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

2. A Half Century of Growth in Health Care Resources 19501998 Acute Care Hospital Beds 330/100,00353/100,000 Physicians141/100,000287/100,000 RNs369/100,000(1970)800/100,000

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

4. New Federal Legislation  Regional Medical Programs  Comprehensive Medicare/Medicaid 1965  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

5. National Health Expenditures

7. U.S. Health Care Spending Compared to Other nations

8. Health Insurance Coverage

9. Calm Before the Storm: Increase in the Number of Uninsured Americans  2004 45 million uninsured  Employers laying off workers  Employers cutting back on health insurance benefits  State’s cutting back on funding for Medicaid programs

10. Americans Who Can’t Afford Care

11. U.S. Death Rates People Aged 55-64 who die over 8 years

12. U.S. Unmet Health needs

13. Impact of Health Care Costs Amount that employee health Care costs add to auto prices

14. The Graying of America Persons 65 and Over

15. 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

16. 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

17. Growth of Managed Care Plans

18. 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

19. 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

20. 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

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

22. Changes in the Practice of Medicine  Conflicts of Interest (Florida study) 40% MDs have investments in centers to which they refer patients40% MDs have investments in centers to which they refer patients 60% clinical labs are MD owned60% clinical labs are MD owned 93% diagnostic imaging centers are MD owned93% diagnostic imaging centers are MD owned 80% radiation therapy centers are MD owned80% radiation therapy centers are MD owned 50% physical therapy are MD owned50% physical therapy are MD owned

23. 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

24. 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

25. Prescriptions for U.S. Health Care  Implement Information Technology Electronic health recordsElectronic health records Computerized order entryComputerized order entry Electronic prescribing systemsElectronic prescribing systems Decision support systemsDecision support systems

26. Prescriptions for U.S. Health Care  Implement Evidence-based Medicine 17%-32% of surgery on Medicare patients is unnecessary17%-32% of surgery on Medicare patients is unnecessary Less than 25% of people with hypertension use BP medications to control their disease.Less than 25% of people with hypertension use BP medications to control their disease. Reduce the overuse of antibioticsReduce the overuse of antibiotics

27. Prescriptions for U.S. Health Care  Fix the Reimbursement System Providers are not paid for quality care. The best and the worst healthcare providers are paid the sameProviders are not paid for quality care. The best and the worst healthcare providers are paid the same Since providers are paid for procedures, and treatments, they are penalized if they eliminate unnecessary proceduresSince providers are paid for procedures, and treatments, they are penalized if they eliminate unnecessary procedures There are few incentives to provide preventative careThere are few incentives to provide preventative care

28. Prescriptions for U.S. Health Care  Implement Disease Management Programs Monitor patients with chronic conditions such as diabetes, congestive heart failure and coronary heart diseaseMonitor patients with chronic conditions such as diabetes, congestive heart failure and coronary heart disease Monitoring and proper care can reduce hospital cost by more than 30% and cut rehospitalization by 50%Monitoring and proper care can reduce hospital cost by more than 30% and cut rehospitalization by 50%

29. Prescriptions for U.S. Health Care  Redesign the ICU The sickest 1% of patients account for 27% of health care costsThe sickest 1% of patients account for 27% of health care costs Electronic monitoring of ICU patients can reduce mortality rates by as much as 27% and shorten length of stay by 17%Electronic monitoring of ICU patients can reduce mortality rates by as much as 27% and shorten length of stay by 17% Training ICU staff to follow guidelines can reduce length of stay by an average of 2.5 daysTraining ICU staff to follow guidelines can reduce length of stay by an average of 2.5 days

30. Prescriptions for U.S. Health Care  Get patients Involved in Their Care Help patients to make judgments about treatment alternatives based on evidenceHelp patients to make judgments about treatment alternatives based on evidence

31. The Future  Single-payer system with negotiated prices ands and global budgets  or  Individual incentives for cost control in a pluralistic privately dominated system (e.g., Health care spending accounts, Defined Contribution Plans)