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From Cottage Industry to Big Business: Impact on Medical Practice
| Article
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17066 |
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Section : |
MODERN THOUGHT
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| Issue
Date : |
8 / 1990 |
4,604 Words |
| Author
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Reinhard Priester
Reinhard Priester, attorney, is a research fellow at the
Center for Biomedical Ethics of the University of Minnesota. |
Radical changes during the past two decades have transformed health care from a cottage industry of independent physician entrepreneurs to a bureaucratic, corporatized sector of the economy. In 1989, the health care system consumed more than $620 billion, about 11.5 percent of America's gross national product (GNP). Two categories of change have revolutionized health care. The first category includes scientific, demographic and cultural transformations such as the introduction of new technologies, an increasingly adversarial legal climate, the aging of the population, and an increase in the supply of health care resources. These changes, some dating back to the end of the Second World War, have reshaped the health care system.
The second category of health care changes comprises a variety of increasingly aggressive efforts to control health care expenditures. These cost containment initiatives include - in the 1980s alone - the following:
· the adoption by conventional health insurance plans of managed care initiatives such as utilization review and mandatory second surgical opinion;
· the horizontal integration of health care facilities into large, multi institutional organizations;
· the expansion of hospital organizations into home health care, ambulatory surgery, substance abuse clinics, and related health care services;
· a shift away from retrospective fee-for-service reimbursement and toward prospective payments systems; and
· the extraordinary growth of managed care plans such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
Combined, these revolutionary health care changes have had the greatest impact on physicians. The force of change has taken many of them by surprise. Traditional medicine - unmanaged, independent, fee-for-service, community-based physicians and hospitals - is disappearing. It is being replaced by new forms of health care, ranging from large group practices where physicians are salaried employees to traditional insurance plans with mandatory review of physicians treatment decisions by so-called case managers. Insurance companies and other third-party payers employ strict methods in managing the utilization and costs of health care services, requiring supervision of clinical
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