Evening star., 1938-10-18
DR.. DAVIS, PIONEER
IN GROUP HEALTH,
HEARD BY JURORS
Expert on Cost of Medical
Care Will Testify Most
of Today.
'ANTI.M MONOPOLY CASE
MAY LAST 3 WEEKS
New York Authority Is Second
Witness Called in Hearing
on Restraint of Trade
BACKGROUND

BACKGROUND
In ,odke of launching OF Group
Health Association year ago by
Home OUners' Loan Corp. came
torrent OF criticism from organized
medicine, tolloUed by expulsion
from District Medical Society OF q
Group Health staff physician and
cancellation of courtesy privileges"
at hospitals for Group Health staff.
Complaints by Group Health OF
"obstructionist tactics" led De-
partn1ent OF Justice to charge anti
trust utoldtions and to call special
grand jury inquiry OF American
Medical Association and local So
ciety.
The extraordinary grand jury in
vestigating Department of Justice
charges Of antitrust violations by
organized medicine today heard tes-
timony by pioneer in the Group
Health movement, Dr. Michael NJ
Davis of New York City, chairman Of
the National Committee for Research
in Medical Economics.
DR.. Davis, who organized pay med
ical clinics for persons of moderate
means as early as 1918, has been
afhliated for several years with the
Julius Rosenwald Fund in Chicago.
For five years he was director Of med
ical service for the fund and resigned
to organize the National Committee
for Research in Medical Economics
under Rosenwald auspices.
He is a recognized expert on cost
Of medical care, particularly as it ap-
plies to persons of the lower income
groups. He has written numerous
books and pamphlets on medical eco
nomics and related topics.
DR.. Davis was expected to remain
in the grand jury room much Of the
day, according to Allan Hart, one Of
four special assistants to the Attorney
General in charge OF the proceedings.
He was the second witness called by
the Government in the attempt by the
Department of Justice to show that the
American Medical Association and the
District Medical Society violated the
Sherman Antitrust Act by alleged
"obstructionist" and boycott" tactics
against Group Health Association, Inc,
here. The first witness when the grand
jury began its deliberations yesterday
was DR.. Hugh Cabot of the Mayo
clinic, Rochester. MINI.
Headed Boston Dispensary.
DR.. Davis, who holds Phi. D. degree
from Columbia University, was direc-
tor of the Boston Dispensary from
1910 to 1920 and it was during this
period that he established in Boston
clinic for persons of small income.
On leaving Boston in 1920, he became
secretary of a committee on dis
pensary development in New York
City, and has been a consultant in
hospital organizations for about 18
years.
The pay clinic at Cornell University
Medical College was organized by DR..
Davis in 1921. He was PROFESSIONAL
lecturer at the University of Chicago
from 1882 to 1896. He is fellow Of
the American Public Health Associa-
ton, member of the American Col
lege of Hospital Administrators, the
American Sociological Society and the
National Organization for Public
Health Nursing, and is affiliated with
number of other organizations.
The Department of Justice staff to-
day adopted a mo interview in the
courthouse" rule for all grand jury
witnesses. Mr.. Hart explained to re-
porters that this move was taken to
protect" witnesses. 1t was known that
some department officials were a little
concerned over publication Of an in
terview yesterday with DR.. Cabot. DR..
Cabot was quoted as differing with the
departments view that the practice of
medicine is a trade" within the mean
ing Of the antitrust laws.
The grand jury is meeting at its
quarters in the new Police Court Build
ing. The probe may take three weeks,
according to latest indications.
Swiftly impaneled, the grand jury
went into session Immediately after
being sworn in yesterday afternoon
at District Court by Justice James M.
Proctor and proceeded to hear its first
witness, Dr. Cabot.
DR.. Cabot was presented by the
staff of special assistants to the Attor-
ney General who are to lay before
the new grand jury testimony alleging
that the American Medical Associa-
ton and Medical Society of the Dis
trict of Columbia have violated the
Sherman Antitrust Act. Specifically,
the charge is restraint Of trade" in
alleged obstructive" and boycott"
tactics against Group Health Associa-
ton, Inc.
Arch Critic of A. M. A.
DR.. Cabot, the first witness, from
the Mayo Clinic, is well known as a
champion Of cooperative medicine
and arch critic of the American Med
ical Associations present set-up and
Csee MEDICAL, Page A-3.)