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Chapter III - Progress of the National Insurance Act


It is most interesting to observe the progress made during the first year of the operation of National Insurance and to survey the actual progress with the criticism of its opponents well in mind.

In the first place the National Insurance Act was entirely experimental in this country. No precedents could be invoked. The Act was necessarily complex in its manifold details, although exceptionally wide powers were delegated to the Insurance Commissioners in the shape of administrative, supervisory and judicial functions. The Insurance Act directly touched the action of nearly one-third of the entire British population, or some fourteen millions of people. Not only was it enacted that weekly sums had to be paid by or on behalf of these people, but their employers had also to pay contributions and to perform weekly duties in respect of the collection of the same. Both employers and employees had specific and frequent duties laid upon them for active and individual observance. The central administration had to organise an entirely new department of work and procure and educate its staff. Advisory Committees had to be formed. Insurance Committees had to be set up for each district. Approved Societies had to be recognised and set in motion. A medical service had to be instituted for each part of the country. The provision of drugs and medicines had to be made. The public in general had to be informed and educated as to the provisions of a new and complicated Act of Parliament which cut in every direction into the life and duty of the nation. In addition to all the difficulties inherent in the sheer magnitude of this herculean task, destructive and querulous criticism as to the merits of the Act, and more particularly as to some of its details, had to be met. ,

An Act which should never have been allowed to drift into the arena of party politics became a bone of contention in the press and country, and every bye election during the past year was fought not on the merits of the Act as a great social engine of reform, but by party politicians exploiting any and every grievance that any section of the community felt with regard to any part of it. In addition to all the difficulties and opposition engendered by different causes, the medical profession for a variety of reasons avowed much dislike for and displayed violent opposition to the conditions appertaining to medical service under the Insurance Act. Resistance Leagues were formed to work against the Act and a malignant and persistent opposition press fulminated daily against National Insurance. The difficulties connected with starting the Act were so many and the obstacles were so great that many people believed that the Act would never start, or that if it did begin it would only be partially operative and that a feeble beginning would end in an ignominious and early break down. Prominent politicians publicly prophesied that the Act would never begin. Others said it would not start inside three years. Others pledged their reputations that it would be five years before half the insured population would be in Approved Societies. Many others said and believed that the deposit contributor class would consist of 10, 15, 20, 25 and up to 33% of the insured population.

No Act of Parliament was ever launched amidst so many difficulties and against such hostile and menacing opposition.

No Act of Parliament ever achieved such magnificent and instantaneous administrative success.

The Commissioners threw themselves with energy and ability into their gigantic task. Staffs were organised. Leaflets and circulars by the million were printed and circulated. Lectures were delivered to Societies and the public all over the country. Advisory Committees were formed. Insurance Committees were set up and quickly got to work. Societies of every kind were approved and started operations in the most energetic and fruitful fashion. Employers everywhere signified that they would obey the law, and many of them, while keenly critical of the provisions of the Act, evinced great interest in the work of the Approved Societies and the Public Health and Tuberculosis crusade under the Act. The mass of the people joined some kind of Approved Society, and only a very small proportion, for one reason or another, drifted into the Post Office. The doctors, induced probably by extra Government grants, took service under the Act. The rods of the Resistance Leagues withered up and those of the Act blossomed like Aaron’s. The National Insurance Act in its main great outlines had come to stay and its successful initiation is at once a triumphant testimony to the belief of the people in a national system of insurance against ill-health, and a tribute to the fruitful labours of those who are working for the prevention and cure of sickness, for the healing of the nation, and for deliverance from the scourge of the white plague. The common-sense and law-abiding instincts of the British people provided a colossal rebuke to the meaner spirits who guided an unscrupulous agitation against a great scheme for the national welfare.

To Mr. Lloyd George, as he watched the fate of his child, the months must have been anxious ones. But he won through in a great triumph. It was after the storm in his native woods that he sought for and gathered ample stores of firewood. And now, after the tempest of criticism, he is gathering- the gratitude of hundreds of his fellow citizens, secured as they never were before against all that menaces their health and consequently their comfort. He is almost in the enviable position of the man who makes the songs of a nation.

In connection with the initiation of the Act, it should be remembered that Sanatorium benefit was the only benefit which was immediately operative in July, 1912. During' the first year, in the United Kingdom, nearly 20,000 persons received the benefit of some kind of treatment in connection with Tuberculosis. More definite information for a portion of the year is contained in a table which is taken from official sources and which is incorporated in these pages.

Medical benefit began to operate in January, 1913, and since then on the average in the United Kingdom nearly 500.000 persons have received medical treatment and attention every week.

Sickness benefit started in January, 1913, and on the average in round figures 270,000 persons have received weekly sick pay in the United Kingdom.

Maternity benefit also began in January, 1913, and nearly 18.000 maternity benefits have been paid weekly.

In six months a sum approaching 2,500,000 has been paid in treating insured persons who were receiving medical benefit. In the same period nearly two-and-a-half millions have been disbursed in payment of sickness claims. In half a year nearly half a million of maternity benefit has been paid.

PROGRESS OF THE ACT IN SCOTLAND.

The following details are taken from official sources of the actual progress made in initiating the National Insurance Act in Scotland :—

Sale of Stamps.

The amount received from the sale of health insurance stamps in Scotland up to the 11th July was ;£2,040,000. To these receipts there would fall to be added Government grants both special and those of two-ninths (or one-fourth) of the cost of benefits and administration.

Expenditure upon Benefits, etc.

The Amount advanced by the Scottish Insurance Commissioners to Approved Societies up to 15th July was ,£710,604, of which ^'4-16,810 was for benefit and ^263,794 for administration. Advances to Insurance Committees totalled ^'322,992. The amount paid in respect of claims by deposit contributors up to the same date was £377 in sickness and ^85 in maternity benefit. It will be observed from the foregoing figures that the average claim for sickness and maternity benefit by deposit contributors has been only 3d. per head, a shrewd comment on those critics who promised us a welter of poor lives in this section of the scheme.

IV. INSURANCE COMMITTEES IN SCOTLAND.

The number of Committees and their aggregate membership may be summarised as follows :—

The number of burgh Committees is now twenty-five, owing to the Committees for the burghs of Govan and Partick having ceased to exist in consequence of the recent extension of the boundaries of the city of Glasgow.

One result of the constitution of Insurance Committees is a considerable accession to the number of persons interested in the local administration of the country. To the extent of one-fifth the members were already members 'of Town and County Councils. But, as regards the rest (2,000), it may be assumed that a large proportion had not previously served on any public local bodies.

V. MEDICAL BENEFIT IN SCOTLAND. Formation of Panels.

On the 15th January, 1913, when medical benefit came into operation, there were local difficulties still remaining for adjustment, to which reference will be made; but in Scotland generally the panels constituted were 'adequate, and were capable of affording competent medical attendance and treatment to insured persons.

Further additions were made to the members on the medical lists during the early weeks and months of 1913. The following table shows the number of practitioners on Scottish Panels as at March, 1913, together with the average number of insured persons per practitioner for each Insurance Committee.

Practitioners on Medical Lists, Scotland, at March, 1913:—



As regards the number of persons receiving- attendance from each insurance service practitioner, in five Counties there

are more than 500 insured persons per practitioner, and in nine more than 100. Among- these, the highest number is in Linlithgow, with an average of 737; the next in order is Fife, with an average of 612. The remaining 22 county areas have 400 insured persons or less per panel practitioner. Orkney, Kincardine, and Inverness are all below 200.

In the burgh group the majority of Burghs—21 in number —show between 400 and 1,100 insured persons to each insurance service practitioner. Two burghs show less than -100: Rutherglen with 255 on an average, and Wishaw with 274. Three burghs show more than 1,000, namely Clydebank with 1,006, Paisley with 1,231, and Dundee with 1,638 insured persons, respectively, per practitioner on the medical list.

Mileage.

Considerable discussion has been aroused in Scotland among medical practitioners in country districts as to their relative disabilities as compared with urban practitioners, more especially the difficulty caused by sparseness of population and deficiency of means of locomotion. It is now admitted that the advent of the motor car has solved many of these difficulties, although some expense is entailed by the upkeep of a car. The following passage on mileage is taken from the Report of the Scottish Insurance Commission :—

“Mileage is the distance which has to be travelled by doctors in order to visit their patients. It is that which has to be annihilated in order to place doctors who are remote from insured persons on an equality with those who live closer by them.”

The question of mileage is not one of distance merely, though the distances travelled by doctors in Scotland are often remarkable. It involves such further consideration as deficiency or absence of roads, crossing of moors or mountains, and frequently passage by water. It is closely related to economic conditions, especially in the Highlands, of which it may be said that wherever the doctor’s journeys are longest and most arduous, the means to lighten the burdens of travel will be found to be least available.

At a Conference held on 25th and 26th November, 1912, between the Chancellor of the Exchequer and a deputation from the British Medical Association, the subject of financial provision for mileage, over and above the redistribution permitted under the Medical Benefit Regulations, was put forward for consideration. It was recognised by the Government that in some parts of the country which are exceptionally sparsely populated, and in which there are special difficulties of access (such as mountain, bog, and moorland), practitioners would be placed at special disadvantage, and it was decided to ask Parliament to provide a special fund to be applied by the Insurance Commissioners in making increased provision for such areas.

Thereafter, at a meeting on 3rd January, 1913, which took place in London between the Chancellor of the Exchequer, the Commission, and the Chairmen and Clerks of the Scottish County Insurance Committees the subject was again under discussion. A small Committee was formed consisting of the Chairman of Renfrew County Insurance Committee, and the Vice Chairman and Clerk of Lanark County Insurance Committee, to procure from the various Scottish County Insurance Committees information which might be of value in dealing with the question. Schedules of enquiry were drawn up and issued by the small Committee through Clerks of County Insurance Committees to doctors in County areas throughout Scotland. The doctors were asked to furnish on these schedules an approximate statement of the miles which would require to be travelled by them, the miles being measured from the nearest available practitioner on the panel. Miles were to be regarded as of two varieties, normal miles, that is to say miles beyond three measured along a driving road ; and special miles, that is to say miles beyond three of any of which a quarter or more could not be so travelled, but only on foot, as on hill or moor, and exceptionally by ferry. These returns were duly furnished, and, though somewhat approximate and in a number of cases incomplete, they proved of considerable service by indicating the numerical scope of the problem as it presented itself in Scotland.

Lowlands.

Apart from the Highlands and Islands, for the sparsely populated rural areas of Great Britain a mileage fund of p£50,000 has been voted. The share of this fund which will fall to Scotland, excluding the Highlands and Islands, is ^1G,000. While the Highlands, for the purposes of the Medical Service Committee were properly demarcated from the Lowlands on the ground of the straitened circumstances of the people, it would nevertheless be inaccurate to conclude that in sparseness of population, ruggedness of contour, want of railway communication, difficulty of road transit, or rigour of climate the Highlands cannot be matched by certain portions of the area which, for convenience of reference, is here entitled the Lowlands. The eastern extremity of the Grampian Range intrudes into Banffshire and Aberdeen, and the highest summit but one in the British Isles is situated in the latter county. The rigorous winters at Tomintoul are well known. Strathdon, where the doctor has to travel by sleigh for several months each year has already been referred to. The conditions prevailing in Arran and in the Border and Southern Counties have been under the notice of the Commission. The whole Lowland area outside the towns is essentially sparsely peopled.

Precise details remain to be ascertained. It is the purpose of the Commission to take immediate steps to investigate Lowland mileage by an expeditious method. The object of the enquiry will be to ascertain a basis for distribution of the grant with a view to its apportionment among individual doctors as speedily as possible.

By Regulation 50 of the Medical Benefit Regulations, an Insurance Committee may, if they think fit, make arrangements for a payment to practitioners on the panel in respect of mileage, such payment, by Regulation *10 (3), being deducted from the Panel Fund for disbursement among doctors who attend insured persons resident at such distance as may be determined. The financial procedure involved, though nominally a deduction, is in effect a redistribution of a portion of the Fund for the benefit of medical men who have distances to travel.

The provision referred to, which is in addition to, and not in place of, the subsidy which will be payable from the Treasury Grant for mileage, was adopted by agreement between the Insurance Committees of Lanarkshire and Midlothian and the medical practitioners of these Counties. It was decided that the sum of 2d. per insured person per annum should be reserved to form a County Mileage Fund. It is intended that the rate of payment shall, as far as practicable, be Is. Gd. per mile over three from the doctor’s residence, measured along a driving road.

HIGHLANDS AND ISLANDS MEDICAL SERVICE COMMITTEE.

In many respects including National Insurance the Highlands and Islands of Scotland constitute one of the most difficult administrative problems of the whole of the United Kingdom. It should always be borne in mind that a relatively small proportion of the Highland population is employed in the sense of the Act and that a combination of difficulties exist which is not to be found elsewhere in Great Britain. The following from the Scottish Report presents a good idea of the problem :—

“On the 11th July last the Highlands and Islands Medical Service Committee (of which the Deputy Chairman of the Commission was a member and one of the Inspectors the Secretary) was appointed to investigate conditions in the Highlands and Islands. In the absence of a definite indication in the terms of reference as to the exact area to which the enquiry was to be confined, the Committee determined to take evidence from the counties of Argyll, Caithness, Inverness, Ross and Cromarty, Sutherland, Orkney and Shetland, and from the Highlands of Perthshire.

“In the Committee’s Report, which was submitted on the 24th December last, the circumstances which made medical provision in the Highlands and Islands a special problem were stated to be as follows :—

(a) That on account of the sparseness of the population in some districts, and its irregular distribution in others, the configuration of the country, and the climatic conditions, medical attendance is uncertain for the people, exceptionally onerous or even hazardous for the doctor, and generally inadequate.

(b) That the straitened circumstances of the people preclude adequate remuneration of medical attendance by fees alone.

(c) That the insanitary! conditions of life prevailing in some parts render medical treatment difficult and largely ineffective.

(d) That in default or disregard of skilled medical advice and nursing, recourse is not infrequently had to primitive and ignorant methods of treating illness and disease. These methods are a source of danger, especially in maternity.

(e) That there is danger of physical deterioration from defective dieting, and more markedly in the infant and juvenile population.

(f) That rural depopulation is not a feature of the whole area of the remit, and thatl even where notable, the necessity for medical provision is not materially reduced.

(g) That the local rates, from which the doctors’ income is mainly derived, are in many cases overburdened.

(h) That owing to the industrial conditions the Insurance Act is only very partially operative.

(i) That, in short, the combination of social, economic, and geographical difficulties in the Highlands and Islands—not to be found elsewhere in Scotland—demand exceptional treatment.

“The quality of the country is specifically referred to as rugged, roadless and mountainous. Where not composed of islands, it is described as very largely peninsular on the seaboard, and broken up inland by lakes and rivers.

“Adverting to the Insurance Medical Service, the Committee state that they are convinced that the industrial conditions of the area are such as to make the provisions of the Insurance Act less operative than in other parts of Scotland, and they foresee considerable trouble in providing medical benefit for fully-insured persons far removed from a medical centre. They express the view that special subvention for the insured would appear to be necessary, and that the provision of medical attendance for their dependants is also a matter requiring urgent consideration. It was clear to the Committee that, having regard to the economic conditions prevailing in the Highlands and Islands, the extent to which medical services are at present subsidised from Imperial funds is quite inadequate, and that as local resources are in many parishes already well nigh, if not wholly, exhausted, any general amelioration of the existing medical service cannot be achieved without a further and a more substantial subsidy.

“In subvention of the Insurance Medical Service there was voted in the Special Grant-in-aid to Scotland for 1912-13 the sum of ;£l0,000 for the Highlands and Islands for mileage and other special charges. In order to make this money available at the earliest possible moment to medical men in the Highlands and Islands the Commission, through their Inspectors, are now engaged in obtaining data to enable them to prepare a scheme for its distribution on an equitable basis between the County Insurance Committees concerned. For the purpose of enquiry, the provisional standard is a three-mile limit from the residence of the nearest available insurance service practitioner, but all sea journeys are being noted, whether within or without three miles. The basis of distribution to medical men within counties will be determined as soon as possible after the enquiry is completed.

“It should be observed that the ^10,000 is not for mileage only, but for special charges also. These terms of the Grant, provided the fund suffices, will give an opportunity to treat cases of exceptional hardship with the consideration which they may be found to merit. Cases of difficulty and danger in the medical service of the Highlands and Islands have come under the observation of the Commission.”

It only remains to be added in this connection that as a result of the National Insurance Act and the investigations and recommendations of the Dewar Committee, an Act has been passed to provide a special parliamentary grant of ^"42,000 a year to aid in improving the medical service in the Highlands and Islands, and a special Board has been constituted to administer this fund and to administer schemes for the improvement of the medical service in the district concerned. Great hopes are entertained of a much needed improvement in the medical service of the Highlands and Islands of the North of Scotland.

CHEMISTS.

The provision and supply of proper and sufficient drugs and medicines and prescribed appliances to insured persons is one of the duties of every Insurance Committee.

No difficulty was experienced in Scotland in arranging for this supply. Scotland has been fortunate in having in the pharmacy profession an excellently trained service who have deservedly won high reputation for skill and integrity. Some attempts have been made in various quarters to suggest that some Scottish chemists were supplying inferior drugs and medicines for the use of insured persons. Not a shadow of proof was ever forthcoming for a charge which is not now heard. On the contrary we have direct testimony that Scottish chemists continue to dispense drugs and medicines of the same high quality as they formerly supplied, and indeed as they were bound to supply according to agreement and the law of the land. The following- statement of the position of chemists is taken from the Scottish Commission’s Report:—

“The position of chemists in Scotland with respect to service under the Act is believed to differ in some degree from that of their professional brethren in England. It is understood that in the past throughout England generally the supply of drugs to patients by medical men has been the prevailing custom, and in certain districts the almost unbroken rule, not only in country places where no pharmacist was established, but also in cities where the services of chemists; could readily have been secured. In Scotland, on the other hand, while doctors in remote and solitary places have dispensed their own medicines, they have done so under the constraint of circumstance, and the great majority of medical men in towns and other populous areas have been content to leave the work to chemists.”

It is understood that in England, as contrasted with Scotland, the amount of medicine consumed per patient is higher; that the period for which mixtures are prescribed to last is shorter, leading to more frequent repeats and consequent dispensing fees; and that the proportion of mixtures, which are quickly made up, to such preparations as pills and powders, which take some time, is very considerably greater.

So it has come to pass that the Act, by drawing a line of separation between medical treatment and the provision of drugs, has directed into the hands of English chemists an. increased volume of trade, without conferring upon Scottish chemists an equal or corresponding advantage. It has been alleged by pharmacists in Scotland generally that the Act cannot increase their custom ; and on this ground, it is presumed, they have been disposed to praise the tariff of charges somewhat faintly.

The Commission were informed that investigations made by Pharmaceutical Committees and others in important Scottish centres appeared to show that the tariff of prices was likely to leave the Drug Fund of the areas concerned at the close of the year with an appreciable balance to carry forward. A supplement to the tariff was submitted by the Secretary of the

Pharmaceutical Standing' Committee. The Commission let it be known that they were prepared to approve the supplement, which rectifies certain inaccuracies. They also said that, if at the end of twelve months it should be found that there was an unexpended balance in the Drug Fund sufficient to justify an additional proportionate retrospective payment not exceeding 10°/o on the amount of the accounts of individual chemists, they would consent to such additional payment being made as might be approved by themselves and the Insurance Committee.

In reply to a request that they would indicate their readiness to consider a stated case in regard to an increase in dispensing fees, a general revision of tariff prices, and payment for postage or carriage of medicines for insured persons in rural areas, the Commission explained that while they would, at any time, be glad to give careful consideration to such representations, they would deprecate any amendments being made until a year’s experience of the working of the tariff has been obtained. They assumed that any proposals as regards revision of tariff prices had reference only to an annual revision as at the date of the agreements, and not to a scheme of adjustment of prices to follow market fluctuations. Any suggestions on the last-mentioned lines they would deem impracticable.

Representations were made to the Commissioners by the Pharmaceutical Standing Committee (Scotland) with respect to Regulation 30 (1) of the Medical Benefit Regulations, in so far as it permits doctors to claim the right to supply medicines to insured persons residing in a rural area more than a mile from the place of business of a chemist who is on the list of an Insurance Committee. The Standing Committee expressed the view that the Regulation, in so far as it gives such permission, should be repealed. The Commission stated, in reply, that they would afford every assistance to the Pharmaceutical Standing Committee in submitting the special position in Scotland and in explaining the difficulties which have been raised there by this provision of the Regulation.

The procedure for dealing with drugs, as opposed to appliances, in connection with pharmaceutical service under the Act, was the occasion of frequent enquiries addressed to the Commission.

By Regulation ‘28 of the Medical Benefit Regulations, the Drug Tariff is the list of prices for drugs ordinarily supplied and for prescribed appliances. There are other drugs not on the Tariff, which may be ordered also, and the manner of calculating payment for these is provided for in the Regulations ; but there are no appliances permitted to be provided other than the prescribed appliances, which by Regulation 27 are stated to be the appliances mentioned in the Second Schedule.

The difficulties of chemists in handling prescriptions ordered under this head were appreciably increased by the circumstance that the tariff of prices of appliances put forward by the Pharmaceutical Standing Committee was not co-extensive with the Schedule. Splints, for example, are named in the Schedule simpliciter; leg splints, therefore, may be ordered though arm splints only are priced in the Tariff.

These considerations ruled the decision as to the correct form to be used for ordering. Prescriptions for drugs were to be entered on the green or pink form, respectively, according as their component substances were or were not all included among drugs priced in the Tariff; but all appliances permitted to be ordered, whether priced in the Tariff or not, were to be ordered on green forms. Appliances not included in the Second Schedule to the Regulations were not to be ordered at all.

During the early days of the operation of Medical Benefit, statements were circulated in certain quarters to the effect that the pharmaceutical service of the Act was such that insured persons must necessarily be supplied with drugs of an inferior quality.

This statement is incorrect. The conditions of the agreements entered into by chemists with Insurance Committees expressly stipulate that all drugs shall be of good quality, and any chemist failing to observe the terms of his undertaking to the detriment of the service will be liable to have the question of his continuance upon the list of chemists reported upon by an Enquiry Committee appointed by the Commission.

Drugs duly ordered are to be supplied to the insured persons by the chemist, the cost being defrayed out of the Drug Fund at the prices set forth in the Tariff. It is important to note that the Drug Tariff is not an exhaustive list of the drugs which may be ordered for insured persons : it is a list, prepared for the sake of convenience, showing the prices agreed to be paid by an Insurance Committee for certain drugs if ordered. Drugs which are not included in the Tariff, but which the doctor may consider necessary for the proper treatment of the case are ordered in a special manner, and their cost also forms a charge upon the Drug Fund :—

The number of chemists on the lists of Insurance Committees in March, 1913, is shown in the following table:—


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