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Health care macro trends and the laboratory's future.

Health care macro trends and the laboratory's future

Many of our current social, political, and economic upheavals were, to a certain extent, predictable--and a few prescient sociologists and futurists predicted them. The ongoing realignment of the American health care industry reflects and contributes to all these changes, so it isn't surprising that popular books like "Megatrends,' "The Third Wave,' and "The Social Transformation of American Medicine' contain some valuable insights for those who wonder about the future of the traditional hospital and its laboratory.1-3

Some sectors of health care are undergoing a period of economic contraction and retrenchment, hospitals in particular. Meanwhile, other delivery systems are growing, while the industry as a whole continues to expand along with an aging population's demand for health care services.

From this underlying current, we can trace the development of several broad-based trends with profound implications for the laboratory profession. They are presented in Figure I as what we are moving away from and toward.

To deepen our understanding of these trends, it's useful to examing the evolution of hospitals from a historical perspective. They long ago outgrew their original function as charitable institutions for the terminally ill, but the hospital industry's boom years really began with the advent of Medicare in 1965. During this era of openhanded Government support, the more you spent, the more you received. There were no incentives for effective cost management, much less cost containment, until the Tax Equity and Fiscal Responsibility Act of 1982 and the prospective payment system the following year.

Now we have only to read the hospital want ads to see the changes. Positions in marketing, utilization review, and information systems, which used to play a minor role if they existed at all, are now in high profile. Financial managers are eagerly sought after, and dollar-smart administrators and managers are on the most-wanted list at every level.

An industry that has traditionally prized clinical and technical skills above all others has finally realized that it can't continue to function unless its institutions are financially sound, capable of aggressively selling their services, and able to compete effectively for physicians and patients. The medical records department, once hidden in the basement like the clinical laboratory, has now risen to be one of the most important departments.

Where do we go from here? Crystal gazing has its hazards, but some predictions can be aired with relative assurance. Changes in the practice of medicine are of particular interest, because physicians tend to be a bellwether for developments in health care as a whole. Other groups to watch are the insurance and pharmaceutical industries and employers in general. These groups will help shape our futures as both medical providers and consumers.

From the physicians' standpoint, one key trend is the shift away from solo practice and toward group practice. The days of the lone practitioner are numbered, especially in urban settings. Rents are high, qualified help costly, and the needed skills for insurance and billing too complex. A group practice spreads costs and risks.

The growth of group practices has also spawned a new generation of office laboratories. In groups, more physicians can afford the simplified desktop analyzers aimed at their share of the testing market. The addition of office testing to the workload implies a need for a nurse, laboratory generalist, and business manager --or for someone combining all three roles.

Modes of physician payment are likewise evolving, from fee-for-service to prepayment. Recent legislation and other pressures require more firms to offer employees a choice of health and payment plans, such as standard insurance versus prepaid coverage. New incentives have encouraged enrollment in health maintenance organizations and preferred provider organizations. These arrangements don't create a direct or immediate demand for the hiring of more laboratory personnel, as their main thrust has been to keep patients out of the hospital. But as they continue to grow, they may also contribute to an increase in lab utilization.

The trend from curative medicine to preventive care is a natural outgrowth of the drive to cut hospitalization. Curing disease has been the longstanding goal of most hospital care, but the current climate has prompted many institutions to branch out into wellness-oriented programs--weight loss, cardiovascular fitness, stress prevention, and stop-smoking clinics, for example. Such programs extend the hospital's market reach, generate new income, and act as feeder systems to fill empty beds.

A corresponding trend is the growth of outpatient facilities to replace traditional inpatient treatment for a variety of conditions. Again, hospitals have sought to hold on to their share of the market by establishing freestanding centers for urgent care, ambulatory surgery, and dialysis. Through birthing centers and hospices, they have even sought to provide alternate sites for birth and death--both closely linked to hospitalization for decades.

The move from hospital-based care to alternate delivery systems has profound repercussions in all the health professions, for whom the hospital has become the predominant employer. In the cost reimbursed hospital bureaucracies of the past 20 years, clinical and technological expertise were rewarded and specialization and fragmentation flourished.

Clinical laboratories benefited, along with the pathology groups that controlled them and the medical technologists that worked in them. The laboratory produced a product. That product, and the work involved, could be predicted and quantified, unlike many other medical services. These same qualities made clinical laboratories highly vulnerable to costcutting.

At the same time, cost-effective patterns of treatment have resulted in a smaller and more acutely ill inpatient population (most of th new health care options are ambulatory). These combined factors are putting many hospitals in the red, and have forced some to shut down wings, merge, or go out of business altogether.

The freestanding not-for-profit community hospital, in fact, may be another endangered species. Acquisitions and mergers have swallowed up many of them in the swing to for-profit operation. Some investor-owned chains have established a track record in the business of long-term care, wherein capital equipment expenditures are low, expensive staffing is not required, and profits are made with relatively low levels of investment.

Among the hospitals that survive, cost-effectiveness will be a watchword for acquiring new technology. Increasingly, laborintensive technologies will be replaced by highly automated, off-site instrumentation. While the health care industry has yet to employ robotics to a great extent, some large instruments offer virtually hands-off functioning. They also cost a small fortune --for example, magnetic resonance imaging--and some hospitals have installed them off the premises in joint ventures with physicians.

The major trend in diagnostic technology is toward smaller instruments designed for easy operation in physicians' offices. Benchtop analyzers lend themselves well to the needs of the ambulatory care setting. Large-scale sophisticated instrumentation may eventually become centralized in a few independent or hospitalbased reference labs in each region, while the typical small hospital pares down its laboratory into a Stat facility with office-type instruments.

Strides in pharmacology have also contributed to the lowered hospital census and the shift from acute to chronic care. Patients with some forms of coronary disease, mental illness, pneumonia, and other conditions may never need to see the inside of a hospital. Meanwhile, as our population ages in the coming decades, we will have to explore new longterm care options for chronically ill patients who overstay their payment limits.

Patient demands are also changing. The stereotype of the trusting, docile, and uninformed patient is out of date. Today's patients are more likely to think of themselves as consumers of medical services and to seek the same kind of quality and convenience they expect in other areas. When patients can choose among higher co-payments, second opinions, HMOs, and other schemes, the nature of their decisions will differ as to where, when, and how they will be treated.

As a result, the physician/patient relationship has taken a turn from paternal to collaborative. Insurers reward this assertiveness, encouraging patients to seek second opinions on the necessity of surgery and other procedures. This proliferation of options may eventually make the old family doctor obsolete. Many medical consumers already have little or no relationship with one personal physician. Better-informed patients are also more likely to challenge traditional wisdom and seek flexible, innovative practitioners.

Physicians are coping with economic pressures as well as altered patient expectations, thanks to the glut of doctors--especially in urban areas--that has supplanted last decade's shortage. This abundant supply has weakened the profession's negotiating ability. Corporate chains and clinic systems can hire on their own terms, rather than the physician's. As a result, physicians are now competing to reestablish their role in some aspects of medical practice that were delegated to other health professions during the shortage. The shifting power base has also altered the relationship between physicians and hospital administrators.

The trend from little or no competition to intense competition extends to the hospitals' quest for patients, and it has nourished a new offshoot of the industry: marketing. In most hospitals, advertising and public relations experts hold key positions tied closely to the planning department. As the HMO field expands, so too does its emphasis on extending market share. Deregulation, not unlike that in banking and airlines, has allowed once-forbidden advertising to proliferate. In other words, health care is no longer insulated from the law of supply and demand.

Perhaps the most sweeping macro trend is the move from fiscal irresponsibility toward bottom-line management. If every major social upheaval finds its roots in economics, then all these developments can be seen as interrelated. Survival is the issue-- not effectiveness, quality, or access to care. Organizations, whether run for profit or not, are starting to manage in similar ways. They are creating a demand for improved computer technology and better management information systems. All give rise to new job markets, and health professionals at all levels need these skills in addition to their clinical or technical ones. (See Editor's Memo, MLO, August 1985.)

Has the patient been nearly forgotten in the scramble to survive? Sometimes it seems that way. However, the patient is also the loser if a health care institution is unable to stay open.

Change brings opportunity. Many dire predictions have been made as the future of the health care business takes shape. The survivors will be the alert and intelligent people who can assess their value in the job market and take action to obtain the skills and knowledge they need. The hospital industry is changing its focus, reevaluating its goals, and changing its image to match. Are you?

1. Naisbitt, J. "Megatrends: Ten New Directions Transforming Our Lives,' 6th ed. New York, Warner, 1983.

2. Starr, P. "The Social Transtormation of American Medicine.' New York, Basic, 1983.

3. Toffler, A. "The Third Wave.' New York, William Morrow, 1980.

Table: Figure I Trends shaping the laboratory's future
COPYRIGHT 1986 Nelson Publishing
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Copyright 1986 Gale, Cengage Learning. All rights reserved.

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Author:Day, Carmel Marti
Publication:Medical Laboratory Observer
Date:Jan 1, 1986
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