The American health system: a contentious environment in the 21st century.Enormous advances in medical sciences, almost unceasing economic growth, and nearly insatiable demand for medical services during the past 100 years has resulted in the health field's emerging as one of America's major growth industries. The first quarter of the 21st Century could witness a more contentious environment as an American health American Health Inc. is a company that manufactures health supplements. It is located in Holbrook, New York. One of its products is labeled the "Chewable Original Papaya Enzyme" with the attached registered trademark, "The 'After Meal Supplement'". system with relatively fewer resources strives to meld a properly structured competitive design with a minimal number of regulatory safeguards. Of particular concern will be cost containment cost containment,
n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. , protection of the public against fraud and abuse, and assurances to all Americans of reasonable access, equity, and quality health services health services Managed care The benefits covered under a health contract . A few of the more critical societal trends that are expected to impinge im·pinge
v. im·pinged, im·ping·ing, im·ping·es
1. To collide or strike: Sound waves impinge on the eardrum.
2. on the delivery of health services during the next 50 years include:
* Growth in the number and the percentage of the population with chronic diseases.
* Number of nonwhites exceeding whites by 2030.
* Increasing gaps in income between the old and the young, and declining number of persons in the middle-class.
* Rising number of homeless; the uninsured, now totaling more than 41 million and growing at an annual rate of one million; and possibly half of all children living in poverty by the turn of the century.
* Large and expanding number of citizens addicted to drugs and alcohol.
* Slow improvement in demographic factors such as infant mortality (hardware) infant mortality - It is common lore among hackers (and in the electronics industry at large) that the chances of sudden hardware failure drop off exponentially with a machine's time since first use (that is, until the relatively distant time at which enough mechanical , teenage suicide Teenage suicide is the self-killing of a teenager. Although the suicide rate among youth significantly decreased in the mid-1990s, suicide deaths remain high in the 15 to 24 age group with 3,971 suicides in 2001 and over 132,000 suicide attempts in 2002, making it the third , unemployment, and poverty among the elderly.
An Economic Backdrop to the 21st Century
The American economy performed well in the 1950-1990 period, with some minor negative fluctuations, in terms of total output and unemployment. What is worrisome is that, in terms of output per worker, the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. performed through the 1980s consistently below other western industrialized in·dus·tri·al·ize
v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es
1. To develop industry in (a country or society, for example).
2. nations, although improvement in our workers, efficiency has been observed in recent years. A troubling example is the number of paid hours per discharge in Canada and Germany being considerably less than those expended ex·pend
tr.v. ex·pend·ed, ex·pend·ing, ex·pends
1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend.
2. in American hospitals, which traditionally have had significantly shorter average lengths of stay than acute care facilities elsewhere in the world.(2)
America has done better than Europe or Japan in providing additional jobs. This increased number of workers in the labor force, however, has been accomplished at the expense of real wages (i.e., purchasing power Purchasing Power
1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase.
2. ) per employee. America experienced a lower ratio of investment to gross domestic product (GDP GDP (guanosine diphosphate): see guanine. ) as well as a significantly lower growth rate of capitalization per employee than most other western industrialized nations. Contentious labor-management relations during the 1960s and 1970s were often cited as particularly harmful to America's long-term productivity growth.3 The leaning of the United States toward more of a service economy foreshadows further decreases in average take-home pay take-home pay
The amount of one's salary remaining after federal, state, and often city income taxes and various other deductions have been withheld. and more difficulties on the part of employees in meeting out-of-pocket costs out-of-pocket costs Managed care Health care costs that a covered person must pay out of pocket–eg, coinsurance, deductibles, etc. See Copayment. for medical care.
The United States, record on poverty, which affects demand for health services, has improved. According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. official definitions, 33 percent of the population was in poverty in 1947, dropping to 11 percent by 1973. The percentage of those in poverty rose to 15 percent in 1983 and in 1994 was 13.5 percent, a total of 34.5 million Americans. A greater percentage of Americans experiencing poverty compared to those in other western industrialized nations may result from greater inequality in pretax incomes. Whether it is mainly the rich getting richer or the poor getting poorer, or both occurring at the same time, is a subject of ongoing debate. Whatever the reason, the increase in the inequality of incomes among Americans in the past two decades should be regarded as a negative factor when evaluating our long-term economic outlook and our ability to adequately finance our nation's health system.
A small but growing number of economists argue that this inequality of income may be harmful to long-term industrial growth. A study of 56 countries found a strong negative relationship between income inequality and growth in GDP per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. . In economies with less income equality, concerns about social and political conflict are thought to more likely lead to government policies that cramp industrial growth. America and Switzerland, nations with high income inequalities, witnessed much slower productivity growth in the 1980s than did the more egalitarian Japanese, German, and Swedish economies. Societies with wider economic inequalities were also found to have more ill health, social stress, and crime, which hinders the development of the economic underpinnings that would allow health industries to continue to grow.
Given the economic, social, and political imperatives that face America in the 21st Century, we can expect to struggle "harder" and "differently" to implement effective and efficient delivery of medical care, particularly where excess capacity of physician specialists, hospital beds, and expensive sophisticated equipment exists.
Excess Capacity of Health Resources
Managed care plans, particularly those with capitated payment arrangements, encourage decreases in the number of services provided. As a result, HMOs can staff at the ratio of one physician per 900 sub scribers, compared with the current overall ratio of one doctor per 415 persons. These findings suggest a possible excess of roughly 165,000 physicians by the year 2000 6
* Primary care physician supply and demand are forecast to be close to equilibrium, assuming current training programs in these specialties continue to attract the current number of medical school graduates. Surprisingly, the supply of primary care physicians could by the year 2000 be 7 to 18 percent above desired levels.
* A significant surplus of specialists continues to be projected, the oversupply o·ver·sup·ply
n. pl. o·ver·sup·plies
A supply in excess of what is appropriate or required.
tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies estimated by the year 2000 to be 61 to 67 percent. Specialties in which a notable excess supply of physicians is anticipated include cardiology cardiology
Medical specialty dealing with heart diseases and disorders. It began with the 1749 publication by Jean Baptiste de Sénac of contemporary knowledge of the heart. Diagnostic methods improved in the 19th century, and in 1905 the electrocardiograph was invented. , gastroenterology gastroenterology
Medical specialty dealing with digestion and the digestive system. In the 17th century Jan Baptista van Helmont conducted the first scientific studies in the field; William Beaumont published his own observations in 1833. , pulmonary disease, general surgery, ophthalmology ophthalmology (ŏf'thălmŏl`əjē), branch of medicine specializing in the anatomy, function and diseases of the eye. Ophthalmologists specialize in the medical and surgical treatment of eye disorders, vision measurements for , orthopedics, plastic surgery, and urology urology
Medical specialty dealing with the urinary system and male reproductive organs. It traces its origin to medieval lithologists, itinerant healers who specialized in surgical removal of bladder stones. .
If HMO HMO health maintenance organization.
A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, inpatient use rates were widely emulated, the average American acute care facility by the turn of the century would have only a 35 percent occupancy. The often-cited projection that capitated payment in the 21st Century could drive inpatient utilization down to one occupied bed per 1,000 persons proposes a 38.5 percent reduction in the current average daily census daily census See Census. , something that might be difficult to achieve with our nation's aging population. In any case, hospitals will rely on an increased number of ambulatory care ambulatory care
Medical care provided to outpatients.
n the health services provided on an outpatient basis to those who can visit a health care facility and return home the same day. visits to survive.
Most health networks and freestanding hospitals in the 21st Century, rather than closing facilities, will scale down the scope of services provided so that expenses meet shrinking revenues. An obvious exception is an alliance with several institutions located in the same general service area that has the option of closing one or more facilities. When faced with fiscal difficulties, health organizations will expend reserves (funded balance) that often have been accumulated over several decades. In this scenario, aside from employee layoffs, most noticeable will be the lack of new capital projects as the average age of physical plants rises. Meanwhile, as major employers, hospitals will be under constant pressures to avoid eliminating jobs and to provide needed services with a reduced revenue stream.
As an outcome of various forces, such as managed care plans, being able to constrain the use of and the amount of payment for tertiary-type services, providers in the United States will experience a slowing in the purchase of, a greater centralization cen·tral·ize
v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es
1. To draw into or toward a center; consolidate.
2. of, and more concern about the appropriate queuing of patients for sophisticated services. The United States within several decades could be replicating the experience of other western industrialized nations by centralizing cen·tral·ize
v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es
1. To draw into or toward a center; consolidate.
2. tertiary services at fewer facilities, thereby reducing the cost per procedure and improving clinical outcomes.
While a surplus of resources tied to acute medicine will become more evident in the next quarter century, there will be increased demand for senior citizen programs, for continuing care continuing care
a professional convention that a veterinarian who is treating an animal is obliged to continue treating that case unless an arrangement is made with its custodian to transfer the care to another practitioner or to a specialist. facilities for the aging (i.e., apartments, independent living, and skilled nursing beds), and for comprehensive treatment programs for the addicted. These health-related programs traditionally have faced one key issue-they are not usually covered by private insurance and therefore need to be heavily supported by public funding Public funding is money given from tax revenue or other governmental sources to an individual, organization, or entity. See also
Difficult to evaluate is the impact of mandating universal access during the 21st Century, providing coverage to the more than 41 million uninsured Americans. Of significant concern is that western industrialized nations with universal, comprehensive national health insurance often have more physicians per 100,000 persons and certainly experience significantly greater hospital and physician use rates per capita than does the United States.
Impact of the Current Competitive Theme
How to improve integration and coordination of health resources, and curtail health expenditures--specifically the future cost of entitlements--has become a major debate in Washington and in many states. Congress has pressed for cost reductions for entitlements as a crucial element in lowering the federal deficit, reducing taxes, and balancing the budget by the year 2002. Health providers realize that future increases in Medicare and Medicaid Medicare and Medicaid
U.S. government programs in effect since 1966. Medicare covers most people 65 or older and those with long-term disabilities. Part A, a hospital insurance plan, also pays for home health visits and hospice care. reimbursement will be far less than they experienced in the past decade. A key question is whether managed care plans in the 21st Century can provide, at an affordable cost, universal comprehensive health insurance benefits of reasonable quality to 260 million or more Americans? As the competitive theme matures in the first quarter of the 21st Century, the United States could experience the following trends:
* Congress over the next several decades will provide less Medicaid funding by continuing to seduce se·duce
tr.v. se·duced, se·duc·ing, se·duc·es
1. To lead away from duty, accepted principles, or proper conduct. See Synonyms at lure.
2. To induce to engage in sex.
a. the states into block grants that contain virtually no federal guidelines.
* Medicare will be continually modified to lower its costs by raising deductibles and coinsurance A provision of an insurance policy that provides that the insurance company and the insured will apportion between them any loss covered by the policy according to a fixed percentage of the value for which the property, or the person, is insured. and indexing benefits to personal income.
* Providers, whether fee-for-service or capitated, will be delivering services for subscribers enrolled in private or publicly sponsored plans at a reduced reimbursement per unit of service.
* Elected officials will be reluctant to reduce benefits or increase taxes to pay for entitlements.
* A majority of insured employees will be covered by managed care plans that provide more flexibility than the traditional group- or staff-HMO approach. An increasing percentage of their premiums will cross-subsidize those either uninsured or covered by the public sector.
Competition, as it "shakes out excess revenues," could conceivably result in a temporary deflation deflation: see inflation.
Contraction in the volume of available money or credit that results in a general decline in prices. A less extreme condition is known as disinflation. within the 5 to 15 percent range of America's GDP for health expenditures. These cutbacks in health expenditures will cause an additional number of persons to become uninsured, less comfort and greater inconvenience for patients, and a reduction in the health industry`s labor force by 1.2 to 1.7 million workers. A universal comprehensive national health insurance plan will be enacted sometime in the 21st Century that causes an inflationary period for the health field, simply because of the increased demand for services by those currently uninsured, similar to what occurred after the passage of Medicare and Medicaid.
The Increasing State Role
There is growing evidence that much of the success of the Canadian, French, German, and Japanese health systems in restraining expenditures is based not on federal mandates or competitive approaches, but rather on actions of their states (provinces or Lander). These countries have been most effective in restraining the growth of health expenditures while still providing universal access to relatively high-quality care.8 This has been accomplished by their states, cutting reimbursement to providers to restrain both demand for and supply of health services. These cost containment efforts have often been achieved by federal officials working hard to increase the state's authority to decide how health resources should be allocated. These circumstances suggest that what happened in Washington in 1994 is not unique.
The German model, like the Canadian, is a national health insurance system within the decentralized de·cen·tral·ize
v. de·cen·tral·ized, de·cen·tral·iz·ing, de·cen·tral·iz·es
1. To distribute the administrative functions or powers of (a central authority) among several local authorities. structure of federalism federalism.
1 In political science, see federal government.
2 In U.S. history, see states' rights.
Political system that binds a group of states into a larger, noncentralized, superior state while allowing them . That is, federal law mandates coverage and contribution levels, but associations of physicians and hospitals negotiate with sickness funds (not-for-profit insurers) at the state level. Reimbursement for doctors is calculated by dividing the total number of fee points (representing all eligible services rendered by all associated physicians) into the global prospective budget for physician services that year. Negotiations over relative-value scales and annual global budget amounts occur between sickness funds (with half employer and half employee representation) and physician associations. Likewise, sickness funds and hospitals within a state negotiate next year, s reimbursement rates.
The German approach, where a state becomes deeply involved in the organization and financing of health services, yet physicians have clinical autonomy, patients have free choice of doctors and hospitals, and there is a multi-tier of benefits, is somewhat like what has implemented in California over the past three decades. This could well be the American model for the 21 st Century.
The Formation of State Health Services Commissions
A rapidly emerging trend in every American metropolitan area is the formation of health networks (made up of hospitals, physicians, and insurance underwriters) with annual operating revenues of $1.0 billion or more that often function strategically as oligopolies. These geographically linked, regional health alliances are gaining awesome market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market
penetration - the act of entering into or through something; "the penetration of upper management by women" and fiscal power. Eventually almost all providers will be affiliated with a network or be anxious about being "left out."
The Department of Justice (DOJ (Department Of Justice) The legal arm of the U.S. government that represents the public interest of the United States. It is headed by the Attorney General. ) and the Federal Trade Commission (FTC FTC
See Federal Trade Commission (FTC). ) are concerned about these networks but do not have conceptual and empirical tools that enable them to distinguish between arrangements that hurt competition and those with the prospect of improving the region's health delivery system. The goal of the DOJ and the FTC is, of course, to prevent the most gross and crass anticompetitive an·ti·com·pet·i·tive
That discourages competition among businesses: anticompetitive foreign trade restrictions. practices. Given the current political environment, however, even this seemingly modest objective is probably too ambitious. For DOJ and FTC to be credible law enforcers, officials must be willing to litigate far more aggressively than has been the practice in the recent past. They must be willing to lose a substantial proportion of the cases they initiate. In the absence of any strong public support, however, these actions could be considered too risky by the DOJ and FTC leadership.
The failure of antitrust agencies to restrain harmful consolidations will eventually become of greater concern to the public. As a result of the formation of networks and the shortcoming short·com·ing
A deficiency; a flaw.
a fault or weakness
Noun 1. of the DOJ and the FTC in the health industry, the establishment of state health services commissions will gain increasing political support in the 21st Century. Perhaps the most fundamental issue surrounding the possible use of this public utility concept for the health industry is an assessment of whether an appropriate balance can be obtained between the rights of patients and providers and the need for governmental control. Why this is unlikely to be accomplished, relates to state health services commissions being able to merge their legislative, judicial, and executive powers. A commission is legislative in nature because it must write its own rules; it is judicial because it must decide cases for and against one health network versus another; and it is executive because it must enforce its own rules and regulations. Such a statutory authority has difficulty in not crossing and blurring the boundaries of its tripartite TRIPARTITE. Consisting of three parts, as a deed tripartite, between A of the first part, B of the second part, and C of the third part. powers and duties.
All of the foregoing is made more difficult when one takes into account outside pressures from the state legislature A state legislature may refer to a legislative branch or body of a political subdivision in a federal system.
The following legislatures exist in the following political subdivisions:
v. taint·ed, taint·ing, taints
1. To affect with or as if with a disease.
2. To affect with decay or putrefaction; spoil. See Synonyms at contaminate.
3. by political partisanship. Ex parte [Latin, On one side only.] Done by, for, or on the application of one party alone.
An ex parte judicial proceeding is conducted for the benefit of only one party. contracts--not only with elected and appointed officials, but also from the lobbying groups--are difficult to control in a free-enterprise society. We have learned that much from the way political action committees presently influence members of the U.S. Congress.
The tripartite relationships and political pressures are further complicated by the anticipated overlapping of state statutory authorities: the public health department concerned with broader community health issues; the insurance department approving HMO benefits and premiums; and the health services commission dealing with entry, scope of services, reimbursement rates, profit margins, and the exit of programs and facilities. Such divided authority will require coordination and integration among sometimes seriously conflicting policy goals, causing conflicts among providers and between providers and government agencies. A number of these matters will eventually be settled in state and federal courts.
An S & L-Type Debacle in the Health Field?
As huge cutbacks in Medicare, Medicaid, and other third-party payments are implemented and joint ventures and mergers among providers proliferate, the question arises whether further downsizing (1) Converting mainframe and mini-based systems to client/server LANs.
(2) To reduce equipment and associated costs by switching to a less-expensive system.
(jargon) downsizing of the health industry could seriously jeopardize the financial statements of our nation's providers. Is there any likelihood of the savings and loan savings and loan n. a banking and lending institution, chartered either by a state or the Federal government. Savings and loans only make loans secured by real property from deposits, upon which they pay interest slightly higher than that paid by most banks. (S & L) debacle and the bail out ($200 to $250 billion) of the late 1980s being repeated in the health industry in the 21st Century? Is the estimated $289 billion owed by the health industry in longterm indebtedness (mostly in tax-exempt bonds) now or in the foreseeable future at significant risk?
The 1994 elections and the congressional debate during the fall of 1995 reflect a shift to the political right and provide further credence to the view that, for the foreseeable future, the American health system will focus on competitive concepts, as the S & Ls did after 1982, without concurrently implementing any safety and soundness regulations. With this oversight lacking, most state governments will be slow to respond, as they are inherently more reactive than proactive. In this case, state regulation will be particularly tenuous, with elected and appointed public officials being confronted by influential lobbies on any major decision.
A highly contentious environment will surely result as consumers demand health services as a public right and providers are faced with significant fiscal shortfalls as a result of cutbacks in Medicare, Medicaid, and HMO reimbursement. In this mismatch, the S & L debacle of the late 1980s is unlikely to be repeated in the health field during the 21st Century for several reasons:
* Federal and state governments would reluctantly appropriate additional dollars by raising taxes or increasing budget deficits, because access to high-quality health services for all Americans is considered by most public officials to be as critical as guaranteeing the repayment of savings bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. deposits insured by the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. .
* The health industry would find ways, at least for the short term, to curb costs or to use previously accumulated surpluses to tailor the delivery of care to available resources.
* Administrative costs administrative costs,
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. of and consumer-provider resistance to continuing micromanagement This is about the management style. For the computer game strategy, see Micromanagement (computer gaming).
In business management, micromanagement is a management style where a manager closely observes or controls the work of their employees, generally used as a pejorative term. of health services will result in less public hesitancy hes·i·tan·cy
An involuntary delay or inability in starting the urinary stream. in allowing government to set global budgetary targets.
* Fiscal incentives of managed care plans discourage replacing existing and acquiring new, expensive tertiary services. Reduced reimbursement will hasten centralization of tertiary services and will force queuing of patients on the basis of acuity acuity /acu·i·ty/ (ah-ku´i-te) clarity or clearness, especially of vision.
Sharpness, clearness, and distinctness of perception or vision. for tertiary services. Significant savings will be achieved, received although patients and families will be inconvenienced and additional clinical risks will be incurred.
After the health field's predicted downnizing, some outstanding indebtedness will be in jeopardy, and some of the weaker networks could witness shattered shat·ter
v. shat·tered, shat·ter·ing, shat·ters
1. To cause to break or burst suddenly into pieces, as with a violent blow.
a. financial statements. What will be of particular concern is that the fiscally weakest health alliances, often in underserved areas, will be among those most often fiscally pressed, and, in some cases, they will seek bankruptcy protection as a means to restructure their long-term debt Long-Term Debt
Loans and financial obligations lasting over one year.
For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Under these conditions, the federal government will be required to step in with a highly politicized "health care delivery relief fund," as President Clinton proposed with a Medicaid waiver for the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. County health system. Government funds will be used in the 21st Century to bail out failed alliances and HMO plans in a manner similar to efforts in the S & L debacle, in disaster relief, and in various subsidies (e.g., floods, farm, tobacco). The short answer is there will be far more bankruptcies in the health industry than in the past decade, but no major S & L-type debacle in the 21st Century.
A Blending of Competitive and Regulatory Approaches
The United States needs to spend more time defining what its health system should achieve in the next century rather than having elected officials on one side of the aisle scaring the public with such rhetoric as "there is already too much government" and on the other side saying that "these projected cutbacks will result in an inadequate safety net for the disenfranchised." Possibly a more balanced position to articulate is that the competitive model has the ability to squeeze out "excess revenues" faster than is generally possible by the regulators, but a market-driven environment more fundamentally changes the behavior of providers and consumers by reducing access to the use of and possibly the quality of care in ways whose impact is not yet well understood.
Our debates might focus on the advisility of converting some current federal entitlements into block grants to the states--with a third less funding for Medicaid by 2002 than is now projected--to reduce the federal budget deficit and, thereby, place greater fiscal strain on the states. Potential impacts that might be analyzed are a probable increase in the number of persons uninsured as eligibility for Medicaid benefits is curtailed and the possibility of providers, experiencing less reimbursement for delivery of care to the indigent indigent 1) n. a person so poor and needy that he/she cannot provide the necessities of life (food, clothing, decent shelter) for himself/herself. 2) n. one without sufficient income to afford a lawyer for defense in a criminal case. because state legislators lack the political will to raise taxes.
A major outcome of the health debate in Washington during the past two years is the increasing recognition that an amalgam of market-driven and regulatory approaches is already under way to contain costs and improve access. How that blending occurs is crucial in determining whether the modications now envisioned by Congress and the states, and those that will emerge in the future, will enhance our nation's health delivery system in the 21st Century.
The media, in publicizing the experience of the west coast "competitive model," often overlook the earlier role of the California state government in creating a statutory framework to enhance competition among providers. Compared with those of other states, California officials have been exceptionally proactive, assertive, and even autonomous when developing health policies. In fact, regulatory features of the state's health politics may be inseparable from the successes that were achieved in later years from its market-driven approaches.
In the late 1960s, California balanced relatively liberal MediCal eligibility criteria with tight fiscal restrains on provider payments. Limited reimbursement to providers helps explain why the state spent half as much on twice as many Medicaid clients as did New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . In the early 1970s, California pushed "prepaid health plans" as an early experiment in Medicaid managed care. When scandals erupted, the state passed regulatory legislation. By pledging to keep health maintenance organizations away from fraud and abuse, the legislature and executive branches may have facilitated the state's managed care expansion during the 1980s.
The 1982 legislation that authorized selective contracting in California was implemented by a "czar" who coolly exploited hospitals, excess capacity and the inherent craving by administrators for increased market share by insisting on sealed bids for MediCal business. He dramatically rejected a couple of bids to demonstrate that state government would force the providers to accept reduced reimbursement rates. In no other state, except possibly New York for short periods, has such power over hospital reimbursement rates been concentrated in the hands of one public official.
This brief historical overview suggests that it may be misleading to always equate competition in the health field with a weak role of state government. California's political proclivity pro·cliv·i·ty
n. pl. pro·cliv·i·ties
A natural propensity or inclination; predisposition. See Synonyms at predilection.
[Latin pr for vesting, at least for short periods, sizable rate-setting and other directive powers in the hands of public officials insulated from the usual protests and pressures of providers has been at least as important in launching and sustaining its competitive model.
[TABULAR DATA OMITTED]
Ironically, maybe the problem is that public officials in traditional rate-setting states have lacked the political will to act as aggressively as California did. Rate-setting methodologies may contain costs less impressively than does competition not because they cannot do so, but because the pluralistic plu·ral·is·tic
1. Of or relating to social or philosophical pluralism.
2. Having multiple aspects or parts: "the idea that intelligence is a pluralistic quality that ... politics in these states encourage compromise on payment rates that the public, providers, and payers can agree upon. This amounts to a collective decision-making process that avoids letting cost containment chips fall where they may.
What is unexpected in evaluating the efficacy of various states, cost containment efforts is that the average annual growth in health expenditures during the 1980-91 period in California differed marginally from those Maryland and New York and that roughly a third of the residents in these three states now are HMO subscribers (table, above). After adjusting the 1993 average hospital discharge cost in California, Maryland California is a census-designated place and community in St. Mary's County, Maryland, United States. The population was 9,307 at the 2000 census. California continues to grow with the spread of population out from the older adjacent community of Lexington Park and the growth in , and New York by the volume of ambulatory care visits, case mix intensity, the Medicare wage index, and the number of admissions per 1,000 persons, significant differences are noted. The 55 percent greater per capita hospital cost in New York is at least partially explained by the state's having 34 percent more paid hours per adjusted discharge (corrected for differences in ambulatory care services).
California has gone further than most states in melding together a few key regulatory measures with a long history of competitive strategies and, as a result, has been impressive in containing hospital costs. However, with an uninsured population soon to reach 25 percent (more than 70 million persons), a tattered "safety net" for the vulnerable, widespread stress because of various demographic factors, and a number of health and educational institutions approaching fiscal collapse, the state is hardly the model one might select to use throughout the nation. Conversely, if the New York health industry emulated the efficiencies illustrated by the paid hours in California, it would eliminate approximately 200,000 full-time equivalent Full-time equivalent (FTE) is a way to measure a worker's involvement in a project, or a student's enrollment at an educational institution. An FTE of 1.0 means that the person is equivalent to a full-time worker, while an FTE of 0.5 signals that the worker is only half-time. positions. Such layoffs, even achieved over a decade, would cause significant social, economic, and political ramifications ramifications npl → Auswirkungen pl , offering just another example of why the health field is predicted to be particularly contentious in the 21 st Century.
Where Are We Really Heading?
On balance, the best practical advice for the 21st Century is for health policy makers, physician executives, and others to reject a choice between competition and regulation, when competition means "market-driven" and regulatory means "government." What is now most needed is a blend of a properly structured competitive design with a minimum of regulatory safeguards. Among the more appropriate models to follow are the cost containment experience in California and the German health system.
Where the United States is most likely heading in the 21st Century is toward state health services commissions setting target amounts by sector for total health spending and then allowing providers to compete on price and quality to gain increased market share. The proposed Medicare "look-back" or "fail-safe" provision and the Medicaid block grants to the states already represent a form of global budgetary targets, and that principle will be later applied to all payers by setting a cap on health spending in each state. In economic downturns, states will tend to tighten down on the total amount available for health services, tying the industry more closely to the vicissitudes vicissitudes
changes in circumstance or fortune [Latin vicis change]
vicissitudes npl → vicisitudes fpl; peripecias fpl of the business cycle.
As money becomes tighter in the health field, powerful health networks might well squeeze out the weakest competitors, increase prices, and slash expenses. If only one or a few alliances remain in each metropolitan area, access, comprehensiveness of benefits, the ability of managed care organizations to obtain competitive bids from providers, and quality of care could be compromised. The fiscal incentives of capitated payment may lead some physicians to limit beneficiaries, access to medical services. There is also the potential issue of a large number of providers, choosing to discontinue or to drastically reduce their participation in specific publicly sponsored programs because of inadequate reimbursement. Where there are limited total dollars and intensive competition occurs among providers, fraud and abuse unfortunately can become a central issue.
Some of the major thrusts of the 21st Century health system will be maintaining a multi- rather than single-payer system single-payer system Health reform Social medicine, in which all medical services are paid by a single reimbursement agency. See Canadian plan, Clinton Plan, Managed care, Socialized medicine. ; regionalization regionalization Managed care The subdivision of a broadly available service–eg, a blood bank, into quasi-autonomous regional centers, capable of making decisions and providing more cost-effective and/or faster service to hospitals and health care facilities, of resources as a result of forming health networks and the state health services commissions; and more stringent enforcement of cost containment efforts to reallocate Verb 1. reallocate - allocate, distribute, or apportion anew; "Congressional seats are reapportioned on the basis of census data"
allocate, apportion - distribute according to a plan or set apart for a special purpose; "I am allocating a loaf of some of these resources to other more pressing domestic concerns. Aside from the obvious reluctance of consumers, providers, and payers to relinquish their power, profit, and protection under the current approach, there may be a far more fundamental issue--more than an incremental change in government involvement in health services is considered by most Americans to be alien to our current values of pluralism and individual responsibility. The preference is to solve such problems at local and state levels rather than at the federal level.
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Journal of the American Medical Association 272(3):222-30, July 20, 1994. [7.] Weil, T. "Comparison of Medical Technology in Canadian, German, and U.S. Hospitals." Hospital and Health Services Administration 40(4):525-34, Winter 1995. [8.] Schieber, G., and others. "Health System Performance in OECD OECD: see Organization for Economic Cooperation and Development. Countries, 1980-1982." Health Affairs 13(3):100-12, Fall 1994. [9.] Enthoven, A. "The History and Principles of Managed Competition." Health Affairs 12(Supplement): 24-48, 1993. [10.] Wilsford, D. "States Facing Interest: Struggles over Health Policy in Advanced, Industrial Democracies," Journal of Health Politics, Policy, and Law 20(3):571-614, Fall 1995. [11.] Glied, S., and others. , Comment: Containing Health Care Expenditures--the Competition vs Regulation Debate." American Journal of Public Health The American Journal of Public Health (AJPH) is a peer reviewed monthly journal of the American Public Health Association (APHA). The Journal also regularly publishes authoritative editorials and commentaries and serves as a forum for the analysis of health policy. 85(10):1347-9, Oct. 1993. [12.] Weil, T. "Health Networks and Managed Care Could Result in Public Utility Regulation." Hospital and Health Services Administration, in press. [13.] Zwanziger, J. "The Need for an Antitrust Policy for a Health Care Industry in Transition." Journal of Health Politics, Policy, and Law 20(1):171-3, Spring 1995. [14.] White, L. The S & L Debacle: Public Policy Lessons for Banks and Thrifts Regulation. New York, N.Y.: Oxford University Press, 1991. [15.] Weil, T. "Any Possibility of an S & L-Type Debacle Occurring in the Health Industry?" Journal of Health Care Finance 22(1):49-59, Fall 1995. [16.] Iglehart, J. "Germany's Health Care System." New England Journal of Medicine The New England Journal of Medicine (New Engl J Med or NEJM) is an English-language peer-reviewed medical journal published by the Massachusetts Medical Society. It is one of the most popular and widely-read peer-reviewed general medical journals in the world. 324(7):503-8. Feb. 11, 1991, and 324(24):1750-6, June 13. 1991. [17.] Levit, K., and others. "Health Spending by State: New Estimates for Policy Making." Health Affairs 12(3)7-26, Fall 1993. . Marion Merrell Dow (MMD MMD Movement for Multiparty Democracy (Zambia)
MMD Make My Day
MMD Merchant Mariner Document
MMD Myotonic Muscular Dystrophy
MMD Myotonic Dystrophy
MMD Mass Median Diameter
MMD Metal Matrix Diaphragm ). Managed Care Digest, Update Edition. Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.: MMD, 1994. [19.] American Hospital Association American Hospital Association (AHA),
n.pr a nonprofit national organization of individuals, institutions, and organizations engaged in direct patient care. The association works to promote the improvement of health care services. . Hospital Statistics, 1993-94. Chicago, 111.: AHA, 1994. [20.] Personal communication with Arnold Silver and Glenn Pearl, Rate Controls Publications, Inc., Phoenix, Ariz.. Oct. 13, 1995.
Thomas P. Weil, PhD, is president of Bedford Health Associates, Inc., Management Consultants for Health and Hospital Services, Asheville, N.C. He can be reached at Flat Iron Bldg., Suite 900A, Asheville, N.C. 28801, 704/252-1616, FAX 704/253-3820.