The 19th century brought creation and expansion of railroads in the United States that hauled freight and carried paying passengers. One offshoot from privately-owned railroads was the creation of company-built and -operated hospitals to treat their employees in remote locations. Railroad worker professions had a high injury rate with loss of limbs, severe injuries, and death. This is an example of private businesses seeing a real problem and initiating a process to solve it without federal government help.

Railroad hospitals created a new profession called the railway surgeon who practiced railway surgery. Railway surgery was defined as, “. . . the medical specialty devoted to caring for railway employees, and sometimes non-employee family members or injury victims.” Railway surgeons created first aid kits, pioneered emergency medicine, made their own portable emergency kits, created sterilized gauze, implemented occupational health services, specialized in amputations and prosthetics, created hospital train cars and testified in injury lawsuit cases. “Their research and publications created the first modern study of trauma care.” They worked for the railroad out of their own offices or at railroad established hospitals and clinics. These many medical innovations are used in 21st century medicine.

Railroads provided employee health insurance plans where the employee paid a fee to participate that allowed medical treatment at the company operated and owned clinic or hospital. These were predecessors to today’s employee health insurance plans. “Workers resented having their wages garnished to pay the surgeons’ salaries, while other doctors scorned them as lackeys of the railroads.”

Railroad work was physically hard and dangerous. “They suffer as if they were fighting a war,” said Congressman Henry Cabot Lodge, in 1892. “In the United States, in 1889, one in every 35 railway workers was injured each year, and in more dangerous ‘running trades’. . . in close proximity to trains, that rate jumped to one in 12. One out of every 117 workers died on the job.”

One of the earliest railroad hospitals opened in Sacramento, California in 1869. Dr. Robert S. Gillespie writes: “By 1896, 13 railroads operated 25 hospitals, treating over 165,000 patients annually.” “The industry reached a peak of 3700 beds at 35 railroad hospitals around the country.” No government-issued certificate of need was required to build and operate each railroad hospital.

Railroads also retained private physicians under contract in cities along their lines. These doctors were on call at all times to provide initial care at any railroad-related emergency, even if the injured was not an employee.

Southern Pacific’s San Francisco hospital was the second one in the nation to open an intensive care unit. Many of these hospitals operated nursing schools, internships, and residency training programs.

Each innovation occurred without federal oversight.

Railroad hospital land and buildings were counted as taxable private property. “Many railroads created independent foundations to own and operate the hospitals and health plans to discharge this tax liability.” These non-profit foundations were known as employee hospital associations (EHAs). Each one gave employees more representation in hospital management. Each EHA hospital board of directors consisted of railway employees from a variety of occupations, typically one from each of the many unions representing them. Railroad business executives managed the company-owned hospitals. Non-profit EHAs allowed them to solicit donations, although the hospitals still relied on payroll deductions, patient payments, and company subsidies.

The many examples of privately-owned railroad created hospitals in the late 19th century without federal oversight or regulation brought unforeseen innovation to medicine still used in the 21st century.