Pennock insurance plan in 1940

Hospital costs 50 years ago seemed as much a concern then as now.

In the 1940s health coverage by insurance was rare, but there was an announcement of one of the first attempts in Barry County to provide health services by prepayment. To assist families in covering this cost, Pennock Hospital joined with other hospitals across the state to provide a group hospital plan at two cents per day. The plan could be initiated with a group of 10 or more employees.

An article in the May 9, 1940, Banner described how the hospital was funded and what advantages the group insurance plan would provide. It also gives us today a glimpse of how the hospital was financed and managed 50 years ago (in 1990).

The article introducing the plan said, "The great benefits of hospital treatment for any person afflicted with a serious disease, or when a major operation must be performed, or a fractured bone set are so well-recognized that comment is unnecessary. The only reason why a number of people do not use these superior advantages is because of the charges such an institution has to make for its services.

"Hospitals do not make profits. On the contrary, in the big cities, hospital deficits have to be met by community drives. In smaller cities, like Hastings, such organizations as the W.K. Kellogg Foundation and our splendid hospital guides donate to the institution any needed supplies and much new equipment, which would cost our hospital a large sum each year."

Added to this was the additional expense of "demand (for more equipment) that an up-to-date hospital needs.

"And Hastings has that kind of hospital," declared the article.

The health plan was sponsored by "100 of the best hospitals in Michigan" and was a success. "Our own Pennock Hospital has recently joined the organization, so that such employed individuals and families in Hastings can, if they wish, have hospital treatment here at a yearly cost less than two cents a day per person. This organization, which includes 100 hospitals, is known as 'The Michigan Society for Group Hospitalization.' It is a non-profit organization operated by Michigan hospitals themselves " The organization of the Michigan Society for Group Hospitalization was endorsed by the various medical societies in Michigan and the State Health Department. It operated much the same as today's health insurance agencies. The management deducted the dues each month from the employee's check and made the payment direct to the Group Health Society.

The cost for services were given as single subscriber in a ward, 60 cents a month; semi-private room, 75 cents per month for two persons the cost was ward, $1.20 per month; semi-private $1.50; and for a family, costs were ward, $1.50 per month; semi-private $1.90.

The benefits given (to) the subscribers were as follows: 21 days of hospital care; 90 additional days at 50 percent discount from the regular rate; meals and dietary service; general nursing care; use of the operating room, (as often as necessary); routine clinical laboratory service; all ordinary drugs and dressing; and maternity care if the contract had been in effect for 12 months.

Not included was the doctor's fee or services.

"That item the individual or family must arrange for themselves, just as they would if they were to have medical care in their own home," the article said.

That was still the period when doctors made house calls. Some Hastings doctors made house calls, depending on the circumstances, until about the 1970s.

Under the group hospital plan, subscribers could choose which hospital among the 100 different ones they wished to use. The time in the hospital would be deducted from the 21 days.

The hospital whose services the subscriber received (were) paid by the state society at a rate of $6.50 per day. If the subscriber wished (for) a private room, that could be had by paying $1 per day additional.

According to the article, if the reader had any additional questions or (needed) further information, it could be obtained by calling Miss Lottie Teusink, superintendent of Pennock Hospital. The plan was endorsed by the American Hospital Association; the Michigan State Medical Society; the Michigan Hospital Association, and the Michigan State Nurses Association.

"There are several firms and corporations in Hastings," continued the article, "each having 10 or more employees, where this plan could be worked out. An illustration of its benefits has been already shown in Pennock Hospital since it signed up. All the doctors of Ionia County have signed up as a group for this hospitalization plan.

"A doctor at Lake Odessa needed hospital treatment, presented his card at Pennock Hospital and was admitted. He received his treatment and care at no cost to him so far as the hospital was concerned, that expense being paid by the State Society for Group Hospitalization.

"A railroad employee, also living in Lake Odessa, was one of a group of ten or more such employees who signed membership cards and had paid his monthly dues regularly. His small son was injured in an accident in a way that required an operation. The father brought his membership card, which included his family as well as himself, presented it to the superintendent of Pennock Hospital, and his little son was admitted. The operation was performed, the needed hospital care was given to the boy, and no charge was made to the parents because the Michigan Society for Group Hospitalization was obliged under the plan to pay the cost and did pay it at the stipulated rate of $6.50 per day."

The article ended with: "We hope there may be formed in Hastings several groups whose members will receive hospital care at very low cost under this cooperative plan. We also hope that such benefits may soon be extended to other groups, such as day laborers, farmers and possibly clerks in stores so they can receive hospital treatment at the very low cost provided in this plan."

How successful this plan was is not known. When World War II started, everything changed. Perhaps this also changed. It is entirely conceivable that the plan became part of Blue Cross and Blue Shield. The other thing that could have happened was it was not successful and just dropped.