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Medical Economics

JAMA. 1936;107(15):1227. doi:10.1001/jama.1936.02770410049016.
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EVILS OF CONTRACT PRACTICE  Contract practice, in this country, was born of geographic and social necessity. When certain pioneering industries, such as mining, lumbering and construction work, pushed beyond established settlements, such industries were obliged to provide whatever medical facilities were supplied to such isolated communities. This service varied widely in quality but was better than none.Most modern types of contract practice lack this excuse of necessity. Instead of meeting a lack of facilities in an isolated locality they compete with adequate facilities already established. The motive of establishment is not the benefit of those receiving the service but the possibility of financial gain to those contracting for the delivery of the service. Contract systems are now operated more often to reduce compensation costs, absenteeism, labor turnover, inefficiency and wage payments than to supply needed medical service.This conclusion as to motive is justified by certain facts. The contract


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