Between the 1900s and the 1940s, patients flocked to what were called “prepaid physician groups,” or “prepaid doctor groups.”

Prepaid groups offered inexpensive health care because physicians acted as their own insurers. Patients paid a monthly fee directly to the group rather than to an insurance company. Physicians undermined their financial position if they either oversupplied services (as they do today) or if they rationed services. Ordering unnecessary tests and procedures drained away the group’s resources and adversely affected physician pay, which was often tied to quarterly profits. But if patients were unhappy with their care, the group stood to lose paying patients.

Unlike today’s medical group practices, prepaid groups were composed of doctors from various specialties. So rather than solely working with other general practitioners, GPs worked with surgeons, obstetricians and ophthalmologists. At the end of each day, the group’s physicians met with one another to consult over tricky cases. Thus, chronically sick patients and individuals with several conditions or difficult-to-diagnose illnesses enjoyed one-stop medical care.

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Image: Library of Congress via The Conversation

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