SPECIAL ARTICLE
G O V E R N M E N T PRACTICES A N D THE ME D I C A L PRACTITIONER* THEODORE COOPER, M.D., PH.D. Dean, Cornell University Medical College, New York, New York
Governmental policy in the area of cost containment will be an opening wedge for making even more extensive revisions of the medical care system a major political issue. I say further revision of the system and not just a national health insurance program, because the basic argument for national health insurance will really center on the necessity to restructure our total system of medical care. Therefore, cost containment is the principal issue that we in the profession must concern ourselves with in a vigorous way on three levels. The first level is the m a n a g e m e n t of our health care institutions. At our medical center, we have instituted such new practices as selfinsurance and better purchasing policies and procedures. We have adopted many standard business m a n a g e m e n t t e c h n i q u e s . These changes have saved us about $5 million a year. This is not a trivial amount. Presently, the Center writes off outpatient department losses of $6.8 million a year, and absorbs $7.3 million a year for house-stafftraining costs. When we can offset some of these losses - - upward of $5 million a year in savings through better management practices - - it is a major contribution to containing costs. It should also indicate to the public that we are sensitive to the health care cost problem. The second area of concern must be in our professional activities. Here, the major thrust is to achieve savings through utilization review. Our own institution has the lowest average length of stay of the major voluntary academic centers in New York City. Our occupancy has been increased about 10 per cent in the last few years. Thus, we can make the case that we are becoming more efficient through utilization re-
*Address given before the American Association of Clinical Urologists, Inc., New York, New York, May 12, 1979.
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view and quality assurance review by the professional staff. The third area of attention must be education. Here, we have not yet been very successful. A recent survey of the attending staff, the fulltime staff, the house staff, and the students at The New York Hospital-Cornell Medical Center were asked what they knew about the costs of what they ordered. The survey results were not very convincing that the professional staff pays much attention to costs they generate in the academic setting. As a result, we have initiated with the House Staff Committee a variety of programs d i r e c t e d at creating an increased awareness of the cost issues involved in their professional activities. Individual and institutional attention to these cost factors will contribute significantly to a solution to the escalation of costs if we persist and do not let the uncertainties of the general economy and the adverse media-reporting deviate us from our necessary courses of action. The rise in the medical cost index for the month of April was substantially below the rise in the cost of living index. Nevertheless, HEW (Department of Health, Education and Welfare) Secretary Califano has initiated a major drive for enactment of a mandatory cost containment bill. Such legislation is not likely to be adopted, in my estimation, although it is a high priority political issue to this Administration and to the Democratic party. The general consensus is that any bill reported out of committees will be modified along the lines of the Talmadge bill, which provides incentives to institutions to contain costs and a trigger mechanism for instituting mandatory controls, if necessary. Such legislation would be a compromise with the voluntary effort in order to give it a chance. But, if we want to forestall that legislation, it behooves us to return to our institutions and see to it that a major effort continues to contain the escalation of health care costs.
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Cost Escalation The major factors that contribute to cost escalation m u s t have p r i o r i t y c o n s i d e r a t i o n . I suggest there are six major causes that have brought us to the condition we are in. Technology is not a major cause, nor is the avariciousness of physicians. The major cause is the reimb u r s e m e n t policies that were established in 1965. They were embodied in the legislation that is known as Medicare and Medicaid. These programs gave a thrust to the third-party payment system, over the strong objections of the profession. These programs in turn led to increased public expectations and a decreasing awareness of the cost of hospitalization and h e a l t h care. F u r t h e r m o r e , M e d i c a r e and Medicaid created a large patient constituency oriented to institutional medicine. As a result, 40 per cent of the costs that are now considered so outrageous are generated in the hospital sector. It is human nature to follow the Willie Sutton principle and "go where the money is," not because one will necessarily get more money, but because the patient's cost burden is relieved by hospitalization. This is not to say that some practitioners have not taken advantage of the system. Even allowing for some venal doctors, it is clearly legislation that has fostered increased expenditures. The second contributory factor has been the growth in public expectations. The public's increasing awareness and interest in health care is fantastic. The current paradox is that the public is being convinced that it should actually have more for less. What a tremendous public relations feat the Administration and the Secretary of Health, E d u c a t i o n and Welfare have accomplished during the last few years. I cannot cite many other accomplishments in the health field by this Administration, but I can say that it is absolutely clear that the Secretary of Health, Education and Welfare has been successful in c o n v i n c i n g t h e A m e r i c a n p u b l i c that t h e y should have more for less and at no less quality, and that the villain in the cost and availability crisis is you, the ordering physician. A third cause is the labor agreements that ensued after the enactment of the Medicare program. Health benefits became a form of nontaxable income transfer. Such benefits are now major negotiating features in all labor agreements, and it is only within the last few years that big business has realized the importance of this feature of labor relations. W h e n General Motors pays out a billion dollars a year for 326
health benefits, it becomes a significant cost factor. As a result, the health benefits package in labor agreements is now getting proper attention from management in a way that I hope will not precipitate further unreasonable increased expectations. A fourth factor has been the increasing drive toward specialization. This is a natural outcome of the medical research that has greatly enlarged medical knowledge in general. For some reason or o t h e r , p e o p l e have c o m e to t h i n k t h a t specialization is some sort of evil that must be resisted. Thus, one hears comments that we do not need specialization, we do not need more research, and that we have e n o u g h medical knowledge. That is clearly an unwarranted conclusion, at the present time. The notion is also prevalent that if you become a specialist you become less humane and more insensitive. You even hear it said that the highly trained doctors are not competent to provide general care, and that the less well-trained doctors are more humanistic and more sensitive. This is a fallacy that we should correct. We know what the proper balance is in optimal medical education and training. A highly trained doctor can be a good primary care physician, and a "good doctor" can be a specialist. But the specialist must not be made a scapegoat in an effort to rebalance the allocation of resources in this country, particularly along geographic lines. Other contributing factors are changing hospital labor practices and regulatory rules. Both have i n c r e a s e d hospital costs fantastically. Twenty years ago, the hospital staff was underpaid, and this inequity has been redressed. But, more important is the fact that administrative and regulatory costs of running an institution are absolutely staggering at the present time, and they are increasing. The Hospital Association of New York State recently made a study which demonstrated that 25 per cent of regular per diem operating costs could be allocated to some form of institutional regulatory requirement. I repeat, 25 per cent! Hospital administrative staffs have had to be increased to deal with regulations, as agency after agency requires more and more documentation from the providers of medical care. National Health Legislation You hear a lot of debate about catastrophic and national health insurances. These are major political issues, and they have a great potential
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for influencing the structure of medical practice. It is my estimation that by the s u m m e r of 1980, we will have at least some expansion of the federal insurance program because of the political imperatives, and despite the obvious cost increases involved. The expanded program that I expect you will see is catastrophic health insurance, as proposed by Senator Long. This is the most attractive of the existing proposals. It has some hazards for all of us, and it will also carry a feature that will attempt to take the first step in the federalization of Medicaid. There are few federal p r o g r a m s t h a t are as m e d i o c r e as Medicaid - - relatively poorly administered, absurdly financed, and badly interfaced with the profession. I foresee that through new regulations and in all proposals for insurance an attempt will be made to extend prospective reimbursement to all health care providers including physicians. In New York State we are now all experts at prospective reimbursement systems. We have had nearly ten years of experience. The system is one of the reasons why Medicaid costs in New York State went up only 8.6 per cent last year, while in the nation they went up 12.8 per cent. You will h e a r i n c r e a s i n g d i s c u s s i o n of fee schedules for physicians in association with this drive, and my guess is that every major piece of legislation will carry a request to set prospective fees for the physician. There will be an attempt also to change the rules about institutional priorities for reimbursement. That means there will be an attempt to change r e i m b u r s e m e n t schedules to provide payment in a reasonable way for services that can be done on an ambulatory basis. I think this is one change that will be salutary for all of us. There will also be legislative attempts to change the roles of the nonphysician health professionals. When I was still in government service that objective was gaining attention, and it persists. Licensed limited practitioners will want to have access to fees for service without physician's surveillance and responsibility control. This can be done only through regulatory legislation and licensing boards. There will be an attempt to reverse what has been known as "itemization." As society becomes enamored of computers, codes, and indices, everything that was done was itemized. Then it was found that the aggregate of the sum of the processes was always more than you used to charge just for a workup. If you charge separately for listening to the chest and doing an
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EKG and proctoscopic examination, it comes out to more than saying come in and get a workup. There will be an attempt to go back to an all-inclusive fee rather than itemization. The Clinical Laboratories Practice Act will have an impact on some of us. The thrust is to take regulation of laboratory work right into the physician's office. A new drug bill will be debated again this year. It will attempt to change prescribing practices of physicians, as well as other practices of the drug industry. There will be one major debate in the fall of 1979 that I want to call to your attention because it will have significant impact on all of us in the future. That debate will be over the health manpower bill, or the extension of the Health Professions Education Act. This legislation will attempt to do three things. First, it will try to eliminate capitation for medical schools. Secretary Califano made the decision that we have too many doctors. Consequently, incentives to encourage growth in medical school classes will be eliminated. There will be a major debate over Administration proposals to reduce funding for medical education. A second objective will be to attempt to force further change in the mix of specialists. There is dissatisfaction in Washington with the trend in the ratio of specialists to primary care physicians, In 1975-1976, Congress was persuaded to set a goal of 50 per cent of all graduates to go into so-called primary care postgraduate training. Legislators now feel they were deceived because we were able to produce that n u m b e r within one year. The reason we could do this was because of the way in which primary care was defined: i.e., internal medicine, pediatrics, obstetrics and gynecology, and family practice. There is no difficulty in showing that the first year or so out of medical school young doctors go into these fields. The problem is in changing their orientation in the later postgraduate years. C o n g r e s s will a t t e m p t , t h e r e f o r e , to force further limits on specialization. This will have a significant impact on the profession. A third dimension which will be of greatest concern is how and who should decide how many people should be in what specialty. This will be done in a pseudoscientific way through an advisory committee, in which a large percentage of the profession will be co-opted. It will be known as the Graduate Medical Education National Advisory Committee (GMENAC). The G M E N A C program, at the m o m e n t , is funded at 3.5 million dollars a year and has set
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up a computerized model. Doesn't that sound highly scientific - - a computerized model trying to determine how many doctors are needed in particular areas of medical practice! They will take the international code book, list all the diseases, get groups of doctors in and ask them, "How many patient visits do you need, on average, for this disease?" They will get concurrence among this group of experts. Let us say that, for prostatitis, you need so many patient encounters a year in this category. They will do a little arithmetic and find out how many doctors are needed for prostatitis. You go through all diseases this way, and you add it all up in a sophisticated arithmetic analog model, and you come out with the number of doctors needed. There will be a small debate about who should treat what. In some specialties, it is more important than in others. They will acknowledge that there is some overlap and will make another mathematical formula to take care of that. There are already 18 committees of professionals appointed to help make this study of projected needs. Conclusions will be reached, not only about how many doctors we should have doing what, but how much they should be paid. You can see that this approach to decisions on numbers of specialists required is a very potent tool for mischief. I urge you to beware in saying this is an acceptable approach just because it has the cooperation of the profession. Such cooperation has really been compulsory. When the government asks you to join a committee, you think you have to participate in order to have access and input. That is reasonable but, once you participate, you have been "had" in some respects. The degree of professional independence that is essential for effective participation is an absolutely fundamental need. Technologic Change This all sounds like doom and gloom, but some other things are going on that I think you should be aware of. The most important occur-
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rences in the next decade is that medicine will continue to change technologically. What is in the scientific pipeline right now is spectacular. The hallmark of the last t h r e e decades of medicine was the changing ability to intervene in the natural history of disease. The doctor finally could do things that made a difference, through anesthesia, blood transfusion, surgical techniques, antibiotics, drugs, and so forth. We have a tremendous record of accomplishments, and the statistics reflect this, despite what the government says. The absolute increase in duration and quality of life, and the decrease in certain forms of death are outstanding accomplishments of this medical era. But, as you look down the road to the future, the prospects are even more exciting. The scientific findings in the fields of immunology, surface chemistry, and genetics will be of importance not only to geneticists for the treatment of Tay-Sachs disease, or some other inborn errors of metabolism, but also as diagnostic tools for all physicians. What is going on in neurobiology allows people to understand pain and motion, alcoholism, addiction, and all kinds of psychophysical problems. Pharmacology, if not hobbled by the FDA (Food and Drug Administration), has developed a wide spectrum of generally applicable drugs. New knowledge is going to provide you with practical tools for everyday encounters with your patients. I hope I have given you some insights into the serious threats to the profession likely to come about because of increasing governmental intervention. I have also tried to encourage you to take an interest in and an active role in curtailing or rationally directing the growing interface between government and medicine. I hope I have convinced you that the future scientific prospects for the profession are so fantastic and exciting that we must take seriously the present threats to the optimal development of our profession, and develop solutions mutually satisfactory to our profession and the society which we se rye.
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