​Les Services de Santé de Québec (1946-1949)

 

1946 was a milestone year in SSQ's growth as it marked a brand-new start. Until then, the company had been a strictly local endeavour struggling to make inroads. To make matters worse, a fearsome competitor—Blue Cross—had opened up for business across the province of Quebec.

There is no question that Blue Cross's arrival was a matter of grave concern and not only to SSQ's management. The clergy, led by Monseigneur Georges‑Léon Pelletier, auxiliary bishop of Quebec City, was also worried and urged SSQ to restructure its operations in order to thwart Blue Cross once and for all. Such full-scale resistance stemmed from the view, shared by Monseigneur Pelletier and some of his colleagues, that Blue Cross, due to its religious neutrality, might have an adverse impact not only on the population, but also on the province's Catholic hospitals.¹ Of course, economic arguments added to the pressure being exerted.

This combination of factors proved so compelling that SSQ took steps to shore up its financial position. Among other things, the company opened up its doors to technical experts. Since volunteers no longer met the restructured company's needs, the decision was also made to hire a permanent paid staff.

Bringing in the experts

Paul Champoux
Chairman of the Board
(March 1946-March 1951)
General Manager
(April to October 1949)

In economic terms, SSQ was forced to admit that its members' share capital was insufficient; more funding was required. Dr. Tremblay and certain board members began singing the company's praises to figures in the business community while extolling the potential benefits for investors.

Dr. Tremblay and Édouard Coulombe, manager of Laliberté (a local store), capitalized on the latter's contacts and entered into discussions with two influential local businessmen: Paul Champoux, co-owner of Laurentide Automobiles, and François Morisset, owner of Morisset Automobiles.

They were joined by a young lawyer, Jean Grenier, and several medical professionals, including Dr. Dorion, all of whom agreed to provide financial support. As a result, an amendment to the company's bylaws was adopted on March 12, 1946, under which the maximum number of shares that one member could hold was increased from 40 to 100. Meanwhile, the minimum share capital was set at $2,000. It also appears that the management structure was given greater flexibility at the same time.

Together with the decision to allow individual members to hold up to $500 in share capital (i.e., 100 shares at $5 each), more flexibility was (discreetly) granted in terms of the form financial support could take. In any event, the balance sheet as at December 31, 1946, showed an amount of $3,000 representing "loans from various shareholders".

Due to these investments, it was inevitable that changes would be made to the board members' responsibilities and titles. After calling on the previous board members to relinquish some of their duties, Dr. Tremblay proposed on March 4, 1946, that Paul Champoux be named chairman of the board, with Jean Grenier serving as secretary (March 12, 1946) and François Morisset as treasurer (March 4, 1946). Of the initial group of modest means that had come together in 1944, only former president Henri Vallières, former treasurer Antoine Verret and Albert Pouliot remained; all three became untitled board members. The initial board, which was broadly representative of the cooperative's clientele, now consisted of influential figures with more business savvy but little cooperative experience. At the same time, the positions of general manager and medical director were made official. Dr. Jacques Tremblay was named general manager on March 4, 1946, while Dr. Jules-Édouard Dorion succeeded Dr. Roméo Blanchet as medical director on March 20, 1946.

New atmosphere

The creation of these new positions and a medical advisory committee, along with the arrival of more experienced board members, significantly modified the rules of the game. The one most affected by this was clearly Dr. Tremblay, who had carried out virtually all of the key functions ever since the beginning. In effect, the founder was eventually forced to delegate a portion of "his" powers in order to ensure the survival of "his" company, even if that meant working with people who did not necessarily subscribe to all aspects of his philosophy.

Like Jean Grenier, François Morisset and Paul Champoux were certainly "good bosses" as well as devoted citizens, although they had little knowledge of cooperative practices and principles. Based on their experience, they were inclined to focus on profitability and efficiency, although they were not opposed to the practices and principles of cooperation. Nor were they the perfect candidates to run an insurance company, particularly one specializing in healthcare. Despite their good faith, differences stemming from their experience and beliefs became a major source of tension between SSQ's various components (i.e., the board, the medical director and the medical advisory committee).

Fortunately, these tensions also had a positive outcome: board renewal and the creation of more transparent structures within the organization served to boost SSQ's credibility. The company now projected a more reassuring brand image.

To maximize these positive effects, an advisory committee was created; its members were well-known businessmen, professionals and cooperators from Quebec City and around the province. They included Senator Cyrille Vaillancourt, general manager of the Fédération de Québec des Caisses populaires; Dr. J.-A. Tardif, president of La Laurentienne; and Lucien Côté, president of the Société Saint-Jean-Baptiste.

Even though these men did not play an official role within the company, their stature gave SSQ legitimacy in the eyes of the public. The company thus joined Quebec City's chamber of commerce in September 1946.

Declaration of support by the Association patronale des services hospitaliers de Québec, which called on its members to support Les Services de Santé de Québec

Gaining the medical profession's support

SSQ benefited not only from its newly expanded range of operations (it went province-wide in June 1946), but also from its range of policies covering medical, hospital and surgical expenses. Its rise was hampered, however, by the silence of key medical associations: they were the holders of knowledge and power in the healthcare field—and they held SSQ's fate in their hands.

One man played a pivotal role in this regard: as SSQ's medical director, Dr. Jean Dorion was well aware that the medical profession's opinion of SSQ was a matter of great importance. He also served on the board of the Fédération des Sociétés médicales de la province de Québec (FSMPQ) [Quebec provincial federation of medical societies] and was well positioned to argue SSQ's case in dealings with this organization. He also brought considerable prestige and competence to the table. Nonetheless, despite the fact that SSQ had ensured medical autonomy in all respects—the medical associations' main rallying cry—it is no exaggeration to say that Dr. Dorion only obtained the FSMPQ's official recognition and support in June 1946 after a long and bruising battle.

This state of affairs should come as no surprise: it was no easy matter to overcome the medical profession's resistance to a company that, although privately run, still appeared to threaten the practice of individual-oriented medicine. When the FSMPQ finally bestowed its blessing, the meaning was clear: the doctors had admitted that improvements were needed in the area of healthcare distribution.

In addition to the FSMPQ, the Association patronale des services hospitaliers de Québec (APSHQ) [Quebec City's hospital services business association] offered its unequivocal backing on October 24, 1946, and asked its members to support SSQ as well.

This time, the arguments went beyond preserving medical prerogatives; instead, they emphasized SSQ's effectiveness and freedom of action, as well as its value to average wage-earners and its roots in Catholic and French Canadian traditions.² The ties between the religious authorities and the hospital administrators were close, so it is highly likely that Monseigneur Pelletier's admiration for SSQ also boosted its attractiveness in the eyes of the APSHQ, along with the Montreal chapter of the Catholic Hospital Council of Canada. In fact, the CHCC was the first organization to offer its support for SSQ on May 14, 1946.

Model contract presented to doctors wishing to become doctor-members of Les Services de Santé du Québec

Different compensation model

As the public relations campaign was beginning to bear fruit, the company made a number of internal adjustments. For example, action was needed to quell discontent about the participating doctors' financial compensation. An amendment to the bylaws provided a necessary clarification: the "per capita" system was replaced by a "fee-for-service" monthly payment system. The ceiling on the doctors' fees was also raised. The members' purchasing power was now among the factors taken into account when determining what fees would be charged. Before the amendment was adopted, the participating doctors undertook to limit their earnings to the contributions made; later on, this restriction applied only to families or unmarried individuals whose income did not exceed a certain amount.³ But the novelty of the formula still lacked significant drawing power: a list of participating doctors, most likely compiled in 1946-1949, shows that the company was making limited headway. During that period, there were 71 participating doctors, 59 of whom were based in the Quebec City region.⁴

Recruitment efforts

New members were recruited thanks to the cutting-edge nature of SSQ's compensation model and to recent endorsements by influential associations, in addition to the company's extended range of operations and its coverage of new types of expenses (i.e., surgical and hospital). Still, an active effort had to be made in this regard.

Dr. Tremblay had given Jean-Paul Drolet, a man who truly believed in the SSQ cause, the task of representing the company. Hired on April 8, 1946, Mr. Drolet was in charge of SSQ's advertising campaign, although he remained under Dr. Tremblay's supervision. In assuming responsibility for what would today be referred to as the company's communications department, Mr. Drolet carried a heavy burden: he had to prove that SSQ was superior to Blue Cross, a powerful competitor that had made an immediate and lasting impression on SSQ's top-priority target markets. Rising to the challenge, with the invaluable assistance of his wife (Fernande Faucher), Mr. Drolet worked tirelessly in the Quebec City region and around the province, often under very difficult conditions. Mr. and Mrs. Drolet had confidence in the French-Canadian nation's potential and strengths, and their fervent desire to help the disadvantaged in all ways explained their impressive dedication to SSQ's cause.

Mr. Drolet utilized an array of original advertising techniques, particularly during meetings at which Blue Cross and SSQ faced off in heated debates. He also promoted SSQ's wider range of services, which were not only curative but preventive as well. Depending on the circumstances and the audience he was addressing, he championed the company's cooperative operating model, its French-Canadian roots and its sensitivity to workers' problems. But the issue of contribution rates remained crucial.

SSQ's monopoly on bold business moves did not last long. On January 1, 1947,⁵ Blue Cross introduced two new hospital treatment programs, one covering medical expenses and the other surgical expenses. In terms of exclusive services, SSQ continued to distribute medical services by means of house calls or office visits.

Intense competition

Expressing its concern for "the welfare of the population", the non-profit Association d'hospitalisation du Québec (better known as Blue Cross) found support within organizations that enjoyed great influence among French Canadians, such as the Fédération des œuvres de charité canadienne-française and the Société médicale de Montréal; it was also targeting the same clientele as SSQ. That is why Mr. Drolet and SSQ had to go to such efforts to overcome this major competitor. This led them to play the nationalist card in dealings with nationalist-leaning groups, such as the caisses populaires, the Catholic unions and certain professional associations, among others. SSQ had no better argument with which to set itself apart from Blue Cross.

Although various private companies were operating in the same insurance field, Blue Cross remained SSQ's main competitor, not only in the market but also in the eyes of SSQ's directors (see table below).

Accident-HEALTH insurance premiums in Quebec: distribution between main insurers (1946-1950)

(in thousands of dollars)

	Blue Cross	SSQ	Metropolitan	Zurich	Total for all companies1
1946	1,281	6	848	558	3,410
1947	2,660	73	1,135	691	4,358
1948	4,435	161	1,307	876	5,573
1949	5,934	238	1,728	1,110	7,294
1950	7,421	365	1,976	1,485	9,533

Blue Cross and SSQ were fraternal benefit societies whose business is not included in the total premiums collected. The table shows SSQ's position in relation to Blue Cross, as well as Blue Cross's position in relation to the overall market and to the two other largest companies at the time.
Source: Report of the Superintendent of Insurance and SSQ's financial statements.

Beginning in 1947, Blue Cross held the lion's share of the accident-health insurance market in Quebec, outpacing all of its competitors. In this particular arena, SSQ was a lightweight: in that same year, its premiums collected were only 2.7% of Blue Cross's total. Despite a new start, SSQ was still locked in a struggle for survival.

SSQ, however, enjoyed a number of significant advantages. For one thing, it had privileged ties to the cooperative movement, as well as with the clergy and nationalist movements. The list of the first groups recruited and their distribution according to field of activity (tables 1 and 2) clearly illustrates the importance of these links. For example, three caisse populaire groups were among the top 50 member groups and provided more than 500 members between them: 385 from the Caisse populaire Saint-Louis-de-France, 63 from the Fédération de Québec and 69 from Union régionale de Lévis.

The cooperative movement's involvement went even further. Following extensive lobbying, in particular by Dr. Tremblay and SSQ, targeting the president of the Fédération de Québec des Caisses populaires, Cyrille Vaillancourt, an agreement was signed with numerous caisses populaires based within as well as outside the Quebec City region. This agreement made things much easier for SSQ as the caisses promoted SSQ's services among their own members. Interested caisse members simply had to fill out an application form. Another very straightforward service was withdrawal authorization, which enabled the caisses to transfer clients' contributions to SSQ.

Ranking of the top 50 groups (1946-1947) — Table 1

Group No.	Name	Approximate No. of members
1	Collège de Lévis	54
2	Les Arts domestiques Québec	21
3	Collège Sainte-Anne-de-la-Pocatière	57
4	Séminaire de Chicoutimi	37
5	Employés de l'Hôpital Sainte-Croix de Drummondville	40
6	Foyer du Bon Conseil	10
7	Fédération des Caisses populaires de Québec	63
8	Hôtel-Dieu de Saint-Hyacinthe	35
9	Faculté des Sciences, Université Laval	18
10	O.T.J. Québec	10
11	Employés de l'Hôpital de Saint-Jean, Saint-Jean	46
12	Employés U.R.C.P.Q., Caisses Desjardins, Lévis	69
13	Clergé de l'archidiocèse de Rimouski	61
14	Clergé de Gaspé	33
15	Clergé de Chicoutimi	91
16	Clinique de Réhabilitation de Montréal	3
17	Employés du Comité paritaire des Arts Graphiques	21
18	L'Hoir Aluminium, Lévis	189
19	Société d'assurance des caisses populaires, Lévis	31
20	Morisset Auto, Québec	58
21	Laiterie Granger et Frères, Saint-Jean	15
22	Le Quotidien Ltée, Lévis	26
23	Institutrices, Comm. scol. de Valleyfield	40
24	Hôtel-Dieu d'Arthabaska	41
25	Gardes-malades de Chicoutimi (Unité sanitaire)	12
26	Producteurs de Sucre d'Érable du Québec (Les) (Plessisville)	18
27	Hôtel-Dieu de Lévis	21
28	Caisse Populaire de Saint-Louis-de-France, Montréal	385
29	Hôpital de Plessisville	13
30	Employés des Postes de Sherbrooke	43
31	Instituteurs de l'École Saint-Barthélémy, Montréal	16
32	Institutrices de l'École Olier, Montréal	17
33	Librairie Beauchemin Ltée, Montréal	48
34	J.N. Arsenault Ltée, Montréal	16
35	Société d'adoption et de protection de l'enfance, Montréal	38
36	Jeunesse ouvrière catholique, Montréal	43
37	Syndicat des Instituteurs de Saint-Jean-d'Iberville	31
38	Commission d'Assurance-chômage, Coaticook	11
39	Ruelland et Simard, Chicoutimi	16
40	Artisanat Mercier, Chicoutimi	13
41	Le Devoir, Montréal	22
42	L'Imprimerie du Saguenay Ltée, Chicoutimi	38
43	Société médicale de Québec, Québec	53
44	Commission des Accidents de Travail, Québec	93
45	Commission d'Assurance-chômage, Arvida-Chicoutimi	19
46	Commission d'Assurance-chômage, Québec	80
47	Séminaire de Trois-Rivières	33
48	Librairie Canadienne, Québec	10
49	Salon Lavigne, Québec	6
50	J.A. Désy Ltée, Montréal	15
A	Spécial – Employés et administrateurs de SSQ	14

Source: SSQ share capital records

Targeting the private sector

Although SSQ had little trouble gaining a foothold among cooperatives, religious institutions and government agencies, it did have difficulty, at least initially, reaching companies in the private sector. There was no great mystery about this: the group insurance formula meant that employers had to defray a portion of the plan's costs in order to facilitate workers' access to healthcare. In many cases, however, employers concluded that since they contributed to the plan's funding, they alone should choose the insurance company offering their employees coverage.

Even more than the shared nature of the contributions (i.e., employer/employee), the types of coverage offered by SSQ came as a surprise to many employers. At the time, insurance coverage focused on worst-case scenarios: accidents and hospitalization expenses garnered more attention than medical treatments administered at home or in the office; prevention had yet to become an issue. SSQ's competitors also benefited from their connections with Quebec's English-speaking community, made up primarily of industrialists or business owners, when insuring employees of these companies. In contrast, SSQ's advertising geared towards employers sought to establish a link between workers' health and their efficiency—a fairly progressive argument for that era.

In Quebec, people would have to wait many years before recognition would be given to the argument that the continuity and smooth functioning of the economic system required society to cover the bulk of social service costs. As a result, SSQ's depiction of "progressive" business leaders was often at odds with socio-economic realities.

Workers also found SSQ's approach attractive. Unions were often the best (or only) way to gain access to companies in the private sector. Fortunately, members and directors with roots in the business world soon made their influence felt; the private-sector groups grew rapidly in number as well as in total members (table 2). Among the top 50 groups in 1946-1947, one‑half represented religious institutions, while around one-half of the next 100 groups were from commercial and industrial enterprises.

Distribution of the FIRST 150 groups and their members by field of activity (1946-1948) — Table 2

Field of activity	Number of groups	Number of members
Colleges and schools	17	501
Hospitals	19	588
Clergy	6	337
Miscellaneous associations/institutions	12	226
1. Total clergy-related institutions	54	1,652
Caisses populaires	7	767
Other cooperatives	2	49
2. Total cooperatives	9	816
Commercial and industrial enterprises (including chambers of commerce)	60	2,031
Federal, provincial and municipal governments	15	646
Unions	3	69
Professionals	3	105
SSQ directors/employees	2	20
3. Total other sectors	83	2,871
4. Miscellaneous and unclassified	4	77
GRAND TOTAL	150	5,416

Source: SSQ share capital records

Among the various sources of support that facilitated SSQ's rise, the company's agreement with La Laurentienne, under which the latter's representatives were required to advertise SSQ's services, was key.⁶This stemmed from the efforts of Dr. Tardif, president of La Laurentienne and a member of SSQ's advisory committee. As a result, La Laurentienne's agents offered a life insurance plan, in addition to SSQ medical coverage.

Distribution and organization

In the beginning, most of SSQ's clientele came from Quebec City's Lower Town district and then the greater metropolitan area. But the other regions of the province were quick to come on board as the company's advertising efforts gained traction. In 1947, SSQ employed a number of advertising specialists trained by Mr. Drolet; in addition, a number of regional branch offices were opened for business, including one in Montreal (opened in March 1946), which had one employee, Marguerite-Marie Lefebvre, with Jean-Robert Bonnier (appointed in 1948) serving as regional representative. He was followed by Jacques Allard (appointed on November 12, 1948) and Louis Dufresne and A. Gauthier (appointed on September 23, 1949).⁷

In other cities, the branch offices had only one or two representatives, e.g., Simone Godbout in Trois-Rivières, Jean-Louis Maltais and Lorenzo Genest in Chicoutimi and Paul Alexandre in Saint-Jean.

Even the Quebec City office had only a handful of employees. In addition to representatives Jean-Paul Drolet and Alfred Lévesque, the team in early 1949 consisted of seven employees: Léonidas Morissette, Marc-Édouard Côté, Charles Lapointe, Ronald Beaupré, Jean-Paul Proulx, Paul-Émile Deschènes and Thérèse Pagé.

Under those circumstances, the division of labour was fairly relaxed, with each employee taking on various tasks. This included the general manager, Dr. Jacques Tremblay, who was regarded by his employees as firm, determined and industrious. True to his nature, Dr. Tremblay liked to hire hard-working individuals. He also wanted his staff to believe in the company's importance and be fully devoted to its cause. The atmosphere seemed quite pleasant despite difficult conditions (e.g., a nine-hour workday, unpaid overtime and low salaries).

Dr. Tremblay's offices, located at 52 Avenue des Oblats, still served as the company's headquarters, even though the space was increasingly cramped.

Internal tensions

The company was still struggling to gain a foothold and its chances of survival were far from certain. On one hand, differences between the general manager and the board undermined the harmony and unity that were necessary for success. On the other hand, despite concerted efforts to boost SSQ's credibility, its financial situation remained precarious (see following table). The rate of growth was swift, although this sometimes skewed the balance between revenues and expenses; the company thus had less room to manoeuvre. In addition, overhead remained high in relation to contributions, while cash flow was weak in comparison with short-term liabilities and the surplus was very small in relation to the company's financial commitments. Action was needed in the areas of internal harmony and management style. Startup cooperatives often find themselves in a precarious financial position, and they only survive if their main goals are clearly stated and supported by all concerned.

Main financial statement items (1946-1950)

(in thousands of dollars)

	Premium revenues	Total revenues	Surplus (deficit)	Total assets	Liabilities	Engagements	Member equity
1946	6	7	(5)	24	11	15	5
1947	73	74	19	41	38	9	28
1948	161	162	22	75	72	20	52
1949	238	242	(13)	66	59	31	35
1950	365	368	(19)	73	58	54	19

Truth be told, the situation was quite critical due to internal differences. In 1948, Dr. Tremblay, backed by Dr. Jules-Édouard Dorion and Dr. J. Émile Pelletier, even attempted to carry out a coup in the belief that the problem would be solved by "renewing" the board, i.e., by forcing several resignations. Against this backdrop, a number of individuals familiar with the cooperative movement were approached; most of them regarded the proposal to join the board as a "brutal" change and turned down the offer. Only Paul-Émile Charron, from the Fédération de Québec des Caisses populaires, was intrigued by the idea and accepted the invitation. However, he limited his role to that of "supervisory consultant". Assisted by Maurice Samson, from the accounting firm Samson, Bélair and Associates, and by René Bélanger, from the City of Quebec's employee union, Mr. Charron was tasked with upholding cooperative principles in the members' best interest and in the interests of SSQ itself.

As this counter-offensive gathered pace, the stakes came into sharper relief. There were also disputes involving various individuals: in 1948 for example, the general manager Dr. Tremblay, who had devoted several years of his life to the cause of medical cooperation, attempted to renegotiate his salary with SSQ,⁸ which had been set at $3,000 a year in 1947.

According to Dr. Tremblay, his salary was in no way commensurate with his qualifications and skills, which could easily fetch $8,000 or more in private practice.⁹ He also feared that the potential relocation of the company's cramped headquarters would mean the end of the extra income he earned by renting out his office space to the company. ¹⁰ Dr. Tremblay was successful on both counts: his salary was increased to $6,500 and SSQ extended its lease.

Critical questions

The following year, the same problem arose again. This time, however, several new issues came into play. Even though the balance sheet at December 31, 1948, showed a surplus, the board was dissatisfied: the company was regarded negatively by hospitals, doctors and some members due to its occasionally inadequate level of service. In addition, it appeared that management was in a hurry to make investments as soon as the necessary cash became available, which sometimes led to unacceptable delays in paying claims. Furthermore, contractual provisions were interpreted so restrictively that, in the event of a dispute, clients rarely came away satisfied.¹¹

These problems were all attributed to the general manager, Dr. Tremblay. When it came to settling disputes, Dr. Tremblay was assisted by the medical director, Dr. Dorion, who was just as critical of Dr. Tremblay's style as the board was. The reality was that Dr. Tremblay, although a competent manager, was undermining the company's credibility, not only in the eyes of its clientele, but also among the participating doctors and hospitals. As a result, his administrative style and financial arrangements led to conflict with the board and with the medical director. Inevitably, the controversy caused by these differences of opinion and misunderstandings called into question the division of power between SSQ's decision-making bodies.

In an attempt to address the situation, the board began by reviewing the general manager's duties and powers.¹² It subsequently decided to make a number of changes to Dr. Tremblay's responsibilities. The medical director was put in charge of professional relations with doctors and hospitals and was tasked with resolving claim disputes in collaboration with the medical advisory committee.¹³ In making these changes, the board hoped to make Dr. Tremblay's policies more flexible and to improve SSQ's relations with its members, as well as with doctors and hospitals.

The situation, however, did not evolve in quite the way the board had hoped, no doubt because the changes to the company's structures were accompanied by a warning that, though general in nature, was actually directed at Dr. Tremblay:

Following the submission of various complaints to the board concerning undue delays in paying out numerous claims, the directors hereby order the company's officers and employees to pay all amounts due to insured individuals, provided that contributions were made normally for the month in which care and services were provided to the member or dependents, without waiting to collect the additional premiums.

Dr. Tremblay's employment at a salary of $550 a month "for the time being" was agreed to, although he was asked to meet with the board on March 25, 1949, to discuss certain terms in his contract.

Towards open conflict

In Dr. Tremblay's view, the curtailment of his powers showed a lack of confidence on the part of the board,¹⁴particularly given his small raise in salary (only $100 a year).¹⁵ Emboldened by his status as company founder, Dr. Tremblay vigorously defended his point of view and sent out a series of memoranda and factums (written arguments) to the board and the medical advisory committee. Drawing on his knowledge of the cooperative movement, particularly as it applied to the medical field, Dr. Tremblay compiled a sheaf of supporting documents that set out his view of the respective roles that the general manager, the medical director and the board should play.

Dr. Tremblay's position was quite easy to explain. In a memorandum sent to board chair Paul Champoux,¹⁶ Dr. Tremblay quoted from the articles and bylaws of numerous cooperatives, both medical and non-medical, in an attempt to prove that general managers were usually in charge of managing business operations and staff, as well as external relations. They were also accountable for these tasks in dealings with the board. According to these same sources, the medical director normally reported to the general manager, even on medical and professional matters.

In another memorandum sent to the medical advisory committee,¹⁷ Dr. Tremblay discussed the theoretical underpinnings of his definition of the medical director's and the medical advisory committee's functions. In his view, the committee and the medical director were only entitled to fully exercise their powers if the medical practice itself was organized into "cooperative premises", as provided for in the area of cooperative medicine. In this regard, Dr. Tremblay cited the example of the Elk City cooperative hospital, which had originally inspired his project in 1944. Dr. Tremblay regarded SSQ first and foremost as a consumer cooperative—the first step towards cooperative medicine. Consumers, then, via the board and the general manager, were the ones who should be running the company. The participating doctors, he concluded, were merely consultants.

Dr. Tremblay certainly did not lack for arguments favouring his own decisions and attitudes or opposing the board's decisions concerning his salary or concerning his or the medical director's responsibilities. Despite his arguments, the board had to come up with a solution not only to the administrative problems, but also to the personality clashes that were constantly complicating the situation.

At the same time, the board was unable to convince Dr. Tremblay that SSQ's relations with the medical community and with its members were problematic. The board also had difficulties moving from full confidence in Dr. Tremblay, who had devised and promoted the healthcare cooperative formula, to exerting direct control over the situation, which was required under the circumstances. In any event, Dr. Tremblay was unable to accept the notion of accountability, particularly if accompanied by criticism of his management style or personal conduct. He thus fell back on legalistic arguments. In so doing, he failed to take a clear-eyed view of the situation: he underestimated the board's determination to take corrective action aimed at saving the company.

A painful break

Against that backdrop, the board had even more problems communicating with the general manager. Dr. Tremblay was increasingly withdrawn and isolated in his position; the company's operations were grinding to a halt. Paul-Émile Charron, who had moved from the oversight committee to the board of directors, tried to smooth things over. By launching a diplomatic offensive, he hoped to improve the climate and to encourage Dr. Tremblay to change his behaviour and agree to a redefinition of his duties. Unfortunately, his efforts were in vain, and Dr. Tremblay dug in his heels.

The situation became toxic: on April 29, 1949, positions and convictions on both sides were clear and cast in stone; there was no room for compromise. Dr. Tremblay, convinced that he was indispensable to the survival of the company he had founded, decided to play for keeps: in memoranda dated April 28 and 29, he called for an end to discussions concerning his management style. With their backs to the wall, the board made a painful decision. At its meeting on April 29, Dr. Tremblay was relieved of his duties, with René Bélanger presenting the sole dissenting voice:

It is hereby resolved to withdraw the company's offers of employment to Dr. Jacques Tremblay dated March 16 and March 25, 1949, as said offers have not been accepted. Effective immediately, Dr. Jacques Tremblay is relieved of his duties as general manager of SSQ and shall be notified thereof without delay.¹⁸

The decision came as a complete shock to Dr. Tremblay, who was forced to undertake a painful top-to-bottom reexamination of his career on very short notice. Four months later, he took SSQ to court. The contents of the documents submitted and the testimony shed further light on the issues at stake. Above and beyond the personality clashes, both parties staked out clear positions on the main points in dispute.

Dr. Tremblay claimed that his "ousting" constituted "an unjust and untimely dismissal" that was "illegal, irregular and null and void" since SSQ had "no reasonable cause" and had not given him "adequate notice", which he defined as three months. His claim for compensation was the equivalent of three months' salary, or $1,650. He also claimed that his salary as general manager (totalling $3,000 in 1947 and $6,500 in 1948), was far from commensurate with his contributions to SSQ since its founding, whether in terms of the duties he carried out, the use of his private automobile and office or the loss of his personal clientele, which he had relinquished in the best interests of the company. SSQ's response was that Dr. Tremblay had not completely stopped practicing medicine as per their agreement. Dr. Tremblay claimed that he had not taken on any new patients, that he had attended to his personal clientele outside of office hours and that there had never been an official agreement in that regard.

SSQ argued that Dr. Tremblay had run the cooperative as if he had been "the sole manager and owner", that he did as he pleased, that he refused to cooperate or to answer unpleasant questions and that he was intransigent when it came to member complaints and staff matters. In response, Dr. Tremblay cited as evidence the board's repeated expressions of confidence in him: he had always been given a free hand and the board had recognized his competence without ever seeking out information that went beyond his own statements. He added that no criticisms of him had been raised at the general meetings or by the oversight committee, even though they could easily have done so if the situation had been as dire as they said, which Dr. Tremblay clearly refused to admit. As for relations with members, Dr. Tremblay stated that he was convinced he had upheld the rights of all concerned and felt a sense of achievement in the fact that he had amassed a reserve fund totalling $36,000 as at December 31, 1948.

In its own submission, SSQ also referred to events that had occurred between March 18 and April 29, 1949, along with attempts to resolve the dispute over policy matters and the general manager's mandate. SSQ's submission, dated November 17, 1949, had been preceded in September of that year by an interview with Dr. Tremblay, which had been conducted by Jean Grenier on behalf of the cooperative. On February 14, 1950, Dr. Tremblay presented his written response to SSQ's argument.

Out-of-court settlement

The legal phase of the dispute came to an end when the lawsuit was withdrawn at Dr. Tremblay's initiative. On February 23, 1950, an out-of-court settlement was reached concerning furnishings and accounting records. In addition, each party agreed to pay its own expenses.

The settlement also stipulated that Dr. Tremblay would cease to be an SSQ member. That was one way of ending a conflict that had taken up far too much energy—energy that was needed for the company's survival. These events left a sense of bitterness and sadness among all concerned.

Behind these conflicts lay fundamental differences concerning the company's strategic direction, pitting Dr. Tremblay's idealistic notions of cooperation against a more realistic cooperative philosophy better suited to the growthrelated constraints of an insurance company facing intense competition. Dr. Tremblay had the conviction (if not the certainty) that he was in the right. Due to his sense of paternity and ownership with respect to the company he had founded, he saw himself as indispensable. In response, the other board members felt the need to chart a different course based on their own beliefs. Even though these individuals (particularly those who were among the first to provide start-up funding) did not completely subscribe to Dr. Tremblay's cooperative vision, they were just as committed to the company's survival. Above all, they sought to implement a rigorous administrative framework (which they saw as essential), along with a more conciliatory approach to member expectations and the reactions of the medical personnel. Real cooperation was certainly not incompatible with a change in direction.

Despite its problems, the company had to keep operating. Since the general manager vacancy needed to be filled as soon as possible, the chairman of the board (Paul Champoux) was appointed on an interim basis. On June 29, 1949,¹⁹ a young social sciences graduate from Université Laval, Jacques de la Chevrotière, was appointed assistant general manager. He also held a master's degree in industrial relations and had worked since 1946 for the Conseil central des oeuvres.

Mr. de la Chevrotière's task was far from easy. He took office on July 25, 1949, despite the fact that he had never completed any insurance training. He used the weeks preceding his official start date to prepare himself for his new duties. On October 28, 1949, the board welcomed Mr. de la Chevrotière as one of its members, replacing Dr. Tremblay; Mr. de la Chevrotière was also appointed general manager, replacing Paul Champoux.

Since the company's bylaws had to be amended, a special general meeting was called for November 11, 1949, sparking opposition among some members. In early November 1949, demands that the special general meeting be proposed were set out in a circular addressed to the members, citing a lack of information concerning the recent changes at SSQ. A memorandum was also issued providing a point-by-point critique of the meeting's agenda. Although both of these documents were unsigned, they showed in-depth knowledge of the company's operations and summarized the main thrust of Dr. Tremblay's arguments.

In fact, this show of resistance only succeeded in delaying the meeting by a few weeks (it was originally scheduled for November 11 and was eventually held on December 2). The amendments to the bylaws were approved, including another name change: "Les Services de Santé de Québec" became "Les Services de Santé du Québec", which reflected its province-wide operations.

Needless to say, these conflicts left the team feeling unsettled. A lingering sense of unease also affected the individuals overseeing the change in direction. But despite the sudden departure of the founding general manager and unstable financial situation, the board members remained convinced that the company's fundamental mission was intact. They forged ahead with the new experiment in the face of a still-uncertain future. Survival was paramount.

Next chapter : Turnaround and high-speed growth (1950-1959)

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1. SSQ-QHSA, Jacques Tremblay (Mémoire pour le comité d'études, Montreal, Quebec, January 6, 1947, 2 pp., Tremblay archives). 
2. See p. 31, statement of the APSHQ dated October 24, 1946. 
3. $3,000 for families, $1,800 for unmarried individuals (bylaw adopted on March 12, 1946). 
4. List of participating doctors, circa 1947 (Drolet archives). P. 32 includes an example of the medical contract in effect in 1949. 
5. Blue Cross (Association d'hospitalisation du Québec), sixth annual report and brochure entitled "Protection sécurité pour votre famille, pour vous", 1947. 
6. Minutes of the board meeting, June 2, 1946. 
7. Taken from the minutes of the board meeting. 
8. Jacques Tremblay, memorandum to Jean Grenier, January 26, 1948, 4 pp. 
9. Jacques Tremblay, letter to François Jobin, May 23, 1949. 
10. Jacques Tremblay, memorandum dated January 26, 1948, 4 pp. 
11. Minutes of the board meetings, February 25 and March 18, 1948. Two of these cases were reviewed. 
12. Board meetings of March 18 and 25, 1949. 
13. Jacques Tremblay (document describing the general manager's duties, no specific date, March 1949).
14. Jacques Tremblay, letter to P.E. Charron (April 20, 1949). 
15. Lepire, J. Alex. Statement of claim and declaration (July 20, 1949)
16. Letters from Jacques Tremblay to Paul Champoux (April 28) and factum dated April 24, 1949 (Tremblay archives).  
17. Minutes of the medical advisory committee meeting, March 14, 1949. Attached thereto is Dr. Tremblay's memorandum. 
18. Letter from Jean Grenier to Jacques Tremblay (April 30, 1949). 
19. Letter from Jacques de la Chevrotière to Jean-Paul Drolet (July 26, 1949).