The Social Transformation of American Medicine James G. Anderson, Ph.D. Purdue University

A Half Century of Growth Resources

A Half-Century of Growth Medical Education 40 new schools so medicine 8 new schools of osteopathy 13 new schools of dentistry

New Federal Legislation Medicare/Medicaid 1965 Regional Medical Programs Comprehensive Health Care Planning Assistance Health Professions Education Assistance Maternal and Infant Care Children and Youth Projects Title V SS Act Neighborhood Health Centers and Head Start, Economic Opportunity Act

National Health Expenditures

Explosive Growth of For-Profit Health Care 19% Acute Care hospital Beds 50% Nongovernmental Psychiatric Beds 77% Nursing Homes 33% Diagnostic Laboratories 40% Hemodialysis Centers

Managed Care Integrated financing and delivery of health care Contracts with selected providers to furnish comprehensive services to enrolled members at a predetermined rate Utilization and quality controls Financial incentives for members to use providers associated with the plan Assumption of some financial risk by providers

Growth of Managed Care Plans

Controls Over Type and Amount of Care Delivered Selection of physicians and hospitals (Pro/File Computer-based system) Use of primary care physicians as gatekeepers Financial incentives to influence medial practice Computer-based systems to review appropriateness of surgical and diagnostic decisions

Controls Over Type and Amount of Care Delivered Payment to primary care physicians based on utilization and quality Use of clinical rules: Treatment protocols Administrative constraints Practice guidelines

Changes in the Practice of Medicine Industrialization of Health Care Monitoring Emphasis on productivity Substitution of allied health professionals Emphasis on Cost Containment Patient Dumping Salaried Physicians 50% under 35 18% over 40

Changes in the Practice of Medicine Rise of Commercialism MD entrepreneurs Bonuses for patient referrals Hospitals pay group practices and provide incentives Ambulatory care clinics paid commission on charges Development of for-profit hospitals

Changes in the Practice of Medicine Conflicts of Interest (Florida study) 40% MDs have investments in centers to which they refer patients 60% clinical labs are MD owned 93% diagnostic imaging centers are MD owned 80% radiation therapy centers are MD owned 50% physical therapy are MD owned

Changes in the Practice of Medicine Dispirited Physicians/Disgruntled Patients Erosion of public confidence (70% of public is dissatisfied) Decrease in medical school applicants Unhappy practicing physicians

Struggle between Managed Care and Fee-for-Service Congressional “Patient Protection Act” State laws requiring health plans to accept “any willing provider” State patient protection acts

The Future Centralized government regulatory mechanisms and global budgets Individual incentives for cost control in a pluralistic privately dominated system.