Monday, Mar. 11, 1946

Blue Cross

The fastest-growing experiment in U.S. social medicine is the Blue Cross, a nationwide organization with the laudable purpose of helping members meet hospital bills in advance. Blue Cross operates through 3,500 hospitals in 44 states,* has more than 20,000,000 members.

Now Blue Cross has reached a milestone: more than half of Rhode Island's population is on its roster, the first state to achieve that mark. Eventually, Blue Cross hopes to have the whole U.S. enrolled.

Growing Pains. This phenomenal growth has all been within the last decade. It began one day in the late '20s in Dallas when 1,500 schoolteachers asked Baylor University Hospital if it would furnish three weeks prepaid care for a fixed, per-person payment of $6 a year. The hospital, scenting a dependable source of income, said yes.

The experiment prospered. In the first year few teachers got sick and the treasury had a balance. Glowing reports spread to hospitals in other cities, which set up similar plans. Then snags were encountered. Promoters, seeing opportunities for quick turnovers, set hospital competing against hospital. Bad guesses landed some of the plans in hot water. New York City's unit unthinkingly gave sweeping maternity benefits, soon found its roster swamped with young mothers who insisted on staying in the hospital a free full three weeks. In 1938, a flu epidemic finally put the unit in the red.

The Three Apostles. But generally the hospital plans were financially sound, and as they grew they prospered--thanks largely to three men. In St. Paul, a onetime schoolteacher named E. A. Van Steenwyk became a rampaging apostle of voluntary hospital insurance, tried to convert everyone he met, from elevator boys to bishops. By 1936 he had bullyragged 200,000 Twin Citizens into signing up. He went on to Philadelphia, became Blue Cross's model organizer.

About the same time, in Essex County, N.J., Frank Van Dyk, ex-hospital fund raiser, solved Blue Cross's worst handicap. He persuaded all the county's hospitals to join in one group, permit subscribers to go to any hospital they chose. This is now standard Blue Cross practice.

But all the hospital units were still separate entities. In 1938 a medical economist named Clarence Rufus Rorem, using the remnants of a Julius Rosenwald Fund grant, made a survey of the scattered hospitalization plans, sold them on forming a national organization. Rorem is now the $15,000-a-year national director.

Partial Answer. Today the bulk of Blue Cross enrollments come from big industries, some of which pay all or part of employe membership costs. Hospitals must meet minimum technical standards set by the American Hospital Association. Blue Cross's annual revenue (1945) : $125,000,000.

For a maximum of $24 a year, the average Blue Cross subscriber, or any member of his family, gets: 1) 30 days semiprivate care in the hospital; 2) an additional period (variable according to locale) at half cost; 3) all meals, including special diets; 4) operating room and anesthesia; 5) electrocardiograms, physical therapy and routine lab tests. Membership cards are honored throughout the U.S., and farther. One member recently collected a refund for an operation performed five years ago in Tokyo.

As an obvious and partial answer to socialized medicine, Blue Cross has worked well. As memberships increased, benefits have been raised. Some chapters have added plans to prepay doctor bills as well. All that can seemingly stop Blue Cross from snowballing still more is state-controlled medicine.

*Exceptions: Mississippi, Arkansas, Wyoming, Nevada.

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