Paying the Doctor

Judges ordered Medicaid offices to fund genital surgery in the 1970s even though it wasn’t proven to help patients

“They were unhappy, disturbed persons before any treatment and they are not boundlessly happy and free of disturbance afterward. Who is?”

–Harry Benjamin, describing his transsexual patients in 1966

In the 1970s, a California psychiatrist wrote of his patient, G.B.:

“Patient is a 25-year-old transvestite who is presently on hormone shots … he has some fixed delusions about extraterrestrial creatures controlling him and controlling the earth.”

An appeals court eventually ordered that Medicaid pay for G.B.’s “sex reassignment surgery” (SRS). 

Medicaid is a federal program administered by states that pays for poor people’s healthcare. Some of its rules are set by Congress or a federal agency; states overlay their own rules. The upshot: there’s gatekeeping, not just for SRS but for all kinds of medical services. The government doesn’t want to pay doctors for interventions that aren’t necessary or effective. But if applicants appeal these agencies’ denials, judges get the final word.

SRS reportedly cost between $5,000 and $10,000 in 1979, which would be about $22,000 to $45,000 in today’s dollars. 

So, how did 1970s gender doctors make the case that SRS was medically necessary for their patients? In this post I’ll map out how gender doctors pitched SRS and excused its failures to the public. Then I’ll show you the cases in which judges made the call on whether patients got SRS.

“Gender doctors” is the term I’m using for psychiatrists, endocrinologists, and plastic surgeons who treated patients on the path to SRS. Many had connections to the Gender Identity Clinic (GIC) at Johns Hopkins, which was founded in 1966 as the first SRS center in the US. Journalists and judges accepted this crew as authorities on people who wanted to be the opposite sex. Some psychiatrists and surgeons opposed SRS, but the voices that got quoted in 1970s legal opinions and the New York Times tended to belong to true believers who repeated the same talking points. 

A Diagnosis Tailored to the Cure

As awareness of SRS grew following tabloid coverage of Christine Jorgensen (1952) and Avon Wilson (1966), gender doctors started getting calls from people who wanted to change sex. Gender doctors classed the males into three categories: transsexuals, homosexuals, and transvestites. Only transsexuals were considered appropriate candidates for SRS. The New York Times reported in 1979:

"Researchers have found that many patients who apply for sex-change operations are not transsexuals but rather transvestites (those who are sexually stimulated by dressing as the opposite sex) or 'guilty' homosexuals who believe it is morally and legally more acceptable to be a transsexual. Such patients should be treated with psychotherapy, not a scalpel[.]"

How to identify a true transsexual? They were defined by their incorrigibility. They wanted to resemble the opposite sex and no amount of therapy would change their mind. In fact, that’s what justified such a drastic intervention. The first GIC director, a plastic surgeon named John Hoopes, said around the time GIC opened:

“If the mind cannot be changed to fit the body, then perhaps we should consider changing the body to fit the mind.”

In the gender doctors’ accounts, transsexuals came off as ascetic, almost holy figures in contrast to pleasure-motivated homosexuals and transvestites. The endocrinologist Harry Benjamin wrote in his canonical 1966 book The Transsexual Phenomenon that in transsexualism “the chief object is the sex transformation.” He claimed that “many transsexuals have no overt sex life at all” while others “preserve a normal married life” with women; some had “normal boyfriends” who would treat them like “girls” and would marry them after they received SRS. The unifying theme was vanilla.

(Like a gender doctor, I’m focusing on men here. Next week I’ll tell you what women were up to in the 1970s.)

One more trait supposedly defined transsexuals: they’d wanted to change sex all their lives. Time Magazine reported in 1974:

“Classic transexuals are born with the anatomy of one sex but suffer from a total, lifelong identification with the other, perhaps influenced by prenatal hormone disturbances.”

But the psychiatrist John Money, who had been assessing candidates for SRS since 1966 at GIC, cast doubt on that criterion. He told the New York Times in 1973:

“There are no absolute standards for diagnosing transsexualism, and many people who appear to be transsexuals are in fact highly unstable in their gender identification — they tend to flip back and forth.”

Money fiercely championed the theory that gender identity was not only stable but cemented in early childhood. Why the inconsistency? I think here he was implying that some people lied about their personal history when seeking SRS, claiming they’d identified as the opposite sex all their lives when this was not true. (To this day, gender doctors twist themselves in knots when they discuss the stability of gender identity.) Money’s colleague Jon Meyer, a psychiatrist, said something similar that year to the New York Times:

“We have to be especially careful now … because the word is out on how to talk to the doctors to perform the surgery.”

Meyer soon went from “careful” to fed up. The next year he started sounding the alarm about SRS in scholarly writing and in the press, as documented by Bob Ostertag in Sex Science Self. He conducted a study that showed GIC’s patients’ functioning did not improve after SRS. In 1979 he told the New York Times:

“[S]urgery is not a proper treatment for a psychiatric disorder, and it’s clear to me that these patients have severe psychological problems that don’t go away after surgery.”

So Meyer abandoned the theory that some SRS patients were “true transsexuals” destined to benefit from SRS and the rest were lying perverts. But many of his colleagues did not. Gender doctors kept arguing that true transsexuals thrived after SRS. If a patient floundered, it meant he’d been an impostor all along. So SRS was effective for transsexuals, and transsexuals were defined as people for whom SRS was effective. 

Even a true transsexual might feel disappointed after SRS, but that also wasn’t the doctors’ fault. Time Magazine in 1974:

“The major psychological problem after surgery, according to [Stanford psychiatrist] Dr. [Norman] Fisk, is that in spite of careful counseling, ‘expectations are often way out of line with reality.’"

So for all these problems, how did doctors persuade judges that SRS was “medically necessary” under Medicaid rules? Here are the cases that went to court through 1980. They were all decided after Meyer started speaking out against SRS. 

Denise R. v. Lavine (New York, 1976)

In a 4-3 split, the judges on New York’s highest state court upheld a Medicaid commissioner’s denial of SRS for a Brooklyn man named Denise R because he wasn’t crazy enough.

Under New York law, Medicaid would only cover conditions “that cause acute suffering, endanger life, result in illness or infirmity, interfere with his capacity for normal activity, or threaten some significant handicap.”

Apparently all involved agreed that men should not be started on estrogen until SRS was imminent because “hormonal treatment without the prospect of an operation raises the danger of cancer and the possibility of severe psychological reaction.”

Denise’s psychiatrist, Ettinger, weighed in:

“Dr. Ettinger … reported that although [Denise] had the psychomotor behavior, voice and manner of a woman, there was no formal disturbance of thinking, nor suicidal inclination. Dr. Ettinger concluded [Denise] was suffering from a severe psychopathology ...”

Ettinger referred Denise to two New York City hospitals for SRS, but both shut down their SRS practices before they could operate on him.

Shagan, an endocrinologist, started Denise on estrogen anyway. The Court disapproved: “this hormonal therapy may have assisted not only in the development of female characteristics but in an exaggeration of [Denise’s] ‘psychopathic’ personality.” So the judges found that the Medicaid commissioner was justified in discounting Shagan’s claim that “the operation was a matter of life and death.” 

Doe v. State (Minnesota, 1977)

Minnesota’s highest court ruled unanimously to override the state Medicaid office’s denial of SRS funding.

Doe was a 45-year old man who received Medicaid benefits because he was “totally disabled for psychological reasons resulting from his transsexual condition.” He was slated for SRS through a nearby hospital, but it lost its federal funding and shut down after Doe had already started on hormones. Doe applied to Medicaid to pay for his SRS.

Minnesota’s Medicaid office denied Doe’s application because the operation was not medically necessary. Its ruling noted that “No conclusive evidence was presented to support the petitioner's contention that, if she has the surgery, her psychological problems will be alleviated to the point that she will no longer be disabled and will become self-supporting.”

The Court blanched at this stingy standard, pointing out that it could block terminally-ill patients from receiving healthcare. A walk for the gender doctors.

G.B. v. Lackner (California, 1978)

G.B. is the patient from the top of this post who had concerns about aliens. A California state appeals court decided that Medi-Cal should pay for him to undergo SRS because the “only evidence presented in this case was that the surgery was necessary and reasonable.” It cited Doe and another decision, Rush, that was later reversed by an appeals court (discussed below).

G.B.’s psychologist and physician claimed transsexuals faced a risk of suicide if they couldn’t access SRS, and his psychiatrist stated:

"As a general rule transsexuals have an improved psychological, social, and vocational adjustment after transsexual surgery. I believe this will prove to be the case for [G.B.]. Numerous attempts by way of therapy, pharmacology, behavioral and disciplinary approaches have generally been unavailing in treating the transsexual. Surgery is thus indicated for [G.B.] and I believe she would benefit significantly by it."

It doesn’t seem that the psychiatrist offered any studies or other evidence to support his claims. And recall: if a patient didn’t improve after SRS, his doctors were wont to infer that he wasn’t a transsexual after all.

Medi-Cal had denied payment on the grounds that SRS was “cosmetic surgery.” The appeals court scoffed at this:

“The [Medi-Cal office’s] conclusion that castration and penectomy changes the appearance of male genitalia seems strained.”

The court didn’t address the concern that perhaps G.B. was wrong about his need for SRS just like he was wrong about aliens controlling the human race.

In gentle terms, a dissenter went where no judge had gone before – he entertained the thought of reining in doctors:

“Without impugning the integrity of the medical profession, I fear that if [Medi-Cal is ordered to fund SRS], an applicant who seeks assistance under the Medi-Cal program will be able to shop around until he or she finds a physician who believes such treatment is medically necessary. This fear is backed up by emerging reports that ‘Medicaid patients have two and one-half times more surgery than the general population’ … and other information indicating that some physicians perform unnecessary surgery.” 

Of course, the judge pinned the problem as much as possible on patients.

Pinneke v. Preisser (Iowa, 1980)

A federal appeals court ruled that SRS was not cosmetic surgery because:

“This approach reflects inadequate solicitude for the applicant's diagnosed condition, the treatment prescribed by the applicant's physicians, and the accumulated knowledge of the medical community.”

The court cited a Supreme Court case that upheld the right to Medicaid funding for abortion.

Abortion is an apt analogy for SRS: the intervention is chosen by the patient, but in court, advocates emphasize the role of the doctor because judges love doctors. For example, “the choice to terminate a pregnancy is between a woman and her doctor…”

Rush v. Parham (Georgia, 1980)

Georgia’s Medicaid office denied Carolyn Rush’s SRS because the operation was “experimental.” A federal appeals court let the rationale stand, defining “experimental” as “treatment not generally recognized as effective by the medical profession.”

So the court wasn’t really taking power away from the healthcare industry – just from doctors who strayed from the herd. 

The court noted that the Georgia Medicaid office “submitted counter affidavits stating that transsexual surgery was ineffective and dangerous.” There’s no record of the anti-SRS side producing such evidence in the other Medicaid cases.

About the lawyers …

In four of those five cases, the transsexual was represented by a civil legal aid lawyer. That’s someone who works for a local nonprofit, likely funded through the federal Legal Services Corporation (LSC), which is dedicated to representing poor people in their everyday legal disputes. Much of their litigation during the 1970s focused on prying loose public benefits like Medicaid.

After Republicans swept Congress in 1994, they imposed restrictions on LSC-funded organizations. One of the biggies: no more challenging welfare laws. Legal aid lawyers could help their clients apply for benefits, but they couldn’t appeal determinations in a way that might end up changing the rules for everyone. The Supreme Court struck down this restriction in 2000 as violating the free speech rights of LSC lawyers and their clients. 

In general I love legal aid and oppose any restrictions on its practice. But researching this post made me squirm.

A New Day

In a few of the cases I discussed, judges mentioned clinics abruptly shutting down. Even as reporters and judges lapped up gender doctors’ wisdom, SRS practice seemed to be on shaky footing. 

In 1979, GIC closed its doors in the wake of Meyer’s rebellion. Decades later the doctor responsible, Paul McHugh, explained why. He noted the lack of evidence SRS was helping patients and, after his decision, “the relief of several of our plastic surgeons who had previously been commandeered to carry out the procedures.” Yes: apparently surgeons had been ordered to carve off breasts and penises even when they didn’t believe it was a good idea.

Hoopes, GIC’s first director, later acknowledged: “I never saw a successful patient. For the most part they remained misfits.”

Ostertag describes what happened after GIC closed:

“Similar clinics at other universities followed suit. Some imploded as a result of similar controversies. Others, like the clinic at Stanford, did not actually close but simply moved off the campus and went private. Surgeons at private clinics did not have to justify their practice to university boards. And they could make a lot of money performing surgeries that university hospitals denied.”

Some of that money was flowing from Medicaid offices, on judges’ orders.

This post was lightly edited on Sept. 29, 2024.