This system was pervasive on Class I railroads in the Far Western and Southern regions, but uncommon in the Eastern Region, where only the C&O and the Wabash were so governed, both stemming from managerial heritage -- the C&O was a Collis P. Huntington Road, the Wabash a Gould road. The Milwaukee Road was so governed only on lines west of Mobridge, South Dakota. The Great Northern, Soo Line, Burlington, and Chicago & North Western were the only major western roads without a medical-care system; however, Burlington subsidiaries Colorado & Southern and Fort Worth & Denver, and C&NW subsidiary Omaha Road, had medical-care systems.
Medical care through fixed periodic payment was also widespread in industrial-scale western metals mining (Montana, Idaho, Colorado, Utah, Arizona, Nevada), industrial-scale lumbering in Oregon, Washington, and California, and in coal mining throughout the United States. Some steel mills and large, integrated industrial establishments also featured company medical systems, such as Tennessee Coal, Iron & Railroad Co. in Birmingham. The first railroad hospital, in Sacramento, California, and railroad health-care system was instituted by the Central Pacific Railroad in 1865. The same system began to appear in coal mining at about the same time, some believe it was an outgrowth of British coal-mining practice but there's not a lot of information about the origins of employee medical-care systems in the 1800s.
The system only indirectly arose from the high injury rate; the root causes were:
(1) the Federal Employers' Liability Law and no federal or state workmen's compensation law, which enabled the employee injured in the line of duty to recover damages from the employer through a lawsuit, which as interpreted by a jury of peers (and in a railroad town whom else might be found on the jury) was viewed by the railroad companies as too lucrative to the injured employee;
(2) a lack of established medical services in remote and frontier environments, and lack of likelihood that medical services would self-develop without company support;
(3) inclusion of medical care in employment was viewed by companies as an inducement to attract employees that otherwise would decline to work in remote and frontier environments;
(4) an widespread ethos of paternalistic practices by large corporations during this era, particularly because the labor force was so heavily made up of immigrants; corporations as well as the general public felt that the labor force needed to be Americanized in language, culture, lifestyle, and social practice.
The very first medical subspecialty organization in the U.S. was the Railway Surgeons. Unlike physicians of today who at least in theory are supposed to put the interests of the patient before the interests of anyone or any institution or company, the Railway Physicians gave their primary allegiance to the company, and viewed their major challenges as the identification of malingerers, defending the company against lawsuits, competition from unaffiliated physicians, and maintaining their access to the free pass.
Unlike railways, compulsory medical care in the mining industries typically included the employee's families. Pregnancy was not covered; the employee paid a separate and often exorbitant fee to the company medical system for each birth. Treatment for venereal disease was excluded in virtually all company-administered medical-care systems.
Company medical systems in coal mining often provided grossly substandard medical care offered by unqualified or unlicensed physicians in squalid clinics. Many coal mining companies used the medical system as a profit center with captive customers. A major investigation of coal mining medical systems at the direction of President Franklin D. Roosevelt and conducted by the U.S. Naval Health Service in the mid-1930s resulted in exposure of these practices, with the result being that coal mining health care was transferred to the United Mine Workers Union, and the burden of payment effectively transferred from the coal miner to the coal consumer. Railroad medical systems suffered a less ignominous outcome because unlike coal mining their hospitals and institutions were large-city based and thus had greater pressure to conform with progressive medical and social thought and standards. They gradually faded away under cost pressures into typical PPO or HMO type insurance; I believe the last railway hospital to close was the Southern Pacific hospital in San Francisco in the 1970s. Some railroad hospital associations still exist, but are entirely an insurance organization.
The traveling public was rarely treated in a railroad hospital; treatment by a railway surgeon or hospital usually required the passenger to sign away his or her right to sue for damages. The level of treatment was at the discretion of the railway surgeon and the outcomes for the patient were whatever the railway surgeon said they ought to be. This is not to be confused with emergency medical treatment.
Of tangential but striking interest, railways that offered medical care systems had a strikingly lower employee fatality rate than railways that did not, in the 1905-1920 period. (I did a multiple regression analysis back in graduate school to see if this was the case.) The three safest raillroads in the country, in terms of number of employee fatalities per total man-hours of employment were the Southern Pacific, Union Pacific, Santa Fe, Illinois Central, and Denver & Rio Grande Western -- all at least two standard deviations above the norm most years. The least safe railroads were the New York Central and Pennsylvania Railroad -- three standard deviations below the norm most years. The least safe western railroad was the Milwaukee Road. I seriously doubt that the railroad medical care system had any direct influence on reducing the fatality rate, but more likely a railroad that had a management style that would include a hospital system also was a railroad that took safety more seriously, and a railroad that needed a hospital system by reasons of remoteness was one that had more incentive to not kill off too many employees, as replacements were not close at hand as they were in the teeming cities of the Official Territory. Official Territory states were also the first to pass state Workmen's Compensation laws (New York State 1910), which removed much of the benefit to a railway of operating a railway medical system.
It's also of interest that compulsory Workmen's Compensation laws, bitterly opposed by business interests and rural states for many years, extending into the last Southern state, Mississippi, not until in 1948, was opposed by business because without employees could only seek redress through the courts. Poll taxes and jury selection criteria in the early 1900s tended to favor juries composed of businessmen. Later after the abolition of restrictions on jury composition, business interests realized the jury system was becoming adverse to their economic interests, and flipped their position to support Workmen's Compensation. Railroads are still outside of the Workmen's Compensation system.
Stan Johnson's book, The Milwaukee Road's Western Extension, which has a chapter devoted to medical care for the workers.
Of tangential but striking interest, railways that offered medical care systems had a strikingly lower employee fatality rate than railways that did not, in the 1905-1920 period. (I did a multiple regression analysis back in graduate school to see if this was the case.) The three safest raillroads in the country, in terms of number of employee fatalities per total man-hours of employment were the Southern Pacific, Union Pacific, Santa Fe, Illinois Central, and Denver & Rio Grande Western -- all at least two standard deviations above the norm most years. The least safe railroads were the New York Central and Pennsylvania Railroad -- three standard deviations below the norm most years. The least safe western railroad was the Milwaukee Road. I seriously doubt that the railroad medical care system had any direct influence on reducing the fatality rate, but more likely a railroad that had a management style that would include a hospital system also was a railroad that took safety more seriously, and a railroad that needed a hospital system by reasons of remoteness was one that had more incentive to not kill off too many employees, as replacements were not close at hand as they were in the teeming cities of the Official Territory. Official Territory states were also the first to pass state Workmen's Compensation laws (New York State 1910), which removed much of the benefit to a railway of operating a railway medical system.
https://cs.trains.com/trn/f/111/t/128096.aspx
News to me. Thanks
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