Shall Government Help Pay Nation’s Doctor Bills? Sharp Fight Aroused by Program.
This headline could have appeared in any of the nation’s papers in 2009 or 2010. Instead, it was published in San Jose, California, in August 1938. That year one of the country’s first managed health care entities, Group Health Association, Inc., went head to head with the American Medical Association and the District of Columbia medical establishment in a legal battle over patients’ rights and affordable health care for low-income families.
Dr. Mario Scandiffio (1902-1996), a Washington pediatrician employed by GHA, found himself in the center of the imbroglio when his hospital privileges were revoked along with those of other GHA practitioners. My research frequently veers off into unanticipated territory and last year’s encounter with Scandiffio and his wife, Pauline (1903-1989), is becoming one of those side trips. The Scandiffios were the first owners of Northwood Park’s 1939 New York World’s Fair Home, the subject of my paper at this year’s Vernacular Architecture Forum conference.
GHA was founded in 1937. This was a time during which the American health insurance industry was an emerging business. The model was simple: a monthly premium payment bought access to a network of specialists and generalists and hospitalization plus necessary diagnostic tests. The idea for founding GHA grew from discussions by managers in the Home Owners Loan Corporation, a part of the Federal Home Loan Bank Board. By attempting to minimize absenteeism and other costs associated with employee illnesses while also improving the quality of those peoples’ lives. According to a 1941 article by Dr. Scandiffio, GHA sought to eliminate the economic barriers separating the poor and access to healthcare and make practicing medicine more efficient by sharing lab and x-ray facilities in a large urban clinic. The AMA perceived GHA as a threat and moved aggressively against the new medical cooperative which was being accused of trying to socialize medicine. The medical establishment, i.e., the AMA and the District of Columbia’s District Medical Society, swiftly began marginalizing GHA’s physicians by revoking their hospital privileges and memberships.
This being Washington, D.C., legal action was quick in coming. The Justice Department opened an investigation into the AMA and the Medical Society of the District of Columbia for violating antitrust laws. Indictments followed and the case wound its way through the federal courts until 1943 when the U.S. Supreme Court issued an opinion upholding the lower courts’ decision that the AMA and Medical Society had acted unlawfully.
Dr. Scandiffio was one of GHA’s first medical professionals. The son of Italian immigrants to New York City, Mario V. Scandiffio graduated from The George Washington University medical school in 1928 and did his residency and internship at the New York Post Graduate School. Scandiffio’s medical school roommate introduced him to Pauline Loria, a Bureau of Engraving employee and singer with her own show on local radio station WOL. Married in 1930, the Scandiffios lived in Washington where he worked in private practice. Dr. Scandiffio’s first day of work for GHA was November 1, 1937, the day GHA’s Eye Street clinic opened to the public.
One day after starting work at GHA Dr. Scandiffio received a registered letter from the District of Columbia Medical Society directing him to appear before the group’s Compensation, Contract and Industrial Medicine Committee to answer charges that he had engaged in unprofessional conduct by practicing for GHA. Scandiffio responded by first resigning from the Society and then rescinding his resignation. The Society expelled Scandiffio in early 1938 and the case began attracting national attention. The AMA opposed GHA because the new model threatened the institutional framework of professional medicine. The struggles to reform healthcare in the United States in 1994 and again when President Barack Obama took office look remarkably similar to the issues faced by GHA and Dr. Scandiffio. In his 1941 paper on the GHA, Dr. Scandiffio described GHA’s most fundamental beliefs:
It was felt that there should be little or no economic barrier to securing competent and adequate medical care. All of us are gamblers at heart and, unfortunately, one of our most vital possessions – good health – is too often gambled with. It is almost a universal characteristic to delay seeing the doctor until all other means at our disposal have failed. The result is that the private practitioner sees only advanced illness and has little time for the care of early illness or for preventive medical care. Care of early illness and preventive care are, to me, the primary advantages of prepaid group medicine for it is distinctly to the best interests of both patient and physician to know how to achieve good health and how to maintain it. Then too, early care results in lower morbidity and mortality and in a marked reduction in the number of serious or advanced illnesses. 
Scandiffio resisted the medical establishment’s pressures and remained with GHA. In the spring of 1939 he became GHA’s medical director and a few months later he and his wife bought Northwood Park’s 1939 World’s Fair Home. Scandiffio left GHA in May 1944 and opened his own Silver Spring practice on Georgia Avenue. The Scandiffios lived in Silver Spring until 1952 when they moved to Miami, Florida.
 Dr. Mario Scandiffio, “The Program of the D.C. Group Health Association,” Social Security in 1941, 145-149.
Look for Part II: a closer look at Group Health Association, Inc.
Thanks to Ann Scandiffio for sharing her family photos.
© 2010 David S. Rotenstein