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The Nation's Health Sector: Regulation or Reform?
JAN.lFEB.lMAR., 1974
VOLUME XV - NUMBER 1
PSYCHOSOMATICS OFFICIAL JOURNAL OF THE ACADEMY OF PSYCHOSOMATIC MEDICINE
The Nation's Health Sector: Regulation or Reform? Statement of Congressman John B. Anderson of Illinois Before the Twentieth Annual Meeting of The Academy of Psychosomatic Medicine, Williamsburg, Virginia-November 18, 1973
The health care industry has in recent years become an increasingly important concern of the federal government. Federal responsibility in this area was minimal until 1965 when medicare and medicaid extended government-subsidized health insurance to the elderly and direct health benefits to the poor. In addition the subsequent failure of the health delivery system to respond adequately and efficiently to the new demands for services fostered by medicare and medicaid and the resulting inflationary spiral in the health sector has forced the federal government to get even more deeply involved in the direct regulation of health service costs and prices. However unwelcome this trend may be to some, the fact is that we can look forward to more of the same. The persistent rise in health care costs has convinced even traditional supporters of free market solutions that putting a permanent lid on prices may be the only way to stem the tide and protect the health consumer. Prior to 1965, less than 6 percent of the nation's GNP was spent on health services-or about $40 billion. By 1972 the health share of the GNP had risen to almost 8 percent. and HEW estimates health care expenditures wilI total over $110 billion by 1975. This growth is certainly not accounted for by a comparable increase in total services but rather a startling rise in costs in reaction to new. unmet demands for services. Hospital costs, as you probably know, have seen the biggest increase. They rose 10.4 percent last year in spite of economic controls. The average cost of one day in the hospital now stands at $105.* This compares unfavorably to thc 1970 price of $81 and is particularly shocking when wc consid~r that in 1950 the average cost for one day in the hospital was only $15. Consumers who can't possibly afford today's exorbitant hospital costs are beginning to exert heavy pressure on Washington in an effort to reduce their financial burden. At the same timc. the Fedcral share of total health " Etliror's NOll': This may be the average but not so in New York City where it is about 50~( higher. unquestionably related to increased cost of maintenance in an urban center.
expenditures has been rlsmg rapidly during recent years. The $5.2 bilIion spent by the government on health in 1965 has been boostcd up to $30.3 bilIion this year, an increase produced largely by government subsidies for medicare and medicaid patients. Funds distributed by the government to the poor and the elderly represent 65 percent of today's government health spending, or $20 billion a year. Not surprisingly, this growing federal investment has generated strong internal pressure for the government to cut individual health care costs. and this pressure can only grow as further subsidy programs are considered. In fact, we can look forward to a truly massive federal investment when a version of national health insurance is enacted, for it wilI extend permanent benefits to whole new segments of the population. Future increases in federal health expenditures can be easily seen by ~amining some of the cost estimates for national health insurance proposals now pending in Congress. They range from $5 to $10 billion per year for the more conservative plans, all the way up to a phenomenal $80 biIlion annual figure for the Kenncdy proposal. In the meantime, while the climate in Washington favors immediate and strict economic controls in the health sector, there is stiII substantial disagreement about how stringent these controls should remain and whether permanent economic regulation will actually heIp. The federal government has had no experience with systematic regulation in the health field, and it is therefore difficult to predict the precise effects of government controls. Moreover. experience with other regulated industries does not. in my opinion, bode well for the future success of permanent controls in the health sector. We are now experiencing very serious dislocations in the surface transportation and natural gas industries. for example. primarily as a result of the damages done by heavy-handed regulatory agencies. While these effects may be economically undesirable 7
Jan./Feb./Mar.. 1974
II 1111 1111111 11mII III III 1111111111 1111111111111
PSYCHOSOMATICS
in other industries, they would be socially disastrous in the health care field. However inadvisable the prospect of long-term regulation may seem, recent inflationary pressures have convinced some government officials, including HEW chief Casper Weinberger, that the current economic stabilization program controls on health prices must remain in place for the indefinite future. I believe that this fate may indeed await the health care industry, if hospitals and private physicians alike do not take adequate steps to regulate themselves. Success convinces people, and there has been some undeniable success in curbing costs under phase II and phase III. The composite physician fee index, for instance, increased at a much slower rate under phase III than before controls. While the rate of increase before the stabilization program began was 7.4 percent, during phase III the annualized rate of increase was only 4.1 percent. On a wider scale there has been an overall reduction in the rate of health cost inflation. Before the program began, the medical care component of the Consumer Price Index increased at a rate of 6.7 percent a year. But phase II brought it down to 3.4 percent and during phase III, while the CPI was climbing to an annual rate of 9.1 percent, health care costs were increasing by only 3.8 percent. So far, the medical profession and hospital administrators have been extremely cooperative in complying with these price controls in spite of serious cost squeezes, delays in the processing of justifiable exemption requests and a number of other economic hardships. In a more positive sense, though, I b~lieve the medical profession should seize the day by taking a direct role in combatting inflation before price controls settle in for good. Whether or not doctors and hospitals can organize and take the initiative in promoting some basic reforms in the health care delivery system-reforms which will automatically curb costs-may well determine the permanency of the new phase IV economic regulations. II In fact, medical professionals and hospital administrators may be the only ones in a position to attack the underlying causes of health cost inflation. Among the basic problems which have not yet been adequately handled are maldistribution of personnel, overlap and inefficiency among competing facilities, inadequate hospital budget-planning and review, the delivery of overly expensive services, and unnecessary investments in costly equipment. The medical profession should be promoting change and suggesting solutions to meet these problems. Otherwise, it is certain that a complicated and unwieldy government apparatus will imbed itself into every aspect of health care from delivery to financing. A number of basic approaches to reform which I
consider worthy of the medical profession's support are now being tried out under federal aegis. For example, the Department of Health, Education and Welfare has already provided some funds to initiate certain experimental Health Maintenance Organizations (HMOs). These are prepaid group health plans offering a single unified approach to the delivery of a comprehensive range of services-from hospital care to laboratory testing and physician visits. By setting an annual, prepaid limit on a patient's health expenditures and guaranteeing full care without further charge. HMOs have achieved significant successes in encouraging doctors to provide preventive care. thus decreasing hospital utilization and cutting total costs for the organization as a whole. Since private. single hospitals. and separate laboratory facilities have been unable to handle today's enormous demands effectively, it would seem that some of the extra burden placed upon them should be lifted. Whether HMOs can take on a sizeable proportion of th~ nation's patients who are not now receiving enough care from the current disconnected system has not yet been proven, but it would seem to me that it is in the interest of hospitals, doctors, and consumers as well as the government to test the HMO concept for future possibilities. Two months ago in the House there was bipartisan support for initiation of a limited HMO program. The HMO bill which the House passed provides for assistance to HMOs with their start-up costs and for a study of the feasibility of integrating HMOs within the delivery system. Whether or not the pilot projects under this program prove to be consistently successful, they are bound to produce some competition within the medical community prompting private physicians and hospitals to cut costs. increase efficiency and coordination, administer preventive care and provide consistent attention to their own patients so that HMOs won't "steal them away." Another effort which promises to streamline the delivery system is the greater use of paramedical personnel. As the medical profession has flocked to specialty fields, great gaps have been left in manpower for handling the more generalized chores in doctors' offices and hospitals. To alleviate this problem, manpower training programs under the federal government have been targeted at training greater numbers of paramedical personnel. By allowing these semi-professional individuals to take on their more routine duties, many doctors are now able to provide their professional assistance to greater numbers of patients. Paramedicals have already begun to show great promise for a rational redistribution of the work load and a few states have enacted law to promote the delegation of certain medical chores to them. Perhaps the greatest positive contribution which Volume
xv
NATION'S HEALTH SECTOR-ANDERSON
doctors themselves will be able to make in improving overall care and cutting costs lies in the relatively new concept of peer review organizations, composed entirely of doctors who monitor the activities of fellow physicians treating medicare and medicaid patients. Medical societies have already taken the lead in setting up self-policing units in a number of states. These selfregulating activities were prompted by recent disclosures that medicare and medicaid patients have been receiving low-quality care at outrageously high costs. Progress in states where foundation-sponsored peer review organizations are now operating has been significant. As prototypes for the nationwide development of these groups, they have shown how well self-regulation can really work. A major success was achieved by a peer review organization in Sacramento, California. In a period of less than a year-from October 1972 to July 1973while it conducted basic reviews of medicare services, the average hospital stay was only 7.3 days, fully five days less than the national average. Even psychiatric care. a very difficult area in which to establish standards, has been affected by peer group review. In Salt Lake City, Utah, with cooperation from attending psychiatrists in the general hospital, the average psychiatric admission period was reduced by eight days, from 19 to II. One of the most successful peer group review organizations has been operating in New Mexico for several years. As a direct result of their efforts in screening applications for medicaid services, hospital utilization, which has posed a major inflationary problem, was reduced by fully 20 percent and the average hospital stay per medicaid patient was reduced by two days. Other cost-cutting was made possible by a 45 percent reduction in unnecessary injections administered in physicians' offices. In monitoring the quality of care for medicaid patients, this group found instances where necessary care was not being provided and corrected these inadequacies with full cooperation from attending physicians. For example, it was found that prolonged treatment for anemia was being performed without blood counts and that necessary x-rays were not performed to aid in diar,nosis prior to treatment. The success of these prototypes was a major impetus toward the enactment in 1972 of a federal program which will sanction and fully finance peer review organizations, under the new title of Professional Standards Review Organizations, PSROs. HEW is beginning the implementation of this program and projects 100 PSROs in place by 1976 at a federal cost of $ I00 million. The ultimate goal is a nationwide network of up to 200 PSROs which will cover designated regions. They will be designed to regulate both quality and expense Jan.lFeb.lMar., 1974
of medical treatment for medicare and medicaid patients. Once established, federally-funded PSROs will develop standards of care for the treatment of different illnesses which will serve as guidelines for judging the performance of area physicians. Rotating panels of doctors will then review medicare and medicaid payment claims or service requests, measuring them against these accepted norms and suggesting better care and less expensive alternatives where they exist, or they will deny reimbursement for unnecessary services. It is anticipated that PSROs will operate in close cooperation with attending physicians so that adjustments can be made prior to treatment. The prototypes I have described have already developed procedures for timely pre-service or concurrent screening of requests, which diminish the need for retroactive denial of payment claims. Federally-funded PSROs will follow their example so that doctors and hospitals will not be caught in an unexpected squeeze, unable to collect for services already rendered to medicare or medicaid patients.
PSROs are particularly important now that serious consideration is being given by Congress and the administration to a number of national health insurance plans. If these groups can be successful in reducing costs and improving treatment for medicare and medicaid patients, their jurisdiction is likely to be expanded to cover the great numbers of patients who will receive government funds under a national health insurance plan. If PSROs were to fail, however, a big boost would be given to comprehensive, compulsory plans which rely on a single mode of delivery, like large-scale prepaid group practice organizations. These far-flung plans would mitigate a total, top-ta-bottom reorganization of the health care delivery system and establish a nationwide, bureaucratic structure to distribute government funds, establish standards, and make policy decisions from the top. Under such a system American doctors may well be confronted with the prospect of being servants to an impersonal public utility-overloaded by a tremendous volume and variety of illnesses and near-illnesses, plagued with screening problems, and finally infused with artificial incentive schemes to bolster slipping quality. This is indeed the situation that has brought many British doctors fleeing to the United States.
III As threats like these mount, there is considerable hope for preserving a varied and responsive delivery system by carrying out the reforms embodied in the three trends I have outlined-experimentation with HMOs, a greater use of paramedicals and the nationwide development of PSROs. But these are essentially cooperative efforts that depend upon support from the 9
PSYCHOSOMATICS
medical community itself to achieve success. Unfortunately, r~cent reactions among some segments of the medical community to these reasonable reforms have demonstrated that sufficient cooperation has not always been forthcoming. Organized medical groups have b~en less than fully supportive of HMO experimentation. The American Medical Association, claiming that HMOs threaten solo, fee-for-service practitioners, mounted a large effort against federal HMO legislation in Washington. And on the state level, medical lobby groups have succeeded in pushing through laws which severely restrict the development of prepaid group practice organizations. These efforts seem to me to reflect a dangerously short-sighted commitment to the status-quo. Again, in reaction to the trend toward greater use of paramedicals, some physician organizations have taken a similar counterproductive stance, for they have chosen to view paramedicals as yet another threat to traditional m'.:'des of rr:vate practice. As a result, restrictive laws have b~cn enacted in a number of states requiring licensure for paramedicals before they can perform even the most routine chores. I hope these discouraging activities of state and national med:cal associations do not spoil the chances for the success of the new PSRO program which has not yet been implemented. It appears now that there is a good possibility that the medical profession will get bogged down in minor differences over area designations and precise mechanisms for federally-funded PSROs and end by missing this excellent opportunity to successfully extend peer group review nationally. Even though organized medical groups have been ambivalent about their commitment to the PSRO program and suspicious of HEW involvement, individual practitioners will be the PSRO key to success for they are the ones who will make or break the program at the regional and local level. It seems to me that the PSRO
Hop~
and
Patienc~
concept is tailor-made to the medical profession for it relies upon the basically good instincts of individual doctors. I would hope that physicians view PSROs as an outlet for transforming their personal concern with the state of health care into positive action. Within the next few years as the current crisis in health care delivery continues to plague the nation, all of us will be called upon to make some very difficult decisions. In my view, it will be imperative that the medical profession and individual doctors undertake serious and sustained efforts to assure the successful implementation of the peer review concept. Likewise, organized medical groups will have to begin to take a more flexible and compromise-oriented approach to health care reform generally. And finally, it will be incumbent upon those of us charged with making legislative decisions in Washington to take great care to insure that the reforms we do adopt are not overly disruptive or counterproductive. For these reasons, I believe that in the final analysis, active practitioners hold the key to the future shap~ of our health care system. If they will lend their support during the coming years to enlightened methods for improving the health sector, we will probably see the basic outlines of our open, pluralistic health care system continued. However, if the uncompromising attitudes that have been displayed in some quarters persist, the trend toward increasing government control and day-to-day Federal intervention in health care delivery will intensify and expand. That is certainly not an outcome which I would welcome, and, I am sure, a development which the medical profession is d;:termined to avoid. Working together. I am confident that indeed we can and will provide a more viab'e solution to the difficulties now confronting the U.S. health care system. Congress of the U.S. House of Representatives, Washington, D.C. 02515.
are two soveraigne remedies for all, the surest reposals. the softest
cushions to lean on in adversity. Robert Burton (1577-1640) The Anatomy of Melancholy
10
Volume XV
VOLUME XV - NUMBER 1
PSYCHOSOMATICS OFFICIAL JOURNAL OF THE ACADEMY OF PSYCHOSOMATIC MEDICINE
The Nation's Health Sector: Regulation or Reform? Statement of Congressman John B. Anderson of Illinois Before the Twentieth Annual Meeting of The Academy of Psychosomatic Medicine, Williamsburg, Virginia-November 18, 1973
The health care industry has in recent years become an increasingly important concern of the federal government. Federal responsibility in this area was minimal until 1965 when medicare and medicaid extended government-subsidized health insurance to the elderly and direct health benefits to the poor. In addition the subsequent failure of the health delivery system to respond adequately and efficiently to the new demands for services fostered by medicare and medicaid and the resulting inflationary spiral in the health sector has forced the federal government to get even more deeply involved in the direct regulation of health service costs and prices. However unwelcome this trend may be to some, the fact is that we can look forward to more of the same. The persistent rise in health care costs has convinced even traditional supporters of free market solutions that putting a permanent lid on prices may be the only way to stem the tide and protect the health consumer. Prior to 1965, less than 6 percent of the nation's GNP was spent on health services-or about $40 billion. By 1972 the health share of the GNP had risen to almost 8 percent. and HEW estimates health care expenditures wilI total over $110 billion by 1975. This growth is certainly not accounted for by a comparable increase in total services but rather a startling rise in costs in reaction to new. unmet demands for services. Hospital costs, as you probably know, have seen the biggest increase. They rose 10.4 percent last year in spite of economic controls. The average cost of one day in the hospital now stands at $105.* This compares unfavorably to thc 1970 price of $81 and is particularly shocking when wc consid~r that in 1950 the average cost for one day in the hospital was only $15. Consumers who can't possibly afford today's exorbitant hospital costs are beginning to exert heavy pressure on Washington in an effort to reduce their financial burden. At the same timc. the Fedcral share of total health " Etliror's NOll': This may be the average but not so in New York City where it is about 50~( higher. unquestionably related to increased cost of maintenance in an urban center.
expenditures has been rlsmg rapidly during recent years. The $5.2 bilIion spent by the government on health in 1965 has been boostcd up to $30.3 bilIion this year, an increase produced largely by government subsidies for medicare and medicaid patients. Funds distributed by the government to the poor and the elderly represent 65 percent of today's government health spending, or $20 billion a year. Not surprisingly, this growing federal investment has generated strong internal pressure for the government to cut individual health care costs. and this pressure can only grow as further subsidy programs are considered. In fact, we can look forward to a truly massive federal investment when a version of national health insurance is enacted, for it wilI extend permanent benefits to whole new segments of the population. Future increases in federal health expenditures can be easily seen by ~amining some of the cost estimates for national health insurance proposals now pending in Congress. They range from $5 to $10 billion per year for the more conservative plans, all the way up to a phenomenal $80 biIlion annual figure for the Kenncdy proposal. In the meantime, while the climate in Washington favors immediate and strict economic controls in the health sector, there is stiII substantial disagreement about how stringent these controls should remain and whether permanent economic regulation will actually heIp. The federal government has had no experience with systematic regulation in the health field, and it is therefore difficult to predict the precise effects of government controls. Moreover. experience with other regulated industries does not. in my opinion, bode well for the future success of permanent controls in the health sector. We are now experiencing very serious dislocations in the surface transportation and natural gas industries. for example. primarily as a result of the damages done by heavy-handed regulatory agencies. While these effects may be economically undesirable 7
Jan./Feb./Mar.. 1974
II 1111 1111111 11mII III III 1111111111 1111111111111
PSYCHOSOMATICS
in other industries, they would be socially disastrous in the health care field. However inadvisable the prospect of long-term regulation may seem, recent inflationary pressures have convinced some government officials, including HEW chief Casper Weinberger, that the current economic stabilization program controls on health prices must remain in place for the indefinite future. I believe that this fate may indeed await the health care industry, if hospitals and private physicians alike do not take adequate steps to regulate themselves. Success convinces people, and there has been some undeniable success in curbing costs under phase II and phase III. The composite physician fee index, for instance, increased at a much slower rate under phase III than before controls. While the rate of increase before the stabilization program began was 7.4 percent, during phase III the annualized rate of increase was only 4.1 percent. On a wider scale there has been an overall reduction in the rate of health cost inflation. Before the program began, the medical care component of the Consumer Price Index increased at a rate of 6.7 percent a year. But phase II brought it down to 3.4 percent and during phase III, while the CPI was climbing to an annual rate of 9.1 percent, health care costs were increasing by only 3.8 percent. So far, the medical profession and hospital administrators have been extremely cooperative in complying with these price controls in spite of serious cost squeezes, delays in the processing of justifiable exemption requests and a number of other economic hardships. In a more positive sense, though, I b~lieve the medical profession should seize the day by taking a direct role in combatting inflation before price controls settle in for good. Whether or not doctors and hospitals can organize and take the initiative in promoting some basic reforms in the health care delivery system-reforms which will automatically curb costs-may well determine the permanency of the new phase IV economic regulations. II In fact, medical professionals and hospital administrators may be the only ones in a position to attack the underlying causes of health cost inflation. Among the basic problems which have not yet been adequately handled are maldistribution of personnel, overlap and inefficiency among competing facilities, inadequate hospital budget-planning and review, the delivery of overly expensive services, and unnecessary investments in costly equipment. The medical profession should be promoting change and suggesting solutions to meet these problems. Otherwise, it is certain that a complicated and unwieldy government apparatus will imbed itself into every aspect of health care from delivery to financing. A number of basic approaches to reform which I
consider worthy of the medical profession's support are now being tried out under federal aegis. For example, the Department of Health, Education and Welfare has already provided some funds to initiate certain experimental Health Maintenance Organizations (HMOs). These are prepaid group health plans offering a single unified approach to the delivery of a comprehensive range of services-from hospital care to laboratory testing and physician visits. By setting an annual, prepaid limit on a patient's health expenditures and guaranteeing full care without further charge. HMOs have achieved significant successes in encouraging doctors to provide preventive care. thus decreasing hospital utilization and cutting total costs for the organization as a whole. Since private. single hospitals. and separate laboratory facilities have been unable to handle today's enormous demands effectively, it would seem that some of the extra burden placed upon them should be lifted. Whether HMOs can take on a sizeable proportion of th~ nation's patients who are not now receiving enough care from the current disconnected system has not yet been proven, but it would seem to me that it is in the interest of hospitals, doctors, and consumers as well as the government to test the HMO concept for future possibilities. Two months ago in the House there was bipartisan support for initiation of a limited HMO program. The HMO bill which the House passed provides for assistance to HMOs with their start-up costs and for a study of the feasibility of integrating HMOs within the delivery system. Whether or not the pilot projects under this program prove to be consistently successful, they are bound to produce some competition within the medical community prompting private physicians and hospitals to cut costs. increase efficiency and coordination, administer preventive care and provide consistent attention to their own patients so that HMOs won't "steal them away." Another effort which promises to streamline the delivery system is the greater use of paramedical personnel. As the medical profession has flocked to specialty fields, great gaps have been left in manpower for handling the more generalized chores in doctors' offices and hospitals. To alleviate this problem, manpower training programs under the federal government have been targeted at training greater numbers of paramedical personnel. By allowing these semi-professional individuals to take on their more routine duties, many doctors are now able to provide their professional assistance to greater numbers of patients. Paramedicals have already begun to show great promise for a rational redistribution of the work load and a few states have enacted law to promote the delegation of certain medical chores to them. Perhaps the greatest positive contribution which Volume
xv
NATION'S HEALTH SECTOR-ANDERSON
doctors themselves will be able to make in improving overall care and cutting costs lies in the relatively new concept of peer review organizations, composed entirely of doctors who monitor the activities of fellow physicians treating medicare and medicaid patients. Medical societies have already taken the lead in setting up self-policing units in a number of states. These selfregulating activities were prompted by recent disclosures that medicare and medicaid patients have been receiving low-quality care at outrageously high costs. Progress in states where foundation-sponsored peer review organizations are now operating has been significant. As prototypes for the nationwide development of these groups, they have shown how well self-regulation can really work. A major success was achieved by a peer review organization in Sacramento, California. In a period of less than a year-from October 1972 to July 1973while it conducted basic reviews of medicare services, the average hospital stay was only 7.3 days, fully five days less than the national average. Even psychiatric care. a very difficult area in which to establish standards, has been affected by peer group review. In Salt Lake City, Utah, with cooperation from attending psychiatrists in the general hospital, the average psychiatric admission period was reduced by eight days, from 19 to II. One of the most successful peer group review organizations has been operating in New Mexico for several years. As a direct result of their efforts in screening applications for medicaid services, hospital utilization, which has posed a major inflationary problem, was reduced by fully 20 percent and the average hospital stay per medicaid patient was reduced by two days. Other cost-cutting was made possible by a 45 percent reduction in unnecessary injections administered in physicians' offices. In monitoring the quality of care for medicaid patients, this group found instances where necessary care was not being provided and corrected these inadequacies with full cooperation from attending physicians. For example, it was found that prolonged treatment for anemia was being performed without blood counts and that necessary x-rays were not performed to aid in diar,nosis prior to treatment. The success of these prototypes was a major impetus toward the enactment in 1972 of a federal program which will sanction and fully finance peer review organizations, under the new title of Professional Standards Review Organizations, PSROs. HEW is beginning the implementation of this program and projects 100 PSROs in place by 1976 at a federal cost of $ I00 million. The ultimate goal is a nationwide network of up to 200 PSROs which will cover designated regions. They will be designed to regulate both quality and expense Jan.lFeb.lMar., 1974
of medical treatment for medicare and medicaid patients. Once established, federally-funded PSROs will develop standards of care for the treatment of different illnesses which will serve as guidelines for judging the performance of area physicians. Rotating panels of doctors will then review medicare and medicaid payment claims or service requests, measuring them against these accepted norms and suggesting better care and less expensive alternatives where they exist, or they will deny reimbursement for unnecessary services. It is anticipated that PSROs will operate in close cooperation with attending physicians so that adjustments can be made prior to treatment. The prototypes I have described have already developed procedures for timely pre-service or concurrent screening of requests, which diminish the need for retroactive denial of payment claims. Federally-funded PSROs will follow their example so that doctors and hospitals will not be caught in an unexpected squeeze, unable to collect for services already rendered to medicare or medicaid patients.
PSROs are particularly important now that serious consideration is being given by Congress and the administration to a number of national health insurance plans. If these groups can be successful in reducing costs and improving treatment for medicare and medicaid patients, their jurisdiction is likely to be expanded to cover the great numbers of patients who will receive government funds under a national health insurance plan. If PSROs were to fail, however, a big boost would be given to comprehensive, compulsory plans which rely on a single mode of delivery, like large-scale prepaid group practice organizations. These far-flung plans would mitigate a total, top-ta-bottom reorganization of the health care delivery system and establish a nationwide, bureaucratic structure to distribute government funds, establish standards, and make policy decisions from the top. Under such a system American doctors may well be confronted with the prospect of being servants to an impersonal public utility-overloaded by a tremendous volume and variety of illnesses and near-illnesses, plagued with screening problems, and finally infused with artificial incentive schemes to bolster slipping quality. This is indeed the situation that has brought many British doctors fleeing to the United States.
III As threats like these mount, there is considerable hope for preserving a varied and responsive delivery system by carrying out the reforms embodied in the three trends I have outlined-experimentation with HMOs, a greater use of paramedicals and the nationwide development of PSROs. But these are essentially cooperative efforts that depend upon support from the 9
PSYCHOSOMATICS
medical community itself to achieve success. Unfortunately, r~cent reactions among some segments of the medical community to these reasonable reforms have demonstrated that sufficient cooperation has not always been forthcoming. Organized medical groups have b~en less than fully supportive of HMO experimentation. The American Medical Association, claiming that HMOs threaten solo, fee-for-service practitioners, mounted a large effort against federal HMO legislation in Washington. And on the state level, medical lobby groups have succeeded in pushing through laws which severely restrict the development of prepaid group practice organizations. These efforts seem to me to reflect a dangerously short-sighted commitment to the status-quo. Again, in reaction to the trend toward greater use of paramedicals, some physician organizations have taken a similar counterproductive stance, for they have chosen to view paramedicals as yet another threat to traditional m'.:'des of rr:vate practice. As a result, restrictive laws have b~cn enacted in a number of states requiring licensure for paramedicals before they can perform even the most routine chores. I hope these discouraging activities of state and national med:cal associations do not spoil the chances for the success of the new PSRO program which has not yet been implemented. It appears now that there is a good possibility that the medical profession will get bogged down in minor differences over area designations and precise mechanisms for federally-funded PSROs and end by missing this excellent opportunity to successfully extend peer group review nationally. Even though organized medical groups have been ambivalent about their commitment to the PSRO program and suspicious of HEW involvement, individual practitioners will be the PSRO key to success for they are the ones who will make or break the program at the regional and local level. It seems to me that the PSRO
Hop~
and
Patienc~
concept is tailor-made to the medical profession for it relies upon the basically good instincts of individual doctors. I would hope that physicians view PSROs as an outlet for transforming their personal concern with the state of health care into positive action. Within the next few years as the current crisis in health care delivery continues to plague the nation, all of us will be called upon to make some very difficult decisions. In my view, it will be imperative that the medical profession and individual doctors undertake serious and sustained efforts to assure the successful implementation of the peer review concept. Likewise, organized medical groups will have to begin to take a more flexible and compromise-oriented approach to health care reform generally. And finally, it will be incumbent upon those of us charged with making legislative decisions in Washington to take great care to insure that the reforms we do adopt are not overly disruptive or counterproductive. For these reasons, I believe that in the final analysis, active practitioners hold the key to the future shap~ of our health care system. If they will lend their support during the coming years to enlightened methods for improving the health sector, we will probably see the basic outlines of our open, pluralistic health care system continued. However, if the uncompromising attitudes that have been displayed in some quarters persist, the trend toward increasing government control and day-to-day Federal intervention in health care delivery will intensify and expand. That is certainly not an outcome which I would welcome, and, I am sure, a development which the medical profession is d;:termined to avoid. Working together. I am confident that indeed we can and will provide a more viab'e solution to the difficulties now confronting the U.S. health care system. Congress of the U.S. House of Representatives, Washington, D.C. 02515.
are two soveraigne remedies for all, the surest reposals. the softest
cushions to lean on in adversity. Robert Burton (1577-1640) The Anatomy of Melancholy
10
Volume XV