Policy watch

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POLICY EDITORS

Max Michael, M D

Cooper Green Hospital William F. Bridgers, MD The Eutaw Group

EDITORIAL STAFF Dvora Konstant

Sharney King

WATCH Deja Vu [Mullah F, Rivo ML, Politzer RM. Doctors, dollars, and determination: making physician work-force policy. Health Aff (Millwood) 1993; 12 (Suppl): 13851.] [Barondess JA. The future of generalism. Ann Intern Med 1993; 119: 153-60.]

University of Alabama

at Birmingham

CONTRIBUTING EDITORS

[Mirvis DM. Physicians' autonomy line relation between public and professional expectations. N Engl J Ivied 1993; 328: 1346-9.]

Dennis P. Andrulis, PhD, MPH National Public Health and Hospital Institute

Ronald G. Blankenbaker, MD Erlanger Medical Center

Rachel Block Vermont Health Care Authority

Eli Capilouto, DMD, ScD University of Alabama at Birmingham School of Public Health

W. Dale Dauphinee, MD, FRCP(c) McGill University

G.E. Alan Dever, PhD, MT Mercer University

Emily Friedman Health Policy Analyst Chicago, Illinois

Lawrence W. Green, DrPH University of British Columbia

Mary E. Guy, PhD University of Alabama at Birmingham

Robert L. Kane, MD University of Minnesota School of Public Health

Marion Ein Lewin, MA Institute of Medicine

Alice Atkins Mercer, PhD University of Tennessee

C. Kirk Osterland, MD

Royal Victoria Hospital

George Pickett, MD, MPH Lake Success, New York

James D. Wright, PhD Tulane University

nce again we are experiencing a clamor for more primary care physicians, and if national health plans and reimbursement schemes cooperate, this time we finally may have a gradual shift in the medical manpower planning and policy in the United States. Mullan et al make a strong case for the development of a more rational physician manpower policy. The opportunity exists for influencing health manpower outcomes through federal appropriations that totaled more than 15 billion dollars in 1992. Mullah et al advocate f i v e areas for workforce reform: (1) provide training and continuing education for a majority of practicing physicians in the generalist disciplines; (2) reflect the population's racial/ethnic diversity in the physician workforce; (3) distribute the physician supply better to provide geographic access; (4) keep the physician-to-population ratio at current levels; and (5) establish supply needs for nurse practitioners, primary care physician assistants, a n d certified nurse midwives. To accomplish these reforms, they suggest the use of commissions, educational consortia, refocused f u n d -

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ing, reformed accreditation and certification requirements, and e m p h a s i s on i n c r e a s e d reimbursement for generalists. Barondess's support of revised and redefined general internal medicine requirements fits with manpower reforms. He advocates reducing the number of internal medicine subspecialists and increasing the amount of training generalists receive. This newly sophisticated generalist would provide care t h a t is more into, grated and coherent across multiple levels of intensity. Basic resid e n c y t r a i n i n g s h o u l d be expanded to 4 years, to enhance the physician's capacity in secondary and tertiary care across a broad array of clinical problems. This new system would lead to a reduction in subspecialty fellowships through substitution of fourth-year medicine residents in subspecialty services. The costs of this additional year of training should be offset by the reduction in subspecialty training positions. In the course of these changes, physicians' roles in society and in health care will also change and their sense of autonomy may be threatened. Mirvis's short and very provocative article suggests that there is a "key distinction... between knowledge itself, which is the purview of the professional, a n d t h e a p p l i c a t i o n of t h a t knowledge, which is subject to non-professional views and decisions." Physicians appropriately expect autonomy involving their intrinsic work, making diagnoses, prescribing therapy, and performing procedures. But there are other areas where the public's Requests for reprints should be addressed to Policy Watch. University of Alabama at Birmingham, 405 DREB, UAB Station, Birmingham, Alabama 35294-0012.

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priorities and sense of right and wrong c o m b i n e with medical knowledge to influence decisions. Mirvis states that the medical profession should not consider the involvement of the public in the debate over health care delivery as illegitimate infringement on its autonomy. The medical profession must increase its involvement in health care policy while allowing participation of nonmedical professionals, or risk loss of public credibility. The reform-minded environment in which health care finds itself offers o p p o r t u n i t i e s for growth and change for the medical profession. Changes in physician training, in primary care, and in physician understanding of autonomy all appear to be on the horizon. AAM

Political Will, Good Will [Clinton administration description of President's health care reform plan, "American Health Security Act of 1993." September 7, 1993.]

ven if a federally mandated, fully tax-supported "single payer" option is, at least for now, a political nonstarter, it is possible for a Health Alliance to act as a "single buyer." Step 1 is critical in the Clinton plan: setting up monopsony purchasers. Step 2 is a given: financial access to care is assured to everyone, and most everyone is assured some choice among at least three plans, including a fee-for-service option. Although a fee-for-service option may be priced too high for most people, abandoning it is apparently another political nonstarter, as is folding into the new system the Departments of Veterans Affairs and Defense, and, at least right away, the Medicare program.

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Step 3 is to reduce the number of sellers, with Health Alliances purchasing comprehensive care packages from large, vertically i n t e g r a t e d organizations who compete for patients at a predetermined, negotiated price. Because urban areas have redundant (specialty) capacity and a shortage of generalists, the provider groups will need to expand into underserved areas in order to enroll a sufficient number of patients. Subsidies will induce providers to enroll people in rural and inner-city areas. Step 4: Although restructuring plus some command and control will reduce the rates of increase in total outlays, to be on the safe side, the Clinton plan imposes a cap. Commencing in 1996, expenditures are racheted down on both the publicly and privately financed sides such that by the turn of the century the health sector grows at the same rate as the gross domestic product. Step 5: After the hearings and debates have run their course, a federal legislative mandate for reform must be passed. This will surely rank as the domestic policy accomplishment of at least the last half of this century, and betting on both sides of the aisle is that it may very well actually happen. The good news is that the questions, Who's covered? For which services? To be p r o v i d e d by w h o m ? a n d W h o p a y s how much? are all resolvable via political give and take. All that will be easy compared to what will happen next: implementation in all 50 states and in thousand of cities, towns, hamlets, and crossroads. States must come up with a plan acceptable to the National Health Board, set up Alliances, approve provider groups, see that everyone is enrolled, and develop an information system that can keep track of users, nonusers, costs, and accountabilities.

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Some states will say, give us relief from ERISA, a few Medicaid waivers, some safe harbors from antitrust, and we'll finish what for years we've been trying to do without, Uncle Sam, a great deal of help from you. Other states will fiddle around until the Department of Treasury threatens to implement a payroll tax and the Department of Health and Human Services stages a takeover under court order. Equity for everyone regardless of location may be an ultimate goal that might not be easily achieved. Other concerns also loom large because they are not as dependent upon a political mandate as upon the goodwill of a great many people within and outside the system. Will there actually be a reduction in redundant personnel and facilities, with redistribution? Will enough local leadership come f o r w a r d to assure geographic access to comprehensive care for the historically underserved? Will the reorganization come about soon enough to preclude a financial crisis on either the publicly or privately funded sides? Will there be locally sensitive contingency plans if that happens? WFB

The Underclass and Medical Care [McBride D. Black America: from community health care to crisis medicine. J Health Polit Policy Law 1993; 18: 319-37.]

his article dwells on a disturbing truth: that men who live in Harlem are less likely to reach their 65th birthday than men who live in Bangladesh. What has gone wrong in a nation as affluent as the United States for this to be the case? David McBride argues that a new kind of ghettoization has developed for America's underclass.

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In this "New Ghetto" we find urban African-Americans for whom health care is disorganized at best and missing at worst. The seven major health problems that underlie the much higher mortality rate of bl~icks are cancer, cardiovascular disease and stroke, substance abuse, diabetes, homicides, a c c i d e n t s , a n d i n f a n t mortality. The problems of urban blacks are so severe that McBride questions the very survival of black America. The "New Ghetto" is characterized by large neighborhoods with high unemployment, homelessness, soaring crime rates, and an overwhelming dependence on e m e r g e n c y - r o o m medical services. Problems related to social violence, AIDS, teen pregnancy, school dropouts, and drug abuse continue to increase, apparently unaffected by social programs intended to make a difference. For instance, researchers in the late 1980s found that 1,250 inner-city children from kindergarten through sixth grade in Brooklyn, New York, suffered from nervous system, respiratory, and/0r infectious or parasitic diseases. About one third of all these children needed immediate medical care for these and other conditions. Blacks already experience shorter life expectancies, a higher rate of chronic and debilitating illnesses, and less p r o t e c t i o n against infectious diseases. As urban blacks have become more dep e n d e n t on public hospitals, shifts in demographic and employment patterns have caused many urban hospitals to close, thus closing off a significant avenue of access to health care. To further complicate matters, crisis medicine has replaced a community-centered approach to health care for the underserved. The author calls for a return to the c o m m u n i t y health center model that focuses attention on the health of a community rather

than on the health of an individual patient. He takes to task those who advocate competitive health care, for he claims that they seem not to understand (or, by implication, not to care) that the racial barriers to health care are being ignored. Managed competition promises to do little, if anything, to address the needs of the urban underclass. To make m a t t e r s worse, it r e m o v e s c o n t r o l of health services from consumers to providers. There is little to be optimistic a b o u t if o n e a g r e e s w i t h McBride's perspective on U.S. health care. He believes t h a t health reform is moving to a vision of the medically needy as an anonymous mass, a "colorless" marketplace that "disidentifies" the economically troubled black community. The author points out that by discussing the "patient-consumer" in theoretical language, the harsh realities of health care for the urban underclass are forgotten. As the debates over health reform heat up, they need to address the very problems that McBride discusses in this compelling article.mMEG

Open Your Pocket and Say "Ouch" [Airman SH, Young DA. A decade of Medicare's prospective payment system success or failure? Journal of American Health Policy 1993; 3: 11-9.]

he Medicare's prospective payment system (PPS) was enacted in March 1983 as an incentive for hospitals to control costs through greater efficiency in the delivery of health care to Medicare recipients. Basically, P P S provides a fixed and predetermined payment per case for all inpatient hospital services fur-

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nished during an admission. The per-case payment is determined by the corresponding "diagnosisrelated group" (DRG) for the patient. The theory, in general, was that hospitals would profit to the extent they could provide health services within DRGs below the corresponding payment level for t h a t D R G , and w o u l d suffer losses otherwise; P P S was, therefore, enacted as an incentive to increase efficiency and thereby control spiraling hospital costs. What lessons can be learned from the experience of a decade with the P P S system? Many, and none are very encouraging. One result of P P S is that Medicare payments to hospitals now only cover about 90% of the costs of treating Medicare patients, which requires "cost shifting" to cover the difference. Thus, payments to hospitals from privately insured patients now amount to about 128% of the cost of care. Further, since the P P S provisions only apply to inpatient care, many hospitals have "unbundled" services to settings not covered by P P S (principally, to outpatient clinics). There is also evidence t h a t many hospitals have attempted to increase their Medicare revenues by assigning cases to higher-paying DRGs. "Clearly, the financial incentives that were designed to make h o s p i t a l s more e f f i c i e n t and hence to slow the growth in hospital costs failed to do so." Since the costs of providing care to Medicare patients have grown more rapidly than Medicare payments under the P P S system, profit margins have been squeezed and the viability of some hospitals has been threatened. In general, hospitals that have remained financially healthy under the P P S system are those that are most successful in generating revenue from other sources to make up the difference (and to make up other losses inVOLUME 166

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curred through Medicaid and uncompensated-care patients). Thankfully, there is no credible evidence that the quality of care received by Medicare patients has declined in the face of these pressures, although this remains a concern. So what happened? In brief, "the P P S incentive to generate a profit by controlling costs was

o v e r w h e l m e d by other, more powerful incentives." Chief among these are c o m p e t i t i v e pressures to provide a full-service treatment environment with all the latest high-tech medical technologies and services, whether economical or not. Critics argue that P P S is essentially a government-administered price system whose principal effect is to allow

POLICY SPEAK "Under a scenario originally brought to my attention by CongressmanFortney (Pete) Stark (D, Calif), all executive members of the administration, all members of the House of Representatives, and all senators, would by law, lose their andtheir families' health insuranceuntil all Americans enjoy comprehensive health insurancecoverage. Should such a law ibe passed, the moral imperative

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the government to control the growth in its Medicare costs by shifting a share of them to private payers. Defenders argue that excessive costs rather than inadequate payments are at the heart of the problem. Either way, the lO-year history of P P S gives little cause for optimism about efforts to reform the American system of health care financing.--JDW

of universal coverage wouldvery swiftly dawn on these powerful decision makers. It would be a safe bet that no American residentwould remain uninsuredby the middle of 1994." --Reinhardt UE. Grading President Clinton's health

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proposal. JAMA 1993; 269: 2553.

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