Doc Morbid is the odd, unfriendly doctor in Junktown. Despite his attitude and two bodyguards, Flash and Cougar, he is a competent physician and, from time to time, teaches budding young doctors medicine (for instance, Razlo from Shady Sands is one such student).
Apart from providing medical services to the people of his fine town, the doctor is also an entrepreneur. In his basement he operates an underground butcher shop, where human body parts are prepared by him and his dwarf assistant Gretch for shipment to Iguana Bob in The Hub for the production of iguana-on-a-stick.
When heading to Junktown on a caravan route, the caravan driver sometimes says "Hear there's an odd doctor out that way. Deals in the dead they say." This is obviously a reference to Doc Morbid selling his body parts to Iguana Bob in order to use for the meat.
He can heal the player - for a price. After talking to him, there is no way to leave without him becoming hostile, unless you pay to be healed. However, the player is free to go inside his basement, and use this information to blackmail Iguana Bob of the Hub. It should be noted that when the character is badly wounded the price to heal you can be 500 caps (or more).
Trying to bargain your way out of a fight after entering the basement can cause him to remove one of your eyes, reducing Perception to 1.