Letters of the same import were received from other employers in New Hampshire who had refused to accept the act.

The commission found that employers, in discussing this question, generally made the argument that compensation acts are based upon the theory that the industry should be charged with the cost of industrial accidents, regardless of fault, and that if negligence of the injured workman is to be ignored and he is to recover compensation regardless of his acts, then likewise the employer's negligence, which in modern industry is generally the negligence of his servants and agents, should also be ignored.

The commission found that as employees became accustomed to the workings of compensation acts and realized that they were real and substantial and that payments were made promptly, they lost interest in the question of employers' liability laws; they generally expressed themselves as satisfied with a good compensation act and did not care for the option to sue under the liability law. While this was not always the case, it is rapidly becoming the dominating thought. In fact, the evolution of this legislation tends toward making the compensation act an exclusive remedy. While the early acts gave the employee an option after an accident as to which remedy he would pursue, the later statutes took this option away from him except in special cases. In these they require that he shall elect before the accident whether he will accept the compensation act, and, having accepted it, he is to be deprived of any other remedy except under certain specified circumstances. The latest New York statute not only pays a more liberal compensation than any other act so far adopted but makes workmen's compensation the exclusive remedy.

XVIII. MEDICAL AND SURGICAL AID.

Prior to the enactment of workmen's compensation laws, employers were not required to pay for the medical services furnished to injured employees except as included by the jury in fixing the damages in the small number of cases in which the employees recovered damages. Consequently, not only were employees often neglected at the time that they needed medical services but their physicians received remuneration only as the employee was able to pay.

Under all the compensation acts, except those of Washington and New Hampshire, employers are required to furnish medical service, although in Arizona, Kansas, Maryland, and Nevada pay for medical services is required only to cover the last illness in death cases. In some States the statute limits the services as to amount and in others as to length of time. That the employee is entitled to this allowance is generally conceded, and in many cases the employers and insurance companies are paying a larger amount than that fixed by the statute. As a rule, this additional expenditure is made for the purpose of facilitating the recovery of the workman so as to reduce the amount payable as compensation.

The cost of medical services, being larger than was anticipated when the statutes were first enacted, it has become an important item of expenditure.

According to the last report of the Employers' Mutual Liability Insurance Co. of Wisconsin, it has paid out and become liable to pay for medical services about 50 per cent of the amount that it has paid

to injured employees. The Industrial Commission of Wisconsin also states in its second annual report that-

the cost of medical attendance, including hospital and nurse hire, has averaged about 50 per cent of the indemnity that has been paid to injured employees. On a basis of 50 per cent of the indemnity for medical attendance, there has been paid out during the year ending July 1, 1913, for medical, surgical, and hospital treatment $79,594.46, covering about 45 per cent of the industrial accidents of that State which come under workmen's compensation.

From this it would appear that for each dollar paid to an injured workman in compensation an additional 50 cents is paid to the doctor for medical attendance.

According to statements made to us by different insurance companies, the amount paid by them for medical services as compared with the amount paid for compensation varies greatly, though the experience in some States has not been large enough to give a true average. For Massachusetts, one company reports that on a wide experience the amount for medical expense is 43.8 per cent of the amount paid to workmen; another company gives 29 per cent and still another 40 per cent. Naturally, in a State paying a high rate of compensation, the proportion for medical attendance will be less, and likewise in a State having a one-week waiting period.

In considering the medical cost and the variations between the different percentages here given, it must be borne in mind that it is possible that in some of the reports given this commission there have not been fully considered the amounts to be paid as compensation in the future for accidents extending beyond the year covered. If this be true, the proportion of medical cost during the first year may be greater than it will be in succeeding years.

A large insurance company which reported to this commission a lower cost of medical service than that contained in other reports specifically stated that its figures were made

upon the basis of the amounts paid, plus the amounts which are going to be paid as the result of accidents. The amounts have not been simply those which we have paid out for medical attention and for compensation to workmen, as this would lose sight of the amounts still to be paid, both for medical attention and compensation to workmen on accidents already reported.

This company reported to the commission that the amount paid for medical services in Massachusetts was 29 per cent, Illinois 28, and New Jersey 20, and in discussing the question further said:

Although Massachusetts shows a percentage slightly larger than the figures of Illinois, the figures do not show that the medical expenses have been greater in Massachusetts-they are simply greater in relation to the scale of compensation paid to the workmen. Our experience under the other compensation acts has not developed sufficiently to date to warrant our issuing conclusive figures. We believe, however. that the above percentages are upon a reliable basis, and we trust that they will be of service to you. We might add that our experience has shown that medical cost has increased more rapidly than compensation cost during the operation of an act. Your attention is called to the fact that the various compensation laws provide a high limit for medical attention, also a considerable period of time. Again, the medical attention covers a much larger number of cases than does the compensation, owing to the exclusion of one or two weeks. These conditions produce the large amount paid for doctors' services. The average cost per case in Illinois is $5.90, Massachusetts $5.30, and New Jersey $2.79. The New Jersey amount is low owing to the fact that this cost was low at the commencement of writing compensation insurance. The cost at this time is nearly as high as that of Massachusetts and Illinois. The manager of the claim department tells me that he has no reason to believe that the doctors are making excessive charges This company has never favored the doctors'

* * *

*

*

*

contract whereby a company furnishes a doctor for every district. We have uniformly permitted the employer or the injured employee to select his own doctor, and find that has proven the most satisfactory way to handle the matter.

Another insurance company writes that it has paid out in Massachusetts $9,662.19 for compensation and $3,930.59 for medical services, a ratio of medical services to compensation of 40.6 per cent. The same company has paid out in Illinois $33,568.24 for compensation and $13,569.84 for medical services, the ratio being 40.4. The large percentage of cost of medical services is in part accounted for by the fact that as many of the disabilities do not last longer than two weeks the workmen are not entitled to compensation, while all of the injured are entitled to a doctor's bill.

For

The experience of a shoe manufacturing concern in Boston illustrates this phase of compensation. Of 11 accidents occurring in a plant of this company prior to July 31, 1913, only 2 required the payment of compensation, while all involved a medical bill. these 11 accidents the total amount of compensation was $28.93, while the total for medical services was $84.50. The experience of this shoe company, while illustrating the large number of accidents in some industries which require medical expense but do not involve compensation, also is suggestive of the extent to which the amount of compensation would be increased if it were not for the requirements of the law which compel the employer to furnish efficient medical attention. Out of these 11 cases a large portion involved blood poisoning, and if they had not been given proper medical attention at least some of the number would have suffered serious losses.

The reports of the insurance companies to the Massachusetts Industrial Accident Board show that out of the 41,256 accidents for the year ending June 30, 1913, 26,609 required medical services without compensation; 10,827 entailed both medical services and compensation, and the remaining 3,820 compensation without cost for medical

services.

However, an impression prevails that costs of medical services are excessively high and that physicians, knowing that bills are to be paid either by employers or insurance companies, charge rates higher than they would if their services were to be paid for by the employees for whose benefit they are rendered.

In Michigan the industrial accident board instituted an inquiry involving six industries and 19,295 employees and covering 3,757 accidents, and from this it would appear that the amount of money paid for medical and hospital attention was $8,032.03, and the amount paid to the employees and their families for compensation was $15,588.55.

The subject is a delicate one, and the commission found what it considered a tendency on the part of both employers and insurance companies to avoid antagonizing the members of the medical profession, whose expert knowledge is frequently a controlling factor in determining the extent of personal injuries. The medical profession has its professional standards which it desires to maintain and with which parties concerned are loath to interfere. There is generally an objection in the profession to working upon a salary or under a contract system, while many employers feel that by some such system the cost of medical attention could be reduced. There is a strong tendency to respect the physician and his standards.

30003--S. Doc. 419, 63-2- -3

An insurance representative in one of the Western States said to the commission:

The old-established hospitals have not made any increase in their rates, but there have been a number of industrial hospitals, so called, which are private enterprises conducted solely for the purpose of taking care of cases of this kind, which have charged fees that are higher than the fees charged by the older established hospitals, and if they have not done that they have charged the same fees and given service that was not as good. We have made it a rule that wherever we find such a hospital we will do all that we can to prevent a man from going to it. We find that, with the doctors, there are certain ones who overcharge. We make it a rule that we will recommend to each risk one or two doctors to whom they may send their men. We usually let them pick the doctors. We do not make any rule requiring the men to go to a particular doctor. We simply recommend doctors who agree to a fair schedule of fees. If a man has a doctor who happens to be a family doctor, we pay the bill unless it is excessive. If it is excessive, we submit it to the industrial accident board which has the power to rule on the reasonableness of the medical charge. The board has requested that we do so.

Others who appeared before the commission suggested that it would be a good move to have a provision in the law requiring that doctors' bills be referred to the State industrial board for consideration.

The Industrial Accident Board of Massachusetts, realizing the seriousness of the situation, held a conference in March, 1913, with the representatives of the medical societies of the Commonwealth of Massachusetts, which resulted in the appointment of an advisory committee and the adoption by that committee of certain recommendations referred to in Appendix No. 5. Under the law of Massachusetts the employer or the insurance company has the right to select a physician, otherwise neither is required to pay for the services, but through the cooperation of the industrial accident board there has been a working agreement with the insurance companies whereby the employee may select his own physician.

At the conference the chairman of the Massachusetts board, in presenting the matter to the physicians present, in the course of his remarks, said:

* *

If I understand the law correctly in these matters, you have no right whatever to charge, simply because there is an insurance company in the case, any more than you would charge the injured man if he came to your office for your personal treatment and assistance. Remember that; because the continuance of this working agreement depends, as I have said, entirely upon you. This is all a question of cost. The insurance companies at first objected strenuously to this agreement. They said they could not do business if they could not select their own doctors, but the industrial accident board asked them to try it out, and so far it is working satisfactorily. * Some bills that have been refused payment by insurance companies have been fair, but others are exactly the contrary. When a young doctor, living and seeking practice in the neighborhood of the working poor, asks $5 a visit, sometimes making two visits a day, the answer is obvious. When doctors visit patients with a crush of the nerve of the thumb, or a lacerated wound, and claim they make three visits a day because of the necessity of administering opiates, what is the answer? These, however, are only the common everyday troubles with the medical features of the workmen's compensation act. Workmen's compensation laws which aim to compensate injured employees have a more far-reaching object in view, and that is the prevention of industrial accidents. The board is anxious that the medical profession should be properly compensated and not be deprived of any professional privileges, and especially that this great movement may be put on a firm and just foundation, and for these purposes calls this meeting and seeks your cooperation. The physicians of Massachusetts will receive at least five times as much in fees from the industrial accident board through the insurance companies as was received by them under the employers' liability act. The insurance association and the Government, if farsighted, will not content themselves simply with the cure of the ills that are found to exist, but will aim at preventing them and getting the injured person back to work.

If the insurance company has not a voice, or only a minor voice, in the selection of medical treatment, will its opportunity and endeavor in the direction of prevention be seriously hampered?,

The conference was attended by the leading physicians of the State, at which one of the physicians said:

It seems to me unfortunate that a law as good as this could not be carried on with cooperation, and that the medical profession should not be in a position to do its best most generously. In essence, we come here to-day to offer to give the board a committee to cooperate with it. The Massachusetts Medical Society and the Homeopathic Society stand ready to help. * ** I think the feeling of the profession, right or wrong, is that regarding the question of choice of a physician, the danger is on the side of the injured man-that he may get inefficient care. The injured man is going to make a great many mistakes, and not always get the best, but he will not knowingly seek cheap or unskilled aid.

Something of the enormous amount of hospital work performed by physicians and surgeons, a great deal charity work, was referred to by one of the physicians, who stated that:

There are upward of 80 hospitals and dispensaries in Boston for the treatment of the sick and injured. More than 300,000 persons receive treatment annually in these institutions. It has been estimated that at the prevailing rates for such services in private practice the labor rendered to these people every year by the medical profession would amount to between $8,000,000 and $10,000,000. The medical profession naturally feels that this charity work is overdone; that a certain proportion of these charity patients are well able to pay the doctor for his services; and that in view of the enormous amount of work necessary for the proper care of the worthy poor, they should not be required to serve those able to pay for treatment, including the members of insurance companies or other benefit associations, without compensation.

Another physician said:

I believe that the insurance companies are imposed upon in many instances, but there are honest men in the medical profession. All we want is fair remuneration; precisely what we would charge that individual if he were paying the bill himself. We are perfectly satisfied with that.

Another physician presented another phase of the situation:

There seems to be a great stress laid upon the percentage paid the doctors. The board seems to think that the new law pays the doctors a great amount. Now, if we were paying compensation to well people, we could easily understand why that criticism would be just, but we are paying compensation to a man more in need of medical service than he is of bread. If a man has a septic hand, it may be a question of life or death; if a man has a broken leg, it is a question perhaps of his future earnings. This is a social law that is going to do justice to the worker. It is going to place the whole cost of accidents in the right place. Any ruling that is going to lessen our earnings is not going to fulfill that theory.

The argument presented at the conference that the employees would get better service by having the privilege of selecting a physician was not always approved by employers whom this commission met at their various conferences. It was quite generally stated that the employee, except where he had a regular family physician, was indifferent as to the physician who should attend him, quite frequently was unacquainted with the physicians in the community and generally at the time of his accident was in no condition to give it consideration. That, on the other hand, the employer, if given the right to make the selection, would not select a cheap or inefficient physician, but would be interested from a financial point of view in getting good medical aid, knowing that the amount of compensation that he must pay the injured one would be increased if recovery was delayed or the extent of the injuries enhanced by poor