Rorem, C. Rufus

The field of health economics was still in its infancy when C. Rufus Rorem (1894–1988) was asked to join the landmark Committee on the Costs of Medical Care (CCMC) in 1929. From that time onward, Rorem's groundbreaking work established his reputation as a pioneer in this new field. Along the way, Rorem proved to be an innovative and influential advocate for group medical practice, hospital prepayment, uniform hospital accounting, and areawide health planning.

Born in Radcliffe, Iowa, in 1894, Rorem was the son of Norwegian immigrant parents who were members of the Religious Society of Friends, or Quakers. Rorem attended Oberlin College, majoring in political science. After graduation, he accepted a position with the Goodyear Tire and Rubber Company. But he soon left to join the U.S. Army for service in World War I. After the war, Rorem decided to pursue a career in education, and he took a position teaching accounting and business courses at Earlham College, a small Quaker college in Richmond, Indiana. To establish his credentials in accounting, he passed the Indiana Certified Public Account (CPA) examination. At that time, Rorem saw where his future lay, for he enrolled in graduate studies at the University of Chicago. He received an instructorship in accounting, and he completed a master's and a doctoral degree in economics. Soon Rorem was promoted to assistant professor at the university, and in 1928 was appointed assistant dean of its School of Commerce and Administration. And in 1929, he became an associate professor.

While at the University of Chicago, Rorem developed a friendship with a colleague who had a lasting influence on his life. In 1928, he met Michael M. Davis. Davis was a major figure in the nation's medical-care circles; he was the director of medical services at the Julius Rosenwald Fund and an executive committee member of the CCMC. The CCMC was organized in 1927 and supported by a number of large foundations to conduct a 5-year study of the financing and delivery of medical care in the nation.

In 1929, Davis asked Rorem to become the associate director of medical services at the Rosenwald Fund. He also asked Rorem to lead a study of hospital capital investment for the CCMC, which had not been studied previously. The project appealed to Rorem because of his background and his interest in public finance and nonprofit corporations. It was not long before Rorem was a full-time staff economist for the CCMC. In 1930, he moved to Washington, D.C., where he assisted in preparing a number of CCMC reports, including the landmark Final Report of the Committee on the Costs of Medical Care, which was published in 1932.

While at the University of Chicago, Rorem also met Isidore S. Falk. Falk would become widely recognized in medical-care circles for his work on health and Social Security issues. Eventually, Falk became the associate director of the CCMC research staff, linking him professionally with both Rorem and Davis.

Rorem's work at CCMC led to his interest in the prepayment of healthcare. He became associate secretary of the American Hospital Association (AHA) and later, executive secretary of the Committee on Hospital Service, where he assisted in the approval of prepaid group hospitalization in 1934. It has been said that Rorem more than anyone else shaped the movement of prepaid healthcare. Ultimately, Rorem's activities at the AHA helped enormously in laying the foundation for the formation of Blue Cross and Blue Shield plans around the nation. In his work, Rorem was influenced by E. A. Filene's emphasis on applying the principles of scientific management to the healthcare field and by his advocacy for group prepayment and regional health planning.

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