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The Care of Strangers: Economic story of hospitals ~ Ch 4: Dr JWW invents the 20th century business plan for modern hospitals

The Care of Strangers: Economic story of hospitals ~ Ch 4: Dr JWW invents the 20th century business plan for modern hospitals

by faithgibson on May 16, 2013

Chapter 4 ~ Dr. JWW’s Plan for a Nationwide, Technologically-enriched Hospital System:

Adding elective hospitalization of healthy patients & ‘lying-in’ departments to basic hospital services as the core of a new business model for private hospitals

The during the 19th and early 20th century scientific breakthroughs in biology and physics introduced new fields of medical care that turned medicine into an effective, science-based discipline.  For the first time in human history, medicine as a formal disciple provided practitioners with new and effective capacities to diagnose, treat serious injuries and painful chronic conditions and even cure formally fatal diseases.

Except for accurate knowledge of human anatomy, the art and science of medicine was historically very long on ‘art’, and embarrassingly short on effective therapies. At the turn of the 20th century, the number of safe and effective drugs could literally be counted on one hand — (import list – other files).

The scales finally tipped in favor of science when [insert text about the four great advances – Pasteur, Lister, etc].

However, this required a totally different set of ‘tools’, ones that depended on a capital-intensive, technologically-enriched hospital system. While this modern medical system was orders of magnitude more effective, it was also dramatically more expensive than the simple hospitality provided by19th century hospitals.

But unlike most of Europe, the US did not have a national health care system. From the perspective of organized medicine, it did not want one either. This meant that cost of running a hospital in 20th century America had to be paid by those who used its services and like any other business — revenue had to match or exceed operating expense. The immediate barrier to a technologically modern hospital system in the US was the most basic economic question: who would pay – ill and injured patients or healthy taxpayers?

The first and the most long-lasting method for addressing this dilemma can be trace directly back to Dr. J. Whitridge Williams, the Johns Hopkins surgeon-turned-hospital economist who dreamed big by envisioning a national system of full service, technologically-equipped community hospitals.

Dr. Williams was one of two most influential obstetricians in American during the time that obstetrics was under going a dramatic make-over. Traditionally it was a minor part of the general practice of medicine until the two “Titans” of American obstetrics

(NOTE to Self –-> import text about the foundation of the “new obstetrics” by JWW & JDL but remember not to tip your hand. This is the Story of Hospitals, not HNCBGTOTWSOHx or a trirade about the abuse of power by the OB profession. Stylistically, it may be best to postpone the fuller background on ‘new ob’ – plus intro of De Lee and JWW as “titans” and the father of American obstetrics until after the initial description of his vision. In this instance, it would be for the purpose of providing his bona fides and placing him squarely in the cat bird seat of history on these two important topics and should be done with a light hand.)

His other bona fides included being asked to set up the surgical gynecology department at Johns Hopkins University Hospital in 1893 and then being appointed associate professor of gynecology in 1894.

He was appointed vice-president of the American Gynecological Society in 1903-04, Chief of Obstetrics at Johns Hopkins University Hospital from 1895 to 1910 and Dean of the medical school from 1911 to 1923. He was incidentally the originating author for the classic obstetrical textbook “Williams Obstetrics” first published in {1908}.

However, Dr. Williams’ most lasting legacy was not in obstetrics as much as the economics of 20th century American hospitals. His unique insights and action plan ultimately shaped 20th century hospitals into the economic institutions they are today.

He did two historically influential things. The first was so insightful that it put him a century ahead of his time; the other was to use his extraordinary information in a perverse way.

Dr. Williams’ brilliance was to realize that the thousand year-old model of hospitals as low-cost places of hospitality for the sick (more like a hospice than modern medical center) ended when Pasteur proved the germ theory of infection disease, Lister’s developed the principles of asepsis and sterile technique, Morton discovered anesthetic gases and Roentgen invented the x-ray machine.

It was perfectly clear to Dr. Williams that the break-through discoveries of Pasteur, Lister, Roentgen and Morton had forever ended the thousand year-old model of low-tech, low-cost custodial care. He personally witnessed the bold new potential of medical science as this new style of therapeutically effective medical practice was successfully implemented in well-founded teaching hospitals and large urban institutions. The best and newest these technologies were already in daily use at Johns Hopkins, Harvard, Columbia-Presbyterian, Stanford and other big-name teaching hospitals.

But Dr. Williams also realized that these wonderful new abilities would be lost to the vast majority of Americans unless the technology-enriched services could be made available in “ever middlesex, village and county seat”, to steal (and paraphrase) a line from the Midnight Ride of Paul Revere. Every community hospital had to be upgraded to include at least one state-of-the-art x-ray machine, a ‘modern’ operating room with the ability to sterilize surgical instruments, a clinical laboratory equipped with microscopes, a central processing unit with giant sterilizers (autoclaves) to kill germs on everything that touched or was touched by a patient. New categories of specially trained professionals were needed to run all these new departments and expanded functions.  Running a hospital in the 20th century was expensive and yet it had to pay its bills just like any other business.

Dr. Williams’ unique insight includes the facts laid out in the previous chapter – the economic problems created by the capital-intensive needs of ‘modern’ hospitals combined with the sobering reality of sick people as the economic basis of a business model (i.e. ‘paying customers’) had long ago proven to be a failure. The very people that most need and benefit from technologically-enriched hospital services – the ill, injured, disabled – are the demographic least able to pay these big bills. This observation is so startlingly simple it’s almost insulting, but it was unique in 1910 as it is now, which is to say, these facts are still not acknowledged in the public debate over healthcare policy.

Nonetheless, Dr. J Whitridge Williams saw the economic dilemma of the ‘modern’ American hospital from his own unique place in history. The four decades from 1890s to 1920s was a boom era as America was industrializing itself at a fever-pitch and American industries turned out an impressive number of scientific and technological advances and produced new technologies in the fields of communication, transportation, entertainment and labor-saving devices for the ‘little woman’.

The year 1908 was particularly remarkable as Henry Ford’s new factories turned out hundreds of Model-T Fords, the Wright Brothers sustained heavier-than-air flight for 2½ hour and an American naval ship {insert name ship & confirm political motive} circumnavigated the world in a show of military prowess. [Smithsonian Magazine centennial article on 1908] Radio, silent movies, telephones, washing machines and vacuum cleaners had all been invented and the general standard of living was quickly improving. A high level of public excitement accompanied the industry (better description) and inventiveness, as newspapers reported a mood of hopefulness and belief that even greater changes were just around the corner.

Dr. Williams also had his own professional perspective on the economic aspects of American hospitals. During the period in question, he was both Dean of Johns Hopkins School of Medicine (one of the most prestigious in the US) and an active member of several professional organizations including the AMA. He was at home in high society and used to rubbing shoulders with the uber-rich philanthropists of his day – Rockefeller, Vanderbilt, JP Morgan and Carnegie.

His ideas for a nation-wide system of community hospitals reflected the ‘can-do’ enthusiasm of the time that just presaged the ‘roaring twenties’. When combined with his own personal and professional background, he was undeterred by the mismatch between the incomes of sick people and the size of their hospital bill or the medical profession’s non-negotiable rejection of a nationalized healthcare system.

While this clearly presented a daunting challenge, he optimistically believed he had the perfect answer. The first thing was to change the image and function of hospital care beyond the passive 19th century role of merely reacting to illness and injury. He saw an opportunity for 20th century hospitals to redefine themselves (we’d call this ‘re-branding’ today) and expand their market share beyond the usually unpredictable and unprofitable ill or injured patient.

Hospitals administrators needed to become pro-active on behalf of the services their hospitals provided. In particular, they needed change the way people thought about hospitals and how its revenue was generated. It would be very hard for a small community hospital that depended on sick people as paying customers to remain in business if they were also required to invest a considerable portions of that income in state-of-the-art x-ray machines, equipping their laboratories and expanding their facilities.

However, this was a catch-22 — if they didn’t invest in these new technologies, they would have little of value to offer in a 20th century world and would be left behind.  What local hospitals needed most was a low-cost, high-yield service that would generate revenue that could then be use to broaden their base, allowing them to upgrade their facilities and expanded their lab, x-ray and surgical services. This new capacity would in turn generate additional revenue to plow back into more capital improvements or profits for its owners.

Dr. Williams’ plan held the key to both of those goals by inventing the new category of ‘elective’ hospitalization. His bold new idea was to add ‘lying-in’ wards and solicit the patronage of healthy childbearing women as electively hospitalized maternity patients. Dr Williams’ brilliance was to radically change the ‘usual and customary’ business model of hospitals — one that in the US depended on income from sick people – and introduce a new category of paying customer — electively hospitalized healthy maternity patients.

As a business model for capital-intensive 20th century American hospitals, this was a stroke of genius. Unlike illness, which tends to be seasonal, and injury, which is unpredictable in timing as well as quantity, childbirth is evenly spread round the year and its annual occurrence is predictable. At that time, the US birth rate was 2 million annually, so this category of service was expected to add at least a million ‘elective’ hospitalizations every year. According to Dr. Williams, the average population of a county in 1914 was 20,000 inhabitants. With an annual birth rate of 35 per 1,000 that would provide 700 births a year. He concluded that was “ample material for the patronage of a small hospital, located … at the county seat, if even a large minority of the women of the community can be induced to patronize it.”

If even half of these 700 mothers-to-be could be convinced to have babies in the hospital (and their husbands talked into paying for it), it would generate a new admission almost every day or 350 a year. The math was simple: when the new mother’s 14-day postpartum stay was added to that of her baby in the hospital nursery, it produced an annual census of 9,800 patient days. Maternity patients paid only a few dollars a day for their hospital room, but combined with small additional fees for use of the L&D facilities, special equipment, other supplies and newborn nursery charges, each new lying-in ward would generate tens of thousands of dollars in additional revenue annually. This steady revenue stream would handsomely underwrite the expanded services of a community hospital and the purchase microscopes, operating tables and x-ray equipment.

Dr. William’s plan replaced the idea of “build it and they will come” with a new paradigm: “if you can get them to come, you’ll have enough money to build it”.

The plan was simple:  every small, medium and large community hospital in the US should add a ‘lying-in’ ward (or ‘re-purpose’ an unused or unprofitable part of the building) and extend their basic service to include physician-attended childbirth services and a 14-day postpartum stay for the mother and 14 days of nursery care for her healthy newborn. In the early 1900s, the average married woman had 6 children, so repeat business was a given for a large (and healthy) segment of the population who were happy to pay a modest (but still very profitable) fee for this ‘elective’ service.

Most notable of all – Dr. Williams’ his plan economically revolutionizes the business end of hospitals without involving the federal government (the dreaded idea of ‘socialized’ medicine) or any other centralized bureaucracy that might limit the many entrepreneurial opportunities available to the medical profession. At that time, the vast majority of hospitals in the US were proprietary facilities with less than 25 beds owned and run by physicians.

It is no surprise that Dr. Williams’ plan to hospitalize healthy maternity patients was eagerly embraced by the medical profession and organized medicine. While they appreciated its ability to generate additional revenue, they also saw hospitalized maternity patients as an invaluable asset in two important areas.

First was the expanded opportunity for clinical training of medical students. The medical profession had quite a list of reasons for objecting to midwife-attended births but very high on this list was a fight over ‘teaching cases’. Every time a midwife attended a normal birth, the obstetrical profession claimed they had ‘wasted’ an opportunity for a medical student to expand his clinical knowledge and sharpen his skills.

“It is generally recognized that obstetrical training in this country is woefully deficient. There has been a dearth of great obstetrical teachers with proper ideals and motives, but the deficiency in obstetrical institutions and in obstetrical material for teaching purposes has been even greater. It is today absolutely impossible to provide {teaching} material.” [1912-B, p. 226

“I should like to emphasize what may be called the negative side of the midwife. Dr. Edgar states that the teaching material in NY is taxed to the utmost. The 50,000 cases delivered by midwives are not available for this purpose. Might not this wealth of material, 50,000 cases in NY, be gradually utilized to train physicians?” [1911-D, p 216]

“Another very pertinent objection to the midwife is that she has charge of 50 percent of all the obstetrical material [teaching cases] of the country, without contributing anything to our knowledge of the subject. As we shall point out, a large percentage of the cases are indispensable to the proper training of physicians and nurses in this important branch of medicine..” [1912-B, p.224]

“In all but a few medical schools, the students deliver no cases in a hospital under supervision, receive but little even in the way of demonstrations on women in labor and are sent into out-patient departments to deliver, at most, but a half dozen cases.

When we recall that abroad the midwives are required to deliver in a hospital at least 20 cases under the most careful supervision and instruction before being allowed to practice, it is evident that the training of medical students in obstetrics in this country is a farce and a disgrace.

It is then perfectly plain that the midwife cases, in large part at least, are necessary for the proper training of medical students. If for no other reason, this one alone is sufficient to justify the elimination of a large number of midwives, since the standard of obstetrical teaching and practice can never be raised without giving better training to physicians.” [1912-B, p.226] {emphasis added}

The second bonus in elective hospitalization of maternity patients was creating an expanded market for the services of graduate physicians. Since only medical doctors were allowed to have hospital admitting and practice privileges, the economic competition of midwives as birth attendants was conveniently eliminated.

While increased income was appreciated, so was the dramatically improved working. Physicians who normally attended births in the homes of their patients were quick to grasp the time and labor-saving elements of Dr. Williams’ plan to cluster their labor patients together in one place – the local community hospital.

Hospital-based birth services would totally eliminate the multiple trips between the doctor’s office and the homes of his patients, which were typically scattered all over the countryside. Given the nature of maternity care, doctors frequently had to make multiple house calls before, during and after the birth. Hospital lying-in wards would obviously save an enormous amount of valuable driving time.

Having one’s labor patients under the charge of a trained nursing staff saved physicians from the tedium of a long labor. One textbook of that era referred to the doctor’s perspective on labor ‘as the waiting period before the doctor was called’.  The hospital as a facility also provided the convenience OB call room, and comfort of a clean bed. Doctors could sleep while their patients labored and the nurse would wake them when she was ready to deliver.

This was a huge improvement in working condition when compared to the typical experience of a general practitioner who routinely provided care in the cramped, inconvenient, poorly lit and often unheated homes of a farm family having its 10th child on a cold and stormy night in the middle of winter. Even if everything went perfectly and quickly, it was still an uncomfortable and inconvenient experience for the doctor. If it became necessary to perform any kind of medical or surgical intervention, a well-equipped hospital and well-trained staff was obviously a vast improvement. Hospitals conveniently provided a clean, spacious, warm and well-lit facility, plenty of nurses and other staff, access to special equipment, and (thankfully!) a central supply department that did all the cleaning and sterilizing of instruments.

Last but not least the hospital maternity ward provided an on-going opportunity for social and professional interaction between physicians and created a camaraderie that helped elevate the status of the medical profession. None of these physical, technological or social advantages could have been duplicated in the old, time-consuming system of house calls that dispersed doctors to the far reaches of their geographical district, isolating them from the daily contact of their peers and technologically-centric improvements of ‘modern’ medical science.

Public opinion about hospital-based maternity care was not as single-minded as that of the medical profession, but Dr. William’s anticipated that. His plan included the elements of a PR campaign to ‘educate’ the populous about the advantages of elective hospitalization and persuade them that hospital childbirth was the hot, new modern way – be there or be square! This was actually quite a departure from the way normal opinions about hospitals, which were generally thought of as a place where very sick people went to die. Up to this point, the few women who did go to the hospital for normal childbirth were either very poor or suffering some serious complication. The words ‘healthy woman’, ‘normal childbirth’, ‘economically-secure’, and ‘hospital lying-in ward’ almost never wound up in the same sentence.

Changing this negative association – the ‘old’ idea that hospitals were places were the very sick when to die — was one of the elements alluded to by Dr. Williams’ new ideas for 20th century hospitals. To take full advantage of ‘modern’ medical science and hospital-based technologies required a change of image. The traditional association with disease, disability and death needed to be replaced with an image that reflected hope, health and the promise of a shinning new life.

In this ‘new order’, hospital would embody life-affirming characteristics in two different but complimentary ways. One is the joy of the family of a newborn baby that was born in the hospital’s brand new maternity ward, a momentous event celebrated by the proud new father with a round of cigars. The other is the giddy relief and gratitude of a patient suffering from some awful, maybe fatal disease who is miraculously cured, thanks to accurate diagnosis, new medial treatments or safe surgery. As a direct result of his hospital experience, he is able to walk out as a new person looking forward to a long, healthy, pain-free, physically-enabled life.

For hospital administrators, this whole idea boiled down to one starkly simple scenario: when families are tooling around on a Sunday afternoon in their new Model T and drive by your institution, do you want the mother to point to your hospital and say to her youngest child in an excited tone of voice: “Look, honey, that’s where you were born” OR do you want her to sadly say: “Oh, that’s where your favorite Uncle Fred died”.

The classic association between hospitals and unpleasantness was not the only public-relations hurtle to be overcome. Another reason to resist hospitalization for normal childbirth was of course the added expense. Families already had to pay the birth attendant’s professional fee (doctor or midwife). If they went to the hospital, they would also have to an additional bill to pay.

However, providing maternity care to healthy women in 1914 cost far less than one would imagine. New mothers mainly needed a slightly medicalized version of hotel services – a bed, clean linens, three hot meals a day and a nurse to check on them from time to time (temperatures, blood pressures, etc). Their healthy newborns likewise required simple custodial care – bathing, diaper changes and being taken out to their mothers for feeding every four hours. The cost of a hospital birth (not counting the doctor’s professional fee) in 1914 would have been under $50 or about a 16th of the cost a Model T Ford (about $800). By comparison, a hospital birth today — $12 to $32 K — is about the same as a low- to mid-priced new car.

In less than a decade, the medical profession’s efforts to educate the public were extremely successful in the northeast and on the west coast, as many hospitals in large cities and smaller towns opened maternity wards and actively promoted their use. Between 1915 and 1925, the number of home births attended by GPs and midwives in areas of the northeast plummeted by a factor of three {check stats in TAASPIM documents}.

Hospitals in the rural mid-west and the South were somewhat slower to offer hospital-based maternity care on a large scale. In the segregated South, black families did not have the option of a hospital birth, nor was hospital-based maternity care available to desperately poor sharecroppers and other rural residents who also did not have ‘cash in hand’. Nonetheless, hospital birth increased from about 15% in 1910 to 50% by 1938 – the first year that more than half of all babies were born in the United States were delivered in American hospitals.

How the legacy of Dr. J. Whitridge Williams came to light

Dr. Williams’ ideas for a system of private hospitals in the US were the subject of a small book published in 1914 called “TWILIGHT SLEEP ~ Simple Discoveries in Painless Childbirth”. Dr. J. Whitridge Williams’ co-authored it with the help of a physician colleague, Dr. Henry Smith Williams, who was also an attorney and professional science-writer. John Whitridge and Henry Smith Williams were contemporaries who shared the same surname, but there is no evidence that they were related.

The primary audience for their mutual efforts was the philanthropists of the era (Carnegie and Rockefellers Foundations), government officials, influential trend-setters and husbands. While the general topic of childbirth was of interest to childbearing women, the book was about childbearing women, not FOR childbearing women. Its tone makes it clear that women were expected to benefit in an indirect way, to be influenced by it but not to read the book for themselves.

The historical document produced by Williams and Williams describes Dr J.W’s vision of a national system of fully equipped private hospital, introduces his new ‘business model’ that identified healthy maternity patients as a steady source of hospital revenue, and then it goes on to identifies barriers to implementing the plan and provides a long, point-by-point description of Dr. Williams’ strategies for overcoming all of these possible problems.

While Dr. J.W’s own goals for the new surgical specialty of obstetrics was not a primary focus of the “Simple Discoveries in Painless Childbirth”, he obviously hoped to change the public’s perception in the area of normal childbirth and the professional role of obstetricians.

At this time (1912-1913), there were only two types of maternity patient who planned hospital births. The first were medically indigent (often homeless) women who became teaching cases (i.e. clinical or ‘obstetrical’ material) for medical students and interns; the second was women who developed a serious complication that required medical or surgical interventions and were sent to the hospital by their general practitioner or midwife. Likewise, the scope of practice for the surgical specialty of obstetrics was generally restricted to interventions provided when complications and emergencies occurred.

Dr. J. Whitridge Williams wanted society to accept the elective hospitalization of childbearing women as the new norm and for everyone to see the obstetrical profession as the only ‘appropriate’ provider for all childbirth-related services.

Dr. J. W’s ideas and his astonishing role in shaping the economic model for American hospitals in the 20th century has been one of our best-kept secrets. For the better part of a century as his small book has never come to the attention of historians and medical anthropologists. His pivotal role in making community hospitals as ubiquitous as “school houses and libraries” might never have come to light at all were not for a serendipitous bit of good fortune.

New technology and the random happenstance that so often accompanies important discoveries made privy to his ideas in December 2004. That is when Google began its Google Book Search project to make hard-to-find books available on-line by digitizing the contents of academic libraries. Larry Page and Sergey Brin, the two co-founders of Google, are both Stanford grads, so the Stanford Green Library was one of the first collections to be digitized. Stanford’s copy of the small, 128-page book by the doctors Williams and Williams was submitted to this industrialized process, which uses a special camera (Elphel 323) designed for scientific applications that is capable of digitizing a 1,000 pages an hour and a 1,000 books a day.

“Twilight Sleep” the book can now be downloaded as a bit-map document by anyone with an Internet connection, it is finally getting the level of public attention that it always deserved but for some reason, did not receive.

================= Edit line – Aug 13 @ 1:22 am + 4:11 pm =============

Dr. J. Whitridge Williams — his motive and strategies to implement his ambitious ideas