facilities where all the personnel work on salaries. The government
network consists of regional hospitals, auxiliary hospitals, and "external services"
or dispensaries. The insured person may go to any of these establishments
that he wishes, but would ordinarily go to the one closest to his home. Within
the facility, he does not have free choice of doctor under the principal social
security scheme, although in the older and smaller social security schemes
(using the indirect pattern) set up by the French for civil servants the patient
is allowed to choose his own physician. In the government facility the general
physician is expected to give all preventive service required and all curative care
within his competence. For specialist care the patient must be referred to a
regional hospital.
The evolution of policies on medical salaries in the Tunisian scheme clearly
reflects some of the issues faced by direct-pattern systems everywhere in the world.
When the scheme was initiated in 1960, physicians were free to work any length
of time they wished, being paid by the month at a fixed amount per hour. In
1961, the "part-time reform" was introduced, requiring that every physician
appointed in the Ministry of Health must work at his official post at least three
hours a day. But this was not very successful, since most of the doctors preferred to devote the maximum possible time to their private practices and even
to cut corners on the three-hour schedule. In 1962, therefore, following a detailed investigation, the "full-time system" was introduced, with special incentive supplements to physicians who would agree to virtually abandon private
practice. All hospital doctors now work full time; part-time doctors are appointed only in dispensaries and only to the extent that full-time doctors are
not available. The "full-time" status nevertheless permits each physician to
spend two three-hour periods per week seeing private patients. Moreover,
unlike the Polish doctors, he may see these patients in the government premises.
Thesalary rates for both full-time and part-time physicians vary with seniority,
qualifications and responsibilities.

GENERAL PHYSICIAN'S CARE

59

Any judgment on the operational consequences of the Tunisian direct pattern of general physician's care must take account of the serious shortage of
medical personnel the nation faced on independence (with mass exodus of French
physicians and nurses) and which it still faces. Although, as discussed in Chapter 12, there has been a substantial improvement in Tunisian health manpower
resources in recent years, the quantity and quality of care are still compromised
by serious shortages. Data are not available on the volume of ambulatory services used by the insured population, but they are kept for the total of such
services provided to all persons coming to the hospitals or dispensaries run by
the Secretariat of State for Public Health. For the total population of about
4,500,000 there were 3,200,000 consultations offered in all the government facilitiesin 1965, or a rate of about 0.85 consultations per resident per year. Even
if the insured population received two or three times this national average, the
rate would still be low in comparison with that in the industrialised countries.
The difference, however, must be attributed to the ratio of health personnel to
the population, to inadequate transport facilities, to the lower cultural level of
the population as a whole, etc., in the developing countries, and not to the
pattern of medical care organisation as such.
Domiciliary visits are reported to be especially infrequent in the social
security scheme, owing mainly to the shortage of doctors. It is obvious that
several patients can be seen in a dispensary in the time required for a single
home call, so that very few of the latter can be expected in a country with
personnel shortages. For the same reason, the quality of care is bound to be
compromised by the pressure on the doctor's time.
In spite of the handicaps, the insured population in Tunisia is said to be
generally satisfied with the care provided. Even crowded clinics and long
waits are deemed to be better than conditions before the introduction of the
scheme. Evidence of its merits is seen in the increasing tendency of civil
servants covered by the older French scheme—with an indirect pattern of free
choice of private doctor, fee-for-service payment, and reimbursement method—•
to voluntarily seek care at the facilities run by the Secretariat of State for Public
Health. In these places, while civil servants must pay for services, the official
reimbursement covers the full charges (compared with only about one-half or
one-third of actual private charges in recent years), and they appreciate the
convenience of various specialists being available under a single roof. Sometimes salaried doctors in the public facilities are suspected of being less solicitous
of insured patients than of private patients whom they see. On the whole,
however, the 14 per cent, of Tunisians who are covered by the 1960 Act are
considered fortunate, and it is widely hoped that the direct-pattern medical
care scheme will soon be extended to the rest of the population.
Physicians, too, are said to be generally satisfied with the Tunisian social

60

ORGANISATION OF MEDICAL CARE

security scheme. They are pleased with the technical equipment and aids
provided in governmental facilities, which they could seldom afford in private
offices. Like doctors everywhere in the world, they are exerting pressure for
higher salaries, and the full-time doctors are demanding more time for extramural private practice. It is evident, however, that such concessions to the
private sector of physician's care can only be made at the expense of reducing
the resources in the public sector, since the total volume of medical manpower
available at any time is fixed.
India.
The social security scheme in India, as noted earlier, provides general
physician's care both by the indirect pattern, with capitation payment, and the
direct pattern. Our focus here will be on the latter section of the scheme,
with some comparisons between the two mechanisms operating in the same
nation. [65]
When India initiated its social security scheme providing medical care
for selected types of industrial workers in 1948, it faced a problem similar to
Tunisia's. The Employees' State Insurance Corporation (E.S.I.C), established
to administer the scheme soon after the country had obtained its independence
from the United Kingdom, had to make policy decisions in a context of vast
social distress and severe shortages of medical personnel and facilities. Its
basic decision was to favour the direct pattern of medical care, whenever this
could be implemented. In large cities, however, general physicians were
making a good living in private practice and could not be attracted in sufficient
numbers into employment in an organised scheme. In Bombay and Calcutta,
therefore, and a few other places, the indirect pattern was applied, with free
choice of private doctor and capitation payment. Beneficiaries in these cities
now constitute somewhat over half of the approximately 13 million insured
persons covered under the scheme. The fact that the whole scheme serves
only about 2.6 per cent, of India's vast population of some 500 million has
much influence on its basic methods of operation.
The direct pattern of medical care, covering the other half of the beneficiaries, might have been launched through establishment of new and separate
facilities, but E.S.I.C. chose to develop a scheme integrated with the general
services of the Ministry of Health. This is done through contracts made by
E.S.I.C. with the state governments; the latter hire the personnel and provide
the medical service, for which E.S.I.C. pays seven-eighths of the costs (the
remaining one-eighth of costs being paid out of the funds of the state governments and being regarded as a proper obligation to beneficiaries as citizens).
In addition, E.S.I.C. has constructed nearly 100 dispensaries (as well as numerous
hospitals, to be discussed later) throughout the nation, which are staffed

GENERAL PHYSICIAN'S CARE

61

by full-time salaried doctors. Since these doctors are not permitted to engage
in any private practice, they receive a supplementary "non-practising allowance"; otherwise their salaries are determined by the general schedule
followed in the official public health service of the relevant state government,
which generally gives increments for additional experience and qualifications.
The E.S.I.C. dispensaries provide equipment and auxiliary staff for minor
surgery, for laboratory examinations, and for distribution of pharmaceuticals.
Each dispensary has at least two general physicians on the staff and the larger
ones have more. Specialists are in regular contact with the dispensaries and
come on specified days for consultations, for which they are paid honoraria.
The patient does not ordinarily have free choice of doctor in the dispensaries,
except that a woman physician is always available, and female patients may
choose her for their care.
Unfortunately, statistical data are not available on the quantitative output of services of the direct system of general physician's services in the Indian
social security scheme. The rate of consultations received by protected persons is undoubtedly higher than among the general population, but it is still
probably low because of the general shortage of medical personnel. This
advantage over the level of care received by the general population, incidentally,
is defended by the fact that insured persons make a financial contribution
(2.4 per cent, of wages) to the scheme, as do their employers.
In spite of this lack of quantitative data, there are other forms of evidence
which permit interesting comparisons between the direct pattern and the
indirect or "panel" pattern of general physician's services under the E.S.I.C.
scheme. In the direct pattern, the organisation of medical care in dispensaries
permits certain systematic preventive services, which are hardly ever offered
by private practitioners. Family planning advice is readily provided in the
dispensaries, and this is highly important in India, with its vast population.
The quality of diagnosis and treatment is almost certainly higher with two
or more physicians working together, aided by auxiliary staff, than in the
private doctor's office, which is usually very small and poorly equipped.
Medical records and reports, which have real importance for good continuity
of medical care, are superior in the direct pattern. Complaints by patients
are said to be fewer. In Delhi, where there are 400,000 beneficiaries under the
direct pattern, only about 20 complaints per month are received.
One important indication of the relatively greater effectiveness of the
direct pattern in India is the recent trend in the Punjab state to change over
from the indirect to the direct pattern, a change also contemplated in one town
of the state of Madras. As for the entire social security scheme, the general
attitude of people is in favour of its expansion, for the vast non-insured
population resent the superior services received by the protected minority.

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ORGANISATION OF MEDICAL CARE

Physicians, on the other hand, have numerous dissatisfactions, especially those
working under the indirect pattern, who seek higher capitation payments.
The Indian Medical Association, moreover, shows the same attitudes of opposition to the extension of the direct pattern that characterise societies of private
doctors in the more industrialised countries. Employers have criticised the
E.S.I.C. scheme for allegedly increasing absenteeism of workers, although the
recent investigation of a special review committee failed to corroborate this.
*
*

*

All in all, the operations of the direct pattern of general physician's care
with full-time salaries in Poland, Tunisia, and India permit some general
conclusions about this approach. While an ideal system of medical care has
certainly not been achieved in any of these countries—or in any other country
using either the direct or the indirect pattern—the difficulties relate principally
to the general deficiencies in resources. The mechanisms of the direct pattern
appear to make better use of those personnel and facilities that are available
than do those of the indirect pattern, which has indeed been applied in certain
sectors of the same countries.
The scarce time of the doctor, in relation to the great social need for his
services, is more efficiently used in the direct pattern, where he is aided by
auxiliary personnel and where labour-saving equipment is on hand. Simple
cases may be screened by nurses or medical assistants, so that they need not
take the doctor's time at all. Preventive services can be readily integrated,
immunisations, health education, laboratory case-finding tests, etc., being
carried out and dietary supplements dispensed by ancillary personnel. Young
doctors who have not yet built up a reputation in the community can immediately
be engaged at full capacity, instead of wasting many precious hours waiting
for the patronage of private patients. At the same time, the work of young or
inexperienced doctors can be reasonably supervised by more experienced
physicians; quality standards in diagnosis and therapy can be maintained on
a day-to-day basis.
At the same time, it must be recognised that there are disadvantages in
the direct pattern of general physician's care, especially when the social security
scheme covers only a small percentage of persons in an area. For the direct
pattern to operate properly, several physicians and allied personnel must be
under one roof. The population served, however, may be scattered over a
wide territory, and many beneficiaries may be compelled to travel long distances to the health centre or dispensary for ambulatory care. If the population
served is large in relation to the supply of doctors, pressures mount up, waiting

GENERAL PHYSICIAN'S CARE

63

periods lengthen, and patients may get perfunctory care. A certain impersonality may mar the relationship between doctor and patient. The use of auxiliary
personnel may be abused so that some patients, who should properly see the
doctor, are prevented from doing so. The free choice of doctor by the patient
is usually restricted, so that a continuing friendly relationship based on trust
and confidence may not evolve.
These deficiencies associated with the direct pattern of physician's care
have been frequently pointed out by critics, but it is important to realise that
they are attributable to relative shortages of physicians and other resources
more than to the organisational pattern itself. Comparable and even more
serious deficiencies may be attributed to the indirect pattern of care, even when
greater resources are available. Moreover, the deficiencies may and do disappear under the direct pattern when adequate resources are present. Before
we embark on a discussion of the relative merits of the different patterns of
organising general physician's care, however, one important modification of the
direct pattern, namely the employment of physicians on part-time salary,
should not be forgotten.

F.

DIRECT PATTERN WITH PART-TIME SALARIES

In some countries the direct pattern of general physician's care is used
under social security schemes, but a majority of physicians are engaged on
part-time salaries. This is the arrangement in several Latin American countries,
among which we shall examine the experience of Ecuador.
Ecuador.
Although various governmental and charitable facilities are found in
Ecuador for general medical care and there are many physicians in private
practice in the main cities, when the National Social Welfare Institute set out
to provide physician's care to its beneficiaries it chose to apply the direct
pattern. In 1936, when the scheme started, it made contracts with existing
beneficencia hospitals and with employers operating industrial clinics, to serve
its membership. Since then the Institute has established 32 dispensaries
throughout the country and, in co-operation with industrial firms, another
48 first-aid health stations. All beneficiaries, who at present account for only
about 5 per cent, of the national population (dependants of insured workers
are not yet covered), must get their ambulatory and domiciliary care from
general physicians at these dispensaries or stations; there is no system of free
choice, since all the scheme's doctors are officials, but in practice an insured
person can choose his own physician at the larger dispensaries. For specialist

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ORGANISATION OF MEDICAL CARE

services the patient may be referred to a hospital or to one of the large dispensaries with specialists on their staffs.
The dispensaries and health stations are located at places convenient to
the insured workers. They have laboratory and X-ray facilities and staffs of
auxiliary personnel.
The great majority of physicians in the Ecuadorian system work part time,
usually for four hours a day but sometimes for two or six. Monthly salaries are
paid according to the time spent working for the system. The balance of the
doctor's work-day is nearly always devoted to private medical practice in his own
office. This arrangement is usually defended on the grounds that it enables the
doctor to earn a better living than he could by salary alone. The freedom of the
physician to engage in aflexibleamount of private practice is attractive to him, so
that the Ecuadorian scheme has no problem in recruiting all the personnel it
needs.
For the privileged 5 per cent, of the Ecuadorian population who are
protected by the social security scheme, the volume of general ambulatory
service is relatively large. Ambulatory consultations average about 4.6 per
insured person per year (1,011,000 consultations per 220,000 persons)—a rate
which is remarkably high. To the extent that quality of care can be judged by
the time allotted per patient, this is also relatively good; in 1965 consultations
were provided at a reported rate of 4.05 per physician-hour, or about 15
minutes per patient.
Nevertheless, the part-time salary system, in Ecuador or elsewhere,
causes certain difficulties which have been widely recognised. The psychological commitment of a doctor to the organised medical care scheme is bound
to be weakened if a substantial share of his time is spent in his private practice.
Since the earnings per hour in private practice are usually higher than in the
social security scheme, he is inevitably tempted to spend more time in the
former than in the latter and perhaps to be more diligent in his private work.
Another tendency, which is said to be negligible in Ecuador but is frequently
observed in other Latin American countries, is the diversion of social security
beneficiaries to private medical offices. [105, p. 54] Thus, if a dispensary is
crowded the physician may advise the patient to come to his private office
for more solicitous attention. A hedge against this abuse, of course, is the
additional personal cost to the patient, but an anxious or desperate patient
may be willing to pay this extra price even if his income is very low. It is this
potential abuse which has led some countries, like India, to insist on full-time
medical employment in the direct pattern of care, or other countries, like Poland,
to demand a minimum of seven hours of service a day from every physician.
In spite of these problems, the extent of which is probably small in Ecuador,
the general attitude toward the medical care scheme is highly favourable

GENERAL PHYSICIAN'S CARE

65

among protected persons. The level of care offered to them is so much higher
than that enjoyed by the non-insured population that the latter are clamouring
for extension of coverage. The preference, moreover, is for the direct pattern ;
when a Bill was recently introduced in the Ecuadorian legislature to permit the
indirect pattern with free choice of private doctor under social security, it was
opposed by labour representatives. Physicians in Ecuador are also generally
satisfied with the scheme; they accept the principle of being salaried civil
servants, so long as their freedom of professional judgment on patient care is
protected and their salaries are adequate.
G.

EVALUATION OF THE DIFFERENT PATTERNS

There are obvious difficulties in comparing the operation of the different
patterns for providing general physician's care, when the total national settings
in which those patterns prevail are so different in other respects. The differences in quantity and quality of general physician's care under the schemes of
the Federal Republic of Germany and India, for example, are attributable much
less to the different patterns of organisation than to the over-all socio-economic
and cultural differences between the two countries. [16]
Nevertheless, from the experiences of the direct and indirect patterns and
their variations in the eight countries reviewed above, certain general conclusions may be drawn. With both patterns there are advantages and disadvantages, the net balance of which must be weighed with reference to each nation.
The indirect pattern is attractive to both patients and doctors in the industrialised countries with free market economies. Free choice of private general
physician meets the psychological needs of patients in those countries and
satisfies the competitive entrepreneurial interests of doctors. If the supply of
doctors is relatively high, this pattern is usually associated with a high quantity
of service; the fee-for-service payment system rewards the doctor with extra
earnings for more service, and even the capitation system does not discourage
service, although it may encourage referral from general practitioners to specialists. Doctors are easily accessible in the urban centres, since private medical
offices are usually distributed in some rough relation to the concentration of
the population (although there may be fewer doctors in slum districts). Physicians are generally happy with this pattern, because it allows them great
personal freedom and usually yields relatively high earnings.
On the other hand, the indirect pattern of general physician's care has
many disadvantages. The quality of services provided is certainly questionable,
since the typical private doctor giving ambulatory care is working alone; he
does not have the benefit of consultation from colleagues or the technical aid
of ancillary personnel. The fee-for-service payment method—whether through

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ORGANISATION OF MEDICAL CARE

remuneration by a third party or reimbursement—often leads to excessive services which may be harmful and are always economically wasteful. Studies in
the United States, where different systems operate side by side and can be
readily compared, have frequently shown a higher volume of services of doubtful value under the indirect pattern; especially high is the rate of elective surgical procedures, like tonsillectomy or appendectomy, which in the United States
are frequently done by general practitioners. The fee system, moreover,
often discourages general physicians from referring patients to specialists, even
when it is medically advisable to do so. The net costs to a social security
scheme are invariably higher under the indirect pattern, as many experiences in
Latin America have shown. The professional independence of doctors under
the indirect pattern permits them to settle wherever they wish, so that they are
nearly always concentrated in the cities and in critically short supply in rural
areas. The desire of doctors to safeguard their independence leads to many
fierce disputes on fee schedules and other matters between doctors and the social
security authorities, sometimes resulting even in medical strikes. Efforts at
some control over quality and expenditure in the indirect pattern require a great
deal of bureaucracy and paperwork, which are burdensome for all the parties
—patients, doctors and social security agencies.
With the direct pattern of general physician's care, there are numerous advantages which are the converse of the disadvantages above. Since doctors are
employed in an organised framework, their performance is aided by equipment
and ancillary staff rarely available in a private office. The quality of the doctor's
work is guaranteed by the fact that he is working under the critical eyes of a
team of colleagues with whom he is closely associated. (For in-patient care in
hospitals, such teamwork is accepted everywhere as desirable, but the same
reasoning can be applied to ambulatory care.) The costs per beneficiary are
clearly lower, both because of reduction of unnecessary services and because of
economies of scale and the availability of labour-saving equipment. Referrals
of patients to specialists can be more easily arranged, since there are no incentives against this. Preventive services can be readily integrated with curative
services, through the assistance of nurses, health educators and other auxiliary
personnel. The young doctor's time can be used to full capacity from the onset
of his professional career. Rural populations can be better served by assigning
doctors to ambulatory facilities in rural areas. Demands on the doctor's time
for clerical tasks, or even for very simple medical tasks, are less, because of the
availability of auxiliary personnel and because of the inherently greater simplicity of the salary method of remuneration. Salaries can be fixed on the basis
of objective measurements of qualifications and responsibility, and awkward
controversies or negotiations on fee schedules are avoided. As for the ultimate
outcome of the direct pattern in terms of the health and survival of patients,

GENERAL PHYSICIAN'S CARE

67

objective evidence comparing the two patterns is rare; in New York City,
however, a careful study in 1955 showed a lower infant and maternal mortality
in a population served by the direct pattern (the Health Insurance Plan of
Greater New York) than in a demographically and socially comparable population served by the indirect pattern of physician's care. [128]
The direct pattern, however, also has its disadvantages. An organised
framework, of course, deprives the doctor of some of his independence, thereby
sometimes lowering his morale. If the leadership of the whole system is excessively rigid, this may be quite serious. The very quantity of personnel in an organised health centre or polyclinic may lead to a certain impersonality which
patients may find offensive. Pressures for reducing costs can be promptly
transmitted through the system and may lead to a quantitative reduction in
services below a reasonable level.
Obviously everything depends on the net quantity of resources of personnel
and facilities available in either pattern, and on the skill and sensitivity of the
administrative leadership. In the industrialised countries the resources are
greater; the indirect pattern may cause some wastage of those resources, but
this may be tolerable in the interests of practical politics. In many of these countries a direct pattern of physician's care would simply not be achievable without
serious political disruption. In the developing countries, on the other hand,
the resources are usually very deficient, and their wastage cannot be tolerated.
The direct pattern becomes the only reasonable choice if a social security
scheme is to be developed at all. This has, indeed, been the usual decision in
the developing countries, as well as in those industrialised countries which have
adopted a fully socialist political structure. Even in some industrialised countries with a moderately socialist structure, like the United Kingdom or Sweden,
the direct pattern has been adopted for most specialist services and hospitalisation, though not for general practitioner care. The experience of different
countries with respect to specialist and other sectors of medical care will be
considered in subsequent chapters. [142]

5. SPECIALIST CARE
In Chapter 1 the world-wide advance of medical specialisation was noted,
and the different categories of specialists were outlined. Chapter 4 discussed the
experience of countries in providing general physician's care under different
patterns. While the patterns for providing specialist care are in many cases
similar to these, they sometimes show marked divergences.

A.

THE IMPORTANCE OF SPECIALISATION

On the whole, the aim of specialisation in medicine, as in other fields, is to
obtain greater knowledge and skill in dealing with a narrow range of problems. [Ill] Competence in a speciality usually requires longer training; the
basic years of medical training prepare the physician to be a general practitioner, to understand human health and disease as a whole. After this, he
must usually undertake further studies to qualify as a specialist. With additional training, he is better able to cope with complex and serious disease problems. It is natural, therefore, that in all countries—whether they follow the indirect or the direct pattern of medical care organisation—the specialist should be
accorded greater status and higher remuneration. This corresponds, of course,
to the trends in science and technology as a whole over the last century or more.
Only in recent years has there been a swing of the pendulum, and there has been
fresh recognition that to be truly competent, a general physician requires a
breadth of knowledge adequate for a full understanding of the patient's general
state of health. In some countries, as a result, postgraduate training in general
medicine is being offered, with official certification being issued to the specially
qualified general practitioners. [18]
As noted earlier, specialisation may be by age group, sex, body organs,
special techniques of diagnosis or therapy, or other criteria. In all specialities,
services to patients may be rendered in different settings :
(a)

an ambulatory care facility;

(b)

the patient's home;

(c)

the bed-wards of a hospital.

SPECIALIST CARE

69

The organisational arrangements for care in these different settings often vary.
Moreover, ambulatory care facilities may be of different types :
(a)

a physician's private office ;

(b)

an organised ambulatory care centre or polyclinic;

(c)

a hospital out-patient department.

This implies further differences in organisation.
There are obvious technical needs for integrating the services which several
doctors provide to the same patient in different settings. A patient with an
attack of renal colic, for instance, may be visited first at his own home, he may
then be seen in an ambulatory care facility after the acute attack subsides, and
finally he may be hospitalised for kidney surgery. Likewise, there are important
relationships that must be maintained between the general practitioner, who
usually sees the patient first, and the specialist who carries out the final treatment. An organised medical care scheme under social security may require that
all patients (with the possible exception of pediatric or obstetrical cases) be seen
initially by a general physician, with access to specialists only on referral ; or it
may permit direct access to specialists by the patient at will. These different
patterns can have repercussions on both the quality and the costs of medical
care.
Since the organisational arrangements—whether under the direct or the
indirect pattern—often differ widely as between ambulatory and hospital care,
we shall first examine the ambulatory specialist services. We shall then examine specialist services for hospital in-patients, which will bring us to the next
chapter on the organisation of the hospital services as such.
B.

AMBULATORY SPECIALIST SERVICES BY THE INDIRECT PATTERN

Under social security schemes following the indirect pattern, specialists in
private medical practice may be available to beneficiaries on a fee-for-service
basis. With the indirect pattern, remuneration by salary or capitation payment
is hardly feasible for specialists. The fees for each service, however, may be
through third-party payment by the social security agency, as in the Federal
Republic of Germany or Canada, or by reimbursement of the patient, as in
Belgium—corresponding to the mechanisms for general physician's care in those
countries.
Ambulatory specialist care under the indirect pattern may be given in the
doctor's private office or in the out-patient department of a hospital. The
patient generally has free choice of specialist, as well as access to specialists
with or without referral by a general practitioner or by another specialist. Thus

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ORGANISATION OF MEDICAL CARE

in Belgium, the patient may go to any specialist's private office for any ailment
or he may consult a specialist in a hospital out-patient department. In either
instance, the specialist is paid a fee for the service by the patient, who obtains
reimbursement from his insurance fund. The specialist receives higher fees than
the general practitioner for the same category of service. Accordingly, he is
legally bound to confine his services to his proper field of specialisation. The
patient is free, furthermore, to consult more than one doctor in the same speciality, so long as he is prepared to pay the personal ticket modérateur each time.
In the Federal Republic of Germany specialists may also be freely consulted by patients, with or without referral. The great bulk of ambulatory
specialist care is provided through private independent offices. Specialists are
paid a fee for each service (without cost sharing) by the insurance funds. Some
restraint, however, is imposed by the requirement that the beneficiary must have
a sickness form which is issued only once for each three-month period. Within
this period, if he has already seen a general practitioner (or another specialist),
he may consult the second practitioner only on referral unless he wishes to pay
personally. In any subsequent three-month period he is free to see any specialist he pleases without a referral.
A small proportion of ambulatory specialist care in the Federal Republic
of Germany is given by physicians in the out-patient departments of hospitals
in which they are engaged. Although these specialists are on salaries in the
hospitals for their in-patient work, they may accept fee payments from the insurance funds for this ambulatory care. There are restraints, however, on the
patients they may see—designed apparently to encourage people to go to independent specialists. Thus the hospital-based specialist may see ambulatory
cases only on referral from an independent practitioner, either general or
specialist. Such referrals, moreover, may be made only for specified purposes,
such as diagnosis, advice to an independent practitioner on therapy, elaborate
therapeutic techniques not available in private offices, or convalescent care
following hospitalisation.
Altogether less than 5 per cent, of authorised sickness fund physicians are
attached to hospitals, so that it is obvious that the preponderant pattern of
specialist services is the indirect one, through private medical offices.
In Canada specialist care for the ambulatory patient is also freely available,
with or without referral from another physician. It is usually paid for on a feefor-service basis. In the Saskatchewan scheme, however, a higher level of
specialist fee is payable only if the patient has been referred by a general practitioner or another specialist. On rare occasions the private specialist may see
a protected person in the out-patient department of a hospital (in which he
generally has a non-salaried staff appointment), but the vast bulk of ambulatory specialist services are given at independent offices.

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71

A growing proportion of private specialists in Canada, however, are voluntarily combining to form private group practice clinics. Fees for each service
are paid to these clinics, exactly as they would be paid to doctors working on
their own. The doctors may share the clinic income in various ways, including
salaries; when salaries are used, they are often adjusted in proportion to the
income earned for the clinic by each particular specialist.
The indirect pattern of ambulatory specialist care, as demonstrated in
Belgium, the Federal Republic of Germany and Canada, has various consequences for the patient and the social security system. The patient, of course,
usually enjoys his freedom of choice, although he may be puzzled and uncertain
in making it. As a practical matter, he often asks a general physician to recommend him a specialist, but, as noted previously, this advice may not be
readily offered. If, therefore, the patient makes his own selection of a specialist
he may not choose the most competent one or he may select one in a speciality
inappropriate for his condition. This can obviously be wasteful for the social
security fund, and may even bs harmful for the patient by delaying his arrival
at the appropriate specialist.
Moreover, the fact that private specialists may be located at different
places causes inconvenience and travel expense for the patient. Communication
between the several physicians who may be treating one patient may range
from good to poor. In the latter case certain diagnostic tests may be duplicated,
and records of the past history of the case may not be transferred. Even if
communication is good, the transfer of information on the patient between
different private offices is time-consuming and may be costly.
One of the important abuses of the indirect pattern of specialist care has
come to be known as "fee splitting". This practice involves the transmission
by the specialist of a portion of his fee to the general practitioner who referred
the case. Not all specialists, of course, do this, so that the general practitioner
may tend to favour the ones who do, rather than the best qualified ones.
Indeed, the specialist's fee may even be raised in order to cover the "rebate"
paid to the referring doctor. Fee splitting has been defended as a method of
correcting inequities in fee schedules which, for reasons of medical supply
and demand, yield much higher fees for specialists, especially surgeons, than
for general physicians. Correcting such inequities, however, could be done
by simple modification of fee schedules, rather than by this devious route. The
practice of fee splitting has been widely condemned by medical associations,
but the necessity for such repeated disapprovals gives a clue to the extent of
the problem. [32]
On the positive side, one of the important developments in the indirect
pattern of specialist services has been the rise of the private group practice
clinic. In a sense, this represents a method of transferring some of the advan-

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tages of the direct pattern of medical care to the indirect pattern. In the group
practice clinic a team of specialists in different branches of medicine work
together, aided by ancillary personnel and equipment. As few as three physicians—an internist, a surgeon and a pediatrician, for example—may be associated, or there may be as many as a hundred, covering the full range of specialities. The skills of all these doctors are brought to bear on the patient with
a serious illness, and easy communication among the specialists helps to assure
a balanced view of his case. The individual doctor is not a slave to his private
office, but can get away for postgraduate study or holidays. In his daily work
he has the benefit of stimulation from colleagues. Preventive services can be
more readily given with the aid of nurses and other auxiliary personnel. Laboratory and X-ray equipment can be much more adequate than in the isolated
doctor's office. Patient records can be unified. Economies in the cost of
producing medical service can be achieved, although these may not always be
passed on to the patient as lower fees, but may simply result in higher net
earnings for the doctor. In a word, the private group practice clinic develops
for ambulatory specialist care under the indirect pattern the integrated relationships that prevail ordinarily for hospital care under either pattern. Yet it is
significant that private group practice has developed most extensively in the
United States, where the medical staff organisation within hospitals is least
well developed. [69]
Group practice within the indirect pattern also has its disadvantages.
The smaller units often have administrative difficulties and many fail; individualistic doctors may find it difficult to subordinate their personal wishes to a
team goal, without moral pressures from a large organisational authority.
When payment to the group practice clinic, as to the individual private practitioner, is made on a fee basis, various diagnostic and treatment procedures may
be unnecessarily multiplied to increase the clinic's income. If the over-all
direction of the clinic is poor, standards of performance for everyone may
decline. In spite of all these hazards, the very development of private group
practice within the indirect pattern of medical care is evidence of the deficiencies
of isolated and unco-ordinated speciality service to the ambulatory patient.
C.

AMBULATORY SPECIALIST SERVICES BY THE DIRECT PATTERN

In most countries of the world it is more usual to provide specialist services
to ambulatory patients under social security systems through the direct pattern.
Thus specialists are more often attached to organised facilities—either health
centres or out-patient departments of hospitals—where they are paid full-time
or part-time salaries and work in a team with other personnel. Perhaps the
major exception to this is the "super-specialists" who in areas with a small

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73

protected population may be paid on a fee basis, despite the general operation
of a direct pattern.
In the United Kingdom the direct pattern for ambulatory specialist care
operates side-by-side with the indirect pattern for general physician's care.
Although every beneficiary is attached to a private general practitioner, inpatient or out-patient treatment by specialists is ordinarily obtained at hospitals.
Thus, the hospital out-patient department (O.P.D.) is the chief resource for
ambulatory specialist care, since the United Kingdom National Health Service
does not operate separate polyclinics. On the whole, the same specialists who
serve in the wards see patients in the out-patient section of the hospital.
In the United Kingdom hospital there is a well-established hierarchy of
specialists, ranging from junior "House Officers" through "Registrar" and
"Senior Registrar" up the professional ladder to the top specialist position of
"Consultant". The details are explained in the I.L.O. monograph on the
United Kingdom. All of these posts are remunerated by salary, in which
account is taken of past training and achievements and supplementary awards
are given for distinguished work. Most of the specialists are full-time, but
Consultants and sometimes others in the higher grades are free to spend a
portion of their time in private practice. A common pattern is to consider the
working week as having 11 parts (morning and afternoon on each week-day,
plus Saturday morning), with the specialist devoting two-elevenths or threeelevenths of each week to practice in a private office. In the hospital outpatient department the Consultant and various other grades of specialist work
according to schedules which give the specialist time not only to see patients
by appointment but also to exchange notes with his colleagues. Patients
usually come to the hospital out-patient department on referral from a general
practitioner, except in emergencies.
In most other countries following the direct pattern for ambulatory
specialist care specialist services are provided either in hospital out-patient
departments or at polyclinics or health centres separate from hospitals. In
Tunisia the great bulk of specialist service to the ambulatory patient is given
in a hospital O.P.D., because only a few separate polyclinics have been developed. The same is true in India ; under the E.S.I.C. scheme there are a few
large separate "diagnostic centres" in the main cities, but specialists are usually
seen at a hospital O.P.D. The latter arrangement has the advantage of having
a wide range of equipment and ancillary personnel on the spot, since these are
required anyway for hospital in-patients. The ambulatory patient, on the other
hand, may find it burdensome to have to travel a long distance to a hospital ;
health centres or polyclinics closer to where the people live may not only
reduce travel time but may provide psychological advantages, since it is common
for the more seriously ill patients in the hospital wards to pre-empt the attention

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ORGANISATION OF MEDICAL CARE

of doctors, so that out-patients may be perfunctorily treated. Most of the
specialists in India and in Tunisia are paid by part-time salary, depending on
the number of hours they devote to the organised scheme.
In Poland the services of specialists for ambulatory patients are provided
quite extensively through a network of district and regional polyclinics, as
well as in hospital O.P.D.s. The polyclinics are located in the various neighbourhoods of the cities or in large industrial plants. Some are at schools,
where pediatricians are in attendance. Ordinarily a specialist may be seen
only on referral from the local district general physician, except for specialists
in venereal disease or tuberculosis, to whom patients may have direct access;
they also have direct access to birth-control clinics. A complex case may be
referred from a district or industrial polyclinic to a regional polyclinic with a
wider range of specialities or to an out-patient department of a large teaching
hospital (i.e. a hospital attached to a medical school) where the most advanced
consultation is available. There are some general hospitals in Poland that
have no out-patient departments, so that all ambulatory specialist care is given
at separate polyclinics nearby.
The social security scheme in Ecuador offers ambulatory specialist care
at a number of separate dispensaries or polyclinics in the larger cities, as well
as at the O.P.D.s of larger hospitals. In the smaller dispensaries and even the
O.P.D.s of the smaller hospitals, which are staffed by general physicians and
a few specialists, patients may see a specialist only on referral from a general
physician or another specialist. Specialists, who work part time, are paid by
salary, at higher rates than general physicians. If a suitable specialist is not
locally available in the scheme, the patient may be referred to a private specialist who is paid on a fee basis.
There is wide agreement that the direct pattern for ambulatory specialist
care is appropriate to the complex requirements of modern medicine. In the
developing countries, where specialists are in very short supply, it is more
suitable for making the fullest possible use of their time. [34] But even in the
industrialised countries, like Poland and the United Kingdom, the combination
of several specialists in a polyclinic or hospital out-patient department is conducive to better communication and, therefore, a higher quality of care. The
problem in organised ambulatory facilities, as noted in the previous chapter,
is the hazard of impersonality in the doctor-patient relationship. The picture
of a crowded clinic, with patients suffering through long hours of waiting on
hard benches, has often been painted. One must recognise, however, that this
situation is due mainly to shortages of personnel in an organised medical care
scheme; under the indirect pattern waiting periods for private medical appointments may be many weeks, if specialists are under pressure because of similar
shortages. Organised clinics or hospital O.P.D.s, moreover, can operate on

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75

an appointment schedule and can provide comfortable waiting rooms, if the
scheme has the administrative and financial resources for these amenities.
D.

IN-PATIENT SPECIALIST SERVICES BY THE INDIRECT PATTERN

The manner in which specialist services are provided for hospital inpatients under a social security scheme can be quite different from that for
such services to the ambulatory patient. In many countries, like the Federal
Republic of Germany, where the bulk of ambulatory specialist services are
given under the indirect pattern through private offices, in-patient specialist
care is still given predominantly under the direct pattern. Only in a few
countries is the indirect pattern applied for specialist services to in-patients and
out-patients alike.
Canada is perhaps the typical example of the latter arrangement. Under
the organised medical care scheme in Saskatchewan, as in the rest of the
country, the vast majority of specialists are in private practice, and this applies
to their in-patient as well as their ambulatory service. For services to inpatients, the health insurance scheme pays fees according to a schedule exactly
as it does for ambulatory patients. (A separate payment is made to the hospital
for the distinctly institutional services.) The medical staffs of general hospitals
are made up predominantly of private physicians who spend most of their time
(perhaps 80 to 90 per cent.) in private offices, and come to the hospital only as
"attending physicians" for the care of their private patients. These attending
physicians, in fact, need not be specialists at all, although if they are general
practitioners the scope of the work they are permitted to do in the hospital may
be somewhat restricted.
As a private specialist treating a hospital patient, the Canadian physician
is subject to certain rules and regulations. These are usually formulated by
the medical staff itself and given authority by the governing board of the hospital. In addition to these internal rules, various other influences from governmental and voluntary professional bodies (like the Canadian Council on
Hospital Accreditation) shape the policies inside hospitals and set quality
standards for the performance of doctors. The average patient is none the
less principally under the responsibility of his personal physician—specialist
or generalist—and only secondarily served by the hospital or its medical staff
as organisational units. There are numerous variations in the degree of rigour
and discipline in the medical staffs of Canadian hospitals, the larger units
tending to be more rigorous. The entire character of Canadian hospitals,
however, is undergoing rapid changes, the trend being towards higher levels of
organisational discipline. Compared with ambulatory care, the treatment of
in-patients is subject to much professional supervision. [81]

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ORGANISATION OF MEDICAL CARE

While the above description characterises the great majority of hospitals
in Canada, as well as in the United States, there are some hospitals that follow
the direct pattern of in-patient specialist care. Mental and tuberculosis
hospitals, and some other public institutions for longer-term care, usually have
staffs of full-time specialists on salary. Some government general hospitals
serving special population groups, like needy persons or military veterans,
have full-time salaried staffs. In most general hospitals under either voluntary
or governmental auspices, moreover, there are usually a few specialists on
salaried appointments in such fields as pathology and radiology. For the
average self-supporting person in Canada, however, the "open-staff" hospital,
described above, is the usual arrangement for in-patient specialist care.
In Belgium the activities of specialists for in-patient care are less homogeneous. In hospitals under the control of voluntary organisations (churches
or other non-governmental bodies), the "open-staff" pattern observed in
Canada is usually followed. Such institutions contain about 60 per cent.
of the 40,000 general hospital beds in the country. Belgium is unlike Canada
in that general practitioners are seldom allowed to admit patients, but specialists
are individually responsible for their private patients and they receive fees for
their services. For these high-cost services the specialist is often paid directly
by the sickness insurance fund (that is by a "third-party" or tiers payant
mechanism) rather than by reimbursing the patient, as is the case with ambulatory services.
In Belgian general hospitals under government auspices the direct pattern
is followed with about 40 per cent, of the beds, and in-patient specialist services
are provided by a staff of salaried doctors employed by the institution. Government hospitals serve indigent persons and others not protected by social
security, as well as the protected persons, although there is a greater tendency
for the latter to go to hospitals run by voluntary bodies where the indirect
pattern of in-patient specialist care prevails.
In the Federal Republic of Germany private specialists not on the hospital
staff are allowed to treat their patients only in certain hospitals designated for
this purpose (Belegkliniken), which are mainly small institutions and account
for 11 per cent, of hospital beds. It is usual for less seriously sick patients to
be treated in these hospitals and the private specialists using them are paid fees
by the insurance funds in the same way as they would be paid for ambulatory
services. The great bulk of in-patient specialist care in Germany, which is given
through the direct pattern, will be considered in the section below.
Evaluation of the indirect pattern of specialist care of in-patients is very
difficult, because it is undergoing rapid changes. Hospitals of all types, even
those most firmly dedicated to "open-staff" policy, are applying restraints to
private physicians in the interest of maintaining quality. The very fact that

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77

this evolution is occurring is evidence of the deficiencies of the pure indirect
pattern. Quite apart from the fact that standards for physicians in open-staff
hospitals are less rigorous, the very multiplicity of specialists in them creates
greater problems as regards teamwork and the development of close personal
relationships among doctors, nurses, technicians and other members of the
hospital corps. There is bound to be less consultation among specialists in the
care of a hospitalised patient when one private physician is in charge than when
the patient is the responsibility of an organised clinical service. On the other
hand, a personal physician may show greater devotion to his patient. The ideal
is to unite a high level of diligence in specialist care with all the advantages
resulting from teamwork. [123]

E.

IN-PATIENT SPECIALIST SERVICES BY THE DIRECT PATTERN

In most social security systems the in-patient services of specialists are
organised by the direct pattern, that is, physicians are engaged by a hospital
and form part of its hierarchy. They are paid by salaries and usually spend all
or most of their time working for the hospital. The patient is a responsibility of
the medical staff as a whole, rather than of an individual doctor chosen by the
patient.
In the United Kingdom over 95 per cent, of in-patient specialist care is
provided under this arrangement. There is provision for the treatment of some
private patients, and a few hospitals, mostly small ones, permit outside physicians to admit patients freely and to work in them on an individual basis. In
Poland this is also the rule, virtually 100 per cent, of in-patient specialist service
being given by salaried members of the hospital staff. The range of specialists
differs markedly with size of hospital, the widest range being in the large
hospitals attached to medical schools ; patients are sent for specialist care from
peripheral hospitals to the larger central ones, as may be medically necessary.
In Ecuador in-patient care is also given by highly organised staffs of
salaried specialists. As in the ambulatory services, many of these specialists
do not work full time in the social security scheme. They may treat private
patients for private fees, but this must be done in other hospitals outside the
organised scheme. A similar arrangement prevails in the Tunisian social
security system. The direct pattern is followed for all specialist services in
government-run hospitals. The same specialists, however, may see private
patients in non-governmental hospitals when they are off duty from their
salaried appointments.
India has a more complex mixture of arrangements for in-patient specialist
care. In the large hospitals built by the social security scheme (Employees'
State Insurance Corporation), there are full-time salaried specialists who give

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ORGANISATION OF MEDICAL CARE

all the in-patient care; these specialists have no private practice inside or outside
the hospital. Their employment, it will be recalled, is by the government
public health services, with which E.S.I.C. is integrated for personnel purposes.
Likewise, in large regular government hospitals, where E.S.I.C. beneficiaries
may be admitted, the specialist staff follows the full-time direct pattern. In
smaller E.S.I.C. hospitals, however, where the patient load is not great enough
to justify full-time staffs, specialists in private practice are engaged only for
certain hours each week, for which they are paid "honoraria". This is, in
effect, a modified direct pattern, with payment on an hourly rather than a
full-time salary basis.
In Belgium about 60 per cent, of in-patient specialist care is by the indirect
pattern, but 40 per cent, is by the direct pattern, mainly in government hospitals
with their own staff. Here, although the patient has no free choice of doctor,
he is treated by a well-qualified team of organised specialists.
The direct pattern also characterises in-patient specialist services in the
Federal Republic of Germany for almost 90 per cent, of the beds. Thus, it
is markedly different from specialist care outside the hospital, which is predominantly by the indirect pattern. Once admitted to the hospital, the beneficiary
is usually treated by a full-time staff of specialists, among whom he has no free
choice. These specialist services by the direct pattern are in the larger hospitals,
with a reputation for quality of service greater than in the smaller hospitals

where the indirect pattern is allowed. Thus, although the protected person has
free choice of hospital and he knows that choice of a large closed-staff institution will often mean a departure from his out-of-hospital doctor (either general
practitioner or specialist), in the vast majority of the cases this choice is made.
Evidently, the advantages of treatment by a highly organised staff of hospitalbased specialists are usually considered more important than the attraction of
a personally chosen doctor.
In all the countries where use is made predominantly of the direct pattern
of in-patient specialist care, considerable social prestige is associated with such
hospital staff appointments. The salaries paid for full-time appointments are
relatively high and competition for them is keen. Long-term, even lifetime,
tenure is the usual policy, whether or not teaching responsibilities at a medical
school are involved. Once appointed, specialists serve with each other for long
durations and develop a spirit of teamwork and institutional pride conducive
to the promotion of excellence.
F.

EVALUATIVE COMMENT

The organisational arrangements for specialist care under social security
schemes are obviously more oriented towards the direct pattern than are those

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79

for general physician's care, and this is even truer for in-patient than for ambulatory service. In the case of most countries of the world one can reasonably
conclude that as the patient's medical needs move from the mild (within the
general practitioner's competence) to the moderate (appropriate for ambulatory specialist care) to the critical (requiring in-patient specialist treatment),
the importance of the direct pattern of care is more widely appreciated. Perhaps this gives the best basis for evaluating the different patterns.
Specialist service, more than general physician's care in the office or home,
demands the highest skill, for the patient's life is often in the specialist's hands.
The indirect pattern permits the patient to exercise free choice, but it is in a
technical sphere where his judgment is not likely to be sound. In the case of
pediatrics and obstetrics perhaps, the patient's natural emphasis on the doctor's
personality, rather than scientific acumen, has some meaning. But for most
medical and surgical specialities the judgment of physicians regarding other
physicians is bound to be more reliable, so that the whole "free choice" argument
loses much of its force.
With the indirect pattern of specialist care, whether ambulatory or inpatient, the hazards of the fee system, reviewed in the previous chapter, must
be recognised. For in-patient specialist care, the problem of superfluous
surgical operations can be extremely serious, as has been demonstrated in
several "medical audit" investigations in the United States. [79] The problem
of fee splitting is also serious, as reflected by its widespread condemnation.
There are also reports of "ghost surgery", under which the patient's personally
chosen doctor stands by while another doctor does the operation after the
patient has been anaesthetised. The actual operator may be more skilled than
the doctor chosen by the patient, but the latter has been deceived.
The technical quality of service is bound to be superior when a series of
specialists work together in a team. Whatever importance may be attached
to the personal doctor-patient relationship in general physician's care, the
technical and scientific considerations would certainly seem to be more important for specialist care. With the direct pattern the team of specialists can be
aided by a corps of technicians and nurses and by the latest scientific instruments.
With the indirect pattern this is only achieved in the private group practice
clinic. The costs to the social security system are certainly lower by the direct
pattern, as shown in Latin America, where both patterns have been tried side
by side. In the United States also, where the two patterns can be compared
under voluntary health insurance schemes, the lower costs of the direct pattern—
even with payment of high specialist salaries, as in the Kaiser-Permanente
Health Plan of California—have been documented. [38]
The relative costliness of the indirect pattern in hospitals is due not only to
the net cost of medical fees compared with salaries. It is also explained by the

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ORGANISATION OF MEDICAL CARE

diversified demands imposed on all the non-medical members of a hospital
staff. When dozens of different private specialists have patients in a hospital
ward, the nurses must make adjustments to the particular requirements of each;
one specialist calls for one type of catheter, another calls for a different type.
The hospital pharmacy must supply the drugs preferred by each doctor.
Observations of the patient's progress must be recorded meticulously by the
nurses, since the doctor is absent most of the time. Comparison of the nurse's
copious notes in a Canadian hospital chart (indirect pattern) with the brief
notes in a United Kingdom hospital chart (direct pattern) helps to explain the
lower per diem hospital costs in the latter country. A comparative study of
the staffing of hospitals in Sweden (direct pattern) and the United States
(indirect pattern) showed much lower personnel-to-bed ratios, and correspondingly lower costs, in the former. [80] In the direct-pattern medical staff organisation of hospitals the doctors and their numerous co-workers get to know
each other well, and to achieve by cordial relations what otherwise requires
elaborate procedures. Moreover, the need to control the technical performance
of independent specialists in indirect-pattern countries (e.g. Canada) has
brought forth a profusion of committees, rules and regulations which may be
more bureaucratic than those in the direct-pattern hospitals without being
as effective in controlling quality.
The advantages of the direct pattern of specialist care for achieving geographical coverage of a country are obvious. It is difficult to find enough
doctors to serve rural areas in any country, but with the laissez-faire indirect
pattern the concentration of doctors in cities and towns is most marked.
Private fees are always highest in the cities, and—unless a national health
service covers everyone in a nation—private doctors have little inducement to
settle in the rural districts. A direct-pattern medical care scheme with enough
doctors wanting to work in it can locate physicians in areas where they are
needed. Moreover, the specialist services can be regionalised in a systematic way.
Comparative evidence of the effectiveness of the two patterns of specialist
care in terms of the mortality or recovery of patients is difficult to find. Studies
made in the United Kingdom have shown a lower case-fatality rate for specific
surgical and medical diagnoses in teaching hospitals, compared with nonteaching hospitals. [85] Teaching institutions clearly have more highly organised full-time staffs, but the individual qualifications of their specialists are also
exceptionally high, so that the differences cannot really be attributed to the
direct pattern as such. One can only observe that in most countries modernminded people who find themselves seriously ill prefer treatment by specialists
who work in a direct-pattern facility, such as the Mayo Clinic in the United
States, the Military Hospital in Bogotá, Colombia, or the Mahatma Gandhi
Memorial Hospital in Bombay, India.

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81

The great prestige of full-time salaried hospital specialists in most countries
has been mentioned. It is significant, however, that this applies to countries
where the direct pattern of in-patient specialist care predominates. Where the
indirect pattern predominates, as in Canada and perhaps in Belgium, greater
prestige tends to go to the independent physician. In fact even the pathologist
or radiologist in Canada and the United States often objects to salaried employment by a hospital because it allegedly demeans his social standing. It is
obvious, therefore, that the attitude towards a particular pattern of medical
care organisation, in the eyes of both patients and doctors, is heavily influenced
by which pattern has evolved as the predominant one in that country. On a
world scale, the movement is clearly toward a predominance of the direct
pattern of specialist services.

6. HOSPITALISATION
Everywhere in the world the hospital has become an increasingly important
element in medical care. Not only is it a place for the bed care of the seriously
sick, but it brings together under one roof all the variety of scientific skills
required for the modern scientific diagnosis and treatment, and even the
prevention, of disease. The patients served may be ambulatory—in an outpatient department of the hospital—or confined to bed. The hospital is also a
centre for education of professional personnel and for medical research. It is
small wonder that in all social security schemes offering health services the
provision of hospitalisation plays an important part. [53]
A.

ISSUES IN HOSPITALISATION

The mode of work of physicians in hospitals with varying organisational
patterns—particularly for specialist services—was reviewed in the last chapter.
But the physician cannot function in isolation, and many alternative arrangements characterise the hospital environment in which he works. As noted in
Chapter 1, there are "general hospitals" for treating a wide range of diseases,
and "special hospitals" for certain disorders of very high prevalence, either
long-term (like psychoses) or short-term (acute infectious diseases). The
sponsorship of hospitals by governmental or voluntary bodies may also be of
different types. In all hospitals, however, there are certain common problems
of administration that face social security schemes everywhere.
A problem experienced in all countries of the world is the proper supply of
hospital beds to serve the needs of the protected population. The bed supply
is usually measured in terms of the number of hospital beds available at any
one time for each 1,000 persons in the system, a distinction being made between
beds in general hospitals and beds in special ones. The bed supply for general
hospitals in the industrialised countries ranges from three to seven beds per
1,000 of the population, with another increment of two to five beds per 1,000
in special hospitals, yielding an over-all ratio of from five to 12 beds per 1,000
persons. In the developing countries the bed supply tends to be much lower,
falling mainly in the range of one to five beds per 1,000 of the population in
all types of hospital. (The bed supply in some of the developing countries,

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83

especially in Latin America, has shown a striking increase in recent years.) The
policies on use of the available beds for various types of patient and on the
methods of internal hospital administration will obviously differ, depending
on the amplitude of the over-all bed supply. [148]
The construction of modern hospitals is expensive, and funds for this purpose
may be derived from various sources. Social security schemes must always make
the decision on whether to build their own hospitals or to enter into contractual
relationships with hospitals that already exist or are to be constructed by other
organisations. In either instance they must decide upon the bed supply to be
furnished for beneficiaries, since this will have an enormous influence on both
the adequacy of medical services in the scheme and their aggregate operating
costs. More will be said about construction problems in Chapter 13.
The size of hospitals is also a basic question, which has secondary effects
on the problems of transportation. In general, large hospitals—e.g. with
500 beds or more—can offer a much wider range of technical services than
small ones with, say, under 100 beds. On the other hand, large hospitals mean
a great concentration of resources at one location, so that patients must travel,
on the average, longer distances to reach them, or ambulance services must be
provided. In practice, large general hospitals can be staffed only in major
cities, so that rural people must travel long distances to reach them or depend
on smaller hospitals in the smaller towns. Large hospitals for long-term
illness, like mental disease or tuberculosis, are often built in small towns, but
they still serve large territories. For certain services (like food, laundry or
pharmaceutical supplies) large hospitals can enjoy economies of scale, although
the wider range and higher quality of services (e.g. more laboratory and X-ray
examination, better-supplied pharmacies, etc.) often means that the over-all
per diem costs of large hospitals are actually higher than those of small ones. [67]
To assure each person the technical quality of services required for his
particular case, arrangements must be made to permit his transfer, if necessary,
from a small hospital close to his home to a large one at a distance. Or he
should, in the first instance, be permitted to by-pass a nearby small hospital
and enter a distant large one directly, if his medical condition requires this. To
facilitate this movement of patients, as well as to promote good professional
standards, systems of "hospital régionalisation" have been developed in many
countries. These networks of hospitals enjoy a lesser or greater degree of
co-ordination, depending on the pattern of ownership and control of the individual facilities. Sometimes social security schemes may co-operate with
public health agencies in establishing or operating rural hospitals in such
regionalised systems (see Chapter 13).
The services which hospitals are called upon to render are related reciprocally to the level of ambulatory and domiciliary services available outside.

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If the latter services are amply provided, with proper diagnostic and therapeutic
technology, in health centres or private medical offices or industrial clinics
or elsewhere, then the demands on hospitals will be less ; if ambulatory and
domiciliary services are inadequate, then the burden on hospitals will be
greater. The long-term trend in scientific medicine has been for a higher
proportion of total health services to be rendered in hospitals, including their
out-patient departments, because the range of complex equipment and personnel
required can only be assembled there. Nevertheless, this trend is not irreversible, and many efforts are being made to improve the scope and quality of outof-hospital services, both for the convenience of patients and for reasons of
economy. [152]
There is also a reciprocal relationship between the over-all volume of
services required from hospitals and the general conditions of life of the people
in a country. It is widely observable throughout the world that, after admission
to a hospital, patients from poor and depressed environments tend to require
longer periods of hospital stay than patients from prosperous environments.
Thus the average length of stay in hospitals in most developing countries
—even for the same precise diagnosis—is usually longer than in hospitals in
industrialised countries. The same difference is also found within any single
country where there are hospitals respectively serving persons of lower and
higher income groups. Many factors contribute to these findings, including
the slower recovery rates of underfed persons, the later stage of disease at
which medical attention is first sought among the poor, the reluctance of
hospital physicians to discharge a patient to squalid home conditions where
convalescence would be difficult, etc. Inadequate staffing of hospitals serving
the poor also leads to long stays, because of delays and inefficiencies in carrying
out diagnosis and therapy. Whatever the multiple causes may be, it is evident
that with long hospital stays fewer patients can be served in a year by a given hospital bed supply than with short hospital stays. Thus it is evident that the effectiveness of hospitals in serving a population depends not only on the internal
efficiency of the institution, but on the social and physiological characteristics
of that population. In a sense, one of the prices that society pays for poor living
conditions is a higher cost for operating hospitals. [127]
Despite these external social restraints on the efficiency of hospitals, much
can be and is being done to improve their internal administration. With
increased staffing, medical procedures can often be accelerated, so that average
length of stay can be reduced. Even though this usually increases costs per
day, the net costs per case may be lowered. Costs of hospital care are rising
everywhere in the world, not only in absolute monetary terms, but usually as a
proportion of average income per head in the country as well. (This was shown
for nine out of 12 countries in an I.L.O. study [1, pp. 58-63], published in 1959,

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and the trend seems to have accelerated since then.) This may be due mainly
to the increased range and better quality of hospital services, but it still creates
pressures everywhere for greater economies, which counter-balance those for
improving quality of service.
To reduce costs, hospitals have increased their use of mechanical equipment, especially in such departments as the kitchen and the laundry. (This
yields savings, of course, only where wages of kitchen and laundry workers are
relatively high and equipment costs relatively low.) They have attempted to
give patients more intensive therapy and arrange for their follow-up, after
discharge, in an out-patient facility or by home visits of a nurse. Some hospitals have established boarding houses nearby, where patients can stay while
getting out-patient therapy, without using a hospital bed. The wards in hospitals have been reorganised in relation to the severity of the patient's condition,
so that the acutely ill case is treated in an "intensive care unit", the moderately
ill patient is treated in the general wards, and the convalescent or chronic case
is treated in a separate "limited care" section. This scheme of "progressive
patient care", as it is called, establishes a division of labour (especially various
grades of nurses) which is believed likely to produce economies. All these and
other features of internal hospital administration are being actively explored
so that the tide of rising costs can be stemmed while the quality of services
offered is maintained or improved.
A new profession of "hospital administrator" is evolving in many countries.
The precise functions of this person vary with the scheme of medical staff
organisation as reviewed in the previous chapter. Sometimes the hospital
administrator is a physician, who may spend no time or only part of his time
in clinical patient care; sometimes he is a non-medical person who has been
trained for the task. The qualifications of the person in charge of the general
direction of a hospital obviously influence the efficiency with which all the
complex services are operated and integrated. [100]
The problems of hospital planning and administration exist in all countries,
but they are tackled in different ways according to whether the scheme follows
the indirect pattern for hospitalisation or the direct pattern. The method of
paying for hospital services, too, depends to a great extent on the pattern
followed, though there may be more than one different method under each
pattern. The characteristics and consequences of these diverse arrangements
in the eight countries under study will now be reviewed.
B.

INDIRECT PATTERN OF HOSPITALISATION

When hospitals have a long historic development in a country, and the
aggregate bed supply in relation to population is relatively high, the indirect

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pattern of providing hospital services has usually been applied under social
security schemes. This has been the policy in Belgium, the Federal Republic
of Germany and Canada.
Belgium.
In Belgium, for example, there are over 400 hospitals with some 73,000
beds, i.e. a bed-population ratio of about 7.7 per 1,000. About 60 per cent.
of these beds are in non-governmental hospitals, each of which is owned and
operated by some local religious or other voluntary non-profit body. The
remaining 40 per cent, are in hospitals owned and controlled mainly by local
units of government. Most of these institutions have a history going back
many decades, sometimes to the Middle Ages. Each hospital usually has a
Board of Directors composed of leading citizens, and the hospital tends to be
proud of its long tradition of managing its own affairs. When the voluntary
sickness insurance scheme, the forerunner of the present compulsory scheme,
was launched in Belgium in 1894, there was already a framework of hospitals
in all parts of the country, in which protected persons could be served. The
policy applied by the scheme, therefore, was to make contracts with existing
hospitals to serve beneficiaries, for which the scheme would pay all or part of
the costs.
Today, over 90 per cent, of the Belgian hospitals—both those run by the
public authorities and those operated as voluntary bodies—are under contract
with the social security scheme to serve its beneficiaries. The scheme pays the
hospital maintenance charge for each day of care rendered to a beneficiary;
there is no ticket modérateur or any other form of cost sharing by the patient.
The "third party" payment, however, covers only service in a public ward (at
least half the hospital's beds must be in such wards), and the patient must pay
extra charges personally if he requests a private or "semi-privatg" (two-bed)
room. Hospitalisation for longer than about ten days also requires authorisation from the Advisory Medical Officer of the local insurance carrier.
The daily maintenance charge is intended to cover the costs of all inpatient hospital care, except physician's services (which are paid for separately,
as explained in Chapter 5). The amount varies for hospitals of different
degrees of complexity, but is a fixed figure for all hospitals of a certain category.
Within that category, depending on the precise expenses incurred, it is possible
that one hospital may receive payments which are slightly higher than its true
costs while another may get payments that are lower. This, of course, causes
some difficulties in relationships between the social security scheme and the
hospitals. A small number of hospitals are owned and operated by local
insurance funds (mutual benefit societies), but they are paid daily charges in
the same way as other hospitals.

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Federal Republic of Germany.
In the Federal Republic of Germany also, most hospitals are owned and
operated by local units of government or local voluntary bodies—religious or
other. [66] A few hospitals are owned by the local sickness insurance funds
themselves, but this is exceptional. As in Belgium, the beneficiary has free
choice of any hospital, and the hospital is paid on the basis of a flat rate per
patient-day of care. Here, too, the flat rates depend on the level of complexity
of the hospital, and in each Land the hospitals are classified into one of a range
of six to 20 categories. The insurance funds do not, however, pay the full
costs of overheads (depreciation of buildings and equipment, interest on
past debts, allotments to reserves, etc.), these being assumed by the public
authorities (to which 80 per cent, of hospital bed capacity belongs) or by the
voluntary body running the hospital. There have been long arguments,
however, on how much money should be expected from the social security
scheme and how much from local general revenues.
The patient-day payments to hospitals in the Federal Republic of Germany
further differ from those in Belgium by generally including the costs of inpatient physician's services (since hospital specialists are usually on salary).
Only in the small proportion of hospitals (with 11 per cent, of beds) where
independent physicians give the in-patient care, are these costs excluded, since
fees are paid separately to doctors.
Canada.
The Canadian social security scheme also uses the indirect pattern of
providing services to beneficiaries through local hospitals, but its system of
payment differs again from that in Belgium and the Federal Republic of
Germany. As explained in the monograph on Canada, hospitalisation is the
only benefit which is at present nation-wide (unlike physician's care which is
provided under a universal social security scheme only in Saskatchewan).
There are differences in the precise method of administration in each of the
ten provinces, but in all of them the federal Government meets approximately
50 per cent, of the costs through grants to the provinces.
The Canadian scheme provides full hospital service, except for physician's
care. As noted in Chapter 5, nearly all physician's services are provided by
independent practitioners who receive separate fees for each service. Only the
costs of services of pathologists, radiologists or other "supporting" physicians
employed by the hospital are included in the payments to hospitals. These
payments are, however, based on an estimate of costs in each individual
hospital, rather than according to a classification of hospital types as in Belgium
or the Federal Republic of Germany. The determination of these costs is an

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elaborate process. Each hospital submits its expected budget for the next
year's operation, based largely on the previous year's costs, with adjustments
(usually upward). The budget is reviewed by the responsible provincial
government agency and, on the basis of legal definitions of reasonable standards
(e.g. a maximum number of nurse-hours per patient per day), it is approved.
Then the hospital is paid, not for each patient-day of care given, as in Belgium
and the Federal Republic of Germany, but in fixed monthly or fortnightly
instalments through the year. Occupancy rates are assumed to be about
85 per cent., but if the hospital proves to be exceptionally crowded for justifiable reasons (such as an epidemic), then supplementary payments are made at
the end of the year. The periodic payments to hospitals, based on an approved
budget, greatly simplify the administration of the scheme, and they also
discourage excessive use of hospitals with consequent financial waste. [132]
*
*

*

Under all three of these indirect patterns of providing hospital service the
social security scheme sets numerous standards for hospital staffing, personnel
and services. Although there may be limitations on the use of private rooms,
all the essential hospital services—full range of nursing care, diagnostic tests,
operating room service, special diets, in-hospital drugs—are ordinarily required.
There may be deficiencies, however, in the application of these standards
because of lack of resources or poor local hospital management. Inspection of
hospitals to assure compliance with standards may be lax. On the other hand,
the competitive interest of hospitals under the indirect pattern to attract
patients is an inducement to maintain quality, especially in larger cities where
several hospitals are accessible to the same population.
C.

DIRECT PATTERN OF HOSPITALISATION

In many countries the social security scheme operates hospitals directly.
In the developing countries, usually after a period of following the indirect
pattern, the scheme has built its own hospitals to achieve higher standards than
were available in the previously existing facilities. In the industrialised countries the existing national framework of hospitals may be taken over by the
governmental social security authorities and simply operated by them. The
latter development has occurred in the United Kingdom and Poland.
United Kingdom.
In the United Kingdom, on the inauguration of the National Health
Service in 1948, almost all existing hospitals—whether under local government

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or voluntary agency sponsorship—were placed under the control of the Ministry
of Health. For administrative purposes the nation was divided into 14 regions,
in each of which the hospitals (general and special) were assigned to the control
of a Regional Hospital Board. Within the region there are smaller Hospital
Management Committees responsible for the direct operation of one or more
institutions which, in sum, have about 1,000 beds. Basic policies on hospital
staifing, equipment and services are established by the Ministry, but they are
carried out by the Regional Boards and the local Management Committees.
Appointments of personnel and purchase of supplies, for example, are handled
at the board or committee level.
All persons are provided the full range of essential hospital services, no
authorisation being required except the decision of a hospital physician. Ordinarily a patient is referred to the hospital by a general practitioner, but the
decision to admit him is made by a hospital-based specialist. The patient and
his general practitioner have free choice of hospital, i.e. they need not use
the one in the local area. In practice, however, the nearest hospital capable of
handling the case is normally used, because the general practitioner is likely to
be acquainted with it and because it is convenient to the patient. The standards

for hospital operation laid down by the Ministry are rather general, so that
within them individual hospitals are free to develop innovations.
One factor which determines the extent of innovations or improvements,
of course, is financial support. Budgets are submitted by each Hospital Management Comittee to the Regional Boards, where they are reviewed, perhaps modified, and sent on to the Ministry of Health. Depending on the state of national
finances, the grants of the Ministry to the Regional Hospital Boards may or
may not meet the requirements of all the budgets submitted. The Ministry allotments must cover construction costs as well as operating costs, and for many
years after the Second World War the funds available nationally for new hospital
construction were extremely limited. The Regional Board makes periodic
payments to each Hospital Management Committee. Thus, the individual hospitals operate on an annual budget, and do not depend on patient-day payments
which might exceed or fall short of the true costs.
Because whole networks of hospitals are controlled by Regional Boards,
various adjustments can be made from year to year in the services offered by
different hospitals in the region. For example, the surgical service can be more
highly supported in one hospital and the obstetrical service in another. Duplication of expensive equipment infrequently used, such as the artificial kidney
machine, can be avoided. On-the-job training for certain types of personnel,
like pharmacists or dieticians, can be offered. Patients can be readily referred
to different levels of hospitals within the region without this involving financial
complications. The teaching hospitals connected with medical schools are not,

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however, under the Regional Boards (but under separate Governing Boards)
in England and Wales, though they are in Scotland.
Poland.
In Poland, after the Socialist Revolution which followed the Second World
War, the existing framework of hospitals was also taken over by the Ministry
of Health. The solution adopted differed from that of the United Kingdom in
that the hospitals were placed under the control of a hierarchy of government
agencies concerned with all health services, rather than with hospitals alone.
Each of the 22 "voivodships" or provinces into which Poland is divided has a
Health Department. This agency is responsible for all hospitals, health
centres and all other health activities in its borders. Each voivodship, in turn,
is divided into powiaty, or districts, each of which has a Health Department
responsible for all hospitals and other health services within its borders. Each
hospital has a Director, who is responsible to the head of the Health Department
in his district. The Health Department officials at the voivodship and powiat
levels are administratively responsible to the general government authorities
(People's Councils) at those levels, but they follow technical standards promulgated by the central Ministry of Health.
As noted earlier, not everyone in Poland is fully covered by the social
security system, but all persons are treated in the same hospitals ; the protected

persons (mainly industrial workers and their dependants) pay nothing, while the
non-insured (mainly agricultural families) pay about one-half of the costs.
Hospitals are financed through the funds allotted by the Health Ministry to the
provincial and district Health Departments. Each hospital operates on a budget, without respect to the numbers of patient-days of care. The hospital
budget, as in the United Kingdom, includes the salaries of physicians working
in it.
Ecuador.
In contrast to the United Kingdom and Poland, in which the social security scheme has taken over control of all, or almost all, existing hospitals in the
nation, Ecuador represents another form of the direct pattern for hospitalisation.
Since the existing quantity and quality of hospital facilities in the country was
not very satisfactory, the scheme gradually proceeded—after an initial period
of contracts with existing public hospitals—to build its own hospitals and to
operate them directly for its own beneficiaries. Thus, in 1965, the Ecuadorian scheme owned ten hospitals with about 700 beds, in which nearly all the
in-patient care to its members is given. Occasionally, when the beds are full
in a social security hospital, a beneficiary may be accommodated in a private

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hospital or "social welfare" institution with which the scheme has a contractual
relationship. In 1968 new hospitals in four main cities will raise the scheme's
own bed supply to 1,500.
The social security hospitals are generally much better staffed and equipped
than the other hospitals in Ecuador. While comparative data on the expenditure
for the different types of hospitals in Ecuador are not available, such data have
been tabulated for a neighbouring Latin American coutry, Colombia. [28]
Here the daily maintenance costs in the social security hospitals are 2.2 times
higher than in similar facilities under the management of the Ministry of Health.
(The benefits of higher staffing and more intensive care associated with this higher
per diem expenditure have been mentioned above.) Thus, in Latin America,
the social security hospitals generally have a higher proportion of nurses,
better equipped laboratory and X-ray departments, a better supply of drugs,
better hygiene, more adequate dietary service, etc., than the hospitals under
beneficencia or health ministry sponsorship. The financial support of social
security hospitals is simply based on an annual budget which the scheme provides from its central fund.
India.
Hospitalisation under the Indian social security scheme is both by the direct
and the indirect pattern, but it is described here because the long-term plan is
to swing toward the direct pattern. By the end of 1966 the Employees' State
Insurance Corporation had built 16 hospitals of its own and 18 annexes to existing public hospitals for a total of about 2,700 beds. These hospitals are directly
administered and financed by the E.S.I.C. scheme. In addition, in areas where
the number of beneficiaries has been smaller, E.S.I.C. reserves beds in existing
public hospitals which it pays for at a fixed per diem rate ; about 3,300 beds are
provided through this indirect pattern. Current plans call for construction of
an additional 46 hospitals and eight annexes under direct E.S.I.C. sponsorship.
In its own hospitals E.S.I.C. pays the costs of supplies, food and so on
through an annual budget mechanism. The physicians and other personnel in
the hospitals, it will be recalled, are employed by the state ministries of health,
with reimbursement of the costs by E.S.I.C. The net daily costs are much
higher in E.S.I.C. units than the per diem payment made to public hospitals,
for care of beneficiaries. For these higher costs, however, the E.S.I.C. hospital
is believed to be providing a much higher quality of service, through larger staffs,
better diets and more individual attention to patients.
Tunisia.
Yet another variety of the direct pattern of hospitalisation is found in
Tunisia. All in-patient care of social security beneficiaries is given in regular

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hospitals of the Ministry of Health, which are operated directly by the Ministry.
When the general social security scheme was started (by Act 60/30 of 14 December 1960), consideration was given to the construction of a parallel system of
social security hospitals, as in Ecuador, but this was rejected as too costly and
wasteful of existing resources. Thus, all beneficiaries are simply treated in the
existing public hospitals without charge. If a patient requests a bed in a small
ward (four beds or less) he is expected to pay a supplement.
To cover the costs of hospitalisation the social security scheme makes an
annual lump-sum payment to the Ministry of Health. This is intended to meet
the costs of all health services to protected persons, for both in-patient and
ambulatory service, and it is not calculated specifically on the basis of the number
of days of hospital care provided, as in India. The scheme does not reimburse
patients for the costs of hospital care that they may happen to obtain outside
the government system—for example in private hospitals—except in rare instances, when a beneficiary may have to be sent outside the country for highly
specialised treatment not available in Tunisia. Hospitalisation in Tunisia includes the services of phyisicians, who are paid salaries by the Ministry of
Health.
Thus, unlike that of Ecuador or E.S.I.C. in India, the Tunisian social security scheme uses the existing framework of government hospitals. Yet the
scheme avoids the complexities of the indirect-pattern schemes of Belgium,
Canada and the Federal Republic of Germany in that the services are not
purchased on a per diem basis. There is simply an over-all agreement between
the scheme and the Ministry of Health. Annual lump-sum payments by the
scheme accordingly help the Ministry to build up its over-all facilities and
personnel for medical care, which are needed to serve this developing country's
whole population.
D.

EVALUATION OF HOSPITALISATION PATTERNS

The effectiveness of this great variety of indirect and direct patterns of
hospitalisation under social security must be judged against the social and political background of each country. In industrialised countries like Belgium,
Canada and the Federal Republic of Germany—and one might add Australia,
France, Sweden, the United States and many others—faced with the political
realities of local hospital sovereignty, it was understandable how the relatively
complex arrangements of the indirect pattern should have evolved. In the
developing countries, like Ecuador, India and Tunisia—and one might add most
of the other African, Latin American and Asian countries with social security
schemes—it was politically feasible, and certainly administratively simpler, to
follow the direct pattern. Perhaps the most valuable lessons are to be learned

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from industrialised countries like Poland and the United Kingdom—and one
might add Israel, New Zealand, the U.S.S.R. and the other socialist countries
—where, in spite of the fact that a well-developed network of autonomous hospitals already existed, a highly organised direct pattern of hopitalisation has
been developed.
Even if we disregard the social and political backgrounds to these versions
of the direct pattern, certain observations may be made on the value of the
results achieved with them. The local ownership and operation of hospitals,
whether by voluntary bodies or units of local government, is acclaimed in many
countries as a great source of strength and quality. Community leaders work
hard to improve the hospital. Charitable donations are given for expanding
services and improving their quality. Volunteers give their time to sew linen,
serve meals or help to care for patients. The United Kingdom National Health
Service has demonstrated how citizen participation and volunteer contributions
can be retained even in a highly systematised direct pattern of hospitals. Innovations can be tried out at once, without awaiting approval and funds from some
higher authority. Flexibility in developing new ideas and adjusting to rapidly
changing needs is possible in the direct pattern, once allowances have been made
for certain minimum technical standards, and physicians are generally pleased
with the high degree of freedom they enjoy in their professional work in such
hospitals. [108]
With the indirect pattern, it is certainly more difficult to assure the maintenance of standards. The influence of a social security scheme or a ministry of
health must be indirect, and continuous policing is not practical or wise. The
self-disciplinary inducements of competition are not effective in rural areas, for
example, where an isolated hospital has a virtual monopoly of the medical
market. Local pride may lead a small hospital to accept complex cases which
it is not properly equipped to treat. The whole concept of régionalisation is
very difficult to implement under the indirect pattern.
The natural desire of any organisation responsible for managing its own
affairs—whether hospital or factory—to earn as much as possible to enable it to
expand and achieve financial stability is easy enough to understand. Yet this
may create a tendency to extend the length of stay of patients unnecessarily, if
each day of occupancy means additional earnings. The natural objective will
be to keep the beds occupied at the highest possible rate. The Canadian system
of hospital payment, on the basis of an annual budget rather than per diem
charges, may counteract this tendency in the short run. Over the years, however,
pressure will still be exerted for maximising hospital occupancy. In any event,
the negotiation of a proper figure for the daily maintenance cost of a hospital
is always difficult. There are endless debates between social security schemes
and hospitals about reasonable levels for certain expenses (including the salaries

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of personnel) and about the inclusion or exclusion of certain features, such as
depreciation, interest, reserves, costs of research, or costs of staff education.
Lastly, the costs of hospitalisation can be kept down by limiting the supply
of hospital beds. With the indirect pattern this can be done in theory but in practice it may be difficult to carry out. In Canada, for example, every licensed
hospital may participate in the scheme ; this results in an especially high ratio
of beds and a very high rate of hospitalisation—much higher than for comparable insured populations in the United States. Under the direct pattern the
over-all utilisation rate can be more readily influenced by straight control over
the supply of beds. Moreover, hospitals can be located in rural as well as urban
areas in relation to population and in accordance with a "master plan". [29]
There is also the question of relationships between in-patient hospital care
and the ambulatory services. Diagnostic or therapeutic procedures may be
wasted if there is not close communication between the two sectors. Yet, with
the indirect pattern, there is often no professional tie between the medical staff
inside the hospital and the personal doctor outside. Even with the direct pattern, continuity of patient care may be poor, but it is at least feasible, as in
Ecuador or Poland, to establish polyclinics as satellites of hospitals.
Actual measurements of the results achieved under the different patterns
of hospital organisation are difficult to interpret. The volume of hospital services provided differs greatly from one country to another, but it is obviously
influenced much more by the general level of affluence of the country and its
net supply of hospital beds than by the pattern of hospitalisation in the social
security scheme. In Canada, for example, the protected population receives
hospital care at the high rate of 160 admissions and 1,917 days of hospitalisation
per 1,000 persons per year (1964 data). It is of interest that the highest hospitalisation rate (224 admissions per 1,000 persons per year) occurs in the province
of Saskatchewan, the only Canadian province where social insurance for physician's care covers the entire population. (Easy access to physicians, due to
insurance protection, with fee-for-service payment of doctors and an indirect
pattern of hospital organisation and of in-patient specialist care evidently leads
to a very high rate of hospitalisation.) In Ecuador, the hospitalisation rate for
the protected population is only 60 admissions and 870 days per 1,000 persons
per year. While this is much higher than the rate for the non-protected population of Ecuador, it is less than half of the Canadian hospitalisation rate. The
rate would probably be higher if the Ecuadorian scheme covered families
(although it does cover pensioners, among whom hospital needs are high) and
unemployed persons. The difference must be attributed, nevertheless, mainly
to the amplitude of hospital and medical resources of the two countries.
Some comparisons of the effects of different systems of hospital organisation on the hospital utilisation rate can be made by examining different health

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insurance schemes in the same country. In the United States, for example, the
hospital admission rate under insurance schemes with the direct pattern of
hospitalisation (for example the Kaiser-Permanente Health Plan) is lower than
under insurance schemes covering comparable populations by the indirect pattern (for example the Blue Cross plans). [110] The differences may be attributed
partly to the methods by which physicians are paid (salaries in the former and
fee for service in the latter) and partly to the lower bed-population ratio in the
direct-pattern schemes. But, although the greater controls of the direct pattern
appear to reduce hospital utilisation, comparison of the different patterns as
regards volume of service provided is extremely difficult even in the same
national setting.
The meaning of a high or a low hospital utilisation rate, moreover, in terms
of the quality of medical care, is by no means clear. An extremely low rate
doubtless means deficient care and an extremely high rate may mean excessive
and unnecessary care, but there is a broad range of cases between these two
extremes which is difficult to interpret. Everything depends on a knowledge of
the optimal hospitalisation rate for a population of defined social and demographic characteristics. We simply do not know what this rate is. If, for
example, the hospital admission rate is 50 per 1,000 persons per year under one
scheme and 200 per 1,000 under another, the first rate may be too low and the
second too high, but what would be optimal ? The answer will govern our judgment on the relative quality of the medical care in the two schemes, but to
find this answer requires more research in different cultural settings.
If quality of hospital care is judged in terms of the scientific preparation
of the personnel giving in-patient services, then the direct pattern probably has
the advantage most of the time. A social security system can stipulate requirements for its own hospital staffs that it can seldom demand or enforce in independent hospitals with which it enters into contracts. There are, of course,
exceptions to this, especially in the industrialised countries where many independent hospitals have distinguished histories, but when there are scarcities of
well-qualified personnel a social security scheme operating its own hospitals can
usually enforce high standards more effectively than hundreds of separate
independent institutions.
The human and personal quality of in-patient care under different hospital
patterns is even more difficult to measure. Most observers have the impression
that small hospitals give more intimate attention to the patient's personal needs
than large hospitals. [56] Hospital size, however, is not determined by the
social security pattern; large and small hospitals may exist under both indirect
and direct patterns, depending on their particular history, the distribution of
the population, and other factors. Technical quality is undoubtedly easier to
achieve in large hospitals and there is probably a tendency, therefore, for social

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security schemes building their own hospitals, as in Latin America, to put the
first emphasis on technical standards—choosing to build large hospitals—even
if this means that patients will be dealt with more impersonally. There is no
reason theoretically, however, why a large hospital cannot be subdivided into
small nursing units and thereby achieve good personal care as well. The costs
would simply be higher.
On the question of costs, the relative results of the indirect and the direct
patterns of hospitalisation are also not so easy to judge as might at first appear.
In India the per diem costs of operating the E.S.I.C. hospitals are much higher
than the contractual per diem payments made to outside hospitals. Likewise,
in Ecuador, the costs of operating the social security hospitals are higher than
those for hospitals outside the system. For these higher costs, however, it is
generally agreed that average hospital stays are shorter and the quality of care
is superior. The critical question is the relative per diem cost of the same quality
of care under the two patterns. Now there is presumptive evidence that economies can be achieved in a large system of hospitals under the direct pattern that
cannot be achieved by the same number of hospitals each operating independently. This is easily demonstrated by drawing a parallel with large industrial
companies (or agricultural enterprises), which have great competitive advantages over small ones. The question is certainly complex, but most economists
would agree that a large-scale system (i.e. the direct pattern) can make fuller
use of its resources, and hence achieve savings more readily, than multiple
producing units. [47]
In terms of the attitudes of patients, there are satisfactions and complaints
under both patterns of hospitalisation. In Belgium there are reports that patients
have complained about supplementary charges made by the hospitals (indirect
pattern). x In Canada, although the bed supply is high, there are still complaints about waiting periods for elective surgery. In Ecuador, where the bed
supply is relatively low, the workers are nevertheless generally pleased with the
hospital service, because it is so much better than what they had formerly and
than what is available to the non-protected population. In India, too, the
workers who can use the E.S.I.C. hospitals feel fortunate in being a favoured
minority. Attitudes are obviously relative, and depend on a person's expectations in the light of his own past experience and the observed current circumstances around him. [431 Certain studies of patient attitudes made in United
States hospitals show the great majority of patients to be well satisfied with the
service they receive in all types of hospital; it is mainly the exceptionally
demanding patient—usually upper middle-class, intellectual, and with very
high expectations—who has complaints in almost any type of institution. [109]
1

See the I.L.O. monograph on Belgium.

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97

The attitudes of hospitals—or more properly hospital administrators and
governing boards—depend, of course, on their previous history in a country
launching a social security scheme. When there is a history of strong independent hospital development, as in the industrialised countries, the hospitals
tend to guard their sovereignty with pride. They usually prefer the indirect
pattern, which pays them for services rendered, but allows them to run their
own affairs with relative freedom. On the other hand, many independent
hospitals had serious financial problems before the advent of social security.
In the United Kingdom and in Chile the absorption of the previously autonomous local hospitals—especially those under voluntary sponsorship—was
actually welcomed as a sudden solution to their difficulties. Throughout Latin
America the beneficencia or charitable hospitals have gradually come under
increasing subsidy and control of central governments, to nearly everyone's
satisfaction. When totally new hospitals are established by a social security
scheme under the direct pattern, the general experience suggests a rapid development of loyalty and enthusiasm for the over-all scheme.
Finally, the comparative evaluation of the different hospital patterns in
terms of the recovery rates of patients defies measurement at this time. One
can only conclude tentatively that a pattern which provides the fullest implementation of modern medical science probably saves the most lives and cures
the most patients. But there is always a cost side in a cost-benefit analysis,
and one has to judge how much a society is able or willing to pay for saving a
life or reducing a day of disability. The task in hospitals is to provide the
laboratory and X-ray services, the surgical equipment, the blood banks, the
nursing services, the intensive care units, the pharmacies, the oxygen apparatus,
the emergency services, and everything else the physician needs for the effective
care of patients, and to provide them with maximum efficiency and minimum
cost. [92] The pattern of organisation of the medical staff, moreover, exerts
a great influence on the performance of individual doctors within the complex.
The trained hospital administrator, whether he is a physician or not, is a key
figure in co-ordinating all the elements involved in the delivery of services. No
pattern of hospital organisation can be successful without both adequate basic
resources and imaginative leadership in using them.

7. PHARMACEUTICAL PRODUCTS AND APPLIANCES
Hospitals usually provide patients with pharmaceutical products as part
of the hospital service, whether this is organised by the direct or indirect pattern.
Outside hospitals, however, the provision of drugs in a social security scheme
may follow either the indirect pattern (through purchase from independent
pharmacists) or the direct pattern (through the pharmacies of the organised
scheme). In either arrangement the pharmaceutical products themselves must
be produced first, and this is usually a complex manufacturing process done
outside of the social security system.
Both the production and distribution of drugs have become an elaborate
process throughout the world, as the number and variety of compounds have
multiplied. The use of drugs for curative or palliative or even preventive
purposes has steadily increased everywhere. Because this is one sector of
medical care which articulates with the whole private chemical industry in many
countries, and with the whole process of importation and foreign trade in other
countries, it has presented special problems of rising costs. Appliances for
the treatment of various disorders, like eyeglasses or prosthetic limbs, present
similar problems of production and distribution. These general problems and
issues will be explored briefly, before we examine experience in providing drugs
and appliances under different patterns of organisation.
A.

ISSUES CONCERNING DRUGS AND APPLIANCES

An elaborate industry making thousands of different pharmaceutical
products has grown up in many countries, principally in Europe and the United
States. [77] The developing countries must import most of their drugs, although
several have come to produce a large share domestically through local branches
of foreign corporations or wholly new domestic firms. The industrialised
countries may also import many drugs or the raw chemicals from which drugs
are compounded. Tariffs tend to elevate the costs of most imported items.
In most countries drugs which embody a new pharmacological principle
may be patented, and this grants a certain monopoly to the company which
has first produced them. During the several years of life of a patent, the price

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99

of the patented product can usually be kept high to yield profits to the inventor
and to amortise the original cost of the research. Even after a patent has
expired, however, a brand name is guarded by copyright law and can help to
sustain high prices. After patent expiration, or in the case of drugs that have
never been patented (like iodine or penicillin), the product can be manufactured
by anyone and sold under another name. When the latter simply reflects the
chemical composition, it is usually referred to as a "generic-name" product,
the price of which is much lower. There is an international convention on
patents and copyrights which most countries honour, thereby assuring the price
advantage of patented products. [87, p. 97]
Because most drug production is part of private industrial enterprise,
competitive interests lead to a great deal of advertising. For drugs available
only on a doctor's prescription the advertising is directed to physicians, but
for other drugs it is beamed at the general public. The latter form of advertising leads to much self-medication, which is often useless and may delay the
patient's procurement of proper medical care. But even advertising exclusively
to the medical profession is often misleading and always expensive, accounting,
on the average, for about 25 per cent, of drug prices according to government
studies in the United States. [63]
In many industrialised countries the government has legal powers to control
drug advertising and labelling, though this is seldom the case in the developing
countries. Controls are also exercised over drug manufacture, to ensure the
purity and safety of the products. A number of national tragedies, in which
hundreds of persons have been killed or crippled by harmful pharmaceutical
products, underscore the urgent need for such controls on an even more
stringent basis. [21] National controls over the pricing of drugs, however, are
seldom applied, except in the socialist countries; pricing is usually left to the
operations of the free market.
In the socialist countries, pharmaceutical products are produced by the
government and furnished directly to the social security scheme. In India too,
a small share of drugs is produced in government plants. Sometimes social
security schemes buy large quantities from the drug manufacturer at wholesale
rates. With these exceptions, the drugs produced by private industry normally
flow through a channel of wholesale and retail distributors, each stage of which
involves a "middleman" distribution cost, before they reach the patient.
Social security schemes provide pharmaceutical products only on the order
of a physician. The adequacy of benefits for prescribed drugs is important
not only in itself, but in order to discourage resort to self-medication, a practice
that may adversely affect the health of protected persons. There is a wide
range of possible solutions to the problem of how to pay benefits in respect of
prescribed drugs, determined usually by the expenditure a social security scheme

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is prepared to make. Limitations on certain types of drugs and cost-sharing
mechanisms are sometimes applied to reduce costs. The situation is similar as
regards appliances which may be prescribed under a medical care scheme.
B.

INDIRECT PATTERN OF DRUG DISTRIBUTION

In the Federal Republic of Germany, Belgium and the United Kingdom
the social security scheme provides drugs as an out-of-hospital benefit through an
indirect pattern. With a doctor's prescription the protected person may obtain
the drug at any pharmacy. The methods of administration, however, differ in
each country.
Federal Republic of Germany.
In the Federal Republic of Germany the protected person takes his
prescription from a physician to any pharmacist, who then sends the bill to
the patient's insurance fund. The only cost sharing is a small flat-rate charge
of 50 pfennig on each prescription form, regardless of its cost or the number of
different items prescribed on the form. There are virtually no limitations on
what the physician may prescribe, although he is theoretically expected to order
the least expensive type of the intended pharmaceutical product. In practice
this policy is very difficult to carry out because the drug market offers an enormous variety of items—some 60,000—which is a much greater number than
can be found in other European countries (Denmark, for example, has only
about 1,600 items on its drug market). There are over 10,000 independent
pharmacies in the country, or about 17 per 100,000 population.
The vast majority of drugs used are proprietary, and "generic-name"
products are rarely prescribed by the doctors. Since the variety of proprietary
products is so great, and advertising is so abundant, one can hardly expect the
doctor to be always acquainted with the least expensive and most effective
preparation in each category. Some of the sickness insurance funds have tried
to cope with the problem by sending doctors detailed lists of recommended
drugs, but many doctors have objected to this and, in any event, they are not
compelled to follow the recommendations.
Each month the pharmacist sends his accumulated bills for prescriptions
to the various insurance funds whose members have used his pharmacy. His
price for each prescription is governed by a national law which allows him a
fixed percentage of "mark-up" beyond the wholesale price of the drug; this
provision applies to all drugs sold in the Federal Republic (even outside the
social security schemes). All pharmacies, except very small ones, must reduce
the price charged to insurance funds by 7 per cent. At the office of the insurance
fund, of course, monthly bills arrive from many different pharmacies, so that

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the whole process of financial administration is very complicated. Efforts at
simplification through computer processing of all pharmacy bills and payments
have recently been launched in certain Länder.
Despite these efforts at some reasonable controls over drug prescription
and costs, there has been a slow rise in the rate of use of and expenditure for
prescribed drugs under the social security scheme. In 1964 the expenditure on
out-of-hospital pharmaceutical products and supplies amounted to threequarters of the sum spent for all physicians' services. The problem of controls
over both quality and costs in this indirect pattern absorbs a great deal of
attention in the social security scheme.
Belgium.
The Belgian social security scheme follows the indirect pattern for distribution of drugs, but it differs in several respects from that of the Federal
Republic of Germany. It is similar to the Federal German scheme in that
the patient has free choice of any pharmacy, but the reimbursement mechanism
is used. The patient pays the pharmacist and then seeks reimbursement from
his insurance fund. The cost sharing, moreover, is relatively higher. A distinction is made in the benefits between "made-up" or generic prescriptions
and proprietary products. For the former, the patient pays 15 Belgian francs
towards the cost, which is estimated as about one-fourth of the current cost
of the average prescription; the balance is reimbursed. For proprietary drugs,
however, the insurance reimburses relatively less; a sliding scale is used, under
which the patient may have to pay as much as 50 Belgian francs.
Sale of proprietary drugs, which tend to be more expensive than generic
products, is controlled by a national technical council, which issues an approved
list of drugs. Only drugs on that list, which is reviewed periodically, are
subject to reimbursement at all. Unfortunately, many doctors pay no attention to the list, so that the patient is forced to pay the full cost of certain prescriptions. The prices of both generic and proprietary prescriptions (on the
approved list) are fixed by the social security scheme. The basic problem, however, is that many proprietary drugs are approved for general sale in the
country by the Ministry of Public Health (since they are found to be safe), even
though the social security scheme may not have placed them on its approved
list because of unreasonably high pricing.
United Kingdom.
In the United Kingdom, although the direct pattern is used for hospitalisation and specialist services, the indirect pattern is applied for out-of-hospital
drugs (as for general physician's care). The patient may go to any participating

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"chemist" or pharmacist, and almost all of the 13,000 pharmacies in England
and Wales take part. The pharmacist sends his bills (actually he sends the
prescription forms) to one of 22 Pharmaceutical Pricing Offices, which pay them
on the basis of a nationally established pricing schedule. The prices take account
of wholesale drug costs, a container allowance, an overhead allowance, and a
professional service fee. With some exceptions patients are required to pay
a small share of the cost.
There is no restriction on the drugs the doctor may prescribe. For his
advice, the Ministry of Health, through pharmaceutical advisory committees,
publishes lists of (a) "efficacious drugs" and (b) "drugs of no proven efficacy",
but these are said to have very little influence on the prescribing habits of the
doctors. The vast majority of prescriptions are proprietary drugs, and some
70 per cent, of these are foreign imports which are relatively expensive. General
practitioners whose prescribing practices are found statistically to yield costs
substantially above the average for their area are subject to visits from Regional
Medical Officers of the Ministry of Health. Extreme cases may lead to complaint
by the Minister to the Medical Committee of the local Executive Council, which
supervises the general physician's services, but the latter procedure, which could
lead to financial sanction, is rarely used. Otherwise, there are no effective controls
over the quality or costs of pharmaceutical benefits. Expenditure on drugs has
risen steadily since the beginnings of the National Health Service in 1948, both in
absolute amount and in proportion to the total health service costs. In 1948-49
pharmaceutical benefits cost £16 million or 6.5 per cent, of all health service
costs, while in 1965-66 these had risen to £137 million, constituting 12.2 per
cent, of the total health service costs.
Canada.
Canada does not provide out-of-hospital drugs in any of its social security
schemes, except workmen's compensation for employment injuries. In hospitals, of course, pharmaceutical products and appliances are simply regarded
as part of the hospital service. The general medical care scheme in Saskatchewan
does not offer pharmaceutical products.
*
*
*
It is evident that in the Federal Republic of Germany, Belgium and the
United Kingdom the indirect pattern of providing pharmaceutical products
involves many problems. Free use of local pharmacies and largely unrestricted
prescribing practices by physicians are obviously convenient for both patients
and doctors. They seem to lead, however, to seriously rising costs and raise
numerous questions about the quality of medical care provided.

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C. DIRECT PATTERN OF DRUG DISTRIBUTION

The approach to drug distribution in countries using the direct pattern is
very different. In Poland, Ecuador, Tunisia and India the social security
schemes operate their own pharmacies, with salaried pharmacists, and out-ofhospital drugs are dispensed under much more carefully controlled conditions.
Poland.
In Poland about 80 per cent, of the drugs are produced by the Government
and about 10 per cent, by private producer co-operatives; about 10 per cent.
are imported. All drugs, however, are distributed either at health centres or at
local pharmacies which are owned and operated by the Ministry of Health and
Social Welfare. Pharmacists and various pharmacy aides are paid full-time
salaries, based on their qualifications and responsibilities. About 95 per cent.
of drugs dispensed are manufactured compounds and 5 per cent, are individually
prepared on a doctor's special prescription; the only "proprietary" drugs are
imported manufactured items.
If drugs are procured outside hospitals the patient must share the
cost. Protected persons in Poland normally pay 30 per cent, of the official
price of drugs, but there are a number of exceptions to this rule. Thus pensioners, invalids, disabled veterans and others get drugs free; and drugs are also
free in emergencies or for the treatment of venereal disease or tuberculosis. In
some circumstances protected persons must pay only 10 per cent, of the price
(e.g. if they suffer from chronic disease). Non-protected persons (mainly peasants) have to pay the full price of drugs, but still obtain them in the government pharmacies or at health centres or polyclinics. In Poland, too, as in the
indirect-pattern countries, the national expenditure for drugs has shown a
steady rise, from 1,928 million zlotys in 1955 to 7,742 million zlotys in 1965.
The proportion of these sums disbursed under the social security scheme has
also risen, from 44 per cent, in 1955 to 67 per cent, in 1965.
Ecuador.
In Ecuador drugs are provided mainly from pharmacies established at the
hospitals and ambulatory care facilities of the social security scheme. The
pharmacists and aides are on full-time salary and there are no charges to the
protected person. All drugs must be prescribed by the generic name, according
to an official schedule issued by the Medical Department of the scheme. Many
products are purchased in large quantities at relatively low prices directly from
the manufacturer.
There have been occasions, however, when the supply of drugs of certain
types in the official pharmacies has run low, and the physicians have then

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prescribed products which are purchased in outside private pharmacies. This has
proved very expensive and demonstrates clearly the economies of the direct, as
against the indirect, pattern. Thus in 1963, a year when use of private pharmacies was especially great, the cost of pharmaceutical products consumed as
much as 30 per cent, of the total cost of the medical care scheme; by 1965 the
supply of drugs under the scheme improved, and drug expenditure went down
to 18 per cent, of the total cost. Medical inspectors are appointed to visit the
hospitals and health centres to make certain that the pharmaceutical service is
being properly handled, that the doctors prescribe according to the official drug
schedule, and that abuses are eliminated.
One of the abuses in the Ecuadorian scheme, as in other countries, is the
resale of expensive medicines by the beneficiaries. Since most drugs are imported
and their prices are high, an illicit market has developed, in which beneficiaries
take the prescribed drugs issued at the hospital or polyclinic pharmacy and
resell them to a private one. This was done quite easily when manufactured
drugs were dispensed in their original containers, but it has been much reduced
by the more recent practice of using containers clearly identified as coming from
the social insurance scheme and marked "not for sale". It is evident that this
sort of abuse can be expected mainly in a country where the general income level
of the protected persons is low and the temptations for even small financial
gains are therefore great.
Tunisia.
The direct pattern of drug distribution is also applied in Tunisia, where the
hospitals and ambulatory care facilities maintain pharmacies. They keep a supply
of drugs in accordance with an official list issued by the Secretariat of State for
Public Health. Drugs may not ordinarily be purchased from private pharmacies at the expense of the social security scheme. Moreover, the quantity of
drugs dispensed at any one time is limited by regulation, so that the patient
must return for further medical examination before an additional supply can be
dispensed.
No charges are made to protected persons for drugs or supplies. Pharmacists and pharmacy aides are on salary, and are paid by the Secretariat
of State for Public Health. The over-all supply of drugs in Tunisia has been
limited by reason of the general economic handicaps of the country and by
the necessity to import most items at relatively high prices. Economies are
achieved, however, by a Central Pharmacy run by the Secretariat of State, which
purchases drugs in large quantities and then distributes them to the various
official dispensaries. If a drug not on the official list is urgently requested by a
physician, it may be purchased from a private pharmacy by the hospital or
polyclinic, from which it is dispensed to the patient.

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India.
In India drug distribution to ambulatory patients—like general physician's care—follows both the indirect and the direct patterns in different regions
of the country. In the "panel" areas, where private physicians paid by capitation give general care, the patient obtains prescribed drugs at any private pharmacy on the approved list. Thus there is free choice of pharmacy, but within
certain limits, since not every pharmacy is on the approved list.
Under the E.S.I.C. scheme, three types of drugs are classified: (a) common
drugs; (b) special and more expensive drugs; and (c) drugs which may be
prescribed only by a specialist. In the indirect-pattern areas, the first type is
intended to be dispensed directly by the "panel" physician from his private
office and covered by his capitation payment, although if such drugs are moderately expensive they may also be prescribed and obtained at a pharmacy; the
second type is always obtained at a private pharmacy, as is the third type. Since
the private physician can prescribe for E.S.I.C. beneficiaries only the drugs on
the three lists approved by the social security scheme, there are restraints on
his prescribing practices. The pharmacists are paid fees for each prescription,
according to a pricing formula included in the agreement between E.S.I.C.
and the pharmacist. Since each prescription price must be checked in the
bills submitted to the E.S.I.C. offices, there are often delays in paying the
pharmacists, which have caused many complaints.
Another problem in the indirect-pattern areas is substitution of other items,
like soap or cosmetics, for the drug ordered on the prescription the beneficiary
brings to the pharmacy. It is alleged, moreover, that some "panel" practitioners
issue blank prescription forms, allowing the pharmacist to fill in the name of
the most expensive drug on the official list; sometimes these preparations are
even sent back to the doctor for dispensing to other private patients.
It is easy to appreciate, therefore, why the E.S.I.C. authorities greatly
prefer the direct pattern of drug distribution, which is used in areas of India
where physician's care is obtained at organised facilities. Drugs and supplies
are distributed from central or regional drug depots to the pharmacies attached
to those facilities. Bulk purchasing makes the costs of prescriptions much
lower and the abuses described above do not occur. Adherence to the specific
drugs on the three approved lists, in the interests of both economy and quality,
is also rigidly attained.
Mainly because of the large share of drugs dispensed by the indirect
pattern, the over-all expenditures for drugs in the Indian scheme are relatively
high. They amount to over 34 per cent, of the total costs of the medical care
scheme. The objective of E.S.I.C, therefore, is to move gradually towards the
direct pattern for all drug distribution, with more and more E.S.I.C.-operated

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pharmacies, even in areas where general physician's care follows the indirect
pattern.
*

*

In all the countries using the direct pattern for dispensing pharmaceutical
products the greatest problems relate not so much to the distribution or dispensing of drugs as to the initial procurement of drugs from manufacturers.
In the developing countries a large share of expensive drugs must be imported.
Great economies are achieved in Poland and to some extent in India, where
the Government has begun to manufacture its own drugs; but Ecuador,
Tunisia and most other developing countries have not yet been able to do this
and are dependent on the private pharmaceutical industry abroad or at home.
We have so far said very little about the distribution of appliances or other
commodities necessary for comprehensive medical care. These include
eyeglasses, hearing aids, crutches, artificial limbs, braces, trusses, and so on,
as well as consumable supplies like bandages or plasters. In general, the
distribution of these items corresponds to the policies followed for pharmaceutical products, using either the indirect or the direct pattern. There is somewhat
greater use of the indirect pattern, however, since the demand for these appliances and supplies is less frequent than that for drugs, and in any one locality
it may not be sufficiently great to warrant establishment of a direct unit (such
as a prosthetic appliance shop) by the social security scheme itself. The
dispensing of eyeglasses is probably more often done by the direct pattern,
since the need for them is relatively widespread and the economies achievable
by comparison with purchasing from private opticians are great. In some
schemes, however, eyeglasses or other appliances are provided only for special
cases, such as employment injuries.

D.

EVALUATIVE COMMENT

Although there are few statistics to serve as a basis for comparative
judgment, the relative advantages of the indirect and the direct patterns of
pharmaceutical services can be generally discerned.
The indirect pattern has obvious conveniences for both patient and doctor,
especially when private pharmacies are widely distributed. Such pharmacies
are often open from early morning to late at night, ready to serve any urgent
pharmaceutical need. In the same pharmacy the patient can conveniently buy
soaps, toothpaste or other products for family use. A very wide variety of
drug compounds can be stocked by the private pharmacy, meeting the prescription requirements of many different physicians. Because he runs a competitive

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business, the private pharmacist is eager to please his client, and may be helpful
to him in advising on the detailed procedures for taking certain drugs; in some
countries he may personally give injections.
But the very advantages of the indirect pattern are also at the root of its
disadvantages. Large numbers of small independent pharmacies have high
aggregate overhead costs; to meet these costs and to give the pharmacist a
profit adds to the cost of prescriptions. Maintenance of an inventory of
hundreds or thousands of different drugs is obviously costlier than keeping a
more selective inventory. Not only cost but also quality is at stake, since
among the huge variety of pharmaceutical products sold commercially many
items are of doubtful value. Various abuses are possible, as reported in India.
The administrative tasks of paying pharmacists on a fee basis for each prescription are onerous for both the social security scheme and the pharmacist
himself.
To help reduce the above difficulties, various controls have been introduced
in some countries. Official lists of approved drugs—sometimes called "drug
formularies"—are issued and maximum wholesale prices are fixed. The
enforcement of these regulations, however, is usually difficult. When there is
no restricted formulary, efforts may be made to influence the prescribing
practices of doctors by educational means, but the busy doctor may pay little
attention.
The fundamental problem with the indirect pattern—and even to some
extent with the direct pattern—lies in the fact that proprietary drugs—often of
unproven efficacy—are produced in superfluous variety by hundreds of competitive manufacturers. In many cases they are economically protected by
patents, and the expenses of large-scale advertising further add to their cost. [86]
As a result, the costs of pharmaceutical benefits in social security schemes
everywhere have been rising, not only in absolute figures but also as a percentage of total medical care costs. The schemes have also been growing in
administrative complexity, as the various restraints mentioned above have
attempted to stem the tide of rising costs. Some of the schemes using the
indirect pattern, like the Belgian scheme, offer a financial inducement (lower
cost sharing for the patient) to the prescribing of "generic" compounds, which
are chemically equivalent to but less expensive than proprietary drugs. The
general experience, however, is that physicians continue to prescribe mainly
the proprietary items, either because advertising has convinced them of their
reliability and superiority or simply because of custom and convenience.
If generic compounds are sometimes unreliable, the solution would seem to lie
in greater governmental controls over their standards of production. [118]
The direct pattern of drug distribution cuts through most of these difficulties. The operation of pharmacies at hospitals or health centres, with

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pharmacists and aides on salary, is more economical. It is also much more
readily subject to controls in the selection of a reasonable formulary or list of
drugs of proven value. Generic compounds can be given preference systematically. Although a pharmacy at the place where physician's care is rendered
may be more distant from the patient's home, it has the convenience of quick
accessibility following the medical consultation and also easy communication
between the doctor and the pharmacist when that is necessary. Pharmacists
or aides in a health centre are not so likely as the independent pharmacist to
give medical advice outside their competence. Payment of pharmacists by
salary is far simpler administratively than paying them fees for each prescription.
On the other hand, the direct pattern also has its problems. Because its
inventory of drugs is usually more restricted, the directly operated pharmacy
may be unable to meet certain exceptional prescription demands, and drugs
must be procured from private sources. Dependence on a central supply
depot of some sort may involve administrative delays, and periods of shortage
of certain drugs may occur. Physicians often object to the restrictions of a drug
formulary since it reduces their freedom to prescribe. Patients may get the
impression, as has occurred in Tunisia, that the official drugs are less effective
than those sold privately—even though there is no scientific basis for this
belief. Indeed, even in the indirect pattern of the Federal Republic of
Germany, beneficiaries complain about the requirement that the physician
must prescribe the least expensive form of a pharmaceutical product, fearing
(without justification) that this means inferior drugs for them.
The abuse of drug resale by beneficiaries, while associated with the direct
pattern, cannot really be attributed to it. Rather, it is an obvious consequence
of the general level of poverty in the developing countries, which drives protected persons to these small "black-market" dealings. It may be noted that
in India, even with the indirect pattern, a similar abuse is prevalent.
In any pharmaceutical service there is a tendency to wastage by prescribing larger quantities than the patient finally takes. Controls over maximum
quantities dispensed can be more readily applied under the direct pattern.
Lacking the profit motive, the direct-pattern pharmacy has no interest in
maximising its sales. The basic policy of such pharmacies is determined by the
medical leadership of a social security scheme, and not by commercial or entrepreneurial motives. In remote rural locations, where the profit motive would
never lead to the establishment of a private pharmacy, a direct pharmaceutical
unit at a health centre can be readily set up for the service of beneficiaries.
Perhaps the ultimate problem in the pharmaceutical field is on the side of
production rather than the distribution of products. In the industrialised
countries there is often national legislation governing the drug industry—

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manufacturing methods, labelling and advertising of products, introduction
of new compounds which might be unsafe, etc. Even in the most highly
industrialised and affluent countries, however, enforcement of such drug control legislation—with respect to hundreds of manufacturers—is often weak.
The most important control would be a proof of drug effectiveness for the
treatment of specific diseases, in addition to safety from harmful side effects,
as the condition for the sale of a new compound. [147] Very few countries
have such legislation ; in the United States, where it does exist, the technical
problems of implementing it are very difficult.
Yet the very lack of strong control legislation at the national level accounts
for the frequent lack of faith of doctors in generic compounds and the confidence they are led to have in well-advertised proprietary drugs. [146] It is
true that the private pharmaceutical industry has produced some important
new drugs from its own research, induced by competition, but it has also produced and sold some tragically harmful compounds. Moreover, most of the
basic discoveries of important drugs, like insulin, penicillin, or the antipoliomyelitis vaccine, have come from university research laboratories rather
than commercial ones. [72]
The long-term trend in the pharmaceutical services of social security
schemes is certainly towards greater controls over both quality and price. The
pressures of rising rates of drug utilisation and rising over-all costs are leading
to this. Accordingly, the indirect pattern is being subjected to increasing
restraints, which make it resemble the direct pattern. In the socialist countries
both distribution and production of drugs have become direct governmental
operations. In the developing countries, where the framework of private
pharmacies and private pharmaceutical manufacturing companies has been
relatively weak, the social security schemes have usually taken a short cut and
applied the direct pattern at the outset. The weaknesses in these schemes are
due not so much to the drug distribution pattern as to the poverty of the
countries, and they will probably diminish as their economies as a whole
develop.

8. DENTAL CARE AND OTHER HEALTH SERVICES
The bulk of health needs are met by the medical, hospital and pharmaceutical services reviewed in previous chapters, but still other services are
required for comprehensive medical care. These include dental services, treatment of visual disorders, physical therapy, social services and sometimes
special nursing services outside the hospital. Since most of these services are
not so critically determinant of life or death as those already reviewed, they
tend to have a lower priority in most social security schemes, yet they may be
very important in the reduction of disability or the maintenance of health.
Some of these services, like physical therapy, are complementary to those of
the physician. Others, like dental care or the correction of eyesight, are offered
quite independently of the physician. In either instance they may be expensive
for the patient and inaccessible without the financial support of a social security
scheme.
There are special organisational features to each of these dental and other
health services. Space permits their examination, however, only briefly. In
terms of the prevalence of disease and the costs of its care, dental services are
the most important; we shall therefore consider them first, by the indirect
and the direct patterns. Then the other allied health services will be briefly
reviewed.
A. DENTAL CARE BY THE INDIRECT AND DIRECT PATTERNS

The indirect pattern, with reimbursement of the patient for a part, but
not all, of the costs, is used for dental care in Belgium, the arrangements being
very much like those for general physician's care. The range of dental services
authorised is very wide and there is no limit to their frequency or duration,
except for orthodontia and dental prostheses. The protected person has free
choice of private dentist, whom he pays for the service according to a fee
schedule; the patient is then reimbursed by his insurance fund for 75 per cent.
of the approved fee; widows, pensioners, invalids, and orphans receive full
reimbursement.
Orthodontia in Belgium is a benefit only if it is begun before 12 years of
age, and prosthetic replacement of teeth ordinarily only after the age of 50.

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111

In spite of these limitations, it is of interest that the largest share of the dental
expenditure goes for dental prostheses (46 per cent.), while tooth extractions
absorb 23 per cent, of the expenditure, preservative dental care 20 per cent.
and other services smaller shares. Thesefiguresmay reflect a tendency towards
dental neglect; if proportionately more were spent on preservative services
(principally fillings), less expenditure might be necessary for extractions and
prostheses—including full and partial dentures—later in life.
In the Federal Republic of Germany the indirect pattern is followed, but
with straight payment of the dentist by the sickness funds. There is free choice
of any participating dentist, and 90 per cent, of the 32,000 dental practitioners
in the country are approved for participation. The range of benefits, however,
is not so broad as in Belgium, for prosthetic replacements of teeth (partial or
full dentures) are usually not included. Thus, if a patient has dental fillings
performed to preserve teeth, the costs are fully met by the sickness fund, but
tooth replacement must usually be paid entirely by the patient privately. Some
sickness funds, however, have been able to conclude agreements with dentists
to pay part of the costs of dentures, according to a fee schedule. The Federal
German social security authorities would like to extend benefits with respect
to dental prostheses, but have so far not been able to negotiate agreements with
the dentists. Expenditure on dental care is at present DM24 per insured
person per annum, which is about one-fourth of the amount spent on general
physician's care.
In the United Kingdom, under the National Health Service, the indirect
pattern is also followed, but the range of dental benefits is very wide. There is
free choice of private dentist, who is paid for his services by the local Executive
Council of the National Health Service. No registration with a particular
practitioner is required, as for general physician's care, and payment is on a
fee-for-service rather than capitation basis. While virtually all types of dental
care are provided, there are two restraints: (a) certain services require prior
approval by a local Dental Estimates Board; (b) there is cost sharing for all
dental services (varying in amount) except clinical examinations and emergency
stoppage of bleeding. The cost sharing required is modest, being £1 for
ordinary treatment and ranging up to £ 5 for full mouth dentures. The prior
approval applies to extractions of teeth, dentures, orthodontia and certain
other services.
In addition to this basic dental service for the whole population through
the indirect pattern, there is also a priority service by the direct pattern for
certain demographic groups. Young children and expectant or nursing mothers
are entitled to free dental care at clinics employing salaried dentists. Unfortunately, these clinics, maintained by local education authorities (for the children)
and local health authorities (for the mothers), are generally understaffed, so

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that most of the persons concerned must still rely on private dentists through
the indirect pattern. In the latter arrangement, however, these priority groups
are relieved of cost sharing.
Social security systems with general physician's care following the direct
pattern also follow this pattern for dental services. Ecuador maintains dental
clinics staffed by salaried dentists at some of its social security establishments.
The larger health centres have several dentists equipped to perform a variety
of procedures, but the smaller ones have only one dentist, usually part-time.
Over 95 per cent, of the service is for extractions, fillings and cleanings, while
less than 5 per cent, is for prostheses ; for the latter, the patient must pay the
cost of materials. In India there are salaried dentists attached to the outpatient department of E.S.l.C. hospitals, but the volume of services provided
is small. The basic problem is the extreme shortage of dental personnel. Poland
has relatively more dentists, and every health centre or polyclinic has a dental
clinic. Protected persons receive care free except for special charges for the use
of gold in prosthetic replacements.
The main problem besetting dental care under both indirect and direct
patterns is the world-wide shortage of dentists and dental auxiliary personnel
in relation to the large volume of need. Even in the industrialised countries
using mainly the indirect pattern dentists are in short supply, so that the fees
payable for their services are relatively high. [39] In the developing countries

using mainly the direct pattern the personnel shortages are much greater, so
that only a very limited range and volume of services can be offered. In the
Tunisian social security scheme no dental services can be offered at all.
B.

SERVICES OF PARAMEDICAL PERSONNEL

Within hospitals, a wide range of paramedical personnel serve protected
persons, and their services are simply regarded as part of hospitalisation. Thus
nurses, laboratory or X-ray technicians, physical or occupational therapists,
pharmacists, social workers, dieticians, clerks and aides of many sorts contribute to the teamwork by which the hospital patient is served under both
direct and indirect patterns.
Outside hospitals, the services of paramedical personnel are organised quite
differently, depending on the general pattern adopted in the country. Free
choice of private paramedical practitioner and payment on a fee-for-service
basis under the indirect pattern contrast with employment of the paramedical
personnel in organised systems under the direct pattern.
Thus, in Belgium, private nurses may be called to the patient's home, on
a doctor's order, and the costs are partially reimbursed by the insurance fund.
There is free choice of such nurses, and 59 per cent, of the private nurses in

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113

the country participate in the scheme. Physiotherapists may also be called to
the patient's home or consulted in a private office, with a similar free choice
and reimbursement mechanism; 66 per cent, of physiotherapists in the country
participate. Midwives also operate on the same basis both in the patient's
home and in maternity hospitals ; 80 per cent, of them participate. Similar
arrangements govern the private services of opticians, hearing aid providers
and makers of prosthetic appliances (braces, artificial limbs, trusses, etc.).
For all these health services it is of interest that the agreements on fee schedules
concluded with the social security scheme are faithfully adhered to. The
controversies that have marked the negotiations with physicians have not
occurred, and there is virtually no tendency to charge the patients higher fees
than stipulated in the official schedule; even paramedical practitioners who have
not concluded agreements seem to follow the official fee schedules. One is
reminded that the entrepreneurial power of different professional groups has
much influence on the harmony of relationships with social security schemes.
For one type of service, however, Belgium follows the direct pattern. This
is for social workers or social welfare officers who assist families in which a
person has tuberculosis, cancer or other chronic disease; these social workers
also help rehabilitated workers to re-enter employment or to secure specially
sheltered jobs. Since such services are not likely to be sought privately by the
patient, they are provided without any charge by salaried social welfare personnel employed directly by the local insurance carriers. It may be noted that
these services, by facilitating the return to work of disabled persons, can actually
reduce expenditure by the insurance funds. Although the same might be argued
for the services of physiotherapists or home-visiting nurses, the social worker
is the only out-of-hospital professional person in Belgium serving under the
direct pattern.
The social security scheme in the Federal Republic of Germany provides
access to a somewhat similar range of private out-of-hospital health personnel.
When they work in association with a general physician, these personnel are
paid straight by the sickness funds on a fee basis, no cost sharing being required from the patient. The funds conclude general agreements with them,
except for midwives, who are governed as to their obligations and fees by a
special national statute. Each sickness fund, however, is free to offer or not
to offer the services of paramedical personnel, depending on its financial
capacity; there are no nation-wide requirements, as there are for physician
and hospital benefits. Much emphasis is given to spas and places for rest
cures, where masseurs, remedial gymnasts and sometimes chiropractors may
receive fees for their services.
As in Belgium, special services to the non-hospitalised patient, which may
facilitate recovery without using expensive hospital services, are handled

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separately in the Federal Republic of Germany. These are the home care
services of nurses or domestic aides, which enable a chronically ill person to
stay in his own house. Instead of expecting the patient to seek these services,
however, the local sickness fund usually arranges for them (with the patient's
consent) through some established voluntary agency (like the Red Cross) or
local public health authority; the fund then pays the agency for the services.
In the United Kingdom the indirect pattern is applied to ophthalmic
services, for which the regulations are rather complex. There are separate
provisions for ophthalmic opticians—that is, non-medical practitioners who
test vision and prescribe eyeglasses (known as "optometrists" in other countries)—and for dispensing opticians, who do not test vision but supply corrective eyeglasses. There is free choice among these practitioners, who are
paid on a fee basis by the local Executive Councils. Small charges are also
payable by the patient for the eyeglass lenses and frames.
Other health services in the United Kingdom are provided by the direct
pattern. Home nursing and domestic home helpers who can enable a chronically sick patient to stay out of the hospital are provided directly by the local
public health authorities. These personnel are on full-time salaries. Distinguishable from home nurses, there are "health visitors" under the local health
authorities—or sometimes voluntary agencies—who carry out preventive and
educational services in the household. They seek out abnormalities in children,
help discharged mental patients to readjust at home, give advice on carrying
out the doctor's instructions, etc. Ambulance services are also provided under
the direct pattern by the local public health authority, either with its own staff
and vehicles or under contract to other local bodies. Finally, certain healthrelated services to aged or disabled persons living at home are provided by
local welfare authorities, which are parallel with local public health authorities
in the structure of United Kingdom local government.
The Canadian social security scheme does not provide out-of-hospital
services of paramedical personnel except in so far as nurses or technicians are
employed in the offices of private physicians.
*

*

In countries where general physician's care is based on the direct pattern,
the services of allied health personnel also follow this pattern. In Poland the
services of opticians (both for visual examination and production of eyeglasses)
are available at regular health centres or hospital out-patient departments. The
same applies to provision of hearing aids and orthopaedic appliances. Ambulance service is not regularly provided, but expenses incurred by protected
persons in coming to a health establishment are reimbursed. Social services

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115

to assist in the rehabilitation of disabled persons or in the care of the aged at
home are also provided by local district offices, which are organised in a framework similar to that of the local health department. These "social assistance"
activities come under the direction of the Ministry of Health and Social
Welfare.
Ecuador oifers paramedical health services in its social security scheme
only through its regular establishments. Ophthalmic services are included
only for visual examination, but physical therapy is part of the basic service of
the larger ambulatory care facilities. Home nursing services are not included
in the social security scheme, but they are to some small extent available from
the public health authorities for both the insured and the non-insured population. Social workers are in very short supply, but they are attached to the
larger hospital out-patient departments and health centres.
In India, none of the allied health services is offered in the indirect-pattern
or "panel" areas. At the health centres in the direct-pattern areas, however,
midwives and health visitors are on the staff. They are intended to spare the
time of the physician both in the clinics and by occasional visits to the patient's
home. Ophthalmic and physical therapy services are not offered.
There is, however, another type of practitioner who is quite important in
India. There is an ancient system of Ayurvedic healing, which originated long
before the modern scientific era and is still operative. In localities with a
severe lack of physicians the services of Ayurvedic practitioners are sometimes
incorporated in the E.S.I.C. scheme under both the indirect and the direct
patterns. In 1965 there were 450 such practitioners seeing patients under the
indirect capitation pattern, and another 400 engaged in health centres under
the direct pattern. The long-term intention of the scheme is to reduce the
use of these traditional healers and to restrict services to those of scientifically
trained physicians, but for the present this is not deemed to be feasible. Moreover, it is believed by many that the Ayurvedic practitioners may be effective
in the treatment of psychosomatic ailments, where the patient's faith in his
doctor is an important factor.
C.

EVALUATIVE COMMENT

The volume and quality of these various dental and other health services
under social security schemes are obviously more dependent on the over-all
national supplies of personnel than on the organisational patterns as such. In
countries with dire shortages of dentists, ophthalmic practitioners, physical
therapists, professional nurses, social workers, etc., it is evident that any
system of organisation is unlikely to meet health needs very well. The developing countries have very scant supplies of these personnel, and even the

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industrialised countries have far fewer dentists than would be necessary to
treat all dental disease. [124]
The shortage of personnel underlines the importance of making the
fullest possible use of the scarce time of those available. For dentists, whose
training is relatively long, this is especially true. Yet in private dental practice
many precious minutes are wasted in the course of various procedures, such
as waiting for fillings or plastic impressions of the mouth to harden. In an
organised dental clinic several dental chairs can be used simultaneously, so
that the dentist may work on a second or third patient while the others wait.
Although it is sometimes possible for a private dentist to have more than one
chair in his office, this is not generally the case. Many tasks in dental treatment
can be delegated to auxiliary personnel under supervision. In New Zealand,
for instance, dental nurses do drilling and filling in the treatment of caries in
children. [57] In many countries the scaling and cleaning of teeth is done by
dental hygienists, and at the side of the dentist are other forms of auxiliary
personnel. All of these paradental personnel can be more efficiently provided
in organised clinics than in private dental offices.
Considerations of dental care quality and costs in the indirect pattern
compared with the direct pattern are similar to those relating to general
physician's care. There may be a certain cold impersonality in a large dental
clinic, but there is no question about the lower costs per service. It is significant
that in the United Kingdom, the Scandinavian countries and elsewhere the
direct pattern of dental service is used in government schemes for children and
expectant mothers—even though most care follows the indirect pattern—
because of the obviously greater economies. The simple fact that dentists in
the United Kingdom prefer private practice to salaried employment (so that
the governmental services are understaffed) is evidence of the higher earnings
•—and hence higher costs to the consumer—in the private indirect pattern.
On the other hand, the public authorities can raise dental salaries if they
attach sufficient importance to keeping a service adequately staffed.
Proper geographical coverage of a population with dental service cannot
simply rely on the indirect pattern, so long as there is a serious national shortage
of dentists. When earnings can be very high in a city, there is little incentive
for a dentist to settle in the hinterland. Only by the direct pattern, with
employment of dentists and auxiliaries in health centres, can there be any hope
of achieving their distribution in the rural areas or in unattractive city neighbourhoods.
A study of the rates of specific dental services under social security schemes
indicates the degree to which preventive services are being provided. A high
rate of extractions and prostheses reflects a failure to preserve the natural teeth,
compared with a high rate of cleanings and restorative fillings which serve to

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117

preserve the teeth. To achieve good tooth preservation, however, requires
regular dental attention which can only be given when there is a higher supply
of dentists than any country, even the wealthiest, has at present. This goal is
so costly that increasing interest is being shown in preventive approaches like
fluoridation of public water supplies to fortify the tooth enamel against
decay. [41] At the same time, a radical redefinition of the scope of the activities
of dental auxiliaries, working under the supervision of fully qualified dentists,
appears necessary. Such arrangements are, of course, facilitated under the
direct pattern with well-organised clinics.
Similar judgments apply to the other allied health personnel with even
greater force. Ophthalmic (or Optometrie) services, involving eye examination,
lens grinding, and eyeglass fitting, are always a teamwork task. Physical
therapy, occupational therapy, the testing and correction of hearing loss, the
prescribing, manufacture and fitting of prosthetic appliances, all these technical
services require the co-operation of physicians and ancillary personnel. The
direct pattern seems to lend itself better than the indirect to assembling under
one roof personnel with all the required skills. [136]
There are special hazards in ophthalmic service under independent private
practice. Opticians are not normally trained—nor, in most countries, are
they legally permitted—to diagnose and treat all the many diseases of the eye;
they deal only with errors of visual refraction. Yet the patient with a visual
disorder does not know whether his difficulty is merely refractive or due to
some more serious disease of the eye or, indeed, of the whole organic system
(such as diabetes, disorders of the nervous system or hypertension). Proper
medical care, therefore, ought to require an initial examination of the patient
by a physician, with referral to an optician only after systemic disease or
organic disorders of the eye have been excluded. This policy can be more
readily achieved under the direct pattern.
The same applies to the services of physical therapists who ought properly
to work always under medical direction. The independent practice of these
allied health personnel in many countries reflects historic developments in
entrepreneurial economic systems, but does not correspond to the requirements
of modern medical technology. Both quality and economy, therefore, suggest
the wisdom of the direct pattern for these services in both developing and
industrialised countries.

PART III
SPECIAL PROBLEMS

9. PREVENTION OF DISEASE
It has become commonplace to point out that an ounce of prevention is
worth a pound of cure. If disease or accident can be prevented, the individual
is far better off than if he gets sick and then requires treatment, however
skilfully the treatment may be given. Yet considering the population as a
whole, prevention is not necessarily easier or cheaper than cure, although these
assumptions have often been made. Prevention ordinarily requires some action
affecting large numbers of individuals before they are sick—when they are
ostensibly well—and this action may be difficult and expensive. The manner
and degree in which social security schemes promote the prevention of disease
is the subject of this chapter.

A.

THE BASIC STRATEGY OF DISEASE PREVENTION

Virtually everything in a person's life affects his health. His genetic
endowment, his social environment, his housing, his occupation, his personal
contacts, his transportation, his habits, his educational opportunities, his total
financial resources—all these contribute to his state of health, to his likelihood
of getting sick, or to the prospect of recovery if he becomes sick. In a broad
sense, therefore, everything that a social security scheme can do to protect the
economic stability of its members prevents disease and promotes health.
Financial security during unemployment or old age and financial assistance
during periods of short-term disability or long-term invalidity help to provide
resources for maintaining health. Family allowances provide money for food
and shelter to families with children.
In a more immediate sense, health promotion depends on many controls
of the physical environment which have become the conventional obligations
of government, outside of social security schemes. The supply of water must
be pure and plentiful; human waste must be disposed of effectively; food must
be protected from contamination ; insects and other vectors of disease must be
controlled. Atmospheric pollution must be prevented—a problem long
recognised in mines and factories and now confronting general urban populations. Accidents at places of work, on the roads, and even in homes should be

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prevented to the extent that external intervention can do this. Standards
should be applied to housing. [26]
This is all part of the general task of environmental hygiene, a task which
in nearly all countries is assigned to the ministry of health and its subdivisions.
For certain environmental controls other branches of government may be
responsible, such as factory inspection coming under ministries of labour or
sanitary conditions in dairies under ministries of agriculture. The delegation
of authority from central to local levels of government and the degree of enforcement of standards, of course, differ greatly among countries. In the older
industrialised nations the controls have become quite effective and the diseases
caused directly by environmental defects have been greatly reduced. In the
newer developing nations fundamental problems have not yet been solved,
and diseases such as dysentery, malaria or schistosomiasis, which can be
prevented by environmental health measures, are still highly prevalent.
Achievement, therefore, of the health goals of social security schemes
requires a proper level of environmental hygiene. The responsibility for this
need not, however, be assigned to statutory social security agencies, especially
when those agencies protect only a portion of the population. Measures of
environmental hygiene or sanitation must involve the total population to be
effective. There are distinct ways, nevertheless, in which even statutory social
security agencies can promote environmental hygiene, as we shall see.
As the communicable diseases have come under greater control through
improved environmental health measures, other diseases have become more
important. Heart disease, cancer, arthritis, diabetes, and other degenerative
metabolic disorders have become the major causes of death and disability
in the more industrialised countries, and even in the large cities of the developing
countries. The prevention of these disorders is not so easy, given the present
state of medical knowledge. To a large degree, it depends on the personal
behaviour of individuals—for example, the limitation of cigarette smoking as
a preventive of lung cancer or the taking of exercise as a preventive of cardiovascular disease. Thus education to influence behaviour becomes important,
as well as social programmes (such as sports and recreation) to encourage
certain types of behaviour. Achievement of proper nutritional levels to
strengthen resistance to disease obviously depends on policy in agriculture,
international trade, etc., as well as education. [82]
For many diseases the only preventive action now feasible is the detection
of the disease at an early stage, when it can be more effectively treated. Thus
any system of medical care which facilitates prompt access to the doctor
without economic or geographic hindrance also fosters prevention. Before
symptoms have developed, however, a population may be subjected to various
screening or "case-finding" tests, which may detect signs of a disease even

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123

before the individual is aware of it. The communicable diseases also require
personal as well as environmental health measures for their control, such as
immunisations and isolation and quarantine of cases to prevent the spread of
a disease. All these measures can be promoted under organised medical care
schemes.
We cannot, of course, review the entire strategy of disease prevention in
this volume, but the results achieved by the indirect and the direct patterns of
social security may be compared.
B.

DISEASE PREVENTION UNDER THE INDIRECT PATTERN

In genera], the indirect pattern of medical care accepts the private practice
of medicine and purchases the services of practitioners on behalf of its beneficiaries. The vast majority of practitioners work in individual offices, where
they await the arrival of patients with various complaints. They are seldom
in a position, as private doctors, to organise preventive services for a population
before sickness appears. Thus, it is evident that the main emphasis of the
indirect pattern is on the treatment of disease rather than on its prevention.
Theoretically, of course, the private physician can invite his patients to come
for periodic health examinations, for immunisations, for health counselling,
etc., and this is sometimes done. In pediatrics it is relatively common, especially in the care of small infants. But as a rule the private physician is fully
occupied meeting the demands of sick patients, and has little time and often
no interest in seeking out others for attention. Moreover, he seldom has the
auxiliary staff to assist in the numerous chores involved in routine preventive
services. When indirect-pattern schemes aim to promote disease prevention,
therefore, they usually deviate from their conventional relationships with
private doctors. This is the case in Belgium, the Federal Republic of Germany,
Canada and the United Kingdom.
Belgium.
In Belgium the local insurance carriers sometimes organise case-finding
programmes for tuberculosis (chest X-rays), syphilis (blood tests) and other
chronic diseases in factories where the workers are insured. Cancer detection
programmes in women, through cytological examinations of vaginal specimens,
are also carried out. General physical examinations of schoolchildren are carried
out in certain districts. These organised preventive efforts require special engagement of doctors and nurses by the insurance funds—essentially in the style of the
direct pattern. There is no national policy on such efforts, however, and they
are not applied uniformly by the different insurance funds. If positive cases are
detected by these surveys, the individuals can, of course, be promptly treated.

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Federal Republic of Germany.
In the Federal Republic of Germany the local sickness insurance funds
have historically had little direct interest in disease prevention. They have
looked to other agencies, such as the public health authorities, the school
systems, the Red Cross and various other voluntary bodies. Insurance funds
have co-operated with other organisations on various preventive campaigns,
but they have seldom taken the initiative. In Munich, for example, the medical
association recently launched a diabetes detection survey, and a cancer detection survey was made in another city; the insurance funds do not finance these
surveys, but they cover the costs of diagnostic follow-up of any suspected cases.
Individual immunisations provided by sickness fund doctors are paid for, as are
prenatal examinations. Massive immunisation campaigns, however, such as
those against poliomyelitis, have been carried out directly by the public health
authorities.
Canada.
In Canada, too, the social security schemes focus on treatment, leaving
public health agencies the tasks of prevention. In Saskatchewan, however,
it so happens that the hospital insurance scheme—the first such service
to be launched in Canada—is administered by the provincial public health
agency. Thus, other divisions of the same agency are responsible for preventive services. This close administrative relationship has fostered certain
co-operative measures—for example, the more accurate reporting of communicable disease cases admitted to hospitals or the identification of rheumatic fever
patients, who are given penicillin after discharge to prevent further attacks. The
physician's care insurance in Saskatchewan, however, is administered by a separate commission, which is concerned essentially with paying bills ; it pays for preventive services to individual patients, but does not encourage their procurement.
United Kingdom.
The United Kingdom has a well-established network of local public health
authorities engaged mainly in disease prevention, although little is done in this
field through the general practitioner or hospital services. Indeed, the capitation system of paying general physicians has led almost to an avoidance of
preventive service; since the doctor has been paid nothing extra for immunisations or periodic health examinations, he sends his patients to the local public
health clinic for these services. To counter this tendency and encourage more
personal preventive service in general practice, a recent regulation authorises
special fees to general practitioners (over and above the capitation payment)
for immunisations and prenatal examinations.

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Much thought has been given to integrating the activities of the three main
administrative components of the United Kingdom National Health Service;
the executive councils for ambulatory services, the regional boards for hospital
and specialist services, and the local public health authorities. One objective
of this integration would be to promote disease prevention through the first
two sectors, as well as the third. Renewed interest has recently been shown in
health centres at which general practitioners would work; the setting-up of
such centres could lead to integration, since they could also offer health visiting,
educational, case-finding and other preventive services under the auspices of
the public health authorities. The chief current weakness of the United Kingdom scheme in the sphere of prevention is the retention of the indirect pattern
for general physician's services. If one considers the local public health programmes as part of social security, then of course much disease prevention,
both environmental and personal, is included in it. Public health has not,
however, been closely identified with the general practitioner service, which was
the heart of the United Kingdom health insurance scheme (1911-48) leading
to the National Health Service.
C.

DISEASE PREVENTION UNDER THE DIRECT PATTERN

The potentialities for incorporating preventive services in the direct pattern of organisation, especially under the heading of general physician's care,
are much greater. Not that these potentialities are always realised. The deficiencies of personnel and other resources in developing countries often impede
the implementation of ideas which would be administratively simple.
Ecuador.
In Ecuador the principal responsibility for disease prevention lies with the
National Health Bureau in the Ministry of Social Welfare. Environmental
hygiene is entirely the responsibility of that body, which is somewhat equivalent
to a ministry of health. Nevertheless, the social security scheme runs a separate
programme of preventive service through its network of health establishments :
since 1948 there has been a disease prevention unit with its own special staff; it was
reorganised and strengthened in 1964. The objective of the unit is to promote
periodic health examinations of all insured workers, including chest X-rays and
laboratory tests, to provide immunisations in co-operation with the public health
authorities, and to advise on time off to be taken by workers where this is necessary in the interests of their health. Furthermore, each beneficiary has a "health
card" on which all treatment, whether preventive or curative, is recorded.
In practice, these preventive services are so far little developed. Periodic
examinations are given only in the main cities. The workers' rest centres for

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which provision is made under the scheme have not yet been established. The
comprehensive health cards have been issued, but they are not diligently used.
Certain achievements can, however, be reported. In Quito many factories
have been visited by health teams carrying out laboratory tests and X-ray
examinations to detect diseases among all the workers. In one mining area,
with a high incidence of venereal disease, a general campaign to find cases and
treat them was carried out. Health education is offered at all the health centres
of the scheme. At the same time, the social security scheme co-operates with
the National Health Bureau in its broader preventive efforts, such as the malaria
eradication campaign.
India.
In India little preventive work is accomplished in the capitation payment
areas using the indirect pattern, but in the direct-pattern areas the social security
scheme follows a policy of integrated preventive and curative services. In
the E.S.I.C. health centres children are immunised as a matter of routine.
Family planning advice is given, which has long-term objectives of health
promotion. In two areas, Kanpur and Delhi, special intensive pilot programmes integrating prevention with treatment have been launched. Maternal
and child health consultations and home-nursing visits have been promoted;
adults have been immunised with tetanus toxoid; close co-operation with the
malaria eradication campaign has been maintained. The intention is to extend
this policy to other areas. The most crying need for disease prevention, of
course, is in the environmental sphere, and this is the responsibility of the
public health authorities.
Tunisia.
In Tunisia, since the social security scheme for non-governmental workers
is integrated with the services of the Secretariat of State for Public Health, the
preventive services are part of the daily work. The control of trachoma, which
causes much blindness, is a serious problem in North Africa, and services for
this purpose are given at the same health centres that treat the sick. Immunisations are given there also and workers undergo general physical examinations. The great handicap in Tunisia is the general shortage of professional
personnel.
Poland.
It is the Polish social security scheme that probably best illustrates the
integration of prevention into day-to-day medical care. No distinction is
made in the administration or personnel devoted to preventive tasks. As
explained in Chapter 4, all health services are provided through a network of

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127

district health centres and hospitals. At these establishments emphasis is
given to periodic health examinations of children and adults, as well as to
immunisations, health education, etc. In addition, the purely environmental
and epidemiological control services are headquartered at the district health
centres. Sanitary inspectors and visiting nurses are stationed there. The director of the district health department is responsible for all activities, curative
and preventive, in the territory.
But the integration does not mean that all types of service are given at
all hours of the day. It is customary for certain hours, often in the afternoons,
to be reserved for preventive services to children and mothers, while in the
mornings anyone may receive general medical care. Special sessions may be
reserved for venereal disease treatment, tuberculosis, psychiatric disorders,
crippled children, and so on. Most of these special clinic sessions are open
to the total population and not confined to social security beneficiaries. In
Poland, however, as elsewhere, there are many gaps between the reality and
the theoretical plan. Despite a very impressive increase in the number of
doctors and other health personnel after the vast destruction and loss of life
caused by the Second World War, many districts are still understaffed and the
preventive services tend to be neglected more readily than the more pressing
demands of therapy. The intention, however, is to incorporate all personal
preventive services into the daily programme of every health establishment
and to supervise environmental health services from the same locations.
D.

GENERAL COMMENT

At the risk of a slight over-simplification, it may generally be said that the
purely environmental health controls are nearly always a function of ministries
of health, and in most countries are carried out quite separately from the
personal health services. For the latter, however, the different approaches
to preventive service under the indirect and direct patterns are relatively easy
to distinguish. When curative care is purchased principally from private
practitioners or local hospitals, it is difficult to promote personal disease prevention services in the social security system; therefore, separate public health
agencies must be relied upon for these along with the environmental health
measures. When the social security scheme provides its own health facilities
and manpower directly, the personal preventive services can be readily incorporated.
In the developing countries, where the direct pattern is more often applied,
the needs for disease prevention are most urgent. A number of infectious
diseases, which are largely responsive to currently known preventive measures,
are still endemic or epidemic. Aside from the environmental controls, people

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ORGANISATION OF MEDICAL CARE

must be educated about the hazards of polluted water, about infant feeding,
about proper excreta disposal, about insect vectors of disease, and so on. They
must also learn about the importance of seeking medical care soon enough.
Immunisations against smallpox, diphtheria, tetanus and poliomyelitis are
essential. Prenatal care is necessary to reduce the hazards of childbirth. [141]
Numerous precautions are feasible to prevent the spread of tuberculosis, syphilis, trachoma and other chronic infections. Epidemiological follow-up of
those who have had contact with a disease is also necessary. Routine laboratory
tests are important to detect cases of intestinal parasitosis, malaria and other
tropical infections. [144]
All these personal preventive measures are easier to apply if they are
coupled with arrangements to treat the sick. Prevention appears less urgent
than treatment and is hence often neglected; if it is offered at the same place
where treatment is sought, it is more likely to be appreciated. Thus an integration of prevention and treatment has psychological advantages from the
viewpoint of the consumer, as well as greater efficiency on the "production"
side. [154] When a social security scheme offering medical care, therefore, is
launched in a developing country, there is much wisdom in the Tunisian pattern of building it into the basic public health framework, already concerned
with prevention. If a separate system is established, as in Ecuador, it must
develop its own personal preventive services or else work out a liaison—which
is often administratively difficult—with the public health programme.
In the industrialised countries, the need for disease prevention may not
be so dramatic, but it is still present. As our knowledge expands, the potentialities of preventing even the non-infectious diseases enlarge. Health and hygiene
counselling can be given by the preventively oriented doctor. A wide range of
tests can be given for early detection of many chronic disorders. The various
immunisations, of course, are still important. All these personal preventive
measures can be taken more readily by organised teams of personnel, even in
the industrialised countries.
One cannot say that the direct pattern will automatically favour disease
prevention measures. Obviously everything depends on the adequacy of
resources and the operational policies. Since personal disease prevention,
however, ordinarily requires the health services to make contact with people
before they are sick, the capacities of the direct pattern are certainly greater.
Nurses and health aides of various types can help to induce people to accept
disease prevention as a matter of routine and to carry out the many tasks of
preventive medicine. Expensive diagnostic equipment is also necessary. Health
service organisation under the direct pattern can much more readily provide
these resources.

10. SAFEGUARDS FOR THE PATIENT AND PROVIDER
OF MEDICAL CARE
V
y
Medical care is a highly personal matter, and any system of organisation
runs the danger of offending or mistreating individuals involved in it. This danger becomes greater as a medical care system becomes larger and the problems
of careful communication multiply.
Effective diagnosis and treatment require that the physician be given full
and accurate information by the patient, but such information—if it goes any
farther than the physician—could damage the patient's reputation. To reassure
the patient that he need not hesitate to report the most intimate facts, laws
have been passed in many countries on the confidential nature of medical
information or, more briefly, medical secrecy. Medical secrets may be revealed
only with the patient's consent or under circumstances when the general public
interest is involved, such as in reporting communicable disease to public health
authorities or giving medical testimony regarding suspected crimes. [119]
An organised medical care scheme, however, requires detailed information
on the services provided to beneficiaries. This is especially true for systems in
which payment of providers is dependent on a report on the precise content of
the services rendered, as under the indirect pattern with fee-for-service payment.
The hazard of disclosure of confidential information to unauthorised persons
therefore exists, though it can be reduced by various procedural safeguards.
A second danger, more general and probably more important, is the possibility of a failure in the delivery of services to which protected persons are
legally entitled. There may be a denial of services or an improper or deficient
rendering of services. [9] To safeguard against these or to redress any wrongs,
most social security systems include a mechanism for appeal by the beneficiary.
There may be channels of appeal within the system and, as a last resort, through
the courts of law outside the system. Moreover, there can be infringement of
the rights of providers of service, which may also be subject to appeal.
A.

CONFIDENTIAL NATURE OF MEDICAL INFORMATION

Countries with a strong tradition of individual freedom, such as those of
Western Europe, have placed special emphasis on the protection of the patient's

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right of privacy. Thus, in Belgium, the laws governing licensing of physicians
impose specific penalties for breach of the patient's confidence. The social
security scheme, however, requires the submission of medical reports to insurance carriers, and there have been controversies over the years on the extent
or scope of information which must be submitted by the doctor as a basis for
remuneration. These controversies have been reduced by indoctrinating all
health insurance administration personnel on the delicate responsibilities of
their work; these personnel are warned of the penalties they face through
unauthorised divulgence of confidential medical information.
Moreover, the patient himself must disclose certain information to the
insurance carriers in order to seek reimbursement for his medical expenses.
There can hardly be objections to this since the disclosure of information is
obviously in the patient's own interest; yet the law concerning the confidential
nature of medical information has sometimes been misinterpreted to serve as an
argument against reasonable administrative procedures. If a patient suffers from
cancer he is exempted from cost sharing, so that he must clearly disclose his
diagnosis to the insurance fund to be relieved of this expense.
In the Federal Republic of Germany also, the sickness form submitted by
the doctor to the insurance fund as a claim for remuneration must record the
patient's diagnosis. Employees of the sickness funds are, of course, forbidden
to disclose this information to anyone. In certifications of disability necessary
for the award of cash benefits the diagnostic description must be relatively detailed, establishing the inability of the patient to carry on his usual work. Federal German law specifically relieves the physician of his obligation of professional secrecy in order to fulfil these administrative requirements.
The health insurance schemes in Canada likewise require reporting of
diagnoses by physicians and hospitals. No specific legislation has been considered necessary to relieve the doctor of his general obligation regarding the
confidential nature of medical information, but the patient is protected by the
Common Law against any disclosures to non-authorised persons. The whole
question of medical secrecy is not a significant issue in Canada; very seldom do
problems arise. If there are infringements, the patient may seek redress against
the doctor in a court of law.
Under the direct pattern of medical care organisation, medical secrecy has
not constituted a significant problem. Perhaps this is because the payment of
physicians or others does not require any reporting of diagnoses outside the
health centre or hospital. Facts about a patient's condition are recorded, of
course, on a medical chart, but this is seen only by other doctors or health
personnel within the establishment. Charts are not ordinarily removed from
the facility, nor may any information in them be disclosed to outside persons.
In Ecuador it is pointed out that no complaints about violation of professional

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131

secrecy have been received in the entire 30 years of the social security scheme's
operation.
Likewise in India, patient records—both in the indirect capitation payment
areas and in the direct pattern areas—are protected from disclosure to persons
outside the scheme. Some employers have, indeed, attempted to get information
on the health status of workers from the E.S.I.C. scheme, but this has been
refused.
In Poland, the confidential nature of medical information is protected by
the laws governing the licensing of physicians and auxiliary health personnel.
As in most other countries, such information may only be disclosed outside the
medical facility on the permission of the patient or under certain circumstances
required by law. The latter include diagnosis of communicable diseases (especially venereal disease and tuberculosis), which must be reported, and the findings of medical examinations ordered by governmental authorities for certain
legal purposes. The latter would presumably refer to certifications of disability
for the authorisation of cash benefits.
The whole question of medical secrecy in social security schemes has ceased
to cause the concern today that it did in earlier decades. When social insurance
or other social methods of financing medical care were first launched, they were
regarded by some as an "intervention" of a third party between the patient and
the doctor. There was fear that the intimate secrets of the patient might be
disclosed to others, and various safeguards were therefore built into the
administrative machinery to prevent this from happening.
As the volume of medical care provided to the population has increased
and the administrative personnel and procedures in large social security systems
have become more complex, it has become more necessary to have detailed
information on the patient's diagnosis and the doctor's services. The intimate
doctor-patient relationship remains, but it has necessarily become surrounded
with requirements for communication so that the doctor receives his economic
rewards and the patient his economic benefits. Moreover, as we shall note in a
later chapter, medical communication can serve as an instrument for safeguarding the quality of service rendered.
Meanwhile, the whole social meaning of sickness has changed, so that it is
seldom regarded as a cause for shame. Perhaps venereal disease may still carry
social stigma, but mental disorder, cancer, tuberculosis, crippling conditions
and other disorders that were once closely guarded secrets are now generally
faced as natural events for which the individual bears no guilt. [75] In addition,
the interdependence between individuals in society has become more widely
appreciated and there is growing recognition that poor vision in a bus driver or
epilepsy in a factory machine operator is of just as much concern to the whole
of society as is communicable disease. There are also numerous medical issues

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involved in crime detection, divorce actions or certain other civil suits. Disability or invalidity insurance, of course, requires extensive disclosure of medical
information for the good of the patient as well as for the protection of social
insurance funds. The above developments have doubtless reduced the importance attached to medical secrecy.
Thus, as we have seen, under either pattern of medical care the problem
of medical secrecy is theoretically solved either by strictly limiting the purposes
for which information may be released or by making the receipt of benefits
conditional on the patient's disclosing the confidential information himself. In
receiving medical care under a social security scheme the patient is implicitly
or explicitly authorising release of information on his case for administrative
purposes. If he wishes a medical secret to be guarded completely, he can seek
care at his own expense, outside of the organised scheme, and this is doubtless
done occasionally in all countries. The benefits of a social security scheme,
however, are so valuable that it is rare for anyone to forgo them for the doubtful
advantage of absolute protection of his medical secret.
B.

APPEALS BY PATIENTS AND PROVIDERS OF CARE

To help assure the equitable operation of a medical care scheme, it is
important that beneficiaries should have some channel for making complaints
or appealing for the redress of wrongs such as denials of service to which a person is entitled, or provision of improper or injurious service. This right of appeal
is required by various I.L.O. Conventions on social security, that deal, inter
alia, with medical benefits.x Grievances may also come from providers of
service, and must likewise be handled.
The Belgian social security system has special tribunals for disputes. Either
insured persons or providers of service may bring complaints before claims
commissions, which are located conveniently throughout the country. On the
commission there are equal numbers of employer and worker representatives,
presided over by an appointed doctor of law. Decisions may be appealed
against beyond the local tribunal to an appeals commission, but this is seldom
done, since the great majority of complaints are settled by some form of conciliation. Any final decision of an appeals commission may also be further
appealed against before the general courts of the land.
In the Federal Republic of Germany complaints about services received
by a protected person are made initially to the sickness fund to which he
belongs. Most are settled at this level, with the fund resolving differences between
1
Sickness Insurance (Industry) Convention, 1927; Sickness Insurance (Agriculture)
Convention, 1927; Social Security (Minimum Standards) Convention, 1952; Employment
Injury Benefits Convention, 1964.

SAFEGUARDS

133

patient and provider of service. If the patient or provider is not satisfied,
he may take the complaint to a civil court which allows appeals from the local
to the provincial to the federal level. For complaints about denial of benefits
from a sickness fund, the individual niay_bring_action in a special "social court"
established to hear cases coming under various types of social legislation.
The Canadian hospital insurance scheme permits complaints by either
patients or providers to the administrative agency in each province. If the
aggrieved party is not satisfied, he may then appeal to a general court of Jaw.
In addition, complaints about the quality of service rendered by a doctor
may be brought by a patient to the provincial medical association. The latter,
of course, as a non-official body, has no legal authority, but it may exert
influence on a doctor to correct misbehaviour; decisions, however, are seldom
in favour of the patient, so that this channel of complaint is rarely used.
The United Kingdom National Health Service permits hearing of complaints by patients or providers of service within the administrative machinery
which controls the various services. Thus complaints involving ambulatory
care benefits (general practitioners, dentists, drugs, etc.) are brought before the
Local Executive Councils, and complaints about in-patient hospital or specialist
services come before the Hospital Management Committees. Beyond these
local bodies, appeals may be made to the Regional Hospital Boards, and eventually to the Ministry of Health. At any point along the way, the patient or
provider is free to carry his complaint to ageneral court of law. Since the latter
action is complex and expensive, however, it is seldom taken. There have
recently been some sensational cases which have aroused interest in modification
of the appeals system. It is believed by some that the scales of justice within the
National Health Service administration are somewhat weighted in favour of the
providers of service, and that a stronger voice should be given to representatives
of consumers in the judgment process.
In all four of the above countries, where the indirect pattern of medical
care prevails (except for in-patient and specialist services in the United Kingdom), the procedure for handling complaints initially involves a series of actions
within the social security scheme, followed by recourse to the general courts of
law. This policy is related, of course, to long traditions of common law and
civil liberties in these countries. But it is also related to the dependence of the
social security scheme, under the indirect pattern, on the actions of numerous
independent practitioners and hospitals. The controls that the organised scheme
can exert on these providers are limited, so that ultimate recourse to the courts
of law is necessary. Exercise of this right is rarely carried out, but its existence
helps to assure professional discipline in the system.
By contrast, the right of appeal in the direct-pattern medical care schemes
appears to be somewhat more restricted. In Ecuador complaints may be made

N/
^

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ORGANISATION OF MEDICAL CARE

to the director of the dispensary or hospital, after whom they may go to higher
levels. The ultimate appeal is to the National Social Welfare Institute of the
central Government, but there is no appeal beyond this to the courts. Likewise, in Tunisia, the only channel for appeals is within the social security
scheme itself, but not to the courts of law. It must be realised, however, that
representatives of the protected persons participate directly in the administration and also in the appeals machinery of these schemes.
In the Indian social security scheme appeals concerning either entitlement
to services or quality of services given are handled entirely within the scheme.
Under the Employees' State Insurance Act there are employees' insurance courts,
to which a complaint may go if the beneficiary has not been satisfied by an
administrative decision. Since 1952, when the scheme was started, however, not
a single dispute involving medical care has come before these courts. With
respect to entitlement, the policy of E.S.I.C. is to be liberal, providing care to
anyone who claims to be eligible and settling proof of eligibility later. As for
quality of care, the shortages of medical personnel and facilities in India are
so great that expectations are limited and allegations of deficient quality could
not be realistically defended. In any event, the general courts do not receive
such claims.
Under the Polish medical care scheme a dissatisfied beneficiary may appeal
to the director of the local health facility,'and from his decision to the district
and regional People's Councils all the way up to the Council of Ministers of the
National Government. As a last resort, an appeal may go to the Supreme State
Control Chamber. There is no appeal, however, outside the executive branch of
the Government in the courts of law. It is pointed out, however, that the various
People's Councils are profoundly representative of the general population, so
that their decisions would tend to be weighted on the side of the patient.

The chief value of a system of appeals for beneficiaries lies not in the
settlement of disputes but in the encouragement of diligence and responsibility
in the provision of medical care. While in all types of schemes, under both the
direct and indirect patterns, the rate of complaints and appeals is low, the
mere availability of the right of appeal exerts a disciplinary influence. In the
indirect pattern the possibility of ultimate recourse to the courts of law fortifies
this influence, but in the direct pattern discipline is enforced through the daily
operations of the medical care scheme. It is less important, therefore, to allow
recourse to the general courts.
In some countries, especially Canada and the United States, the rate of
civil malpractice suits against doctors has greatly increased in recent years. [24]

SAFEGUARDS

135

This phenomenon is not specifically related to the existence of social security
schemes, but is a sign of a growing sense of personal rights among the people,
a loss of inhibition in the face of medical authority. To cope with this trend,
which is evident especially in thefieldof major surgery, medical staffs in hospitals have increased their organisational discipline. Doctors in private practice
have been induced to keep more careful records and to exercise great caution.
Most of the legal suits against doctors and hospitals are not successful, but
the threat of their occurrence has undoubtedly had some influence in improving
the quality of medical care.
The vast majority of complaints in any medical care scheme are handled
by administrative action. When patients are dissatisfied or even when they
claim to have suffered injury owing to medical negligence, the matter can usually
be settled by some conciliatory effort. Freedom to express dissatisfaction and
to make appeals, however, is important as a safeguard of the patient's rights
and as a continuous inducement to diligence in both the administration of a
scheme and in the performance of doctors and hospitals. [13]
The doctors and other providers of service in a social security scheme may
also have complaints, for which some channel of redress is necessary. Because
the relations of health personnel to the various schemes have been discussed
fully in other chapters, only a few words need be said here. [8]
Under the indirect pattern an occasional doctor may become weary of an
over-demanding patient and decline to see him again. "Free choice of doctor"
for the patient usually implies "free choice of patient" for the doctor also, so
that any patient may be rejected as long as some other physician is available
to care for him. The commoner complaints under the indirect pattern, however, concern the rates of remuneration for services rendered. These are the
subject of prior negotiation, of course, between professional associations and
social security bodies, but interpretations of the charges submitted for specific
services may be debatable. There may also be dissatisfactions over delays in
payments. Complaints by doctors or other providers are usually taken up
directly with insurance carriers, but in extreme cases they may be processed
through the same appeals machinery as that used by the patient.
Under the direct pattern salaries and other conditions of work are also
usually negotiated between professional associations and the social security
bodies. General labour laws in a country may influence these relationships,
especially those involving auxiliary health personnel. Complaints within a
clinic or hospital are usually handled through the general administrative
machinery, in which representatives of the providers themselves are, of course,
included.
Under both patterns, grievances of doctors, nurses or other personnel are
often championed by their professional associations, which speak with a louder

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ORGANISATION OF MEDICAL CARE

voice than the individual practitioner. When the latter is in independent
practice, the relationships between social security bodies and medical associations have sometimes been highly contentious, resulting even in strikes. Under
the direct pattern the relationships seem to be less difficult—perhaps because
this pattern is used predominantly in countries where physicians are pleased
to receive stable salaries. In either pattern the harmony of relationships probably depends largely on the proportion of the population covered by a social
security scheme; when it is very high, the provider's total income is more
dependent on the policies of the scheme and his "bargaining" is bound to be
more severe. The tone of these relationships inevitably influences the response
of a social security administrative body to complaints by individual health
personnel.
These various safeguards of both patients and providers in medical care
schemes have, in general, been gradually improving the efficiency of operation
of the services. They are, however, merely a "safety valve", less fundamental
in assuring a proper quality and quantity of care than the basic organisational
structure of the scheme and the exercise of deliberate controls on performance
to be reviewed in later chapters.

11. DISABILITY CERTIFICATION
The operation of social security schemes providing cash benefits for loss
of earnings due to short-term or long-term sickness is a complex subject, with
obvious relationships to the maintenance of health. If the worker is receiving
social insurance benefits as long as he is unfit for work, moreover, he is obviously
in need of medical care to hasten the recovery process and terminate his claims
on the insurance fund. In this chapter we shall examine only those aspects of
sickness benefit schemes that articulate with the medical care system—principally the process of medical certification of short-term disability and methods
of establishing permanent invalidity.

A.

IMPORTANCE OF MEDICAL CERTIFICATION

The determination of both the onset and the conclusion of sickness and
an estimation of the resultant disability are clearly medical tasks. The physician
treating the worker is technically in the best position to make these judgments,
as long as he can be protected from unreasonable pressures from either the
worker or the insurance fund. [11]
The operation of a cash sickness benefit scheme in a country is inevitably
influenced by the whole state of the economy, the level of employment and the
availability of an unemployment insurance scheme. If there is a high level
of unemployment and no insurance scheme to protect against it, pressures
naturally mount for identifying some sickness in the unemployed worker, so
that he may get disability cash benefits. Moreover, a worker may be unfit
to do heavy work, but capable of doing lighter work; if the worker is not trained
for it, however, the doctor is placed in the difficult moral position of condemning him to unemployment, unless there is a job retraining programme. From
the viewpoint of good medical care, the objective of medical certification of
disability is to relieve the sick worker of the obligation to do work which would
be harmful to his health. Although, strictly speaking, the doctor's main
concern is that his patient should recover from illness, and not that he should
receive cash benefits, the latter objective is also important because it is consistent with the former.

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ORGANISATION OF MEDICAL CARE

The problems that arise often spring from the larger social and economic
environment and the abuses generated by unemployment and poverty. To
reduce those and to help assure equitable decisions, social security schemes
employ various forms of "control doctor". Their functions are somewhat
different under the indirect and the direct patterns of medical care organisation. [8]
B.

CERTIFICATION UNDER THE INDIRECT PATTERN

The initial determination of inability to work in all patterns of medical
care is done by the physician who first sees the patient, whether this is in an
ambulatory facility or a hospital. It is the subsequent review of such certifications that differs between the indirect and direct patterns. Thus, in Belgium,
the personal physician makes the initial determination, which he reports on a
prescribed form to the local insurance carrier; on this form he also makes an
estimate of the probable duration of the disability. On the basis of long
experience, manuals or guide books are published in many countries, indicating average durations (and also ranges of duration) of incapacity for different
diagnoses, to help the less experienced doctor in making such estimates.
The staff of the Belgian insurance carrier includes a "control doctor" who
reviews these reports and then makes the final determination of the duration
of disability for which cash benefits will be paid. In most cases he accepts the
judgment of the initial doctor, but he may alter the duration of benefits or
require a second examination of the patient by himself or another doctor. He
may also require another examination after a stated period to assess the progress of the case. Whether or not the later examination is ordered, the personal doctor must submit a final certification of the worker's ability to return
to work.
In the Federal Republic of Germany the procedures are somewhat similar.
In the contract between the physicians and the sickness funds, rather strict
standards are specified on methods of certifying both the onset and the termination of disability. It is required, for example, that a careful medical examination
be performed and that the onset of illness may not be recorded for any date
prior to that examination (with rare exceptions). A control doctor from the
sickness fund may, after review, order a second examination by a "confidential
practitioner".
When the control doctor in the indirect-pattern countries makes a decision
different from the worker's personal physician, there is obviously some embarrassment and irritation for the latter. Moreover, the paperwork required is
sometimes burdensome to busy doctors. In the United Kingdom, where the
capitation payment method greatly reduces the communications involved in
basic medical care (since claims need not be submitted for each item of service

DISABILITY CERTIFICATION

139

rendered), certifications of disability constitute a major share of the general
practitioner's administrative paperwork.
Yet it is difficult to see how else disability certification could be handled
under the indirect pattern, for the personal doctor is in a better position to
assess disability and estimate its duration than an outside doctor not familiar
with the patient. Moreover, a second parallel corps of doctors, specifically
for disability certification, would be expensive for the social insurance system
and burdensome for the patient. The control doctor, nevertheless, is needed
to protect the insurance fund against abuse and also to protect the primary
physician from undue pressure by a malingering patient. The doctor might
wish to please his private patient and be willing to issue an exaggerated disability claim, but if hejcan remind the patient that it may subsequently be
reviewed by a control doctor any pressures for false certifications are reduced.
Another function of the control doctor, demonstrated by some of the sickness
funds in the Federal Republic of Germany, is to advise on rehabilitation of
injured or disabled workers. This may involve not only medical rehabilitation
therapy, but also retraining for other types of employment.
C.

CERTIFICATION UNDER THE DIRECT PATTERN

In the direct-pattern medical care system initial certifications of disability
are also made by the primary physician, but the review process is different. In
Ecuador the review is simply made by the director of the clinic or hospital where
the primary doctor is employed. A medical inspector from the social security
scheme also reviews certifications occasionally. Each certification, however,
is limited to seven days, and it must be reissued as necessary at intervals up
to the maximum of 26 weeks.
In the Polish system the initial assessment of incapacity is made by the
local physician either at an industrial clinic (if the worker is employed at a large
plant) or in a district health centre. Any local general practitioner may certify
incapacity for up to ten days, but a senior physician in a clinic or health centre
may certify it for up to 45 days. For periods beyond this and up to 26 weeks
the case is referred to a medical commission attached to the district polyclinic.
Thus there is a hierarchy of medical authority depending on the duration of
disability to be certified, but there is no secondary review of each certification,
as in the indirect-pattern countries. [71]
In India initial disability certifications are made by the primary physician
in both the direct-pattern and the indirect-pattern areas. The ordinary case
requires an initial, an intermediate and a final certification by the doctor,
although the maximum duration of cash benefits is only eight weeks (except
for tuberculosis). In the direct-pattern areas of India there is little systematic

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review of the certifications, but in the indirect-pattern areas there are reviews
by control doctors. In Tunisia, which also uses the direct pattern, secondary
review of disability certifications would likewise appear to be quite limited.
The most serious problem regarding disability certifications in developing
countries like Ecuador, India and Tunisia is the abuse arising from the absence
of unemployment insurance accompanied by massive unemployment. Disability benefits can serve as a disguised form of unemployment benefits. Social
security schemes in these countries can detect this abuse, however, by statistical
review of claims coming from certain districts, medical units or physicians,
without having to depend on the case-by-case review of control doctors.
Fundamentally, the direct pattern of medical care organisation has less
need for painstaking review of disability certifications than the indirect pattern.
The primary physician in an organised clinic may be lax, but he has no incentive
for false reports of disability, since he is not dependent on the patient's goodwill for his earnings. His loyalties are not divided between the patient and the
insurance scheme. He can be objective in making a decision, knowing that
only his superior in the organisation may review it.
D.

INVALIDITY CERTIFICATION

When disability lasts longer than the maximum period for which sickness

cash benefits are payable (usually 26 weeks) or if it is permanent, the process
of medical certification is generally different. Insurance benefits for such
long-term disability or invalidity can accumulate to a considerable level, and the
responsibility for certification is therefore weighty and more rigorously implemented. [25]
In the Invalidity, Old-Age and Survivors' Benefits Convention, 1967, the
International Labour Conference defined invalidity for the purpose of the
instrument as "incapacity to engage in any gainful activity, to an extent prescribed, which incapacity is likely to be permanent or persists after the termination of a prescribed period of temporary or initial incapacity".* By
implication, there is both a medical and an economic aspect to the determination
of such a state. The medical judgment, of course, must be exercised by physicians, but the judgment on capacity for "any gainful activity" requires knowledge of the labour market and the types of job within it.
In both indirect-pattern and direct-pattern countries, therefore, determination of invalidity is normally made not by individual doctors but by duly
constituted boards whose members are knowledgeable about both medicine and
employment conditions. In both the indirect-pattern and direct-pattern
1

Art. 8.

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141

countries these boards are established in the framework of the social security
scheme. Thus, even in Poland and Tunisia, where short-term sickness benefits
are certified by the general public health service, invalidity certifications require
review by a board within the social insurance organisation itself.
Recertification of invalidity at intervals (usually annually) is ordinarily
required. At these intervals, as well as initially, an important question is
whether the individual can be rehabilitated for some type of gainful work. In
some countries, moreover, invalidity pensions may be "partial" (if the disability reduces the person's earnings substantially but not completely), although
sometimes partial but severe disability may warrant a full pension. A programme of rehabilitation, therefore, may render a person partially if not fully
employable, and thereby affect the amount of his invalidity pension.
The determination of invalidity is in practice bound to be influenced by a
country's resources for vocational rehabilitation. In the industrialised countries
these are usually much greater than in the developing countries—on both the
medical and the employment side. It follows that the development of programmes of physical medicine, job retraining, sheltered employment, etc., will
have an effect on the certifications made for invalidity insurance funds. More
important, however, is the beneficial effect of such programmes on the physical
and mental well-being of the disabled worker. [19]

PART IV
RESOURCE DEVELOPMENT AND ALLOCATION

12. PERSONNEL TRAINING AND SELECTION
Any social security scheme providing medical care leads to an increased
demand for that care by furnishing economic support for its costs. Care can
be provided, however, only by properly trained personnel, so that it is essential
for an adequate supply of such personnel to be available. The approaches of
various schemes to the assurance of adequate quantities and quality of health
personnel will be briefly reviewed in this chapter.
A.

THE EDUCATION OF HEALTH PERSONNEL

Physicians and other health personnel are trained in most countries by
universities, hospitals and other special institutions. Their historical predecessors were engaged in private practice or employed in hospitals for centuries
before social security schemes came into being and sought their services. In
a sense, organised medical care schemes can be regarded as a source of economic demand, which is met by a certain supply of personnel that offer services.
In the developing countries, however, the supply may often be so inadequate
to meet the demand that deliberate social measures are often necessary to
produce the health personnel.
Even in the industrialised countries, where medical science is more advanced and health services are easily accessible because the transport system is
highly developed, the supply of personnel may not prove to be adequate to
meet the level of demand of populations accustomed to high standards of living.
A relative personnel shortage, coupled with increasing demand, leads to a rise
in prices for medical services. As a result, it becomes necessary to find methods
of economising in the delivery of medical care, such as employing less expensive
auxiliary personnel with physicians in a team. Auxiliary personnel are also
needed for purely technical reasons, and they must be trained in greater numbers
as technology advances. [74]
The flexibility of an educational system in training the health personnel a
country needs depends on its resources. Investment must be made in buildings,
in teachers, in books, equipment, etc. Nearly all countries have accumulated
these educational resources, which have been provided by religious bodies,
philanthropic endowments and governments. Although the role of government

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at various levels has become increasingly important [91], the universities
have not lost the powerful spirit of autonomy which they have attained over
the centuries, and this conditions the degree to which they respond to general
social needs. In the training of health professions, moreover, this responsiveness
may vary with the precise ministry of government—whether of education or
of health—exercising supervision over the educational institutions.
Another basic issue in the training of health personnel is their mode of
licensing. [120] In some countries licence to practise is more or less automatically granted by a statutory body, on completion of specified university work
with award of certain academic degrees. This is the usual policy in countries
where the universities are under substantial official control. In some countries,
however, where the universities are quite independent of government, physicians and other health personnel must pass separate examinations by governmental bodies in order to obtain their licences ; in the United States, for example,
such examinations are administered by special "examining boards" in each of
the 50 states. Whatever the policy adopted, the government body responsible
for licensing may differ, being a ministry of health or another agency. This
may have a bearing on whether or not the power of licensing is used as an
instrument of national health policy, such as the achievement of a reasonable
geographic distribution of practitioners.
The distribution of physicians, dentists and other health personnel in the
rural and urban areas of a country is a basic problem faced by social security
schemes. It is not enough to have an adequate total supply of health manpower; they must be located where the people live. The economic support
provided by an organised medical care scheme can help to attract personnel to
certain isolated areas which might otherwise be totally devoid of them (see
Chapter 14).
Physicians and other personnel may cross national boundaries for study,
research or practice. Problems must be faced, therefore, in the examination
of foreign credentials of education, before licence to practise is granted. [150]
Protected persons may also cross national borders for procurement of medical
care, so that a social security scheme may have to develop special administrative procedures for remuneration of foreign physicians. When any physician
or nurse or other such trained person permanently leaves his home country to
work in another, this constitutes a loss of the social investment made in his
education. The development of strong social security schemes may have the
effect of keeping physicians in their native land, by providing good conditions
for their work.
Medicine and its allied disciplines are, of course, continually developing.
To keep up with continuous scientific developments practitioners need regular
spells of postgraduate education. Social security schemes can be helpful in

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147

supporting this, even requiring that practitioners take postgraduate courses as
a condition for participation in the scheme. But the different types of social
security schemes are affecting the training and employment of health personnel
in other ways, too.
B.

INDIRECT-PATTERN COUNTRIES

It has been argued that the development of social security schemes for
medical care puts restraints on the freedom of the medical profession and
therefore discourages young people from medical studies. The evidence is quite
to the contrary. In the German Reich, soon after enactment of thefirstnational
social insurance law in 1883, the relative supply of physicians did not decline,
but rose rapidly. From 1889 to 1898 the German population increased by 12
per cent., while the number of physicians rose by 56 per cent. This was a much
more rapid rise than characterised the medical profession in the United Kingdom and the United States—both of which lacked social insurance—over the
same decade. [122] Even in recent years, the relative supply of physicians has
continued to rise in the Federal Republic of Germany, from a ratio of one doctor
to 703 inhabitants in 1960 to a ratio of one to 691 in 1965.
It has been no problem to train enough physicians to meet the needs of
the medical care scheme in the Federal Republic of Germany. In fact, the
opposite has occurred—namely there is an apparent excess of doctors, at least
in certain districts. In order to limit expenditure, the sickness funds had
previously imposed a standard for approved practitioners of no more than one
to 500 protected persons, since it had been observed that more than this ratio
led to an extravagant multiplication of services. In 1960, however, the Federal
Constitutional Court declared this quota system illegal, as obstructing free
medical competition. Physicians must still be under contract to sickness funds
if they are to be paid by the funds, but they cannot be denied a contract because
the number of doctors has already reached a given maximum in any locality.
Nevertheless, not all physicians are under contract with sickness funds. In
1964, out of 50,060 physicians in independent out-of-hospital practice, 43,647
were approved for insurance practice. (Another 34,143 physicians were on
hospital staffs or were engaged in other types of professional work inappropriate to insurance practice.)
The liberalisation mentioned above has had certain negative effects. Since
the number of sickness fund practitioners in a locality can no longer be limited,
there is no way of stopping a heavy concentration of doctors in certain attractive communities, while others—especially rural districts—remain undersupplied. Moreover, the right to enter various specialities is not subject to limitation, so that the numbers of practitioners in different specialities bear little

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relation to the objective needs of patients. Most serious, according to experts, has
been the relative decline in general practitioners. In communities with a very
high supply of doctors the insurance funds have discovered (as noted in
Chapter 4) that the number of services rendered per patient tends to rise beyond
a reasonable level.
With respect to dentists, the situation in the Federal Republic of Germany
is very different. The supply in proportion to population has actually been
declining; in 1960 it was one dentist per 1,716 inhabitants and in 1965 one per
1,873. The deficiency seems to be in educational resources: in 1964 about half
the applicants for dental training had to be rejected because there was not
enough university space for them. There has also been a sharp decline in the
number of midwives, and obstetrical service is increasingly being given by
physicians in hospitals. Nurses are also in short supply, and some hospitals
have been unable to admit patients because of this lack. Several Land governments have begun to plan for increased training facilities to make good the
shortages, but responsibilities have not been assumed by the social security
scheme as such.
In Canada the training of health personnel is likewise a nation-wide task
not specifically related to the social security scheme. The national ratio of
physicians to population has been improving—from one doctor per 967 inhabitants in 1948 to one per 864 in 1965. The distribution among the ten provinces,
however, is quite uneven. In 1965 it varied from one doctor to 733 persons in
British Columbia to one per 1,505 in Newfoundland. The proportions of
doctors in speciality practice are also quite variable, from 20 per cent, in Newfoundland to 39 per cent, in Quebec. The generally good over-all supply of
doctors in Canada, moreover, cannot be credited to any rise in the output of
Canadian medical schools in proportion to population growth; indeed, the
medical school output has stayed almost constant in the last five years. The
improved supply has rather been due to a large influx of medical graduates from
other countries. In 1964, of all new licensed physicians in Canada, 36 per cent.
were foreign-trained, and this percentage has been about the same for several
years. Some Canadian physicians, of course, emigrate to other countries
(mainly the United States), but on balance the inflow exceeds the outflow.
The steady rise in specialisation in Canada, as elsewhere, has contributed
to the concentration of doctors in towns and shortages in rural areas. Some
of this effect has been counteracted by the formation of private multi-speciality group practice clinics in small towns serving rural districts. In Saskatchewan, the medical care insurance scheme set up in 1962 gave rise to a number
of such "community clinics". Perhaps indirectly, social security has contributed to the production and distribution of physicians by strengthening the
hospital system.

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149

The ratio of dentists to population in Canada, as in the Federal Republic
of Germany, has been declining. In 1959 there was one dentist per 2,969
inhabitants and in 1963 one per 3,096. The maldistribution between urban
and rural districts is also very marked.
The Canadian hospital insurance scheme has doubtless had a positive influence on the supply of nurses and certain other auxiliary health personnel. By
supporting the cost of hospital services, it has enabled hospitals to engage an
increasing number of nurses; to do this, however, the nurses must first be
trained and this is done primarily in hospital-based schools. The output of
these schools is so high that in 1962 there was one registered nurse per 240
persons in Canada—a supply much higher than the United States (one nurse
per 354 persons in 1961) despite its greater wealth. Not all these nurses,
however, are employed full time in Canada, or any other country, since many
marry and acquire family responsibilities. Nursing salaries have traditionally
been low (in comparison with other types of female employment) and this has
doubtless contributed to a high rate of departure from work.
In spite of the relatively high supply of nurses in Canada, hospitals and
public health agencies have for some years felt a shortage, because the demand
for nurses, according to modern standards of patient care, has risen even
faster than the output. Also, the shortening of the conventional work-day
from 12 to 8 hours has increased the demand further. Adjustments have been
made by engaging large numbers of auxiliary nursing staff—"vocational"
nurses, "nurse aides", etc.—with much less training than the registered or
professional nurse. Much thought is being given in Canada and elsewhere to
a redefinition of nursing functions, so that simple tasks can be delegated to
personnel with minimum training and more complex responsibilities reserved
for a smaller proportion of fully trained nurses.
Since the inauguration of the National Health Service, the United Kingdom
has faced a gradually mounting demand for medical care, and hence increased
requirements for personnel. On the whole, these requirements have been met
by an increased output of the training schools. Despite some departure of
doctors for other countries the net supply has steadily improved. Between
1949 and 1964 the population of England and Wales rose by 10 per cent, but
the supply of general medical practitioners increased by 21 per cent, and that
of hospital staff doctors by 55 per cent. The relative supply of nurses has also
steadily increased. The supply of dentists has stayed approximately constant,
so that in this field the same shortage is felt as in Canada and the Federal
Republic of Germany.
It is difficult to generalise about health personnel in the indirect-pattern
countries, but it would appear that social security schemes have been associated
with an over-all improvement in the supply, in spite of shortages in certain

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fields. Perhaps it is not accidental that the dental services, which are not so
well covered by social security, are likewise least well staffed—the ratio of
dentists to population actually declining in several countries. The relative
supply of physicians, however, has risen slowly and the supply of nurses and
other paramedical personnel has risen strikingly. The number of pharmacists
does not appear to have increased, but the need for their services has declined
as pharmaceutical compounds have been increasingly prepared in drug factories rather than local pharmacies. The main adjustment to the rising
demand for medical care under social security schemes in the industrialised
countries has been through the training of an increasing proportion of paramedical and auxiliary personnel and their employment in hospitals, in ambulatory centres and even in private offices. [153] Probably the most persistent
problem under the indirect pattern of medical care organisation is the geographic
maldistribution of personnel—a problem that is inevitably more difficult to
solve when they are engaged mainly in independent professional practice.
C.

DIRECT-PATTERN COUNTRIES

The approach to meeting health personnel needs in countries using the
direct pattern of medical care organisation has been somewhat different from
that just reviewed. Partly because of the pattern and undoubtedly also because
the countries concerned are mainly (though not entirely) developing nations,
efforts to achieve the necessary supply and distribution of personnel have been
more deliberate and more centrally planned.
In Poland the challenge faced after the destruction wrought by the Second
World War was tremendous. There were only 7,000 physicians for the 24 million people in the country, or one per 3,400. In the next 20 years several
new medical schools were founded and training was intensified so that today
there are 42,000 doctors for 33 million people, or a ratio of about one doctor
per 800 persons. Unlike those in the countries of Western Europe, the medical
schools—known as "academies"—are under the Ministry of Health and
Social Welfare rather than the Ministry of Education. The basic curriculum
is prescribed by the Ministry of Health and Social Welfare, with much emphasis
on preventive medicine and the main attention given to practical problems. There
are ten medical academies, affiliated with hospitals but not with the universities.
Since the entire medical care scheme in Poland is under the Ministry of
Health and Social Welfare, as are the academies, it is evident that the educational efforts are closely linked with the needs of the health service. The
distribution of health personnel throughout the country is achieved mainly
under the organisational framework of the direct medical care pattern. While
private practice is permitted, every physician must work seven hours per day

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151

in the social security scheme, so that he must take employment where there
are vacant posts. The national supply of doctors is still not enough to fill all
the vacancies, but the urban-rural distribution is much better than it was in
the pre-war days. In the health centres, as well as the hospitals, much use is
made of auxiliary personnel, the great majority of whom are women. The
policy is to encourage the meritorious personnel of lower levels to continue
their training and rise in the system. Thus the majority of Polish physicians are
also women, many of whom had been nurses or other types of paramedical
health worker.
Tunisia has long had a very meagre supply of medical personnel, and the
development of its whole social security scheme has been impeded by this.
While there have been great improvements since 1960, in 1966 there were still
only 730 physicians in the country (over half of whom were foreigners), for a
ratio of one to 6,100 inhabitants. Even the Tunisian-born doctors have in
the past been trained overseas, principally in France, since there was no medical
school in the country. A Faculty of Medicine and Pharmacy was set up in
1962, and the Government now awards scholarships to 90 per cent, of the
students. Schools have also been established for training auxiliary health
workers, including midwives, anaesthetists, laboratory assistants, male nurses
and female nursing auxiliaries.
The schools both for physicians and for paramedical personnel are under
the direction of the Secretariat of State for Public Health. As in Poland, this
arrangement is considered more appropriate for meeting the practical needs
of the medical care scheme. Since the medical benefits of the social security
scheme in Tunisia are integrated with the other functions of the Secretariat
of State for Public Health, the curricula of the medical school and the allied
health schools can be adjusted specifically to the health problems of the
country, d n the more conventional university atmosphere of medical schools
it is commonly recognised that the emphasis of teaching may correspond more
to the personal research interests of faculty members than to the objective
health needs of the population.)
There are obviously vast medical personnel gaps to be filled in Tunisia
before its social security scheme can operate effectively. As noted in Chapter 4,
the salary incentives for full-time work are gradually attracting an increasing
proportion of physicians into the organised scheme, where they can serve
more patients than in private practice and where there are teams of auxiliary
workers to enable them to spend their time more efficiently. In 1966, 78 per
cent, of the 730 doctors in Tunisia were attached full time or part time to the
Secretariat of State for Public Health.
In India the shortage of physicians and other health personnel is also
severe. In 1964 there were about 100,000 active doctors (i.e. not retired and

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ORGANISATION OF MEDICAL CARE

engaged in medical work), i.e. a ratio of one to 5,500 population. The
unevenness in distribution of medical staff between urban and rural areas is
tremendous, with the concentration greatest in the very largest cities. Unlike
those in Tunisia and, of course, Poland, only 46 per cent, of the doctors are
employed in the public sector or in non-governmental organised establishments,
and 54 per cent, are in private practice. It is doubtless because the latter is
so lucrative in the main cities that the Indian social security scheme has had
to use the indirect pattern of medical care for over half of its beneficiaries.
The medical schools and other training institutions in India are under the
sponsorship of state governments, religious bodies and other entities, and are
supervised in only a very general way by the central Ministry of Education.
They are not affiliated with the central or state ministries of health. Likewise,
the social security scheme is not directly involved in medical education, although
in two states E.S.I.C. has subsidised some special training courses for nurses,
pharmacists, and technicians. Many young Indian doctors are trained in
British hospitals. On the whole, the health personnel picture in India has been
discouraging, because the supply of doctors has not even kept up with the
growth of population in recent years. The remuneration offered in the social
security scheme—and, it would seem, in other organised medical care schemes—
is not adequate to entice nearly enough doctors away from private practice to
meet the needs of insured persons. The ultimate problem, however, is obviously
the over-all national deficiency of health personnel.
The relative attractions to physicians offered by the social security scheme
in Ecuador are much greater. That country also has a great shortage of physicians, the ratio being one to 2,800 inhabitants in 1962. The social security
scheme, however, is able to pay relatively high salaries, so that a substantial

share of doctors have been attracted to full-time or part-time employment in
it. As a result, the protected persons in the scheme were served by a ratio of
one doctor to 800 in 1964, and the target set is even higher, one to 700.
This is manifestly a better ratio than is available to the 95 per cent, of the
Ecuadorian population not yet covered by social insurance.
The medical schools, of which there are three, are attached to the universities, under the general supervision of the Ministry of Education but enjoying
great autonomy. In certain ways, however, the social security scheme also
contributes to personnel training. Through its hospitals, the scheme provides
the internships which are required before medical degrees are awarded. They
also offer training courses for nursing auxiliaries. To improve the quality of
medical service in the scheme, affiliated physicians are sometimes sent abroad for
postgraduate study, and this is done also for hospital administrators. Medical
research is conducted in the social secuitry hospitals, which has an uplifting
effect on the quality of medical care as well.

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153

The direct pattern of medical care organisation, with its relatively high
salaries, not only attracts a disproportionately high share of Ecuador's scarce
supply of doctors, but it backs them up with a high complement of allied health
personnel. In 1966 there were 1,648 health employees in the scheme, of whom
326 were physicians and 1,322 were in allied fields. Thus there are at least four
paramedical workers for every doctor (probably even more as a strict ratio,
since many doctors work part time)—a ratio much higher than is feasible in
private medical practice and enabling the physician's productivity rate to be
increased.
D.

MEDICAL MANPOWER PLANNING

In both the indirect and the direct patterns of medical care organisation
the basic problem not yet satisfactorily solved in any country is how to achieve
proper geographical distribution of sufficient numbers of health personnel
with the right kinds of qualifications. In the older industrialised countries
supplies are, of course, higher than in the developing countries, but the use of the
indirect pattern results in various imbalances. With the physician in private
independent practice, distribution between urban and rural areas remains
uneven, the proportion of specialists and general practitioners may be inappropriate to needs, and the use of expensive physician time may be extravagant
because there are not enough auxiliary personnel in independent medical offices.
In the developing countries there are usually serious shortages of medical
and allied personnel, which can to a certain degree be offset by the greater
efficiency gained through the direct pattern of medical care organisation.
If a government medical care scheme is poorly financed, however, as in India,
it may be impossible to attract sufficient numbers of doctors into salaried
employment. On the other hand, if a social security scheme is relatively
affluent, as in Ecuador, the attraction to salaried medical positions may be so
great as to create handicaps for the non-insured majority of the population.
In socialist countries like Poland the problem has been approached by legally
requiring that all physicians give a specified time per day (seven hours at
present) to the national social security scheme. Since the latter does not
protect everyone in the country, however, doctors still spend much time in
private practice, which permits numerous inequities in the treatment of lowerincome patients, particularly in rural areas. When the entire population is
protected for medical care, as in the United Kingdom, it is possible, without
banning private practice, to allocate personnel rationally both by speciality and
by geographic location. This is feasible for the direct-pattern aspects of the
National Health Service—that is, the specialist and in-patient hospital services—
but is not so readily done for the general practitioner services, for which the
indirect pattern is followed.

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ORGANISATION OF MEDICAL CARE

The difficulties and shortages of health personnel throughout the world
have led to increasing interest in national health manpower planning. As
health service is coming to be regarded increasingly as a right of citizens, the
practice of medicine and associated fields is becoming recognised more as a
social service than a private business. The investment in professional education
of substantial funds derived from the community places a special obligation on
graduates to apply their skills to meet social needs. It implies that the interests
of the population, even in isolated or unattractive places, should ultimately be
the major determinants of the specialities and locations of doctors and other
health personnel in a country. It also means that a pattern of medical care
which makes inefficient use of the doctor's valuable time—as in isolated private
practice—is wasteful not only of his personal investment (e.g. the cost of medical
equipment and rental) but of society's investment in his education.
National health manpower planning does not mean that personnel would
lose their freedom, but rather that the choice of health service as a profession
or occupation implies a social commitment. It means that the physician or
nurse or technician accepts responsibilities in a system which offers services in
a balanced relationship to the needs of patients. This is, of course, the strategy
of the direct pattern of medical care organisation, a strategy which nearly all
nations accept in otherfields,like education. It does not infringe the "rights"
of the health professions, despite much argument on the question, as long as
the freedom of technical judgment in diagnosis and treatment is protected and
as long as remuneration and conditions of work are reasonable.
Social security schemes can promote the achievement of national planning
of health manpower. They can offer remuneration for services in a geographical network which matches the distribution of the population, and in specialities which correspond to the diseases and age groups (e.g. pediatrics and
geriatrics) of the population. No physician, dentist, pharmacist, nurse or any
other health worker need be commanded where to go or what speciality to
enter. The health service system, however, should have designated positions
in it, for which any qualified person may compete. Full publicity should be
given to all vacancies and opportunities. Financial rewards can be made
higher for less attractive locations. At the same time, good conditions of
technical staffing and equipment can make medical work psychologically
rewarding, even in isolated places.
If health needs suggest a greater demand for pediatricians or geriatric
nurses, for example, the educational institutions should offer more training in
these fields, and less in other fields for which the health requirements are less.
To permit the unlimited training of surgeons, who are then free to engage in
private practice anywhere they wish, creates pressures—observed frequently in
the United States and Canada—for the excessive performance of surgical

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155

operations. The proportions of the various specialists should be based on
objective assessment of morbidity rates in an atmosphere devoid of financial
incentives towards one speciality or another. In a word, the needs of the
population should define the range of health manpower to be trained.
Such rational policies can be applied best if there is national planning of
health personnel education. The universities need not necessarily be controlled
by ministries of health, as in Poland, but they should be responsive to the
requirements of such ministries. As countries move towards universal population coverage for medical care, the financial basis is created for the implementation of such social policies.
Priority for social determination of educational goals can also influence
the content of education. The opinion is widespread among the public health
leaders of the world that medical education gives much too little attention to
the preventive and sociological side of medicine; some of the hostile attitude
of private physicians toward social security is simply due to the fact that the
subject was neglected in their course of medical training. [154]
There has undoubtedly been progress in this regard, and more efforts are
being made to develop a community sense today than a generation ago. Thus
influences from the outside world must continuously be brought to bear on the
universities if they are to be properly responsive to social needs.
There is need also for continuing postgraduate education if medical and
allied personnel are to be kept abreast of scientific advances. Participation
in this can be more readily achieved under the direct pattern of medical care
organisation, where it can be built into the daily programme of work. But,
under any pattern, the renewal of licences of physicians and others could be
made conditional on periodic refresher courses and lifelong learning.
Another special need in all countries is for personnel trained in the
administration of the health services. Administrative responsibilities are too
often simply assigned to physicians as the traditional leaders of the health
team, even though they may lack competence in this role. Special nonmedical personnel can be trained to administer hospitals and other health agencies, so that the time of the highly trained physician is reserved for the tasks
that only he can perform. At the same time, a few physicians may receive
supplementary education in social and administrative matters for high-level
public health responsibilities.
Throughout the world there are shortages of health manpower as the
effective demand for medical care—partly through the operation of social
security systems—has increased more rapidly than the output of personnel. To
correct these shortages in the most rapid and efficient way, the functions of
physicians, dentists, nurses, and others must be redefined. Many tasks which
have traditionally been done by doctors can be performed by less skilled, and

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therefore less expensive, auxiliary personnel working under direction. The
direction can best be given in organised health centres and hospitals of sufficient
size to support a full complement of multidisciplinary staff. Thus the ultimate
solution to health manpower training and employment probably lies in an
evolution towards the direct pattern of medical care organisation.

13. HEALTH FACILITIES AND THEIR PLANNING
Most countries in recent years have undertaken national planning of their
hospitals and related .health facilities. While the older hospitals have usually
been built on purely local initiative, the newer ones tend to be established, at
least in part, as a result of a national assessment of the population's needs for
in-patient care. To meet the hospitalisation needs of protected populations,
social security schemes must obviously be concerned about the physical resources for this care, just as they are concerned about personnel resources.
In Chapter 6 we examined the principal issues in hospital service as provided under the indirect and direct patterns of organisation. Here we shall
briefly consider some of the special problems of hospital construction, design
and geographical distribution.
A.

IMPORTANCE OF BUILDINGS AND EQUIPMENT

While personnel are doubtless more important than bricks and mortar,
the design of a building and the equipment it contains can nevertheless greatly
influence the efficiency and quality of medical service. Adequate floor space
is needed for all the necessary technical functions—laboratory tests, surgical
operations, radiological examinations, preparation of food, washing of linen,
sterilisation of supplies, physical therapy, storage of records, etc. For diagnostic tests a bewildering array of technical equipment is needed in modern medicine, and for surgery the instrumentation and anaesthetic equipment available
set definite limits as to what the surgeon may do to help the patient. Many
types of equipment, moreover, require specially trained personnel to use them,
so that the needs for material and human resources are reciprocal. [27]
These rising standards make modern hospital construction very expensive.
A century ago, when hospitals consisted of little more than a number of large
halls accommodating rows of beds, the cost of construction could be met very
often by private charity or by meagre allocations from local government. Today, the construction of a reasonably adequate hospital in any country of the
world requires a large social investment, which must be financed to an everincreasing degree out of the revenue of higher units of government or the funds
of large social security schemes. These costs cannot always be met at the time

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ORGANISATION OF MEDICAL CARE

of construction, but may be amortised over many years. The construction
debts are frequently paid from the income a hospital derives out of its charges
for patient care.
The construction costs of hospitals may be supported by social security
schemes in various ways. They may simply be included as a depreciation
allowance in the per diem payments made for the care of beneficiaries, or the
scheme may grant capital subsidies to independent local hospital authorities,
governmental or other. Costs may be met fully and directly by a scheme which
simply builds its own hospitals. Under any of these methods, the social security
scheme is influencing the network of material resources for hospital care available
to serve protected persons and sometimes the entire population of a country.
As social security schemes have provided stronger support for the operating costs of hospitals, and as general levels of living have risen, the expectations
of patients have increased. The large impersonal public ward was a product
of charity, and the patient had therefore no right to be demanding. But as
workers and others have come to pay their own way under social security
schemes, they have been justified in making demands for greater comfort and
privacy. As a result, the large ward with 30 or more beds is now being replaced
by much smaller units of eight, four or two beds, or by single-bed rooms, in
which not only is the patient's personal dignity better protected, but his biological recovery is likely to be more rapid. Such hospitals are, however, more
expensive to build and also to staff.
A special requirement in all hospitals is for a layout and materials that
will reduce the hazard of cross-infection. There must, of course, be proper
water supply and sewage disposal. Walls, beds, equipment and all other objects
must be made of material that can be easily cleaned or sterilised. Hospitals
must also take account of the special needs of patients with chronic disorders.
More attention must be given to facilities for physical and occupational therapy,
and even for keeping up the morale of the long-term patient. The various
medical specialities—surgery, obstetrics, pediatrics, etc.—ordinarily require
special sections in a hospital if patients are to be effectively served. In all
countries men and women must have separate hospital accommodation. All
these requirements of hospital design add to the complexity and costs of proper
construction.
Quite apart from the requirement for good hospital design in general, there
is the need in all countries for an adequate number and distribution of hospital
beds in relation to the population. [53] Social security schemes can greatly
influence this by their policies of financing both construction and operation
of hospitals. The impact of the schemes on the geographical distribution of
hospitals, as well as their internal design, is felt in both the indirect-pattern and
the direct-pattern countries.

HEALTH FACILITIES AND THEIR PLANNING
B.

159

INDIRECT-PATTERN COUNTRIES

Federal Republic of Germany.
With its long history of industrial development and independent local
governments, the Federal Republic of Germany has a large network of hospitals. In 1964 there were 10.6 hospital beds per 1,000 inhabitants, of which
7.1 beds were in general short-term hospitals. Altogether there are about
3,600 separate hospitals, of which about half are general; the other half specialise in mental illness, surgical cases, maternity, eye diseases, tuberculosis,
geriatric patients, etc. Thus the sickness funds under the social security scheme
pay for services to their members in many different institutions; there is a
standardised per diem charge, depending on which of six grades a hospital
belongs in. With 2,000 separate sickness funds (and a larger number of them
in the past), it is not surprising that the social security scheme, as such, has
played very little part in over-all hospital planning. A few miners' funds
have established and now operate their own hospitals, but otherwise the needs
of the scheme have been met by the existing facilities.
Belgium.
In Belgium, too, the hospitals are owned and operated by local government or voluntary (mostly religious) bodies, rather than by the social security
scheme. A few of the local insurance funds operate their own hospitals, but
this is exceptional. Construction of government hospitals, however, is sometimes subsidised by the scheme. As much as 80 per cent, of construction costs
has been contributed for the establishment of new hospitals by governmental
bodies in rural areas. The scheme has thus been able to stipulate standards of
construction and design.
Canada.
The Canadian hospital insurance scheme also simply makes contracts with
existing hospitals rather than building its own. The operation of the scheme
has, however, greatly increased the rate of hospital utilisation of the general
population, so that the demand for beds has risen. As a result, much new
hospital construction has been undertaken by local bodies, in the knowledge
that the capital costs will eventually be recovered from charges for hospital
service. Moreover, a separate programme of federal government subsidy for
local hospital construction has operated in Canada for some years outside of
the social security scheme.
It has been observed in Canada, as in other countries where hospitals are
highly subsidised, that the reservoir of need for hospital care is very large,

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ORGANISATION OF MEDICAL CARE

and new beds tend to become promptly filled. [55] It is therefore realised that
an ultimate determinant of the costs of the hospital insurance scheme is the
supply of beds available. This has led most Canadian provinces, through their
departments of health, to exercise controls over all new hospital construction.
In addition, there are provincial laws on the licensing of hospitals, requiring
that various standards of both construction and operation be met. Thus,
although these controls over hospital bed capacity, design and operation, as
well as the granting of subsidies for construction, are not functions of the social
security scheme as such, they are all indirectly related to it. The scheme may
be said to create pressures for the more rigorous planning of hospitals by other
governmental bodies.
Non-governmental groupings of hospitals have also been organised in
Canada for the purpose of influencing hospital construction and operation
systematically. One of the special problems in this thinly settled country is the
proliferation of very small hospitals, often with under 25 beds. Such small
hospitals cannot handle any but the simplest cases effectively, although they
may help to keep physicians in certain small towns. A sounder approach
would be construction of proper ambulatory care facilities at such locations,
equipped to transport patients to a larger hospital in the next town. Voluntary
hospital planning councils have attempted to influence construction patterns in
rural regions, and also in metropolitan centres where somewhat similar problems occur. The councils also promote inter-hospital co-operation, such as
bulk purchasing of supplies or joint personnel training programmes in the
interests of economy.
*

*

Thus, in the indirect-pattern countries studied, hospital construction and
planning are on the whole influenced indirectly by the social security scheme,
but it is not directly responsible for them. The main role of the scheme is to
provide afirmfinancialbase for hospital maintenance, once the institutions are
built. (It is true that in some countries, like the Federal Republic of Germany
or Norway, the per diem payments made by the social security scheme for
care in local government hospitals are somewhat less than full costs, so that
the government is indirectly subsidising the schemes as well.) The achievement
of proper standards of internal design and of a reasonable distribution of beds
geographically is left largely to governmental authorities or other organised
bodies.
C.

DIRECT-PATTERN COUNTRIES

Hospital construction policies in the direct-pattern countries are more
closely integrated with the requirements of the social security scheme.

HEALTH FACILITIES AND THEIR PLANNING

161

Ecuador.
The Ecuadorian scheme has built its own hospitals, in relation to the
location of its beneficiaries. In areas where the number of beneficiaries is too
small, it contracts with other local hospitals for services. Since the over-all
supply of hospital beds in the nation is low, all new construction by the scheme
adds to the national resources, even though the number of beds available to
the favoured 5 per cent, of the population who are insured is much higher than
that for the rest of the population. Indeed, the occupancy rate of the social
security hospitals in 1965 was only 63 per cent., suggesting that more beds
have been supplied than can be used by the number of persons so far protected.
It is expected, of course, that population coverage will gradually increase,
especially for dependants.
India.
The Indian social security scheme builds its own hospitals in some parts
of the country, where beneficiaries are numerous, and reserves beds in government hospitals in other parts. As in Ecuador, any increase in the number
of hospital beds helps the nation, since the over-all supply is so deficient.
Although the number of beds and their ratio to the population have been increasing slightly, the national supply in 1965 was still only about 0.5 bed per
1,000 people. Long-term planning of health services in India calls for construction of hospitals, in regional networks under the state governments, to achieve
a ratio of about two beds per 1,000. [65]
Tunisia.
Tunisia also has a serious shortage of hospitals, although the improvement
in recent years has been impressive. In 1956 there were 1.7 beds per 1,000 inhabitants, and this increased to 3.0 beds per 1,000 by 1966. Since the social
security scheme is integrated fully with the Secretariat of State for Public
Health, the over-all hospital resources benefit the protected persons along with
everyone else. The distribution of beds in Tunisia is quite uneven, as in so
many other countries; there is naturally a heavy concentration of beds in the
capital (8.77 beds per 1,000 inhabitants in Tunis and suburbs in 1965), but even
in the provinces there are variations (from 2.68 beds per 1,000 in Sousse to
0.89 per 1,000 in Kasserine in 1965). Nationally financed construction will
obviously be necessary to correct these inequities.
United Kingdom.
Virtually all hospital construction in the United Kingdom is the responsibility of Regional Hospital Boards and the Boards of Governors of teaching
hospitals, under the National Health Service. The money for construction is

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ORGANISATION OF MEDICAL CARE

granted to the Boards by the Ministry of Health, partly on the basis of a standard formula (for smaller construction projects) and partly on the basis of
allocations for major projects on which the Regional Board has submitted a
specific proposal. Thus the regions have some freedom to decide on minor
structural changes at existing hospitals, but all major construction is subject
to national review and control. The architectural plans of all projects costing
over £ 120,000 must be reviewed by the Ministry.
With this centralised policy, the distribution of beds among the 14 regions
in the nation is quite even. There are about nine beds per 1,000 population in
the country and they are occupied at a rate of about 86 per cent. Any new
construction in a hospital region is planned in the light of the region's over-all
needs ; beds are not added to one hospital if another one nearby has a low
occupancy rate. The hospitals in each region, moreover, attempt to function
as an integrated system, avoiding duplication of infrequently used and expensive equipment and pooling efforts in recruitment, staff education, purchase
of supplies, etc. Patients are also referred from the smaller to the larger
hospitals in the region as necessary. [45]
Poland.
In Poland also, the principle of régionalisation is followed in hospital
construction and operation. The voivodship is the geographic unit in which
hospitals are planned by the Health Department, under the direction of the
Ministry of Health and Social Welfare. During the Second World War there
was enormous destruction of hospitals, but the expansion since the war has
been rapid. Standard architectural plans are provided by the Ministry and,
with appropriate modifications, are adapted to the local terrain. By 1954
there were 6.3 beds and by 1963 there were 7.7 beds per 1,000 of the population. In the main cities there are large teaching hospitals giving training in all
the specialities. At the voivodship level there are hospitals of about 200 or
300 beds with the principal specialities, and at the powiat level there are smaller
hospitals mainly for maternity, accidents, infections and minor surgery; these
are complemented by health centres for ambulatory care. All this construction
(or transformation of existing buildings for health purposes) is carried out in
accordance with the requirements of rational geographical distribution and is
financed mainly by the Ministry of Health and Social Welfare.
Polish hospitals serve the entire population, whether they are protected by
the social security scheme or not. The only difference is that hospital treatment
for protected persons is free, whereas non-protected persons have to pay about
one-third of the costs. The supply of hospital beds is still deficient in the rural
areas by comparison with the cities, but it is improving with construction
grants from the Government.

HEALTH FACILITIES AND THEIR PLANNING

D.

163

THE MOVEMENT TOWARDS RÉGIONALISATION

In spite of the different historical origins and different administrative
policies of hospitals in the indirect-pattern and direct-pattern countries, the
trend all over the world seems to be to establish hospitals in geographical
networks which take account of the distribution of the population and make
the most rational use of the complex resources required by modern medical
science. When the direct pattern of hospital service is followed, the planning
of these regional networks is done under the social security scheme. This is
easiest in countries like Poland, Tunisia and the United Kingdom, where
hospital services for the whole population are given under a single system.
But even in the indirect-pattern countries the movement towards régionalisation
is proceeding because of general pressures from government and voluntary
bodies outside the social security system.
Régionalisation is a method of assuring the quality of hospital service that
each patient needs, regardless of where he happens to live. [113] At the same
time it aims at economy by avoiding unnecessary duplication of equipment or
wastage of beds. Its achievement depends on both construction and operational
policies. Hospitals must be located reasonably in relation to population and
contain an appropriate number of beds; although an ideal network is seldom
possible since the situation is determined by the existing infrastructure, the
system of hospitals can be gradually improved. Operationally, the tasks are
more difficult. Each hospital tends to develop a certain pride and sense of
sovereignty, which may impede co-operation with other hospitals in a geographical system. The smaller peripheral hospitals in a regional network may
resent the leadership or domination of the larger central hospitals, and may
attempt to handle patients who ought properly to be referred elsewhere.
Co-operative activities in procurement of supplies or training of personnel
mean that individual preferences must be submerged in a uniform set of standards.
Under the indirect pattern, exceptional leadership and various financial
inducements are usually necessary to achieve inter-hospital co-operation.
Hospital autonomy, which may be fortified by religious or other cultural
differences, is not conducive to transfer of patients, exchanges of staff, joint
purchasing of supplies or other co-operative activities. Rivalries between
hospitals may even lead to certain extravagances, in order to attract patients.
If one hospital in a city has money—perhaps from a charitable endowment—
which permits it to pay higher salaries, it may attract an abundance of nurses
or other scarce personnel, leaving other hospitals with a serious shortage.

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ORGANISATION OF MEDICAL CARE

Even under the direct pattern of hospital services, the effectiveness of
régionalisation depends on whether the social security scheme as a whole is
integrated with the services of other major programmes, especially those of a
ministry of health. When a social security scheme has limited coverage, as in
most of the Latin American countries, its hospitals may compete for personnel
with governmental and voluntary hospitals outside the scheme; top-level
co-ordination or extension of the scheme's coverage to a large majority of the
population is necessary to put an end to this situation. The integration of
social security hospitals with all other public health facilities, as in Chile, makes
régionalisation easier to achieve. A single unified network of hospitals can
permit optimum allocation of resources in relation to population needs with a
minimum of duplication or wastage.
The very lack of hospital resources in most of the developing countries in
a sense simplifies the task of achieving regionalised hospital systems. The
authorities do not face so strong a background of tradition and vested interests
as in the industrialised countries, but can start with a relatively clean slate.
They can benefit from the experience of the older countries and learn lessons
from their mistakes. Their problem, of course, is insufficiency of economic
resources to build the necessary number of hospitals and transport networks
to reach them. By thinking in terms of regionalised hospital systems, however,
the developing countries can make the most of every penny invested in hospital
construction.
In both the developing and the industrialised countries rational planning
of regionalised hospital systems is easier in rural areas than it is in urban areas.
The main cities usually contain hospitals under the sponsorship of several
different governmental and voluntary bodies and integration among them is
usually difficult to achieve; moreover, a large number of specialised hospitals
can be justified by the size of urban populations. In the rural areas, however,
it is clearly to the interest of all sponsoring agencies to combine their resources
for the construction and operation of large unified hospitals to serve all accessible population groups. In this way it will be easier to provide high-quality
service than by building in one town a variety of small facilities under different sponsorships to serve various sectors of the rural population.
Planning of the geographical distribution of hospitals, of course, has
importance far beyond the logistics of in-patient care. Since the most elaborate
medical equipment and the most specialised personnel are to be found in hospitals, they can well serve as the backbone of the health service system, including
the ambulatory and preventive services as well. [1471 Hospitals can, however,
play this role only if they are properly integrated into a system of health
service through which communication and authority can flow easily.

14. MEETING RURAL HEALTH NEEDS
References to the special problems of providing medical care to rural
populations have been made throughout this volume. The uneven distribution
of resources—health personnel and facilities—between rural and urban areas
has been observed in nearly all countries, with extreme deficiencies in the rural
areas of developing countries. In Peru, for example, 72 per cent, of all doctors
(1957 data) were located in the capital, Lima, containing 15 per cent, of the
population, while the remaining 85 per cent, of the people were served by only
28 per cent, of the doctors. [105, p. 54] Even in the prosperous United States,
the physician-population ratio (1963 data) was 143 per 100,000 in the metropolitan areas compared with 81 per 100,000 in the isolated rural areas,
(which nevertheless contained 42 million people). [139, p. 25] Everywhere in
the world the rural population receives less medical care and is less well served
by modern scientific measures than the urban population.
Much of the progress in urban medical services has been due to the benefits
of social security systems. In their traditional form of social insurance, however, those systems have not been generally feasible for populations engaged in
agriculture or other rural occupations. While there are some exceptions, and
certain limited rural populations have been enrolled in social insurance schemes,
other mechanisms have usually been necessary to protect rural populations,
especially in the developing countries. Even when social insurance is feasible,
it must be supplemented by special action to assure medical benefits for protected persons in rural areas.
It is in connection with rural populations that a modernised definition of
"social security" becomes necessary. The term has been so traditionally
applied to statutory schemes, which assure prescribed benefits to persons who
have earned the right by individual financial contributions, that other schemes
supported simply from general revenues have sometimes been excluded from
the definition. In a wider modern sense, however, as noted in Chapter 1,
"social security" can be regarded as the granting of guaranteed benefits,
regardless of whether there are contribution conditions. This definition is
especially relevant to health services for rural populations.
In this chapter, therefore, the problems of achieving medical care protection
of rural populations under the broader definition of social security will be

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ORGANISATION OF MEDICAL CARE

considered. In the interests of brevity, however, special attention will be
given to the action of the social insurance schemes (in the narrower sense)
which currently protect limited and designated populations, and to the steps
taken to increase the efficacy of protection.
A.

SPECIAL PROBLEMS OF MEDICAL PROTECTION IN RURAL AREAS

The enormous difficulties of enrolling agricultural and other rural populations in conventional social insurance schemes have been very well analysed
in other reports of the International Labour Office. [125] In the industrialised
countries, where the majority of the population consists of urban workers and
their dependants, the rural minority can often be protected by special supplementary schemes. In the developing countries, however, where the large
majority of the population is rural, and where incomes are very low, the social
insurance approach has usually been restricted to the urban minority. Health
services for the rural population have depended mainly on efforts of ministries
of health or other agencies under which rural people may or may not have a
statutory right to benefits.
There are many reasons why the social insurance approach is unsuitable for
rural economies. [7, pp. 90-97] Agricultural work is much more heterogeneous
in structure than urban industry. Workers on large plantations, receiving
regular wages, may resemble factory workers, but farm labourers, sharecroppers, farm tenants, peasants who own a small plot of land, and other
categories, are very different. The work may be done, at different seasons and
in varying proportions, by various members of the family. The systematic
payment of social insurance premiums by worker and employer, or even by the
self-employed farmer alone, is hardly feasible. Moreover, the average amount
of earnings in rural work is usually extremely low. In the developing countries
of the world the vast bulk of the rural population lives at a bare subsistence
level; even if the administrative problems were solved, how much of these very
low incomes could be channelled into a social insurance fund ? If even as
much as 5 per cent, of income were payable into a fund, the amounts received
would still be extremely small, hardly enough to support reasonable benefits
for various contingencies.
With respect to sickness benefits and medical care the problem is especially
serious. Medical care is inherently expensive, since it requires skilled personnel
and elaborate equipment. It is simply beyond the means of most rural people,
either as individuals or collectively. To make matters worse, the very isolation
of rural areas from large cities actually increases the costs of most medical
services, if only because of the logistic problems of transportation, electric
power, water supplies, etc.

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167

It is thus clear that rural medical services—if they are to be at all comparable with those in the cities—must be financed otherwise than by social
insurance. In the developing countries this has nearly always meant using
general revenues. The ultimate derivation of those revenues from import
taxes, land taxes, income taxes, sales taxes and other sources is an extremely
complex economic process beyond the scope of this volume. The main point
to recognise is that the use of general revenues, rather than social insurance,
to finance rural medical care is essentially a form of national solidarity to
compensate for the meagre earnings of agricultural families.
The difficulties in rural medical care have been in some ways reduced and
in other ways aggravated by developments in the larger cities. [88] Industrialisation and the resultant urbanisation increase the over-all wealth of a country
and thereby enlarge the technical resources with which rural health problems
may be tackled. Moreover, the cities educate personnel, conduct research and
provide technical leadership for an entire nation; urban hospitals also can
obviously serve rural people who travel to them. On the other hand, the
attractions of urban Ufe leave the villages at a great disadvantage in acquiring
medical personnel; if there is a choice, the large city with its culture and
comforts is preferred. This is true even if financial rewards to doctors and
others are made just as high in the rural districts. The operation of social
security schemes for industrial workers has even aggravated the disparities.
To serve town dwellers medical resources are concentrated in the cities even
more than would be the case if there were no more than a free market for
privately purchased care.
Since economic productivity is lower, the general level of living in rural
areas is below that in cities. Housing is usually poorer and the means of
transport are fewer. Even the nutritional level is often inferior, despite food
coming from the land. Educational levels of the people are nearly always
lower, for lack of schools. As a result, the morbidity and mortality rates in
the rural areas of developing countries are usually higher than in the towns.
(This is not necessarily true in the industrialised countries, where communicable
diseases have been greatly reduced and where urban life is associated with a
higher volume of other diseases, especially heart disease and cancer.) The
handicaps of ignorance and distance reduce the rate of utilisation of medical
care by rural people, even when services are made available at market towns.
In recent years the hardships of rural life have caused special problems in
the cities owing to mass migrations of rural families in search of something
better. In Latin America, Asia and elsewhere destitute rural families have
flooded into the large cities, often settling in a belt of shacks around the metropolis. These are people who can either no longer survive in agriculture or
have hopes of finding better-paying industrial employment. Miserable as

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ORGANISATION OF MEDICAL CARE

their dwellings may be, they settle down in their new surroundings; this, of
course, means that they exert demands on the hospitals and health centres
of the city. In the long run, the cities must absorb these people and offer
employment to them and steps must at the same time be taken to improve
agricultural work and life so as to reduce the rural exodus.
Countries with all types of social security system have undertaken special
measures for improving rural medical care. Where the indirect pattern of
medical care organisation prevails, the feasibility of deliberate intervention is
less, but then special health schemes outside the statutory social security
framework may be used. Where the direct pattern prevails, mechanisms both
inside and outside social security are extensively used. The extent of rural
health problems can, however, be more clearly seen by examining national
experiences in terms of the economic development of countries, rather than
according to their medical care patterns, as in other chapters of this volume.
We shall therefore examine successively the special action for rural health
service improvement taken by the industrialised and by the developing countries.
B.

HEALTH MEASURES FOR THE RURAL POPULATIONS IN
INDUSTRIALISED COUNTRIES

Canada.
Canada is an example of an industrialised country which nevertheless has
vast rural areas. Its national social security scheme for hospitalisation, which
applies the indirect pattern, serves rural and urban people alike, since coverage
is almost universal. By supporting the costs of hospital care in rural communities, of course, it helps to improve rural medical care; to some extent
the hospitalisation scheme may even promote the survival of some small
inefficient rural hospitals that, in the interests of quality and economy, ought
to close down, allowing the local residents to use a larger hospital not far
away. [98]
In addition to this national statutory scheme, a number of other special
governmental programmes in Canada are intended to meet the needs of very
sparsely settled rural populations. In the far northern territories, where there
are Eskimos and other American Indians, the federal Government operates a
special health service with its own salaried doctors, nurses and other personnel.
There are small "outpost hospitals" and health centres where clusters of people
live, and private physicians in a few towns may be engaged on part-time
contracts. In the rural province of Newfoundland, the government has built
a network of "cottage hospitals", also staffed by salaried medical personnel.
The "rural municipalities" of the thinly settled prairie provinces have also
engaged general practitioners on salary to serve the entire local population.

MEETING RURAL HEALTH NEEDS

169

These are all, in eifect, special schemes of rural medical care based on the
direct pattern. [35]
The provincial governments in Canada also operate direct-pattern schemes
for families living in the thinly settled northern areas. Air ambulance services
bring isolated patients to hospitals in the towns. Several provinces also provide
training fellowships for medical and dental students on condition that they
serve for specified times in the government health scheme—usually in rural
areas. Although the Saskatchewan medical care insurance scheme, which
covers that province's total population, generally follows the indirect pattern,
there is a special provision for placing salaried physicians in rural localities
lacking a doctor. Another method of attracting doctors to small villages has
been the construction of health centres in which their private offices could be
located.
Thus, even though the indirect pattern is the general rule in Canadian
medical care schemes, the solution of rural problems has required the introduction of several measures which involve direct provision of personnel, facilities
and transport services by government agencies.
Belgium.
Belgium is a much smaller industrialised country, with no serious rural
problems. Even here, however, there are fewer doctors in rural areas than
there are in cities. The most thinly settled area is the province of Luxembourg,
with only 50 inhabitants per square kilometre, compared with 311 in the country as a whole. In this hilly southern province, with 219,000 population in 1965,
there were 110 physicians per 100,000 people, compared with 226 in the province
of Brabant, where the capital is located, and 151 in the country as a whole. The
distances from a rural home to a doctor in town, however, are seldom great.
The problem in the rural parts of Belgium relates mainly to the load of home
visits made by the rural doctors. To compensate for this, the social security
scheme has allowed higher fees for these doctors and special payments for the
time spent in travel, as well as the actual transport expenses.
United Kingdom.
The United Kingdom is another industrialised country with a dense population, so that its rural problems are not serious. Since the National Health
Service covers everyone, and is financed mainly from general revenues, there
are no economic obstacles to medical care in rural areas. The achievement of
an adequate supply of health personnel in rural communities has nevertheless
required special measures.
General physician services follow the indirect pattern, but settlement of a
new doctor in a locality requires registration with the local Executive Council.

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ORGANISATION OF MEDICAL CARE

If the area is already well supplied with general practitioners, however, it may be
designated as an "over-doctored area" by the Ministry of Health, and new
physicians are thereby barred from settlement. The effect is to channel doctors
into less well supplied areas, some of which are rural. Another approach is
followed in the thinly settled Highlands and Islands of Scotland. Here, to provide general practitioners where the capitation payment method would not yield
an adequate income, salaried personnel are engaged—essentially using the
direct pattern.
The needs of rural populations for hospital and specialist services are
tackled by the Regional Boards. Every part of the British Isles is included in
some hospital region, so that any shortcomings in rural areas are made good
through hospital construction and staffing, under the direct pattern, by the
Regional Boards. Ambulance services are also operated extensively to bring
rural people into urban centres.
Federal Republic of Germany.
In the Federal Republic of Germany special attention has been directed to
rural needs mainly by statutory provision for "rural sickness funds". These
were intended originally for coverage of agricultural workers, but they now
also cover other types of worker in certain areas where other insurance funds
do not operate. Of the 2,000 sickness funds in the Federal Republic 102 are of
the rural category and in most cases—for instance in that of small farmers—
membership in them is voluntary.
The indirect pattern of medical care is the prevailing one in rural areas, as
in the cities, with one special exception, miners. Many of these are rural people,
living often in isolated settlements. To ensure the necessary medical services
the miners' funds, of which there are eight, engage their own salaried doctors
and operate their own dispensaries and hospitals. Here again, as in Canada,
while the indirect pattern is the general rule, the special problems of medical
care in difficult circumstances, where the private medical market would fail, are
solved by implementation of the direct pattern. Indeed, the judicial decision
of 1960, fortifying the free market for private physicians vis-à-vis sickness funds
(see Chapter 4), has probably made matters worse for the rural areas. The
effect of this decision, it is believed, has been to increase the concentration of
doctors in certain cities, leaving rural districts less well served.
Poland.
Poland, too, is an industrialised country, but the approach to rural medical
care is quite different. Under the direct pattern of medical care organisation,
special efforts have been directed to providing services in rural areas. Basically,
this is done by estabhshing rural health centres with salaried doctors and other

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health personnel. In more thinly settled areas there are "health posts" staffed
by nurses or health auxiliaries who givefirstaid under the supervision of doctors
at the health centres ; doctors visit the health posts once, twice or three times a
week. There are also midwife posts in the villages. Ambulances and aircraft
(or helicopters) are available to transport patients from a rural health post to
a health centre or hospital.
The self-employed rural population—mainly small peasants and their
families, it will be recalled—do not have full social security protection. Children
under 1 year of age are fully protected for both disease prevention and cure, but
after this medical care must be paid for at rates which in many cases are well
below the true cost. In certain districts, however, rural health co-operatives
have been organised whose members build health centres, which are then
equipped and staffed by the Ministry of Health and Social Welfare. The
maintenance costs are then met by the co-operative.
The staffing of rural health centres with physicians and dentists has been a
difficult problem in Poland, where many of the rural areas are still quite lacking in cultural attractions. After 1948 the problem was tackled by requiring all
new medical graduates to serve in a rural location for two years. Furthermore,
medical and surgical specialists could be sent by the Ministry to rural assignments for two-year periods. Experience with these measures, however, was not
very successful; after the two-year assignments both the young doctors and the
specialists would usually leave and settle in larger cities. In 1963, therefore, the
policy was changed. Budgetary allotments by region now determine the number
of the medical posts for each voivodship and hence the number of physicians and
others to be engaged; a reasonable proportion of the posts can thus be provided
at rural locations. To make the rural positions more satisfactory, housing
accommodation is provided in or near the health centre. Many of these positions are filled by married couples, both of whom are professional personnel.
Under this system, the level of rural health service in Poland is rapidly
improving. The mechanisation of agriculture and development of industries
in rural areas is, of course, also contributing to more fundamental solutions to
the rural health problem. For the present, many rural people still depend on
privately purchased medical care—seeing the doctor in his hours off duty from
the public service. Complete coverage of the rural population under the social
security system is still under discussion.
C.

HEALTH MEASURES FOR THE RURAL POPULATIONS
IN DEVELOPING COUNTRIES

In the developing countries the problems of rural medical care are much
more severe than in the countries just reviewed. The disparities in health

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resources between city and village are much greater, and the level of living in
the rural districts is much lower. For reasons discussed earlier, the coverage of
rural populations by social security systems is also very limited.
To the extent that modern scientific medical care is provided to rural
people in developing countries, the direct pattern of organisation is nearly
always followed. In the main, this tends to be through a ministry of health providing services outside of any social insurance framework. Networks of rural
health posts, health centres and rural hospitals—open to everyone who comes
—have been established by the governments of nearly all developing countries,
although the quantity of these resources is seldom adequate. [1551 Generally
the ratios of personnel and hospital beds to population are extremely low at
present. In the absence of sufficient scientific resources, rural people must still
depend largely on untrained traditional healers.
Within social security systems in these countries, the direct pattern is, of
course, also followed. One could not hope to arrange medical care on the basis
of indirect payments to private personnel and facilities in these rural areas.
Even with the direct pattern, however, there are serious unsolved problems in
attracting doctors to rural positions. So long as the national supply of medical
manpower is relatively low and a free market for private medical practice operates in the cities, it has been difficult to staff the health facilities built in the
smaller towns.
Ecuador.
In Ecuador 63 per cent, of the population live in villages with under
2,000 inhabitants, but very few of these are protected by the social security
system. Coverage is limited to workers in certain large agricultural enterprises
and in public works such as road-building. Quite recently, however (1966),
steps were taken to extend coverage to ordinary farm workers in selected rural
areas. It is planned to construct 20 rural health centres, each to have satellites
in the form of village dispensaries and first-aid posts; almost 100 doctors and
numerous other personnel will be provided. The new scheme will be developed
in co-operation with the national Bureau of Health (equivalent to a ministry of
health in other countries) and other health agencies. Protected persons will
be entitled to use these facilities as a right, but other persons in the area will
have access to them on the basis of indigency or special payments. This plan,
however, lies in the future. Until now the social security scheme in Ecuador has
had hardly any impact on the rural population. Rural health services have been
provided by other public authorities.

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Tunisia.
In Tunisia, where the social security medical scheme is integrated with the
Secretariat of State for Public Health, the rural areas are served also by the
direct pattern. The shortage of physicians is extreme. New medical graduates
are required to spend two years at a rural assignment, and few exceptions are
allowed. Furthermore, since 1963 private medical practitioners have been
prohibited from settling in Tunis, where the concentration is already very high.
Government scholarships are given to students of medicine, dentistry and pharmacy, in return for which the graduate must devote ten years to the public
service. During this relatively long period of obligation, he may be sent anywhere in the country to staff government hospitals or health centres. The
entire country is divided into health regions, each containing a central regional
hospital, several auxiliary hospitals, and rural dispensaries, as well as special
units for pharmaceutical supplies, laboratory tests, ophthalmological services,
health education and environmental hygiene. Ambulance services are also
attached to the regional and auxiliary hospitals.
This national system of medical care organisation in Tunisia under the
Secretariat of State for Public Health is clearly oriented to the needs of the
large rural population. Agricultural workers or farmers, however, are not
covered by the social security scheme as such. They have access to the Secretariat's services as citizens to the extent that services are available, but they do
not have a statutory right to service, which is often hard to obtain as the numbers of personnel and facilities in rural regions are still inadequate. While the
medical services for beneficiaries under the social security scheme are provided
through the same framework of resources, the concentration of protected persons
in the cities has fostered the development of much greater medical resources there.
For isolated mineworkers and their families there is a special medical care scheme.
coming under the National Mining Authority; even these statutory beneficiaries, however, may be transferred to a regional hospital run by the Secretariat
of State for Public Health for treatment of serious conditions.
India.
The most serious rural medical care problems are found in India, where
tens of thousands of villages are without a single scientifically trained physician.
Tens of millions of village-dwellers must rely on Ayurvedic and other traditional healers who base their treatments on ancient precepts, and thousands of
villages lack even these practitioners. The approach to rural medical care in
India is through a network of rural health centres, staffed by salaried medical
and auxiliary personnel of the Ministry of Health of each state. Each centre is
intended to serve about 30,000 or 40,000 persons, but often there is only one

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physician for this number. Mobile units may go periodically to the villages.
Difficult cases are sent to larger "secondary health centres" or to district hospitals. Voluntary religious and non-sectarian agencies also operate some rural
services, but their impact is small. Many of the rural health centres are understaffed because doctors are not compelled to serve in the government scheme and
the majority choose to engage mainly in private practice in the large cities.
The social security scheme (E.S.I.C.) in India has small impact in rural
areas because it applies only to factories with at least 20 workers, where power
is used for the purpose of manufacturing; its geographical coverage is being
gradually widened. Although the scope of the scheme is limited, there are
difficulties in recruiting enough doctors to staff the E.S.I.C. health centres. The
goal is to provide an average of one doctor for each 3,800 persons (1,000 insured
persons plus dependants), but this ratio has not been achieved for beneficiaries
in the smaller towns. The resources are better, however, than for the general
rural population which is now served by a ratio of only one doctor to about
30,000 population. It is evident that the direct pattern of medical care has been
necessary, both in the E.S.I.C. scheme and under the over-all Ministry of Health
scheme, to provide even a minimum service for the population outside the
large cities.

D.

GENERAL OBSERVATIONS ON MEDICAL CARE
IN RURAL AREAS

In both the industrialised and the developing countries the special problems
of providing medical care to rural populations seem to demand greater recourse
to the direct pattern of organisation. In the cities, the operation of the free
market—while causing problems that have been discussed—can yield an adequate supply of medical personnel and facilities to meet the needs of protected
persons. But in the rural areas the free market alone is never adequate to
solve the problems. Even in the industrialised countries, special measures
applying the direct pattern in one form or another have been necessary; in the
developing countries such measures have been overwhelmingly necessary.
The difficulties of covering agricultural and other rural populations under
the traditional social insurance mechanisms have been mentioned earlier. While
some adjustments to these problems have been possible in the wealthier industrialised nations, in the developing nations the only solution has been use of
general revenues to provide direct-pattern services to rural people. To the
extent that these people are served by modern medicine, the ministry of health
of a country, rather than the statutory social security scheme, has been mainly
responsible. Much thought has been given to various methods for deriving insur-

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ance contributions from small landowners and agricultural workers, but their
implementation has been very limited.
While the direct pattern of organisation is generally conceded to be
necessary for rural medical care in developing countries, it is still plagued with
difficulties. Most serious is the limited over-all national supply of medical and
allied health manpower. No matter how systematically organised a scheme
may be, a deficient national supply of doctors will mean that the rural locations
will be least well served. Even in Poland, where every physician must devote
seven hours a day to public service, posts in the country are the last to be filled
and the first to be vacated if more attractive posts become available in town.
In other countries, where the physician has no legal obligation to serve in the
public system (unless he is a new graduate serving for a limited duration), the
concentration of doctors in the towns, even under a direct-pattern scheme, is all
the greater. The ultimate solution of rural medical care problems therefore
depends on an ample national supply of medical personnel.
To cope with the shortages of rural physicians, developing nations have
been making increasing use of auxiliary health personnel of many types. Such
personnel can be trained in a short time at relatively small cost, and can do
many tasks that would otherwise use the scarce and expensive time of physicians.
The ideal solution is to employ professional nurses with two or three years of
training after secondary school, but these too are in very short supply in the
developing countries, so that much more briefly trained health workers must
normally be used. These auxiliaries should work at the side of a physician, but
in very poor rural districts they often work alone at small posts. They have
standard instructions on immunisation of children, first aid for injuries, perhaps
midwifery, drug therapy of simple ailments, and steps to be taken to secure
proper care for patients who appear seriously ill. Obviously such personnel can
make dangerous mistakes, and everything depends on the degree to which they
are supervised. Effective use of these health workers, as well as technicians,
pharmacists and other categories, requires the direct pattern of organisation
with careful discipline.
Mobile health units are another device widely used in developing countries
to bring some limited medical care to isolated country people. Trucks can be
fitted out for the convenient transport of medical equipment and supplies of
drugs. These are a sensible expedient when the population lacks means of
transport but, in the long run, a better quality of medical care can be expected
at fixed installations to which the patient can travel. Public transport and
ambulances are, of course, essential.
Rural populations are in need of preventive services (see Chapter 9) as
much as or more than townspeople, but it is usually wasteful to provide them
separately. At a rural health centre it is more economical to offer the preven-

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tive services (immunisations, health education, case detection, etc.) in conjunction with treatment of the sick. Moreover, preventive services are more likely
to be acceptable to people if they are offered at the same location and even by
the same personnel as medical care. Although ministries of health in developing
countries have traditionally minimised therapy and emphasised prevention, they
are now coming to follow this integrated approach. Even special environmental hygiene campaigns in rural areas, such as those against malaria or schistosomiasis (involving elimination of vectors), can be more effective if they are
followed up by regular medical services at a local health centre.
As noted earlier, the rate of utilisation of medical services in rural areas
is invariably lower than that in towns, and this is true even when adequate
resources are available. Lower educational levels, transport problems and perhaps even a certain stoicism doubtless contribute to this. There is every likelihood that basic morbidity rates in rural areas are higher than in towns (largely
owing to infectious disease and malnutrition); in Colombia, where a careful
national household morbidity survey was recently made, the prevalence of
sickness in the rural population, making the necessary adjustments for age,
was found to be higher than that in the urban population. [37, p. 29] With
improvements in medical resources and the whole level of rural life, the utilisation rate for health services usually rises, but it is a slow process. The demands
for improved rural medical care, however, have not been as loud and insistent
as they have often been among the more demanding populations of the cities.
On a political level, therefore, the rural health problem has received less urgent
attention.
To meet rural health needs, planning is obviously required at a national
level. The cities, in a sense, can take care of themselves, but the rural areas
require external assistance. Funds must be mobilised from a total national
economy to raise the level of rural medical service up to the standard expected
today. This can ordinarily be done best through a national government and
financed out of general revenues. The special problem of providing medical
services to a scattered rural population can best be solved through the direct
pattern of organisation, with salaried personnel in regional networks of
facilities as described in Chapter 13.
The social insurance mechanism has served an important historical purpose
in enlarging resources for the medical care of industrial populations through
guaranteed financing. In some countries, like the U.S.S.R. or the United
Kingdom, it has evolved into a national health service, covering everyone and
based mainly on general revenue support. Industrialised nations with relatively
affluent rural populations, like Canada or the Scandinavian countries, are still
evolving through the social insurance path towards universal coverage for
medical care. In the developing countries, however, it would be a very slow

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process to follow this path today. More simple and direct would be the
national extension of comprehensive care to the rural areas by either social
security or the public health authorities, with services being available to everyone without a means test. (If a wealthy person preferred to purchase medical
care independently in the private sector, he should still be free to do so. A
well-staffed public system, however, would make this a rare occurrence.) The
principle of social security, with statutory rights for the individual, would then
be implemented not by the device of personal premium payments, but rather
by a national policy of mobilising medical resources to meet the needs of all
rural people.

PART V
QUALITY, COSTS AND CO-ORDINATION

15. INFLUENCING THE QUALITY OF MEDICAL CARE
Almost every feature in a social security system may influence the quality
of the medical care given within it. Apart from the method of financing each
of the principal types of medical care—general physician's service, specialist
service, hospitalisation, pharmaceutical products, etc.—the system may exert
a wide range of influences on the quality of performance. Many of these have
been mentioned in the previous chapters, especially in discussing the effects of
various methods of remuneration and the production of personnel and facilities.
In this chapter we shall examine the more deliberate action taken within
organised medical care schemes to influence the quality of professional performance. First, however, we should be aware of the full range of influences on
quality, only some of which operate within a social security system and many
of which are part of the entire fabric of the health professions and the whole
way of life in a country.
A.

T H E RANGE OF INFLUENCES ON QUALITY

The educational system of a country is obviously a fundamental determinant of the quality of care that medical graduates will render. The schools
which train dentists, nurses, pharmacists, technicians, etc., set limits on what
may be later done by their graduates. Various external controls may be exerted, moreover, on the content of curricula; such controls may emanate from
both ministries and non-official sources.
Professional licensing laws are also of the utmost importance, as they
define the standards which must be met by persons entering each of the professions. Hospitals too may be subject to official licensing, as may pharmacies
and laboratories. In addition, the health professions themselves have evolved
codes of ethical behaviour which exert powerful influences. [78] Physicians
and other health personnel wish to have the respect of their colleagues, and this
has been used as a subtle sanction on their actions and attitudes. In many
countries the medical profession has developed elaborate procedures for policing itself and punishing offenders.
The health professions themselves have also established standards for
certifying speciality qualifications. These standards may come to be recognised

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by the public authorities, including those responsible for running social security
schemes. Hospitals, too, may stipulate many additional standards, defining
the permissible limits of medical action. [117] Private physicians may also
voluntarily band together in "group practice clinics" so as to influence each
other's daily performance.
Continuing or postgraduate education is important to maintain the quality
of medical performance in the face of advancing knowledge. A variety of
agencies other than universities may offer such instruction, and various degrees
of compulsion or pressure may be exerted on professional personnel to engage
in such learning. The scientific journals, of course, are another continual
fountain of communication on new knowledge.
The number of health personnel and facilities in a country sets limits on
the quality of care that a population may receive; and if personnel are too few
the time allotted to each patient can be too short to permit proper service.
The geographical distribution of personnel, which, as we have seen, can be influenced by many factors, determines the time available for patients in each
locality.
All these influences on the quality of medical care exist independently of
whether there is a social security scheme or not. An organised medical care
scheme can, however, exert many further influences on the quality of performance. The qualifications demanded of personnel who work in the scheme may
be higher than those required for basic licensing. Systematic postgraduate
education may be compulsory. Environmental conditions as well as employment contracts may be especially conducive to high-quality performance by
the health personnel.
Various reviews of medical activities may be carried out by expert observers, and rewards or penalties may follow. The obligation to keep records
for the scheme can influence the diligence of personnel and facilitate communication among them. Certain specific medical acts, such as elective
surgery or the ordering of elaborate orthopaedic appliances, may require prior
authorisation by another physician. More generally, the whole day-to-day
performance of doctors and others may be subject to continuous surveillance
in a professional hierarchy.
The objective of review procedures is not simply to identify cases of poorquality work but rather to encourage good performance in advance. The
individual provider of health service must be continuously reminded about his
social role, so that he will exercise self-discipline. There are inevitable pressures in any long-continuing activity to become weary of the task and to lose
the enthusiasm necessary for achieving excellence. A systematic review procedure helps to counteract this human tendency, so that the welfare of patients
can be protected.

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183

In order to promote good-quality medical care one must have methods of
measuring it. [20] The ultimate measurement is the rate of recovery of patients
from illness or, conversely, the rate of occurrence of persistent disability or
death. However, such measurements of the end result of medical care require
extremely careful long-term observations which are seldom feasible as a guide
to judgment of day-to-day medical performance. A middle course, therefore,
is usually taken, in which an expert observer assesses the manner of medical
management of a series of cases. This is often called the "medical audit"
technique, and it takes various forms, using direct visual observation or inspection of written records. [46] Another related approach is examination by
a pathologist of tissues removed at surgical operations. At a still more crude
level, quality may be estimated by simple measurements of the time spent per
patient seen (or patients seen per hour) or the frequency of special procedures
—like laboratory tests or consultations—which tend to reflect careful work.
None of these methods of measuring quality is as yet completely satisfactory,
but their steady development reflects efforts at stimulating diligence. Perhaps
the most important point is that the quality of medical care is no longer regarded
as something vague, mysterious and immeasurable, but rather as being inherent
in a series of actions which are scientifically observable and measurable. [44]
The influences on quality of medical care vary greatly under the different
patterns of organisation. In every pattern a balance is attempted between too
few and too many controls, because excessive "policing" can discourage imagination and initiative. The administrative machinery for quality controls can
itself become so burdensome as to frustrate its whole purpose. The point
where this balance is achieved is quite different in the countries using the
indirect and the direct patterns of medical care.
B.

METHODS OF INFLUENCING QUALITY UNDER THE INDIRECT PATTERN

When a social security system purchases medical care for its beneficiaries
from independent doctors, hospitals and other providers of service, it must
rely mainly on indirect methods of influencing the quality of care.
Belgium.
In Belgium virtually every licensed physician may participate in the medical
care scheme, so that no discrimination is exercised with respect to technical
qualifications. Hospitals, however, must meet minimum standards, as noted
earlier, and each hospital must have, for example, at least one full-time physician. As the coverage of a social security scheme approaches 100 per cent, of the
population, it becomes impractical to exclude any significant number of doctors
from participation, and other forms of quality control must be relied upon.

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The chief instrumentality for quality surveillance in Belgium is the attachment of one or more advisory medical officers to each insurance carrier. While
the principal function of these officers is the medical certification of disability
for cash benefits, their duties also involve keeping a general check on the content of medical services provided. Furthermore, they are responsible for prior
authorisation of certain secondary benefits, such as prolonged courses of
physical therapy or prolonged periods of hospitalisation (for the purpose of
controlling costs as well as quality). Advisory medical officers also maintain
imrecords of all medical services, on the basis of the patient's claims for rebursement, so that they can attempt to identify unusual instances of excessive or improper care. It would appear, however, that the capacity to take
corrective action must be limited to extremely flagrant cases. The advisory
medical officer also serves as a source of information to practising physicians
on the precise services that a particular patient may have previously received
from other physicians.
A second echelon of medical surveillance is provided by the Central Medical Control Service of the National Institute for Sickness and Invalidity Insurance; this central authority maintains a corps of supervisory medical officers
in each main region of Belgium. These physicians supervise the work of the
local advisory medical officers and they are free to investigate deviant cases of
medical care directly. They may make sample surveys of the services of individual doctors (from claims records) and may interrogate patients also. Poorquality service may be suspected if cash benefits are paid for excessively long
periods of incapacity in relation to a specific diagnosis. If investigation reveals
improper medical work, sanctions (usually temporary suspension from the
scheme) may be brought against the offending doctor. (He may appeal against
these to a higher medical tribunal, if he wishes.) The frequency of application
of such sanctions is low, the number of cases in 1966 being only 11 : one pharmacist, two dentists and eight physicians. The very existence of this review
system, however, probably exerts a disciplinary influence on the various private
health practitioners.
Federal Republic of Germany.
Under the indirect pattern in the Federal Republic of Germany only the
most indirect influences are exerted on the quality of service rendered by various
personnel. As for physicians and dentists, any licensed person may participate without further review of his qualifications. For secondary practitioners, however, like masseurs, opticians, or brace makers, special qualifications are laid down. Pharmaceutical products and other secondary supplies or
services, of course, may be provided only on the prescription of a doctor. As

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noted in Chapter 7, special lists of drugs recommended as efficacious and economical are issued periodically by the central public health authorities, but
the physician is not obliged to abide by them.
Checks on the content of services rendered by each doctor essentially take
the form of cost review. As in Belgium, the sickness funds engage "control
doctors"—full time in the larger funds and part time in the smaller ones—
whose duties are mainly to review disability certifications, but who also
examine statistical records to identify cases of deviant medical behaviour.
Such cases are judged not by examination of medical records, but rather by
observing the extent to which the cost of treatment by a particular physician
is in excess of the average costs per case treated in a region. For example, the
average costs per case for pediatricians (or other specialists) in a calendar quarter
year are statistically computed, and if the charges of a particular pediatrician
are appreciably higher the matter is brought to the attention of the association
of sickness fund practitioners in the region (see Chapter 4). These associations
are required by law to check on the economic as well as the qualitative aspects
of the doctor's medical service, and to impose penalties (against which the doctor
has the right of appeal), when necessary. The final payment of fees to doctors, it will be recalled, is by the associations of doctors (receiving sums from the
sickness funds) which may reduce specific charges in individual cases. Similar
review of the performance of doctors is carried out by the sickness funds with
respect to the drugs prescribed. Exceptionally high drug costs referable to a
doctor are brought to the attention of the associations of sickness fund doctors for
follow-up, but the regulations state that the established therapeutic value of a
drug is more important than the price in judging the propriety of its use.
It must be admitted, however, that the principal orientation of the whole
Federal German system of controls seems to be towards cost more than quality
surveillance. The law requires the sickness funds to maintain various records
and statistics on the operation of the whole medical care system, but these too
are confined largely to lists of eligible persons, periods of incapacity, and expenditure, rather than giving summaries of the medical procedures carried out.
The fundamental assumption is that the technical quality of service provided
to patients is solely the responsibility of the individual practitioner; the social
security system intervenes only when there is evidence of financial extravagance.
Most hospitals have their own organised controls over the quality of care,
irrespective of whether or not a social security system operates. This is true
in the Federal Republic of Germany, as elsewhere, but it should be pointed out
that a sickness fund may refuse to pay a hospital if it does not meet appropriate
standards. Relationships between sickness funds and hospitals have been
somewhat informal, but plans are under way to introduce formal contracts
specifying precise standards of in-patient care.

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Canada.
The Canadian national hospital insurance scheme exercises control over the
quality of hospital care by stipulating certain minimum services that each establishment must provide. The principal control, however, is the requirement in
each province that hospitals shall be licensed, which depends on periodic inspections by government authorities and the application of relatively detailed
regulations. Consultants on various technical matters, such as the operation of
laboratories or radiological departments, medical record systems, dietary services,
etc., are also sent by the provincial public health authorities to hospitals, either
on their request or on revelation of deficiencies during the official inspections.
Perhaps the Canadian hospital insurance system's most important longterm influence on the quality of care is gained through its provision of strong
financial support, which has enabled nearly all hospitals to improve their
staffing and equipment. Provincial standards may stipulate, for example, the
provision of certain laboratory services, for which the hospital insurance payments provide the money necessary to engage qualified technicians. Insurance
payments may also support the costs of in-service training of personnel to
upgrade their qualifications.
As for physician's care in the statutory Saskatchewan scheme, the quality
controls are very few. Every licensed doctor may participate, and review of
the fee-for-service claims is confined to verification that the charges are appropriate for the item of service specified; there is no review of the medical necessity
or propriety of the service. In all the provinces colleges of physicians and
surgeons (which are not academic institutions but statutory authorities for
medical licensing and discipline) are expected to identify deviant medical
behaviour, but this is seldom done except in flagrant instances, such as drug
addiction or fraud. In any event, the activities of the provincial colleges are
outside the orbit of the social security system.
As noted elsewhere, one of the significant influences on the quality of
physician's care in Canada has been the rising rate of formation of group
practice clinics. The fact that specialists in these units work in teams enables
them to exercise some surveillance over ambulatory care, parallel with that
practised for in-patient care by the medical staffs of hospitals. Postgraduate
courses in many fields are offered by medical schools, hospitals and medical
associations, but attendance is optional.
United Kingdom.
In the United Kingdom the nature of quality controls differs strikingly
between general practitioner and dental services (following the indirect pattern)
and specialist and hospital services (following the direct pattern). Most of the

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difficulties in quality maintenance described by outside observers apply to the
general practitioner services.
Apart from licensing, one of the most important influences on the quality
of general practitioner services is the limitation on the number of persons permitted on the panel of each doctor. The maximum at present is 3,500 (although
the average in 1965 was 2,412), and the capitation payments are somewhat
lower for additional numbers beyond about the first thousand, so as to discourage excessively large panels. In this way the average medical time available per patient is protected at a minimum level. Beyond this level, complaints
against a general practitioner are received by the local Executive Council ; if a
breach of the terms of his service is established he may be penalised by a
reduction in remuneration or, in extreme cases, by expulsion from participation. Complaints usually originate from patients and the great majority are
dismissed; in 1965 there were 665 complaints in England and Wales, of which
only 31 resulted in reduced payments and only one in expulsion of a doctor
from the National Health Service. Over-prescribing of drugs is detected by
statistical review and, in the first instance, is approached through personal
discussions with the doctor by a Regional Medical Officer of the Ministry of
Health.
Since there are no fee-for-service claims in the United Kingdom general
practitioner service, no systematic review is made of the physician's services.
Nearly all general practitioners are busy, and the conditions of practice, with
poorly equipped "surgeries" (offices), are often not conducive to high-quality
diagnostic work. The National Health Service has therefore encouraged the
formation of partnerships of general practitioners, advancing loans to build
proper accommodation for such groupings. Closer ties with hospitals are also
encouraged by permitting the general practitioner to use the out-patient department for laboratory and X-ray examinations (without the intervention of a
specialist). In recent years there has also been reactivation of the original 1948
conception of the health centre, in which several general practitioners are aided
by a staif of nurses, technicians, and clerks which they could not afford in
separate private offices.
*
*

*

All in all, the influences on quality of care under the indirect pattern are
somewhat fragmentary, being confined to identification of extremely deviant
performance through statistical tabulations or from specific complaints. In
the older systems organised along lines similar to those of Belgium or the
Federal Republic of Germany, the procedures for corrective action are complex and cumbersome. Essentially the indirect pattern relies on the competence

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ORGANISATION OF MEDICAL CARE

and integrity of the individual practitioner—medical, dental or pharmaceutical
—which is, in turn, influenced by his basic education, postgraduate training,
codes of ethics, and so forth. Stronger—and in the long run more reliable—
influences on quality are probably the slow growth of private group medical
practice and the operation of medical staff discipline within the walls of hospitals. In so far as these trends are observed under the indirect pattern, they
represent a gradual introduction of organisational features that are really
characteristic of the direct pattern.
C.

METHODS OF INFLUENCING QUALITY UNDER THE DIRECT PATTERN

The approach to quality control under the direct pattern of medical service
is quite different. Instead of depending on external administrative surveillance,
it is based on daily observations of medical performance within an organised
framework.
The influence of underlying medical education and ethics is substantially
the same as with the indirect pattern. The qualifications of personnel required
for entering the system, however, can be more selective. Since physicians and
allied personnel are appointed for specific tasks—whether as specialists or
generalists—their appointments can be based on a review of their qualifications.
Selection procedures can be quite strict in countries like Mexico or Venezuela,
where only a fraction of the population is covered by social security and only
a portion of the total medical manpower need be recruited. But even in a
country like Poland, where every doctor in the nation must serve in the system,
individual doctors are still appointed to specific posts, and there is keen competition for certain appointments. In the United Kingdom hospital service
the severity of the competition for specialist (Consultant) appointments helps
to explain the high prestige of these physicians, in contrast to most general
practitioners.
United Kingdom.
In the United Kingdom the specialist and hospital service incorporates
many quality controls apart from the rigorous selection of doctors for staff
appointments. The Regional Hospital Boards supervise the standards set by
the Ministry of Health in all the hospitals under their jurisdiction. The care
of patients is the responsibility not only of the physician immediately in charge,
but of a pyramidal structure of physicians headed by a highly qualified specialist; thus, any unusual symptom or reaction can be readily discussed with
colleagues. Incentives towards excellence are provided by annual supplementary
financial awards for meritorious service. Statistical tabulations are kept on
all hospital cases with respect to length-of-stay and recovery rates in relation

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189

to the diagnosis, age and sex of the patient. These are presented to hospital
staffs as a matter of routine so that deviance from norms may be noted and
corrective action taken if necessary. (Comparisons of these data are made
between hospital regions, between hospitals, and between individual physicians.) Postgraduate education is a regular activity in the larger hospitals of
all regions, and physicians throughout the region are invited to participate.
In the out-patient departments, where most ambulatory specialist services in
the United Kingdom are furnished, the same concept of teamwork is applied
as in the in-patient wards.
Poland.
Since the direct pattern for general practitioner and pharmaceutical
services to both in-patients and out-patients is used in Poland, quality controls
are correspondingly structured. Since all licensed doctors must work in the
national social security system, the controls depend largely on procedures
within the day-to-day operation of the medical care scheme. The standards
for appointments of physicians and other personnel to various positions are
issued by the Ministry of Health and Social Welfare, but only, however, after
discussions with the leadership of the various professional associations of
health workers (physicians, nurses, dentists, etc.). Likewise, the curricula for
qualification in each speciality of medicine are developed jointly with the association of specialists concerned.
The day-to-day supervision of medical performance in Poland depends on
a hierarchy of professional authority which corresponds with the general
political structure of the country. At the local or district level there is a head
of each health centre, polyclinic or hospital, who is responsible for all professional activities in his establishment. Each of these heads is responsible to
the Director of the Health Department of the District People's Council. (The
People's Council is the elected governmental authority of the district, which has
a presidium or executive arm; attached to the presidium are various technical
departments, including one for health services.) The Director of the District
Health Department is responsible to the Director of the voivodship Health
Department (of which there are 22 in Poland), for all professional matters.
The regional Health Department Director is responsible to the Ministry of
Health and Social Welfare.
In addition to this vertical line of authority on technical matters there is
a horizontal link at each level (district, regional, and central) between the
director of the health department and the general political authorities of the
Presidium of the People's Council at that level. The People's Councils are
concerned, one might say, with achievement of the goals of the health services,

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ORGANISATION OF MEDICAL CARE

rather than with the technical means to that end. At the same time, the People's
Council determines the size of the budget for each health establishment (the
budget is certainly an ultimate determinant of quality). At the central government level the Council of State of the Seym—corresponding to the Presidium
of the People's Council—determines the amount to be allocated for health
services in relation to other items of the national budget.
On the more technical level of quality controls, periodic inspections are
made at the different levels of the health service structure. Ministry of Health
and Social Welfare officials make a general review of all voivodship health
departments every three or four years, in addition to holding annual discussions
on the general health service plan. Likewise the voivodship health authorities
visit the district health departments about every six months to review operations.
This technical supervision is carried out with assistance from an important
body, the National and Regional Consultants' Institution, composed of the
most eminent specialists in the various fields of medicine from throughout
the nation. These experts are called upon periodically to advise on the applications of new scientific discoveries in the medical service, to define standards for
the staffing of all health establishments, to propose principles for diagnosis
and treatment, to evaluate performance through statistical analyses, to help
to plan future improvements, and to give their opinions on virtually all problems involving the technical quality of service. Individual consultants are also
called upon to visit ambulatory care units or hospitals to report on the quality
of their operations, and they may recommend the withdrawal of speciality
qualifications from certain doctors deemed to be doing poor work.
At the district level, supervision is exercised by the director of the district
health department, and the heads of large polyclinics supervise smaller
ambulatory units such as local urban clinics and rural health centres. Throughout the system, communication on the care of patients is facilitated by a unified
system of medical records. Each protected person has a record in the health
facility where he receives primary ambulatory medical care—-whether this is
a rural health centre, an urban subdistrict clinic, an industrial clinic or a
school clinic. If he is referred for care to a larger polyclinic or hospital, the
record is temporarily transferred with him, and eventually returned.
The above description of the network of quality controls in the Polish
medical care scheme is perhaps oversimplified, but it is intended to convey an
understanding of the general principles of the system. Undoubtedly, there are
deviations in practice from the orderly lines of authority that have been described, due to problems of staffing, transport, personalities and all the other
human elements that affect any system. The basic conception, however, is
clearly that of an integrated system, in which both ambulatory and hospital
services come under quality surveillance from a double hierarchy of authority

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—administrative and technical. Each professional health worker is supervised
by someone at a higher level, up to the National Council of State. Individuals
may transfer from one post to another, if there are vacancies and if they meet
the requirements of the new position. Postgraduate education is available as
a basis for advancement, but is not mandatory (as it is, for example, in the
U.S.S.R.). Technical standards, established at the central government level,
are applied throughout the system, with the assistance of distinguished regional
specialists who supplement the supervisory efforts of the full-time health
service administrators.
Ecuador.
In the Ecuadorian social security scheme a somewhat similar hierarchy
of quality controls is applied within a smaller system of medical care. Since the
scheme serves only about 5 per cent, of the population, the whole administrative
structure is much smaller and is separate from the over-all network of government health services in the country. It does not come under a ministry of
health, but the lines of authority from local centres of ambulatory care and
hospitals lead up to the Medical Department of the National Social Welfare
Institute. There is general supervision of the over-all social security scheme
by the Ministry of Social Welfare and Labour, but this does not extend to
controls over the technical aspects of medical care.
The initial influence on quality in the scheme is through careful selection
of medical and other personnel by competitive examination. Since only a
portion of the total medical manpower in the nation is needed, the bestqualified persons can be chosen on a part-time or full-time basis (which, of
course, puts the patients served by the doctors not selected at a disadvantage).
Once appointed, the social security doctors have an opportunity to improve
their knowledge in many ways, including scientific conferences, research and
various types of postgraduate education. The social security hospitals have a
continuous programme of clinical meetings to help to keep the staff's knowledge
up to date. Furthermore, physicians, auxiliary medical personnel and hospital
administrators are granted fellowships for special training either in Ecuador or
abroad.
In the day-to-day operations of the Ecuadorian scheme the head of each
health establishment supervises technical work. In addition, medical inspectors
attached to the Medical Department of the National Social Welfare Institute'
make periodic visits to all establishments to review the details of patient care.
The written records of each doctor may be reviewed and judged with respect
to the adequacy of diagnosis and treatment; judgments are also made on such
matters as the duration of hospitalisation and the prices of drugs prescribed,

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ORGANISATION OF MEDICAL CARE

indicating that economy as well as quality is under review. Physicians do not
receive numerical grades on their performance (as in the Mexican social security
scheme, where these grades may affect promotion and salaries), but the process
of professional review has been said to exert a positive influence on the quality
of care. It is stated that unnecessary laboratory tests and excessive days of
hospitalisation have been reduced as a result of the medical inspections.
One of the general quality controls used in Ecuador is the stipulation of
an appropriate number of patients to be seen per hour in the ambulatory care
centres. In the past it has been very high in the busy urban clinics, resulting in
perfunctory care, but it is now enforced at no more than six patients per hour
—including either initial or subsequent consultations. Thus, the quality of
medical care is directly influenced by the quantity of physician time available.
Economic waste, of course, may indirectly impair the quality of service in
a medical care scheme, as is also illustrated in Ecuador. Because of excessively
long hospital stays in the social security hospitals, new patients formerly often
had to be turned away and sent to government or private hospitals which
might be of lower quality. By reduction of the average duration of stay due
to the medical inspections, beds have been freed and more cases can now be
admitted to the scheme's own hospitals. In the case of drugs, there was a
period in 1963 when the supply in the social security depots was very low,
making it necessary to purchase drugs from private pharmacies at high prices ;
moreover, doctors often neglected to follow the scheme's drug formulary and
were extravagant in their choice of drugs. With greater direct importation of
drugs by the scheme and more diligent use of the official formulary following
inspections, the relative cost of drugs has been greatly reduced—it dropped
from 30 per cent, to 18 per cent, of the total cost of medical care between 1963
and 1965. These savings have released more funds for other sectors of the
scheme, such as the engagement of physicians.
The whole system of records and statistics is an instrument of quality
control in Ecuador, as elsewhere. A unified medical record is kept at the
local health centre, and the results of all examinations are entered into it.
If the patient is hospitalised, a summary of the record is sent to the hospital,
and a summary of the hospital record is sent back to the health centre when he
is discharged. In the central office of the Medical Department statistics are
regularly compiled on the number of patients treated at different locations and
on the diagnoses most frequently made; these provide clues to the existence
of abnormal situations which may call for corrective action.
India.
The quality controls in the social security scheme of India are less specific.
In the main, quality controls are the responsibility of the regular government

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health services of each of the states, into which the E.S.I.C. medical staff is
integrated. In recruiting physicians, E.S.I.C. had originally attempted to
require prior medical experience of five years, but this had to be given up for
lack of enough applicants. The public scheme has various standing committees
at the national and state levels which periodically visit the government health
units—hospitals and health centres—and make recommendations for improvements. In addition to these two levels of official committees there are tripartite
committees, with representatives of workers, employers and the Government,
which belong to the E.S.I.C. schemes. These committees make their own
occasional inspections, and if they detect problems bring them to the attention
of the government health service. Tripartite committees are set up even at each
health facility. E.S.I.C. also maintains a purely technical inspection team of
medical specialists who look into local facilities from time to time. Also at
the technical level, the routine supervision of the Director of Medical Services of
each state government affects the day-to-day operations of the whole system.
Hospital services in India, it will be recalled, are provided either in facilities
built by the social security scheme or in government hospitals with which the
scheme makes contracts. The latter must meet certain standards, but it is
difficult to enforce these in all the states. For ambulatory care, the degree of
quality surveillance is very different between the direct-pattern and the indirectpattern areas. In the latter areas, where ambulatory services are provided in
small private offices—many of them extremely poor in equipment—there is
virtually no surveillance of quality; not even financial claims for each service
are subject to review, as in the Federal Republic of Germany, because the
capitation payment system is used. In the direct-pattern areas teams of doctors
and allied personnel in health centres exert some group discipline. The
statistical reports on services rendered are said to be very poor from the
indirect-pattern areas by comparison with the direct-pattern areas.
Tunisia.
In Tunisia the principal quality influences are those exerted by the general
government health service into which the social security scheme is integrated.
There are regional boards of health, which supervise the whole medical care
scheme in each region. Since the system is entirely based on the direct pattern,
there are supervising doctors in all hospitals and health centres. As in India,
however, the principal limitation on quality is doubtless the great shortage of
medical personnel. In the face of this shortage, the direct pattern permits maximum use of the manpower available and some degree of disciplinary influence
on medical performance.

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D.

GENERAL OBSERVATIONS ON QUALITY SURVEILLANCE

Although the different schemes of medical care organisation obviously
apply a great variety of methods to help to safeguard the quality of service
provided to protected persons, the success of any of the methods used will
depend on the educational qualifications of health personnel in the country.
Whatever the level of qualification, however, schemes that serve only a minority
of the national population can be more discriminating in selecting physicians
and others for participation, while as a social security scheme approaches
100 per cent, coverage it is compelled to permit participation of all or nearly
all personnel in the country, which inevitably means some lowering of standards.
This is the case whether the medical care pattern is indirect or direct, although
with the use of the direct pattern the disadvantage can to some extent be
offset by carefully selecting personnel for specific responsibilities in an organised
framework. (Personal influences or favouritism may, on the other hand,
sometimes intervene.)
After doctors and others are appointed by a scheme, the provision of
continuing postgraduate education for them becomes very important. This is
done in all systems, but in varying degrees. Under the indirect pattern the
decision of a doctor to undertake postgraduate study is entirely his own, and
he may be inclined to do so for personal advancement and to improve his
competitive position. On the other hand, some doctors may lack ambition
and fail to undertake any further study after their initial licensing. [95] Furthermore, the independent doctor loses earnings if he is away at study, and he
may be unable to find a locum tenens to care for his patients. Under the
direct pattern postgraduate education can be built into the system. Attendance
at courses may be mandatory or, at least, may be a subject of social pressures
within the system. The daily routines in an organised framework of medical
care may incorporate educational activities, such as regular clinical staff
meetings in a health centre.
Under either pattern of medical care organisation, the control of quality is
doubtless easier in hospitals, because personnel always work in teams. When
physicians are attached more or less full time to the hospital, as in the direct
pattern, the controls are doubtless easier, for the power of group discipline is
stronger under such circumstances. In most countries of the world the
greatest prestige is associated with appointment as a full-time hospital physician,
and relatively high salaries are paid. As a result, the most highly qualified
individuals compete for these appointments. Indeed, the quality level in
out-of-hospital services may suffer as a result.
Outside the hospital, the surveillance of quality under the indirect pattern
depends on various administrative procedures. Since observation by one's

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fellow-doctors in private offices is virtually impossible, the surveillance must
largely depend on written records and financial claims for payment of the
doctor or reimbursement of the patient. Similar indirect procedures apply to
the prescribing of medications. [58] In a health centre or polyclinic, on the
other hand, continuous observation by colleagues is feasible. The use of
carefully composed drug formularies can be enforced; advice can be readily
given by one doctor to another; professional competition can be replaced by
co-operation. On the other hand, skilful leadership is required to keep a
medical team harmonious.
In any pattern, laws or regulations are effective only if they induce selfdiscipline by individual practitioners. The codes of medical ethics and the
whole way of life of a society of course lay the groundwork for personal
behaviour. The possibility of financial incentives towards performance of
unnecessary medical services is, however, inherent in the fee-for-service payment
method. [104] If financial incentives operate in a direction consistent with
ethical precepts, their influence is positive rather than negative. This is done
when the financial rewards are dependent on the judgment of one's colleagues
in an organised framework.
The technical requirements of modern medical science demand specialisation. [145] Yet the work of different specialists requires co-ordination in the
treatment of the patient. The necessity for this has been generally accepted
in hospitals, but it is applied outside hospitals mainly in the direct pattern.
Indeed, to some extent, social security schemes paying doctors and dentists in
isolated practice may even encourage them to continue to do so by providing
financial sustenance. To counteract this tendency, specialfinancialinducements
for the formation of private group practice clinics have been provided, as in
the United Kingdom.
Careful records of the examinations and treatment given to patients are
necessary to ensure proper continuity of care. These are easier to keep under
the direct pattern, where a unified record can be used in which different personnel can make entries. Periodic statistical reports can also be compiled
from records to permit evaluations of the rate of various services in relation to
quality standards at different times and places. [115] Under the indirect
pattern such statistics are often difficult to compile, because they depend
on the diligence of hundreds or thousands of different practitioners or hospitals
following diverse recording practices. Under both patterns, however, the
purpose of statistical tabulations is still very largely for financial control.
Much improvement is needed, with greater use of computers where appropriate, to develop statistics which describe the exact content of technical
services rendered to patients. In the future it should be possible to assess
the quality of medical care from statistics on the results of the care in terms of

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the recovery of patients from sickness and the maintenance of health. [116]
This is a very complex task which would require careful identification of the
characteristics of patients and their environments and accurate determination
of their health status after treatment, as well as information on the nature of
the medical treatment given. From such data conclusions could be drawn on
the quality of medical performance in different component parts of a system,
so that corrective measures could be taken where necessary.
In none of these different approaches to quality maintenance in medical
care schemes does any country at present require, as part of its licensing laws,
evidence of continuing qualifications to practise medicine. In the absence of
criminal or grossly negligent or unethical conduct, lifetime licensing is the rule
for physicians everywhere. On the other hand, midwives in the Federal
Republic of Germany and Sweden must attend periodic refresher courses in
order to retain their licences. To prevent professional qualifications from
becoming obsolete, one might expect periodic relicensing of physicians (based
on participation in continuing education) to be required in the future, as was
recently recommended by a presidential commission in the United States.
[138, pp. 40-42]
Under the indirect pattern the private practitioner everywhere in the world
guards his freedom and tends to object to the various administrative controls
which may be imposed in order to protect quality and costs. [8] He objects
to the paperwork required and he especially objects to review procedures,
such as those of control doctors, which may challenge his judgment. Yet
paradoxically, most of these burdensome procedures are made necessary by the
indirect pattern itself. The administrative requirements in the case of feefor-service payments or reimbursements are far more complex than those for
straight salaries, and surveillance by control doctors is necessitated by the very
independence and isolation of private medical practice. In an organised
framework, surveillance by colleagues is a normal daily practice, a source of
help rather than annoyance. This is not to suggest that every organised medical
establishment functions smoothly; if there are frictions, however, they can be
eliminated more easily. The quality of medical care can be consciously protected. In many medical care schemes the consumer or patient is given a voice
in the top administration, as a further assurance of his protection in the arrival
at policy decisions.
The issue of professional freedom figures prominently in any discussion of
quality controls for medical care. It is sometimes argued that any external
influence on the doctor's judgment reduces his freedom and impairs the quality
of his work, and special fears are expressed about controls over physicians
by laymen. The quality controls in a direct-pattern medical care scheme,
however, are exercised by fellow-members of the medical profession. Junior

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personnel receive guidance from their seniors, and experts in each specialised
field ensure that the appropriate standards are applied.
If the quality of medical service is to be steadily improved, it is important to
apply the findings of new research as promptly as possible. [135] Indeed, a
well-organised medical care establishment does research itself, by continuously
evaluating the results of its own work. This is not possible for the practitioner
working in isolation, who can hardly pass judgment on himself; with teamwork,
however, a doctor can enjoy all the benefits of professional co-operation simply
by agreeing to abandon a small measure of his professional independence.
It is no accident that in all countries the highest level of quality is achieved in
the great medical centres of the large cities, where highly organised teams of
salaried personnel are the general rule.

16. SUPPORTING AND CONTROLLING THE COSTS
Influencing the quality of medical care is closely tied to controlling the
costs. Many of the controls on quality—for example limitations on the prescribing of proprietary drugs—are controls also on expenditure. Poor-quality
care is often financially extravagant because a poorly treated illness may become chronic and require more care later on. Every social security system
faces economic restraints, and the task is to achieve the maximum health
benefit that is possible from a defined expenditure.
Every organised medical care scheme, therefore, must incorporate methods
of controlling costs, for any money that is wasted in one sector is not available
for another sector where needs are not being fully met. The operations of the
controls are different in the indirect-pattern and the direct-pattern countries.
Before we examine these differences, however, a few words should be said about
the underlying financing of medical care.
A.

SUPPORTING THE COSTS OF MEDICAL CARE

The financial support of medical care depends, of course, on the total
economy of a country. The amounts available for medical care depend not
only on the gross economic resources or national income, but also on the rate
at which allocations are made from both the official sector (social insurance,
general revenues, etc.) and the private sector. The World Health Organisation
has made studies of the total costs and sources of finance of health services in
various countries. [15] The definition of "health services", in terms of appropriate inclusions and exclusions, is not easy, but the general finding has been
that various countries spend between about 3 and 8 per cent, of their national
incomes on health services. With certain exceptions, these percentages tend
to be higher in the more affluent industrialised nations and lower in the less
affluent developing nations. Thus the economically poorer countries usually
spend less on health service both absolutely and relatively to their over-all
resources.
The proportions of these health service expenditures derived from private
as against organised spending are also highly variable. [17] The data as of

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199

1961-62 do not suggest any generalised relationship between the percentage of
national income devoted to health service and the proportion derived from
organised sources. (Thus, Canada and Israel both spend approximately
8 per cent, of their national incomes on health services, but the former derives
64 per cent, of this from organised sources while for the latter it is 73 per cent.
Likewise, Czechoslovakia and Ceylon both spend about 4.3 per cent, of national
incomes on health service, but organised programmes account for 93 per cent.
of this in the former country and 62 per cent, in the latter.) It is evidently the
political system and attitudes in a country which determine the share of its
expenditure derived from organised programme sources, more than its total
economic strength or the percentage of national income allocated to health.
There can be little doubt, however, that health service expenditure through
organised channels—whether in social security programmes or other arrangements—is more readily subject to controls. Both the volume of services and
the prices paid per unit are more controllable in an organised programme than
in the private market. Indeed, it is the rising costs of privately purchased medical care that in many countries have induced governments and other agencies
to develop systems of medical care. Under such systems, not only is there
some assurance that certain populations will receive the services they need,
but the costs of those services can be more carefully controlled.
Everywhere in the world the costs of medical services have been rising. [76]
While data on long-term historical trends are available from only a few countries
(such as the United Kingdom and the United States), it would appear that this
rise has been not only in absolute expenditure, but also in the percentage of
the national income spent on health services. Thus, relative to the expenditure
for other goods and services, like food or housing, those for medical care have
become more costly. While this is largely due to the increasing complexities
of medical science, it is also due to an increasing rate of utilisation of health
services by the population, associated with higher educational levels, better
transport and greater expectations. [50]
The combination of higher prices for a unit of service (e.g. a consultation
or a day of hospital care) and higher rates of utilisation has made all the more
urgent various mechanisms for control of costs in organised schemes. Private
spending may be extravagant, but only the individual may be aware of it.
In organised schemes, however, high and rising costs become socially relevant
and subject to public debate. The rising costs of medical care everywhere,
therefore, place a special obligation on social security systems to develop
methods of internal cost control. The more limited the funds that are available
to such a system, moreover, the more urgent must be the exercise of cost controls over their expenditure. Our focus, then, is on the internal cost controls
applied in an organised medical care scheme, with respect to different elements

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of ambulatory and hospital care. One of the widely used measures of control,
however, involves a partial shift of the burden of costs to the private individual
even within an organised programme—the practice of cost sharing. This will
be discussed separately, after a brief examination of the main mechanisms
used under the indirect and the direct pattern.
B.

CONTROLS UNDER THE INDIRECT PATTERN

The purchase of services from many independent providers of care imposes heavy administrative obligations on the organisation paying for them.
In Belgium there have been lengthy negotiations on the "nomenclature" or
fee schedule followed to determine rates of reimbursement for various medical
services. Once this schedule is established for a year, the various insurance
societies must follow it, and their controls are limited to examination of the
volume of services per case rendered by each doctor. If statistical compilations
reveal that certain doctors are giving service at a rate much higher than the
average, the Advisory Medical Officer may investigate. Detection of unnecessary or exaggerated services may be penalised by suspension of the doctor from
the programme for a period, but usually the mere notification of a doctor that
his claims are under review is enough to lead to correction.
Similar reviews are made of the average length of stay of hospital cases,
and hospitals where the length of stay for certain diagnoses is significantly
above the average are investigated. As noted in Chapter 15, prolonged hospital
stays require authorisation by the Advisory Medical Officer. Limitation of
expenditure for drugs in Belgium is attempted through differential rates of
reimbursement for generic and proprietary items, as explained in Chapter 7.
Beyond this, noticeably high drug costs, referable to the prescriptions of a particular doctor, are investigated. Probably the major control on expenditure in the
Belgian scheme is the system of cost sharing, which will be discussed below.
The Federal German social security system makes a great deal of use of
statistics to detect rates of service by individual doctors who are suspected of
abuse. If the payment for consultations or drugs is more than 20 per cent.
higher than the average per case for all physicians of a given speciality, an
investigation is made. The associations of practitioners, it will be recalled,
are responsible for any direct contacts with the individual doctor. The funds
available in each calendar quarter arefixed,so that it is to the interest of these
associations to guard against abuses by any of their members. Exceptionally
high costs in particular hospitals are investigated directly by the sickness funds.
In both Belgium and the Federal Republic of Germany, the indirect pattern of physician's care, with fee-for-service charges—whether paid by reimbursement of the patient or straight to the doctor—creates costs problems

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that are probably more serious than the hazard of abuse, since the inherent
economics of private medical practice is involved. Even if all individual
doctors demonstrate the highest integrity, the operation of thousands of individual medical offices is an expensive arrangement. The equipment, rental of
space, auxiliary personnel, and all the other components of production of
medical service are much costlier to support, per service produced, in small
medical establishments than in large ones. On top of this extravagance there
is the whole problem of incentive to maximise services under the fee system,
discussed in Chapter 4. The very task of policing this system to detect financial
abuses requires an administrative structure that is both complex and expensive.
It is probably made even more expensive by the operation of hundreds of
separate insurance funds, in both Belgium and the Federal Republic of Germany, for the purpose of paying bills.
So far as cost controls are concerned, the United Kingdom pattern of
capitation payments to general practitioners is much easier. Once the capitation amount is established, the main control task is to make certain that the
number of persons on each doctor's panel each month is correct. Overprescribing of drugs (which are paid for on a fee basis) is a problem tackled
by statistical identification and follow-up of the extreme cases.
The ultimate control on costs of medical care under the indirect pattern
is probably the moral influence of having a system of review. The proportion
of cases of fraud or other abuses detected in the schemes is very low, and this is
probably influenced by the mere existence of a review process. The associations
of private medical doctors in these countries, however, are politically strong,
and they are usually effective in bargaining for rates of remuneration which
place them in the highest income brackets among all professional groups in
the nation. This can be justified by the high social value placed on the treatment of sickness, and the willingness of governments to pay for it even through
relatively inefficient patterns of organisation. The conversion to less costly
patterns usually necessitates social changes which can be brought about only
under special political circumstances.
C.

CONTROLS UNDER THE DIRECT PATTERN

The control of cost under the direct pattern of medical care is less complicated. The advances of medical science and the rising rate of utilisation of
service by the population must still be faced, so that over-all costs are climbing, just as they are under the indirect pattern. The tasks of review and guarding against abuse, however, are relatively simple, because the operations of the
system are under the direct observation and management of the social security
authorities.

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This is not to imply that controls are unnecessary. In the United Kingdom hospital service, for example, the tendency to climbing costs has been met
by a ministerial decision to limit the annual increases in rate of expenditure
to 2 per cent., apart from increases due to rises in prices or salaries which are
judged by national norms. Detailed justifications are required for any proposed increase in real (i.e. adjusted for inflation) expenditures by hospitals,
and questions are raised about potential savings through reorganisation or
improved efficiency.
For the ambulatory services under the direct pattern, expenditures can be
budgeted in advance in the same way as hospital services are budgeted. The
diligence of personnel in following principles of economy may be regularly
observed. Thus, in Ecuador, the medical inspectors mentioned in Chapter 15
may determine whether the ordering of laboratory and X-ray examinations by
doctors is overdone or whether drug prescribing is extravagant. There is, of
course, a delicate line to be drawn between this type of reasonable cost control
and a reduction in quality of medical care by excessive frugality in expenditure.
In many circumstances the maintenance of quality standards requires an increase in expenditure. The task of surveillance is to distinguish between necessary and wasteful expenditure, and an experienced inspector can become skilful
in making this distinction. Such economies, of course, are quite distinct from
those that are inherently achieved in a polyclinic, compared with multiple
separate medical offices.
In Ecuador, experience indicates the greater economies of the direct pattern. Occasionally the laboratory or X-ray services of a health centre are inoperative, and tests must be purchased from private practitioners in these fields.
The costs are then found to be much higher. The same applies to privately
purchased drugs. In the direct pattern, great economies are achieved by mass
purchasing of drugs and supplies, especially those from abroad. On the other
hand, as noted in Chapter 7, wasteful abuses are possible if beneficiaries obtain
drugs on false pretences and resell them to private pharmacies. This has
been partially, though not completely, controlled by special packaging of drugs
provided in the scheme.
In Ecuador, as well as Poland and other direct-pattern countries, tabulation of the costs of different hospitals and health centres per patient served has
become part of the regular routine. For example, among different ambulatory
care centres in Ecuador the costs varied in 1964 between 11.7 sucres per consultation in the Santo Domingo unit and 74.2 sucres in the Batán unit—the
national average being 28.7 sucres per consultation. One must be cautious,
of course, in concluding that costs above a certain average are extravagant,
since the figures are influenced by the number of consultations requested, the
proportion of medical specialists on the staff, and many factors that may not

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203

reflect poor management at all. Periodic reviews of these cost reports, however, provide clues to possible extravagance, which can then be investigated
and corrected if necessary. Certain clinics, for example, may be over-staffed
in relation to the utilisation rate, and the staffing can be temporarily reduced
until the utilisation rate increases.
In India, the control of costs in the direct-pattern areas of general physician
services is stated to be much easier than in the indirect-pattern areas. For
example, a certain number of beneficiaries lose their entitlement to care each
year because of change of employment (or for other reasons) but in the capitation payment areas they may remain on the doctor's panel and obtain medical
care by fraud. In the direct-pattern areas, eligibility is ascertained as a matter
of routine, and even if a few non-eligible patients slip by the additional expense
in a health centre is trivial. Drug dispensing is also much more readily controlled from the scheme's own pharmacies than from private pharmacies. At
the latter, pharmaceutical prescriptions may sometimes be exchanged for cosmetics or other non-medical products, and expensive proprietary drugs may be
provided in place of cheaper generic ones. It has been found to be very difficult
to penalise any doctor or pharmacist in the indirect-pattern areas because of
the strength of the professional associations in defence of their individual
members.
The cost-control problems in the direct pattern of Tunisia are somewhat
similar to those of India and Ecuador. There is resale of drugs on the private
market and there are prolonged hospital stays. Controls are exercised by the
hierarchy within the Secretariat of State for Public Health, and the principal
responsibility of the social security scheme itself is the accurate identification
of the protected persons. To counteract abuses in this sphere, the registration
booklet now contains a photograph of the beneficiary.
In addition to these various review procedures to control costs, the direct
pattern of medical care organisation has the general advantage of enabling
economies of scale to be achieved. [112] In a large system it is generally possible
to reduce costs by wholesale purchasing of supplies. Both personnel and facilities can be used at a higher level, closer to capacity, with resultant lower costs
per unit of service. The overhead costs per unit of service rendered by ten
doctors in one clinic are lower than for ten doctors in separate private offices,
and the same applies to one 500-bed hospital compared with five of 100 beds
each. Moreover, important savings are achieved in a medical framework
making full use of auxiliary personnel—which can conserve the doctor's expensive time even further.
In a direct-pattern system of medical care, moreover, resources can be
shifted readily in time and space in the interests of economy. If there is pressure from high demand, such as an epidemic, in one locality, funds and personnel

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ORGANISATION OF MEDICAL CARE

can be transferred there from other places with lesser demands, instead of
simply incurring new expenditure locally. Financial decisions can be made in
the light of the over-all requirements of the system, so that economies in one
place are not achieved at the expense of decline in quality in another place.
D.

COST SHARING

The mechanisms for review and control of cost in both the indirect and
the direct patterns, reviewed above, focus their principal attention on the
providers of service. There is another approach, however, used principally
in the indirect pattern and slightly in the direct pattern, which operates via
the patient. This is the policy of requiring him, under defined circumstances,
to pay a share of the costs of the medical care obtained in a social security
scheme. The effects of cost sharing on the operation of a medical care scheme
have long been the subject of debate.
The mechanism of cost sharing and the details of its application to different
types of service are varied. In Belgium it is applied to the services of general
medical practitioners, dentists, physical therapists and home nurses, and to
pharmaceutical products. It does not apply to the services of specialists, outof-hospital diagnostic tests or hospitalisation. The cost sharing is done by the
device known as the ticket modérateur, which is essentially a charge of 25 per
cent, of the official professionaí~fee that is not reimbursed by the insurance
carrier (see Chapter 4) but must be paid by the patient. Strictly speaking, TUB"social security scheme reimburses the patient for 75 per cent, of the practitioner's
fee, according to an official schedule, and the doctor may or may not collect
the other 25 per cent. Nearly always, however, the 25 per cent, is expected to
be paid. For certain beneficiaries, however—pensioners, invalids, etc.—the
insurance carriers pay 100 per cent, of charges. The degree of cost sharing for
drugs, moreover, is greater with respect to proprietary than to compounded
prescriptions, and higher percentages must be paid for low-cost items (see
Chapter 7).
In the Federal Republic of Germany cost sharing is required only for
certain items, like drugs and eyeglasses, but not for physician's care or hospitalisation. Pensioners and other less favoured persons are exempted from
these charges. The amount is, in any event, small—50 pfennig for any
prescription. In the United Kingdom some cost sharing is also required for
medicines.
In Canada, a very small share of the costs of hospitalisation is payable by
the patient in certain provinces (Alberta and British Columbia). It is a small
sum ($1 or $2) per day of care, which constitutes only a trivial percentage of
current hospital costs.

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205

In the direct pattern of Poland, there are no cost-sharing requirements for
protected persons with respect to physician's care or hospitalisation, but outof-hospital drugs require a partial payment by the patient. This is waived in
emergencies, in certain diseases like tuberculosis, for pensioners or other
special groups. In Ecuador, the only cost sharing imposed is for certain types
of dental care. The Indian scheme has no cost-sharing requirements, nor does
the Tunisian.
The main theoretical purpose of cost sharing is to discourage abuse by
the patient, in the form of frivolous or unnecessary requests for medical care,
thereby conserving funds. A second purpose is simply to reduce the net
expenses of a social security scheme by shifting a portion of the costs to the
patient at the time of sickness. Serious questions may be raised, however,
about the soundness of the basis for this mechanism. [62] The concept of
"abuse" itself is questionable, since any action by a patient to seek medical
care must reflect some need, even if that need is psychological or neurotic.
(This is not to be confused with abuse of cash sickness benefits for which
medical certification is required.) Moreover, what reason is there to believe
that the cost-sharing requirement will selectively discourage the "unnecessary"
request for care and not the valid request ? There are no scientific studies at
hand to answer this question. Since the cost sharing is intended to affect the
decisions of a patient to seek medical care, moreover, why should it be imposed
on actions decided by the doctor, such as prescribed drugs or the follow-up
medical consultation after an initial one ?
The amount of the cost shared, whether it is defined as a percentage of a
total charge or a flat amount per service, must inevitably have some effect on
the level of demand for medical care. If the monetary figure is very small, the
effect in discouraging utilisation is bound to be small ; if it is larger, the effect
is bound to be greater but it may well discourage urgently needed care as much
as "frivolous" demand. In either instance, the impact of cost sharing is likely
to be greater on persons of low income and in times of economic recession.
Yet there is no reason to believe that neurotic or "unnecessary" demands are
any more frequent in low-income persons; in fact, the opposite is more likely
to be true. Persons of higher income and higher educational level may "know
too much" and be hypochondriacal about their health. The principles of
preventive medicine require that early attention be paid to the symptoms of
disease; cost sharing, on the other hand, may cause hesitation or delay.
In so far as actual experience with cost sharing can be evaluated, its effects
in reducing utilisation appear to be very slight. In British Columbia, Canada,
where treatment had previously been free, the utilisation rate was not affected
when a small cost-sharing requirement was first imposed for hospitalisation
(about 1952). [30, p. 11] In 1964 the Belgian social security scheme exempted

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ORGANISATION OF MEDICAL CARE

certain persons from paying the ticket modérateur for doctor's care, but there
was no subsequent rise in the rate at which they utilised physician's services.
Hence it may be concluded that the sharing of a small part of the costs does
not significantly affect the rate of demand for medical care, whether that
demand is unnecessary or valid.
With the indirect pattern, cost sharing of physician's services has been
claimed to discourage "shopping around" or consultation of several physicians
for the same complaint. There is no real evidence to support this view, however.
The patient whose anxiety or dissatisfaction leads him to seek a second or
third medical opinion about his illness is likely to do so, with or without
cost sharing. It is only in a direct pattern of medical care, which assigns
patients to specific doctors, that "shopping around" can be inhibited, but
even here the anxious or disturbed patient usually finds a way to get a supplementary medical opinion.
In view of the foregoing, the cost-sharing device can really only be defended
as a method of raising money in a social security scheme, not as a sound
method of reducing utilisation. For this economic objective, however, its
logic is also questionable. Basically, the mechanism places an extra financial
burden on that fraction of the population which, at any one time, is sick. Yet
these are the very persons—especially if the illness is serious or chronic—who are
least capable of bearing this extra burden. Cost sharing, in the opinion of
some, is a partial deviation from the principle of social insurance, the principle
of spreading risks among the greatest possible number of the population.
If there is, in fact, any unnecessary demand for medical care, and if neurosis
or hypochondriasis are rejected as pathological states, then it is still a task for
the physician to discourage that demand. A fiscal procedure can hardly be
expected to do it. Indeed, difficulties of transportation or waiting in a queue
for service probably have greater effect in discouraging excessive demands for
medical care than a cost-sharing requirement.
Thus the ultimate justification of cost sharing in a social security scheme
is a matter of political ideology. By constituting a form of money-raising in
a system, it is a method of keeping social insurance premiums or general taxes
lower than they would otherwise be. It is a principle of greater individual, as
against social, responsibility that is being implemented. There may well be
sound political reasons for striking a balance between individual and social
responsibility in the operation of a medical care scheme. In some of the
developing countries, for example, tax collections may be very uneven, and the
medical care scheme may simply be unable to obtain the necessary financial
support without imposing charges on patients. In the long term, however, cost
sharing is probably a less desirable method of raising money than the classical
devices of social insurance or general revenues. If economies must be achieved

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207

in a medical care scheme, then these ought ideally to be through implementation
of the pattern of medical care organisation which is inherently most economical.
It may be for these reasons that a majority of the members of the I.L.O.
Committee of Experts on Social Security, meeting in March 1967, expressed
the view that provisions on cost sharing for medical care should be excluded
from a new international instrument (Convention and/or Recommendation)
on medical care. [3] Since then, however, a questionnaire on the revision of
Conventions Nos. 24 and 25 concerning sickness insurance, issued to all
States Members of the I.L.O., yielded a majority of responses in favour of
permitting cost sharing in a new Convention, but emphasising that the rules
relating to it must be so designed as to avoid hardship; a Recommendation
should contain clauses relating to the waiver of cost-sharing requirements for
persons of low income or suffering from protracted diseases. [6]
E.

GENERAL COMMENTS ON COST CONTROLS

Although the present chapter has focused mainly on methods of cost
control under various patterns of medical care organisation, it has inevitably
strayed into discussion of their relative levels of operating costs. The evidence
suggests that, for a given quantity and quality of service, the direct pattern is
more economical than the indirect pattern. To cope with the tendencies
towards extravagance in the latter, various administrative review and control
procedures are necessary, and these may sometimes be irritating to independent
medical or dental practitioners, pharmacists or hospitals. But in the direct
pattern also, cost controls must be applied. In any system of social organisation disciplinary pressures are necessary.
Under the indirect pattern, controls are necessary to protect a social
security fund against profiteering or other unfair claims on collective moneys.
Under the direct pattern, the controls are necessary to protect against waste
from carelessness or neglect. In either instance cost controls are a necessary
evil. The generally rising costs of medical care due both to scientific advances
and to increased expectations on the part of patients make controls all the
more urgent. Indeed, the difficulties of cost control under the indirect pattern
are another reason why medical care schemes in many parts of the world are
tending to adopt the direct pattern.
Excessive economies in any medical care system can defeat their own
purpose. If, for example, reduced funds for laboratory or X-ray tests cause
delays in reaching a proper diagnosis of cases, the long-term costs of treatment
may be higher. Prolonged medical care may result from inadequate staffing
of clinics or hospitals, with greater drains on sickness cash benefit funds.
To attract competent medical and allied personnel into a scheme, under either

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the direct or the indirect pattern, high enough remuneration has to be offered.
Incompetent personnel, in the long run, are often more costly.
Another false economy may follow from limiting the scope of benefits in
a social security scheme. If certain workers are covered for industrial injury
benefits, but not for general medical care, some non-industrial injuries will
inevitably be attributed to the work setting. If hospital service is a social
insurance benefit, but not out-of-hospital care (as in Canada), some patients
will be hospitalised for procedures that could easily and less expensively be
done in an out-patient facility. [42] Considering the medical care expenditure
of a whole nation, comprehensive social security benefits are, in the long run,
probably the most economical. In the same way, false claims for cash disability
benefits can arise from the lack of unemployment insurance. Malingering may
reflect bad working conditions or untreated mental illness. Inadequate
expenditure on preventive services, especially in the developing countries,
will cause greater expenses for treatment.
Hospital treatment is usually the most expensive component in an organised medical care scheme. Much of the expense comes from excessively long
durations of patient stay which, in turn, may be due to bottlenecks in the
administrative procedures. Competent hospital administrators may require
higher salaries, but they can direct the use of the resources more efficiently.
Automated equipment may be expensive to purchase initially, but the long-term
savings may be great. Integration of different hospitals in a regional network
can prevent unnecessary duplication of expensive equipment and technical
staff, channel patients to the proper establishment to treat their specific disorders, and reduce the over-all costs of the system.
One cannot object to a rising proportion of a country's gross national
product being spent on medical care, if it means a larger volume of health
service for the population. The task is to see that the increased expenditure
is not simply eaten up by higher prices for medical service or drugs in relation to
the prices of other commodities in the economy. [96] In the older industrialised
countries, where the indirect pattern of medical care prevails, this often unfortunately happens. Free private enterprise in medical care may be so strong in
a country that a social security system must adjust to it, however high the costs
may be. In the developing countries extravagance cannot be tolerated, and every
effort should go into the development and improvement of a direct pattern of
medical care, in which the available resources can be more systematically and
economically allocated.

17. CO-ORDINATION OF HEALTH SERVICE SCHEMES
Most social security schemes are designed to provide protection for
special population groups with respect to special contingencies, including the
need for medical care. As society has developed, other population groups
have come to be served by other organised schemes, and still other forms of
organisation have been adopted for the over-all health services of a nation.
As a result, various administrative difficulties and even wastage of scarce
medical resources have occurred. In this chapter, therefore, the tasks of
co-ordination among a number of health service schemes will be considered.
We shall first discuss the importance of co-ordination, and next the experience
gained by different countries in co-ordinating the different elements of social
security systems with other public or private organisations. The closely related
subject of over-all national health planning will then be briefly discussed.
Finally, a few words will be said about co-ordination at the international level.
A.

THE IMPORTANCE OF CO-ORDINATION

To cope with the multiplicity of organised schemes, various movements
towards co-ordination of health services have evolved in all countries. Certain
of these have been discussed throughout this volume. In Chapter 9 the coordination of preventive services under ministries of health, with social security
systems providing treatment, was considered. In Chapter 11 the co-ordination
of medical care with medical certification for cash disability benefits was
reviewed. In considering special services, like hospitalisation, mention was
made of the integrated use of facilities by social security schemes and other
governmental or private schemes.
The objective of achieving co-ordination of health services in a country is
motivated not simply by the desires of national leaders for a tidy organisation
chart. The main aim is to ensure the optimum use of scarce resources of health
personnel and facilities, regardless of the administrative bodies on which they
depend. [48] If doctors in one scheme, for example, are overburdened with
work while those in another are only half occupied, the population as a whole
loses in the quantity or quality of medical care received. If a hospital under
one sponsorship is half-empty, while that under another has patients on a

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waiting-list, the benefits of expensive investment in hospital construction and
operation are wasted. Co-ordination can help to achieve the distribution
of resources to meet the needs of patients at any given time or place.
Transport costs and time can be reduced by the rational co-ordination of
health services in geographic areas. It is obviously wasteful for patients—and
may even be injurious to their health—to travel a long distance for care at a
place where they are "eligible", when there is another place nearby which they
cannot use because of their "ineligibility". Rules of entitlement to medical
care spring from the regulations of specific schemes, which are man-made and
can be changed.
The tasks of administering a diversity of schemes must also be considered.
The machinery for mobilising health personnel and supplies, handling money,
controlling the quality and costs of the service, and so on, has become very
complex, and maintaining it for several parallel schemes in the same geographical area—perhaps for different categories of persons or different diseases—
results in a waste of administrative effort and, since no country has a surplus of
good administrators, in delays in the delivery of medical care.
Organised medical care schemes may be not merely parallel, but actually
competitive. One may pay higher salaries than the rest, thereby attracting more
and better-quality personnel—to the detriment of the population served by the
other schemes. Perhaps such channelling of resources is reasonable when
social needs dictate a higher priority for certain groups. To encourage certain
types of services, such as those for disease prevention, the ultimate social
gains might justify higher rewards for personnel. (Unfortunately, in practice,
the market of supply and demand usually yields higher rewards for surgery,
which helps only individuals, than for preventive medicine, which helps large
numbers of people.) The use of differential financial rewards as a method of
channelling resources, however, is wise only if the influences exerted yield
priorities that are reasonable.
It is not expected that the combined effect of all the medical care schemes
in a country should always be to secure equality of treatment for everyone. At
certain stages of social development selected populations, such as industrial
workers or children, have to be accorded higher priority in the over-all national
interest. 1107] Urban populations might justifiably have some priority over
rural populations for the same reasons, until geographical extension is gradually achieved. But, whatever the policy on resource allocation at any one
time, its implementation requires co-ordination among all the organised health
service schemes, so that resources are allocated on the basis of social needs, and
not on the basis of power and wealth.
The achievement of co-ordination among the many organised schemes of
health service in a country varies greatly with the general political structure.

CO-ORDINATION OF HEALTH SERVICE SCHEMES

211

The prevailing pattern of medical care in the social security system is also
important, as we shall see in examining the experience of different countries.
B.

CO-ORDINATION WITHIN SOCIAL SECURITY SYSTEMS

As we have seen throughout this volume, medical care under social security is often the responsibility of many separate agencies or institutions, with
much local autonomy. In the Federal Republic of Germany the entire system
was originally based on hundreds of autonomous sickness insurance funds,
which were later integrated into a national system. Approximately 2,000 local
sickness funds are individually responsible for collection of insurance premiums
and provision of benefits for their members, but their operations are co-ordinated in many ways. There are several principal federations of funds with different
categories of members, based on industrial employment, place of residence,
type of occupation, etc. These federations of local funds have offices at both
the Land and the national level. Each federation deals with associations of
doctors and other providers of service, rather than with individual practitioners.
The whole network of funds in each Land is subject to supervision from an
Office of Insurance; supervision at the national level is exercised by the Ministry
of Labour and Social Affairs.
If a protected person becomes sick away from home, he gets medical care
locally but the fees are eventually paid by his own insurance fund. In several
Länder, moreover, a unified computer service processes doctors' and pharmacists' bills for many different sickness funds. While each fund is legally responsible for collecting premiums from its own members, in certain districts this
process is also co-ordinated for several local funds. The incomes of different
funds vary, since insurance premiums often depend on the level of wages of
fund members. Some funds, therefore, may give more generous benefits than
others, but there is a national statutory requirement of minimum basic medical
benefits which all funds must provide.
In Belgium also, the hundreds of separate mutual benefit societies are
affiliated to six national insurance carriers, largely on political or religious lines.
Social insurance premiums, based on statutory percentages of wages, are collected by a national Social Security Office, which distributes funds to each of the
six major carriers. These carriers, in turn, distribute the money for benefits to
each of the local mutual benefit societies. As we have seen, the protected person
is reimbursed by his own society for medical expenses (with cost sharing) outside the hospital and can receive hospital treatment without cost sharing. In all
these complex arrangements, uniformity is achieved by the administrative
services of the six major carriers for their constituent societies, and by regulations
at the national level. The National Sickness and Invalidity Insurance Institute

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carries out the necessary negotiations on fee schedules and other matters with
the national associations of physicians, pharmacists, etc.
Thus, in the older industrialised countries like the Federal Republic of
Germany and Belgium, where the indirect pattern of medical care predominates,
there is a vast problem of co-ordinating hundreds of separate sickness insurance
funds or mutual benefit societies to assure uniform benefits for the whole protected population with respect to the basic medical services defined in the law.
(Beyond these basic benefits, individual funds may offer supplementary health
services.) Although greater uniformity and centralisation of authority has
gradually been achieved, the existence of numerous local insurance funds presents continuous problems of co-ordination. Even in some developing countries, like Mexico or Peru, with separate social security schemes for different
occupational groups, there are serious problems due to lack of co-ordination.
(Recently steps have been taken to explore the possibilities of co-ordinating
these schemes.)
There are plenty of co-ordination problems in the United Kingdom system
too, among its three component parts. The local health authorities, the Executive Councils and the Regional Hospital Boards each represent a separate
heritage of previous authority. Various proposals have been made to integrate
all three of these sectors under some type of new local health agency, responsible
for every service in defined zones. For the present, however, co-ordination is
achieved through various interchanges of members between the three types of
board and through special committees for co-ordination. A recent revitalised
movement for health centres, where general practitioners would work, may help
to increase the co-ordination between the family doctor and the preventive
health services, and closer ties between the hospitals and the general practitioners are being developed in other ways. The absence of any test for eligibility
in the United Kingdom National Health Service, moreover, is a great saving
of administrative effort, which in itself simplifies the access of patients to various
types of care anywhere in the system.
In Canada, where social security for hospital service came later than in
Europe, the problem of co-ordination within the system is much simpler. In
each of the ten provinces there is a single authority which administers the hospital benefits. In Ecuador, India and Tunisia, where the social security schemes
were started almost from scratch, the tasks of internal co-ordination are also
much simpler. The schemes did not have a network of autonomous insurance
organisations to build upon, but simply set up their own network with a clearly
defined line of authority. In the United Kingdom and Poland, where local
insurance societies already existed, new legislation after the Second World War
established a unified national system, with a hierarchy of regional and local
offices.

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213

All these schemes, of course, have some problems of co-ordinating the
different component elements of medical care. The ambulatory services
require co-ordination with the hospital services if diagnostic and therapeutic
procedures are not to be wastefully duplicated. The separate administrative
organs of the National Health Service in the United Kingdom—Regional Hospital Boards, Executive Councils and local health authorities—must articulate
their services for care of the chronically ill, for example, or for health services
to children. [59] Even in a highly systematised scheme like that of Poland, the
co-ordination of preventive and curative services in a district requires deliberate
action. The cities also have their problems since the work of factory, school
and neighbourhood clinics serving different members of the same family has
to be co-ordinated. The problems of health service co-ordination under the
direct pattern, however, do not compare with those in the indirect-pattern
schemes. The latter not only have a large number of local insurance funds to
contend with, but must also respect the autonomy of each of the individual
providers of medical care. Various regulations may be issued to promote coordination, but their implementation requires constant surveillance.
Another aspect of health service co-ordination is the relationship between
schemes for different contingencies within the over-all framework of social
security in a country. The relationships between medical care and cash disability benefits were considered in Chapter 11, especially with respect to medical
certification of disability and invalidity. Old-age protection involves not only
monetary benefits, but also the provision of medical services to pensioners, and
the two elements must therefore be co-ordinated. Thus some medical care
schemes organise special geriatric services, since the health needs of the aged
are especially great. Social security schemes in the industrialised countries
usually continue entitlement to medical care after retirement, including benefits
for the dependants of a pensioner. This is the arrangement in Belgium, Canada
and the Federal Republic of Germany with the indirect pattern of medical care,
as well as in Poland and the United Kingdom with the direct pattern. In the
developing countries the coverage of pensioners for medical care is less consistent; it is provided in Ecuador, but not in India or Tunisia, where national
health resources are quite strained even to cover the actively employed population.
*

*

Social security protection for employment injury bears a closer relationship to that for general sickness than it does to any other contingency, since it
embraces medical care as well as cash benefits. [106] A variety of forms of
relationship are found, influenced by the basic pattern of the general medical

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ORGANISATION OF MEDICAL CARE

care scheme and its source of financing. In Belgium, with its indirect pattern,
the injured worker is treated by physicians, hospitals, etc., who are paid the
full charges (i.e. there is no cost sharing) by employers' associations or private
insurance companies, which are entirely separate from the mutual benefit associations administering the general medical benefits. If an injured worker is
treated under the auspices of his general sickness fund, reimbursement of the
expenses is later obtained from the employment injury compensation scheme.
In Canada the administration of employment injury benefits is likewise entirely
separate from the national hospital insurance scheme. Workmen's compensation cases are actually excluded from hospital insurance coverage, since in each
province such cases are statutorily insured under a separate provincial government agency, which pays doctors and hospitals on a fee basis. In some Canadian provinces the provincial authority operates special rehabilitation centres
for injured workers, which accept difficult and protracted cases and apply
essentially the direct pattern of medical care organisation.
In the Federal Republic of Germany the employment injury compensation scheme is more closely co-ordinated with the general medical care system.
An injured worker is ordinarily treated under the aegis of his regular sickness
fund for the first 18 days. Only after this does his care become the responsibility
of special accident insurance funds associated with each type of industry or
region. As in Belgium and Canada the costs of industrial injury insurance are
met entirely by the employer, which explains why administration of employment injury cases is separate from that for general sickness protection after
the acute phase.
In the direct-pattern countries, on the other hand, medical care for persons
injured at work is usually closely integrated with the general sickness scheme.
Cash benefits, of course, are paid separately and are normally financed from
a fund to which only the employer has contributed. But medical care is simply
provided by the over-all scheme which handles non-occupational sickness and
injury. This is the arrangement in Poland and the United Kingdom, where there
is no separate financing of medical services to injured workers. Appliances or
medicaments which ordinarily require some cost sharing are provided free
for employment injury cases. No special reimbursement to the ministry of
health is made for this medical care because the costs are largely borne out of
general revenues.
In Ecuador co-ordinated medical care is also the arrangement, but the
estimated costs of care for injured workers are reimbursed from a fund to
which only employers have contributed. If a worker is injured in an area of
the country where the National Social Security Institute does not have its own
facilities, then other medical resources are used. In India the social security
medical care scheme also treats employment injury cases involving its benefi-

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215

ciaries, but there is no separate fund to finance either the medical or the cash
benefits. The general E.S.I.C. fund, to which workers, employers and state
governments have contributed, meets the costs of both types of benefit.
Tunisia is an exception to the general rule of co-ordination in the directpattern countries. Here the injured worker is protected by insurance which
employers purchase from private carriers. This care is usually obtained from
private doctors and hospitals who are paid on a fee basis by these carriers. Thus
the indirect pattern of medical care is followed for employment injury cases,
although the direct pattern prevails for treatment of general sickness. It is
evident that the employment injury case is a special source of income for the
private physician, which would be lost if the care were integrated into the general scheme.
C.

CO-ORDINATION OF SOCIAL SECURITY SCHEMES WITH OTHER
PUBLIC AND PRIVATE BODIES

The degree of co-ordination between social security medical care schemes
and other organisations outside the orbit of social security also varies greatly

from one country to another. Where the indirect pattern prevails, the degree
of co-ordination appears to be least; even in the direct-pattern countries,
however, there are distinct differences in the types of relationship.
Public Bodies
The social security system in the Federal Republic of Germany operates
with very little relationship to the general governmental authorities for health
service. The local public health offices have responsibility for the control of
communicable diseases—including environmental sanitation controls and
immunisations—but they do not maintain any regular relationships with the
sickness insurance funds. Indirectly, perhaps, they affect the operations of the
funds by inspection and licensing of hospitals and pharmacies and by supervision of midwives. If there is a threatened epidemic, the public health office
may call on the sickness funds for co-operation, and sometimes the funds
share in the costs of measures against venereal disease.
Social assistance for the poor is the responsibility of other local and provincial
Länder agencies. The social welfare authorities take financial responsibility for
medical care of the poor, which is given through independent practitioners
(paid on a fee basis) or in public hospitals. The sickness funds, however, play
no part in these arrangements, except in special cases where a welfare officer
requests co-operation.
In Belgium the day-to-day operations of the medical care scheme are also
quite independent of the local pubhc health agencies. Services for treatment

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ORGANISATION OF MEDICAL CARE

of tuberculosis and other communicable diseases are now provided by the sickness funds, and the public health agencies limit their functions to purely preventive services and controls of environmental sanitation. Medical care of the
poor, unlike that in the Federal Republic of Germany, is also administered by
the social security scheme, the costs being met by special subsidies from the
Government.
Difficulties are recognised in Belgium at another level, namely the supervisory power exercised over the sickness funds by two national ministries. The
principal authority over the whole social security system is lodged in the
Ministry of Social Welfare, which contains a National Social Security Office.
For the legal control of various health professions and hospitals, however, the
Ministry of Health has responsibility. For example, the Ministry of Health
approves physicians as specialists, although the Ministry of Social Welfare
establishes the list of technical services for which these doctors are considered
competent under the social security scheme. Hospitals are approved by the
Ministry of Health, although the financial support of their services comes
mainly from the social security scheme. Drugs are approved for sale by the
Ministry of Health, but the Ministry of Social Welfare issues a separate list
of drugs which may be prescribed in the social security scheme. Certain
preventive services by private physicians are paid for by the Ministry of Health,
and therefore excluded from the health insurance scheme; yet the fees are
lower than the usual private rates which the sickness funds would be willing to
pay. To solve these problems, Belgian health leaders have advocated the
placing of all supervisory responsibilities for health services in a single ministry.
The hospital insurance scheme in Canada is administered nationally by
the Ministry of National Health and Welfare, which is also responsible for
public health activities at this level. In the provinces, however, the patterns of
administration differ. In five of the provinces a division of the provincial
Health Department is responsible, in four others there are separate hospital
insurance commissions, and in one instance there is a separate Deputy
Minister under the provincial Minister of Health. (In Saskatchewan, where
universal insurance for physician's care operates, that administration is also
under a separate commission.) In all ten provinces, however, the hospital
insurance authorities report to the provincial Minister of Health, and this
helps to achieve some co-ordination with the public health services. At the
local community level, nevertheless, the public health agency has no real
responsibility for the supervision of hospitals. Medical care of the poor in all
provinces but one is a responsibility of provincial departments of social welfare.
Hospitalisation of indigent persons, however, is integrated with the social
security scheme by enrolling these persons in the provincial schemes with
subsidies from the social welfare authorities.

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217

Co-ordination of health services as a whole, under the direct pattern of
social security organisation, varies with the basic policy under which the scheme
was established. In Ecuador the social security scheme was established as a
separate entity unrelated to the public health organisation, although both come
under the general supervision of the Ministry of Social Welfare. While the
Ecuadorian social security scheme gives the great bulk of its services in its own
hospitals and clinics, there are a number of small towns where it has joined
with the National Health Bureau, the local municipal government and other
agencies in the joint construction and operation of health centres. None of
these agencies alone could support the centres, but together they can do so,
at the same time providing care for protected workers under the social security
scheme. There are 19 such joint projects in operation. In addition, the scheme
contracts with general government hospitals for treatment of its beneficiaries
in certain localities, including even Quito, the capital, for maternity cases.
Another form of co-ordination is illustrated by relations with the Andean
Indian Programme, started by the United Nations, the I.L.O. and several other
of the specialised agencies but now operating in isolated mountain areas under
a separate governmental authority. The social security scheme makes an
annual financial grant to the Andean Indian Programme and this is used to
support general preventive and curative services to several thousand isolated
rural families.
Poland demonstrates the achievement of virtually complete co-ordination
between a social insurance system and the public health activities of a nation.
Until 1951, there were separate arrangements for medical care of insured
persons, based on agreements with private practitioners and contracts with
local governmental hospitals, and services could also be obtained directly in
health facilities (clinics, hospitals and sanatoria) operated by the Social
Insurance Office itself. During 1951, however, all responsibilities for health
services—as well as all material facilities—were transferred to the Ministry of
Health, which now operates the unified system described throughout this
volume. The network of national, regional and district health centres and
hospitals serves the total population in their respective areas; the persons
protected under the social security scheme do not have to pay for the services,
while others must pay a share of the costs. A National Insurance Board
still operates separately for administration of the various cash benefits, but it
has no technical responsibility or financial obligation for the health services.
Although there are tasks of technical co-ordination within the health service,
they are necessary because of the geographical separation of various facilities
rather than because of any fragmentation of administrative authority.
In Tunisia, while the historical origin of the social security scheme was
quite different, the operations of the medical service are similar to the current

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ORGANISATION OF MEDICAL CARE

Polish pattern of nation-wide co-ordination with the public health network.
The National Social Security Fund has not developed any health facilities of its
own, but simply assures services to its beneficiaries in the established hospitals
and health centres of the Secretariat of State for Public Health. The Fund
pays an annual.lump sum to the Secretariat of State for these services, which
in 1966 amounted to about 11 per cent, of its total budget. General policy in
the Secretariat of State is determined by a Supreme Public Health Council,
on which the National Social Security Fund is represented.
The relationships between the social security system and public health
authorities in India are also very close, but the former has a more prominent
role than in Tunisia. In the areas applying the direct pattern of medical care
the scheme has built clinics and hospitals with its own money. Some of these
are built as annexes to government establishments. All the medical and allied
personnel in these facilities, however, are employees of the public health
authority in each state. In addition, beneficiaries may use the other facilities
of the government health service, including family planning clinics. (Recently
it was decided that E.S.I.C. hospitals may also be used by non-beneficiaries, if
there are surplus beds.) The social security scheme pays the state governments
seven-eighths of the estimated costs of the medical care provided to its beneficiaries. In the indirect-pattern areas, however, the scheme pays doctors for
services rendered (general practitioners on a capitation basis) and care is

purchased in public hospitals (occasionally in private ones) on a per diem fee
basis.
Proposals have been made in India to dissociate the social security scheme
from the government health services, on the grounds that in different states the
quality of care is uneven and that, on its own, E.S.I.C. could pay higher
salaries, attract more and better-qualified personnel, and render higher quality
care. Since the workers are making a financial contribution, it is argued that
they are entitled to better care than the general population, the majority of
whom are indigent. (The quality of care is now probably better in the E.S.I.C.
clinics than in the regular clinics of the public authorities, and E.S.I.C. hospitals
or reserved quarters of the public hospitals have more amenities.) In 1966,
however, a special review committee considering the question of full separation
of E.S.I.C. from the government health services decided against such a course
of action. The arguments in favour of co-ordination prevailed.
The current integrated arrangements benefit both sides. Although
E.S.I.C. money is used only for its own beneficiaries, the engagement of all
health personnel by the government authorities eliminates competition for
scarce resources and brings into the Civil Service individuals who may later
accept another non-E.S.I.C. assignment. The social security scheme is spared
the burden of operating its own nation-wide medical care system (even though

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219

its administrative responsibilities are still great, especially in the capitation
areas). Communications are maintained through the representation of various
government health officials on the policy boards of E.S.I.C. and the representation of E.S.I.C. officials on various government health commissions. Problems of co-ordination are doubtless greater in the indirect-pattern areas of
India, and these will be solved only when enough new clinics and hospitals are
constructed to enable them gradually to adopt the direct pattern.
The United Kingdom National Health Service constitutes another social
security scheme in which, as in that of Poland, virtually complete integration
has been achieved with the basic national public health authority. The
Ministry of Health at the top controls the entire medical care system and, with
a few exceptions, co-ordinates all health services in the country. The exceptions
are the preventive health services for schoolchildren and the environmental and
preventive services in industry, which come under the Ministries of Education
and Labour respectively. There is no problem, however, with respect to
duplication of personnel and facilities for different population groups in one
locality, since everyone is covered by the same network. No special arrangements are necessary for the indigent, as against the insured. There are problems of co-ordination, nevertheless, among preventive, ambulatory and hospital
services at the local level, as noted earlier.
Private Bodies
This discussion has centred on the co-ordination of social security systems
with other government services, especially those for public health. [102] There
are also tasks of co-ordination with voluntary agencies. In most countries
there are non-governmental bodies which supplement the official services in
certain ways, like the rehabilitation of crippled children or the provision of
informal supporting services to make hospital patients more comfortable.
These supplementary services are often integrated into the official scheme,
with specific duties being assigned to the voluntary agencies, which are sometimes subsidised by government grants. The Red Cross is one world-wide
agency which operates outside of government but plays a key role in the
emergency services. In many Latin American countries it is financed predominantly by government grants, even though the management is entirely in
private hands. Preventive health services for children have also been launched in
many developing countries by voluntary societies ; special clinics are set up for
examination of infants and expectant mothers entirely through private initiative. Their continued operation, however, often depends on government grants.
In the indirect-pattern countries the general hospitals are in great measure
built and administered by voluntary or non-governmental bodies, but financed

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ORGANISATION OF MEDICAL CARE

largely from payments of social security schemes. Cancer societies in some
developing countries operate special hospitals quite outside the social security
scheme, but accept an occasional patient from the scheme. Some tuberculosis
sanatoria have similar relationships with the scheme. In a sense, the running
of the entire hospital system, in the industrialised countries especially, involves
a partnership between social security schemes and voluntary bodies, for the
mutual strengthening of both.
Another type of non-governmental health activity, with which social
security schemes have important relationships, is found in private industry. [137]
Many factories, with or without legal compulsion, operate programmes of
hygienic protection and first aid for their workers. Most countries, moreover,
have some type of factory inspection legislation, requiring minimum standards
of health, safety and welfare, including especially protection of workers from
contact with hazardous substances. Larger factories often have their own
clinics with nurses and part-time or full-time doctors for health maintenance.
Occasionally these private enterprise schemes include complete medical care
for the worker and even his family.
When a social security scheme is enacted to provide medical care for
workers who are already protected by a private factory scheme, there is an
obvious task of co-ordination. In some countries the problem is solved by
having the private scheme continue and either exempting the employer from
paying the statutory social insurance contribution or refunding part of it.
This is done for isolated mining enterprises in Peru, where industrial hospitals
are already established in the hinterland. The social security scheme may
supervise these industrial health services, which may also be made available to
other protected persons in the same locality. In Ecuador agreements have been
made between the social security scheme and private firms, under which the
latter provide ambulatory physician's care at the place of work while the
scheme furnishes drugs, does diagnostic examinations, and provides hospitalisation. This is arranged in 37 larger firms, each with over 100 workers,
where the utilisation of ambulatory services would be high enough to justify
a special factory clinic. In India large companies may build for their workers
clinics and hospitals which are then staffed and operated by the social security
scheme.
Several developing countries have national legislation making it compulsory
for private enterprises employing, say, over 50 or over 100 workers to operate
a general medical service. These laws—which may apply to agricultural
enterprises, such as sugar or rubber plantations, and to mines or oilfields, as
well as urban factories—represent a type of social security legislation offering
protection to selected workers. In the very large foreign-owned corporations,
such as the oil companies in the Middle East or in Venezuela, the medical care

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221

schemes thus established are generally comprehensive in scope and high in
quality. In purely agricultural enterprises, however, the health schemes are
usually inadequate. The objective of general social security legislation in the
developing countries is to establish higher-quality medical services for all
workers, even in the smaller enterprises. In the larger enterprises which have
satisfactory services, the objective may be achieved by co-ordination through
special contracts.
D.

NATIONAL HEALTH PLANNING

Problems of co-ordination must also be faced on a still wider scale between
the health services as a whole and all the other organised functions in society.
This is the case not only as regards the medical care components of a social
security system, but all health services, however they may be sponsored.
Health services must be planned so that the other functions of society—agriculture, industry, education, etc.—are strengthened ; at the same time, planning
in the other sectors must take account of the need to strengthen the health
services. [14]
Many requirements of the health services are obviously dependent on
achievements in other spheres. The collection of money for health purposes—
whether through special social insurance mechanisms or other forms of revenue
collection—must rest on a basic taxation system. Both the rates of taxation
and the efficiency of tax collection influence the amount of public funds that will
be available for health purposes. Education of medical and allied health personnel must rest on a framework of general education in primary and secondary
schools. Likewise the effectiveness of education about hygienic living depends
largely on the general level of literacy achieved in a country. Reasonable access
to health facilities depends on the transport system of a country—roads, railways, public vehicles, etc. Without adequate resources in this sphere régionalisation of health services is impossible.
At the community level there are tasks of architectural planning and
geographical siting. In large cities the location and design of houses, markets,
streets, electrical power systems, factories, etc., will greatly influence the effective
use of health services. In rural communities the nature of the problems is
different, but all the same basic social needs must be met. Rural community
development has been a major planning goal in the developing countries, and
it can influence both the prevention of disease and the delivery of health service.
To cope with these complex requirements, most national governments have
established offices or departments concerned with over-all planning. The
strength and influence of these offices differ, of course, in relation to the political
system of a country. In the fully socialist countries such offices hold a central

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place and enjoy great authority. In other countries, planning may be done by
a research branch in the Office of the President, with policies being laid down
by the President's Cabinet or a Council of Ministers. In the developing countries, where needs are tremendous, resources fewer and government traditions
somewhat younger, such planning is often very active. The scope of planning
may be limited to the direct functions of government or it may encompass all
private activities as well, with various gradations in between. Even when the
scope is restricted, however, the policies adopted for government programmes
invariably exert an influence on the private sector. This is very obvious in the
health services, where social security schemes greatly alter the activities of
private physicians, pharmacists, etc. [54]
A national planning office or high councils of government are inevitably
subject to pressure from different ministries competing to obtain funds. The
Ministry of Education, for example, may argue for a greater allotment of funds,
which may reduce the amount to be allocated to the health services. The military
forces nearly always have a high priority in the distribution of public moneys.
Objective appraisals of the relative benefits to society of different forms of
expenditure—or cost-benefit analyses, as they are called—are very difficult to
make. Subjective judgments on what social values count most have an enormous influence on policy decisions.
Because no country is operated along wholly scientific lines, social policy
decisions are invariably influenced by political pressures. The strength of
popular demand for a service is bound to influence the bargaining power of one
ministry or another. Thus, whatever the opinion of the technical experts may be,
if political pressures for medical care are great the allocation of funds for that
purpose will have higher priority. In the industrialised countries with a variety
of private sectors in addition to the public sector, these political pressures for
health services come from many sources. The hundreds of local insurance funds
in Belgium and the Federal Republic of Germany, for example, serve as pressure
groups influencing parliaments to impose relatively high social security taxes.
The medical profession and the hospital associations can also exert pressure by
their demands for certain rates of remuneration. Labour unions and organisations of farmers, women or certain ethnic groupings may have an influence.
Political parties can take a stand on health service and can judge from the responses of voters the importance of this issue compared with others. The whole
operation of the free market, of course, influences the proportion of national
incomeflowinginto health services.
In the developing countries, where only a small proportion of the population is covered by social security, the funds allocated to it may, in a sense,
circumvent the whole planning process. The budget of a social security system
in Latin America, for example, is usually separate from that of the government

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223

as a whole. The authority administering social security has taxing power of
its own and can draw money from employers and workers quite aside from the
general tax collection system. The rise of this semi-independent taxing power
has been due to the political strength of workers and industrial groups, which
were dissatisfied with the level of health services available in existing government
facilities. As the proportion of covered persons increases and the share of
national income allotted to social security rises, however, the taxing power of
social security systems becomes more subject to the review of national planning
bodies.
The more health service expenditure comes under the review of national
planning bodies, the greater are bound to be the pressures for economy and
efficiency in the system. Health leaders may point out the losses in economic
productivity due to disease and the national gains attributable to improved
health status. They may formulate health service spending as a long-term
investment (with future dividends) rather than simply an expenditure like other
personal goods and services. [89] In spite of this, the money allocated for
health service reduces that which can be spent for other purposes, and everyone
must therefore be concerned that the money is wisely spent.
Thus the world-wide movement toward national planning increases the
pressures toward systematic organisation of the health services. Health ministries are setting up special planning offices to study the needs for co-ordination
and integration of the various organised schemes. Different methods of health
planning are now being explored, together with techniques for evaluating alternative courses of action. [52J As for implementation of the plans, however,
all the techniques aim at the planned deployment of health personnel and facilities in geographical areas, unified administration of services for the entire
populations of those areas, teamwork and integration of preventive and curative
measures. The money to support these services may come from a number of
sources in both the public and the private sectors, but the delivery of services
would generally follow the direct pattern. The rising costs, the scientific
complexities, and the human requirements of health service all fortify this trend
towards the achievement of comprehensive health services for all persons in the
nation.
E.

CO-ORDINATION AT THE INTERNATIONAL LEVEL

Co-ordination between Countries
Co-ordination and planning of health services across national boundaries are
also becoming increasingly necessary, as the world becomes smaller and nations
become more interdependent. The hazards of infectious disease transmission
have for long made international sanitary conventions a necessity, but the needs

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go far beyond this. They involve massive movements around the world of
families, professional personnel, commodities and ideas—all of which have
some bearing on the operation of social security schemes.
People free from disease cross national borders, and they get sick on the
other side. If they are protected by a social security system at home, they
expect some kind of protection abroad, and some countries have concluded
reciprocal agreements for this purpose. Austria and Germany have such a
bilateral agreement, as do Tunisia and France, Poland and Czechoslovakia. In
countries with a universal national health service, like the U.S.S.R. or the
United Kingdom, no tests of eligibility are made and a foreign visitor who falls
sick is simply treated without charge. As social security systems extend their
coverage in more countries, and as international travel increases, more reciprocal
agreements between countries will doubtless become necessary.
Health personnel also cross national borders to live and work in other
countries. Licensing reciprocity has been introduced among certain countries, such as those in the British Commonwealth or the former French
Community. An Australian physician can practise medicine in England and a
French physician in Tunisia, without re-examination. In 1963 the Treaty of
Rome established reciprocity of medical licensing for physicians of the six
Common Market countries of western Europe, and in 1966 the Scandinavian
countries concluded a similar agreement. Such reciprocity, however, is by no
means universal and requires extension. It would depend, of course, on development of international standards of professional training and some international
mechanism for enforcing those standards.
In the process of medical education today, international movement of students is very important both for basic preparation and for postgraduate speciality
training. The movement is largely from the developing to the industrialised
countries, and this creates difficult problems of adjustment for the student both
abroad and on his return home. A better long-term solution is doubtless the
development of good basic schools of medicine and other health sciences in all
countries or in continental regions containing several small countries of similar
culture.
People also go from one country to another to procure certain highly
specialised medical services. The wealthy families of the developing countries
do not hesitate to travel anywhere in the world for certain types of surgical
operation, but a social security scheme may also sometimes send a patient to
another country when it is a matter of saving his life. For scarce and difficult
services it may be more economical to develop a few international treatment
centres to serve various continental regions.
Nations are also dependent on one another for international trade in pharmaceutical supplies and medical equipment. Yet each country imposes its own

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225

tariffs and controls on the importation of such products. One would like to see
a world in which medical supplies and equipment could flow freely, without
trade barriers, among all nations, with quality standards protected by international regulations. Perhaps the most free interchange in the modern world is
the flow of knowledge resulting from research. Books, journals, radio communications and international conferences can spread new knowledge rapidly.
But even this is not yet generalised enough to get through all barriers of language and local traditions.
The Role of International Organisations in Co-ordination
The various international movements and communications mentioned
above are facilitated by the activities of international organisations. Since its
foundation after the First World War the International Labour Organisation
has been a prime mover in the development of social security in general. Many
of the medical care schemes now operating in Latin America, Asia, and Africa
were launched with the technical co-operation of this agency. The continuous
exchange of ideas through international meetings and publications on social
security has also helped to improve the schemes already in operation. The
various international labour Conventions and Recommendations have set goals
to which all nations may aspire.
The World Health Organisation is devoted exclusively to the dissemination
of ideas and improvement of practices with respect to health. Born out of the
Health Division of the League of Nations, it was set up at about the same time
as the United Nations to promote extension of modern health concepts
everywhere in the world. [611 Expert committees, technical consultants, international standards all contribute to the dissemination of ideas on disease control and health promotion. W.H.O. co-operates with countries developing new
schools for training the health professions, and fellowships for foreign study
are awarded. With respect to the organisation of medical care, special emphasis
has been given to the improvement of hospitals and to the integration of preventive and curative services at the community level.
Other international organisations also contribute to the promotion of
health services. The United Nations Children's Fund (UNICEF) provides
basic supplies for the protection of the health and well-being of children in the
developing nations or in nations devastated by war. The Food and Agriculture Organisation (F.A.O.) is devoted, among other things, to improvement of
the nutritional status of populations. The United Nations Educational,
Scientific and Cultural Organisation (U.N.E.S.C.O.) promotes improved basic
education everywhere, including the professional training of health personnel.
The United Nations itself is concerned with problems of population control
which can, of course, have a significant bearing on health.

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Several international non-governmental organisations also contribute to
the promotion of health services. The International Social Security Association
has worked hand-in-hand with the I.L.O. to promote exchange of ideas on the
operation of social security systems, including their medical aspects. [129]
Representing the technical experts engaged in administration of these systems,
it has explored relationships with the medical profession on a world scale. The
World Medical Association has formulated principles of medical care organisation from the viewpoint of the individual physician. [12) Each of the medical
specialities, as well as nursing, dentistry, hospital administration, physical
therapy and an ever-lengthening list of allied health professions are represented
in international associations which foster the exchange of ideas and the formulation of technical standards.
All of these official and non-governmental bodies are playing a part in
improving the organisation of medical care, some aspects of which this volume
has explored. Just as the need for co-ordination has been recognised by
different bodies at the national level so the international organisations have
realised that closer co-operation between them is essential. The I.L.O. and
W.H.O., for example, are co-operating in their respective activities in the field
of medical care. On a regional level, working relationships have been established between the Pan American Health Organisation (Regional Office for the
Americas of W.H.O.) and the Organisation of American States (which contains
a Social Security Branch), with respect to liaison between ministries of health
and social security institutes in the Latin American countries. In 1965, moreover,
the Directing Council of the Pan American Health Organisation passed a resolution urging closer co-ordination between ministries of health and social security
institutions, and the participation of all relevant agencies in national health
planning. [94]
While some differences in emphasis and priorities are bound to emerge
among organisations representing different population groups, public authorities or technical fields, many problems arise simply from lack of communication. Liaison among the international agencies, therefore, like co-ordination
within a country, can foster understanding. It can help all nations along the
road to one of the ultimate goals of social security—health for everyone on
earth.

APPENDIX

APPENDIX

LIST OF BIBLIOGRAPHICAL REFERENCES

PUBLICATIONS OF THE INTERNATIONAL LABOUR OFFICE

1. The Cost of Medical Care, Studies and Reports, New Series, No. 51 (Geneva,
1959).
2. Social Security : A Workers' Education Manual (Geneva, 1958).
3. Principles of International Instruments concerning Sickness Benefits, Report I,
Committee of Experts on Social Security (Geneva, Mar. 1967).
4. "Old-Age Protection under Social Security Schemes", in International Labour
Review, Vol. 82, No. 6, Dec. 1960, pp. 542-571.
5. "Medical Care Protection under Social Security Schemes: A Statistical Study of
Selected Countries", in ibid., Vol. 89, No. 6, June 1964, pp. 570-593.
6. Revision of Conventions Nos. 24 and 25 concerning Sickness Insurance, Report VI
(2), International Labour Conference, 52nd Session, Geneva, 1968 (Geneva,
1967).
7. The Role of Social Security and Improved Living and Working Standards in Social
and Economic Development, Report III, Part 1, Eighth Conference of American
States Members of the International Labour Organisation, Ottawa, 1966.
PUBLICATIONS OF THE INTERNATIONAL SOCIAL SECURITY ASSOCIATION

8. Relations between Social Security Institutions and the Medical Profession,
Report IV, 11th General Assembly, Paris, 1963 (Geneva, 1963).
9. "Responsibility of Social Security Institutions or Authorities for Negligence on
the Part of Members of the Medical and Paramedical Personnel of Their
Establishments", in Bulletin of the International Social Security Association,
Year XV, Jan.-Feb. 1962, pp. 29-32.
10. "Developments and Trends in Social Security, 1958-1960", in ibid., June-JulyAug. 1962.
11. "Report on the Activities of the Working Group on the Problem of Harmonising
the Criteria for the Evaluation of Invalidity", in ibid., Oct.-Nov.-Dec. 1962,
pp. 113-120.
12. "The World Medical Association's Revised Principles of Social Security",
article by Leo PRICE, in ibid., Year XVII, May-June-July 1964, pp. 189-195.
13. "Appeals Procedure in Social Security", in ibid., Year XVII, Oct.-Nov.-Dec. 1964,
pp. 365-370.
14. "Social Security and Social Development", article by Pierre LAROQUE in ibid.,
Year XIX, Mar.-Apr. 1966, pp. 83-90.

230

ORGANISATION OF MEDICAL CARE

OTHER PUBLICATIONS

15. ABEL-SMITH, Brian : Paying for Health Services : A Study of the Costs and Sources
of Finance in Six Countries, Public Health Papers, No. 17 (Geneva, World Health
Organisation, 1963).
16. Idem: "The Major Patterns of Financing and Organisation of Medical Services
That Have Emerged in Other Countries", in Medical Care (London), Vol. 3,
Jan.-Mar. 1965, pp. 33-40.
17. Idem: The Cost and Sources of Finance of Health Services (draft report) (Geneva,
World Health Organisation, 1966).
18. American Academy of General Practice : Manual on General Practice in Hospitals
(St. Louis, Missouri, 1958).
19. American Public Health Association: "Disability-Cash Benefits versus Rehabilitation", in American Journal of Public Health, Vol. 49, Aug. 1959, pp. 1082-1084.
20. ANDERSON, A. J., and ALTMAN, I. A. : Methodology in Evaluating the Quality of

Medical Care (Pittsburgh, University of Pittsburgh Press, 1962).
21. ANDERSON, O. E. : "The Government and the Consumer: Evolution of Food and
Drug Laws", in Journal of Public Law (Emory University Law School), Vol. 13,
1964, pp. 189-196.
22. ARMSTRONG, Barbara N. : Insuring the Essentials (New York, Macmillan, 1932).
23. BADGLEY, Robin F., and WOLFE, Samuel: Doctors' Strike : Medical Care and
Conflict in Saskatchewan (Toronto, Macmillan of Canada, 1967).
24. BLUM, Richard: Hospitals and Patient Dissatisfaction : A Study of Factors Associated with Malpractice Rates in Hospitals (San Francisco, California Medical
Association, 1958).
25. BLUMENTHAL, W. M. : Disability Retirement in Industrial Pension Plans (Princeton,
Princeton University Press, 1956).
26. BOSCH, H. M. : "Global Opportunity for a Better Environment", in American
Journal of Public Health, Vol. 43, June 1953, pp. 20-25.
27. Bouwcentrum, Rotterdam: General Hospitals: Functional Studies of the Main
Departments (Amsterdam, Elsevier Publishing Co., 1961).
28. BRAVO, A. L., and RUDERMAN, A. P. : Costs and Utilization of Ministry and Social

29.
30.
31.
32.
33.
34.
35.
36.

Security Medical Care Facilities in Latin America (Washington, Pan American
Health Organisation, 1966).
BRIDGMAN, R. F. : The Rural Hospital, Its Structure and Organisation. Monograph
Series, No. 21 (Geneva, World Health Organisation, 1955).
Province of British Columbia: British Columbia Hospital Insurance Service
Eighteenth Annual Report (1966) (Victoria, B.C., 1967).
BROWN, Esther Lucile: Newer Dimensions of Patient Care (New York, Russell
Sage Foundation, 1965).
BUIE, L. A. : "Medical Ethics of Today", in R. B. ROBINS (Ed.): The Environment
of Medical Practice (Chicago, Year Book Medical Publishers, 1963), pp. 294-346.
BURNS, Eveline M.: Social Security and Public Policy (New York, McGraw-Hill
Book Company, 1956).
BYER, M. A., et al. : "The Role of the Health Centre in an Integrated Health
Programme in a Developing Country", in Medical Care (London), Vol. 4,
Jan.-Mar. 1966, pp. 26-29.
Government of Canada: Report of the Royal Commission on Health Services,
1964, Vol. I (Ottawa, Queen's Printer, 1964).
COLLINGS, Joseph S. : "General Practice in England Today", in The Lancet, No. 1,
1950, pp. 555-585.

APPENDIX

231

37. Ministry of Public Health of Colombia and Colombian Association of Medical
Schools : Study on Health Manpower and Medical Education in Colombia, Vol. II,
Preliminary Findings (Washington, Pan American Health Organisation, 1967).
38. Columbia University : Family Medical Care under Three Types of Health Insurance
(New York, 1962).
39. Commission on the Survey of Dentistry in the United States: The Survey of
Dentistry (Chicago, 1961).
40. DAVIES, J. O. F., BROTHERSTON, J., BAILEY, N., FORSYTH, G., and LOGAN, R. :

Towards a Measure of Medical Care : Operational Research in the Health Services
(London, Oxford University Press, 1962).
41. DEAN, H. T.: "Fluorine in the Control of Dental Caries", in Journal of the
American Dental Association, Vol. 52, No. 1, 1956.
42. DENSEN, Paul M., BALAMUTH, E., and SHAPIRO, S. : Prepaid Medical Care and

Hospital Utilization (Chicago, American Hospital Association, 1958).
43. DICHTER, Ernest: " A Psychological Study of the Hospital-Patient Relationship",
in The Modern Hospital, Vols. 85 and 86, Sep., Oct., Nov. and Dec. 1954 and
Jan. and Feb. 1955.
44. DONABEDIAN, Avedis: "Evaluating the Quality of Medical Care", in Milbank
Memorial Fund Quarterly, Vol. 44, July 1966, pp. 166-206.
45. ECKSTEIN, H. : The English Health Service : Its Origins, Structure, and Achievements (Cambridge, Massachusetts, Harvard University Press, 1958).
46. EISLEE, C. W., SLEE, V. N., and HOFFMAN, R. G. : "Can the Practice of Internal

47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
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58.
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60.

Medicine Be Evaluated?", in Annals of Internal Medicine, Vol. 44, Jan. 1956,
pp. 144-161.
ETZIONI, Amitai: Modern Organizations (Englewood, New Jersey, Prentice-Hall,
1964).
EVANG, Karl: Health Service, Society, and Medicine (London, Oxford University
Press, 1960).
FALK, I. S. : Security against Sickness : A Study of Health Insurance (New York,
Doubleday, Doran and Company, 1936).
FELDSTEIN, Paul J. : An Empirical Investigation of the Marginal Cost of Hospital
Services (Chicago, University of Chicago, 1961).
Idem: "Research on the Demand for Health Services", in Milbank Memorial
Fund Quarterly, Vol. 44, July 1966, pp. 128-165.
FENDAL, N . R. E . : "Planning Health Services in Developing Countries", in
Public Health Reports, Vol. 78, Nov. 1963, pp. 977-988.
FERGUSON, T., and MACPHAIL, A. N . : Hospital and Community (London,
Oxford University Press, 1954).
FISHER, Paul: "Social Security and Development Planning: Some Issues", in
Social Security Bulletin (Washington), June 1967, pp. 13-25.
FORSYTH, Gordon, and LOGAN, Robert F. L.: The Demand for Medical Care
(London, Nuffield Provincial Hospitals Trust, 1960).
FRIEDSON, Eliot (Ed.): The Hospital in Modern Society (Glencoe, Illinois, Free
Press, 1963).
FULTON, John T. : Experiment in Dental Care (Geneva, World Health Organisation, 1951).
FURSTENBURG, F. F., et al. : "Prescribing as an Index to Quality of Medical
Care", in American Journal of Public Health, Vol. 43, Oct. 1953, pp. 1299-1309.
GODBER, G. E.: "Health Service, Past, Present, and Future", in The Lancet,
5 July 1958.
GOLDMANN, Franz: "Methods of Payment for Physicians' Services in Medical
Care Programs", in American Journal of Public Health, Vol. 42, Feb. 1952.

232

ORGANISATION OF MEDICAL CARE

61. GOODMAN, N. M.: International Health Organizations and Their Work (Philadelphia, Blakiston Company, 1952).
62. HALL, Charles P. : "Deductibles in Health Insurance: An Evaluation", in Journal
of Risk and Insurance, Vol. 33, June 1966, pp. 253-263.
63. HARRIS, Richard: The Real Voice (United States Senate investigation of the drug
industry) (New York and London, Macmillan, 1964).
64. HOGARTH, James : The Payment of the Physician : Some European Comparisons
(New York, Macmillan, 1963).
65. Government of India, Ministry of Health: Report of the Health Survey and
Planning Committee (Aug. 1959-Oct. 1961), Vol. I (New Delhi, 1962).
66. International Hospital Federation: Report of Study Tour of Hospitals in the
German Federal Republic (London, 1958).
67. Idem: Efficiency Methods in the Hospital (Proceedings of the Eleventh International Hospital Congress) (London, 1959).
68. JACO, E. Gartly (Ed.): Patients, Physicians, and Illness (Glencoe, Illinois, Free
Press, 1958).
69. JORDAN, E.P. : The Physician and Group Practice (Chicago, Year Book Medical
Publishers, 1958).
70. KACPRZAK, M., and KOZUSZNIK, B. : Health Care in Poland (Warsaw, Polonia
Publishing House, 1963).
71. KAKOL, Kazimierz: The Social Security System in Poland (Warsaw, Polonia
Publishing House, 1966).
72. KEELE, Cyril: "100 Years of Progress in the Drug Treatment of Disease", in
Journal of the Royal Society of Health, Vol. 6, 1963, pp. 325-330.
73. KERSHAW, J. D . : An Approach to Social Medicine (Baltimore, Williams &
Wilkins Co., 1946).
74. KESIC, Branko: "Training and Use of Auxiliary Health Workers in Latin
America", in Boletín de la Oficina Sanitaria Panamericana (English edition,
selection from 1966), 1967, pp. 1-12.
75. KING, Stanley H . : Perceptions of Illness and Medical Practice (New York,
Russell Sage Foundation, 1962).
76. KLARMAN, Herbert: The Economics of Health (New York and London, Columbia
University Press, 1965).
77. KRAMER, Lucy M.: "Drugs and Medicines", in Public Health Reports, Vol. 73,
Oct. 1958, pp. 929-939.
78. LEAKE, Chauncey D . : Percival's Medical Ethics (Baltimore, Williams and
Wilkins Co., 1927).
79. LEMBCKE, P. A. : "Medical Auditing by Scientific Methods", in Journal of the
American Medical Association, Vol. 162, 13 Oct. 1956, pp. 646-655.
80. Idem: "Hospital Efficiency: A Lesson from Sweden", in Hospitals (Chicago),
1 Apr. 1959.
81. LETOURNEAU, Charles U.: The Hospital Medical Staff (Chicago, Starling, 1964).
82. LILIENFELD, A., et al.: Chronic Diseases and Public Health (Conference of
Chronic Disease Training Program Directors) (Baltimore, Johns Hopkins Press,
1966).
83. LINDSEY, Almont: Socialized Medicine in England and Wales: The National
Health Service 1948-1961 (Chapel Hill, University of North Carolina Press,
1962).
84. LINTON, Ralph (Ed.): Most of the World: The Peoples of Africa, Latin America,
and the East Today (New York, Columbia University Press, 1949).
85. LIPWORTH, L. J., LEE, A. H., and MORRIS, J. N . : "Case-Fatality in Teaching and

Non-Teaching Hospitals", in Medical Care (London), No. 1, 1963, p. 70.

APPENDIX

233

86. MCCANN, A. and BOYKIN, E.: "Pharmacy's Maze: A Bibliographic Approach
to the Problem of Drug Information", in Journal mondial de pharmacie, JulyAug. 1958, pp. 229-235.
87. MILLER, Lloyd C. : "Doctors, Drugs and Names", in Journal of the American
Medical Association, Vol. 177, 8 July 1961.
88. MOTT, Frederick D., and ROEMER, Milton I.: Rural Health and Medical Care
(New York, McGraw-Hill Book Co., 1968).
89. MUSHKIN, Selma: "Health as an Investment", in Journal of Political Economy
(Supplement on "Investment in Human Beings"), Oct. 1962.
90. MYRDAL, Gunnar: Beyond the Welfare State (New Haven, Connecticut, Yale
University Press, 1960).
91. NEWMAN, Charles: The Evolution of Medical Education in the Nineteenth Century
(London, Oxford University Press, 1957).
92. OWEN, J. K. (Ed.) : Modern Concepts of Hospital Administration (Philadelphia
and London, Saunders, 1962).
93. Pan American Health Organisation: Health Planning : Problems of Concept and
Method, Scientific Publication No. I l l (Washington, 1965).
94. Idem: Administration of Medical Care Services, Scientific Publication No. 129
(Washington, 1966), pp. 60-61.
95. PETERSON, O. L., et al: "An Analytical Study of North Carolina General
Practice", in Journal of Medical Education, Vol. 31, Part 2, Dec. 1956, pp. 1-165.
96. Idem, et al. : "What is Value for Money in Medical Care ? Experiences in England
and Wales, Sweden, and the U.S.A.", in The Lancet, No. 7493,1967, pp. 771-776.
97. QUERIDO, A. : The Efficiency of Medical Care (Leyden, H. E. Stenfert Kroese
N.V., 1963).
98. REED, Louis S. : "The Canadian Hospital Insurance Program", in Public Health
Reports, Vol. 77, pp. 97-106, Feb. 1962.
99. RIVERS, W. H. R. : Medicine, Magic, and Religion (London, Keegan Paul, 1924).
100. ROBINSON, Geoffrey A.: Hospital Administration (London, Butterworths, 1962).
101. ROEMER, Milton I.: Medical Care in Relation to Public Health : A Study of the
Relationships between Preventive and Curative Medicine throughout the World
(Geneva, World Health Organisation, 1956).
102. Idem : "Health Departments and Medical Care : A World Scanning", in American
Journal of Public Health, Vol. 50, Feb. 1960, pp. 154-160.
103. Idem: "How Medical Judgment Affects Hospital Admissions", in The Modern
Hospital, Apr. 1960.
104. Idem: "On Paying the Doctor and the Implications of Different Methods", in
Journal of Health and Human Behavior, Vol. 3, spring 1962, pp. 4-14.
105. Idem: Medical Care in Latin America, Studies and Monographs III (Organisation
of American States, Washington, 1963).
106. Idem: "Workmen's Compensation and National Health Insurance Programs
Abroad", in American Journal of Public Health, Vol. 55, Feb. 1965, pp. 209-214.
107. Idem: "A Coordinated Health Service and the Problem of Priorities", in Israel
Journal of Medical Sciences, Vol. 1, July 1965, pp. 643-647.
108. Idem: Hospital Systems in Different Nations (Geneva, World Health Organisation, Expert Committee on Hospital Administration, 1967), publication OMC/
WP/67.1.
109. Idem, and ARNOLD, L. M.: " H O W to Measure Patient-Centered Service", in
The Modern Hospital, Vol. 99, Aug. 1962, pp. 81-84.
110. Idem, and SHAIN, M.: Hospital Utilization under Insurance, Monograph No. 6
(Chicago, American Hospital Association, 1959).
111. ROSEN, George: The Specialization of Medicine (New York, Froben Press, 1944).

234

ORGANISATION OF MEDICAL CARE

112. Idem: A History of Public Health (New York, M D Publications, 1958).
113. ROSENFELD, Leonard S., and MAKOVER, Henry B.: The Rochester

114.
115.

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117.
118.
119.
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Regional

Hospital Council (Cambridge, Massachusetts, Harvard University Press, 1956).
SAND, René: The Advance to Social Medicine (London, Staples Press, 1952).
Scheme of Statistical Tablesfor the Practical Application of a Minimum Programme
of Social Security Statistics, prepared by the International Labour Office (Rome,
Tipografia del Senato, 1964). [Reprinted from the International Review on
Actuarial and Statistical Problems of Social Security, No. 8, 1962.]
SHAPIRO, S., et al. : "Further Observations on Prematurity and Perinatal Mortality
in a General Population and in the Population of a Prepaid Group Practice
Medical Care Plan", in American Journal of Public Health, Vol. 50, Sep. 1960,
pp. 1304-1317.
SHEPS, Mindel C : "Approaches to the Quality of Hospital Care", in Public
Health Reports, Vol. 70, Sep. 1955, pp. 877-886.
Idem: "The Clinical Value of Drugs: Sources of Evidence", in American Journal
of Public Health, Vol. 51, May 1961, pp. 647-664.
SIEGAL, Lewis J.: "Confidential or Privileged Communications", in Forensic
Medicine (New York and London, Grune and Stratton, 1963), pp. 38-59.
SIGERIST, Henry E.: "The History of Medical Licensure", in Journal of the
American Medical Association, Vol. 104, 30 Mar. 1935, p. 1060.
Idem: Medicine and Human Welfare (New Haven, Connecticut, Yale University
Press, 1941).
Idem: "From Bismarck to Beveridge: Development and Trends in Social Security
Legislation", in Bulletin of the History of Medicine, Vol. 8, Apr. 1943, pp. 365-388.

123. SIMMONS, Leo W., and WOLFF, Harold G.: Social Science in Medicine (New

York, Russell Sage Foundation, 1954), "Hospital Practice in Social Science
Perspective", pp. 170-193.
124. SMITH, Q. M . : "The Growing Shortage of Dentists in the United States", in
American Journal of Public Health, Vol. 48, Jan. 1958, pp. 38-45.
125. Social Security in Agriculture (prepared by the International Labour Office),
Report V, Inter-American Social Security Conference, Sixth Session, Mexico
City, 1960.
126. SOMERS, H. M., and SOMERS, A. R. : Doctors, Patients, and Health

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128.
129.
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131.
132.
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Insurance

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Special Research Committee: Health and Medical Care in New York City
(Cambridge, Massachusetts, Harvard University Press, 1957).
STACK, Maurice: "Forty Years in the Service of Social Security", in International
Social Security Review, Vol. XX, No. 1, 1967, pp. 3-56.
STERN, B. J.: American Medical Practice in the Perspective of a Century (New
York, Commonwealth Fund, 1945).
STEVENS, Rosemary: Medical Practice in Modern England (New Haven and
London, Yale University Press, 1966).
TAYLOR, Malcolm: "The National Hospital Insurance Act", in University of
Toronto Law Journal, Vol. 12, No. 2, 1958, pp. 300-303.
TAYLOR, Stephen: Good General Practice (London, Oxford University Press,
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TITMUSS, Richard M.: "The Relationship between Income Maintenance and
Social Service Benefits—An Overview", in International Social Security Review,
Vol. XX, No. 1, 1967, pp. 57-66.

APPENDIX

235

135. TRUSSELL, Ray E.: "The Quality of Medical Care as a Challenge to Public
Health", in American Journal of Public Health, Vol. 55, Feb. 1965, pp. 173-182.
136. United Nations, Department of Social Affairs: Services for the Physically
Handicapped (New York, 1954).
137. Idem, Interregional Meeting of Experts on Social Welfare Organisation and
Administration: Industrial Social Welfare Programmes (paper submitted by the
International Labour Office) (Geneva, 1967).
138. United States Government: Report of the National Advisory Commission on
Health Manpower (Washington, Government Printing Office, 1967).
139. United States Public Health Service : Health Manpower Source Book (Washington,
1964), Section 18, "Manpower in the 1960's".
140. United States Social Security Administration: Social Security Programs throughout the World, 1967 (Washington, Government Printing Office, 1967).
141. VERHOESTRAETE L. J.: "International Aspects of Maternal and Child Health",
in American Journal of Public Health, Vol. 46, Jan. 1956, pp. 19-29.
142. VIEL, Benjamín: La Medicina Socializada y su Aplicación en Gran Bretaña, Unión
Soviético y Chile (Santiago, Universidad de Chile, 1961).
143. WHITE, Kerr L., et al. : "International Comparisons of Medical Care Utilization",
in New England Journal of Medicine, Vol. 277,1967, pp. 516-522.
144. WINSLOW, C. E. A. : The Cost of Sickness and the Price of Health, Monograph
Series, No. 7 (Geneva, World Health Organisation, 1951).
145. World Health Organisation: Public Health Services in Belgium (Geneva, Nov.
1951) publication WHO/PHA/Panel/7.
146. Idem: Cumulative List of Proposed International Non-Proprietary Names for
Pharmaceutical Preparations (Geneva, 1962).
147. Idem: The Quality Control of Pharmaceutical Products (Report on a European
Technical Meeting), Technical Report Series No. 249 (Geneva, 1962).
148. Idem: World Health Statistics 1962 Annual, Vol. Ill, Health Personnel and Hospital Establishments (Geneva, 1966).
149. Idem: "Specialization: A Survey of Existing Legislation", in International
Digest of Health Legislation (Geneva), Vol. 8, 1957, p. 561.
150. Idem: "The Equivalence of Medical Qualifications and the Practice of Medicine",
in ibid., Vol. 18, 1967, p. 459.
151. Idem: Role of Hospitals in Programmes of Community Health Protection (First
Report of the Expert Committee on Organisation of Medical Care), Technical
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152. Idem: Role of Hospitals in Ambulatory and Domiciliary Medical Care (Second
Report of the Expert Committee on Organisation of Medical Care), Technical
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INDEX
A
Abuses, 104, 105, 108, 138, 140
Advertising of drugs, 99
Ambulatory specialist services, 94-102
Appeals, 132-134
See also Complaints by providers of
medical care
Attitudes of patients and providers of care
towards hospitalisation, 95-96
towards specialist care, 81
Auxiliary health workers in developing
countries, 16, 175
Ayurvedic practitioners in India, 173
B
Bed supply and bed/population ratios, 8283, 161-162
Belgian medical care scheme, 31
allied health services, 112-113
appeals, 132
confidentiality, 130
co-ordination, internal, 211-212
with national ministries, 215-216
cost sharing, 50, 51, 101, 204
cost-control measures, 200-201
dental services, 110-111
disability certification, 138
disease prevention measures, 123
drug distribution, 101
employment injury protection, 214
free choice of practitioner, 31, 51, 69-70,
78, 110, 112
general physician services, 50-52
geriatric services, 213
hospitalisation, 86
provision of hospitals, 159
quality surveillance, 183-184
referrals to specialist, 50
rural measures, 169
specialist services, 69-70, 76, 78
C

Canadian medical care schemes, 32
appeals, 133
bed/population ratio, 159-160
confidentiality, 130

co-ordination, internal, 214
with governmental authorities, 216
cost sharing, 204, 205
disease prevention measures, 124
drug distribution, 102
employment injury protection, 214
free choice of practitioner, 32,48,49, 70-71
general physician services, 48-49
geriatric services, 213
hospitalisation, 87-88, 94, 96
paramedical personnel, 114
personnel supply, statistical data, 148-149
private practice outside social security
legislation, 75
provision of hospitals, 159-160
quality surveillance, 186
referrals to specialist, 32, 70-71
rural measures, 168-169
specialist services, 70-71, 75-76
Capitation method of payment
definition, 28
evaluation of, 54
general physician care, 52-55
See also Remuneration methods
Cash benefits, abuse, problems of, 137,140
Ceylon, 199
Charitable schemes outside social security
legislation, 9
Chile, 23, 164
Chiropractors, 16
Colombia, hospital costs, 91
morbidity survey, 176
Communication among personnel, 30, 69,
71, 72, 73, 74, 94, 131, 182, 195-196
Complaints by providers of medical care,
135-136
Confidentiality and measures to protect,
129-132
Contingencies covered, 18-20
Control doctor, functions, 138-140, 184, 196197
Controls in drug industry, need of, 101,108,
109
Co-ordination, 209-226
Cost sharing
See under each country
Cost-control measures, 200-204
Costs, means of measurement, 38
hospitalisation, 85, 93-94, 96

238

ORGANISATION OF MEDICAL CARE

Coveraeg rates
Belgium, 31
Canada, 32
Ecuador, 33
Federal Republic of Germany, 31, 45
India, 33
Poland, 34
Tunisia, 34
United Kingdom, 32
Cuba, 23
Czechoslovakia, 199
D
Denial of services, 129, 135
See also Rights of participants
Dental care services, 110 ff.
Direct pattern, definition, 27, 30
Disability certification, see Medical certification
Distribution of health personnel, 146-156
rural, 165 ff.
Distribution of hospital beds, 159-162
Drug distribution
See Pharmaceutical products and appliances
Drug formularies, 107, 108, 192, 195
E
Ecuadorian medical care scheme, 33
appeals, 133-134
confidentiality, 130-131
co-ordination, government agencies, 217
internal, 214-215
private firms, 220
cost control, 202-203
cost sharing in dental services, 112, 205
dental services, 112
disability certification, 139,140
disease prevention measures, 125-126
drug distribution, 103-104
employment injury protection, 214
free choice of practitioner, 63
general physician services, 63-65
geriatric services, 213
hospital occupancy rate, 161
hospitalisation, 90-91, 94, 96
paramedical health services, 115
personnel supply, statistical data, 152-153
private practice outside social security
legislation, 64, 77
provision of hospitals, 161
quality surveillance, 191-192
referrals to specialist, 63
rural measures, 172
specialist services, 74, 77
Education of medical personnel, controls,
146, 181-182
in Ecuador, 152
India, 152
Poland, 150-151
Tunisia, 151

need for planning, 146, 154-156
Evaluation
criteria, 35-40
dental care, 115-117
general physician's care, 65-67
hospitalisation, 92-97
paramedical health services, 117
personnel qualifications, 194-197
pharmaceutical services, 106-109
specialist care, 78-81
Elective surgical procedures, 36, 49, 66, 79,
96,182
Eligibility, systems for establishing, 20-21
Employer-sponsored schemes, relationship
with social security schemes, 220-221
scope, 11
Employment injury protection, 213-215
Environmental hygiene, control measures,
121-122
See also Public health agencies
F
Fee-for-service method of payment, definition, 28
in general physician care, 45-49
See also Remuneration methods
Fee payment by third party, definition, 28
See also Remuneration methods
Fee schedule, application and effects, 44, 50,
51, 66, 75, 111, 113, 200
definition, 27-28
Fee splitting by specialists, 71, 79
Financial support of medical care schemes,
national planning policies, 221-223
rural areas, 167, 176-177
social insurance mechanism, 21-23, 30
studies by World Health Organisation,
198
Free choice of practitioner, See under each
country
Full-time salary method of payment, general
physician care, 55-63
definition, 29
See also Remuneration methods
G

General physician's care, 43 ff.
Geriatric services, 213
Germany, Federal Republic of, medical care
scheme, 31-32
appeals, 132-133
bed/population ratio, 159
confidentiality, 130
co-ordination, internal, 211-214
with governmental authorities, 215
cost control, 200-201
cost sharing, 204
dental services, 111
disability certification, 138, 139

239

INDEX
disease prevention measures, 124
drug distribution, 100-101
employment injury protection, 214
free choice of practitioner, 31-32, 46, 70,
111
general physician services, 45-48
geriatric services, 213
hospitalisation, 87
paramedical health services, 113-114
personnel supply, statistical data, 147-148
private practice outside social security
legislation, 45
provision of hospitals, 159
quality surveillance, 184-185
referrals to specialist, 31, 47
rural measures and miners' funds, 170
specialist services, 69-70, 76, 78
"Ghost surgery", 79
Great Britain, see United Kingdom medical
care scheme
Group practice, 12, 29, 48, 53-54, 71-72,
148, 182, 186, 187, 195
H
Health education of public, 122, 128, 221
Health personnel, supply, 165 ff.
Homeopaths, 16
Hospital administration, internal, 84-85
Hospital bed distribution, 159-163
Hospital construction, costs, 83, 157-158
Hospital/health service administrator, 85,
155, 208
Hospitalisation, 82 ff.
Hospital régionalisation, 83, 161-164
See also Rural medical services
Hospital size, 83, 95-96
I
Indian medical care scheme, 33-34
appeals, 134
bed/population ratio, 161
confidentiality, 131
co-ordination, internal, 214-215
with governmental authorities, 218-219
cost sharing, 205
cost-control measures, 203
dental services, 112
disability certification, 139-140
disease prevention measures, 126
drug distribution, 105-106
employment injury protection, 214-215
free choice of practitioner, 61
general physician services, 55, 60-62
hospitalisation, 91, 96
paramedical health services, 115
personnel supply, statistical data, 151-152
private practice outside social security
legislation, 60, 77-78
provision of hospitals, 161
quality surveillance, 192-193

rural measures, 173-174
specialist services, 73-74, 77-78
Indirect pattern, administrative system, 27-30
definition, 27
Influencing quality, 181 ff.
International movement of health personnel,
protected persons and reciprocity
arrangements, 146, 223-224
International organisations, role in promotion of health services, 225-226
Invalidity certification, see Medical certification
definition, 140
Israel, 278
L
Licensing laws, 146, 181, 196, 224
M
Medical audit technique for measuring
quality, 79, 183
Medical certification, procedures, disability
cases, 138-140
invalidity cases, 140-141
Medical secrecy, 129-132
disclosure hazards, 129
Methods of payment
capitation, 28, 52-55
fee for service, 28, 45-49
fee payment by third party, 28, 45-49
full-time salary, 30, 55-63
part-time salary, 30, 63-65
payment of hospital charges, 85-88,90,92
reimbursement of patient, 28, 50-52
See also Remuneration methods
Mexico, 192, 212
Miners' funds (Federal Republic of
Germany), 170
N
Naturopaths, 16
New Zealand, 23
Non-governmental health schemes organised
by private citizens, scope, 10-11, 219-221
relationships with social security schemes,
163, 219-221
Nurse, types and functions, 15-16
O

Old-age pensioners, 213
Ophthalmic/physical therapy service, 117
Osteopaths, 16
P
Panel system, definition, 28
Paramedical and auxiliary personnel, functions, 15-17, 44, 62, 110-117, 128, 175
supply, 146-156

240

ORGANISATION OF MEDICAL CARE

Part-time salary method of payment, general
physician's care
See Remuneration methods
Patents/copyrights in drug industry, 98-99
Payment of hospital charges, methods, 86-88
90, 91, 92
Personal disease prevention measures,
promotion, 122, 127-128
Personnel, supply, 146-156
training and selection, 145 ff.
Peru, 165, 212, 220
Polish medical care scheme, 34-35
appeals, 134
bed/population ratio, 162
confidentiality, 131
co-ordination, internal, 212-213
with public health authorities, 217-218
cost sharing, 90,103, 171, 205
dental services, 112
disease prevention measures, 126-127
drug distribution, 103
employment injury protection, 214
free choice of practitioner, 56
general physician services, 56-57
geriatric services, 213
hospitalisation, 90
medical certification, 139, 141
paramedical health services, 114-115
personnel supply, statistical data, 150-151
private practice outside social security
legislation, 57
provision of hospitals, 162-163
quality surveillance, 189-191
referrals to specialist, 56-57, 74
rural measures, 170-171
specialist services, 74, 77
Postgraduate education, 68, 146-147, 155,
182, 186, 191, 194, 196, 224
Prevention of dental decay, 116-117
disease, 9-10, 121 ff., 175-176
Private practice outside social insurance
legislation, general outline, 12
See also under each country
Professional associations, role in negotiations,
135-136, 201, 203
Professional freedom and quality controls,
37, 196-197
Public health agencies, relationships with
social security schemes, 215-219
Q
Quality, influences on, 181 ff.
R
Red Cross, 11,219
Referrals to specialist
See under each country
Reimbursement of patient
See Methods of payment
Remuneration methods, analysis, 27-30

dentist, 110-112, 116
general physician, 45 ff.
influencing medical performance, 30, 44,
47, 49, 52, 54, 65-66, 124, 195
pharmacist, 100-108
specialist, 69-78
Rights of participants, appeals, 132-134
confidentiality and measures to protect,
129-132
recourse to courts of law, 134-135
Rural medical services, disease prevention
measures, 175-176
financial support, 166-167, 176-177
influence of community development, 221
low rate of utilisation, 176
manpower supply problems, 174-175
miners' funds in the Federal Republic of
Germany, 170
mobile health units, 175
special national schemes, 168-174
S
Safeguards
See Rights of participants; Complaints by
providers of medical care
Self-medication, 99
Social security systems, definitions, 13, 165166
co-ordination, internal, 211-215
at international level, 223-226
with national planning schemes, 221-223
with other governmental services, 215219
with voluntary agencies, 219-221
evolution and scope, 11-12
Special government schemes, 9-10
Specialist care, 68 ff.
Statistical records, use for evaluation, 195-196
Sweden, 55, 67, 80, 92, 196
T

Technical quality of services, evaluation,
36, 181-183, 195-196
hospitals, 83, 88, 92-93, 95-96, 194
procedures for promoting/maintaining,
181 ff.
specialist care, 79-80
Traditional healers, 9, 26, 115, 172, 173
Transfer of patients between hospitals, 83
Transport, 175, 210
Tunisian medical care scheme, 34
appeals, 134
bed/population ratio, 161
co-ordination of services, 212, 213, 215,
217-218
cost control, 203
cost sharing, 205
dental care, 112
disease prevention measures, 126
drug distribution, 104

INDEX
employment injury protection, 215
free choice of practitioner, 58, 59
general physician care, 57-60
hospitalisation, 91-92
medical certification, 140, 141
personnel supply, statistical data, 151
private practice outside social security
legislation, 58, 60
provision of hospitals, 161
quality surveillance, 193
referrals to specialist, 58
rural measures, 173
specialist care, 73, 74, 77
U
United Kingdom medical care scheme, 32-33
appeals, 133
bed/population ratio, 161-162
co-ordination of services, 212,213,214,219
cost sharing, 32, 111-112, 204
cost-control measures, general physician's
services, 201
hospitals, 202
dental services, 111-112
disability certification, 138-139
disease prevention measures, 124-125
drug distribution, 101-102
employment injury protection, 214
free choice of practitioner, 52, 111, 114

241

general physician services, 52-55
geriatric services, 53, 213
hospital occupancy rates, 162
hospitalisation, 88-90
paramedical health services, 114
personnel supply, statistical data, 149
private practice outside social security
legislation, 54
provision of hospitals, 161-162
quality surveillance, general physician and
dental services, 186-187
specialist and hospital services, 188-189
referrals to specialist, 52
rural measures, 169-170
specialist services, 73, 74, 80
United States, 12, 55, 66, 72, 76, 79, 80, 81,
92, 94, 95, 134-135, 146, 147, 148, 149,
154, 199
U.S.S.R., 23, 57, 191, 224
V
Voluntary health insurance schemes outside
social insurance legislation, 11
W
World Health Organisation, studies on costs,
198
world-wide medical care, contribution to
improvement of, 225