TABLE 3.-Percentages of families with voluntary health insurance, by work status and occupation of main earner in the family

1 Families included as having some coverage have at least 1 person covered by a hospital, surgical, medical. major medical expense, or dread disease (or polio) policy. Families with only accident or disability insurance are not included here.

Includes 6 families where main earner's class-of-worker status was indeterminate.

These figures do not include 87 families where the main earner was currently working full time but engaged in odd jobs, domestic, or migratory farm work for various private employers, the work being of a non-steady character. Among such families, 40 percent had some coverage.

Percent not computed for groups of less than 50 families.

These figures do not include 33 families where the main earner was in the armed services. In these amilies, 30 percent had some coverage.

TABLE 4.-Percentage of families with voluntary health insurance, by industry of main earner

Industry of family's main earner

All families

Total, main earner currently working full-time..

Agriculture, forestry and fisheries..

Mining...

Construction.

Manufacturing.

Durable goods..

Non-durable goods..

Transportation, communication and public utilities.

Wholesale and retail trade..

Financ, insurance, real estate and business services.

Personal services and repair services.

Entertainment and recreation services..

Professional and related services..

Public administration and armed forces 1.

Industry indeterminate.....

130 percent of the families with main earner in the armed forces had some coverage.

* Percentages not computed for groups of less than 50 families.

Percentage of families in each group with some

coverage

Percent

TABLE 5.-Percentage of families with voluntary health insurance, by income

1 This breakdown by family income shows roughly the lowest third with family income under $3,000, the middle third with family income $3,000 to $4,999, and the highest third with family income $5,000 and over. Percentages not computed for groups of less than 50 families.

Table 6.—Percentage of families with voluntary health insurance, by sex and age of family head

TABLE 7.—Percentage of families with voluntary health insurance, by type of

1 For definition, see; U. S. Bureau of the Census, United States Census of Population 1950. Vol. I. Number of Inhabitants, chapter 1; United States Summary. U. S. Government Printing Office, Wash ington, D. C., 1952, p. xiv.

Ibid. p. xiv and U. S. Bureau of the Census. United States Census of Population 1950. Vol. II. Characteristics of the Population. Part 1, United States Summary, Chapter B. U. S. Government Printing. Office, Washington, D. C., 1952, p. vii.

Ibid. p. xiv, op. cit, volume II, p. vii.

TABLE 8.-Percentage of persons with hospital insurance (nonprofit and private), by type of locality

2. EXPENDITURES FOR PERSONAL HEALTH SERVICES AND VOLUNTARY HEALTH INSURANCE DURING SURVEY YEAR

PART II HIGHLIGHTS

1. The total annual charges for personal-health services incurred by families in the United States is $10.2 billion.

2. Of these $10.2 billion, physicians charge $3.8 billion (37 percent), hospitals $2 billion (20 percent), prescriptions and medicines $1.5 billion (15 percent), other medical goods and services $1.3 billion (13 percent), and dentists $1.6 billion (16 percent).

3. Of all charges incurred by families, 15 percent is covered by insurance benefits. Broken down by type of service: Hospital services, 50 percent; all physicians' services, 13 percent; surgery, 38 percent; obstretrics, 25 percent. The proportion paid by insurance for other benefits was nonexistent or negligible because they are usually not covered.

4. The average charges for all personal-health services is approximately $207 per family; one-half of the families have more than $110.

5. The families with insurance incurred a total median cost over twice as great as those without insurance, $145 compared with $63.

6. Seven percent of the families, or approximately 3,500,000 families, incurred charges in excess of $495.

7. One-half of the families paid out 4.1 percent or more of their incomes. 8. Approximately 1 million families paid out amounts equaling or exceeding one-half of their annual incomes, of which approximately 500,000 families paid out amounts equaling or exceeding 100 percent of their incomes.

9. Among families receiving hospital-insurance benefits, 50 percent had 89 percent or more of their gross hospital charges covered by hospital insurance. 10. Among families receiving surgical-insurance benefits, 50 percent had 75 percent or more of their gross surgical charges covered by surgical insurance. In the present survey it has been possible to project the total amount of charges for personal health services incurred by families by a direct examination of family expenditures among a representative national sample of 2,809 families, subdivided by age, sex, income, size of family, rural-urban, occupation and region. At the same time it has been possible to break down family expenditures by income and by type of service such as hospital care, physicians' services, and so on. 1. National total charges for personal health services

During the survey year families incurred national gross charges for personal health services of $10.2 billion. This figure is exclusive of the amount paid by the Government for direct services, workmen's compensation, and private charity. (Se table 1, appendix.) The medical dollar is divided as follows: Physicians, 37 percent; hospitals, 20 percent; prescriptions and other medicines, 15 percent; other medical goods and services, 13 percent; and dentists, 16 percent. (Adds up to 101 percent because of rounding of the individual percentages.)

Total annual national costs for personal health services paid from all sources are difficult to estimate accurately, but an estimate of $12 billion would seem to be reasonable judging from available data reported by Oscar N. Serbein in Paying for Melical Care in the United States, New York, Columbia University Press, 1953. Thus, $1.8 billion should be added to the $10.2 billion charged the families or approximately 15 percent comes from sources other than individual

payments and insurance benefits. The present survey shows that of the $10.2 billion charged families for personal health services, $1.5 billion or 15 percent was covered by insurance benefits. (See table 2, appendix.)

It is more meaningful, however, to break the totals down by type of service. One-half of the hospital charges are covered by insurance; also 13 percent of all physicians' charges, 38 percent of charges for surgery, and 25 percent of charges for obstetrics. Insurance benefits to cover other services are negligible, because such benefits are not usually provided through insurance. Thus, as a grand total, it appears that approximately 30 percent of the costs of all personal health services today are from so-called third-party payments, exclusive of disability insurance and life insurance.

2. Family charges for personal health services

After considering overall national estimates, it is well to come down to the family unit and its experiences with costs of personal health services. Exclusive of insurance premiums and the portions paid by insurance, the average charges incurred by families is $178 per year. (See table 3, appendix.) The gross charges including the amounts paid for insurance are $207 per family per year. Families with insurance incurred an average gross charge of $237 and families without insurance an average of $156. The gross hospital charges are approximately $42 per family per year, and physicians' charges would be around $75. Medicines average $31 per year; other medical services and goods, $26; and dentists, $33.

(See table 4,

The foregoing discussion was concerned with average family charges, but hereafter the median charges will be used. The median gross charges for all services is $110 per year, which means that one-half of the families experienced charges of less than $110 and one-half more than that amount. appendix.) Since the average gross charges exceeded $200, this indicates that there were some extremely high costs experienced by some families which pulled the average up. The median disregards the extremes and is a more meaningful statistical device in some circumstances. Families with insurance incurred greater charges for personal health services than those without insurance; a median of $145 compared with $63 or an average of $237 compared with $156. This is in part due to greater utilization by those with insurance and possibly also utilization of a more expensive type of service, for example, a private room in a hospital instead of semiprivate or ward. Obviously the higher costs incurred by the insured group have great implications for the national costs of personal health services as voluntary health insurance continues to expand.

For all families there are great differences between incurred charges by income groups, ranging from $54 for those under $2,000 to $238 for those over $7,500. Since the dollar-value of free care is undetermined, it is possible that the costs of services received by families under $2,000 would be higher than the gross incurred charges of $54. For example, 27 percent of families had at least one family member hospitalized, but only 26 percent reported gross hospital charges. Similarly, 77 percent of families reported attendance by a physician, but only 75 percent reported gross physicians' charges.

When the net charges incurred by families with and without insurance are calculated-which excludes hospital, surgical, and other medical insurance benefits there is still a great difference. Families with insurance incur net charges of $117 compared with $63 for families without insurance. (See table 5, appendix.) It would seem that the implications of these differences can hardly be overemphasized.

So much for averages or medians by income groups; what is the distribution of charges for personal health services for families within selected income groups? Families experience a full range of charges from nothing to a great deal. (See tables 6, 7, and 8, appendix.)

"Catastrophe" as used with reference to costs of personal health services has always been nebulously defined "as an awful lot" depending on family income. In the tables mentioned, it should be possible to arrive at some concept of the area of "catastrophe" depending on what standard is adopted. No standard is proposed, but at what point should so-called major medical or catastrophe insurance begin to pick up the check, and at what point for each income group?

Among all families, 11 percent experienced a cost in excess of $395; 7 percent in excess of $495; and 1 percent in excess of $995. Projected to the entire population this means that approximately 500,000 families in the United States experienced a cost for personal health services in excess of $995. These figures

exclude the insurance premium and the portion paid by insurance. Further, in the income group under $2,000, 7 percent incurred a cost in excess of $395; in the income group $2,000 to $3,500 the percentage is also 7, increasing from there on. On the other hand, it is also well to note that almost 39 percent of the families incurred costs under $100 and 9 percent incurred no costs. When families with insurance are compared with families without insurance, it is again borne out that insured families incur greater charges than the uninsured. (See tables 7 and 8, appendix.)

These data illustrate again the classic generalization that the costs of personal health services are unpredictable for the individual family but relatively predictable for a group of families. Thus costs, as such, are not an issue in the sense that $10 billion are too much for the country to spend annually for personal health services. The problem is another classic statement-how to spread this cost equitably so that no one family incurs a heavy cost at any one time.

To make the distribution of the charges for all personal health services more meaningful, tables 9 to 13 in the appendix show a breakdown by broad categories of service: hospital care, surgery, and physicians' services, other than surgery and obstetrics, and medicines and dental services. These tables are particularly significant because they more or less pin-point the problems of the unpredictability of the cost of personal health services.

For all families with and without insurance, 6 percent reported expenditures for hospital service in excess of $195, and 3 percent reported expenditures for surgery in excess of the same amount.

The debate regarding "comprehensive" services is largely concerned with physicians' services such as home and office calls and outpatient diagnostic services, excluding surgery and obstetrics. It is frequently stated that nonsurgical and nonobstetric services are not an important unpredictable financial item and families might well finance such services out-of-pocket and not add the administrative cost of an insurance agency.

The distribution of other physicians' charges shows that 6 percent of the families incur other physicians' charges in excess of $195 per year compared with 3 percent who incur surgeons' charges in excess of the same figure. It is then clear that other physicians' charges are a relatively large item for some income groups, even though such charges are incurred in small amounts at a time. Thus, multiples of service incurring small charges at any one time can, during a year, accumulate into a large amount. At this point it would be useful to have a breakdown of the distribution of the costs of home and office calls and costs of outpatient diagnostic services. It may be that the latter services are more difficult to pay for out-of-pocket than home and office calls. At the same time, physicians' calls and diagnostic services are so interrelated that a statistical differentiation of those services is difficult.

The cost of medicines is another item which is usually not included in insurance against costs of personal health services because of difficulty in controlling the range and volume of prescriptions. There is frequent discussion of including high cost drugs, drugs with specific therapeutic effects, and some of the antibodies. For all families, 9 percent experience costs for medicines in excess of $95 and 2 percent in excess of $195. (See table 12, appendix.) It is not possible to differentiate between prescribed and unprescribed drugs. In any case, it is apparent that there are families that do incur relatively high charges for medicines, illustrating again that multiples of small cost services can add up to a large annual cost. Comparisons between families insured and those not insured show that the families with insurance generally incur larger costs for medicines, even though medicines received while hospitalized are not included. Dental costs are also distributed unevenly among families revealing differences within and between income groups. Forty-four percent of all families incurred no dental bills and 4 percent incurred charges in excess of $195. Differences among income groups are sharp, particularly when charges in excess of $45 are included. No expenditures for personal health service appear to be so closely correlated with income as dental service. (See table 13, appendix.) The median percent of income paid out for personal health services by all families is 4.1. (See table 14, appendix.) The range is from 6.1 for families under $2.000 to 3.2 for families over $7,500. When families with insurance and without insurance are compared, the usual pattern is found since the median percent for families with insurance is 4.9 and for those without insurance 2.9. Among insured families, the lowest income group pays out a higher proportion of