income for personal health services than the same income group among the uninsured. When the distribution of total "out of pocket" charges for personal health services and insurance premiums as a percentage of incomes of all families are calculated, 2 percent of the families, or approximately 1 million families, incurred charges of 50 percent or more of their annual incomes, among whom approximately 500,000 families incurred charges equaling or exceeding 100 percent of their incomes. (See table 15, appendix.) This table provides some tangible data for a definition of "catastrophe" wherever one wishes to draw the line. 3. Proportions of family charges for personal health services paid by insurance A test of the adequacy of health-insurance benefits is the degree to which they cover the incurred charges. For all services 21 percent of the families had received some service for which insurance benefits had been paid in whole or in part. (See table 16, appendix.) For 29 percent of the families who had received insurance benefits, 20 percent or less of their charges for services had been paid by insurance. On the other end, 7 percent of the families had received insurance to cover 80 percent or more of their charges. These gross figures for all services, however, are more meaningful when they are broken down by specific types of services. The proportion of hospital costs covered by insurance is important, because there is a general opinion that it is desirable to cover all or nearly all services recognized as hospital services. Fifty-nine percent of families experiencing hospital costs and who also carried hospital insurance and received benefits had 80 percent or more of their costs covered. (See table 17, appendix.) On the other end 18 percent of the families had 60 percent or less of their hospital costs covered by insurance. It is well to remember that these are national figures, and there are undoubtedly regional variations, and variations among hospital insurance plans. If there is any consensus as to how great a proportion of the surgeons' charges should be covered by insurance, it is accurate to say that families below certain incomes should have all or nearly all of the costs of surgery covered. Thirtyfour percent of the families who experience surgical charges have less than 60 percent of their charges covered by insurance, and 45 percent have 80 percent or more of such charges covered. (See table 18, appendix.) The simple fact in this table is that by and large the payments made by insurance for surgical costs fall far short of equaling the total charges. The difference would seem to involve more than a normal deductible or coin-insurance feature. Very useful data at this juncture would be the prevailing surgical fees throughout the country by region and the prevailing surgical insurance benefits in relation to these fees by region. To what extent is the low proportion of costs covered by surgical insurance due to low fee schedules established by insurance in relation to prevailing surgical fees? On the other hand, to what extent does surgical insurance increase the per-unit surgical costs? Even though maternity benefits are very widespread in insurance contracts, many people in the insurance field feel that maternity costs have not logical place in an insurance program. In any case there is a great demand for such benefits, and they appear to have a firm place in health-insurance contracts. One-half of the obstetrical cases with insurance and receiving benefits had 60 percent or more of the charges covered by insurance and one-half had less than 60 percent of charges covered. (See table 19, appendix.) Maternity benefits, however, are usually not designed to cover the total costs of maternity care. This may account, at least in part, for the relatively low proportion of obstetrical costs covered by maternity benefits. 46293-54-pt. 8-27 TABLE 1.-Estimated national total gross charges incurred by families for personal health services and goods 1. Payments to hospital outpatient departments for the services of salaried physicians and other clinical services. 2. Payments by either consumers or insurance for medical services received from salaried physicians in Government hospitals. 3. The estimated value (at going rates) of physicians' services received from salaried physicians under some form of prepaid medical care plan. 4. Payments by surgical or medical insurance to independent physicians either directly or through reimbursement of patient. 5. Payments by accident insurance or liability insurance (except employer's liability insurance or workmen's compensation) to independent physicians either directly or through reimbursement of patient. 6. Payments for drugs administered by a physician. 7. Payments to independent physicians for services received by persons who were still considered as members of some household in July 1953 even though they had been institutionalized at some time during the past year and were still in an institution on the date of interview. 8. Payments to independent physicians for services received by people who died during the survey year but who had been living at the time of their death with relatives as members of households still in existence in July 1953. (This category thus excludes deceased who had been living in institutions, alone, or only with nonrelstives at the time of their death as well as those who lived in households which were broken up after the death.) 9. Bad debts-services by physicians for which patients were actually billed but which will never be paid for. It is also possible that physicians may sometimes act as collecting agents for the fees for certain services like X-rays, laboratory work, or special tests which they themselves do not perform. The physician may net no income from this and so does not consider these fees as part of his gross income. NORC in general classified all such fees paid to a physician into the physician category. * Excludes: 1. Value of services of salaried physician in a Government or private hospital or clinic or the services of a company doctor when such services were not paid for by the patient and were not received as part of any form of prepaid medical care plan or insurance. 2. Free care (care for which an independent physician received no reimbursement and did not bill anyone). 3. Payments to independent physicians (physicians in private practice) by workmen's compensation, employer's liability insurance, or by an employer for a work-incurred injury. 4. Vendor payments to independent physicians under governmental (generally State or local) assistance programs for various categories of indigent families. 5. Vendor payments to independent physicians by foundations and associations like the National Tuberculosis Association, National Foundation for Infantile Paralysis, Crippled Children's Societies, Rotary, Lions, etc. 6. Payments to independent physicians by recipients under governmental assistance programs when these payments were specifically reimbursed to the recipient by the program, 7. Payments to independent physicians for medical care received by people who were not part of the civilian, noninstitutional population of the continental United States as of July 1953. 3 Both estimates are for pharmaceuticals purchased directly by the consumer. The expenditures for pharmaceuticals administered in hosptials or by physicians and dentists are included in the estimated payments to those groups and are excluded from this item. The NORC estimate contains expenditures for medical appliances including ophthalmic products, services of oculists and optometrists, services of paramedical personnel like chiropractors, chiropodists, podiatrists, naturopaths, faith nealers, etc., the services of private duty nurses, practical nurses, and miiwives, and expenditures for laboratory services like diagnostic tests and X-rays for which the consumer was billed directly by the laboratory. It should be noted that the NORC estimate contains expenditures made directly to dental laboratories for X-rays, denture repair, and the manufacture of dentures on the basis of impressions taken by dentists TABLE 2.—Estimated national percentages of total gross costs incurred covered by total insurance benefits 1 Less than $50,000,000. Since many patients in nongovernmental general and special long-term hospitals, mental and allied hospitals, and tuberculosis sanatoria at the time of the interviewing may not have been considered as members of civilian noninstitutional households, the NORC estimate probably does not adequately represent expenditures for this category of care. TABLE 3.-Average net costs per family for hospital, medical, and dental services 1 The estimates in this table are for incurred "out-of-pocket" charges. Thus, the money paid directly to hospitals and physicians by voluntary health insurance and the payment by consumers for which they received or expect to receive reimbursement by such insurance are both excluded from these estimates. Moreover, insurance premiums are also excluded. TABLE 4.-Median gross charges incurred for hospital, medical, and dental services and goods by family income for families with and without voluntary health insurance 1 Gross charges incurred are all charges incurred by the family unit for its own members for hospital, medical, and dental services and goods. They do not include the cost of voluntary health insurance. The "cost" of free care is, of course, excluded. However, the cost of services received under a hospital-service plan or a comprehensive medical care plan is included. These are families with or without some voluntary health insurance at the end of the survey year. TABLE 5.-Median net charges for hospital, medical, and dental services and 1 Net charges are gross charges incurred (see table 4 for definition) less voluntary health-insurance benefits These figures are for families with and without insurance at the end of the survey year. Median net 3 A small part of the difference in median net charges for families with insurance and families with no in- TABLE 6.-Percentage distribution, by family income, of all families according TABLE 7.-Percentage distribution, by family income, of families with insurance 2 This total includes 5 families whose income was unknown. TABLE 8.-Percentage distribution, by family income, of families without insur- |