Health and Health Care 2010: the Forecast, the Challenge

HEALTH AND HEALTH CARE 2010 The Forecast, The Challenge

Second Edition Contributors Authors: Roy Amara, Karen Bodenhorn, Mary Cain, Rick Carlson, Janet Chambers, Diana Cypress, Hank Dempsey, Rod Falcon, Roberto Garces, Jaycee Garrett, Danielle Gasper, Katherine Haynes Sanstad, Matthew Holt, Susannah Kirsch, Nandini Kuehn, Heather Kuiper, Elaina Kyrouz, Robert Mittman, Ellen Morrison, Ian Morrison, Geof- frey Nilsen, Marina Pascali, Andrew Robertson, Denise Runde, Jane Sarasohn-Kahn, Greg Schmid, Charlie Wilson, Kathy Yu Editors: Charles Grosel, Melinda Hamilton, Julie Koyano, Susan Eastwood Art Director: Janet Chambers Graphic Designers: Adrianna Aranda, Robin Bogott, Diana Cypress, Jeanné Haffner, Melinda Hamilton HEALTH AND HEALTH CARE 2010 The Forecast, The Challenge

Second Edition

Prepared by The Institute for the Future

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Library of Congress Cataloging-in-Publication Data

Health and health care 2010 : the forecast, the challenge / [contributors, Roy Amara . . . [et al.]] p. cm. “To recognize the 25th anniversary of its founding, The Robert Wood Johnson Foundation asked the Institute for the Future (IFTF) to forecast the future of health and and health care in America . . .”—Introduction. Includes bibliographical references and index. ISBN 0-7879-5974-x 1. Medical care—United States—Forecasting. 2. Public Health—United States—Forecasting. I. Amara, Roy. II. Robert Wood Johnson Foundation. III Institute for the Future.

SECOND EDITION PB Printing 10987654321 Health and Health Care 2010 Institute for the Future

Health and Health Care 2010 Contents

Figures x

Tables xiv

Sidebars xv

Abbreviations and Acronyms xvii

Introduction xix

Chapter 1 Health and Health Care Forecast Executive Summary 1

Legislation 1 Demographics: Patients, Populations, and New Consumers 2 Payers and Health Care Costs 4 Health Plans and Insurers 5 Hospitals and Physicians 5 Medical and Information Technologies 6 Care Processes and Medical Management 8 Public Health 8 Three Scenarios 10

Chapter 2 Demographic Trends and the Burden of Disease Increasing Diversity 17

The United States Population Is Growing Older and Living Longer 17 The Face of America Continues to Change-Diversity Is Increasing 19 Household Income Is Increasing, but the Gap Between the Extremes Is Widening 20 The Shifting Burden of Disease: Chronic Diseases, Mental Illness, and Lifestyle Behaviors 21

Contents v Chapter 3 Health Care’s Demand Side Changing Trends in Growth Rates 1960–2010 25

Historical Trends 25 The Issues: What Drives Cost Increases? 26 Market Dynamics 28 The Forecast: Real Cost Growth at 1 Percent 29 The Signiﬁcance of Our Cost Forecast for the Rest of Our 10-Year Outlook 32 Wild Cards 32

Chapter 4 Health Insurance The Three-Tiered Model 35

Scope of Employment-Based Coverage 35 The Issues: How Will People Receive Health Insurance? 37 The Forecast: Source of Insurance—Where Are the People? . . . 39 . . . and What Type of Insurance Will They Have? 42 Tiering Will Increase 43 Wild Cards 43

Chapter 5 Managed Care Experiments in Reinvention 47

The Issues: Managed Care is out of Balance 47 Drivers 49 Regulation May Have Cost Consequences 51 Potential Barriers to IT Implementation 52 The Forecast: Experiments in Reinvention 54 Managed Care 2010: Patterns of Power 60 Wild Cards 64

Chapter 6 Health Care Providers Themes of the Future Delivery System 67

Intermediaries 68 Reimbursement Models: Between Finance and Delivery 74 Care Delivery Organizations for the Next Decade 78 Medical Management: The New Arena of Activity 82 What Happens to Hospitals? 84 Wild Cards 92 vi Contents Health and Health Care 2010 Institute for the Future

Chapter 7 Health Care Workforce Future Supply and Demand 95

Physicians 95 Nurses 103 Physicians’ Assistants 105 Future Employment 106 Pharmacists 107 Wild Cards 108

Chapter 8 Medical Technologies Effects on Care 111

Rational Drug Design 112 Advances in Imaging 114 Minimally Invasive Surgery 117 Genetic Mapping and Testing 120 Gene Therapy 123 Vaccines 126 Artiﬁcial Blood 128 Xenotransplantation 129 Stem Cell Technologies 131 Wild Cards 132

Chapter 9 Information Technologies Will Health Care Join in the Information Age? 135

Base Technologies 135 The Forecast: Four Big Effects in Health Care 138 Progression of Information Technology into Health Care 145 Wild Cards 146

Chapter 10 Health Care Consumers The Haves and the Have-Nots 149

Three Tiers of Health Care Consumers 151 Forecast and Assumptions 156 Wild Cards 162

Contents vii Chapter 11 Public Health Services A Challenging Future 165

The History of Public Health in the United States 165 Key Factors Affecting Public Health in America Today 169 Technology 175 Public Health Frameworks and Strategies: Problems of Perception 176 Reconciling Public Health and Private Medicine 178 The Future: Scenarios and Forecasts 182 Forecast of the Future: Organizational Issues 183

Chapter 12 Mental Health The Hope of Science and Services 187

Facing the Problem and the Facts 189 Determining Priorities for Public Spending 190 Change Agents in Research 194 Mental Health Services Changes in the Next Decade 201 Policy and Legislation 210

Chapter 13 Children’s Health A Good Investment 219

What Keeps Kids Healthy? Access and Environment 220 Access to Health Services: Enough Providers? 225 The Impact of Environment 227 Physical Environment and Increasing Chronic Illness 230 How Are We Doing? 233 What’s in Store? 240 Wild Cards 245

Chapter 14 Health and Health Care of America’s Seniors The Future Awaits Us 251

The Demographics of an Aging Population 251 The Economic Status of Seniors 256 Health Status of Seniors 259 Long-Term Care 267 Elder Health Care Financing Through Medicare 270 Implications 273 viii Contents Health and Health Care 2010 Institute for the Future

Chapter 15 Chronic Care in America An Evolving Crisis 279

Chronically Misunderstood: The Who, When, and What of Chronic Illness 279 Chronic Care Today: How We Got Here 284 Forecast 289 Implications 289

Chapter 16 Disease Management Weaving Disease Management into the Fabric of Patient Care 299

Diseases Being Managed 299 A Disease Management Primer 300 Drivers and Barriers on the Path Ahead 301 Forecast 305 The Pace of Change 308

Chapter 17 Health Behaviors Small Steps in the Right Direction 311

Alcohol and Drug Abuse in America 312 Injury Prevention: A Focus on Guns 324 Tobacco Use and Health 329 Wild Cards 333

Chapter 18 Expanded Perspective on Health Beyond the Curative Model 337

Deﬁnition of Health 339 Stress 340 Socioeconomic Status as a Determinant of Health 341 What’s New? Why Now? 342 Consumer Expectations 343 Deteriorating Health Conditions 344 Global Health Perspective 345 The Future: Shifting Paradigms 346 The Paradigm Shift: Evolution or Revolution? 348 Wild Cards 349

The Reactions 351 Glossary 383 Index 391

Contents ix Figures

Figure 1-1 Increasing diversity of the United States population 3 Figure 1-2 The real story of diversity in 2010 is regional. 3 Figure 1-3 A growing number of adults in the United States have attended college. 4 Figure 1-4 Americans move into HMOs. 5 Figure 1-5 In excess: Physician supply and estimated requirement 6 Figure 2-1 The changing age structure of the population 18 Figure 2-2 The coming surge in the population of age 65 years and older 18 Figure 2-3 Life expectancy at age 65 19 Figure 2-4 Increasing diversity of the United States population 19 Figure 2-5 The real story of diversity in 2010 is regional. 20 Figure 2-6 California is ahead of the nation 21 Figure 2-7 The middle shrinks, the high end grows. 22 Figure 2-8 Determinants of health 23 Figure 3-1 Total health care expenditures as a percentage of GDP, 1960–1999 25 Figure 3-2 Average annual growth rate of health care costs by sector 26 Figure 3-3 Health care cost increases get noticed during recessions 28 Figure 3-4 Future spending projections 29 Figure 3-5 Projection of future health care spending 30 Figure 3-6 Percent of American adults, ages 18–64, with employment-based health beneﬁts or Medicaid, and without health insurance, 1987–1999 30 Figure 3-7 DSH spending exploded in the early 1990s. 31 Figure 3-8 Share of costs borne by government, employers, and consumers 32 Figure 4-1 HMO membership takes off in the 1990s. 36 Figure 4-2 Health plan enrollment for covered workers, selected years 1996–2001 36 Figure 4-3 Employment-based insurance 37 Figure 4-4 Sources of health insurance for Americans over time 39 Figure 4-5. Strong economy, low unemployment made employers stomach premium growth. 39 Figure 4-6 It’s been the IPAs that have grown fastest. 40 Figure 4-7 Future sources of health insurance for Americans 40 Figure 4-8 The future is much more of the present. 43 Figure 4-9 HMO descendants move from mainstream to majority. 43 Figure 4-10 Tiers ‘R’ Us . . . and will be. 44 x Figures Health and Health Care 2010 Institute for the Future

Figure 5-1 Inflation rates diverge 48 Figure 5-2 Enrollment in PPOs grows. 49 Figure 5-3 Expenditure increases persist. 50 Figure 5-4 Employers are unlikely to switch to defined-contribution health benefits 57 Figure 5-5 Consumers will pay more. 58 Figure 6-1 Managed competition: How it was supposed to be . . . how it really is 70 Figure 6-2 Managed care takes over from “unmanaged care.” 72 Figure 6-3 The “fee-for-service brokers” will lose their dominance. 74 Figure 6-4 How physicians got paid in 1997. 75 Figure 6-5 How HMOs pay their doctors and hospitals 76 Figure 6-6 How premium payments get divided up: The PPO world versus the HMO world 77 Figure 6-7 Fee-for-service will fade, but capitation is not its only successor. 77 Figure 6-8 More physicians and many more group physicians 81 Figure 6-9 Hospital beds are slowly disappearing. 85 Figure 6-10 Occupancy has also fallen. 85 Figure 6-11 Sicker patients and fewer beds means more staff per bed. 86 Figure 6-12 There are also more staff in total. 86 Figure 6-13 There are more for-profits, but not that many more. 87 Figure 6-14 Hospital beds will keep slowly disappearing. 90 Figure 6-15 Hospital spending-still a big deal, but proportionately falling slowly 92 Figure 7-1 Physicians in the pipeline 96 Figure 7-2 In excess: Physician supply and estimated requirement 96 Figure 7-3 Median net income 99 Figure 7-4 Projected supply of RNs, 1995–2020 104 Figure 9-1 More and more PC usage by the workforce 136 Figure 9-2 Technologies in the home take off. 136 Figure 9-3 Eighty-five percent of physicians use at least one Internet-enabled application 140 Figure 9-4 Internet access is mostly for the wealthy and educated. 145 Figure 9-5 Internet and computer penetration of the household will continue to increase. 145 Figure 10-1 Population age 65 and older, 2000 to 2050 151 Figure 10-2 Benefits insecurity 152 Figure 10-3 Description of new consumer attributes in 2005 153

Figures xi Figure 11-1 Changes in cause of death, 1900–1999 167 Figure 11-2 The three pillars of public health 168 Figure 11-3 Changes in the share of national after-tax income held by various economic groups in the United States, 1977 and 1997 170 Figure 11-4 Trends in asthma prevalence by region and year, 1980–1994 172 Figure 11-5 Trends in asthma prevalence by year, 1980–1999 172 Figure 11-6 Trends in waterborne disease outbreaks, 1971–1994 173 Figure 11-7 Patterns in waterborne disease outbreaks, 1997–1998 174 Figure 13-1 U.S. ethnic diversity increasing at an accelerating rate 229 Figure 13-2 Children 5–17 years old who speak a language other than English at home 229 Figure 13-3 Most kids are well covered-and are well. 233 Figure 13-4 Unmarried, with children 237 Figure 13-5 Youthful victims of violence: Rate of serious violent crime victimization of youth, ages 12–17 by gender 239 Figure 13-6 Serious violent crime offending rate 239 Figure 14-1 Average annual growth rate of the elderly population, 1910–2050 252 Figure 14-2 U.S. demographic profile, 1995: Middle-age spread of the baby boomers 253 Figure 14-3 U.S. demographic profile, 2010: Baby boomers reach AARP territory 253 Figure 14-4 U.S. demographic profile, 2030: Top-heavy with baby boomers 253 Figure 14-5 Projection of the elderly population by age, 1995–2030 254 Figure 14-6 Centenarians in the United States, 1995–2030 254 Figure 14-7 Number of men per 100 women by age, 1995 and 2030 255 Figure 14-8 Percent of population, 65 and older, by race and ethnicity, 1995 and 2030 255 Figure 14-9 Most common chronic conditions among women and men, 70 years of age and over 261 Figure 14-10 Disability increasing slower than projected 262 Figure 14-11 The growing gap: Anticipated number vs. projected need for physicians trained in geriatrics 265 Figure 14-12 The shrinking pool of potential caregivers 269 Figure 15-1 Prevalence of chronic conditions 280 Figure 15-2 Prevalence of unmet need for assistance among persons with need for ADL help, by age group 283 Figure 15-3 The consequences of unmet need for help, by age group 284 Figure 15-4 Who pays for what? 1995 national health expenditures 288 xii Figures Health and Health Care 2010 Institute for the Future

Figure 15-5 Source of health insurance coverage for persons with any disability, by age 289 Figure 17-1 Prevalence of illicit drug use by age cohorts 314 Figure 17-2 Marijuana is the drug of choice. 314 Figure 17-3 Association of alcohol and illicit drug use 315 Figure 17-4 Prevalence of lifetime alcohol dependency or abuse, and age of drinking onset 315 Figure 17-5 Interaction of drugs, tobacco, and alcohol 316 Figure 17-6 Trends in perceptions of availability and risk of regular use, compared with 30-day prevalence for twelfth graders 316 Figure 17-7 Trends in drug-related emergency room visits, 1978–1996 317 Figure 17-8 Incarcerations in federal and state prisons and local jails, 1985–1997 318 Figure 17-9 Drug use and AIDS 318 Figure 17-10 Economic costs of alcohol and drug abuse 319 Figure 17-11 The workplace consequences of drug and alcohol abuse: Employment history and absenteeism 320 Figure 17-12 Reported past year illicit drug or alcohol problem relative to treatment 323 Figure 17-13 Trends in homicide rates by method, 1985–1999 326 Figure 17-14 Adolescent suicide: a black and white comparison, 1980–1995 327 Figure 17-15 Few smokers report getting help to quit smoking 332

Figures xiii Tables

Table 7-1 Projected physician supply and demand, as envisaged in 2000 (Physicians per 100,000 population) 97 Table 7-2 Projected RN requirements by employment setting, 2000–2010 104 Table 10-1 The tiers of coverage 157 Table 11-1 Stages of relations between public health and medicine 166 Table 11-2 Ten public health achievements, 1900–1999 167 Table 11-3 Factors in the process of privatizing publicly funded public and personal health services 180 Table 12-1 Projected future causes of disability 190 Table 12-2 The most common mental health common disorders in the United States 191 Table 12-3 Estimated economic costs of mental illness by type of disorder, 1994 (billions of dollars) 194 Table 13-1 Healthy People 2000 goals for maternal and child health 235 Table 15-1 Most noninstitutionalized individuals with chronic conditions are under age 65 281 Table 15-2 Annual per-person ofﬁce visits 282 Table 16-1 The pace of adoption of disease management 308 Table 17-1 Biomedical and underlying causes of death in the United States in 1990 312 Table 17-2 Support among national poll respondents for policies to regulate ﬁrearms 328 Table 18-1 Paradigm shifts 347

xiv Tables Health Care Ten-Year Forecast Institute for the Future

Sidebars

Chapter 1 Tiers of Coverage 3 Forecast Through 2005 10 What Level of Health Spending Growth Is Sustainable in the Long Run? 10 Scenario One Indicators 11 Scenario Two Indicators 13 Scenario Three Indicators 14

Chapter 3 The Economy Is the Crucial Denominator 28

Chapter 4 Employer-Sponsored Health Insurance and the Economy 38

Chapter 6 Physicians in Group Practice 80

Chapter 7 New Roles for Pharmacists 107

Chapter 8 The Pace of Change in Drug Design 113 Unnatural Natural Products 114 Drug-producing Animals and Plants 114 Mini-MRIs and MRNs 115 Positron Emission Tomography (PET) 116 The Ethics of Genetic Testing 121

Chapter 10 The Three Modes of Empowerment 150 The Aging Baby Boomers 151 The New Consumers: Who Are They? 153 Children: Patients and Beneﬁciaries, but Not Active Consumers 154

Chapter 12 Service Coordination for People with Mental Illness and Substance Abuse 205 Self-Help Within a Managed Care Plan 207 Complementary and Alternative Medicine (CAM) 210

Sidebars xv Chapter 13 Incremental Medicaid Expansion is Nothing New 223 Who Are Children with Special Health Care Needs? 234 Chapter 17 The Scope of the Alcohol and Illicit Drug Abuse Problem in the United States 313 Chapter 18 Talking to the Doctor 342 “Alternative,” “Holistic,” “Expanded”: What’s in a Name? 343 Evidence-Based Studies: What the Research Shows 344

xvi Sidebars Health Care Ten-Year Forecast Institute for the Future

Abbreviations and Acronyms

AAMC American Association of Medical Colleges AAPCC adjusted average per capita costs AARP American Association of Retired Persons AFDC Aid to Families with Dependent Children AHA American Hospital Association AIDS acquired immunodeficiency syndrome AMA American Medical Association AMC academic medical center CBO Congressional Budget Office CDC Centers for Disease Control and Prevention COGME Council on Graduate Medical Education CPR computer-based patient record CPS Current Population Survey CT computed tomography DRG diagnosis-related group DSH disproportionate share hospital EBRI Employee Benefits Research Institute EMR electronic medical record ETS environmental tobacco smoke FDA Food and Drug Administration FFS fee for service FTE full-time equivalent GDP gross domestic product GME graduate medical education HCFA Health Care Financing Administration HEDIS health plan employer data and information set HIPAA Health Insurance Portability and Accountability Act HIV human immunodeficiency virus HMO health maintenance organization HPV human papilloma virus IMGs international medical graduates IOM Institute of Medicine

Abbreviations and Acronyms xvii IPA independent practice association IVR interactive voice response LPN licensed practical nurses MRI magnetic resonance imaging MRN magnetic resonance neurography MSA medical savings account MSO management services organization MTBE methlytertiary butyl ether NAFTA North American Free Trade Agreement NCQA National Committee on Quality Assurance NHE National Health Expenditure NHIS National Health Insurance Survey NP nurse practitioner OTC over the counter PA physician’s assistant PC personal computer PET positron emission tomography POS point of service PPM physician practice management PPO preferred provider organization PPS prospective payment system PSN provider service network RN registered nurse SAMHSA Substance Abuse and Mental Health Services Association SES socioeconomic status SIDS sudden infant death syndrome SNF skilled nursing facility SV40 simian virus 40 WHO World Health Organization

xviii Abbreviations and Acronyms Health and Health Care 2010 Institute for the Future

Health and Health Care 2010 Introduction

To recognize the 25th anniversary of its described in the first chapter of this founding, in 1997 The Robert Wood report and depicted in the map that is Johnson Foundation asked the Institute bound to the inside of the back cover. for the Future (IFTF) to forecast the We hope that the findings of this study future of health and health care in Amer- will be of value to community service ica for the period between 2000 and the organizations, hospitals, providers, pay- year 2010. This is the Second Edition of ers, and researchers in the long-term that Forecast, revised and updated to planning processes that support their reflect the changes that have occurred own visions of the future. since our initial work in 1997–1998. As we originally stated, the purpose of this This forecast is organized in the forecast is to provide the reader with a following way: description of critical factors that will influence health and health care in the Health and Health Care Forecast first decade of the 21st century. This first chapter provides an overview of the important issues covered in In this book, we have singled out the greater detail throughout the forecast. trends most likely to influence the course It functions as an executive summary of Americans’ health and the state of the of the topics that are covered in greater American health care delivery system in detail in the subsequent chapters. the next decade. The drivers of this system are relatively stable and predictable Demographic Trends and the Burden of from now to 2005. Beyond 2005, and Disease through to 2010 and beyond, the future In 2010, the American population of health and health care is much more will be older and more ethnically and volatile. racially diverse. The burden of disease is shifting toward chronic illnesses To cope with the uncertainties that exist that stem from our behaviors. This in these later years, IFTF has created chapter draws attention to the impor- three different scenarios that describe tance of these shifts. emerging visions of health care in this country. They are titled Stormy Weather, Health Care’s Demand Side The Long and Winding Road, and The The growth rate of American health Sunny Side of the Street, and they are care costs steadily increased from

Introduction xix 1960 through the early 1990s, then This chapter examines in depth the slowed dramatically. This chapter battle that will evolve in the medical reviews the historical factors that management arena. drove these changes and forecasts the health care cost increases in both the Health Care Workforce public and private sectors over the There has been little real change in next 10 years. the way physicians practice medicine since the invention of the telephone. Health Insurance Although physicians are still the cen- Changes in the health insurance sys- tral ﬁgures in American health care, tem and in the numbers of the unin- the current oversupply of doctors and sured are discussed in this chapter. the emergence of new health care The growth of Medicare and Medic- provider roles may create changes in aid, as well as new versions of man- the health care delivery system over aged care products, are projected the next decade. The supply and through the year 2010. demand of these providers are projected through 2010. Managed Care During the 1990’s, managed care Medical Technologies became the dominant health care New medical technologies have been insurance and delivery system, cover- one of the key driving forces in both ing more than 60 percent of publicly the cost and the organization of 20th- and privately insured lives. It was century health care. This chapter instrumental in controlling national reviews eight new medical technolo- health care expenditures during that gies that will affect the provision of decade, and promised to deliver com- patient care in the next 10 years and prehensive, coordinated health care. examines both their potential positive Despite a recent backlash from physi- effects and the barriers that may stand cians, consumers, and the media, in the way of their adoption. managed care will persist as a mechanism to control costs and coordinate Information Technologies the delivery of care. This section out- The health care industry has lagged lines three scenarios that depict the behind other industries in implement- evolution of managed care over the ing information technologies that next decade. streamline business and clinical processes. We forecast that changes in Health Care Providers information technology as applied to There will be continued change in the health care will be a prime catalyst of way health care is organized and deliv- change in the future. ered over the next 10 to 15 years. The surplus of hospital beds will con- Health Care Consumers tribute to a buyer’s market, and a new As a new, educated generation of role for intermediaries will emerge. informed consumers begins to use xx Introduction Health and Health Care 2010 Institute for the Future

more health services, it is demanding health today, and forecasts the progress more information, choice, and control we will make during the next ten years than ever before. These empowered in creating an environment in which to consumers have the capacity to change raise healthy children. dramatically the culture of health care. In addition, the press of health Health and Health Care of America’s care cost containment may lead to a Seniors three-tiered system of access to care As the Baby Boom cohort of the pop- that seriously disenfranchises people ulation ages, there will be an increased who do not have insurance. demand for medical services and a greater interest in adopting healthy Public Health Services lifestyles as a way to age gracefully. Modern public health is practiced in Increased demands on the Medicare an environment of increasing global- Program to finance the health care of ism and resource scarcity. New devel- people over 65 years will put signifi- opments in technology, public health cant pressure on the health care deliv- strategy, and public-private partner- ery system. These new demands may ships will shape future successes and well outstrip our ability to provide failures in public health. This chapter services. This chapter analyzes the examines and forecasts the future of effect that the change in demograph- public health services, including orga- ics and consumer behaviors will have nizational and environmental health on care for our aging population. issues. Chronic Care in America Mental Health The numbers of chronically ill people The incidence and prevalence of men- in America will grow significantly in tal illness in our society and the effects the next decade, as our aging popula- that reverberate through our economy tion lives longer and confronts the ill- and culture are daunting. This chapter nesses inherent in growing older. We explores the issues that surround the estimate the growth in patients with provision of mental health services, chronic diseases, and forecast the new and forecasts the future of new services and technologies that will be approaches, emphasizing community- available to them. based programs. Disease Managemen Children’s Health The U.S. health care system originally Children are the backbone of our was created to treat patients with future. The integrity of their health, acute conditions. Today, the leading especially in terms of prevention of dis- diseases that cause death and disabil- ease and the establishment of healthy ity are no longer acute, but rather behaviors, is paramount to a flourish- chronic illnesses. By 2010, 40 percent ing and productive society. This chap- of Americans will have a chronic ill- ter describes the challenges facing child ness, and caring for them will cost up

Introduction xxi to $600 billion each year. Disease Wild Cards management is quickly becoming the Wild cards are events that have less than key strategy for easing the health and a 10 percent chance of occurring, but economic burdens of chronic disease. will have a tremendous impact on society This chapter provides a description of and business if they do occur. The point the evolution of disease management of wild cards is not to predict an out- into the 21st century, with implica- come but to expand our peripheral vision tions for key players in the health care regarding the total range of possibilities system. that exist; to offer a larger context within which to consider mainstream forecasts; Health Behaviors and to prepare for surprises in the event Our health behaviors, namely smok- that wildcards do come to pass. ing, poor dietary habits, lack of exercise, alcohol abuse, the use of illicit drugs, and violence, influence up to About the Institute for the Future 50 percent of our health status. Located in Menlo Park, California, IFTF Although we do not anticipate radical is an independent, nonprofit research improvements in these health behav- firm that specializes in long-term fore- iors in the coming decade, the empha- casting. Founded in 1968, IFTF has sis that managed care has placed on become a leader in applied research for prevention will help us begin to nonprofit organizations, corporations, decrease these harmful behaviors. In industries, and governments. IFTF has a addition, community-based programs cross-disciplinary professional staff that that change or restrict the environ- works internationally, analyzing health, ment will also be very important. technology, and broad public policy, forecasting potential scenarios for the future, Expanded Perspective on Health and identifying markets for new products A definition of health must have equal and next-generation technologies. applicability to everyone: to the fully well, to people who are unwell because IFTF’s Health Team is in its 17th year of of disease or illness that is treatable or providing health care data tracking and curable, and to that growing segment forecasting based both on primary and of the population with genetic or secondary research data. Our research acquired impairment, such as people projects focus on emerging trends in the with chronic disease or disability. Over organization, financing, and delivery of the next decade, our view of health health care services, technologies, and will be expanded to encompass mental, products, with an emphasis on public social, and spiritual well being. policy changes as well as on the impact of private sector markets. The Health Team evaluates the forces that both drive and resist innovation and forecasts not only the direction but also the pace of change in the health and health care environments. xxii Introduction Health and Health Care 2010 Institute for the Future

ACKNOWLEDGMENTS H. Goldman, M.D. Ph.D.; Michael The idea for this study originated with Goze; Peter Grant, Jessie Gruman, Ruby Hearn, Ph.D., and Steven Ph.D.; David Gustafson, Ph.D.; Melinda Schroeder, M.D., of The Robert Wood Hamilton; David Hansen; Kathy Harty; Johnson Foundation. They believed that David Hayes-Bautista, Ph.D.; David there would be value in developing the Hemenway, Ph.D.; Rona Hu, M.D.; forecast as a long-range strategic plan- Patrick Jeffries; Don Kemper; Bill Kerr; ning tool for health organizations. Along Quita Kirk; Nandini Kuehn, Ph.D., with Dr. Hearn and Dr. Schroeder, Frank Paula Lack; Kim Lawrence; Julia Lear, Karel, Ann Searight, Maureen Cozine, Ph.D.; Bob Leitman; Jeff Lemieux; Connie Pechura, Ph.D., Beth Stevens, Katherine Levit; Karen Linkins, Ph.D.; Ph.D., Nancy Kaufman, Ph.D., and Marty Lynch; Ron Manderscheid, Ph.D.; Jeanne Weber provided consistent over- Alexandra Matveyeva; Molly Mettler; sight and cogent direction to the project, Arnie Milstein, M.D.; Al Mulley, M.D.; helping all of us to focus, refine, and Al Martin, M.D.; Gordon Moore, M.D.; improve the final product. Lois Shevlin H. Richard Nesson, M.D.; Robert New- and Phyllis Kane were invaluable in comer, Ph.D.; Mark Petrakis; David guiding us through the planning and Reuben, M.D.; Dorothy Rice, Ph.D.; development processes. We are indebted James Robinson, Ph.D.; Richard Rocke- to them and are extremely grateful for feller, M.D.; John Rother; Joan Rum- their support and guidance throughout melsburg; Pamela Russell; Bill Scanlon; this project. Andrew Scharlach, Ph.D.; Monica Seghers; Cary Sennet, M.D.; J. J. Singh; The IFTF staff could not have completed Mark Smith, M.D.; Elliott Sternberg, the research necessary to formulate this M.D.; Felicia Stewart, M.D.; Jon Stew- forecast without the help of many col- art; Humphrey Taylor; Sally Tom; Joan leagues, experts, and friends. Among Trauner, Ph.D.; and Leonard Zegans, those who were instrumental in identify- M.D.. ing and refining issues and trends with us, we would like to thank particularly Their thoughtfulness, insightful com- the following people: ments, and generous contributions of time and energy added significantly to Nancy Adler, Ph.D.; Adrianna Aranda; our own knowledge and to the robust- Morris Barer, Ph.D.; John Berthko; ness of the forecast. Katherine Binns; Bob Blendon, ScD; Robin Bogott; Janet Chambers; Rick Carlson; Toby Cole, M.D.; Rena Convis- sor; John Danaher, M.D.; Karen Davis, Ph.D.; Joe DeLuca; Paolo del Vecchio;Al Dembe; Susan Edgman-Levitan; Amy Einshorn; Carroll Estes, Ph.D.; Robert Evans, Ph.D..; Brian Finch, Ph.D.; Bar- bara Fuller; Brianna Gass; Suzanne Gel- ber Ph.D.; Michael Goldberg; Howard

Acknowledgments xxiii Special thanks go to Jean Hagan, Julie Koyano, Sue Reynolds and Susan Eastwood for their sensational editorial work and patience, and to Jon Peck for his guidance in publishing this work.

Andy Pasternack, our publisher at Jossey-Bass, achieved early sainthood for his continuing patience and support during this process.

This forecast was submitted to the Foundation as a report to RWJF and is solely the responsibility of the Institute for the Future and its affﬁliates.

With thanks, Wendy Everett Director

Roy Amara Ellen Morrison Mary Cain Ian Morrison Rick Carlson Geoffrey Nilsen Janet Chambers Marina Pascali Diana Cypress Andrew Robertson Hank Dempsey Denise Runde Rod Falcon Jane Sarasohn-Kahn Jaycee Garrett Greg Schmid Danielle Gasper Charlie Wilson Katherine Haynes Sanstad Kathy Yu Matthew Holt Institute for the Future Susannah Kirsch Menlo Park, California Nandini Kuehn Heather Kuiper Karen Bodenhorn Elaina Kyrouz Roberto Garces Robert Mittman California Center for Health Improvement

xxiv Acknowledgments HEALTH AND HEALTH CARE 2010 The Forecast, The Challenge

Second Edition Health and Health Care 2010 Institute for the Future

Chapter 1 Health and Health Care Forecast Executive Summary

Fifteen years ago, the key issues in the making; determining responsibility for American health care system were clas- medical management; and improving sic: containing costs while improving the health behaviors of the American access to care for people and maintaining people. These will be the health battle- quality of services. Then the rapid cost grounds of the next decade. increases of the late 1980s, combined This chapter provides an overview of with the recession of the early 1990s, our 10-year forecast of health and health added a new issue to the list: ensuring care. We describe the path from now security of beneﬁts. until 2005 in terms of the future legis- After the political dust of the lative and regulatory contexts; changes 1992–1994 debate about health reform in the demographics and attitudes of settled, several structural shifts in the patients, populations, and consumers; system became apparent. Managed the concerns of payers about health care care—designed to contain costs—went costs; the organization of health plans from being an aberration to being the and insurers; the structure of hospitals, mainstream method of providing health provider organizations, and the public insurance. Several new issues came to the health system; the role of medical infor- forefront of health policy: monitoring mation technologies; and the forthcom- the activities of managed care plans, ing shifts in care processes and medical organizing health care providers, and management. Beyond 2005, our forecast evaluating the quality of care delivered splits into three scenarios—one opti- to patients. Although the recent strong mistic about the impact of changes on economy and job market has increased the health of the population, one pes- the security of health beneﬁts for some simistic about the ability of American people, the issue of how to pay for care society to provide coverage and access to for a growing number of uninsured care, and one in which incrementalism Americans remains with us. reigns supreme.

None of these issues will be completely Legislation resolved in the next few years. Instead, a new group of issues will join them. They Legislative activity will be set against a include organizing insurers and interme- background of incremental legislative diaries, along with providers; incorporat- reform. The failure of the health reform ing consumers into health care decision effort from 1992 to 1994 dulled the

Chapter 1: Health and Health Care Forecast 1 appetite of most politicians for signifi- Second, Medicare may look very differ- cant health regulation. In addition, there ent than it did in the early 1990s, when is almost no support for large-scale social its financial future became uncertain. programs targeting the poor or the un- Many Medicare recipients will not be in insured. Major government reform is the traditional fee-for-service (FFS) pro- therefore unlikely. Strong support for gram but instead will be in health main- the current Medicare and Social Security tenance organizations (HMOs), preferred systems means that change in the bene- provider organizations (PPOs), or some fits of these systems will be slow. There other organized health plan arrange- will be few initiatives to design new ment. Cost controls enacted in the 1997 government programs beyond the lim- Balanced Budget Act will have changed ited programs enacted in the past few the way providers deal with Medicare years—insurance portability and chil- patients, in particular placing the reim- dren’s coverage. Neither of these two bursement for outpatient, home health, initiatives will have a significant impact and skilled nursing facilities (SNFs) on a on the overall number of uninsured or prospective payment system. It’s plausi- the general health insurance market. ble that the baseline will be sufficiently different that “incremental” legislation Government legislation in two signifi- in the future could make a big change in cant areas will have some impact on the the nature of the program. But Medicare mainstream health care system. remains the second most popular program among the most powerful demo- First, there will be legislative outcomes graphic group in America—the as a result of a backlash against managed elderly—and politicians have learned to care. While there are few clearly articu- tamper with it at their peril. lated alternatives to market-based health care in the United States, there is consid- Consequently, our forecast for legislation erable support for legislation to curb is one of continued incremental program what are seen as health plan abuses. change directed primarily at providers Given that these regulations will require and with little direct effect on beneficia- little money from public coffers, we can ries. The real challenge—changing expect more regulation of health plan Medicare so that it can afford to cover activity, including disclosure rules, the vast number of baby boomers retir- mandates for clinical protocols such as ing after 2010—will not be dealt with the 48-hour hospital stay for maternity until later in the decade. patients, and medical records privacy laws. Although the effect of such regu- Demographics: lations on the overall market may be Patients, Populations, slight, there will be significant effects and New Consumers on plan and provider operations. In the next decade, Americans will be getting older and living longer. By 2010 the average life expectancy will be up to

2 Chapter 1: Health and Health Care Forecast Health and Health Care 2010 Institute for the Future

86 years of age for a woman and 76 years Figure 1-1. Increasing diversity of the United States population for a man. In addition, there will be more than 100,000 people over the age Percent of 100 in the year 2010. However, the 40 Native American ﬁrst baby boomers will not turn 65 until Asian Hispanic 2010, so although the population is 30 African American aging, it’s aging quite slowly.

20 America will soon be a more ethnically diverse nation (see Figures 1-1 and 1-2). 10 Currently 74 percent of the population is white, but that will decrease to about 64 percent by the year 2010. Asians will 0 1980 1990 2000 2010 make up 5 percent, and African Ameri-

Source: IFTF; U.S. Census Bureau, Statistical Abstract, 2000. cans 13 percent. In the more densely populated western states, approximately 15 percent of the population will be Figure 1-2. The real story of diversity in 2010 is regional. Hispanic.

African American Northeast Hispanic The population will also be better edu- Asian cated in 2005: 55 percent of the popula- Native American tion age 25 years and older will have Midwest the equivalent of one year of college (see Figure 1-3). Income disparity— South a critical factor in determining health— will increase slightly. In the year 2005, West 50 percent of the population will have a family income of $53,000 or more in 0 1020304050 Percent constant 1998 dollars, and the distribution will be slightly more equal. Source: IFTF; U.S. Census Bureau, Statistical Abstract, 2000. Access to care will remain “tiered” and that tiering will become much more extreme. The top tier, the “empowered consumers,” have considerable discre- Tiers of Coverage tionary income, are well educated, and use technology (including the Internet) Empowered Consumers: 38 percent to get information about their health. Worried Consumers: 34 percent These new consumers increasingly will Excluded Consumers: 28 percent engage in shared decision making with their physicians.

Chapter 1: Health and Health Care Forecast 3 Payers and Health Figure 1-3. A growing number of adults in the United States have Care Costs attended college. (Percentage of people age 25 years and older who The health care system has been domi- have attended college) nated by cost concerns for the better part Percent of 30 years, but that domination will 60 wane during the next decade. From 1965 to 1991—from the inception of Medicare 50 and Medicaid through the recession that precipitated the health care reform debate 40 of 1992–1994—health care grew from 30 5 percent of the gross domestic product (GDP) to more than 13 percent. It is 20 now at about 14 percent of GDP, with virtually all the reduction in cost growth 10 coming from savings in the private

0 sector. 1965 1975 1985 1995 1999 2005 We forecast a moderate but consistent

Source: U.S. Census Bureau, Statistical Abstract, 2000. increase in the cost of health care between now and 2005. Health care will grow as a share of the economy,1 albeit more slowly than in the 1960s, 1970s, The second tier is made up of the and 1980s. By 2005, the health care sec- “worried consumers.” These are con- tor will account for about 15 percent of sumers who have access to some health GDP. Employers in the private sector insurance but have little or no choice of will see the short-lived cost decreases of health plans. This tier includes those the mid-1990s fade away.2 They’ll see whose employers only offer one type nominal cost increases of 3 to 6 percent of coverage and those who may be tem- per year. Despite the best efforts of Con- porarily employed and face an even less gress to reduce spending in the Medicare secure health insurance outlook. This system, public programs will continue to “worried” group also includes early grow between 6 and 9 percent per year. retirees and others who do not have the Between now and 2005, business and same access to discretionary income as government will put several strategies the empowered consumers. in place to repress large cost increases. The third tier is composed of the These strategies tend to assuage the “excluded consumers.” In this group are symptoms rather than to attack the cause the uninsured, people on Medicaid, and of the increases. The strategies include others who don’t have access to market- reducing insurance coverage, passing on based health insurance. Throughout our the costs of health care premiums to ben- forecast, these three groups are affected eﬁciaries, and increasing the restrictions in varying ways by different aspects of on access to care via ﬁnancial disincen- the health care system. tives for utilization.

4 Chapter 1: Health and Health Care Forecast Health and Health Care 2010 Institute for the Future

The health insurance market will evolve Figure 1-4. Americans move into HMOs. into a mix of different health plan models, many of which will spend the next Millions several years in a constant ﬂurry of reor- 140 ganization and mergers. Four dominant 120 “intermediary” models will emerge by 100 2005: the case manager, the provider 80 partner, the high-end FFS broker, and

60 the safety-net funder. As a result, in 2007 close to 50 percent of the popula- 40 tion will be in health plans for which 20 cost containment is a key issue. 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Despite all the pressures toward increasing costs in the system, these new strate-

Source: Group Health Administration of America, Interstudy, American Association of Health Plans. gies will be successful enough to keep costs from exploding again as they did from 1960 to 1990.

Health Plans and Hospitals and Insurers Physicians

The biggest change in the health insur- As the demand side evolves, changes in ance market over the past 10 years has the ways providers are organized will been the fast growth of HMO enroll- occur in the context of significant ment. In 1998, more than 76 million provider oversupply (see Figure 1-5). Americans were enrolled in HMOs, and There are approximately 630,000 physi- a majority were in some kind of a man- cians in the United States and another aged care plan. By 2005, HMOs will 170,000 in the medical school pipeline. capture the majority of the commercial There are nearly three new physicians for market and more than 25 percent of the every one doctor who retires. Moreover, Medicare market. Sixty percent of Med- the numbers of nurse practitioners icaid recipients will be in some form of (NPs), physician’s assistants (PAs), and 3 HMO by the year 2010. other non-MD clinicians will increase rapidly over the next decade. Physicians Among this plethora of new products, it are moving into group practices, yet it will be increasingly difficult to distinguish will be 2005 before most office-based one health plan from another. They’ll physicians are in groups, and most of all offer similar—and often the same— those will be in groups of six or fewer. providers and pay those providers through a mixture of discounted FFS and capita- On the hospital side, occupancy percent- tion (a flat fee per patient). By 2005, more age rates have fallen from the low 80s to than 100 million people will be in these the low 60s in the past decade, but nei- “HMO descendants.” (See Figure 1-4.) ther beds nor hospitals have closed at a

Chapter 1: Health and Health Care Forecast 5 interventions of health plans that have Figure 1-5. In excess: Physician supply and estimated requirement driven much activity out of the inpatient (including residents and interns) setting will continue, but at a relatively Total supply of nonfederal slower pace. patient-care physicians Medical and 726,067 690,399 Information 631,431 Technologies 564,074 431,527 Technological change is accelerating in two areas that will affect health care dra- 1985 1995 2000 2010 2020 matically: medical and information technologies. Medical technology has been one of the major drivers of the health Nonfederal patient-care physicians per 100,000 civilian population care system since the introduction of 250 effective pharmacological agents in the Projected supply early part of this century. Its impact will 200 continue in the next decade. However, Projected 150 requirement health care has not made signiﬁcant use of the advances in information technol- 100 ogy that have transformed most other 50 industries. That situation will not con-

0 tinue for much longer as the boundaries 1990 1994 2000 2010 2020 between information and medical technologies begin to blur. Source: IFTF; Bureau of Health Professions, American Medical Association, Council on Graduate Medical Education. Medical Technologies

The health care system has quickly rate that’s close to the drop in demand. adopted new medical technologies, both Set against this background of institu- devices and pharmaceuticals. Despite tional inertia, no dominant model will increased interest in cost-benefit assess- emerge to replace the large teaching hos- ment techniques, the pace of introducing pital and smaller community hospital new technologies is unlikely to slow, and models that provided medical care from there will be a significant increase in the the 1930s to the early 1990s. number of new technologies available in the coming decade. Some of the most There will be some hospital closings and interesting new technologies include: bed reductions, but hospitals will con- Rational drug design. The use of com- tinue to be difficult to shut down. From puters to design drugs that target a a total of just over 850,000 beds in particular receptor. 1997, we anticipate a further reduction of 130,000 beds by 2005.4 The advances Advances in imaging. The use of new in medical technology and the aggressive imaging technologies—such as

6 Chapter 1: Health and Health Care Forecast Health and Health Care 2010 Institute for the Future

electron-beam computed tomography together they’ll be the drivers behind new (CT), harmonic ultrasound, high- clinical care processes. They are: resolution positron emission tomography (PET), and functional magnetic Automation of basic business processes. resonance imaging (MRI)—to look at The transaction standards mandated the form and function of organs that in the 1996 Health Insurance Porta- were once examined only in surgery. bility and Accountability Act (HIPAA) legislation are beginning Minimally invasive surgery. The use of to move plans and providers toward miniaturized devices, digitized imag- automation of the submission and ing, and vascular catheters in neuro- adjudication of claims, determination surgery, cardiology, and interventional of patient eligibility, coordination radiology. of benefits, and authorizations of referrals. Genetic mapping and testing. The identification and testing of genes and Clinical information interfaces. genetic interactions that cause disease. The creation of an electronic medical record (EMR) has stumbled because of Gene therapy. The use of site-specific resistance from providers, even while genes to treat a variety of inherited or many of the basic building blocks are acquired diseases. being put into place. Over the next Vaccines. The use of vaccines to bolster decade, the availability of computers, immune systems, target tumors, or sophisticated decision support sys- immunize against viruses, and of tems, and voice recognition will create delivery methods including oral and interfaces that are clinician-friendly. nasal sprays to simplify the vaccina- A combination of low equipment tion processes. prices, younger, computer-savvy clinicians, and the move of physicians into Artificial blood. The use of recombi- groups will cause a slow but certain nant hemoglobin, using E. coli, to cre- adoption of computerized medical ate a blood substitute. records in the years after 2005. Xenotransplantation. The transplanta- Data analysis. In the next few years, tion of tissues and organs from ani- administrative and claims data sets mals into humans, primarily bone will be extensively “mined” to gain a marrow and solid organs. better understanding of a population’s future illnesses and an improved abil- Information Technologies ity to risk-adjust payments to health plans and providers. After 2005, there The information and communications will be more data available directly revolution will move into the health care from clinical records. There will be system in the next 5 to 10 years. We fore- close to real-time online analytical cast that four main areas will be affected processing of information about by new information technologies and that patient and provider outcomes, and

Chapter 1: Health and Health Care Forecast 7 that information will be used in all use them. The second is the need to aspects of health care. reduce variations in practice, thereby reducing costs and improving clinical Telehealth. A combination of com- outcomes. Since an individual clinician is puter-supported case management, less able to judge adherence to protocols remote telemetry via sensors, and bet- than is a manager reviewing records of an ter-informed patients will create new entire organization, decisions about med- ways of delivering health care. Chron- ical management will continue to shift ically ill patients will be monitored away from the prerogative of the inde- remotely by using a variety of sensor pendent physician. Instead, internal man- devices, such as video cameras, blood agers in provider organizations and pressure monitors, blood glucose read- external managers working for interme- ers, and smart pill boxes. Sensors will diaries and plans will assume increasing be linked to computer systems that authority in managing physicians’ behav- enable the provider to catch adverse ior and patients’ compliance. Because events almost before they happen. The medical management will depend on vast increase in information about information systems to monitor and track health that the Internet, interactive both processes and outcomes, we forecast TV, and other communications media that putting these medical management bring into the home will also affect processes in place will take closer to 15 the health care system. Patients will years than 5 years. use these media for disease-specific research, psychosocial support groups, In the interim, disease and demand self-care, and shared decision making. management programs for the well population—advice nurses working We forecast that the impact of medical with patients using the telephone and technologies on the health care system will the Internet—will be commonplace. The continue to be significant, although the advent of disease management programs true gains from using information tech- and the adoption of clinical guidelines nology and computerizing clinical care will have a significant impact on medical processes will not be seen until after 2005. practice and patient management by 2005 and a sporadic but discernible Care Processes and effect on practice variation a few years Medical Management later. However, the struggle between intermediaries and providers and among Medical management—the active man- different provider organizations over who agement of the care of patients and popu- controls patients’ and physicians’ behav- lations—is currently applied sporadically, ior will not be resolved by 2010. if at all. There are two main issues in the future of medical management. The first Public Health is the debate over which care processes are used. Many groups are developing Over the past 30 years the public health guidelines and practice protocols, but system has operated under pressures of none has agreed how, where, or when to resource scarcity, limits in leadership, and

8 Chapter 1: Health and Health Care Forecast Health and Health Care 2010 Institute for the Future

organizational fragmentation. As the pub- totally collapse because support for public health system assumed the role of lic health will increase enough to main- safety-net medical provider, the economic tain at least a minimal system. The rise of burden upon it became almost unbear- the new consumer will also increase sup- able. Public health also suffered an iden- port for public health measures. tity crisis as the public confused public health with indigent medical care, further Over the next decade, national public diminishing support for a population- health policy will be generally piece- based health infrastructure. At the same meal, but dynamic state-level actions time, new health challenges emerged, will generate enough momentum to such as HIV/AIDS and environmental reignite federal comprehensive health contamination, that required strong lead- care reform debate. Community coali- ership and an integration of population- tions that assure access to basic personal based approaches into public health. and public health services will become more common. Managed care will con- Overarching global forces will determine tinue to dominate, but will be aug- the context in which public health func- mented by the integration of population tions in the future. By the end of this and personal health, public and private decade the currently inchoate social vision patient bases, and a variety of reimburse- reshaping government will have fully ment strategies. The full potency, limita- emerged and will determine the players tions, and consequences of public health and resources in future public health litigation, à la tobacco, also will be evi- leadership and action. Furthermore, dent in the next decade. global economies and populations will drive increases in health risks, and by The future of public health service deliv- the next decade, national public health ery will be shared among the local public concerns will be embedded in a global health agencies, the community’s private context of threats and opportunities. health care providers and organizations, Cost-effective technological advances, and community-based organizations and while mitigated by ethical debate, will leaders. The science of epidemiology will enhance screening, surveillance, and envi- continue to be one of public health’s ronmental health. Finally, public health most useful guides and will extend will increasingly employ “ecological” beyond biomedical applications to evalu- strategies that simultaneously address ate innovative and comprehensive public multiple human and structural determi- health prevention strategies. nants of health and health behavior. Tobacco use will continue its steady During most of the next decade, public decline, but at a very slow pace. In some health will continue to be underfunded geographic regions, use may remain at the and marginalized, and efforts to address current plateau. Community-based these underlying problems will be largely actions and local legislation will remain incremental. Breaches in public health effective tactics in curbing tobacco use in prevention systems will become increas- public places. A persistent inﬂux of youth ingly evident, but the system will not smokers will require constant vigilance,

Chapter 1: Health and Health Care Forecast 9 tious and chronic disease will keep Forecast Through 2005 infectious diseases on the public health Health Care 2 percent per year above nominal attention list. Finally, the by-products of Spending Growth: GDP growth our modern society will gain markedly Health Care Spending: 15 percent of GDP, $6,424 per capita increased attention in the next decade as food safety and air and water quality reach Uninsurance Rate: 44 million uninsured, 15 percent of critical points. The crucible for environ- population mental health action will be child health and safety actions and standards.

especially as smoking interacts with alco- Three Scenarios hol and illicit drug use. Abuse of these substances, in the absence of significant Our forecast is relatively certain and augmentation of treatment and preven- stable through the year 2005. Beyond tion programs, will continue to fluctuate 2005, we have created three scenarios to at high but not record-breaking levels. describe how the health care landscape Barring a massive economic recession, might evolve. firearm injuries related to violence will continue their decline, which began in the Scenario One: mid-1990s, with slower declines in nonvi- Stormy Weather olent firearm injury gaining momentum In the Stormy Weather scenario, as an array of interventions take effect. pressures from rising costs, dissatisfied Although levels of infectious disease in providers and patients, marked inequal- the early 21st century will not approxi- ity of access to care, greedy profit takers, mate those of the early 20th century, and repeated health care scandals accu- (re)emerging infections, drug resistance, mulate through the year 2005. None of resurgence in risky behaviors, threats of the fundamental problems of cost, qual- bioterrorism, and the interaction of infec- ity, or access are addressed in a meaningful way. Between 2005 and 2010, the barometer drops, winds converge, and What Level of Health Care Spending Growth stormy weather erupts. The primary dri- Is Sustainable in the Long Run? ving forces in this scenario include: A sea change in health care spending took place in the early 1990s. The Managed care programs that fail to annual growth rate dropped from 11 percent—a rate that had been sustained deliver on their promises to contain since the 1960s—to 6.75 percent. A combination of forces converged to costs or to improve quality. Instead, lower spending growth: strong price pressure from employer coalitions and they default to more hassling of other large purchasers; a low point in the health insurance underwriting cycle; and providers’ and suppliers’ keeping their prices in check during the providers and gaming of utilization health reform debate and its aftermath. A key question for the next 10 years management systems. is this: Do we sustain the 1990s pattern of low growth rates in spending or do we return to the historical, 30-year pattern of higher growth? Scenario One Consumers and providers who react to reflects the 30-year pattern of spending growth. Scenarios Two and Three the adversarial climate with a strong, reflect the more recent pattern of spending growth. unified backlash to managed care. They succeed in getting legislation

10 Chapter 1: Health and Health Care Forecast Health and Health Care 2010 Institute for the Future

breaks from health plans. Many small Scenario One Indicators employers, meanwhile, drop insurance Health Care 2.5 percent per year above nominal benefits altogether, substantially Spending Growth: GDP growth increasing the number of uninsured. Health Care Spending: 19 percent of GDP, $10,200 per capita The march of new medical technolo- Uninsurance Rate: 65 million uninsured, 22 percent of population gies, which continues unabated. Con- sumers, prompted both by pharmaceutical companies’ direct-to- consumer advertising and by “gee- passed that further erodes the effec- whiz” articles in the popular press, tiveness of managed care by inter- demand access to the latest, greatest, vening in a variety of clinical and and most expensive drugs and medical structural decisions, such as regulation technologies. Beleaguered health of lengths of stay for various proce- plans concede the point and lose con- dures, staffing ratios, and any-willing- trol over cost and quality. provider laws. Costly medical technologies for Health plans that engage in substan- extending life that are not restricted, tial adverse selection and cream- as no social consensus develops to skimming of beneficiaries as Medicare limit spending on health care near the moves toward managed care and a end of life. wider range of choices for its benefi- Information technologies, once ciaries. Medicare risk plans manage thought to be the way to efficiency, to get the bulk of low-cost, healthy consistency, and higher-quality care, beneficiaries, leaving the sick, costly that prove to be costly and ineffective. people to the conventional indemnity Plans and providers find that their plan. Each attempt at risk adjustment investments in the late 1990s and is met with strategies that boost over- early 2000s don’t pay off, but seeing all Medicare spending. no better way, they continue to invest Provider oligopolies, including large after 2005. group practices, physician practice The public health system, which will management firms, national single- be in tatters, with local public health specialty groups, and large hospital departments retreating from service chains, that are able to sustain high provision and only minimally fulfill- prices in an environment that ing mandated functions, and no com- demands open provider networks. pensatory response from the private They threaten to leave the networks sector. of plans that don’t pay well and the plans blink first. Scenario One plays out with a range of Large employers that continue to offer difficult consequences. Health care insurance as a benefit of employment spending, by 2010, constitutes almost in the face of a tight labor market and one-fifth of gross domestic spending. are unable to demand substantial price Even with expenditures at that level,

Chapter 1: Health and Health Care Forecast 11 more than one in five Americans remains benefit structures. They keep substan- uninsured. A majority worry about los- tial price pressure on health plans, ing their health benefits. Insecurity of limiting increases on the commercial benefits is widespread as many people are side to 3 to 4 percent per year. They just one job change away from being also shift cost and risk to employees without health insurance. Even those by moving increasingly from a defined who retain insurance are a lot less happy benefit plan to a defined contribution as their out-of-pocket costs rise. program. As beneficiaries’ out-of- pocket costs increase, utilization of The health system exhibits radical tier- health care services drops off in ing, with much poorer access to care for response. the uninsured and people on Medicaid. Health plans that, in turn, increase Medicaid itself puts enormous strain on pressure on providers. They convince states, as the state programs are faced employers that they can only control with medical costs that overwhelm reces- utilization in a more closed network, sion-depleted state budgets. A number so the expansive networks of the late of major public hospitals are forced to 1990s disappear. In their place are close their doors. Although their closing more tightly controlled networks that helps bring the supply of hospital beds exert both clinical control and strong into closer relation to the demand, it also price pressure on providers. strands many people who have nowhere else to go. The Medicare program finds Providers who—stung by the high itself unprepared to absorb the baby cost and organizational difficulty of boomers, who begin to become eligible forming large units and integrating in 2010. By the end of the forecast care—adopt few of the innovations of period, health reform is again on the the leading-edge provider groups. public policy agenda. Instead, they engage in sustained, and largely unsuccessful, resistance to being “hassled” by insurers. Scenario Two: The Long and Winding Road The cost-containment provisions of the 1998 federal budget, which rein In Scenario Two, The Long and Winding in both Medicare and Medicaid spend- Road, incrementalism reigns. The suc- ing. The provisions stick. That bill cessive attempts at revising a portion of sets the standard for budget bills for the health care system work sufficiently the first 10 years of this century. well that tinkering continues well past 2005. As costs get pushed down in one The public health system, which will place, they pop up in another, but the engage in the dynamic competition system is able to respond rapidly and with the private sector in service keep costs in balance. The primary dri- delivery. ving forces for this scenario include: The period of 2005 through 2010 is one Employers who continue to pay close of turbulent, disorganized change. The attention to health care costs and their health care landscape changes as much in

12 Chapter 1: Health and Health Care Forecast Health and Health Care 2010 Institute for the Future

but most of those are in three- to six- Scenario Two Indicators doctor groups. These groups are not large Health Care 1 to 2 percent per year above enough to accept global capitation safely, Spending Growth: nominal GDP growth align with a hospital, or inﬂuence their Health Care Spending: 16 percent of GDP, $8,600 per capita physicians’ practice patterns radically. Uninsurance Rate: 47 million uninsured, 16 percent of population Comprehensive health reform does not enter the public policy debate, as incremental changes each year reassure elected ofﬁcials that they are “doing something those 5 years as it did in the period from about health care.” 1993 to 1998.

In Scenario Two, costs grow only a little Scenario Three: The Sunny faster than nominal GDP growth, reach- Side of the Street ing 16 percent of GDP by 2010. Federal In the Sunny Side of the Street scenario, and commercial cost containment work all the hard work and investment from well enough to make insurance coverage now until 2005 pays off after 2005 in the affordable for most employers. About form of a sustainable, efﬁcient health care one in six Americans (47 million) is system. Competition helps drive excess uninsured. capacity out of the system. We learn what does and does not work in medi- The health care system remains tiered, cine, and especially how to get providers with about 20 percent of Americans in and patients to work effectively together. the bottom tier of public coverage and Health plans and providers put in place uninsurance, 60 percent in managed care information and management systems plans that substantially restrict their that can take the health care system choice of providers and limit providers’ through the next 2 decades. The driving autonomy, and 20 percent in high-end, forces for this scenario include: indemnity-type programs. Competition at all levels of the health The bottom tier safety-net providers care system, but especially among face tighter conditions, with cuts in dis- providers, which helps drive costs proportionate share hospital (DSH) fund- down. Young physicians enter the ing, an end to cost-based reimbursement market with lower income expecta- for outpatient clinics, and tight state and tions and more of an employee men- local budgets. But they manage to mud- tality than their predecessors. dle through as usual by patching together a range of disparate funding sources. The wave of consolidation of the late 1990s, which continues through the Care delivery is still fragmented, as early 2000s. Efﬁcient health care orga- national players remain relatively rare nizations, which can assimilate the and small. The majority of physicians best practices from their constituent now practice in groups of three or more, parts, emerge. Consolidation also

Chapter 1: Health and Health Care Forecast 13 demonstrate their cost-effectiveness Scenario Three Indicators as well as their safety and efficacy Health Care 1 percent per year above nominal with more rapid approvals. Health Spending Growth: GDP growth plans and providers, through their Health Care Spending: 15 percent of GDP, $8,100 per capita improved information systems, develop the capacity to make trade- Uninsurance Rate: 30 million uninsured, 10 percent of population offs among therapies according to their cost-effectiveness. The public health sector, which will embrace public-private community serves to drive some excess capacity, partnerships, where service delivery especially of hospital beds although occurs in the private sector and gov- not necessarily hospitals themselves, ernment focuses on assessment, devel- out of the system. opment, and assurance. The provider service networks (PSNs) that form to contract with Medicare. In Scenario Three, cost growth is also PSNs find that they have efficient just 1 percent above the nominal growth administrative structures. They begin of GDP. By 2010, it reaches 15 percent to contract directly with employers in of GDP. These moderate cost increases certain parts of the country. Medicare make health insurance more affordable. encourages further growth in its risk People experience more security of contracting as it develops effective benefits, leaving an uninsurance rate risk-adjustment methods that make of 10 percent (30 million people). risk contracting cost-neutral for the program. The good news is that the basics are in place—health systems are equipped to Innovative payment approaches that minimize unnecessary variation in prac- are developed throughout the health tices, they operate efficiently, they can care system. Prospective payment for track what they’re doing. The time spent outpatient services is put in place first cultivating a well-organized health sys- by Medicare, then by commercial tem pays off in the long run. The bad health plans. news is that we still have 30 million Health care information systems, people who are uninsured. which make significant progress Medicare and private plans begin think- beyond their current administrative ing about the long term. They put in functions. Clinical information sys- place incentives to reward population tems are put in place that successfully management in addition to individual improve care processes and outcomes. patient care. They also provide incen- The EMR sees the light of day. tives for a longer-term focus on today’s Developments in medical technology health care decisions. The system appears that focus both on improving out- well equipped to take on the wave of comes and on reducing costs. Regula- baby boomers who will begin to be eligi- tors favor technologies that can ble for Medicare starting in 2010.

14 Chapter 1: Health and Health Care Forecast Health and Health Care 2010 Institute for the Future

Endnotes decreases from health plans in a string of “famous victories” between 1993 and 1997. 1 We forecast that, until 2010, real economic growth will remain at 2.5 percent, with gen- 3 These 60 percent will account for only 30 eral inﬂation in the economy averaging 3 percent of the costs of the program, as the percent. Health care cost growth at 5.5 per- blind, disabled, and dual-eligible elderly will cent will mean no change in the share of still consume most of the resources. GDP going to health care. Faster growth of health care costs will mean that health care 4 This doesn’t tell the whole story as beds are will grow as a share of GDP. often allocated to SNFs, 23-hour beds, or long-term care without moving from the 2 Overall private sector cost increases averaged same facility, but this projection is based on 4.8 percent from 1991 to 1995, but many the ofﬁcial American Hospital Association large employers extracted actual premium (AHA) data for inpatient beds.

Chapter 1: Health and Health Care Forecast 15 Health and Health Care 2010 Institute for the Future

Chapter 2 Demographic Trends and the Burden of Disease Increasing Diversity

Demographic shifts will shape the fastest-growing segment of the popula- future. An increasing number of debates tion. Their numbers will increase from and discussions are surfacing around the 35 million in 1999 to 40 million in 2010 social, economic, and health implications (see Figure 2-2). This “age wave” will of demographic and social change. All of have a transformational impact across these concerns present new challenges for many institutions, levels of government, public policy, government, business, and and segments of society. The health care the health care industry. Several critical industry should begin planning now— issues and trends deserve attention—the well before 2010—to respond adequately aging baby boomers, the increasing eth- to the needs of an older American popula- nic and racial diversity, the growing dis- tion. The average life expectancy has parity between the richest and the increased by more than 30 years in the poorest households, and the future bur- last century and will be 81 for women den of disease. and 76 for men who are 65 in the year 2010 (see Figure 2-3). This chapter examines each of these issues and sets the broad demographic The health care industry will certainly context for examining the future of feel the effects of this demographic health and health care in America. change in the next decade. Baby boomers have transformed many institutions and The United States aspects of society along their life cycle— Population Is including the workplace, ﬁnancial insti- Growing Older and tutions, and government. As baby Living Longer boomers interact with the health care system, their expectations and preferences The United States population is growing will also transform these institutions as older, a demographic trend that will have the health care industry adapts to accom- far-reaching effects as the baby boom gen- modate baby boomers’ demands and eration—those Americans born between numbers. They will access the system not 1946 and 1964—ages (see Figure 2-1). only for themselves but also for their par- People 65 years of age and older are the ents and children. Boomers’ involvement

Chapter 2: Demographic Trends and the Burden of Disease 17 Figure 2-1. The changing age structure of the population (number of Figure 2-2. The coming surge in the people per age group, in millions) population of age 65 years and older

2000 Number (in millions) 50 80 65Ð74 70 40 75Ð84 60 85 and older 30 50

20 40

30 10 20 0 1Ð9 10Ð19 20Ð29 30Ð39 40Ð49 50Ð59 60Ð69 70Ð79 80Ð89 90+ 10 Age group 0 1995 2000 2010 2020 2030 2010 50 Source: IFTF; U.S. Census Bureau.

20 in their own care will be distinctly different from that of past generations of older 10 Americans. They will accelerate the movement and awareness of self-care and 0 1Ð9 10Ð19 20Ð29 30Ð39 40Ð49 50Ð59 60Ð69 70Ð79 80Ð89 90+ wellness and will irreversibly alter the Age group traditional doctor–patient relationship.

Source: U.S. Census Bureau. However, the full impact of the aging population will not be felt until well after 2010, when baby boomers reach retirement age. Many baby boomers will enjoy better health and longer lives due in part to advances in health and medical technologies. With increasing longevity, boomers will lead more active and productive lives rather than simply retiring in old age, illustrating just one of the many social changes associated with this demographic shift. Not until 2030, when the youngest baby boomer has

18 Chapter 2: Demographic Trends and the Burden of Disease Health and Health Care 2010 Institute for the Future

reached the age of 65 and the entire Figure 2-3. Life expectancy at age 65 increased throughout the 20th baby boom’s health care is subsidized by century in the United States and this increase is projected to continue. Medicare, will the nation’s health and

Years of life remaining welfare system feel the true social and 25 economic impact of this large age cohort. This trend signals the urgent need to Women 20 resolve the problems of ﬁnancing and delivering health care, social services,

15 Men and long-term care for the population, as well as managing the health and 10 health behaviors of this group.

5 The Face of America Continues to 0 1900 1920 1940 1960 1980 2000 2020 2040 Change—Diversity Is Increasing Source: Economic Report of the President, February 1999. The United States is growing increasingly diverse. Although the population Figure 2-4. Increasing diversity of the United States population remains largely white non-Hispanic (69 percent), the Hispanic, African Percent American, Asian, and Native American 40 Native American populations are all growing faster than Asian Hispanic the population as a whole—a trend dri- 30 African American ven by both higher immigration and higher birthrates among these groups. 20 By 2010, minority ethnic and racial groups will account for 34 percent of the

10 population, up from 22 percent in 1980. Yet the absolute number of ethnic and racial minorities will remain small and 0 1980 1990 2000 2010 will continue to account for less than 50 percent of the population until well Source: IFTF; U.S. Census Bureau, Statistical Abstract, 2000. after 2050 (see Figure 2-4).

However, national data do not tell the full story—the real story of diversity is regional.

Hispanic, African American, Asian, and Native American populations are not evenly distributed across the United States, making the issue of diversity

Chapter 2: Demographic Trends and the Burden of Disease 19 more pronounced in certain regions than California, the Hispanic, Asian, African in others. Although the degree of diver- American, and Native American popula- sity is increasing throughout the United tions already account for 53.3 percent States, the highest concentration of eth- of the population and no one ethnic or nic and racial minorities is found in the racial group (including whites) is in the West, followed by the South, the North- majority (see Figure 2-6). In cities such east, and the Midwest—a pattern that as Los Angeles, where 45 percent of the will continue (see Figure 2-5). In 2010, population is Hispanic, clinical providers the concentration of African Americans are already facing the challenges of deliv- will be highest in the South. The West ering care to a diverse population. will continue to be the most diverse multiethnic and multiracial region of The increasing diversity of the popula- the United States with the largest con- tion will place new demands on the centration of Hispanic, Asian, and health care industry. As the patient Native American populations. profile shows increasing proportions of Hispanic, African American, Asian, and In addition to examining this issue at Native American patients, the demand the regional level, it is important to look will become more pronounced for ser- at specific states and metropolitan vices that are culturally appropriate, areas—a level where demographic pro- beyond simple language competency. files have more strategic meaning to The concept of culturally appropriate health care providers. California, Illinois, services includes awareness of the com- New York, Florida, and Texas are all plex issues related to the underdiagnosis states where the issues of diversity are of certain conditions and diseases among being confronted now. For example, in minority groups, the effects of lifestyle and cultural differences on health status, the implications of the diverse genetic endowment of the population, and the Figure 2-5. The real story of diversity in 2010 is regional. impact of patterns of assimilation on health status. African American Northeast Hispanic Asian Native American Household Income Is Midwest Increasing, but the Gap Between the South Extremes Is Widening

Another key demographic shift is the West growing number of households with 0 1020304050 high incomes. This trend is particularly Percent important to consider in examining the Source: IFTF; U.S. Census Bureau, Statistical Abstract, 2000. future of both health and health care because income is related to both health

20 Chapter 2: Demographic Trends and the Burden of Disease Health and Health Care 2010 Institute for the Future

By 2010, the number of households with Figure 2-6. California is ahead of the nation. an income of $50,000 or more will reach 48 million, or 52 percent of all house- Percent holds—a number that is driven by the 100 White large number of baby boomers who will Native American 80 Asian be well into their peak earning years. Hispanic 60 African American However, the pattern of income distribu- 40 tion reveals a second, more disturbing trend: a widening of the gap between 20 the richest 25 percent and the poorest 0 25 percent of the population (see Figure California United States 1998 2050 2-7). The prosperity of the 1980s and 1990s has moved many middle-class Source: IFTF; State of California, Department of Finance; U.S. Census Bureau. households into higher income tiers. By 2010, this pattern will be even more pronounced. Research has also shown that when income disparity among the status and access to health care services. population widens, the overall health Although various demographic charac- status of the population worsens.2 This teristics are correlated with differences in projected income disparity will have health status, none is more highly corre- negative consequences on the nation’s lated than income. overall health status and will remain a significant social and health issue well The boom in the United States economy into the future. in the late 1990s resulted in extraordi- narily low unemployment rates, low infla- The Shifting Burden tion, high productivity, and a generally of Disease: Chronic favorable economic outlook. This eco- Diseases, Mental nomic growth (2.5 percent in real terms) Illness, and Lifestyle moved many people into higher house- Behaviors hold income brackets. Households with higher incomes have higher levels of dis- In reviewing disease prevalence and causes cretionary income and have better health of death over the past century, it is impos- status and access to care. sible to ignore the significant decrease in, and even eradication of, many infectious An examination of income distribution diseases. Vaccines, antibiotics, and bio- in the United States from 1970 to 2010 technological advances have curbed the shows two significant trends emerging. communicable diseases of the 20th cen- First, the average per capita income in tury. Simultaneously, there has been an in- America will increase in real dollars. crease in the incidence of chronic diseases, The good news is that higher income is such as cancer and cardiovascular disease. associated with improved health status.1 One reason for this increase is the greater

Chapter 2: Demographic Trends and the Burden of Disease 21 Figure 2-7. The middle shrinks, the high end grows. (Households in the two most dynamic income categories, in 1999 dollars)

$15KÐ$49K $75K+ Percent Percent 60 60

50 50

40 40

30 30

20 20

10 10

0 0 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010

Source: IFTF; U.S. Census Bureau, Money Income in the United States, 1999.

life expectancy enjoyed by many Ameri- comprehensively current mortality and cans. Many chronic illnesses, such as car- disability rates from diseases, injuries, diovascular disease, generally strike people and risk factors and to project them out in their later years. Increases in life ex- to 2020. To assess the relative impact of pectancy and in the proportion of elderly different diseases, the study uses “1 year people are accompanied by an increased of healthy life lost” as a unit of measure- prevalence of chronic diseases. Although ment with which to compare disability new medical innovations promise to make and death from each disease. This a dent in the prevalence of some noncom- approach reveals that the burden of a municable, chronic diseases in the 21st condition such as depression, alcohol century, between 1990 and 2020 the ab- dependence, or schizophrenia has been solute number of deaths in the United seriously underestimated by traditional States from noncommunicable disease will approaches that take into account only increase by 77 percent, from 28.1 million deaths and not disabilities. to 49.7 million.3 The overall effect of heart disease in An important shift in the burden of dis- terms of both death and disability rates ease in the future is related to the huge will continue to be greater than that of impact of chronic disease around the any other illness. When looking only at world. The World Health Organization mortality rates, cancer will continue to (WHO) deﬁnes “burden of disease” as a rank second. What is surprising in the combination of untimely death and current forecast is that—taking into disability.4 The WHO Global Burden account the extent to which an illness of Disease Study attempts to assess causes both death and disability—

22 Chapter 2: Demographic Trends and the Burden of Disease Health and Health Care 2010 Institute for the Future

mental illness, especially unipolar major Figure 2-8. Determinants of health depression, will have a larger impact than cancer by the year 2010. Access to care (10%) The burden of disease is also shifting Genetics (20%) from diseases caused by infectious organisms to disorders with behavioral causes,

Environment such as illnesses related to smoking and (20%) to alcohol abuse. It is estimated that lifestyle behaviors alone contribute to 50 percent of an individual’s health sta- Health behaviors (50%) tus (see Figure 2-8). The biomedical model of health care, which focuses on a single causative agent for an illness and is concerned primarily with curing, is necessary but not sufﬁcient. Much more needs to be done to create and imple- Source: IFTF; Centers for Disease Control and Prevention. ment effective health management and disease prevention programs. Our culture’s current focus on wellness is encouraging but is primarily a phenomenon in the wealthier, more educated cohorts of society—which tend to have a better health status anyway.

Chapter 2: Demographic Trends and the Burden of Disease 23 Endnotes 3 Unless otherwise noted, the information presented here is from 2000 United States 1 Adler, N. Black Report. Report of the Census data. Working Group on Inequalities in Health. London: DHSS, 1980. 4 The Global Burden of Disease. Murray, C.J.L, 2 Wilkinson, R. G. Income distribution and and Lopez, A. D. (eds.). Cambridge, MA: life expectancy. British Medical Journal 1992; Harvard University Press, 1996. 304:165–168.

24 Chapter 2: Demographic Trends and the Burden of Disease Health and Health Care 2010 Institute for the Future

Chapter 3 Health Care’s Demand Side Changing Trends in Growth Rates 1960–2010

From 1960 to 1990, American health care To understand the components of health saw steady cost increases in excess of the care cost growth, we need to know where growth of the rest of the economy: health the money comes from. The United care’s share of GDP went from 5 percent States has had a balanced public-private in 1960 to 12 percent in 1990, as shown health care ﬁnancing system since the in Figure 3-1. But after annual growth introduction of Medicaid and Medicare averaging more than 11 percent per year in 1965. Spending is fairly evenly split between 1960 and 1990 (3 percent above between government and the private sec- the nominal growth of the economy), tor, including out-of-pocket costs and annual growth in health care costs fell to insurance premiums paid by individuals. 5.8 percent between 1992 and 1995 and Any growth in overall health care costs fell each year after that until 1999. For will be a function of the growth in pri- the ﬁrst time in decades, health care costs vate costs, paid by both employers and were stable as a share of GDP.1 individuals, and public costs.

Figure 3-1. Total health care expenditures as a percentage of GDP, Historical Trends 1960Ð1999 The Private Sector Percent of GDP So far it’s the private sector that has 15 experienced the greatest reversal in cost growth. From 1960 to 1990, private 12 sector costs grew an average of 10.6 percent a year. From 1991 to 1995—in a period viewed by some as the triumph 9 of market-based managed care and by others as the ultimate nadir of cost shift- 6 ing from employers to consumers and government—private-sector health care costs fell below the growth rates of the 3 rest of the economy, averaging under 1960 1965 1970 1975 1980 1985 1990 1995 1999 5 percent per year2 (see Figure 3-2). Source: Health Care Financing Administration. Many employers saw an actual decrease in their health care expenditures. How was

Chapter 3: Health Care’s Demand Side 25 Figure 3-2. Average annual growth rate of health care costs by sector

Percent

15 1960Ð1990 1991Ð1999 public sector. In the 1990s, the private 12 sector saw cost growth slow to below 5 percent, whereas the public sector had 9 average cost growths of over 9 percent from 1990 to 1995. The difference

6 between the two widened to nearly 5 percent at that time, indicating that a greater share of health care spending 3 was going to the public sector, and that public sector cost growth was a greater 0 concern for the future. Public sector Private sector

Source: Health Care Financing Administration. While there are several reasons for this fast growth in public sector costs, a casual observer would notice that neither this achieved? First, employers passed of the major public programs—Medicare more costs on to employees by demand- and Medicaid—was as quick to follow ing greater contributions in premiums the private sector’s lead in adopting and forcing higher copays and HMOs or PPOs. Medicare’s basic deductibles. Second, employers reduced infrastructure supports an FFS cost- the number of people for whom they pro- reimbursement system for virtually all vided insurance. But most of these cost types of services apart from hospital decreases resulted from lower payments inpatient care, which was changed to a to health plans. In particular, HMOs and per-episode prospective payment system PPOs have actively intervened with care in 1983. This may partially explain why providers to lower costs and have become public program cost increases did not the staple form of insurance plan used by tail off as they did in the private sector. most employers, rather than the more Even if these were not the causative traditional indemnity products. factors, they encapsulated two underlying legacies of Medicare and Medicaid— The Public Sector a typical FFS payment system and the peripherality of managed care—each of From 1960 to 1990, public spending on which will see dramatic changes during health care grew at an annual average the next decade. rate of 13.3 percent, about 3 percent more than in the private sector. But The Issues: most of that difference related to the What Drives Cost 1960s and 1970s when Medicare and Increases? Medicaid were expanding fast. In fact, the experience of the 1990s is in contrast Several factors are responsible for the to that of the early 1980s, when costs in slowing growth in health care costs the private sector grew faster than in the in the early 1990s. They includ the

26 Chapter 3: Health Care’s Demand Side Health and Health Care 2010 Institute for the Future

movement toward HMOs and PPOs, health care spending from 1960 to a reluctance to raise prices during the 1990, even though health care costs health care reform debate, and a techno- increased as a share of household logical shift away from hospitalization. spending. But with a combination The question is whether these trends of fewer employers offering insurance will continue through 2010. and, of those who do, more demanding premium contributions and In general we believe they will continue increased deductibles and copays, because the experiences and drives of consumers are picking up more of the consumers purchasing health care have financial slack. They are likely to be changed since the mid-1990s. Some of more cost conscious in the future. these purchase factors include: Providers are more “sophisticated.” A more conservative Congress passed a While higher health care costs ulti- budget bill aimed in part at cutting mately translate into higher provider back Medicare expenditures and incomes, in recent years payers have delegating Medicaid decisions to the clearly communicated their demands states. Managed care options will for cost containment. In this equation, expand, quickly and involuntarily for specific providers may be rewarded people in Medicaid and more slowly for reducing costs—despite the (because of market factors) for those in myriad pressures to increase health Medicare. Other entitlements such as care spending—and all providers are Social Security are coming under con- aware of that pressure. sideration for future cuts in a political era when a balanced-budget mentality Although these factors indicate that a appears dominant, even if subdued by slowing of the underlying growth in pressures from industry lobbies. health care costs has taken place, several traditional factors ensure that cost infla- Private (and some public sector) employers tion will not die easily. For instance: have successfully maneuvered a majority of their workforce into managed care The vast majority of providers are paid products. They’ve also either prodded on some type of FFS basis. FFS medi- health plans (intermediaries) into more cine stimulates increased use of ser- aggressive cost-containment efforts vices in contrast to capitation, the with providers or have increasingly pur- most extreme form of managed care chased coverage from plans that have payment. Although pure FFS medicine taken that stance. Now that employers is in decline, most forms of provider know they can influence costs, they are payment still encourage more utiliza- not likely to loosen that control. tion of services rather than less.

Consumers experienced a steady New, and usually more expensive, decrease in their share of national drugs and medical technologies are

Chapter 3: Health Care’s Demand Side 27 becoming available all the time. Use The Economy Is the Crucial Denominator of these drugs and technologies tends Because health expenditures react slowly to cost-cutting measures, the to spread quickly whether or not they amount government and employers spend on health care goes up much are cost-effective. Even with cost- faster than the rest of the economy in times of recession. This rise has a shifting to the employee via multiple- noticeable impact on both the share of GDP and the share of public sector tiered pharmacy benefit programs, revenues and private sector profits. Figure 3-3 shows that health care costs new drugs in the pipeline will be in grew continually from 1985 to 2000, but the economy was less predictable. The difference in real health care spending growth and the growth in real great demand. This will especially GDP was greatest during recessions and least during economic booms. be true for the field of pharmaco- Historically, health care costs are regarded as a problem during and genomics, when both consumer immediately after recessions while on average they increase only a little demand and quality of care issues faster than economic growth. will help pharmaceutical companies to thrive. Figure 3-3. Health care cost increases get noticed during recessions. (Real changes in national health expenditure [NHE] as compared to real changes in GDP over time) The growing labor force, as evidenced by the number of both high-cost employ- Percent ees (e.g., physicians) and low-cost 9 employees in the health care industry, 8 increased at an average annual rate of

7 3.78 percent between 1980 and 1998. That’s 2.73 percent more than the rate 6 of population growth, yet overall wage 5 rates have remained roughly constant. 4 So as more resources go to health care 3 employment, it appears that the sup-

2 ply-driven demand demonstrated during the 1970s is still in evidence.3 1

0 Ϫ1 Market Dynamics 1986 1988 1990 1992 1994 1996 1998 2000 In the United States, the basic trend of Change in GDP, in constant 1996 dollars real growth in the gross domestic prod- Real change in NHE uct (GDP) over any extended period is Difference between NHE and GDP Source: Health Care Financing Administration, Ofﬁce of the Actuary, National Health Statistics Group. about 2.5 to 3 percent per year. This Note: Current dollars deﬂated by the Gross Domestic Product (GDP) chain-type price index. growth rate has held true over the past hundred years with only a few exceptions—for example, during the Great Depression in the 1930s, when the GDP declined at a rate of 13 percent, and during the World War II recovery, when GDP growth soared to 18 percent.

The 1990s produced one of the long- est expansionary periods for the U.S.

28 Chapter 3: Health Care’s Demand Side Health and Health Care 2010 Institute for the Future

economy in the past hundred years— The Bureau of Economic Analysis pegs nine years of expansion that compares GDP growth at 0.2 percent for the sec- favorably to the nine years of expansion ond quarter of 2001. As GDP growth during the Vietnam War and the eight declines, unemployment inches up, years during the 1980s. In the last four and consumer confidence wilts, many years of the decade, annual GDP growth economists see the beginning of a reces- hovered at about 4 percent and unem- sion (defined either as two consecutive ployment dropped to 3.9 percent, the quarters of declining GDP or as the lowest level since 1970. Strong growth downward movement of employment, and low unemployment meant that industrial production, real income, and employers competed fiercely for workers sales4). to fuel increasing productivity. When health insurance premiums began to rise The Forecast: precipitously, employers were only too Real Cost Growth willing to cover the bulk of the increases at 1 Percent in order to retain their workers. The underlying question is whether the The third quarter of 2000 brought an future will look more like the private end to that nine-year expansion. Though sector’s experience in the 1990s—health the year 2000 ended with a 4.1 percent care cost growth in line with economic annual growth in GDP, that annual rate growth—or the public sector’s experi- masked the dramatic drop in growth ence of cost growth at a higher level. from a second-quarter high of 5.7 percent The first possibility continues the trend to a third-quarter low of 1.3 percent. from 1990 to 1995. The second takes us back to the high cost-growth rates of the previous 30 years. Figure 3-4 shows the share of GDP that would end up Figure 3-4. Future spending projections being consumed by health care under (Health care expenditures as a share of GDP) each scenario.

20 8% cost growth There are good reasons to believe that 18 (1960Ð1990 trend) the dramatic growth rate of the period between 1960 and 1990 is a thing of the 16 past. But there are still sufﬁcient factors 5% cost growth 14 (1991Ð1995 trend) to warrant suspicion that the experience 12 of the private sector—a reduction in health cost rates below overall economic 10 growth—in the early 1990s is unlikely

8 to be replicated in the next decade.

6 Overall, we forecast that health care 1980 1985 1990 1995 2000 2005 2010 expenditures between 2002 and 2010 Source: IFTF; Health Care Financing Administration. are likely to grow at 6.5 percent annually—roughly equivalent to just under

Chapter 3: Health Care’s Demand Side 29 Why will the gap narrow? So far, much Figure 3-5. Projection of future health care spending of the private sector’s gains have come at (Health care expenditures as a share of GDP) the expense of consumers, the public sec-

Percent of GDP tor, and providers. For instance, there are 18 relatively fewer people insured by their own or their family’s employers now 16 than there were in the late 1980s— 73.3 percent in 1999, compared with 14 76.1 percent in 1987 (see Figure 3-6).

12 The increase in the number of working uninsured and the fact that most 10 employers are demanding greater contributions toward insurance costs mean 8 that more pressure is put on safety-net providers, such as public hospitals and 6 1980 1985 1990 1995 2000 2005 2010 inner-city academic medical centers (AMCs). Consequently, the financial Source: IFTF. health of these institutions has suffered and the amount of compensation the Figure 3-6. Percent of American adults, ages 18Ð64, with employment- government has paid out in dispropor- based health benefits or Medicaid, and without health insurance, 1987–1999 tionate share payments (DSH) made to hospitals that deliver a higher than aver- Percent age amount of uncompensated care 80 Employment-based reflects this impact (see Figure 3-7). coverage 60 Similarly, the Medicaid expansion of the late 1980s added about 10 million peo- 40 ple to the program at a time when fewer Medicaid 20 people were receiving coverage from Uninsured employers. 0 19871989 1991 1993 1995 1997 1999 In addition, the mainstream Medicare Source: Fronstin, P. Employment-Based Health Benefits: Trends and Outlook. EBRI Issue Brief No. 233. Washington, DC: Employee Benefit Research Institute, May 2001. and Medicaid programs have either experienced cost shifting from private insurers or simply haven’t shared as greatly in the productivity improvements that providers, especially hospitals, have 1 percent more than GDP growth. If experienced over the past few years. this forecast is correct, then health care, which currently consumes 14.3 percent We don’t believe that this discrepancy of GDP, will reach 15.7 percent in 2010 between cost growth in the public and (see Figure 3-5). Within that steady private sectors can continue at the 5 per- growth, the gap between rates of cost cent differential seen in the 1990s. It growth in the private and public sectors appears that the gains made in the pri- will narrow. vate sector at the public sector’s expense

30 Chapter 3: Health Care’s Demand Side Health and Health Care 2010 Institute for the Future

and public sector cost increases will end Figure 3-7. DSH spending exploded in the early 1990s. It is projected to up in the 6 to 9 percent range. Hence, increase 1 percent annually between 1998 and 2010. our forecast of overall costs averages

Billions of dollars 6.5 percent per year. 20 Why will costs stay at that level rather 15 than go much higher? In the private sec- 10 tor, employers and other payers now 5 understand that they don’t simply have

0 to accept large cost increases year after 1989 1990 1991 1992 1993 1994 1995 1996 1998 year. Meanwhile, recent Medicare legislation appears to be the most compre- Source: U.S. General Accounting Ofﬁce, The Urban Institute, Health Care Financing Administration. hensive attempt yet to implement cost containment across the entire program. Previous efforts simply squeezed one part of the Medicare cost balloon and let it were mostly a one-time gain, and the bulge out elsewhere.5 gap is now starting to narrow. Nonetheless, given the greater pressures Evidence of such a reversal is accumu- on the Medicare and Medicaid programs lating. Private insurance premiums and the traditional ability of providers increased between 3 percent and 11 per- to take advantage of the comparative cent in 2001, due mostly to poor mar- inﬂexibility of these programs, we pro- gins among health plans and to increased ject that—although cost growth will utilization of pharmaceuticals and physi- slow—the government’s share of all cian services. Meanwhile, the Medicare health care expenditures will increase and Medicaid cost increases in excess of rapidly. The government’s share of 10 percent seen during the early 1990s spending on health, excluding the gov- slowed to 8 percent and less than 5 per- ernment as employer, will increase from cent, respectively, in 1996 and 1997. around 46.75 percent today to as much The 1997 balanced-budget legislation as 47.5 percent in 2002, when the cur- attempt to put an overall cap on the rent Medicare budget plan expires, and growth of Medicare costs at 6 percent to as much as 52 percent by 2010.6 for the period from 1998 to 2002 caused a precipitous drop in Medicare cost increases, to 0.1 percent in 1998 and Consumers will be the other major 1.0 percent in 1999. This reduction in source of increased spending because Medicare spending may put more pres- they will be paying more for health care. sure on providers, who in turn will try to Currently, out-of-pocket costs (direct transfer their costs to the private sector. spending on medical services) are $202.5 billion a year, or about 15.4 percent of We forecast that private sector cost total health care expenditures. In addi- growth will move closer to the 3 to tion, individuals pay $126.4 billion in 6 percent range over the next 10 years, private insurance premiums, either for

Chapter 3: Health Care’s Demand Side 31 their primary insurance, as a contribu- The Signiﬁcance of tion to what their employer provides, Our Cost Forecast or for Medigap coverage.7 Combined, for the Rest of Our these costs account for 25 percent of 10-Year Outlook total health care spending. We broadly agree with forecasts suggesting that the health care cost problem is Because of the reduction in scope of ben- not going to go away. The nominal rate eﬁts, increased consumer demand for of health care cost growth for the period over-the-counter (OTC) medical prod- 2000 to 2010 will be about 6.4 percent, ucts and complementary services such as or 1 percent over GDP, as opposed to chiropractic care, and the higher growth 3 percent over GDP for the period 1960 rate of both individual and group insur- to 1990. But we believe (with some ance premiums, we forecast that this temerity) that this relatively slower cost share of total spending will rise to as growth may not be the dominant issue much as 28 percent by 2003. After that, for the next 10 years. The period up to growth in the public sector will absorb 2010 is likely to be a cost-containment some of the increase and it will fall back hiatus given the impact of the soon-to- to 26.5 percent by 2010. But in the next retire baby boomers in the years between decade, health care will rise as a share of 2010 and 2030. overall consumer spending.

In 2010, employers will be paying a Wild Cards smaller share of overall costs and govern- Wild cards are events that have less than ment and consumers will be paying a a 10 percent likelihood of occurring, but greater proportion (see Figure 3-8). should they occur they would have a sig- niﬁcant impact. Which wild cards could derail this forecast for information- driven cost control in managed care? Figure 3-8. Share of costs borne by government, employers, and consumers Market forces and risk selection sink

Percent Medicare savings: Health plans will 60 withdraw from Medicare managed Government share care programs because it will be such 50 an unproﬁtable system. Medicare 40 managed care will end up with medical savings accounts (MSAs), PSNs, 30 Consumer share and HMOs cream-skimming on a 20 Employer share noticeable scale.

10 19951997 1999 2001 2003 2005 2007 2009 Cost-reduction strategies in fast- growing parts of Medicare such as Source: IFTF; Health Care Financing Administration. SNFs or home health and outpatient services either don’t work or are

32 Chapter 3: Health Care’s Demand Side Health and Health Care 2010 Institute for the Future

counterproductive because they create tion of legal and regulatory restric- fast-growing exceptions. Those tions on health plans, such as more rapidly growing programs are joined “any-willing-provider” laws, and bans by other new programs like telemedi- on capitation and utilization review cine, which are equally expensive. tilt negotiating power back toward providers. Cost shifting to providers and public payers causes a collapse of the safety A provider surplus, plus aggressive net, forcing large inﬂuxes of federal HMOs, plus Medicare’s actually stick- funding to several inner-city areas. ing to 6 percent cost increases and Medicaid’s getting tougher, keep costs The 2001–2002 recession is deeper below our forecast and below 4.5 per- than anticipated, requiring more ser- cent. As a consequence, health care vices for the indigent and hence a shrinks as a share of GDP. greater share of government revenue and GDP for health care while taxes The technology revolution increases and other revenues decline. the rate of economic growth. Health care costs shrink as a share of GDP The weapons are taken out of the because GDP grows so quickly. hands of managed care. A combina-

Chapter 3: Health Care’s Demand Side 33 Endnotes Medicaid costs grow fastest during recessions, we forecast Medicaid growth to remain 1 Since the mid-1980s, the economy has gen- at about 8 percent. erally grown at an annual rate of 5.5 percent in nominal terms (2.5 percent real growth 6 This does not include the government’s and 3 percent inflation). Thus, for health spending as an employer. We consider that costs to maintain their share of GDP they spending as private health insurance (as does would have to grow at an average annual rate the Health Care Financing Administration of 5.5 percent in nominal terms. [HCFA] in some versions of the national health expenditure [NHE]) and believe that 2 That is, less than 5.5 percent, the average it will increase at the rate of private spend- growth of the economy in nominal terms ing. In 1995, government spending on (not adjusted for inflation). insurance for federal, state, and local govern- 3 Fuchs, V. R., and Kramer, M. J. Determi- ment employees amounted to roughly $58 nants of expenditure for physicians services. billion of the $242 billion spent by employ- In Fuchs, V. R. The Health Economy. Cam- ers on private health insurance in 1995. If bridge, MA: Harvard University Press, 1986. this were to be counted as part of government health expenditures, it would mean 4 Ranking, K. Recession defined. The Dismal that the government accounted for 52 per- Scientist, May 3, 2001. www.dismal.com. cent of health expenditures in 1995. 5 Medicaid too appears to be growing more 7 This does not include $16 billion paid slowly. However, the recent falls in Medicaid as premiums by individuals for Part B of cost growth (i.e., to below 4 percent) came Medicare, which is included in our Medicare during an economic expansion. Because numbers.

34 Chapter 3: Health Care’s Demand Side Health and Health Care 2010 Institute for the Future

Chapter 4 Health Insurance The Three-Tiered Model

The American health insurance system ing (but not limited to) a traditional fee- developed out of a need for hospitals and for-service (FFS) model. Generally, the physicians to make their product afford- Medicare and Medicaid programs were able to ordinary people. Health insurance not included in these arrangements. first became a reality for Americans in the 1930s with the creation of specialized By the early 1990s, the cost advantages health insurance companies—the Blue that HMOs and PPOs afforded employers Cross and Blue Shield plans. The system were great enough that most large em- was given a boost when health insurance ployers, such as the California Public Em- became an employment benefit during ployees Retirement System (CalPERS), and after World War II, and when moved their employees to this type of Medicare (for the elderly) and Medicaid insurance arrangement. This caused a (for the poor) were created in 1965. It rapid growth in the numbers of people was this indemnity-based system of enrolled in HMOs and PPOs, and later mixed public and private insurance in hybrid models like point-of-service sources that constituted the mainstream (POS) programs. By 1995, most compa- of American health care until the early nies had moved their workers away from 1980s. Only in some regions, notably in indemnity plans, and by 2000 more than the West, were any substantial number of 80 million people were enrolled in HMO people enrolled in the prepaid health plans (see Figures 4-1 and 4-2). plans that were later called health maintenance organizations (HMOs). Scope of Employment- Based Coverage During the 1970s and 1980s, a series of legislative and court decisions fostered Moving employees into managed care the growth of selective contracting. plans was not employers’ only response to Selective contracting allowed insurance rising health care costs. They also offered plans, which came to be known as pre- insurance to fewer employees. There has ferred provider organizations (PPOs) and been a long-term erosion of coverage that HMOs, to contract with networks of has been modestly ameliorated by gains providers. The plans could arrange the in the past several years. The Employee contracts at a predetermined price and Benefit Research Institute (EBRI) esti- reimburse providers for their services in mates that 73.3 percent of workers, ages a number of different ways, still includ- 18 to 64, had employment-based health

Chapter 4: Health Insurance 35 insurance in 1999, compared to 76.1 Figure 4-1. HMO membership takes off in the 1990s. percent in 1987. The majority, 55.6 per- (Number of HMO enrollees in millions) cent, received beneﬁts from their own Millions employer, while 17.7 percent got them 90 through a family member’s employer. This marks a slight gain in employer- 80 sponsored beneﬁts in the second half of 70 the 1990s (see Figure 4-3). 60

50 Retiree Beneﬁts Are Getting Worse 40

30 Although there has been some good news regarding health insurance for the 20 active workforce, retiree beneﬁts are in 10 free fall. Employers have changed retiree

0 health benefits because of rising costs— 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 the costs of retiree benefits were rising faster than those of the active work- Source: Group Health Administration of America, Interstudy, American Association of Health Plans. force—and because of a 1992 change in accounting procedures that required Figure 4-2. Health plan enrollment for covered workers, employers to record unfunded retiree selected years 1996Ð2001 benefits as liabilities on their financial

1996 1998 statements. As a result, the share of firms with 500-plus employees that offer POS Conventional POS Conventional 14% 27% 24% 14% health benefits to early retirees fell from 46 percent in 1993 to 31 percent in 2000. For Medicare-eligible retirees, the HMO share fell from 40 percent to 24 percent 27% PPO HMO PPO over the same period. There is no end in 28% 31% 35% sight to this trend.1 Thus, the health benefits cost-containment efforts already have begun. Employers moved to cut 2000 2001 Conventional Conventional health care costs in a way that did not POS 8% POS 7% affect their core businesses. 22% 22% HMO 23% HMO The Uninsured 29% What has changed over the past few years PPO PPO is the number of people who are unin- 41% 48% sured. This number rose during the 1980s

Source: Gabel, J., et al. Job-Based Health Insurance in 2001: Inﬂation Hits Double Digits, and most of the 1990s. By 1998, 16 per- Managed Care Retreats. Health Affairs (September/October) 2001; 20(5): 180Ð186. cent of nonelderly Americans were uninsured, compared to 14.8 percent in 1987.

36 Chapter 4: Health Insurance Health and Health Care 2010 Institute for the Future

workers are more likely to have college Figure 4-3. Employment-based insurance (Percentage of workers aged 18 and graduate school education, their to 64 with employment-based health insurance) income is higher, they are slightly older,

Percent and they are more likely to be skilled. 80 Self-employed workers number around 8.5 million. If the number of uninsured 78 among them grows, they may combine

76 forces with small-business owners who struggle to offer beneﬁts and to create 74 skilled and vocal advocacy for health

72 care reforms to which politicians may begin to respond. 70 1987 1989 1991 1993 19951997 1999

Source: Little, J. S. New England Economic Review, 1995. The Issues: How Will People Receive Health Insurance? However, by 1999, the booming economy helped decrease the ranks of the uninsured Both the source of health insurance to 14.3 percent of nonelderly Americans funding and the type of insurance cover- and the actual number of uninsured from age people receive have great inﬂuence 44 million to 39.3 million.2 on the health care system. Some of the factors determining how people receive The uninsured are not necessarily those health insurance between now and 2010 you might expect—the poor and the are predictable. These include the source unemployed. Indeed, in 1999 35.4 mil- of funding: employee-funded health lion of the 39 million uninsured Ameri- insurance will remain the mainstream, cans were members of families in which and most people will have their insur- the head of household worked.3 More ance paid for by the same source it than 24 million working adults— comes from now. employees and self-employed—were uninsured in 1999. Workers most likely An assessment of the sources of health to be among the uninsured were young insurance for Americans (see Figure 4-4) white men, without a college diploma, shows that in 1999 approximately 174 who worked full-time in the retail or million Americans (62 percent) received wholesale trades for wages of less than private health insurance from their $20,000. Although white men formed employer or purchased it themselves. the majority of uninsured workers, His- Of the remainder, 40 million (10 per- panic men were disproportionately likely cent) were in the Medicaid program, to be among the working uninsured. 39 million (14 percent) were in Medi- care, and about 42 million (16 percent) One in four self-employed workers is had no health insurance and relied on also likely to be uninsured. In contrast to self-pay, county and local programs, or typical uninsured workers, self-employed charity.4

Chapter 4: Health Insurance 37 known for certain. The major categories Employer-Sponsored Health Insurance of Medicare, Medicaid, uninsured, and and the Economy private health insurance will remain the Employer-sponsored health insurance is particularly vulnerable to recession. core sources of coverage, or lack thereof. As business profits and stock market valuations fall, companies are under severe pressure to improve cash flow or reduce costs. However, the question is not only from Lowering the costs of health benefits is the primary way to fight rising costs which source do people receive health in general because the costs of health benefits are not only the biggest insurance—we must also ask what form chunk of indirect costs but are also rising the fastest. Already the magnitude that insurance takes. During the past of the difference between the growth of health premiums and growth in other few years, most people with employer- economic measures is striking. Premiums are growing at more than three times the rate of overall inflation, greater than twice the rate of increase in based insurance have moved from workers’ earnings, and more than twice the rate of medical inflation. At a rate indemnity plans into a variety of more of 4.7 percent, medical inflation is just slightly higher than growth in GDP, but complex models, including several types premiums are growing two-and-a-half times as fast. This is a red flag for of open-panel HMOs and PPOs. The employers facing an economic recession. shift from indemnity to PPO and HMO Tight Labor Markets Limit Employers’ Options models will continue, with the shift Though employers experienced 5 years of accelerating premium growth accelerating in the public programs. in the late 1990s, there was little explicit cost shifting to the covered employees.5 Between 1996 and 2000, both employees’ monthly contribu- Contrary to popular opinion, the growth tion to premiums and percent of premium paid fell significantly for single in PPOs and HMOs was not primarily 6 coverage. (The dollar amount rose and percentage stayed steady for family due to an increase in the number of coverage.) Because the economy was booming and unemployment was enrollees of traditional staff- and group- dropping to its lowest point in 30 years, employers used health benefits to compete for labor (see Figure 4-5). model health plans, such as Kaiser Perma- nente or Harvard Pilgrim Health Plan. The economic downturn of 2001Ð2002 pushed unemployment toward 5 Instead, most of the growth came from percent. If unemployment continues to grow, employers will have a larger labor pool to draw on and more latitude for shaving health benefits costs. independent practice association–based The first line of attack is likely to be altering existing benefits structures, (IPA) HMOs that developed new con- changing waiting periods and eligibility requirements, and shifting more tracting arrangements with community costs to employees. providers (see Figure 4-6). In other words, the delivery system used by the new intermediaries was the same one that Blue Cross, Blue Shield, and traditional indem- Sources of insurance will remain fairly nity systems had been using all along. stable. For the next 5 years, we know who the Medicare population will be; In the mid-1990s, more Medicare and any future policy changes related to eli- Medicaid recipients enrolled in HMOs. gibility will not kick in until late in the Some state governments forced Medicaid next decade. In the near future, employ- recipients to join HMOs, and for a while ment-based insurance will remain the it became more attractive for private-sec- predominant form of insurance for most tor health plans to recruit senior citizens people under 65. There will be a contin- into specialized HMOs. This “Medicare uing group of Medicaid recipients and risk contracting” was a complicated uninsured, but their numbers cannot be arrangement for health plans. Beginning

38 Chapter 4: Health Insurance Health and Health Care 2010 Institute for the Future

a reimbursement policy that encouraged Figure 4-4. Sources of health insurance for Americans over time the recruitment of seniors in high-cost markets such as Los Angeles, Miami, and Millions New York City. Membership of Medicare 200 recipients in risk-contracting HMOs Private Medicare grew from 4 percent at the end of 1989 150 Medicaid to 6 percent at the end of 1994, to 13 Uninsured percent at the beginning of 1998. It then 100 declined to 7.2 percent in 2001, reﬂect- ing the health plans’ reluctance to con- 50 tinue coverage for this population.

0 1987 1989 1991 1993 1995 1997 1999 Two major issues, then, have influenced our forecast for health insurance. One is Source: IFTF, using data from Health Care Financing Administration, Employee Benefits Research the source of insurance. The major sources Institute, and Current Population Survey. of health insurance will remain fairly constant through 2010, although the Figure 4-5. Strong economy, low unemployment made employers stomach relative proportions will change slightly. premium growth. The other is the type of insurance. Percent Although we estimate the numbers 10 enrolled in the classically defined prod- 1996 ucts—indemnity, PPO, and HMO— 1997 8 the distinction among different types 1998 of HMOs, PPOs, POSs, and all the rest 6 1999 2000 of the players in the alphabet soup is 4 becoming irrelevant. Continued innovation in the benefit plans’ contractual 2 arrangements will rapidly erode the dis-

N/A tinction among the classic gatekeeper 0 GDP growth rate* Unemployment Premium growth rate HMOs, PPOs, POSs, and other models of managed care. *GDP growth based on chained 1996 dollars. Source: IFTF, based on data from U.S. Census Bureau Statistical Abstracts, Bureau of Labor Statistics, and Kaiser Family Foundation/Health Research and Educational Trust. The Forecast: Source of Insurance —Where Are the in 1998–1999, health plans began drop- People? . . . ping their Medicare risk programs in Private Insurance regions that were unproﬁtable. For each member enrolled, HMOs were paid 95 The downward trend in the number of percent of the average costs of a Medicare people with employment-based insurance recipient in that particular county— and the upward trend in the numbers

Chapter 4: Health Insurance 39 Figure 4-6. It’s been the IPAs that have grown fastest. (HMO enrollment growth split by IPA and network models versus group and staff models)

Millions 90 Mixed 80 Group 70 Network IPA 60 Staff 50

10 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Source: IFTF, using data from Interstudy.

Figure 4-7. Future sources of health insurance for Americans population, at 1 percent every 5 years,

Millions from about 59 percent in 1997 to about 300 56 percent in 2010 (see Figure 4-7). Private insurance Due to overall population growth, their 250 Medicaid total number will increase by about Medicare 13 million. 200 Uninsured

150 Medicare

100 Meanwhile, the population insured through Medicare will increase at a 50 slightly faster rate than the rate of over-

0 all population growth, increasing from 1995 2000 2005 2010 just under 38 million (14.2 percent of the population) currently to 45 million Source: IFTF, based on data and projections from Health Care Financing Administration, Urban Institute, Lewin Inc., and Congressional Budget Ofﬁce. in 2007 (15.5 percent) and 49 million in 2010 (16.8 percent). While the numbers of the elderly will increase, the fastest- growing segment of the Medicare popu- with Medicaid will remain constant over lation is now the disabled, which is the next 10 years. The number receiving growing at 6 percent annually. Consider- health insurance from employers will ing that no eligibility changes were decrease, as a proportion of the overall made in 1997, a policy that is unlikely

40 Chapter 4: Health Insurance Health and Health Care 2010 Institute for the Future

old, owing to the baby boom after World What’s Behind Medicaid’s Growth? War II, will not begin until 2010 and The Medicaid program has grown in both size and complexity since its will continue until 2040. inception in 1965.7 The program now accounts for about 15 percent of all health care spending ($202 billion in 2000) and provides four major types of coverage: Medicaid 1. acute medical insurance coverage There are now about 28 million Ameri- 2. coverage for the disabled, including residential care for the long-term cans (10.3 percent of the population) who mentally disabled use Medicaid as their primary source of 3. long-term care for the poor elderly (those who have “spent down” to health insurance. That number does not poverty level and need nursing home care) include the nearly 6 million people who are eligible for both Medicaid and 4. state Medicaid programs paying the Medicare Part B insurance premiums for poor elderly and disabled (known as dual eligibles) Medicare. It also does not include an estimated 6 million additional people who Sixty-five percent of people enrolled in Medicaid are in the first category, and are eligible for the Medicaid program but 65 percent of the money is spent on the 35 percent in the last three categories. As that spending tends to fall outside of the traditional acute care are not enrolled in it—we classify these model, it is difficult to include in managed care programs. people among the uninsured. The rate of growth of the Medicaid population A series of legislated eligibility expansions in the late 1980s, followed by the 1990Ð1992 recession, increased the number of people covered by Medicaid depends on both federal and state govern- from 23 million in 1987 to 36 million in 1996. Currently, about 28 million ment policies and the economy, and it is people use Medicaid as their primary source of health insurance (our model notoriously difficult to forecast. However, counts the dual eligibles in the Medicare numbers). Federal legislation in we do not forecast a substantial expansion 1996 gave states far more freedom to alter Medicaid plans, both in terms of in Medicaid eligibility other than for implementing new benefit arrangements and in changing eligibility levels. some children covered under the 1997 Meanwhile several states, notably Tennessee, had already moved their Medicaid population into managed care programs.8 Most other states have Balanced Budget Act. announced an intention to do the same, and we forecast that about 60 percent of Medicaid recipients will be in managed care plans by 2005, We estimate that the number served by although they will account for only 35 percent of spending. Medicaid will grow from 28 million to 9 The 1997 Balanced Budget Act also gave the states funding to increase the 34 million by 2010. Several factors number of children covered by health insurance. States may use these funds could inflate this forecast, including a to increase Medicaid eligibility levels for children or they may create separate faster uptake of children into Medicaid child health programs. or a severe recession that would cause an expansion in the ranks of the poor. However, states now freed from federal mandates could tighten eligibility requirements, which would reduce the to change during the next several years, number of people served. we think that Medicare will continue to cover people over 65 years of age, at least The Uninsured until 2010. There are now 36 million Americans over 65 and there will be The uninsured will still constitute a siz- 40 million in 2010. The significant able proportion of Americans, but our growth in the population over 65 years core forecast is that they will continue to

Chapter 4: Health Insurance 41 be about 15 percent of the population. . . . and What Type of Although counting the number of unin- Insurance Will They sured is problematic, their number Have? appears to be increasing at about 750,000 While the distinctions among indem- people per year. Because health insurance nity, PPO, and HMO are breaking costs dropped in the late 1990s, we pro- down, the people moving into managed ject that this number will fall over the care have been counted in the increase in next 5 years, although the recession may HMO membership, and that’s how man- keep the average growth at 750,000. aged care enrollment will be forecast in the near future. Figure 4-8 shows the There will also be a modest impact on change in type of insurance coverage Medicaid as between 1.5 and 2 million held by the insured over the next children receive coverage over the next decade. 5 years through the Children’s Health Insurance Program (CHIP) provision of Among people with private insurance the 1997 Balanced Budget Act (10 mil- HMO membership grew at about lion of the 42 million currently unin- 7 percent each year during the 1990s. sured are under 18 years of age). We expect that rate to drop to 5 percent from 2002 to 2007, and to 4 percent We forecast that by 2002 the numbers of after 2007. Indemnity programs are uninsured will increase from the current increasingly turning into PPOs, and 43 million to around 44 million. After PPO membership increased to about 2002, the average rate of increase will 60 million by 2002. But by 2010 the decline, partly because of the shifting number will decline to below 50 million age structure in the population. Lack of as PPO members begin to move into insurance is most common among people HMOs. However, the distinctions of age 18 to 34 years, and most of the among these products will be hard to baby boomers will be age 40 to 60 years discern by then and we will call them by the next decade. Overall, we estimate “HMO descendants” (see Figure 4-9). that the rate of growth in the uninsured will be close to an additional 500,000 Two key issues will be of concern to per year through 2010. We estimate insurers in 2010: that, in 2007, 16 percent of Americans (46.4 million) will be uninsured, a per- What the components of the benefits centage that will rise to 16.1 percent or package will be, in terms of the 47.9 million in 2010. insured’s obligations such as coinsurance, deductibles, and copayments. The important factor in these projections The way in which insurance plans pay is the proportion of the population that is the providers. uninsured at any one time. About 21 million of the 42 million uninsured will The first issue, benefits packages and the be uninsured for a year or more. Twice insured’s obligations, will reflect the that number will be uninsured at some underlying tiering that is developing time over a 2-year period. among consumers in the population as a

42 Chapter 4: Health Insurance Health and Health Care 2010 Institute for the Future

on the employment status and wealth Figure 4-8. The future is much more of the present. of the participants: (Type of insurance coverage for the insured) Carriage trade indemnity or PPO, Percent including traditional Medicare: These 100 Indemnity will remain traditional programs 80 PPOs with high deductibles and coinsur- HMOs ance, copayments, and free choice of 60 providers. 40 HMO descendants: Most Americans will

20 have excellent beneﬁts in terms of low or no deductibles, and low copayments 0 1995 1997 2002 2007 2010 (the current HMO standard) if they stay within the provider network and Source: IFTF. work through their plans’ referral processes. The option to self-refer to other providers will be covered in gen- Figure 4-9. HMO descendants move from mainstream to majority. (Number of Americans in HMOs, by source of insurance) eral, but at a lower percentage of reimbursement with higher copayments Millions and most likely higher coinsurance. 160 140 The low tier: This tier will include 120 most Medicaid enrollees, who face a more restrictive set of provider choices 100 Private/employer HMO but with better access to them than 80 they’ve experienced in the traditional 60 program. The providers for this group 40 Medicaid HMO will be dealing with most of the unin- 20 sured. There will also be continued 0 Medicare HMO 1995 2000 2005 2010 2015 but limited efforts to help uninsured individuals and small groups buy into Source: IFTF. these low-tier plans. To see how these factors will translate into reimbursement and affect the provider system, see the “Reimburse- whole (see Chapter 11). We look at the ment Models: Between Finance and second question, provider reimburse- Delivery” section in Chapter 6. ment, in Chapter 6.

Wild Cards Tiering Will Increase A severe, protracted recession in- Three types of insurance models (see creases the number of uninsured and Figure 4-10) are likely to develop based Medicaid eligibles by 75 percent each.

Chapter 4: Health Insurance 43 Universal health insurance legislation Figure 4-10. Tiers ’R’ Us . . . and will be. is enacted, reducing the number of uninsured to nearly zero. 1997 2010 Health insurance premiums become a taxable beneﬁt; employers stop pro- Carriage trade FFS & PPO viding coverage and abandon the mar- Indemnity & 33% ket as purchasers. loose PPO 53% MSAs, vouchers for Medicare, and other individual-based buying become signiﬁcant forces, changing the group HMO descendants nature of the insurance market. 50% HMOs 27% HMO enrollment growth in either Medicare or the commercial market slows substantially or even declines Low tier Low tier 20% 17% due to legislative, market, or other pressures.

Source: IFTF. A national health insurance system is adopted; private-sector insurance is eliminated.

44 Chapter 4: Health Insurance Health and Health Care 2010 Institute for the Future

Endnotes Few of those new Medicaid recipients had previously been uninsured—in fact most of 1 Hewitt Associates. Health promotion/managed them had been insured by an employer—but health provided by major U.S. employers in 2000. this expansion of Medicaid eligibility did Lincolnshire, IL: Hewitt Associates, 2001. make a one-time impact on the underlying 2 National Center for Policy Analysis. Fewer trend of uninsurance. uninsured than previously estimated. Daily 8 Policy Digest, Health Issues, August 9, 2001. Until the 1996 legislation, it was necessary for states to receive a waiver from the federal 3 Fronstin, P. Sources of health insurance and government to make substantial changes in characteristics of the uninsured. EBRI Issue their Medicaid programs. Several waivers Brief No. 228. Washington, DC: Employee were granted, including one that allowed Benefit Research Institute, December 2000. Tennessee to introduce the TennCare man- 4 About 20 million (7 percent) buy health aged care program for Medicaid recipients insurance themselves. and the uninsured. 5 William M. Mercer, 15th Annual 9 There is some controversy over forecasting Mercer/Foster Higgins National Survey of Medicaid enrollment. The Congressional Employer-Sponsored Health Plans, 2000. Budget Office (CBO) estimates annual Med- icaid growth of 2.7 percent. The Urban 6 Kaiser Family Foundation/Health Research Institute reworked the CBO number in 1997 and Educational Trust, Employer Health and established, to our satisfaction, that Benefits Survey, 2001. CBO had overestimated the growth in the 7 The expansion in Medicaid eligibility in core Medicaid populations of Aid to Families the late 1980s, which increased the popula- with Dependent Children (AFDC) mothers tion covered from about 19 million to closer and children and disabled people. They pro- to 30 million, kept the number of uninsured jected a 1.6 percent annual growth rate, lower than it would otherwise have been. which we’ve used here.

Chapter 4: Health Insurance 45 Health and Health Care 2010 Institute for the Future

Chapter 5 Managed Care Experiments in Reinvention

Twenty years ago, “managed care” was damage wrought by the restrictions of nearly synonymous with the term traditional managed care, health plans, health-maintenance organization the courts, regulators, and employers have (HMO). Today, managed care includes responded. The established managed care the continuum from staff- and group- techniques for controlling costs, for model HMOs, through network-model administration and utilization review, and HMOs, to preferred provider organiza- for restricting patients to set physician tions (PPOs). PPOs are the dominant networks and denying service have fallen form of managed care, holding 48 per- prey to lawsuits, regulation, and bad cent, versus HMOs’ 23 percent, of the press. At the same time, health care faces employment-based insurance market.1 immutable cost drivers. Managed care may not be at a breaking point, but the The Issues: current situation is unsustainable. Managed Care Is Out Of Balance Making Up for Lost Time: Prices Soared After successfully restraining premiums and health care inﬂation in the early to Between 1994 and 1998, health plans mid 1990s, managed care has ceased to scrambled to respond to purchasers’ deliver promised savings and many ques- demands for cost containment and to tion its ability to deliver quality care. gain market share by dramatically sup- Both health care costs and premiums are pressing the growth of premiums. To rising at ever increasing rates. Consumers do this, they used a familiar set of man- and providers alike are expressing concern agement tools to control costs. about the quality of care.2,3 In a struggle Capitation and shared-risk arrangements for survival, health care institutions— place providers at risk for some or all together with physicians seeking to components of care at a predetermined regain control over clinical decision mak- ﬁxed price. ing—are rejecting both low reimbursement rates and restrictive practice Utilization review and restriction of management. Consumers want ready services use a centralized process of access to providers and choices among either prospectively or retrospectively doctors and treatments.4 As providers and reviewing and approving payment consumers have made their case about for medical procedures.

Chapter 5: Managed Care 47 Bargaining down payment rates to Premiums Were Unsustainable providers simply attempts to set an advantageous rate for payers. As medical costs continued to rise, albeit With these tools, managed care plans more slowly, plans, providers, and hospi- did, in fact, deliver what they promised tal systems could not sustain the dis- to health care purchasers: the growth of counted prices. HMOs experienced 4 5 premiums slowed. While inflation of years of net losses from 1995 to 1999. medical costs dropped to 4.6 percent in Parsimonious reimbursement wreaked 1996, the growth of premiums plum- financial havoc on providers. In Califor- meted to 0.8 percent per year—one- nia, where managed care realized the quarter of the overall inflation rate (see greatest penetration and the lowest pre- Figure 5-1). Managed care kept premi- miums, the California Medical Associa- ums artificially low by restricting access tion found that 113 out of 300 medical to care, cutting staff, and reducing pro- groups failed or quit between 1996 and 6 fessional fees. But plans and providers 1999. The industry saw a precipitous failed to attack the underlying problems, rise and fall of physicians’ practice- including poor information systems, management companies that could weak administrative support to identify neither manage nor squeeze profits out 7 and track costs, and lack of discipline of medical groups. The value of pri- among providers. Thus managed care vately owned hospitals fell by 33 percent did little to cut the underlying costs of between January 1999 and January 8 delivering health care. Public and pri- 2000. The financial markets began to vate purchasers were much happier with reappraise health care. lower premiums, but physicians, health systems, and consumers were not. Evidence that established managed care techniques are crumbling is abundant.

Many Independent Practice Associa- Figure 5-1. Inﬂation rates diverge. tions (IPAs) and medical groups in heavily capitated areas have struggled Percent to ﬁnd the capabilities to manage 14 effectively under capitation, and many Health insurance 9,10 12 premiums have failed. 10 Medical inflation Highly publicized cases have caused Overall inflation 8 plans like United Healthcare and Workers’ earnings 6 Aetna to back away from utilization

4 review. New laws enabling consumers to sue HMOs for denial of service are 2 chilling enthusiasm for this form of 0 1988 1993 1996 1999 2000 2001 medical management. Source: Kaiser Family Foundation/Health Research and Educational Trust, Employer Beneﬁts Health plans in the public managed Survey, 2001. care market rebelled, pulling out of the Medicare market in response to

48 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

the low reimbursement rates intro- ing access ran afoul of the New Con- duced by the Balanced Budget sumer’s demand for choice. Consumers Amendment of 1997. were more satisﬁed with loose managed care than strict managed care.12 As a Consolidation among providers made result, PPO enrollment grew from 28 them much less likely to accept low percent to 48 percent of insured workers payments in order to be included in between 1996 and 2001 (see Figure 5-2). a managed care network. Enter the Empowered Regulators Responded Consumer to Anti–Managed Care Sentiment To make matters worse, managed care faced the increasingly demanding “New As clinicians and consumers bridled at Consumer” of health care. With dispos- managed care’s restrictions on access to able income, computers, and at least a care and on providers’ decision-making year of college education, these New prerogatives, regulators responded. Consumers want choices, access, control, Building on sweeping federal legislation, and information11. Managed care’s efforts including the HMO act of 1973, the to reduce utilization and costs by limit- Employee Retirement Income Security Act (ERISA) of 1974, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Health Insurance Figure 5-2. Enrollment in PPOs grows. (Health plan enrollment for covered workers, selected years 1996Ð2001) Portability and Accountability Act of 1996 (HIPAA), and the Balanced Bud- 1996 1998 get Amendment of 1997, regulators POS Conventional POS Conventional passed laws to protect patients’ rights to 14% 27% 24% 14% access and treatment and to ensure that medical decision making is squarely in the hands of qualiﬁed clinicians. The HMO 27% effect has been to make managed care PPO HMO PPO organizations more wary of denying 28% 31% 35% care.13

2000 2001 Drivers Conventional Conventional POS 8% POS 7% 22% 22% Five drivers of change will force man- HMO aged care to invent new tools to manage 23% HMO care and control costs—or to fail. 29% Relentlessly rising health care pre- PPO PPO 41% 48% miums and costs that compel purchasers to push for cost containment Source: Gabel, J., et al. Job-Based Health Insurance in 2001: Inﬂation Hits Double Digits, Managed Care Retreats. Health Affairs (September/October) 2001; 20(5):180Ð186. Dissemination of new information technology (IT) that allows for

Chapter 5: Managed Care 49 improved clinical and administrative By 2010, the youngest of the baby oversight boomers will be 65 and an elder boom will ensue. The New Consumers of health care, who demand choice, information, and The diffusion of medical technology control over their health care has proved to be the most potent cost driver in health care.14 Increased regulation of managed care plans and of access to patients’ A shift to new, more expensive phar- medical data maceuticals and increase use is driving drug costs faster than other compo- Innovation in business models to nents of national health care expendi- coordinate the financing and delivery tures. Employers reported 17.5 of health care percent increases in 2000.15 Rising Health Care Premiums and Costs Drive a Information Technologies Push for Cost Containment Offer New Tools for Managed Care Despite its initial success at cutting health care costs, managed care has lost Health care organizations, in comparison its fiscal way. The easily won savings with other industries, have chronically have been realized. An aging population, underinvested in information technolo- advancements in medical technology, gies. Internet-enabled IT is lowering the and the rising cost of pharmaceuticals costs of adopting IT for many organiza- are intractable forces driving health care tions. It is also helping managed care expenditures up (see Figure 5-3). organizations to manage administrative costs. The health care players who adopted Internet-based IT early on have found the Internet to be a powerful force for change and cost-efficiency, but it can also help improve clinical care by:

Figure 5-3. Expenditure increases persist. Preventing errors. Well-designed electronic systems can conﬁrm that the Percent of GDP correct patient is being treated and 15 ensure that the right dose of a medication is administered—and, in 10 so doing, can prevent errors and complications. ■ 5 Aging ■ Med tech Improving clinical decisions. Several ■ Drugs studies have shown that information 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 systems can inﬂuence decisions at the point of care. One trial showed that Source: IFTF; Health Care Financing Administration. using information systems to prompt physicians and “vigorous application

50 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

of a simple and effective information Regulation May Have intervention could save thousands of Cost Consequences lives annually.”16 Regulation is limiting managed care’s Improving disease management. Patients ability to control costs and coordinate with special needs can be referred to care even as it is mandating information disease-management programs or technology that has the potential to case-management programs and can improve clinical care. be monitored closely through Internet technology, thereby reducing high- cost acute episodes, such as emer- Electronic data interchange. HIPAA gency-room (ER) admissions for is intended to improve the efficiency patients with asthma. and effectiveness of the health care system by standardizing the elec- Reviewing quality of care and conveying tronic exchange of administrative feedback. The electronic capture of and financial data and simplifying standardized data elements permits a administrative processes. Health systematic analysis of clinical practice, plans, providers, and clearinghouses benchmarking, and rapid dissemina- that manage health care data are “cov- tion of the results that can drive adop- ered entities” under the law. This reg- tion of best practices. ulation, with fines and imprisonment The convergence of affordability and use- for noncompliance, is a driving force fulness in information technology will that is pushing health care plans to support innovation in managed care. adopt electronic data interchange (EDI), irrespective of whether EDI The New Consumer was among their highest priorities. Demands More In the short run, costs may be high, but the potential for improving care Accustomed to using the Internet for coordination is great. work, online shopping, and stock trading, New Consumers have come to Privacy. In his last weeks in office, expect a similar benchmark of conve- President Clinton enacted wide- nience from their health plans too. They reaching privacy regulations that are demanding access to information could have a strong impact on man- about health plans on the Internet. They aged care. The White House esti- want online administrative services, such mated that new privacy requirements as claims processing and precertification, will increase costs for the nation’s information about enrollment and bene- providers and health plans by $1.2 fits, referrals, and appointment schedul- billion during the first year alone, and ing. Increasingly consumers are seeking $3.8 billion over the course of 5 years. information to help them manage their Other estimates have put the 5-year own health and health care, including cost as high as $22.5 billion.17 Along information about physicians, consumer- with HIPAA regulations, these new friendly clinical guidelines, and informa- regulations will cost managed care tion about treatments. organizations plenty.

Chapter 5: Managed Care 51 Patients’ rights. The highly publicized term change in health care. They have federal Patients’ Bill of Rights legisla- already made their mark. tion attempts to hold health plans and self-insured purchasers account- Established managed care organizations able for health care decisions. If a fed- are responding to the threats of these eral Patients’ Bill of Rights that e-businesses. The old dogs of managed increases the liability of self-insured care are expanding their presence on the employers were to pass, these employ- Web and offering new products that ers might drastically change their role respond to consumers’ demand for ser- in purchasing health care. Experts vice. Kaiser Permanente allows patients believe, however, that the real impor- to make and cancel appointments and tance of the Patients’ Bill of Rights order prescriptions online. Destiny may be more political than practical. Health, Inc. (www.destinyhealth.com) Aggressive lobbying by health plans, is launching a medical savings account employers, and providers makes it product. Highmark Blue Cross Blue highly unlikely that a bill assigning Shield is using the Internet to allow such liability to self-insured employ- enrollees to construct personalized health ers will pass. plans. The New Economy is certainly teaching old dogs new tricks. Innovation Spurs Managed Care to New Ways of Doing Business Driving Managed Care Toward New Tools Innovation outside of established managed care organizations is fostering These drivers have gotten managed care innovation within them. Companies mar- moving. The ready availability and keting health care information, products, potential of information technologies, and services on the Internet are capitaliz- the demands of the New Consumer, ing on the discontent with managed care, regulatory action, and innovation in the focusing on consumers, and driving man- e-health sector itself are driving managed aged care to change. These e-health care care to develop new methods of care coor- companies are claiming functions tradi- dination and cost containment during tionally performed by insurers, IPAs, the next 5 years. These new methods will consultants, and brokers in both the busi- take advantage of information-driven ness-to-business and the business-to-con- approaches that track costs, guide clinical sumer markets. Such companies include practice, and engage the consumer in Medscape, the purveyor of digital clinical self-management while meeting con- data and medical information; eHealth- sumers’ demands for greater choice. Insurance, the online portal for individuals, families, and small businesses seeking Potential Barriers to health insurance; and the employee-bene- IT Implementation ﬁts-management companies eBenX.com and Sageo. Although the recession threat- What stands in the way of the managed ens such innovators’ survival, it does not care industry’s adopting information- affect their ability to bring about long- driven techniques for controlling costs

52 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

while coordinating care? Consumers’ nurses for physicians or allied health demands for choice and control of their care workers for registered nurses. health care, providers’ resistance to scrutiny and loss of autonomy, money, Money and the Economy the economy, regulation, and technology The capital demands of investing in themselves pose formidable barriers that information systems may be signifi- will hamper managed care’s attempts cant. As money markets have shied to lay the groundwork for its own away from health care, managed care reinvention. organizations and providers alike may find it hard to make the investments Consumers’ Demands in IT required to collect and analyze data and to drive cost containment. Consumers’ fears that they may lose control over their health information A softening economy may distract due to breeches of privacy and failures large-scale purchasers and purchasing in data-security systems may slow the coalitions from their focus on purchas- adoption of electronic data-interchange ing high value in health care. systems. Regulation Consumers’ preference for choice may thwart attempts to channel them to Ironically, privacy regulations may cost-effective providers and plans, inhibit the use of Internet-enabled thereby limiting purchasers’ efforts to systems to manage care across practice use data to control costs and health settings. Privacy restrictions could plans’ efforts to guide clinical care. inhibit the flow of information among providers and plans.

Providers’ Resistance The delay in enacting federal privacy to Scrutiny regulations could cause a consumer backlash against HIPAA-induced Providers’ resistance to scrutiny and increases in electronic data exchange their lack of faith in traditional mea- and slow the use of Internet-based sures of health care performance may systems to track and control costs of prompt them to resist increased pres- clinical practice. sure from purchasers and plans to provide performance data. Technology Providers, being independent and Information systems, particularly at notoriously resistant to change, might the provider-group level, may fall balk at consolidation and fail to amass short of what is needed to support the market share and command of sound quality measurement and, per- costs and high-quality data necessary haps more important, improved clini- to help them negotiate with health cal decision making. The resulting plans for favorable payment rates. dearth of timely and useful informa- They may also fail to capitalize on the tion about quality of performance— savings potential of substituting particularly for PPOs and provider

Chapter 5: Managed Care 53 groups—and the absence of evidence that managed care organizations have of cost savings for purchasers may used to date to manage provider costs thwart the use of value purchasing may not disappear, new models of man- as a data-driven, cost-control tool. aging costs will come to the fore. Plans will work in concert with purchasers to The Forecast: make consumers become active partici- Experiments in pants in health care choices that the con- Reinvention sumer will pay for. Imagine managed care in a laboratory, Tiered payment systems. Premiums and running experiments in coordinating care copays will differ based on cost-efficiency while controlling costs. Managed care, of providers and plans and the nature of like health care in general, will have the services received. One approach, used begun to invest in IT by 2005, and will in medical savings accounts, is to imple- be developing new processes to track ment a higher deductible coverage— costs and direct the delivery of care. such as a $2,000 deductible—whereby consumers pay for most of their low-cost, Managed care products that offer choices ordinary care. Alternatively, health-plan to consumers and help providers deliver copayments can be adjusted to be higher better care will thrive. Health care expen- when a patient picks a less cost-efficient ditures will continue to rise. There will provider. PacifiCare health plan in Cali- be stellar examples of improved health fornia recently announced that it would care management across the country, but use this approach for its Medicare HMO the practice of medicine will not be fun- enrollees. Thus, patients are free to make damentally transformed. By the end of a choice. If they believe that a provider is that period of experimentation, managed better and worth the added cost, they care will be poised to reinvent itself. can choose to incur that cost. Thus, the story of managed care will be one of experiments in reinvention. Channeling consumers to preferred providers. Although purchasers have had some All Players in the Health reluctance to choose a health plan that Care System Will Work to Contain Costs places restrictions on network size, this choice may become more acceptable if After several years of rising premiums, costs continue to rise. Restrictions will managed care will find itself in a cru- be based on provider and plan perfor- cible, combined with four reagents— mance and consumers will pay more if purchasers pushing to control rising they choose a provider that has a poorer premiums, consumers seeking choice, track record than alternatives. The providers demanding better pay, and the Leapfrog Group, a coalition of large health care system generally pushing to organizations purchasing health care, has invest in information technologies. established network restrictions for complex procedures for which there is con- Plans will partner with purchasers to contain siderable variation in quality as one of costs. Although the well-worn methods their criteria for choosing health plans.

54 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

Redesigning reimbursement. In the coming services through the Internet. Physi- years, plans will experiment with: cians have been reluctant because of concerns about privacy, lack of reim- Specialty capitation, case rates, and bursement, and potential exposure to episode-based payment. There will be malpractice litigation. Considering moves to paying specialists a capita- consumers’ demand, solutions to these tion payment based on their providing problems are likely to be found. At coverage for a fixed number of least two health plans have announced patients, and paying a specialist a plans to reimburse physicians for lim- single fee for providing care for a ited services provided through the patient’s episode of illness, adjusted Net. This capacity has the potential for severity. Either of these approaches to both reduce costs and increase con- relies on an ability to risk-adjust the sumer satisfaction. payment, so that treating a more Revising payment for chronic illness care. severely ill patient or panel of patients Evidence from disease-management results in greater compensation. These programs indicates that monitoring approaches also require good methods and supporting chronically ill patients for monitoring quality and outcomes at home lead to better outcomes and because of the inherent potential for potential cost savings. The ability to undertreatment. provide this type of care will improve Paying for best practices. More institu- as new technology provides devices tions will focus on providing highly such as sensors that can transmit data specialized care, becoming especially from remote sites and software that adept at particular practices like car- can organize it into meaningful infor- diac surgery, hernia repair, or oncol- mation. These approaches potentially ogy. These so-called “focus factories” can reduce expensive visits with prac- may be the best places for patients to titioners and time lost from work for go if they want highly standardized travel. Models for reimbursing pro- and predictable outcomes because viders for such services will increase. their high volume helps them to hone their skills to deliver highly pre- Managed Care Will Advance dictable results. As consumers and Disease Management purchasers become more aware of the High-risk patients—patients with a seri- quality and cost advantages of this ous, chronic illness who are generally at type of provider, it may become more risk of complications or debilitating acceptable to direct patients to these infirmity—are the most costly patients centers and to pay preferential fees to to treat, and the patients who benefit those that demonstrate they provide most from the comprehensive care that the best care. managed care can offer. Designed to Paying for electronic visits. An increas- treat acute, episodic illness, our standard ing number of computer-savvy health care system does not provide well patients want to communicate with for patients with a chronic disease. It is their doctors and receive health care not designed to monitor patients, nor

Chapter 5: Managed Care 55 can it provide the education, behavior they did during the late 1990s and the modification programs, and continuity early 2000s to contain growth of their of care that are needed to control chronic health care expenditures. conditions. Our experts agree that there will be no Enter disease management. Motivated dramatic move toward radical forms of primarily by a desire to reduce costs, dis- defined contribution by 2005. Tax laws ease-management programs focus on make it cheaper for employers to buy identifying high-risk patients and then health insurance than for individuals to working to implement best-practice buy it. Employers do not know how to protocols. Based on the relatively sparse implement an equitable voucher system. evidence available, disease-management There is no rational, easy-to-use individ- programs reduce or eliminate the need ual market for health insurance. Risk for hospitalization and ER visits and adjustment and adverse selection pose reduce the costs associated with chronic knotty problems for insurance companies. conditions. In a 2001 survey of public and private employers, very few employers were “very To date, much of the initiative for dis- likely” to move to defined contribution ease management has come from the during the next 5 years (see Figure 5-4). vendors of these services and from health Instead, our experts say that purchasers plans, but that is changing. As provider will become information brokers, pushing organizations consolidate and develop employees to become more informed and both resources and management capabil- more engaged consumers of health care. ities, we forecast that they will compete with health plans to take over disease- Employer-purchasers will not be willing management programs. Where they have to pay rising insurance premiums and responsibility for much of the financial rapidly rising prescription-drug costs for risk, they will want to maintain control much longer. They will educate employ- of the programs implemented for their ees and reformulate benefits. With eas- patients. It is also likely that, during the ing labor markets purchasers will be able next 5 years, there will be greater infor- to use the portfolio of cost-containing mation available about the disease-man- tools they have at the ready. Those tools agement programs that work, those that include: do not, and the cost-benefit ratio of such an approach to care. Shifting costs to employee-consumers. Employers will reduce premium contributions, reduce benefits, and Health Care Purchasers introduce higher deductibles or Will Renew Efforts to Contain Costs higher consumer copayments for care. This approach reduces employer pay- While employer-purchasers will retain ments directly, and it also makes con- their role in buying health care and sumers seeking care more careful in negotiating premiums and benefits,18 their choices because they will pay they will also move more decisively than more of the bill.

56 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

Figure 5-4. Employers are unlikely to switch to defined-contribution health benefits. (Likelihood of employers switching to defined contribution for health

2000 Very likely All small firms Somewhat likely (3Ð199 workers) Somewhat unlikely Very unlikely All large firms Don't know (200 or more workers)

All firms

2001

All small firms (3Ð199 workers)

All large firms (200 or more workers)

All firms

0 20 40 60 80 100 Percent

Source: Kaiser Family Foundation/Health Research and Educational Trust, Employer Beneﬁts Survey, 2001.

Managing pharmacy expenditures. Many and providers, and they pay according purchasers will move to three-tiered to performance. copays, increase the use of formularies, With all of these “kinder, gentler” ways of and educate consumers to use drugs controlling costs, purchasers will provide that are less expensive. Some may the options—the consumer and provider experiment with new beneﬁts designs, will choose. Choices will depend on the using deductibles rather than copays ready availability of information about for prescription drugs. cost and performance. Rather than overtly Purchasing value. For large-scale imposing rules and roadblocks, these cost- employers and purchasing coalitions, control methods will use data to guide eliminating plans and providers that consumers’ and providers’ choices. are not cost-efﬁcient or cost-effective can make a big difference in the costs Consumers Will Know More of health care. Purchaser groups, and Spend More including the large automotive companies and the Leapfrog Group, are We forecast that consumers will become writing cost-effectiveness require- more active and better informed by 2005, ments into their contracts with plans as they begin to foot a greater share of the

Chapter 5: Managed Care 57 bill for rising health care costs. But health care they purchase, relative to its because they will pay, consumers will price. The data available by which to also have a more robust array of managed assess quality among health care providers care products, responding to their need are woefully crude. There are increasing for choice, information, and control over efforts, however, to collect data useful for their health care. Insurance companies consumers. In many instances, this infor- will continue to develop managed care mation is available through Internet com- products that provide consumers—both panies, such as HealthGrades.com and purchasers and patients—with flexibility FACCT.com, through large-scale employ- and savings over conventional indemnity ers, or through purchasing coalitions like products. the Pacific Business Group on Health (PBGH). Independent organizations like The HCFA projects that consumer out- Consumer Reports are publishing ratings of of-pocket spending on all health care health plans. Access to information is will reach $297 billion per year by the likely to improve gradually, coming first year 2005, an increase of 34 percent over from consumers’ assessments of each projected expenditures for the year 2000 provider’s performance rather than from (see Figure 5-5).19 rigorous measurement of the technical clinical quality of health care. As informa- Despite the expenses they bear, consumers tion systems are further deployed, how- have very little information with which to ever, more specific detailed measurement determine the value or quality of the will be possible.

Information Technology Will Guide Care Delivery Figure 5-5.Consumers will pay more. Sparked by HIPAA compliance, the OOP expenses (minus premiums) health care industry will take substantial Billions of dollars strides toward embracing Internet-based 450 IT by 2005, creating new clinical and 400 administrative efﬁciencies that have the

350 potential to contain costs. In the short run, investments in IT may drive costs 300 up, but players in the health care indus- 250 try who have access to capital and make 200 wise investments—either by purchasing 150 new systems or contracting for information services—will have the information 100 instrumental to controlling costs and 50 guiding physicians’ decisions in the next 0 phase of managed care. 1980 1990 1996 2000 2005 2010

Source: HCFA Ofﬁce of the Actuary, 2001

58 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

The Health Care Delivery bargaining power and efﬁciency of System Will Position Itself for Power operations. However, mergers do not always meet their goals successfully, Provider Consolidation Moves Downstream. as was proved by the merger of the We forecast that providers will consol- Stanford University and University idate to achieve economies of scale, partic- of California San Francisco Medical ularly to acquire expensive infrastructural Centers, which dissolved because the components, such as information systems, merger was poorly implemented and and to strengthen management. The ﬁnancially disastrous. The experience desire to gain regional market share and will continue to be mixed. bargaining clout in relation to health The Mix of the Health Care plans will be the key factor spurring most Workforce Is Unlikely to providers to consolidate. Change

Consolidation of providers may take any Despite the potential that redeploying of of several forms: the health care workforce to ensure that the least expensive, qualified professional Consolidation of individual physicians renders care may have for controlling and small group practices. This form costs, significant change in this direction of consolidation has been a general is unlikely to occur. Considering that we trend nationwide for several decades, now train more medical residents than and it will continue in regions that most authorities believe are needed, it is have been slow to develop organized difficult to see how putting allied health physicians’ groups. care professionals into the mix would not Consolidation of existing group prac- simply add to the workforce rather than tices and IPAs. The pressure of man- substitute for physicians. In the absence aged care cost-containment efforts has of a health care workforce policy in the caused many regional organizations United States, there is little hope that to fail. When the weaker ones close, planning for a different mix of man- many of the physicians are absorbed power is likely to occur within the next into surviving entities, as was the case few years. after the collapse of Med Partners and Quality Measurement Will FPA Medical Management—both Have More Influence on large, national providers’ management Managing Care organizations. The surviving organiza- 20 tions have succeeded financially The IOM’s report, To Err Is Human, despite the pressure, and it is likely alerted consumers and purchasers to the that they will have greater market frequency and consequences of errors in share in the future. medical practice in the American health care system. Although it is unlikely that Hospital closure with consolidation of the quality of health care will improve patients into fewer institutions. Consoli- quickly, the new focus on medical error dation can also mean mergers of hos- will help several forces coalesce to pitals to form stronger entities for encourage an increasing emphasis on

Chapter 5: Managed Care 59 improvements in quality over the next of business coalitions have experienced 5 years: the requirements for optimum quality in their own industries, and they are Development of data regarding quality for beginning to experiment with “value- PPOs and medical groups. NCQA and based” and “quality-based” purchasing others in the business of evaluating of health care. Purchasing coalitions health care performance are working have begun to put provider payments at to develop quality-measurement tools risk based on quality. Purchasers will for PPOs. RAND corporation “Qual- look for evidence that quality pays and ity Assessment Tools,” which will differential payment matters. evaluate medical groups, will be available by 2002. Both PPOs and medical It is likely that improvements in quality groups will be the subjects of quality will not have a major impact on cost measurement by 2005, and the results over the next 5 years because so many of these measurements will become factors have to be in place to make high increasingly available to consumers. quality an effective driver. However, we forecast that measurement and manage- Deployment of clinical information systems. ment of quality of performance will Although the proliferation of tools to become more prominent as a force driv- foster improved quality of performance ing the shape of managed care. is likely to be gradual, they will become increasingly available to prac- Managed Care 2005: titioners as information systems are A Kinder and Gentler Managed Care? installed. Such tools as computerized physician order entry systems accessi- The existing degree of dissatisfaction ble by handheld devices, electronic with the current system of controlling medical records, and clinical databases costs makes it likely that managed care that physicians can access when mak- will modify its “brute force” approaches, ing decisions about a patient’s care will relying on information systems and make quality management more effec- incentives for consumers and providers, tive and consistent. and perhaps placing an even greater emphasis on the cost-effectiveness of Studies building a business case for quality. health care during the coming years. It seems highly likely that a business We forecast that information-driven case for quality can be built, particu- techniques for coordinating care and larly if the focus is on the prevention controlling costs will begin to dominate of error and its complications—the managed care by 2005. added work needed to remedy the sequelae of medical errors and the loss Managed Care 2010: of an employee’s productivity due to Patterns of Power inadequately treated illness. Managed care will be in transition dur- Pressure from purchasers of care. Large-scale ing the next 5 years. We can conceive of purchasers of health care and members three patterns of market power that

60 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

could emerge by the year 2010: icaid managed care thrives. Government and large employers are still the domi- Big Insurance Dominates nant purchasers of health care. Government Leads Drivers Consumers Meet E-Health-Care Markets Plans and providers consolidate to These power plays are examples of how the gain market share and capital. relative power of health care stakeholders could shift to create new market dynamics Big Insurance makes substantial 10 years from today. These power plays investments in IT. may coexist. They are meant to provide insights about potential market shifts E-health care companies play a subor- that warrant strategy and forethought. dinate role as they meet with financial failure or acquisition by health plans Big Insurance Dominates in the e-health market. Consolidation has created a market dominated by a handful of large health plans. Lax antitrust regulation allows health- Providers are dependent on these plans plan mergers. and focus on delivering care within the frameworks set by the plans. Those with Barriers robust IT systems that demonstrate high performance in delivering care and con- Data standards fail to evolve in order trolling cost succeed. Health plans that to facilitate the free flow of informa- reduce hassles for consumers, possess tion among plans and providers. information systems that track costs, and collect and publish provider perfor- Consumers protect their health infor- mance information will lead the industry. mation, and privacy regulations con- The IT infrastructure is critical. Cus- strain the flow of information within tomer service is Internet-driven, provid- the health care system. ing easy and rapid access to information and services. Plans are responsive to con- The science of performance measure- sumers’ needs, offering a variety of insur- ment in health care fails to provide ance products. Yet consumers have little useful, understandable information choice among health plans. Since the about providers. large-scale consolidation of health plans included the acquisition of e-health care Purchasers, dissatisfied with the price companies, only a few of those companies of plans and their services, work remain independent and operate in the around them and negotiate directly business-to-business space. A lax anti- with providers. trust environment has allowed health plan mergers and acquisitions to proceed Providers cannot deliver the data unhampered. Medicare managed care has needed to drive care management, become a competitive program and Med- pricing, and accountability.

Chapter 5: Managed Care 61 Government Leads Barriers An economic downturn in 2004 triggers a market failure that leads people to The health care-industry lobby lose their health insurance or to drop it. opposes governmental regulation. A reduction in employer-based health insurance increases the ranks of the unin- The pervasive perception among sured. The e-health care market fails as a the public is that government cannot vehicle by which consumers can purchase provide high-quality health care insurance. Consequently, consumers because of bureaucracy and lack of struggle unsuccessfully in the market- expertise. place for individual insurance. Health care costs and premiums rise in the face Advocates insist that this version of an aging population, advances in of government protection is not medical technology, and soaring phar- adequate because the system is still maceutical costs. The public decries dif- inequitable as long as consumers ferential access to health care. Medical with higher incomes can purchase technology costs spin out of control, high-end plans. creating an incentive to use technology assessment. These forces push the gov- Innovation is stunted by government ernment to step in. Legislation is signed regulation. that expands the Federal Employees Health Beneﬁts Plan (FEHBP) to Providers oppose oversight of their include private purchasers and pur- activities by the government. chasing coalitions. Negotiating power between pur- Drivers chasers and providers is limited

An economic downturn triggers a Consumers Meet E-Markets failure in the employer-paid insurance market, increasing the number of In a continuing effort to control their people who are uninsured. costs, the purchasers of health care— largely employers—shift an increasing Health care costs escalate out of share of the health care bill to con- control (19 percent of GDP) due to sumers. At the same time, employers advancements in technology and an invest in educational programs to enable aging population. employees to become more aware of the cost and quality of the health care they The e-health care market fails as a choose. Consumers pay for a larger per- vehicle by which consumers can buy centage of their insurance premiums insurance. than they did just 5 years ago, but they are being offered a growing menu of As medical technology costs spin out health care goods and services. As a of control, the public decries differen- result, consumers are in the driver’s seat tial access to treatments. in health care decision making. New

62 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

Consumers relish taking on this role, as New Consumers act on their need for they have taken on the self-determining information, choice, and control of role in other aspects of their lives, from their care, and they increasingly use personal ﬁnance and investments to the Net to manage their own health shopping. care.

Capitalizing on this changing role of Barriers the health care consumer, e-health care companies emerge to provide the tools Consumers are reluctant to sit in the consumers need to make health care driver’s seat when it comes to manag- decisions—data on the cost and perfor- ing their own health care and are slow mance of providers, personalized health to fully use cafeteria plans to augment plans, personal health records, financial their dwindling health care coverage. transaction tools for purchasing care, and treatment information. Online brokers E-health care companies fail to design and health agents assist consumers in sustainable business models and die selecting care. Privacy regulations that out as quickly as they emerge, reduc- give consumers knowledge about who ing consumers’ confidence in the sees their medical information, and con- direct health care market. trol over access to it, make consumers more confident about the safety of per- High-profile incidents involving vio- sonal health information. By 2010, a lations of the privacy and security of consumer-centered, commercial e-health health information make consumers care market thrives. wary of the Net.

Drivers Providers are slow to make the necessary adjustments to capitalize on Costs rise relentlessly and employers the Net and to integrate IT into their suffer from “beneﬁts fatigue.” practice.

E-health care companies support Powerful health care providers and consumers’ health care decision plans successfully lobby against making with products such as per- the publication of data about their sonal health records, medical savings performance and cost, and consumers’ accounts, peer-reviewed treatment ability to make decisions is hampered information, performance data on by lack of information—slowing the providers and plans, e-brokerage transition to a consumer-centered services, and e-health plans. market in health care.

Privacy regulations are implemented Changes to ERISA and employer tax that make consumers more comfort- laws are incremental and constrain able in using the Net as a vehicle for employers’ move to free themselves conveying personal health information. of the burden of health care beneﬁts.

Chapter 5: Managed Care 63 Wild Cards tools to support physicians’ decision making. These changes promote best The quality movement takes off. clinical practices. Purchasers are off Sparked by the actions of the IOM the hook. The pace at which managed and large-scale purchaser coalitions, care adopts information-driven cost an intense focus is placed on improv- management picks up dramatically. ing quality and using health care quality data as major criteria for purchasing care. A federal Patients’ Bill of Rights passes without protections for self- Purchasers, plans, and providers begin insured purchasers, causing a large- to quantify meaningful savings attrib- scale move to deﬁned contribution, in utable to improvements in quality. which consumers have a voucher to Thus, the business case for quality is purchase coverage directly. Thus, the unassailable, and value purchasing and pressure that purchasers put on plans providers’ emphasis of improvement and providers to join the information in quality become standard health care age is eliminated. business practices. Physicians become sufﬁciently Universal health coverage is enacted frustrated about managed care and that excises the costs of avoidable their level of reimbursement that they morbidity, redundant technology, and yield to unionization and collective unnecessary prescriptions and proce- bargaining, thereby inhibiting the use dures. It also mandates implementa- of information-driven techniques to tion of Internet-based approaches, hold down the costs of care delivery. such as electronic medical records and

64 Chapter 5: Managed Care Health and Health Care 2010 Institute for the Future

Endnotes 11 Twenty First Century Health Care Consumers. 1 Gabel, J., L. Levitt, J. Pickreign, et. al. IFTF. Menlo Park, CA. 1998. Job-based health insurance in 2001: inflation 12 Kaiser Family Foundation, National Survey hits double digits, managed care retreats. of Consumer Experiences with Health Plans. The Health Affairs (September/October) 2001; Henry J. Kaiser Foundation, Publication 20(5):180–186. #3025. June, 2000. 2 Kaiser Family Foundation. National Survey 13 Noble, A., and T. A. Brennan. The stages of Consumer Experiences with Health Plans. of managed care regulations: Developing bet- The Henry J. Kaiser Foundation, Publication ter rules. Journal of Health Politics, Policy and #3025. June 2000. Law (December) 1999; 24(6):1275–1305. 3 Watson Wyatt Worldwide. Putting 14 Spetz, J., and L. Baker. Has Managed Care Employees in Charge, A Survey of Employ- Affected the Availability of Medical Technology? ers, Health Care Providers, and Health Public Policy Institute of California. 1999. Plans. Catalog #: W-332. Bethesda, MD, 15 2000. William M. Mercer. 15th Annual Mercer/Foster Higgins National Survey 4 Arthur Anderson and HealthCare Forum. of Employer-Sponsored Health Plans. 2000 Leadership for a Healthy 21st Century: Cre- 16 ating Value Through Relationship. 1999. Balas, E. A., S. Weingarten, C. T. Garb, et al. Improving preventive care by prompt- 5 Milliman and Robertson, Inc. 2000 HMO ing physicians. Arch Intern Med. (February InterCompany Rate Survey. Brookfield, WI, 14) 2000; 160(3):301–308. 2000. 17 First Consulting Group. One huge 6 California Medical Association. The Coming HIPAA; AHA-funded study sees compliance Medical Group Failure Epidemic: Access to costs in the billions. Modern Healthcare Medical Care for Millions of Californians Is in December 18, 2000. Jeopardy. Special Report by the California 18 Medical Association. San Francisco, CA. Hewitt Associates. Employers to Face September 2, 1999. Double Digit Health Care Cost Increases for Third Consecutive Year. October 2000. 7 Reinhardt, Uwe. Rise and fall of physician 19 practice management. Health Affairs (Janu- HCFA. Personal Health Care Expenditures ary/February) 2000; 19(1):42–55. and Average Annual Percent Change, by Source of Funds: Selected Calendar Years 8 Weiss, Marin D., Chairman, Weiss 1970–2008. Health Care Financing Admin- Ratings. Reuters. September 19, 2000. istration, Office of the Actuary. November 9 Bodenheimer, T. California’s Beleaguered 1998. Physician Groups—Will They Survive? 20 Kohn, L. T, J. M. Corrigan, and M. S. New England Journal of Medicine 2000; Donaldson, eds. To Err Is Human: Building 342: 1064–1068. a Safer Health System. Committee on Quality 10 Trauner, J. Reassessing the plight of of Health Care in America, Institute of physician organizations in California: The Medicine. National Academies Press. 2000. uncertain future for IPAs. Journal of Ambula- tory Care Management 2000; 23:28–38.

Chapter 5: Managed Care 65 Health and Health Care 2010 Institute for the Future

Chapter 6 Health Care Providers Themes of the Future Delivery System

The mixture of physicians, hospitals, tions, and new initiatives among all and other providers that makes up the sectors of the market. This activity has American health care delivery system been as prevalent among nonproﬁt has never been a well-organized entity. organizations as it has been among We are a few years into what we perceive their Wall Street–funded brethren. will be 15 to 20 years of profound It presages a slow transition from a change in the way health care providers world of independent entities to one are organized. This period of change will of more corporate systems. Between occupy all of our forecast period up to here and there have been—and will 2010, and the outcome of those changes be—many false starts, poor invest- will be of profound importance for the ment decisions, and organizational future well beyond 2010. Although disasters. patients will be involved in all stages, both as active agents and as passive The role of intermediaries. Health care recipients of change, most of the action plans, disease management companies, will be driven externally by employers, case managers, and other manage- governments, and health insurers, with ment organizations will become various players in the system trying to much more important in directing create organizations that will survive and patients to providers and in interven- even prosper in the future. Several key ing and directing the activities of care backdrops frame this system: providers and patients. There is a possibility that providers will attempt to Continued organizational change. A com- circumvent the intermediaries and go bination of the demands of employers, directly to such end payers as employ- the rise of managed care, the recom- ers or Medicare. There is also a possi- mendations of consultants, and the bility that, as patients become more infusion of Wall Street capital into the engaged in their care, they will inﬂu- health care system has led to a desire ence the behavior of these intermedi- for new models of health care delivery. aries as well as that of their providers. Current providers are trying to make Intermediaries supported by inte- sure that they will be in the game for grated delivery networks (IDNs), the long term. Consequently, there managed care organizations (MCOs), has been a rash of mergers, acquisi- pharmaceutical companies, and grants

Chapter 6: Health Care Providers 67 to small providers will prove increas- practicing providers will be more ingly popular with patients and accepting of this loss of autonomy. families, reducing the influence of The end result will be more widely providers responsible for overseeing accepted guidelines in use, with less the care. The empowerment of variation and therefore better quality. patients with other sources of information, such as the Internet, will Assuming these four major themes— accelerate this process of provider overcapacity in the system, continued demotion in the patient’s eyes. change among all organizations, the evolving role of the intermediary, and a An oversupply of hospital beds and a battle over control of medical manage- surplus of physicians. America has far ment—this chapter forecasts the future more hospital beds than it uses, and roles of intermediaries, the new models many more than it needs. Whether or of payment to providers and care organi- not this situation is a surplus to some zations, and the structure of service- normative “need,” the overall market delivery organizations. effect is that providers increasingly will be working in a buyer’s market rather than the seller’s market that Intermediaries has existed for the past six decades. Background: The Control over medical management will be Convergence of Open Networks and the Demise the main arena of interorganizational of Vertical Integration conflict in the medium-term future. Physicians and providers have lost The past two decades have produced substantial organizational, financial, a dramatic change in the commercial and clinical control to health plans insurance market and we are now seeing and payers, but they have been build- the beginning of a similar change in the ing systems to win back some of that Medicare and Medicaid systems. HMOs, control. Control over medical manage- PPOs, and POS plans, which limit ment will be the central arena in patients’ access to physicians and ser- which this power struggle plays out. vices through financial incentives and The shift in locus of decision making gatekeepers, have become the dominant away from individual clinicians to form of health insurance for employees other entities will continue. The ques- and their families. Similarly restrictive tion is how far and how fast will that plans have been able to increase enroll- shift go, and exactly who will direct ment in Medicaid and even in Medicare. medical decision making. During the However, most enrollment growth has next decade evidence-based medicine not been in the classic prepaid health (EBM) will increasingly be used in plans—the staff- and group-model large organizations seeking the best HMOs—but rather in IPA-based HMOs clinical methodology and guidelines. that use mainstream community physi- The cohort shift in the population of cians and hospitals.

68 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

There has been a market shake-up in role of IPAs as a “middle man” offering managed care Medicare products, which cost controls. This has played out most have been dropped by many payers in noticeably starting in 2000 in the Cali- unprofitable areas. Nevertheless, with fornia market.1 During the next decade, refinement and modifications, managed the successful IPAs will consolidate and care will remain profitable and new develop systems that add value through products and improved methodologies the addition of information and services, (e.g., United Healthcare’s increasingly and gain brand value recognition in the customer-service-oriented business market place as the perception of this model) will keep the larger payers prof- value increases. itable and growing during this next decade. Smaller payers will find alterna- Virtually all HMOs—with the notable tive niche markets for special groupings exception of Kaiser Permanente and the of covered lives that are actuarially few other group- and staff-model HMOs sound. This process of economic market —use the same provider networks, and maturation will reduce destructive cut- they pay providers through a mix of dis- throat competition, and increase barriers counted FFS and partial forms of capita- to entry during this next decade. It will tion. Moreover, as health plans have also provide a broader menu of health widened their networks and developed care delivery options, with each niche point-of-service plans and direct patient that develops. referrals to specialists, their HMO products are becoming increasingly similar to The growth of IPA-based HMOs sur- the products of PPOs. prised many observers who thought that the cohesiveness and internal controls of Near the end of our forecast horizon, group and staff plans would give them a HMOs will be tackling the balance competitive advantage over the IPA between the cost savings of prevention models. However, IPA models have suc- and the cost of later care. New technol- ceeded in controlling provider costs, ogy and clinical information may well meaning that there has been little com- bring the time horizon for the payback petitive advantage of the staff-model into the range of annual financial plan- HMOs. Providing access to the same ning. This would increase their ability providers that patients were already see- to focus on prevention. ing has been the IPA models’ biggest advantage in selling their products. The Issues: Now That We Are All in Managed Care, What shift toward IPA-based HMOs has signif- Are We Going to Do? icantly changed what most pundits thought the managed care landscape was Most intermediaries offer a mix of insur- going to look like (see Figure 6-1). ance products that provide more or less the same physician networks and similar Maturation of the IPA model has been medical management techniques. They accompanied by some business failures compete on the basis of price to employ- and liquidity problems, arising from the ers, customer service, and benefits to

Chapter 6: Health Care Providers 69 Figure 6-1. Managed competition: How it was supposed to be . . .

Integrated Integrated Integrated Integrated System System System System

World of: ¥ competition between vertically integrated systems ¥ exclusive relationships ¥ empowered consumers

. . . and how it really is.

Health Health Health Health Plan Plan Plan Plan

Provider Provider Provider Provider Integrated System

World of: ¥ horizontally integrated delivery systems ¥ nonexclusive relationships ¥ competition among plans and providers ¥ confused consumers

Source: IFTF.

70 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

individual enrollees, particularly in the to treat high-risk populations, both Medicare market. Most of the savings because of such legislation as the they have gained were achieved by cut- Kennedy–Kassebaum Act and because ting payment rates to providers, and those often they are getting a large enough cuts have gone about as far as they can for share in any one market that they can- the short term. These plans are coming not avoid treating the sicker segments under three new types of pressure: of the community. If insurers cannot avoid expensive cases, their only Although intermediaries have been option is to manage the care of their successful in cutting costs, the sav- numbers in a more cost-effective man- ings have been achieved by one-time ner without cutting quality. How to reductions in payment rates. Mean- do this is a new adventure for virtually while, utilization rates are rising every plan in America. Patients have across the board, particularly as these not been able to understand or use plans have added new providers to HEDIS or other quality measures yet, their rosters, included different types and employer and business groups of populations in their membership will continue to pressure providers to such as Medicare recipients, and improve the data and make it more added new products such as POS. In understandable. the latter part of 1996 and through 1998, the “medical loss ratios” As patients from every venue enter (i.e., how much money was passed managed care, the question becomes: on to providers) of many publicly Which intermediary model is best suited traded HMOs began to increase. Yet to resolve the issues of cost, quality, and cutting back on product offerings is care management? The attempt to ﬁnd not an option, as their employer cus- such models is a key driver for the future tomers are demanding more, not less, of health plans and for health care in variety and choice among provider general. networks.

Forecast: Intermediaries Employers, the government, and Multiply in Type accreditation agencies such as the National Committee on Quality What types of intermediaries will Assurance (NCQA) are demanding patients use? For the insured segment of proof of quality performance. Given the population, the mix of indemnity to the lack of provider differentiation HMO plans will reverse over this next among different health plans, it 10-year period. For enrollees in Medicaid, is hard for them to demonstrate qual- indemnity Medicaid will become man- ity—particularly quality as compared aged care Medicaid, perhaps with slightly to that provided by a competitor. better access to providers. The uninsured will rely on the same network of safety- It is also increasingly difﬁcult for net providers, who will survive with a health plans to avoid a commitment mixture of state and local funding.

Chapter 6: Health Care Providers 71 EBM, outcomes statistics, and the HMOs and PPOs will cover just over reduced variation in clinical care will two-thirds of the entire American popu- cause even the FFS patients in effect to lation (see Figure 6-2). Only the unin- receive managed care, but perhaps with sured, a little over half of Medicare more associated personal services. recipients, and a few upper-echelon Changes in the technology of care, the employees—those in our “high-end FFS inclusion of prevention into care, and the broker” category—will be outside of impact of genomics and proteinomics on managed care. care will change the definition of managed care. And this will create new roles Health plans will spend the next 3 to 5 and new intermediaries during the next years in a constant flurry of consolida- decade. Toward the end of our time hori- tion, experimentation, and restructuring. zon, we will see the dawning of the age of Several dominant strategies will emerge more general use of medical informatics by 2005. Most intermediaries will adopt that will begin to determine the preven- one or more of these strategies, depend- tion or care needed and define the mix of ing on the geography, philosophy, and these that is purchased either out of availability of organized providers: pocket or under a health plan. The case manager intermediary. The case The net result of this forecast is that manager intermediary divides a popu- enrollment in HMOs will increase from lation into the well and the sick and 27 percent to 47 percent of all Ameri- permits the well to have free access to cans by 2007. Combined enrollment in virtually all of its loosely organized provider network. Its primary focus is the aggressive medical management of the sick, often parsed out by dis- Figure 6-2. Managed Care takes over from “unmanaged care.” ease state. It uses a mixture of (Number of Americans, in millions, in HMOs and PPOs versus FFS and provider organizations and relies on uninsured over time) the development of information sys- Millions tems to track the activities of its

250 HMO and loosely organized provider network. PPO The intermediary spends much of its 200 FFS and energy in directing the activities of Uninsured providers and sick patients. Providers 150 are paid in a multitude of ways, usually on a fee-per-episode basis, but 100 must meet or exceed several stipulated speciﬁcations regarding costs, quality, 50 and patients’ satisfaction in order to keep their contracts. The growth of 0 knowledge has been exponential in 1995 1997 2002 2007 2010 recent years. This has or will exceed Source: IFTF. the capacity of some specialists or intermediaries as individuals to know

72 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

everything they could need to know relatively high premiums for good even in one specialized area. The com- customer service and access to high- petence of organized subspecialty tech and complementary care. Mean- knowledge systems and the use of while, a slight majority of Medicare artificial intelligence (AI) in organiza- recipients remain in the FFS system, tions may become a more significant which provides access to a provider competitive factor beginning at the network that looks just like this one. end of this decade. High-end FFS brokers will be ideally placed during the next decade to be The provider-partner intermediary. The the intermediaries in new specialties provider partner allows providers to be that are yet to be defined; these could responsible for the medical manage- include genomic-prevention with ment of the enrollees. The intermedi- nutrition programs or pharmacoge- ary takes on responsibilities for nomic treatment optimization pro- customer service to members, for mar- grams. Such procedures will be keting its providers’ services, and for possible and arise, but will become redistributing risk among its providers. part of mainstream medicine at the The health plan relies on the use of end of this decade. More general various risk-sharing vehicles to pay adoption will await knowledge of the providers, including full and partial value proposition this creates. capitation, satisfaction incentives, and rewards for customer retention. The Direct to provider. In a minority of cases, intermediary rigorously audits large employers in rural markets and a providers to ensure that they manage few big employer coalitions are able to patients to an agreed-upon standard bypass the major plans and set up their but relies on the clinicians to develop own administrative systems that allow protocols and demand-management them to contract directly with techniques. This model operates suc- providers. The providers are asked to cessfully only with large provider orga- take most of the downside risk from nizations. Most intermediaries run this these arrangements and to provide type of model in one region and the medical management and population case-manager model in others. care to enrollees. Essentially, the intermediary functions here are shared by The high-end FFS broker. For upper- employer and provider alike. The echelon Americans, the remnants of financial solvency of this sector will the old FFS system will offer indem- not be strong for the first few years, nity insurance products or PPOs with but by 2005 a small but important very rich benefits and less rigorous portion of the market will be contract- utilization controls. Although these ing directly with employers. plans are unable to compete directly with the more aggressive “case man- The low-tier safety-net funding recipients. agers” or “provider partners” on price, Most of the Medicaid population and they are able to select better risks in some of the indigent will end up in a their enrollee population and charge provider-partner or a case-management

Chapter 6: Health Care Providers 73 Figure 6-3. The “fee-for-service brokers” will lose their dominance. (Percentage of population in each insurance model)

Where we were in 1998 Where we’ll be in 2007

Low tier Low tier Case manager (19%) (25%) (14%)

Direct to Provider Direct to provider partner provider (3%) (<1%) (6%) Case FFS broker FFS broker manager (55%) (19%) (42%)

Provider partner (17%)

Source: IFTF.

HMO, but some of them—and the DRGs led to the early movement of majority of the uninsured—will end Medicare patients from inpatient status up in a “no intermediary, no luck” sce- to outpatient facilities where services nario with limited access to care could be charged on an FFS basis. Those despite the best efforts of safety-net outpatient facilities were usually owned providers. Figure 6-3 shows how much by hospitals. of the population was covered by each type of insurance intermediary Meanwhile, in an effort to control the arrangement in 1998 and forecasts cost of health beneﬁts for employees, what that will be in 2007. many employers and employer coalitions moved to HMOs or other managed care insurance products. Insurers, Reimbursement except in staff- and group-model HMOs, Models: Between slowly began to “push risk” to the Finance and Delivery providers, either capitating physicians only (partial capitation) while paying Background hospitals a discounted per diem, or capi- For patients with either Medicare or pri- tating physicians or physician-hospital vate insurance coverage, reimbursement organizations for all required services for physicians and hospitals was on an (global capitation). FFS basis until the 1980s, when Medicare introduced a prospective pay- When we naively asked a Boston col- ment system (PPS) for hospital inpatient league why the HMO membership rate services based on diagnosis-related in Massachusetts was the same as in groups (DRGs). The introduction of California, yet the utilization rates in

74 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

California for all services were so much referral rates are below a specified level. lower, he replied, “We have lots of man- The net result has been a transfer of aged care in Boston—it’s just FFS man- resources from hospitals and specialists aged care.” The numbers in Figures 6-4 to primary care physicians and health and 6-5 confirm that theory: the spread plans without much global capitation of managed care has not meant a signifi- occurring (see Figure 6-6). Many of the cant spread of capitation. organizational models that hospitals and physicians have designed over the past In fact, only about one in ten dollars few years have not been successful paid out by HMOs is in the form of because they were designed to treat capi- global captitation—the classic Southern tated lives. Even the Southern California California model that was developed in providers found that some health plans the late 1980s. Although capitation is did not want to pass the risk, and possi- spreading outside of Southern California, bly the profits, on to the providers. it is generally used only for primary care Those providers who did accept global services. Instead, aggressive HMOs have capitation found that the rates they were reduced FFS payments to specialists and paid were restricted by the plans. When hospitals and have placed money in risk providers tried to resist those rate pools that primary care doctors may changes, they found that their market share if their overall utilization and power was less than they had hoped.

Figure 6-4. How physicians got paid in 1997 (Percentage of patients with various forms of payment)

Percentage of Percentage of managed care patients by type of payer patients by type of payment

Capitation for all services Uninsured (9%) (all physicians and hospitals) (10%)

FFS Medicaid Capitation for physician's (10%) own services only (17%)

Managed care Discount FFS with a withhold/risk pool (36%) (29%) Traditional indemnity (nondiscounted) Discount FFS (44%) (22%)

FFS Medicare (23%)

Source: Health Care Outlook Physicians Survey, 1997.

Chapter 6: Health Care Providers 75 Issues

Figure 6-5. How HMOs pay their doctors and hospitals While mixed payment methods for (Percentage of HMOs using various methods for any portion of provider payments) providers such as discounted FFS, with- holds, and partial capitation on the Primary Care Physicians physicians’ side and DRGs and per

Capitation diems on the hospital side remain the norm, they all provide incentives for

FFS more utilization. The health plans coun- teract this by attempting to control uti- Relative Value lization externally. Although increases in Scale utilization are still a signiﬁcant problem

Salary for intermediaries, they generally have not responded by passing that risk off to 0 20406080100 providers in the form of capitation. Percent

Specialty Care Physicians There appear to be three reasons for this:

Capitation Health plans that were successful in managing risk could be more prof- FFS itable than those that pass it off in the form of capitation. Relative Value Scale Providers generally are not organized Salary to take on the risk-bearing function of 0 20406080100 capitation and have little incentive to Percent so organize in a world where FFS still predominates. Hospital Services

FFS Patients and consumer groups fear that capitated providers may withhold nec- Per diem rates essary care, although they fear that FFS encourages providers to overtreat in DRGs equal numbers. Several highly visible court cases have fueled this backlash. Capitation The question for the future is whether 0 20406080100 Percent incentives will continue for utilization and what the current ﬂood of people into Note: Percentages do not equal 100. HMOs will mean for payment mecha-

Source: Interstudy, using 2000 data. nisms for providers. The type of payment will have a great impact not only on providers’ behavior but also on how providers organize themselves.

76 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

Forecast Figure 6-6. How premium payments get divided up: The PPO world versus the HMO world It is likely that neither global capitation nor discounted FFS is sustainable in the $160 per Member $150 per Member long run. FFS is inherently inflationary, per Month per Month and capitation raises fears of undertreat- Profit ($10) ment among consumers. We believe that Drugs ($10) Profit ($30) eventually a new way of paying providers Primary care ($25) will emerge. But over the rest of this Drugs ($10) decade a version of the current system will develop that shifts toward more Specialists ($45) Primary care ($30) capitation because of the flood of people into HMOs. Global capitation will most Specialists ($30) likely double in prominence as the number of HMO recipients increases, but it Hospital ($70) will never cover much more than 10 per- Hospital ($50) cent of patients. Meanwhile, Medicare will start to introduce episodic prepayment for many of its components, includ- PPO Aggressive HMO ing outpatient care, and increasingly will Note: These figures are hypothetical. replace the current FFS system. Figure Source: IFTF. 6-7 presents a forecast of how dollars for care will flow to physicians.

Figure 6-7. Fee-for-service will fade, but capitation is not its only successor. Out of this mixture, a separate type of (Share of physicians’ revenue coming from different payment schemes) payment system will develop. Plans and intermediaries will devise reimbursement Percent systems that give providers incentives to 100 deliver care in a manner that improves Performance-based quality, customer satisfaction, patients’ 80 tenure in the plan, and outcomes, as well

Capitation and as productivity and cost-effectiveness. 60 prospective We dub this system “performance-based” prepayment reimbursement, as payments will depend

40 on the provider’s performance on a string of relevant algorithms. By the latter part Discounted FFS of the decade, this system will be the 20 FFS single most important way of paying (including provider organizations, although the old 0 Medicare FFS) methods will still be a prominent part of 1997 2002 2007 2010 the system. Pay for performance will be

Source: IFTF, based on data from IFTF, Louis Harris & Associates, Interstudy, and American more rapidly adopted toward the end Medical Association. of the decade where there is enough cost- efﬁciency to allow the pay to providers to increase. At what point does the cost of

Chapter 6: Health Care Providers 77 the necessary informatics fall below what capital, although the investor-owned sec- can be afforded in capital to provide the tor is a small, barely growing minority required cost-efﬁciencies of the care deliv- of hospitals (about 14 percent) and an ered? The way in which this plays out even smaller minority of physicians. It will help determine if rewarding quality does not appear yet that there is any- will be anything other than a minor form thing fundamentally different about of reimbursement in the next decade. the way for-proﬁt groups are behaving. However, there is investment money Care Delivery available for people trying to create new Organizations for types of provider organizations, many of the Next Decade them focused on disease management or specialty care. Background

The chaotic upheaval of the American The market behavior of nonprofit hospi- health care system that started in the early tals is currently deviating from their 1990s is driven by several forces. The most for-profit competitors. There has been a important of them is the search for stabil- trend, after mergers of nonprofit hospi- ity. Individual physicians and smaller tals, to use the reduced competition to organizations have looked to the large hos- increase pricing more aggressively than pitals and health plans to buffer them the for-profit hospitals.2 This is likely a through tough times. Larger groups and short-term effect that will correct itself hospitals have allied and merged with each during the next decade. other in an attempt to develop bargaining power against the health plans, which Issues have also been merging to amass bargaining power over providers. There have also Through all the activity of the past been attempts to change organizational several years, most physicians who were structures and processes in order to make independent have stayed independent patient-care management more effective, and most hospitals have joined systems but so far that goal has been elusive. On more in name than in terms of substan- an international comparative basis, the tially changing their organization and United States has high resource use and governance. But the driving pressures provider salaries, with fewer hospital beds of reimbursement reductions and the and shorter stays than other OECD coun- certainty that the challenges of tomor- tries. This was associated with outcomes row will be different from those of yes- that were in the bottom half of measures terday are driving continued reinvention and ranking. Toward the end of our time in every provider organization. What horizon, this poorer comparative perfor- changes this reinvention might produce mance can be expected to improve as the are less certain than ever, and at present benefits of our medical informatics and several models exist in different stages technology bring efficiency. of evolution. They include:

Several types of provider groups have Vertical integration. A combination of looked to for-proﬁt companies for providers and health plan, usually

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developing in an altered form of staff Forecast HMO (e.g., Lovelace Health System We do not believe that any one organiza- in New Mexico). tional form will emerge by 2005 to replace the individual practitioner and Horizontal integration. A combination large teaching/community hospital of several similar organizations, such model that dominated medical care from as independent hospitals, in one sys- the 1930s to the early 1990s. In order to tem (e.g., Catholic Healthcare West, satisfy the demands of intermediaries Promina in Atlanta). and patients, different types of organizations will use various models, each of Integrated delivery systems or networks. A which will provide a substantial percent- combination of physicians with hospi- age of care in at least some regions of the tal services and other types of delivery country. In the early 2000s, versions of systems in one organization, typically each of these models are being built with by hospitals’ purchasing physician more or less aggressive intentions by practices but sometimes by physicians’ entrepreneurial physicians and business- acquiring hospitals (e.g., Advocate people. They include: EHS in Chicago, Mullikin Medical Centers in Southern California). The hospital-centered system. The series of large hospital mergers in the mid- Virtual integration. A combination of 1990s were intended to create a model various care-delivery services provided that provides all services in a metro- by separate organizations that offer politan area across a range of facilities. services under contract to each other The range includes inpatient, outpa- and are organized seamlessly (no good tient, diagnostic, and ancillary facilities, examples yet!). as well as physician multispecialty clinics, usually owned by or closely aligned Centers of excellence. Single-specialty with the system. These systems will organizations that provide a defined employ many clinicians, either directly service, either as a subcontractor to or under a contractual umbrella. Many another provider or directly to a plan of the systems will be based around (e.g., MedCath in cardiology, M.D. AMCs, which will have problems mak- Anderson Cancer Center). ing the transition to this more comprehensive approach, particularly in The dominant issue for delivery organi- relation to their faculty and the physi- zations is which model will prove flexi- cian practices with which they contract. ble, resilient, and profitable enough to survive the turbulent decade ahead. Fundamentally, the primary problem Intermediaries and end payers will for AMCs is their organizational demand not only cost-effective and effi- origin as inpatient care centers. The cient processes but also the ability to cultural inertia of the principle under- manage patients and coordinate care lying the former system, which among a range of institutions. required them to “fill those beds,”

Chapter 6: Health Care Providers 79 will cause many to falter. Nonetheless, Physicians in Group Practice in many areas of the country the large During the past 30 years, there has been an explosion in the total number capital reserves of these systems and of physicians in group practices, with an increase from 28,000 in 1965 to their significant presence in the mar- 207,000 in 1998—more than three times greater than growth in the overall ket will ensure their survival. This is physician population. What still surprises many people, however, is that particularly true where their brand more than 40 percent of all office-based physicians still deliver care in individual or two-physician practices. Furthermore, only 60 percent of office- name (e.g., Johns Hopkins) is suffi- based physicians are in group practices of three or more and, of those, about cient to ensure their presence in inter- 70 percent are actually in small, three- to six-doctor practices. A practice of mediaries’ networks. that size is probably too small to develop effective contracting and management skills during the next 12 years. The virtual physician-group cooperative. Despite all the press coverage and expectations, only 56,000 office-based This is an evolved form of the IPA— physicians are in multispecialty groups of more than 100 members—the type the most common current organiza- of group best suited to accept global capitation. That is less than 13 percent tional form for physicians. Although of all office-based physicians and less than 10 percent of the market of IPAs originally were thought of as a physicians delivering patient care. Most physicians have not reorganized into large multispecialty group practices to counterbalance the forces of transitional model on the path to consolidating health plans. “real” medical groups, they will continue to be an important factor to Younger physicians, however, are more interested in group practices and other employment opportunities than they are in setting up their own 2005 and beyond. Their ability to individual practice. In a comparison of age-matched California physicians with use information technology and their less than 9 years in practice, the rate of practice ownership declined from contractual flexibility to coordinate 53.3 percent in 1991 to 42.4 percent in 1996.3 Overall, between 1983 and services will enable virtual groups to 1995, employed physicians increased from 25 percent to 45.4 percent of all enter into contracts with several health 4 practicing physicians. plans. In many cases, the “real” med- Of this new influx of physicians into employee positions, most are joining ical groups at the core of these net- existing group practices—they are not starting their own groups. These young works will be neither large nor physicians are looking for security. They will continue to swell the ranks of cohesive. The organization will be group physicians, but it will take time before they alter overall physician demographics. created from independent physicians with a natural set of referrals, on-call The growth of group practice will not be driven purely by the influx of new coverage, and clinical respect for each physicians, but they will certainly be the greatest influential force. Our core forecast projects that the percentage of patient-care physicians in group other. A management services organi- practice after their residency training will increase from 46 percent in 1996 zation (MSO) will help them make to between 57 percent and 62 percent in 2005 and will reach between 63 contracts with plans for business, with percent and 67 percent by 2010 (see Figure 6-8).5 A historic shift will hospitals, and with other providers for therefore occur in the next 3 to 8 years that will place the majority of patient- services, and often will help them care physicians in groups. However, a substantial minority of physicians assume risk. The MSO will also help (150,000 to 200,000) will continue operating in solo and two-physician practices until 2005 and are likely to continue practicing that way, especially to identify and negotiate with in more rural areas. providers whose utilization or quality is inadequate. IPAs will remain as an umbrella organization for these physicians, and within them there will be a range of activity, including attempts to build groups. Nonetheless, almost all small groups and individual physicians

80 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

ering the administrative inefﬁciency of Figure 6-8. More physicians and many more group physicians most physicians’ practices, there is no (Number of physicians in group practice) reason that these economies of scale

Number should not show some savings. Achiev- ing greater returns may prove difficult 600 over the longer term. 500 Solo and two- physician practices The single-specialty carve-out. In some 400 IFTF forecast specific disease areas, single-specialty range for groups groups and networks of specialists will 300 market their services either directly to payers or to other providers such as Group physicians 200 hospital-based systems or multispecialty groups that need particular 100 expertise. A proliferation of networks will provide specialty disease manage- 0 ment services for cancer, cardiovascu- 1995 2000 2005 2010 lar disease, nephrology, and AIDS Source: IFTF, based on data from American Medical Association. (acquired immunodeficiency syndrome), among others. Some multispecialty groups that do not have sufficient volume will refer their will find that, as a contracting vehicle, patients in some disease categories the virtual group provides them with a because they cannot support nearly as substantial proportion of their patient large a specialty panel as can a single- revenue stream. specialty network. Patients needing specialty care will appreciate being The corporate physician practice manage- able to go to these networks, which ment (PPM) corporation. The trail of for- usually will allow them a wide choice profit PPM companies to Wall Street of physicians. Some of these organiza- that started in the early 1990s will tions will provide all comprehensive continue through this decade. The specialty services in a particular spe- main growth in this area has and will cialty area, such as cancer treatment, come from the PPMs that accumulate whereas others will provide niche sup- existing smaller practices, including port services, such as patient monitor- purchasing physician groups aban- ing and education, that are used in doned by former staff- and group- combination with services provided model HMOs. While pressures from by other organizations. Wall Street will cause many of those corporations to fail, several will The remnants. Changing an 80-year- develop a common platform across old health care system that has been their groups that is similar to the mix supported by government subsidies of corporate and franchise-owned oper- for the past 30 years is not going to ations seen in other industries. Consid- be accomplished quickly. Some

Chapter 6: Health Care Providers 81 independent hospitals, such as prof- potential of disease management, control itable community hospitals in some over the management of medical care suburbs and cash-strapped public will continue to develop as the key arena hospitals in inner cities or rural areas, of activity—and conflict—in health care will not find partners or be incorpo- into the middle of the next decade. rated into a bigger system. Many of the remaining individual and small- The cost to Medicare for the postacute group practice doctors will still be care of beneficiaries over 85 years of age doing what they have always done has been the fastest-growing expense for until their retirement. In that regard, Medicare over the last 30 years.6 These much of the present system will pressures for supportive services for those remain in the health care system of with age-related clinical impairments the future. and disabilities are a further pressure on Medicare managed care. This is therefore a likely focus for future disease or condi- Medical Management: tion management activities in the next The New Arena of decade. Activity

Background: From Managed Issues: A New Idea Makes Care to Managing Care Sense and Trouble

While all of these arrangements on the Medical management—active manage- intermediary side, the payment scene, ment over the full care of patients and and in provider realignment are continu- populations—is currently applied spo- ing, the number of people employed in radically if at all. The main issue is to the health care industry and the utiliza- what extent medical management will tion of pharmaceuticals and technologies spread and be applied more comprehen- continue to increase. At the same time, sively. In some respects this movement is consumers and physicians in tandem taking the health care system from a frustrate the attempts of case managers state of managed care to one of “manag- to signiﬁcantly reduce utilization. Mean- ing care.” That active management com- while, the health care industry has been ponent involves not only changing how rocked by the “realization” that it is the physicians and clinicians manage care of the sick that is expensive. Serious patients, but also how health systems attempts are now being made to manage monitor and look after patients, includ- and establish routines for the care of the ing how much they encourage and sup- chronically ill in the expectation that port self-care. this effort will save money overall, particularly in substituting preventative The issue of medical management maintenance for adverse acute events. involves to some extent at least ﬁve This is called disease management. parties: health plans, providers, employers, patients (and their representative Because of the inability of health plans associations), and the government. All of to control providers and the projected these groups are wrestling over decisions

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surrounding the creation of clinical path- continue to be involved in legislating ways and protocols, specifically, what lengths of stay for particular procedures should be done and what should be mea- and occasionally will demand minimum sured. Intermediaries and providers are staffing levels and mixes in different most concerned with control over adher- types of medical facilities as well. How- ence to those pathways and protocols. ever, during the next decade the focus of The main arena of conflict concerns who activity will shift from designing guide- enforces the behavior of patients and lines to enforcing their use. clinicians: Will it be the intermediaries or provider organizations? Neither plans nor provider organizations will clearly dominate or appropri- Still, the main question for the health ate the role of controlling utilization. For care system is how much of the care deliv- instance, the provider-partner strategy ered is actively managed. That question mentioned earlier essentially assumes will be broken down in two steps that that providers will take on that role, will categorize the population by their whereas in the centralized case-manager health status. How important will the strategy the intermediary keeps that management of disease states be for the role. In either event, the prerogative of acutely sick and chronically ill, and how medical management will shift away much impact will demand management from the independent physician. Both have on the generally well? internal managers, working as part of a clinical team within provider organiza- The most important question behind all tions, and external managers, working the protocols, the process management for intermediaries, will assume increas- changes, and the disease-specific ing authority over physicians and approaches is whether they will make patients in three areas: any difference to cost, care quality, and outcomes in the long term. Managing physicians and physicians’ organizations’ adherence to protocols, guidelines, and pathways to ensure Forecast: Medical consistent application of best practices. Management for the Chronically Sick Creating systems that extend care pathways across the continuum of care Conflicts in deciding which treatment to all facilities where patients receive protocols will apply to whom will stay care—the descendant of current case visible as a political issue during the management. next decade. Intermediaries, providers, and others, including specialty societies Managing patients’ compliance with and quality organizations (like NCQA), their treatment regimens, particularly increasingly will issue multiple and in the case of pharmaceutical use, and conflicting guidelines. In addition, educating and motivating them to states and the federal government will better self-care.

Chapter 6: Health Care Providers 83 Whereas there remains great variation in numbers of hospital beds stopped in the medical practice patterns in the 1990s, early 1980s, slightly before the move of the spread of guidelines will have a sig- Medicare Part A to the DRG-based PPS. niﬁcant impact on medical practice and Since then, reimbursement and medical patient management for the chronically technology have been pushing care out ill by 2005, and a sporadic but dis- of inpatient settings. Beds have closed, cernible effect on practice variation by from a high of slightly over 1 million in 2010. Most chronically ill patients will 1983 to approximately 830,000 in 1999 be under some type of disease manage- (see Figures 6-9 and 6-10). ment program by the end of the decade, and there will be hints of measurable The rate at which inpatient utilization of improvements in outcomes. The use of beds has declined has been much faster demand management by advice nurses in than the rate of closures, and hospitals contact with patients via the telephone themselves have closed at a very slow rate, and the Internet will be commonplace somewhere between 30 and 80 a year, by 2005. However, the struggle over from a high of 5,800 in 1980. Despite who controls patients’ and physicians’ all the rhetoric about the surplus of hos- behavior between the intermediaries and pitals, not much has changed, and in providers, and among and within the 1997 there were still 5,000 of them. In different provider organizations, will not their 1999 survey published in 2000 the be resolved by 2010. AHA noted that in the United States there were 5,890 registered hospitals, of There will be ample evidence by 2005 which 4,956 were community hospitals that individual patient management with 829,575 staffed beds remaining programs for the more severely chroni- available.7 Of these nearly 5,000 or so cally ill will improve health outcomes community hospitals, 2,238 are in sys- in the short term, deliver more consis- tems and 1,310 are in networks, leaving tent and higher quality care, and save a 28.4 percent freestanding still in 1999. small amount of money. However, there This statistic will continue to reduce will be no clear evidence that overall over the next 10 years. cost savings are realized systemwide by the development of these programs, and So many hospitals have survived during their impact on the overall costs of what has been regarded as an unfriendly American health care will be hard to era partly because facilities and beds ascertain. have been converted to day-surgery and 23-hour stay units, and staff time has been converted from inpatient to outpa- What Happens to tient care. But it’s also because closing Hospitals? beds and particularly hospitals them- The Death of the Hospital? selves is very difﬁcult for a variety of business, political, and social reasons. To borrow from Mark Twain, reports of Nonetheless, hospital occupancy has the demise of American hospitals have fallen quite rapidly across the country been much exaggerated. The growth in since the early 1980s to an average of

84 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

diagnosis to be treated will be managed Figure 6-9. Hospital beds are slowly disappearing. in the outpatient setting. Those patients (Total beds in community hospitals*) with two or more diagnoses will remain

Thousands of beds receiving inpatient care in a traditional 1,050 hospital. This will reﬁne the inpatient role of hospitals into the provision of 1,000 care for even more high-acuity patients and resource-intense care. The United 950 States already leads the world in this trend. Adjustments in reimbursement to 900 reﬂect this change will be needed to keep

850 hospitals solvent during the next decade.

800 In the mid-1990s, even those areas that 1980 1985 1990 1995 1999 previously had been exceptions to the *AHA hospital definitions cite community hospitals as “all nonfederal short-term general trend started experiencing lower general and other special hospitals.” This includes AMCs, for-profit hospitals, and state and local government hospitals that match the category. It excludes federal hospitals, occupancy rates. For instance, occupancy long-term hospitals, hospital units of institutions, psychiatric hospitals, rate percentages in New York City fell and several other specialized long-stay hospitals. from the high 90s to the 80s by 1997. Source: American Hospital Association. In contrast, some parts of California had already seen occupancy rates below 50 percent by the mid-1990s. Meanwhile, Figure 6-10. Occupancy has also fallen. the increased needs of the comparatively (Average hospital occupancy rates in community hospitals) sicker patients occupying inpatient beds Percent have led to a significant increase in staff 80 per bed over the past 15 years (see Figure 6-11). Rather than there being merely a

60 relative increase in the ratio of employees to beds because beds were closing and those remaining in them needed more 40 intensive treatment, there has been an actual increase in total hospital employ- 20 ees (see Figure 6-12).

0 Overall, the future of hospitals is murky. 1980 1985 1990 1995 1999 A combination of technological advances, Source: American Hospital Association. managed care, and changes in Medicare reimbursement policy8 means that the underlying demand for inpatient services will continue to fall. Community hospi- 63 percent in 1999 (see Figure 6-10). tals appear to be weathering the storms of Increasingly, with carve-outs, specialty the early 1990s by venturing into other care, and outpatient care capabilities services and reengineering their inpatient improving, those patients with just one delivery services in a way that’s allowed

Chapter 6: Health Care Providers 85 off again in 1997. But these numbers are Figure 6-11. Sicker patients and fewer beds mean more staff per bed. only estimates of true performance, (Full-time equivalents per hospital bed in community hospitals) because many hospitals use their strong 9 5 investment portfolios to subsidize losses.

4 Their larger siblings, the AMCs, are applying the same tactics. AMCs have 3 been getting subsidies from the government, including DSH payments and 2 GME subsidies, which have maintained their proﬁtability over recent years. Fur- 1 thermore, all hospitals are getting a 0 greater share of their revenues from out- 1980 1985 1990 1995 1999 patient care and other services, and many

Source: American Hospital Association. plan to become more heavily involved in those services by making the leap from hospital to “health system.” Figure 6-12. There are also more staff in total. (Full-time equivalents in community hospitals) The overall ﬁnancial success of American Millions hospitals is uneven—one-third of hospi- 4 tals are failing, one-third are just getting by, and one-third are doing extremely well, particularly those that enjoy a geo- 3 graphic monopoly.

Issues 2 Despite the past 15 years of downsizing, pressures from Medicare, and the growth 1 of HMOs and other aggressive health 1980 1985 1990 1995 1999 plans that have cut hospital days for

Source: American Hospital Association. their members, more than 35 percent of the health care dollar is spent on hospital services. That’s a little more than the 34 percent they consumed in 1960, but down from the high of 41.5 percent in them to become more profitable in the 1980. Moreover, hospitals remain a big mid-1990s. Average operating margins chunk of the health care landscape: they for community hospitals rose from 2.7 are the biggest employers in health care percent in 1990 to 4 percent in 1994, and usually are major employers in their where they’ve hovered with little fluctua- communities. tion since. Reported profit margins for hospitals increased from 4 percent in Among health care institutions, hospi- 1991 to 5.5 percent in 1996, only to fall tals enjoy the greatest ease in raising and

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retaining capital. The increased number several nonprofits began to convert to of for-profit hospitals, even though they for-profit status—usually by selling still only account for 14 percent of all out to Columbia. Only nine converted hospitals, has made for even greater in the decade from 1983 to 1993, but access to capital. Hospitals and hospital- 93 converted from 1994 to 1995. A centered systems used this capital to buy combination of more aggressive regu- physician practices, all types of ancillary latory scrutiny by attorneys general in providers, and each other in the late several states and some bad publicity 1990s. But in the next 10 years some about Columbia slowed the trend in fundamental questions about hospitals 1996. Columbia reversed its aggres- will be answered. Most of them concern sive strategy of acquiring and convert- organization and ownership: ing nonprofits in the late 1990s, and the trend toward for-profit status The for-profit, nonprofit divide. Of all appears to be slowing. But the valua- hospitals in the United States, 3,000 tion Wall Street has put on investor- remain nonprofit and another 1,250 owned hospitals is so much greater are publicly owned, usually by coun- than the amount nonprofits can raise ties10 (see Figure 6-13). But the rise to buy them11 that the incentives to of the big for-profit chains, notably become for-profit will remain strong. Columbia/HCA, which consolidated So this issue is not going away. several smaller for-profit chains between 1993 and 1996, showed The tax status of hospitals. Though only some market advantages for investor- a small minority of hospitals are for- owned hospitals. Consequently, profit, several studies have shown that most nonprofits act like for-profits in several ways with only marginal differences in their costs, the amount of Figure 6-13. There are more for-profits, but not that many more. (Community hospitals by ownership) charity care they deliver, and the way they deliver services. Furthermore, Thousands of hospitals the fact that nonprofit hospitals— 6 many of which own for-profit sub-

5 sidiaries—advertise on TV, compete State and local aggressively with each other, and oth- government 4 erwise look much like any other cor- For-profit 3 poration is increasingly attracting politicians’ attention. Given the tax 2 Nongovernment advantages state governments bestow not-for-profit 1 on nonproﬁts, might this status be withdrawn or amended in the future? 0 1980 1985 1990 1995 1999 The prevalence of hospital systems. Many Source: American Hospital Association. hospitals have announced or activated plans to become part of a larger system,

Chapter 6: Health Care Providers 87 even in the nonprofit sector. Usually centers of specialized tertiary care, this means a hospital enters some form teaching, and research. In fact, they of alliance with others; these arrange- have used their care services as revenue ments vary from a nominal affiliation generators that subsidize their medical to full-blown mergers of assets— schools. They’ve also expanded their although most start with the former. residency programs, both in their Some 445 nonprofit hospitals were home-base hospitals and at other teach- involved in some form of merger and ing hospitals in their regions. But this acquisition in 1995 alone,12 yet most expansion is under attack on multiple hospitals still behave as if they were fronts. Medicare, which subsidizes independent. Even in “merged” sys- GME to the tune of about $80,000 per tems, there are often different boards residency place per year, is planning to and competing interests that don’t look reduce those subsidies by 25 percent like a typical corporate organization. over the next 5 years. Moreover, while Some hospitals are taking an alternate Medicare has been willing to pay the track and staying independent. How premium that AMCs charge to cover prevalent will these systems be in the their generally sicker mix of patients, future, and what will they look like? private health plans have become increasingly reticent to do so—and Which services will be under the hospital have played AMCs against each other umbrella? The early 1990s saw hospi- as suppliers of big-ticket procedures. tals trying to get into the business of As a result, AMCs are redesigning offering physician services. But now themselves. Many have merged with most faculty practices have been “inte- crosstown rivals to cut competition in grated”—with success akin to Stalinist specialty services. Others have devel- collectivization—and many hospitals oped regional health networks. Still are suffering financial trouble with the others have struggled with a low-pay- private physicians’ practices they’ve ing mix of patients and reduced state bought. Will we see a return to these and local funding, and several are being health systems’ offering only tradi- spun off by their owners—usually uni- tional hospital services—possibly versities—to other nonprofit or for- employing hospitalists but not pri- profit organizations. What will these mary care physicians? Or will they be battleships of the medical care system a base for creating truly integrated care look like in the future? Will they still delivery? And if they manage to create be flexible enough to play a role in the latter, will they take the opportu- health care service provision? nity of Medicare PSN legislation to bypass health plans and sell insurance Besides the issues of ownership and orga- directly to individuals and employers? nization, there are a couple of broader issues about the future of hospitals. The future of the AMC. Over the course of the past 30 years, AMCs have in- How many hospitals, how many beds? creasingly delivered large amounts of We’ve seen a steady decline in the routine care in addition to serving as number of hospitals and beds. But

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declining faster is the number of occu- will increasingly lead to reduced hos- pied beds as more and more proce- pital operational variation during the dures move outside the inpatient next decade, with a growing apprecia- ward. How many hospitals and beds tion of the “best of breed” in opera- will there be to serve the presumably tional methodologies. This may be sicker inpatient population? an opportunity for larger systems to implement more broadly and gain How much money and will it matter? operational advantages during the Since 1985, a smaller share of overall next decade. health care spending has gone to pay for hospital services each year, apart Forecast from one blip upward in 1990. The money instead has flowed into home Given the complexity of the issues health care, SNFs, ambulatory surgery regarding hospitals and their increas- centers, and all the other facilities that ingly intertwined relationships with the have accepted the exodus of patients. rest of the health care delivery world, Part of that flow is inevitable as tech- not all of the issues will resolve them- nology permits less invasive proce- selves by 2010. Generally, we do not dures. But part of it has to do with expect radical change in terms of either the intricacies of Medicare financing, mass hospital closures or significantly which has rewarded early discharges less money spent on inpatient services. from hospitals to SNFs and home This will be more a period of gradual health visits. Now that Medicare is attrition. But eventually the number and getting serious about the cost explosion organization of hospitals will look quite in these areas and private health insur- different. ers are increasingly putting providers at risk for a continuum of services, it Hospitals and beds will continue to may make sense for hospitals to keep close, but not much faster than the slow patients in hospitals a little longer if it pace we’re currently seeing. Beds will prevents other expenses later. But the close a little faster than hospitals, with bigger question is: If we’re moving to a occupancy rates falling faster still. For system of more integrated patient care, example, hospitals will close beds at a does hospital spending per se matter as a faster rate in the next 5 years than they separate category?13 will thereafter—our forecast is about 2 percent of all beds closing each year A reduction in variation in hospitals. from a 1997 level of 850,000. In 1999, The reduction in variation in the there were still 5,000 community hospi- delivery of clinical care by physicians tals with 830,000 beds in the United reduces costs and improves quality. States, and 71.6 percent were in net- Similarly, the variation in architec- works or systems.14 In 2002 there were ture, operational methods, and organi- roughly 800,000 beds and there will still zational structure will be measured be more than 670,000 in 2010 (see Fig- for efficiency and benchmarked. This ure 6-14). Hospitals themselves will

Chapter 6: Health Care Providers 89 close much more slowly. Even if they owned for-profit hospitals in the United close at twice the rate at which they’ve States. A minority—about 300 of the been closing for the past 15 years, there nonprofit hospitals over 10 years—will will still be 4,300 hospitals in the year convert to for-profit status in order to 2010; the actual number will probably gain better access to capital, leaving be closer to 4,500. This rate in part about 25 percent as for-profit hospitals reflects the difficulty of closing the big (1,100) by the year 2010. But most hos- white building and in part reflects a pitals will stay nonprofit because of their transformation of many to smaller, more religious mission, increased scrutiny patient-centered facilities. Hospitals will from regulators about those conversions, still perform most of their activities and eventually waning interest from without using their inpatient beds. Wall Street in investing capital in an However, in the very long run, many industry that cannot easily create fast hospital systems will hang on to their growth in earnings. bed licenses, waiting for the baby boomers to supply the demand for inpa- Tracking hospitals’ membership in sys- tient care after 2015. tems is very complex, and several different definitions of “hospital system” will In terms of ownership, about 1,000 make the rounds over the next few years. hospitals will remain city-, county-, or But the AHA will likely count individ- state-owned facilities (down from 1,300 ual hospitals, and their owners will at in 2000), and about 2,400 will be tradi- least try to make them look indepen- tional independent nonprofits (mostly dent and community based. So the offi- community or religion based). The tax cial figures will look something like status of nonprofits will come into the Department of Labor’s counting of debate but is unlikely to change signifi- “firms” and “establishments” where cantly. In 1999 there were 747 investor one firm can encompass many establishments. We estimate that around 35 percent of hospitals are currently in a Figure 6-14. Hospital beds will keep slowly disappearing. (Total beds in community hospitals) multihospital system that shares a common overseeing board if not common Thousands of beds ownership. This is likely to increase to 1,000 60 percent by 2002. As this happens, there will be continual increases in the 800 sizes of various systems, particularly on 600 a regional basis. However, by the time the merger and consolidation wave plays 400 out it’s likely that several will have fallen 200 apart, and the number of hospitals in systems will be back down to 50 percent 0 or lower by 2007. The majority of the 1990 1995 2000 2005 2010 systems that exist after 2005 will be Source: IFTF more “real” than virtual and more corporate: a single management structure will

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have final authority over the activities of ingly will be forced to withdraw resi- all its hospital facilities—including the dents from other teaching hospitals. authority to close them down. The problem of uncompensated care will increase, and the margins earned A similar pattern will play out as hospi- on Medicare will decrease, especially for tals move into other services. Most will outpatient services. But the political continue to be in the business of ancil- strength of the major AMCs means that lary services such as providing home they will continue to receive reimburse- health care. Most hospitals will retain ment from Medicare that reflects their arm’s-length relationships with other mix of sicker patients. It’s unlikely that services, especially those provided by many will take any option other than physicians. A minority of the systems merging clinical services with their will become successful long-term neighbors, but some may look to enter employers of virtually all their doctors. for-profit chains, and the possibility of Most will enter into looser relationships severe downsizing or even bankruptcy with virtual medical groups, single-spe- will exist for a few. Those that are in the cialty groups, and individual physicians. public sector and have the worst payer The pattern will vary greatly depending mix—those with a high HMO penetra- on the region, with more successful hos- tion in their region and situated in a pital-based integration with physicians poor inner-city area—are the most likely in the Midwest and South than in the not to survive. West or Northeast but with intense variation within each region. Successful inte- In terms of overall spending—their grated systems in regions outside of the share of the health economy—hospital large metropolitan areas in the West and services will stabilize at approximately Northeast will have the best chance of 32 percent of health spending after successfully starting PSNs and providing 2002, falling from the current level of insurance coverage direct to employers— 34 percent. That will come as a combi- becoming the truly vertically integrated nation of more aggressive health plans system. But the hospital-based system and the new lower Medicare reimburse- going direct to employers will remain a ments squeeze the rate of spending minority, even in regions where hospitals increases. Since the early 1980s, hospital remain dominant as compared to med- costs have increased at just under 1 per- ical groups and health plans. cent less than growth in total national health spending, and we expect that pat- AMCs will continue to face financial tern to resume by the early part of the pressure from all angles. In response, next decade. Total spending will increase they will continue to merge or at least from around $424 billion in 2000 to will find ways to reduce local and $560 billion in 2005 and $660 billion in regional competition in tertiary and qua- 2008 (see Figure 6-15). By 2010, hospi- ternary care and extreme subspecialty tal spending will be about 30 percent of procedures like transplants. They will NHE, but the distinction between hos- face slow but steady reductions in their pital services and other classifications Medicare GME subsidies and increas- will become increasingly irrelevant as

Chapter 6: Health Care Providers 91 leaving most Americans in a Cadillac- Figure 6-15. Hospital spending—still a big deal, but proportionately falling style top-tier plan, which doesn’t slowly (Spending on hospital services 1980 to 2010 as a percentage of all health spending and in nominal dollars) enforce change on a recalcitrant delivery system.

Percent Billions of nominal dollars Medical management proves to be easier than we thought. After some 50 800 research, clinicians identify what are 40 600 the right courses of action for virtually 30 all disease states and use information 400 technology–enabled care processes to 20 quickly ensure the best practice of 200 10 care for most people. Practice varia-

0 0 tions decrease dramatically and out- 1960 1970 1980 1990 2000 2010 comes improve considerably, resulting in measurable savings for the system Source: IFTF; Health Care Financing Administration. by 2010.

A new edition of the North American Free Trade Agreement (NAFTA), some care is reintegrated into hospital including the recognition of foreign facilities from nursing homes and other medical degrees and residency train- facilities. ing, allows the entry of some 100,000 Mexican, South American, and Cana- The underlying change in technology— dian physicians. Supply is so great especially interventions and pharmaceu- that patients, plans, and government ticals that reduce length of stay and take advantage of the newly available admissions—means that inpatient days medical talent and seek care at lower will drop continually. That’s the main prices with emphasis on better patient story for hospital services over the next service. The privileged position of the 13 years, as it has been for the past 13. physician in American culture fades.

Wild Cards PSNs and direct-to-employer strategies work and take up a considerable Physicians leave en masse, either retir- market share. ing at an accelerated rate or ﬁnding opportunities outside of medical prac- New epidemics and new diseases tice. The physician surplus disappears, require more hospital beds. and the clout that health plans have over suppliers evaporates. Hospitals become supplier parts of truly integrated systems. Their man- The consumer revolt against the agement closes facilities and beds HMOs and their descendants reaches quickly. The supply of inpatient beds fever pitch. Employers back down, reaches market equilibrium by 2005.

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Unexpected adverse events may create specific diseases such as heart disease, the opportunity for political interven- cancer, or stroke so as to impact the tion during the current process of existing health care system structure major change in health care. This may adversely. Currently vulnerability lies lead to the loss of variability and the in cross-subsidies and long-term capi- injection of political forces and process tal allocation based on prior projec- into the changes (Clinton Care). tions of use and reimbursement as well as on current incidences of dis- Improved prevention and new outpa- ease. None of these are stable or cer- tient treatment and care significantly tain in the future. skews the prior flow of patients with

Chapter 6: Health Care Providers 93 Endnotes 7 1999 data from AHA Hospital Statistics, 1 Robinson, J., Physician organization in cal- 2000. ifornia: crisis and opportunity. Health Affairs 8 Reinhardt, U. Spending more through ( July/August) 2001; 20:4. cost control: Our obsessive quest to gut the 2 Melnick, G., et al. Market power and hospital. Health Affairs 1996; 15:2. hospital pricing: Are nonprofits different? 9 Levitt, L., et al. Trends and Indicators in the Health Affairs (May/June) 1999; 18:3. Changing Health Care Marketplace Chartbook. Menlo Park, CA: The Henry J. Kaiser 3 Burdi, M., and L. Baker. Unpublished Family Foundation, August 1998. 1996 survey of California physicians compared with age-matched cohorts of physi- 10 1995 data from AHA Hospital Statistics, cians, extracted from the 1991 Robert Wood 1996. Johnson Survey of Young Physicians. 11 Johnson, R. Nonprofit hospitals: Bargain 4 AMA News. January 20, 1997, 40:3. prices? Letter to Health Affairs. (July/August) 1997, 16:4. Describes why conversions make 5 This forecast assumes that there is no sense from Wall Street’s perspective. change in the current number of residents, and that all physicians retire at the same 12 Hollis, S. Strategic and economic factors rate, regardless of whether they are in an in the hospital conversion process. Health individual, a two-doctor, or a group practice. Affairs (March/April) 1997; 16:2. The lower estimate assumes that all new 13 The Congressional Budget Office clearly patient-care physicians will enter group doesn’t think so and declined to make pro- practice and that the number of hospital staff jections on hospital spending in its 1997 does not increase substantially but rather is forecast. consistently replaced. The upper estimate further assumes that 10 percent of the physi- 14 1999 data from AHA Hospital Statistics, cians in individual and two-doctor practices 2000. join group practices over the next 7 years. 6 Lubitz, J., et al. Three decades of health care use by the elderly, 1965–1998. Health Affairs (March/April) 2001; 20:2.

94 Chapter 6: Health Care Providers Health and Health Care 2010 Institute for the Future

Chapter 7 Health Care Workforce Future Supply and Demand

Despite unending speculation about the Physicians evolving structure of health care services, Roughly 170,000 physicians are cur- there has been little fundamental change rently in medical training, with 16,000 in the way health professionals are orga- new students graduating from medical nized and the way they interact with each school every year (see Figure 7-1). other. For physicians, the number and Adding international medical graduates variety of contractual arrangements has (IMGs) to this equation, the physician increased significantly, as has the oversight pipeline is spewing out close to 23,000 from intermediaries in terms of utilization physicians from residency and fellowship review. But there has been little change in programs every year. Given that approxi- the way most physicians practice medi- mately 75 percent of IMGs remain to cine. Furthermore, physicians remain the practice in the United States and that central figures in American health care 7 percent of physicians choose adminis- with nonphysician providers poised to trative and research careers, an estimated play a more critical part in the delivery 19,500 new physicians enter patient care of health care services but as yet unable each year. Over the next decade, the to significantly penetrate the system. Al- number of retirees is expected to increase though nurse practictioners (NPs), physi- from an estimated 8,000 to 13,000 cians’ assistants (PAs), and other health annually, leaving a net annual increase care providers may possess skills that ap- of between 11,000 and 6,000 in the pear to be well suited to the demands of number of practicing physicians. an environment with a greater focus on cost containment and managing health behaviors, their roles have been limited by Assuming there is no change in the cur- their small numbers and the still signifi- rent production of physicians, and bar- cant clout of the medical profession. How- ring significant immigration or other ever, changes in the relative supply of new policy changes, this influx will increase providers and their emerging roles may al- the supply of nonfederal patient-care ter the landscape more drastically over the physicians from 450,000 to 600,000 next 10 to 15 years than has occurred in by 2010, or 219 physicians (excluding the past 30 years. These changes in many residents and interns) per 100,000 popu- ways will determine how quickly and in lation (see Figure 7-2). Assuming histor- what way new service delivery forms de- ical patterns of specialty choice in which velop in the future. 70 percent of trainees enter specialties,

Chapter 7: Health Care Workforce 95 the specialist-to-population ratio is Figure 7-1. Physicians in the pipeline expected to reach 152 per 100,000 population in 2010, whereas the generalist Medical school 67,000 physician-to-population ratio will remain stable at 67 per 100,000. Residents and fellows 100,000 128,000 Why So Many Doctors? Physicians (Post-residency <35 years old) post-training 195,000 Over the past 25 years, the patient- (35Ð44 years old) care physician-to-population ratio has 153,000 increased 65 percent from 115 to 190 (45Ð54 years old) physicians per 100,000 population, with 87,000 specialists increasing from 56 to 123 per (55Ð64 years old) 100,000 population. Several factors have 58,000 contributed to the growth in physician (>65 years old) supply. In 1970, amid dire predictions of

Source: IFTF; Association of American Medical Colleges, 1997; American Medical Association, 1996. a physician shortage, the federal government provided ﬁnancial incentives to medical schools to expand their capacity Figure 7-2. In excess: Physician supply and estimated requirement and foster the immigration of physicians (Including residents and interns) trained in foreign medical schools. Total supply of nonfederal Between 1970 and 1994, the number of patient-care physicians medical students educated in the United 726,067 States grew by 65 percent and the num- 690,399 ber of residents increased by approxi- 631,431 mately 100 percent. However, when the 564,074 shortage threat dissipated, not all policies 431,527 were adjusted accordingly. From 1988 to

1985 1995 2000 2010 2020 1994, although the annual number of medical school graduates in the United Nonfederal patient-care physicians States remained flat, the number of resi- per 100,000 civilian population dency positions increased by more than 250 Projected 80 percent. As a result, there are now supply 200 1.45 first-year residency positions for Projected every medical graduate. The excess posi- 150 requirement tions have been filled by IMGs. 100

50 Physician Surplus— Or Physician Shortage? 0 1990 1994 2000 2010 2020 In the latter half of the 1990s, the Source: IFTF; Bureau of Health Professionals, American Medical Association, Council on Graduate Medical Education. Pew Health Professions Commission, the AMA, the Bureau of Health

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Professionals, and the Council on Gradu- had continued to predict a surplus of spe- ate Medical Education (COGME) all cialists at the end of 2000—announced projected an oversupply of physicians that the nation faced an immediate and overall, an inadequate to marginally ade- projected shortage in a wide range of quate number of primary care physi- specialties that, with one exception, cians, and an enormous oversupply of pediatricians, would be needed to treat specialists. The media tracked residents an aging population already experiencing who were completing training and enter- the chronic conditions brought on by ing practice and reported that their genetic predisposition, unhealthy behav- numbers exceeded openings. The typical ior, and environmental factors. “unemployed” new physician was a specialist; reports often featured the job Prior to 2001, how did the supply of searches of anesthesiologists, radiolo- physicians compare to the projected gists, and pathologists. Other specialists needs of the population? Pooling results obtained jobs in undesired situations and of four different requirement models, the locations, while others were able to find Council on Graduate Medical Education only part-time positions. The IFTF (COGME) estimated that in the year joined the chorus proclaiming a glut of 2000 the United States needed 145 to doctors, and once-popular specialties 185 physicians providing patient care were unable to fill postgraduate training per 100,000 population: 60 to 80 gen- programs with graduates from the 125 eralists and 85 to 105 specialists (see United States medical schools. Table 7-1). Looking out further, they projected that the need for all types of In a report released in February 2001, physicians would increase moderately, however, the Council on Graduate Med- reaching between 150 to 190 per ical Education—the same COGME that 100,000 population in 2010. Each of these models assumed varying levels of managed care penetration (between 20 and 66 percent), various generalist- to-specialist staffing ratios (based on Table 7-1. Projected physician supply and demand, as envisaged in 2000 staff- and group-model HMOs, which (Physicians per 100,000 population) vary from 88:50 to 56:81), and current Year 2000 Supply Requirement patterns of utilization. All physicians 203 145Ð185 The main differences in the projected Generalists 063 060Ð80 requirements are for specialists, as each Specialists 140 085Ð105 model assumes a slightly different com- Year 2010 petitive environment in the future. All physicians 219 150Ð190 However, even the highest estimates of Generalists 067 060Ð80 specialist demand were well below the Specialists 152 090Ð110 projected supply of 152 per 100,000

Source: IFTF; Council on Graduate Medical Education. population. The situation for primary care physicians was a little less clear.

Chapter 7: Health Care Workforce 97 The number of generalist patient-care represent roughly the same percentage of physicians was, and still is, expected to all physicians as they did back in 1970 remain stable at 67 per 100,000, a num- (44 percent). In fact, if we remove the ber sufﬁcient in some scenarios but inad- primary care subspecialties and consider equate in others. With some specialists just general primary care, the percentage providing more primary care (see below) of primary care physicians has actually and the slowdown in primary care as a declined from 43.2 percent in 1970 to gatekeeper in managed care, the forecast 38.2 percent in 1997. Why? Because, as was an adequate supply of primary care Figure 7-3 shows, the money still goes providers through 2010. to specialists.

The apparent oversupply of physicians Although the number of physicians prompted questions regarding the trained as general practitioners is unlikely appropriateness of current medical edu- to affect the proportion of primary care cation policy, particularly at the graduate providers in the near future, more of the level. Many advocated that the number specialist physicians are likely to be proof residents trained in the United States viding primary care. In a 1997 survey of should be reduced to give preference to physicians conducted by Louis Harris & graduates of American medical schools. Associates, nearly half of specialists In 1999, the Pew Health Professions reported spending at least Commission went even further, recom- 25 percent of their time providing pri- mending the closure of 20 to 25 percent mary care, and 22 percent of specialists of the nation’s medical schools. But even said they will be providing more primary if drastic changes are made to reduce the care in the future. Even though special- number of new entrants, and new reg- ists are not ﬂocking to formal retraining ulations make it more difﬁcult for for- programs, they are following the market’s eign medical graduates to practice in the prompting. The share of all physicians United States, many of the physicians self-reporting as primary care providers was who will supply the future market in the a full 16 percent higher in the 1997 sur- United States are already in the pipeline. vey than in the 1994 survey (46 percent Medical training takes so long that any versus 30 percent)—and we know this is changes in either medical education or not due to a large increase in the number policy will not be felt in the market for of primary care physicians being trained. at least another decade. Throughout the 1990s, the projections Too Many Specialists? were for an excess of physicians in 2010, primarily among specialists and predom- In addition to being in excessive supply, inantly in the medical and surgical spe- there is an uneven distribution of physi- cialties. The tragedy here was thought cians by specialty in the United States. to be twofold: not only would there Despite the shift to more outpatient care nationally be an underuse of highly and the emphasis HMOs place on the skilled specialty doctors, but also the role of the primary care physician as money expended for a large portion of gatekeeper, primary care doctors still their training would have come out of

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Reassessment of Physician Supply and Demand Figure 7-3. Median net income COGME’s reported present and pro-

Anesthesiology jected specialist shortage has not been confirmed uniformly by other studies, and at least one unpublished study con- Radiology tradicts the COGME report’s projections for California. Nonetheless, while recog- Surgery nizing regional differences that may be extreme, on balance the demand, and presumably the need, for specialty care Internal medicine exceeds the supply, presently and in the 2000 1997 next 15 to 20 years. The reasons for this General/ 1990 are varied, unpredictable, and in part Family practice 1981 unintended consequences of organizations and processes of the health care Pediatrics delivery systems of the preceding decade of “managed care.” Although multiple 0 50 100 150 200 250 300 forces were in play, in our opinion five Thousands of 2000 dollars stand out as critical factors: Source: Association of Medical Colleges, 1997; American Medical Association; Center for Health Policy Research. Medical Group, Managed Care, 2000, Managment Association, 2001. The increasing complexity of medical practice promotes specialization to achieve best outcomes (e.g., following acute myocardial infarction, stroke, the public purse. Basically, this would be Whipple procedure for pancreatic a waste of valuable resources whichever cancer). perspective one assumes. New medical technologies may replace prior care, but many new Some suggested that the excess of spe- technologies are additive, in that cialists might nudge some physicians to they expand the spectrum of available practice as clinical investigators, filling interventions (e.g., thrombolytics in the ranks of a depleted cadre of physi- stroke, stents in coronary artery dis- cians engaged in clinical research and the ease, implantable ventricular assist conduct of clinical trials. Others might devices in congestive heart failure). assume new roles within chronic-disease management organizations. As the num- In a new era of consumerism in health ber of Americans suffering from chronic care, the public demands specialty disease increases, these organizations will care. Better informed and more assume total care for defined populations health-conscious consumers rebelled of patients with diabetes, congestive against PCP gatekeepers, but proba- heart failure, and cancer, and they would bly more important was the con- seek highly trained specialists to develop sumer’s perception that specialty care and manage their programs. was superior. For example, this led to

Chapter 7: Health Care Workforce 99 legislative action to allow choice and Poor Geographic Distribution access to specialty care. For physicians, “managed care” Geographic maldistribution of physicians, brought disincentives to continue in generalists as well as specialists, has char- the practice of medicine, which pro- acterized American medicine in the past, moted unprecedented numbers to present, and likely future. The reasons for choose early retirement or positions urban concentration of the physician that did not involve direct patient workforce relate to lifestyle, family con- care. This dissatisfaction was not lost siderations such as educational resources, on aspiring college graduates, as cultural opportunities, level of income, reﬂected in the decline in applications access to continuing medical education, to American medical schools. and availability of newer medical technologies and resources. For certain spe- Although demographic projections cialties and subspecialties, the population were accurate, assessments of the and resources of a metropolitan location impact of the changes in the relative are essential and always will be. frequency of diseases they imply did not anticipate the medical interven- The issue for people living in areas with tions that would become available to low physician-density is access to care. manage the inevitable chronic diseases Not only may the closest physician be of an aging population. Health care is located several hours away, but the prac- a service industry, and as more service tice may be so busy that the doctor can- is required to meet demand the work- not take on additional patients. For force will expand proportionately or many people, these are effective barriers nearly so. to obtaining necessary medical care in a reasonable amount of time. In the The history of supply and demand of our absence of timely medical attention physician workforce for the past 50 years their health suffers accordingly. has been one of alternating cycles of mismatches and overcorrections. Most Financial incentives have had only a likely, we have entered yet another one. limited effect in attracting physicians to However, this particular cycle may prove rural areas where the professional isola- more resistant to correction and there- tion, long working hours (especially for fore more lengthy than in the past. on-call duties), and cultural isolation The impacts of our national economy, have acted as strong deterrents. In fact, genomic medicine and preventive care the number of areas in the United States among many possible future trends are with physician shortages is greater now unknown and difﬁcult to predict. How- than it was 30 years ago. The most suc- ever, the present and projected shortage cessful efforts to retain physicians have of many specialist physicians is almost actually relocated GME training to these certainly real if we assume that the rich- underserved communities. Once trained est nation in the world will continue to in these areas, physicians are more likely demand the best health care that those to stay and practice, regardless of where who have access to it can afford. they went to medical school.

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Medicare’s decision to reimburse physi- policy change directed at recruiting cians for rural telemedicine consults minority physicians, their underrepre- could lead to greater use of this technol- sentation in the medical profession will ogy and thus, to a certain extent, combat continue and will be further exacerbated the professional isolation of a rural prac- in regions where minorities are becom- tice. However, the social and cultural iso- ing a greater proportion of the general lation will continue to deter physicians population. from locating in rural areas, and the medical access problems faced by these com- New Role for Doctors munities will remain unresolved in 2010. The New Inpatient Specialist Inadequate Diversity There are two new and emerging roles for physicians in the health care arena. In addition to the uneven distribution The first is the “hospitalist” or “inten- of physicians across specialties and geo- sivist.” These physicians work full time graphic areas, ethnic minorities are in the hospital, providing all of the care poorly represented in the medical pro- to the inpatients of office-based physi- fession. Nationally, African Americans cians. They are distinct from the radiolo- represent 12.6 percent of the general gist, anesthesiologist, and pathologist population but only 3 percent of physi- who also work full time in the hospital. cians, and Hispanics represent 10 per- Most hospitalists are general internists, cent of the general population and only 10 to 15 percent are critical care doctors 4.6 percent of physicians. The racial and (hence the term “intensivists”), and 5 ethnic maldistribution is even more and 10 percent are family practitioners stunning in regions with diverse pop- and emergency room physicians. ulations. For example, in California, Hispanics constitute 31 percent of the Hospitalists are perceived to be more general population but only 5 percent of efficient than office-based physicians, not practicing physicians. only because of their greater familiarity with the inner workings of the institu- Because of cultural and language differ- tion but also because they are more capa- ences, underrepresented minorities pre- ble of effectively managing inpatient fer to, and when possible do, obtain care. Because they are constantly in the care from physicians with similar back- hospital, they are able to monitor grounds. These physicians in turn play patients more closely, which leads not a major role in providing care to minori- only to the ordering of fewer tests but ties, especially to those residing in also to better patient outcomes. Further- underserved low-income communities. more, because hospitalists have the If the physician workforce does not authority to discharge, patients do not mirror the ethnic and racial diversity of have to wait for their physicians to con- the population to be served, it is more duct their morning or evening rounds— likely that minority populations will they can be discharged at any time, not have access to essential health care which leads to higher satisfaction and services. In the absence of significant shorter lengths of stay for patients.

Chapter 7: Health Care Workforce 101 There is some question regarding the this form of retraining because many pur- continuity of care that is provided when sue this avenue through correspondence the oversight for patients’ health is courses. However, as HMOs and pharma- transferred among providers. In one ceutical companies enter the medical sense, transferring the care of a patient to management arena, they will be seeking a hospitalist is akin to referring a patient physician administrators who not only to a specialist—and all of the questions understand the health issues but also have regarding continuity of care that are the business acumen to manage their col- raised with specialists also apply to the leagues and their patients. The demand hospitalist. What is new, however, is the for these dually trained doctors will movement of this phenomenon into the increase as forces trying to alter physician arena of general hospital care and the behavior realize that the best way to do transfer of authority for the patient from that is to employ someone who is the primary physician to the hospitalist. respected by physicians—and to that end, nothing beats a colleague. There are an estimated 5,000 hospitalists currently providing inpatient hospital Renewed Emphasis on care. Assuming that the average hospi- Clinical Investigators talist can care for 15 to 20 patients at The number of clinical investigators and any one time and considering the need the proportion of time that academic for on-call duties and time off, it is esti- physicians devote to clinical research mated that the smallest functioning unit declined steadily in the 1990s as one will be four hospitalists caring for unintended consequence of “managed approximately 50 inpatients. Over the care.” The academic community and the next 15 years, the greater efficiencies NIH are aware of this trend and have provided by the hospitalist will lead to instituted corrective measures and strong increases in their employment in hospi- incentives, fully recognizing the critical tals with at least 80 medical beds. They role of committed investigators in con- will also begin to work in SNFs. It is ducting the clinical research that leads to estimated that most nonsurgical inpa- advances in health care. The subject has tients will be cared for by hospitalists multiple facets, but suffice it to state by 2005. that a once-projected surplus of specialists did not swell the ranks of clinical The Medical Manager investigators but rather failed to do so The second new training path for physi- because of the demands that revenue- cians leads to a business-savvy MD. Frus- producing clinical practice placed on trated with their diminished autonomy in academic physicians. a managed care environment and intent on keeping an upper hand, many physicians are retraining, either in business Nurses schools or in health care administration, and are seeking employment managing In many ways, the nursing profession is other physicians. It is difficult to quantify the most qualified to respond to current the exact number of physicians seeking changes in the health system. Nurses’

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training focuses more on the behavioral providing more of the care for a sicker and preventive aspects of health care population of patients. than does that of physicians. Their skills are increasingly in demand in an envi- Based primarily on 1996 projections by ronment that is moving more toward the Division of Nursing, Bureau of outpatient care and requires its health Health Professionals, the previous edition care providers to function as teams and of the IFTF forecast stated that the future assume managerial responsibilities. supply of RNs would be adequate to meet increased demands (Table 7-2 and Figure Registered Nurses 7-4). This forecast assumed the movement of RNs from hospital-based care Registered nurses (RNs) are the largest into ambulatory care settings, nursing single group of health care providers in homes, subacute nursing facilities and the United States, numbering over 2.2 community health clinics. Allowances million. Hospitals are their primary were made for projected closings of hos- place of employment. As the acute care pitals and hospital beds and a sicker pop- hospital takes a backseat to other venues ulation of in-patients. In 1995, the Pew of care, one might predict that RNs’ Health Professions Commission also primary place of employment will dis- anticipated a surplus of nurses and recom- appear. However, despite the substantial mended a 20 percent reduction in nursing rise in outpatient activity, two-thirds of programs. Although there were murmurs RNs continue to work in the hospital even then about the possibility of a nurs- setting. This ratio has remained steady ing shortage, the majority view, with over the past 15 years with only a slight which we were in agreement, believed decline since 1992. In fact, Linda Aiken that the nursing supply would meet at the University of Pennsylvania has demand through 2010. We weren’t shown that total hospital employment misinformed but we were wrong, none- of all nursing personnel has declined, theless—wrong, because we failed to but the number of full-time equivalent anticipate a rapidly dwindling number of (FTE) hospital RNs actually increased applicants to schools of nursing and a between 1984 and 1994 by 27.6 per- mass exodus of nurses from acute care set- cent, increasing the RN-to-patient ratio tings because of poor working conditions. by 29.4 percent. However, when At the beginning of 2001, the existing adjusted for case-mix severity, the ratio and projected shortage of nurses was char- increased by only 0.3 percent, indicat- acterized as a national disaster of crisis ing that the increases in RN hospital proportions and the number one concern employment barely kept pace with the among health care leaders and hospital increased case-mix severity. Other hospi- administrators. tal nursing staff such as licensed practical nurses (LPNs) and nursing aides have In June 2001, a poll released by the been reduced in absolute terms, suggest- American Hospital Association found ing that the staff-to-patient ratios for serious shortages in the workforce with these nurses have not kept pace with the 168,000 open positions, three-quarters for increased case-mix severity. RNs are RNs, with a vacancy rate of 11 percent.

Chapter 7: Health Care Workforce 103 Table 7-2. Projected RN requirements by employment setting, 2000Ð2010

Public/ Nursing Ambulatory Community Nursing Total Hospitals Homes Care Health Education Other 2000 1,969,000 1,231,800 128,200 134,200 364,300 37,800 72,500 2005 2,095,000 1,305,200 138,000 142,600 387,200 41,500 80,200 2010 2,232,000 1,386,100 152,600 150,700 411,000 45,500 87,400

Source: Projections by Division of Nursing, Bureau of Health Professionals; Health Resources and Services Administration; U.S. Department of Health and Human Services, March 1996.

Multiple factors account for the present nurse ratios have increased, nursing and future shortage of RNs overall and salaries have fallen behind other sectors, most signiﬁcantly among nurses choosing overtime (in many cases “mandatory”) to work in hospital settings. The major has increased, and job satisfaction has impact has fallen on hospitals—on the plummeted. Stress, irregular working acute care nursing units in the emergency hours, declining working conditions, department and in the operating room. low morale, and frustration at providing As hospitals’ reimbursements, revenues, suboptimal care collectively have ampli- and margins have been squeezed by pri- ﬁed the shortage as disaffected nurses vate and government payers, patient-to- leave their jobs, some to work in other health care settings and some to work for vendors, insurers, and managed care organizations. Figure 7-4. Projected supply of RNs, 2000Ð2020 High school graduates, particularly

Millions of registered nurses females, no longer view nursing as an 3.0 attractive career when compared to other opportunities within health care or in other 2.5 service industries. The young adult public is aware of the angst within the nursing 2.0 profession, and therefore chooses other

1.5 careers with better pay and more satisfying work. Enrollment in nursing programs has 1.0 fallen by a cumulative total of 25 percent over the past six years. The result: a declin- 0.5 ing entry of new nurses and a rapidly increasing exodus of practicing nurses. 0 2000 2005 2020 Nurse Practitioners Source: Projections by Division of Nursing, Bureau of Health Professionals, Health Resources and Services The nurse practictioner (NP) is a regis- Administration, U.S. Department of Health and Human Services, March 1996. tered nurse who works as a primary health care provider, focusing on health

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promotion and disease prevention as well Physicians’ Assistants as the diagnosis and management of Physicians’ assistants (PAs) are health acute and chronic diseases. Unlike RNs, care professionals licensed to practice 90 percent of NPs work in outpatient medicine under a physician’s supervision. settings, one-third of which are private This new category of health care profes- practices or HMOs. Although only nine sional emerged in the 1960s, partly in states permit NPs to practice indepen- response to the supply of experienced dently of physicians, over two-thirds of hospital corpsmen and combat medics NPs have primary responsibility for a returning from Vietnam and looking for speciﬁc group of patients within either work. In 1970, there were only 237 a team or a panel situation. More than 85 practicing PAs. Between 1990 and 1997, percent have the authority to prescribe the number of new graduates increased pharmacologic agents. One in ten has 134 percent from 1,195 to 2,800 per hospital admitting privileges, and one in year. In 1998, there were approximately three has hospital discharge privileges. In 31,000 PAs in clinical practice and by some circumstances, NPs function as 2005 there will be about 50,000. physician substitutes, and in others they Approximately 7,400 students are serve as complements, providing health enrolled in PA programs with 3,700 prevention, education, and counseling. graduates annually, a class size that has more than tripled since 1990. There were approximately 71,000 nurses with NP training in 1996, about half of PAs’ precise scope of practice varies whom are actually practicing as NPs. In across the country according to each the late 1980s and early 1990s, the state’s medical practice act. They all expectation that there would be insufﬁ- require physician supervision, but in cient numbers of primary care providers some states this supervision must be fueled an increase in both the number on-site and in others it can be provided and capacity of NP training programs. from a distance. PAs provide basic health Approximately 40 percent of currently care services that 20 to 30 years ago practicing NPs deliver primary care and were provided by the physicians them- 80 percent of graduates are specializing selves—and in many cases still are. in this area. These tasks may include taking medical histories and performing physical exami- The future supply of NPs will undoubt- nations, ordering and interpreting lab edly increase as the demand for their ser- tests, diagnosing and treating illnesses, vices grows and the number of training assisting in surgery, prescribing or dis- programs increases. Based on current pensing medication, and counseling training capacity, there will be at least patients. PAs can legally prescribe drugs 6,000 graduates every year. As demand in 39 states. rises, some of the nurses who are trained but not practicing as NPs may reenter Approximately 43 percent of PAs work the profession. Estimating conserva- in primary care settings, but there is a tively, 125,000 NPs will be practicing steady increase in surgical subspecializa- by the year 2010.1 tion, in which only 22 percent of all PAs

Chapter 7: Health Care Workforce 105 currently work. Roughly one-third of physician providers as substitutes for pri- PAs are employed in hospital settings, mary care physicians, but this practice is 40 percent in physicians’ offices, 10 per- not widespread. cent in clinics, 7 percent in HMOs, and the rest in nursing homes, correctional Large multispecialty group practices institutions, and federal agencies. and physician groups that are heavily capitated are another source of employ- In 1998, just under nine out of every ten ment for NPs and PAs. The correlation PA graduates were employed as PAs in with size suggests that smaller prac- less than a year. The growth in PA jobs tices are unable to take advantage of is projected to increase by 22 percent the cost savings offered by nonphysician annually between 1997 and 2005— providers. Furthermore, even though 9 percent faster than the overall job- studies indicate that nonphysician growth rate in the United States. Based providers increase physician productiv- on current training capacity, it is pro- ity and incomes, professional resistance jected that at least 68,000 PAs will be in certainly affects physicians’ decisions. practice by the year 2010.1 As an example, physicians are more likely to employ PAs, who cannot Future Employment function independent of a physician’s oversight, than NPs. In this cost-cutting era, health plans, hospital systems, and medical groups are In the short term, the greatest impedi- looking at diverse combinations of ment to wholesale use and integration of providers as part of their cost-control nonphysician personnel into provider strategies. The roles of many health pro- networks is lack of supply. If all large fessionals overlap to a certain extent but multispecialty group practices restruc- the scopes of practice for nurses and PAs tured with a ratio of one NP or PA for most closely resemble that of physicians. every two physicians—which some capi- To what extent will nonphysician per- tated primary care groups aim to do— sonnel be employed in the future and in there would not be sufficient personnel what capacity? to staff them. If training programs were expanded sufficiently now, it is possible Staff- and group-model HMOs, which that by 2010 the supply of nonphysician have the greatest incentive to employ the providers could increase to fulfill the most efficient mix of personnel, exhibit demand. great variation in their employment of nonphysicians, ranging from a low of However, beyond the supply issues there zero to a high of 67 per 100,000 are several barriers to the widespread enrollees. It’s therefore difficult to fore- involvement of nonphysicians as direct- cast future requirements with any cer- care providers. tainty based on expected growth in managed care. There is evidence that State laws somewhat arbitrarily limit some staff-model HMOs are using non- the care that nonphysician providers

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mary care experience will compete with New Roles for Pharmacists general practitioners in certain markets. Pharmacy beneﬁt organizations Many physicians will still not be working Disease management with nonphysician providers in 2010. Interviewing and instructing customers and patients (inpatients and outpatients) Pharmacists Joining teams in hospitals, clinics and managed care organizations In 1995, the Pew Health Professions Outpatient vaccinations Commission projected a surplus of phar- Head positions in planning organizing and conducting clinical trials macists and recommended a 25 percent reduction in pharmacy programs. Administrative positions within the pharmaceutical industry Although we did not include pharmacists in our ﬁrst forecast, given trends at the time we would have agreed with the Commission. However, 6 years later phar- may give by restricting pharmaceuti- macists are overwhelmed and a shortage cal prescribing, requiring on-site of 10,000 registered pharmacists exists supervision, and requiring case-by- and is worsening steadily. In many chain case physician approval of services that pharmacies, the major provider of outpa- are ordered. Organized medicine has a tient drugs, pharmacy technicians now do strong incentive to lobby and main- routine tasks formerly performed by phar- tain such restrictions. macists. So why the shortage?

The perception of lower-quality care, In the 5 years between 1992 and 1997, regardless of its merit, not only limits the number of prescriptions increased consumer demand for access to non- 50 percent and this growth will con- physician providers but also may tinue as more people take more prescrip- make health plans skittish about tion medications. The second principal using them more aggressively in cost- reason for the current and projected cutting efforts. shortage of pharmacists is that they are assuming The salaries of nonphysician providers new roles (see sidebar) beyond dispens- are approaching those of newly trained ing physicians. Although these income prescriptions. The incentives to obtain gains are the results of hard-won bat- an advanced degree in clinical pharmacy tles, in an era of a glut of physicians and (PharmD.) have drawn recent pharmacy quality consciousness, medical groups school graduates away from their tradi- and hospitals may prefer to hire a newly tional role as mixers and dispensers of trained physician over an NP or PA. prescription drugs. The shortage is real, but with rapidly rising starting salaries Overall, we expect to see greater but spo- and governmental support for increasing radic use of nonphysician providers in the the number of entering pharmacy stu- next 10 years. NPs with extensive pri- dents, the mismatch between supply

Chapter 7: Health Care Workforce 107 and demand may be corrected much treatment protocols, replace physi- sooner than nursing and medicine reach cians as the patient’s ﬁrst point of that goal. entry into the medical care system.

Wild Cards Frustrated by the power of large health plans and insurers, physicians Americans opt out of managed care embrace unionization. It becomes when policy changes in 2001 offer increasingly difficult for health plans them MSAs at a considerable tax and insurers to enforce compliance advantage. Freed from the hassles of with cost-control efforts. managed care, physicians once again find solo and small-group practice With exceptions legislated by a affordable and rewarding. few states, nonphysician clinicians (advanced practice nurses, physician Although skeptical at first, patients find assistants, and pharmacists) have been their experience with NPs and PAs limited as to scope of practice, auton- exceptionally positive. Patients demand omy, reimbursement for patient care to see these health care providers on a activities, and equivalence with physi- regular basis; state laws are changed, cians. With a projected shortage of allowing greater freedom from physi- primary care and certainly specialty cian oversight; nurses assume key man- care physicians, these restraints may agerial roles in managing care. be modified substantially, with consequently more rapid growth in enter- NPs, supported by effective practice ing students than currently guidelines and computerized data on anticipated.

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Endnote

1 Cooper, R., et al. Current and projected workforce of nonphysician clinicians. Journal of the American Medical Association (September 2) 1998; 280:9.

Chapter 7: Health Care Workforce 109 Health and Health Care 2010 Institute for the Future

Chapter 8 Medical Technologies Effects on Care

New medical technologies are one of the gene therapy key driving forces in health care. Begin- vaccines ning in the 19th century, medicine has artiﬁcial blood made great strides in verifying the germ xenotransplantation theory, creating aseptic surgical tech- use of stem cells niques, discovering antibiotics, developing anesthesia, and imaging the inside of Even after a medical technology or tech- the body. The impact has been huge: nique has been discovered, developed, improving public health, extending our approved, and commercialized, it may life span, saving lives, and heightening take years for it to be disseminated quality of life. The related cost impact widely. Similarly, in many clinical areas has been equally large, especially in the state-of-the-art knowledge is slowly United States, where new medical tech- adopted in community practice. We con- nologies are enthusiastically embraced as clude with a discussion and forecast of they become available. the process of procedural technology transfer in health care. Here we examine nine medical technologies that will affect patient care over the We interviewed experts in many differ- next decade. We describe the technology, ent disciplines and selected technologies then discuss the magnitude and areas of that we forecast to be major advances impact as well as the barriers to change evolving over the next decade. Although where applicable. We’ve excluded some gene therapy is unlikely to have a role in of the leading-edge developments that, the mainstream of medical management because of the long lead time needed to by 2010, by virtue of intense interest in bring them to market, will result in new its potential and a myriad of ongoing technologies beyond our 10-year time clinical trials, we determined that gene frame. The technologies we focus on therapy will be a high-impact technol- here are: ogy. In the nine descriptions that follow, rational drug design we were selective in certain areas because advances in imaging a thorough review of the topic was minimally invasive surgery beyond our intent of highlighting a par- genetic mapping and testing ticular technology for its future impact.

Chapter 8: Medical Technologies 111 Rational Drug Design is that good inhibitors must be complementary to their target receptor. Most drugs on the market today have The two-step process begins by deter- been discovered in random screens of mining the structure of receptors and naturally occurring products or from then solving the 3-D jigsaw puzzle of analog development programs—once a matching molecular structures by time-consuming manual process. using specially developed computer Although today’s robotic systems can programs. screen millions of compounds in a year’s time, this method of random trial and Molecular modeling. This technique error is inefficient: of 10,000 agents looks at the physical structure of a tested, 1,000 typically show bioactivity, receptor and creates the model of a 100 are worth investigating, 10 go to compatible chemical entity by using clinical trials, and only one reaches computer imaging. This can be done patients on the market. Most current with incredible precision down to the pharmaceuticals were chanced upon after level of DNA coding. With the help years of this research by trial and error. of computed chemical algorithms, Occasionally, researchers came across designers can build—first virtually on something that was not only safe for the computer, then “wet” in the lab— human use but also beneficial. The the molecule of perfect chemical fit. chemicals identified from these experiments were discovered as they existed in Virtual reality modeling. This is a nature. Happily, we are no longer just form of computer-enhanced molecu- searching randomly in nature to find lar modeling. It includes features such therapeutic chemicals. Now scientists are as a force feedback handle that per- designing thousands every day. mits tactile manipulation of a 3-D image of the candidate molecule Rational drug design is the development model’s orientation. of new chemical or molecular entities by looking at the physical structure and Combinatorial chemistry. This technique chemical composition of a target—a allows drug researchers to produce molecular receptor or enzyme—and quickly as many as several million designing drugs that bind to those mole- structurally related compounds, which cules, turning them on or off. Drug they then screen to find those that are designers use physical chemistry to iden- bioactive and possibly have therapeutic tify qualities of the specific agent that value. The chemical attributes of those initiates a pathology; once a known molecules are known, and the chemists chain of events is identified, designers working with them expect certain bio- attempt to intervene at a particular point logical activity. With the development with a specific method. Designers use of more reliable and rapid screening several strategies and methods: tests, thousands of related chemicals can be tested in parallel processes for Structure-based design. The central reactivity with a complement of assumption of structure-based design human antibodies on a mass scale.

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Pharmacogenomics. See below, p. 120. Antiviral therapies. Protease inhibitors designed to combat viral disease will Rational drug design will shorten the be an important area of development. drug discovery process. New chemical Every virus uses proteases to chop and molecular entities will get to clinical proteins into amino acids, which the trials faster as the random and unpre- virus then uses as building blocks. dictable time for discovering a com- Targeting and inhibiting these pound by chance is replaced by these enzymes could lead to the creation more predictable design processes based of the first truly effective antivirals. on the structure and complexity of the In the next 10 years, rational drug pathogen. design will create antiviral therapies to combat diseases like human Because rational drug design may result immunodeficiency virus (HIV), in too many promising new chemical encephalitis, measles, and influenza. entities and not enough resources to test them all, prioritization and stratification of candidate products will be an impor- Key Barriers tant area of concern. One of the key driving forces behind Magnitude and Areas rational drug design has been the of Impact increasing power of computers. The techniques and processes involved in Rational drug design will have impact in rational drug design are highly infor- a number of therapeutic areas. Chief can- mation intensive and well suited to didates are: computer processing. The pace of drug design advances is regulated in part by Neurologic and mental disease. Drugs are the availability of research teams that being created that fit the receptors for combine knowledge of biochemistry various neurotransmitters, potentially with that of computer technology. to modify neuronal activity and influence the function of the nervous system As researchers seek to combat more com- in different areas where neurological plex pathogens, they need to develop and mental pathology are manifested. drugs that interact with their targets in more specific ways. With increased specificity and complexity will come The Pace of Change in Drug Design increased costs in developing the proper new chemical entity. The pharmaceutical and biotechnology industries have enthusiastically adopted the techniques of rational drug design. Five years ago, few pharmaceutical companies were heavily invested in rational drug design. As drug design can create an embarrass- Today, entire biotechnology companies have been formed primarily to carry ment of riches in terms of screened can- out structure-based design, and most major pharmaceutical companies have didate compounds, much progress will structure and computational groups as part of their drug discovery effort. In need to be made in evaluating and prior- 5 years, rational drug design will yield a rich crop of new candidate molecules itizing the candidates. for clinical trials.

Chapter 8: Medical Technologies 113 Energy sources currently used for imag- Unnatural Natural Products ing include X rays, ultrasound, elec- Antibiotics that are in current clinical use are compounds made by antibiotic- tron beams, positrons, magnets, and producing bacteria and fungi—researchers have accepted the natural radio frequencies. There is a constant products that nature provided. Now, using recombinant DNA technology, trade-off in the energy sources used: “unnatural” natural products can be produced by combinatorial biosynthesis on one hand, the more powerful the using genetically altered strains of a bacterium such as Streptomyces. Instead of isolating and testing a single natural product, thousands of novel energy source, the more deeply it can biosynthetic molecules, a new class of antibiotics, can be obtained and penetrate and the more detail it can screened. One such product may prove to be a powerful neuroregenerative reveal in the image; on the other agent that could be used in conditions such as Parkinson’s disease, multiple hand, powerful beams can injure tis- sclerosis, Alzheimer’s disease, and stroke. sues and organ systems. The same ultrasound energy that reveals “baby’s Drug-Producing Animals and Plants first picture” to expectant parents also Transgenic animals and plants can be engineered to produce proteins that can, at a higher energy level, smash act as drugs. These living drug factories can be grown from animal embryos kidney stones in an electrolithotropter. injected with human DNA. Transgenic animals can be cloned, and an entire Energy source technology is advancing herd can be created in a single generation. A transgenic ewe can produce as scientists find ways to more nar- milk containing an antienzyme, and its use in treating asthmatics is now rowly focus an energy beam to avoid in clinical trials. A transgenic drug industry has been born as yet another product of biotechnology. Among plants, tobacco has ideal characteristics damage to adjacent tissue. Research for mass-producing bioengineered proteins, augmenting the current pro- also is being conducted on alternate duction of specific proteins in vats of bacterial cultures. energy sources such as thermal differences in order to minimize residual damage.

Advances in Imaging Detector technology is advancing along two dimensions. First, digital detec- Imaging technologies present an tors benefit from the trends in micro- enhanced visual display of tissues, organ electronics toward smaller and smaller systems, and their functions. They features on devices. The resolution of reveal the structural and functional those detectors is improving con- aspects of organs, allowing clinicians to stantly. The first commercially avail- localize specific functions or conditions able “megapixel” detector (able to noninvasively. detect an image that comprises a grid of 1,000 by 1,000 pixels, discrete ele- Imaging has four elements: aiming ments of the image) became available energy at the area of interest; detecting more than a decade ago. By 2005, or receiving that reflected or refracted detectors that can resolve 6,000 by energy; analyzing the data with comput- 6,000 pixels will become available. ers; and displaying those data with tech- Second, there are advances in contrast nology that allows the clinician to view media. These are chemicals that, when and interpret the information. Advances introduced into the body, enhance are taking place in each of these areas the contrast between light and dark that will open up new functions for regions of an image in specific ways— imaging technologies. for example, by highlighting areas of

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Infrared imaging technology may Mini-MRIs and MRNs allow accurate assessment of An important trend in MRI technology is the design of increasingly smaller implanted coronary stents. Known scanners with much lower capital and operating costs. The key: smaller and as ocular coherence tomography less costly magnets. Mini-MRI units will be available for dedicated uses in (OCT), it will identify factors orthopedics, neurology, and mammography. leading to restenosis. Magnetic resonance neurography (MRN) can identify the site of damage to a peripheral nerve by detecting increased signals at sites of nerve entrapment In vivo molecular imaging—the imag- and trauma. It can also show the process of peripheral nerve degeneration and regeneration, the first imaging modality to do so. ing of gene expression in humans— is likely in the next 5 years. The technology is already being used in animals, and its potential (e.g., for determining whether a transgene gets to the tumor site and whether it expresses and if so for how long) will malignant tissues or tissue abnor- be invaluable in assessing the effects malities with more blood flow. of many forms of pharmaceuticals Work is proceeding on contrast and gene therapy. media that have organ, tissue, and cellular specificities. Magnitude and Areas of Impact Analysis of the images is the next function in which there are rapid advances. Advances in imaging are combining Computer analysis of the masses of in several areas. Electron-beam CT data from high-resolution detectors scanning—in contrast to conventional gets faster and better with increases in CT scanning that uses X-ray beams— raw computing power. Breakthroughs offers substantial improvements over in algorithms and techniques, such as old technologies. It allows for rapid neural networks, will speed the con- acquisition of an image, reducing the version from 2-D to 3-D images, discomfort patients experience from improve pattern recognition through remaining immobile for the duration better detection of edges and other of a conventional CT scan. While this features of images, and ease the technology can detect calcium in the manipulation and enhancement of wall of the coronary artery, showing ath- digital images. erosclerosis, it does not show whether there is narrowing of the blood vessel. Display technologies are getting bigger, With the development of new contrast faster, and cheaper. There is spillover agents, electron-beam CT will be able to medical imaging from a range of to show visuals of the arteries them- applications that require high-quality selves, making this technology com- images. Improvements include larger petitive with MRI, although MRI has displays, higher resolution, richer and the additional value of showing blood more meaningful contrasts, and flow. deeper color.

Chapter 8: Medical Technologies 115 than the transmitter so that the clinician Positron Emission Tomography (PET) detects the harmonics, or the frequency- PET was developed and applied clinically to the central nervous system for multiples of the echoes, that are pro- the diagnosis of epilepsy and brain tumors. It became the gold standard for duced inside the body itself. Higher determining myocardial viability and myocardial blood flow, but it found only frequency waves produce images with limited application to other organ systems. Within the past 5 years the better resolution. Applications of har- introduction of multislice imaging, 3-mm resolution, and 3-D resolution has revolutionized the field and made whole-body PET imaging one of the most monic imaging include better prediction exciting developments in imaging for the diagnosis of metastatic and of heart attacks by allowing the clinician recurrent cancer. For recurrent cancer of the head and neck, a notoriously to visualize blood flow through the difficult area to image using current technology, PET has shown an accuracy myocardium. of greater than 95 percent in detecting recurrent disease. Although it is being used to stage many cancers, because the current technique uses glucose The recent introduction of cine ultra- uptake as the marker, this highly sensitive detector lacks specificity. Within the next decade tumor-specific marker molecules will be labeled with sonography and refinement of microbub- positron emitters to provide more specificity, at which point whole-body PET bles as a contrast agent will greatly scanning will be faster, less expensive, more widely available, and the most enhance the imaging potential of ultra- accurate and rapid means of detecting cancer that has spread beyond the sound, including a new role in highly primary site or has recurred. focused therapy by intentionally exploding “loaded” microbubbles at specific sites, such as a liver tumor.

Functional imaging, which provides infor- Harmonic imaging will overcome a number mation about how a tissue or organ sys- of barriers in ultrasonography. About one- tem is operating, will go far beyond the third of all patients are “difficult to im- capabilities of conventional MRI, CT, age,” which means that a patient’s body and ultrasonography, which now provide wall anatomy, for a variety of reasons, is only structural information about tissues difficult to “see” through. Specifically, and organ systems. PET has long been someone who is obese or extremely mus- capable of metabolic imaging—detect- cular or someone with narrow rib spacing ing patterns of energy use in the body. is often difficult to image. Smokers and High-resolution PET will offer pinpoint people who have had radiation therapy accuracy in these images, which will ren- can also fall into this category for cardiac der many invasive diagnostic procedures imaging, and for OB/GYN a variety of such as surgical biopsy obsolete. Func- impediments of the abdomen can cause tional MRI is used to determine location difficulty. of neurological functions such as memory and reasoning in the brain, giving us Harmonic imaging improves the quality the first look at how the brain works. In of images in these patients. Ultrasound many respects, neuroimaging has revolu- generally works as follows: sound waves tionized the study of behavioral neurol- are transmitted into the body at a rela- ogy and cognitive neuroscience. Future tively low frequency and are detected by applications of functional MRI will be in a receiver that is tuned to the same fre- the study of disease and the body’s quency. In harmonic imaging, the response to treatment—for example, receiver is tuned to a higher frequency changes in the pattern of neural activity

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in the brain of schizophrenic patients cycle cost of the equipment, will become being treated with new drugs. commonplace.

Because developments in computing Minimally Invasive power have increased image display Surgery speed and improved the quality and content of digital data, image-guided surgery Also called minimal or limited-access is becoming a mainstream procedure. surgery, minimally invasive surgery was Image-guided surgery is a new kind of made possible by the introduction of minimally invasive surgical intervention. fiber-optic technology, miniaturization It improves on endoscopic and endovas- of improved instruments and devices, cular surgical methods by allowing the image digitization, navigational systems clinician to see a computed functional for vascular catheters, and a sudden image superimposed on the surgical awareness that image-guided surgery was instrument’s location and other relevant the wave of the future. Early examples of information. The current combination of minimally invasive surgery were arthro- nearly real-time imaging and functional scopic knee meniscectomy, endovascular mapping will result in real-time, high- obliteration of intracranial aneurysms, contrast, and high-spatial-resolution coronary angioplasty, and laparoscopic images. cholecystectomy. More recent innovations are image-guided brain surgery, Overall, imaging technologies will minimal access major cardiac operations, improve the diagnostic process and the endovascular placement of grafts immensely. Clinicians will use these for abdominal aneurysms. Over the same technologies to look at the form and period of time, open surgery biopsy has function of organs that were once exam- been replaced by fine-needle aspiration of ined only by surgery, reducing the need many tumors, which is gaining general for invasive diagnostic procedures. acceptance for use on tumors of the breast and thyroid gland. Key Barriers The movement toward minimally inva- There are few barriers to the develop- sive surgery has promoted the prolifera- ment of new imaging technologies, tion of ambulatory surgicenters. The which benefit from the continual consequent major reduction in the vol- progress of computing power. Simple ume of surgical procedures performed in economics will limit the application of hospital facilities has achieved a remark- some technologies. Historically, imaging able reduction in the length of stay, as technologies have been additive—new patients having procedures previously technologies do not replace old ones but requiring hospitalization enjoy more rather supplement their use. In a cost- rapid recovery and return to full activity constrained health system, more restraint because of the lowered morbidity of will be exercised on the use of new imag- the less invasive operations. In areas ing systems. Comprehensive analyses of where minimally invasive procedures cost-effectiveness, including the full life- have replaced their more disruptive

Chapter 8: Medical Technologies 117 antecedents, short-term as well as long- arteriosclerotic arteries that restrict term outcomes have been the same or, in blood flow to the brain. most examples, better, with a high level of acceptance and satisfaction by The second and largest group of endovas- patients. In the case of invasive proce- cular interventionalists are cardiologists dures, less is better. whose major procedure is coronary angioplasty. With advances in intravascular stent technology and the introduc- Magnitude and Areas of Impact tion of pharmaceuticals that inhibit the principal cause of restenosis—postangio- To begin at the top, brain surgery has plasty proliferation of subendothelial been a major beneficiary of image-guided smooth muscle in the arterial wall— technology. Operations requiring access percutaneous angioplasty will further to areas of the brain beneath the surface reduce the indications for open opera- are conducted by using navigational sys- tions for coronary artery bypass grafting. tems and image guidance through small Two recently reported studies have estab- openings in the skull. Even more dra- lished the superiority of coronary angio- matic has been the impact of endovascu- plasty with stenting plus administration lar surgery, the creation of a group of of a platelet glycoprotein inhibitor innovative interventional radiologists. (abciximab) for unstable angina and Using current technology—digitized acute myocardial infarction.1,2 The effect image guidance, catheter navigational will be a significant broadening of indi- systems, and an array of implantable cations for angioplasty over radical (con- materials—endovascular surgeons can servative) management of coronary artery treat almost all intracranial aneurysms disease. Cardiac interventionalists can and many arteriovenous fistulas. More- also correct cardiac arrhythmias, treat over, subsequent open surgical proce- selected cardiac valve disorders, and, by dures can be facilitated by preoperative using improved technology, close con- blockage of blood flow to the tumor or genital septal defects. congenital arteriovenous malformation. The third group of endovascular sur- All endovascular surgery has advanced geons operate in sites other than the and matured rapidly in the past decade. central nervous system and the heart; The practitioners of the art fall into three for example, they place endovascular broad categories with a slight degree of prosthetic devices for the treatment of overlap. The first, interventional neuro- abdominal aortic aneurysms, create radiologists, deal with vascular pathol- therapeutic vascular shunts, and perform ogy of the brain and spinal cord. In angioplasty of narrowed arteries in the addition to the procedures described ear- trunk and extremities. lier, these neurointerventionalists can lyse blood clots in cerebral arteries and Laparoscopy has truly revolutionized the veins, dilate intracranial arteries nar- practice of abdominal surgery for proce- rowed by pathologic vasospasm, and dures on the gastrointestinal tract and open partially or completely occluded female organs. The most recent addition

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to the laparoscopic surgeon’s growing an institute staffed around the clock by list of operations is bilateral adrenalec- endovascular surgeons who can prevent tomy. Further advances will incorporate the death and disability that today’s telepresence technology, which permits a technologies cannot. Current gaps in surgeon to operate remotely, robotics, ancillary pharmaceuticals will be closed and 3-D imaging. Technological by products emerging from the biotech advances are proceeding with unprece- industry. The development of stent dented speed, placing pressures on prac- grafts that can be used in cervical vessels ticing general and gynecologic surgeons and at branchings will extend their either to seek additional training or to application at sites currently beyond the drift into obsolescence with out-of-date reach of endovascular technology. skills. Key Barriers Future refinements in minimally invasive surgery will expand the present The American public wants big scope and range of procedures. New automobiles, SUVs, and RVs but arthroscopic procedures, wider use of minimally invasive, or, even better, image guidance in operations on the noninvasive surgery. The appeal and head and neck, and innovations in lim- marketability of minimally invasive ited-access procedures for spinal and tho- operations have the effect of pulling racic diseases are evolving; within the these technologies into the health care next 5 years they will be accepted prac- system in advance of adequate tech- tice. These advances will be aided by nology assessment, including evalua- interventional MRI, currently used for tion of cost-effectiveness. Adverse liver and kidney biopsy, with its shorter outcomes can and do result from pre- acquisition time and 3-D capability. maturely applied minimally invasive procedures, the rash of common bile For patients with acute stroke, interven- duct injuries inflicted by inadequately tional MRI will be a major addition to trained laparoscopic (cholecystectomy) the surgical process. Pharmacologic surgeons being one example. The brain protection will extend the viability consequences could be restrictive of ischemic brain and prompt transfer to legislation that would have the effect a dedicated MRI facility will permit of creating major barriers to innova- immediate assessment of the brain’s via- tive clinical trials of this promising bility and blood flow. When appropriate, technology. occluded vessels can be opened by endovascular intervention under the Insurers restrict or deny payment for guidance of MRI. By the year 2010, new minimally invasive procedures large population centers will have “vas- by declaring them experimental and cular institutes” that are serviced by therefore not a covered benefit. emergency transportation networks. Vas- cular institutes will facilitate rapid Currently, mechanisms for transfer of movement of heart attack, stroke, and procedural technologies into the prac- other acute vascular accident victims to ticing medical community are barely

Chapter 8: Medical Technologies 119 adequate, bordering on inadequate. gene discoveries provide the basis for As computer-enabled procedural tech- genetic susceptibility testing—recogni- nologies evolve at an ever-increasing tion of a predisposition to disease—and pace, their successful penetration into with it unprecedented opportunities to the delivery system will be restricted intervene with strategies for prevention, unless better models for teaching avoidance, or modiﬁcation of the predis- practicing physicians to use these posed condition. Abruptly, clinical technologies are designed and genetics assumed a role whose impor- implemented. tance was only imagined a decade ago.

Genetic Mapping With the possible exception of stem and Testing cell biology, no scientific discipline is advancing more rapidly than medical Until recently, most genetic tests were genetics. It seems that each week one or used to detect rare and singular condi- more disease-associated genes are identi- tions. Many of these single-gene disor- fied and added to the genomic database ders become clinically apparent during to fuel a parallel growth of diagnostic infancy and childhood whereas others, and screening tests. To date, clinical such as Huntington’s disease and poly- tests have been developed for almost cystic kidney disease, are of adult onset. 500 human genetic disorders, a number Genetic tests are used to detect carrier that will continue to grow. states, in relation to marriage and con- ception, and for prenatal diagnosis and The National Cancer Institute has estab- counseling, e.g. for Down’s syndrome. lished three primary goals with regard to genetic testing: (1) identification of The special field of clinical genetics has every major human gene that predisposes evolved from observations of familial individuals to cancer; (2) clinical appli- occurrences of inherited disorders to the cation of these discoveries to people at use of the tools of human molecular risk; and (3) identification and remedial genetics. Genetic tests have become attention to psychosocial, ethical, and available for more common and more legal issues associated with inherited complex diseases, many with onset in susceptibility. A secondary goal is devel- adult life. With the identification of oping an informatics system to collect, cancer susceptibility genes and of genes store, analyze, and integrate cancer- leading to neurogenetic disorders includ- related molecular data with epidemio- ing Alzheimer’s disease, the Human logic and clinical data. Genome Project provided the engine that propelled the rapid identification Pharmacogenomics of a wide range of genes that can cause complex diseases such as diabetes, cancer, Pharmacogenomics, a particular applica- and heart disease, in which both genetic tion of genomic information, is the sci- predisposition and environmental and ence that defines how an individual behavioral factors combine to reach a responds to drugs. Basically, a drug may critical threshold for causation. These be safe or dangerous depending on the

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Related to pharmacogenomics is tissue The Ethics of Genetic Testing fingerprinting (i.e. testing of tissue When the importance and future ramifications of genetic testing became rather than a person) to determine clear, a number of panels were convened to look at the technical, social, whether a specific drug will be effective. and ethical issues. The Task Force on Genetic Testing was created by the The best example is the testing of breast National Institutes of Health—Department of Energy Working Group on cancer taken from a patient for the pres- Ethical, Legal and Social Implications of Human Genome Research to make recommendations to “ensure the development of safe and effective ence of HER2 amplification: if the gene genetic tests, their delivery in laboratories of assured quality, and their is amplified, a drug, Herceptin, will be appropriate use by health care providers and consumers.” The task force effective, and if not, the drug will be called on the Secretary of Health and Human Services to establish the ineffective. This example illustrates the Advisory Committee on Genetic Testing and to apply “stringent scrutiny” reclassification of a condition, in this when a test can predict future inherited disease in healthy or apparently case breast cancer, according to genetic healthy people, is likely to be used for that purpose, and when no confirming test is available. The National Center for Human Genome (molecular) features and at the same time Research has set aside funds for consideration of ethical, legal, and social provides an example of prescribing a implications of human genome research in which genetic testing has the treatment based on a distinguishing central role. molecular abnormality.

Magnitude and Areas of Impact

Genetic susceptibility testing for cancer genetic profile of the individual, most of the breast, colon, and prostate has often having to do with the function or moved into clinical reality, and in each nonfunction of an enzyme responsible instance the hereditary pattern of disease for the metabolic fate of a drug. For a provided the initial search for the identi- particular drug to be effective (a differ- fication of the critical gene or genes. ent question than its safety), an individual’s genetic profile is equally important. More complex genetic disorders, such Testing for these drug effects is one use as childhood asthma and late-onset of genetic testing. Alzheimer’s disease, suggest either a polygenic inheritance, in which more Pharmacogenomics has two broad appli- than one gene is responsible for the dis- cations. First, for individual patients, ease in a particular individual, or genetic pretreatment testing will predict safety heterogeneity, in which different combi- and efficacy of a particular drug or class nations of genes produce the same condi- of drugs. Second, for the pharmaceutical tion in different individuals. Of even industry pharmacogenomics will have greater complexity are the conditions profound effects on preclinical drug currently being studied in the emerging development and equally impressive field of neurogenetics, where genes that consequences on the design and conduct increase susceptibility to schizophrenia, of clinical trials. The initial application manic-depressive illness, and depression of drug-related genetic testing will con- are studied to find out how they interact centrate on the safety of the drug for with nongenetic (environmental) factors individual patients. to trigger the onset of the recognized

Chapter 8: Medical Technologies 121 disease state. In these psychiatric disor- specifically administered based on phar- ders, identification of the specific genes macogenomic information. Applied to may give clues for designing pharmaco- genetic testing, microchip technology logic interventions. The discovery of will have predictive power for disease genetic susceptibility provides the basis and disease predisposition that hereto- for initiating preventive measures, fore was almost unimaginable. whether through pharmacologic means or counseling. The new term “genomet- Key Barriers rics” has been applied to the discovery of a gene or genes responsible for a trait Practicing clinicians—generalists and and to defining precisely the trait con- specialists alike—lack the knowledge trolled by each gene involved in complex base to practice genomic medicine. multifactorial illnesses. Genetic testing, particularly the predisposition genetic testing for late-onset Within a few years, our present methods disorders in adults, requires a multidisci- of genetic analysis, sophisticated though plinary approach. People seeking such they seem, will be viewed as time- testing need appropriate pre-test educa- consuming, labor-intensive, expensive, tion and genetic counseling and post-test and myopic in scope and application. follow-up care. Before testing is done, New technology will use microchips the person must be informed that other designed to interrogate DNA or RNA factors, genetic and nongenetic, may samples for sequence or expression infor- influence onset and severity of the condi- mation. The molecular arrays for these tion, and that in many situations testing microchips can be synthesized cheaply, is probabilistic rather than deterministic. rapidly, and efficiently by using methods Potential consequences must be under- borrowed from the semiconductor indus- stood, as must the clinician’s inability to try. With fluorescent methods for the guarantee confidentiality despite all safe- detection of DNA and RNA targets, guards and legislative protections. hybridization will occur in a special chamber, and the resulting signals will Genetic testing has a predictable future be detected by scanning microscopy in a based on technological potential. This matter of minutes. Current applications potential could be constrained, delayed, of this microchip technology will revolu- or lost entirely through several possible tionize the fields of diagnostics and developments: the desire in prenatal genomics. Within the next decade, can- testing to enhance specific attributes of cer tissue will be analyzed for differences offspring; technology’s advancing too in gene expression, and in another 5 rapidly for rational assimilation and years specific therapies can be assigned to application because of an understaffed individuals with identified cancer geno- clinical genetics workforce; premature types. Tumors of a particular type will be availability of self-administered testing re-classified by genotypic profile (genetic kits as a consequence of unregulated fingerprint) and once they are classified, commercial interests; and ethical road- individualized treatment will be quite blocks imposed because of misuse of

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genetic information contrary to public which a functioning gene is inserted into policy (e.g., sterilization of people targeted cells of a patient to correct an afflicted with a serious heritable disease inborn error or to provide the cell with a to prevent genetic transmission to off- new function.” The successful delivery spring). and insertion of a functioning gene leads to the expression of a therapeutic protein With proper safeguards, genetic testing of some kind that will supplement or will revolutionize prevention and treat- replace a defective gene or treat the ment of many conditions and diseases, effects of acquired diseases like cancer. but without these safeguards the possibil- Somatic gene therapy, discussed here, ities for mass confusion, misapplication, affects only somatic cells—the kinds discrimination, and lawful or unlawful that are neither sperm nor egg.3 commercial exploitation are sobering. Current methods for gene therapy use Gene Therapy directly harvested cells, cultured cell lines, genetically modified cell lines, In 1997, a blue-ribbon panel of experts and viral vectors, such as modified retro- sharply criticized the rush to initiate viruses or adenoviruses. In the ex vivo clinical trials of gene therapy before an approach, cells from specific tissues are adequate scientific base was established. removed, cultured, and exposed to viral The consequence was a slowdown in or nonviral vectors or DNA containing clinical applications and a return to basic the gene of interest. After insertion of research in several critical areas: better the genes into these cells, the cells are vectors or delivery vehicles to ferry cor- returned to the patient. In the in vivo rective genes into target cells; more pre- approach, viral or nonviral vectors— cise targeting of genes to specific sites or simply “naked DNA”—are directly and tissues; and enhancement of gene administered to patients by various expression following entry into the routes. A third approach involves the target cell. The widely publicized and encapsulation of gene-modified cells and criticized death in 1999 of a patient the reversible introduction of an encapsu- undergoing gene therapy initiated lated cell structure into the human body.3 sweeping improvements in dealing with human subjects of clinical research, A challenge for genetic researchers is not only in gene therapy trials but also to develop methods that discriminately in human research generally. deliver enough genetic material to the right cells. Most gene vectors in current Nevertheless, revolutionary advances in use are disabled mouse retroviruses. gene therapy are preparing medicine for Retroviral vectors offer the most promis- an epochal shift to an era in which genes ing prospect for the transfer of useful will be delivered routinely to cure or gene sequences into defective tumor alleviate an array of inherited and cells because they target only dividing acquired diseases. Gene therapy can be cells and have the potential of long-term defined as “a therapeutic technique in expression. They are considered safe and

Chapter 8: Medical Technologies 123 effective gene delivery vehicles and are and may be useful in neurological attractive because they are designed to therapies. specifically enter cells and express their genes there. Retroviruses splice copies of Liposomes are yet another potential vec- their genes into the chromosomes of the tor under examination. These synthetic cells they invade, and the integrated lipid bubbles can be designed to harbor gene is then passed on to future genera- plasmids—stable loops of DNA that tions of cells. Since cell entry by a retro- multiply naturally within bacteria— virus occurs only when cells are actively into which therapeutic genes are dividing, this feature is exploited in inserted. A synthetic liposome-like rapidly dividing cells such as bone mar- vector, the lipoplex, can bind firmly to row but is not suitable for other tissues, cell surfaces and insert its DNA package such as muscle and lung. Unfortunately, into cells at a significant rate. Mixing retroviruses are somewhat indiscriminate lipoplexes with DNA has become a stan- and have been known to deposit their dard technique for inserting genes into genes into the chromosomes of a variety cultured cells. of cell types, prompting research into viral envelope alteration in hope of Although currently undeveloped for increasing target specificity. The speci- clinical use, two new viral-based vector ficity of the envelope—how the vector is systems hold out the possibility of “packaged”—ensures the appropriate advancing toward the ideal delivery sys- receptors are triggered. tem for directly supplying cells with healthy copies of missing or defective Other viral vectors are also being genes. Both systems have the capacity to explored. These include adenoviruses alter quiescent cells, such as the mature and adenoassociated viruses, herpes stem cells that generate the immune sys- viruses, alpha viruses, vaccina virus, tem. These viral vectors, HIV and simian and poxviruses. Each virus has a poten- virus 40 (SV40), share the preceding char- tial therapeutic niche established by its acteristics. Although HIV is a human attributes and behavior. The next most pathogen whose use will be restricted at commonly used vector after retrovirus least initially to advanced cancers, origin is the adenovirus, a DNA virus that, from a human source may confer an though capable of entering dividing as advantage. SV40, an adenovirus, can be well as nondividing cells, has produced rendered harmless, is capable of infecting disappointing results. Adenoassociated several resting and dividing cell types, is viruses have an appeal because they easy to manipulate, and is stable and cause no known diseases in humans and nonimmunogenic; it appears to be as they integrate their genes into human benign as any available viral vector and chromosomes. But because they are has the added attribute of being directly small, they may not be able to accom- injectable into target tissues. Some inves- modate large genes. Herpes viruses do tigators foresee the development of hybrid not integrate their genes into the host’s vectors that build on the best features of DNA, but they are attracted to neurons viral and nonviral vectors.

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Magnitude and Areas Yet another field of cancer research is of Impact immunotherapy. Immunotherapeutic Current clinical trials are investigating research concentrates on how tumors the genetic treatment of several cancers evade detection and attack via the and genetic diseases, such as cystic immune system, how they spread away fibrosis and hemophilia. Gene therapy from their sites of origin, how they gain has succeeded in treating the symptoms a new blood supply, and how they evolve of patients with cardiac and lower and spread. extremity ischemia, and several children with severe combined immunodeficiency A different form of genetic marking is diseases are surviving as a direct result of used in immunotherapy, also called vac- treatment. cine therapy. Immunotherapeutic vaccinations tag cancer cells with certain One of the most significant develop- genes that make them more visible to ments in this field is the application of the immune system. One method being this methodology to gene marking in widely tested involves modifying a the study of the biology of cancer. Close patient’s cancer cells with genes encod- to 1.4 million Americans will be newly ing cytokines—the communication pro- diagnosed with cancer this year alone, teins of the immune system’s B and T and the treatments currently available— cells—to draw an attack from the surgery, radiation therapy, and chemo- immune system. Unfortunately, this therapy—cannot cure 50 percent of method will benefit only patients with those diagnosed. Although gene therapy robust immune systems and not those was originally targeted toward single- with advanced cancer. gene deficiency diseases that are recessive and relatively rare, about 80 percent of Key Barriers the current clinical trials now focus on cancer. Despite encouraging results, the field awaits answers to many unresolved ques- For treating cancer, a variety of tions. An area where enormous progress approaches are being attempted. Some has been made, but where much more is involve imparting cancer cells with needed, is developing gene-delivery vec- genes that give rise to toxic molecules. tors. Virus-based vectors have been the When these genes are expressed, the most efficient for inserting genes into resulting product then kills the cancer cells in the laboratory, but in clinical cells. Genetic marking of marrow cells applications the results have in some used in similar ex vivo therapies permits cases been short lived, and there have physicians to monitor the effects of dif- been unwanted side effects. ferent cancer-purging methods. Another research focus is on the correction or In addition, the field needs to develop compensation for acquired genetic muta- animal models to test the biological and tions, particularly of the oft-mutated clinical efficacy of the new vectors and tumor suppressor gene p53. procedures. As a result, gene therapy

Chapter 8: Medical Technologies 125 may take longer to reach patients than use. Vectors that have both site- and originally predicted. The progress of cell-type specificities will deliver genes gene therapy also depends on adequate to treat a wide range of conditions in technical, financial, and training most, if not all, organs. The potential of resources, and demands close interaction using genes and gene products in novel between academics, clinicians, and pri- strategies is an incredibly powerful vate-sector companies. incentive to pursue gene therapy as the equal of the future’s most effective thera- Private industry is playing a critical role peutic modalities. in promoting the development of innovative medical technology. These compa- Vaccines nies have millions of dollars at risk: they have to choose technologies, knowing Since Jenner conferred smallpox immu- that the ultimately successful approaches nity with inoculations of cowpox in the are likely to require complex assemblies early 19th century, vaccines have been of new chemical tools and procedures. administered globally as preventive mea- For industry, a necessary incentive is the sures for acute diseases, such as diphthe- award of exclusive protection of innova- ria, smallpox, and whooping cough, and tive breakthroughs. Limited access to have been used to avoid acute infection enabling technologies for gene ther- by creating a low-level immune response apy—such as vectors—because of time- that remains as an acquired immunity. consuming and expensive licensing In the history of public health, vaccines processes, could lead to prohibitive com- have proved to be among the most mercial burdens that would delay effective disease prevention tools. Some progress in the field. diseases, such as smallpox, polio, and measles, have been eradicated or brought In June 1999, there were 313 clinical under control through mass vaccination studies involving gene transfer, of which programs. 277 protocols involved new therapeutic applications with most (193) intended for The current use of vaccines includes any patients with cancer. The same advisory preparation intended for active immu- group that in 1995 accused the scientific nization of the recipient. Until recently, community of overselling the present vaccines were prophylactic—their sole benefits of gene therapy stressed the extra- objective was preventing a specific infec- ordinary potential of gene therapy for the tious disease. They were therefore long-term treatment of human disease. directed against the causative infectious The lack of more efficient gene vectors agent. More recently, vaccines have been was singled out as the major barrier to used against noninfectious diseases. attaining better clinical results.4 Patients with certain cancers have been vaccinated—either prophylactically, to With the intense ongoing activity in prevent the emergence of micrometasta- vector development, we project that tic tumors, or therapeutically, to boost within 10 years a number of efficient the immunologic cytotoxic response to gene delivery systems will be in clinical the tumor.

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Vaccines can have preventive or thera- Vaccines have been effective in treating peutic uses. Preventive vaccines permit melanomas and renal cell carcinomas, the vaccinated individual to develop two cancers that are unique in their immunologic responses that prevent responsiveness to the immune system. or modulate subsequent infection or Vaccine therapies for cancer that stimu- disease. Recently developed therapeutic late the immune system and do not vaccines use new recombinant DNA involve surgery, radiation, or cytotoxicity technology to provide genetic therapy to could become the least traumatic mode patients who already have a disease. The of treatment for particular cancer key to using this technology is speci- patients. A vaccine can activate the ficity for tumor cells or for an infectious immune system by delivering a tumor agent such as HIV or tuberculosis. antigen or by eliciting a nonspecific immune system response. Such a nonspe- The application of molecular biology to cific response would simply boost the the identification of virulent genes has activity of the immune system, resulting led to a fundamental understanding of in greater overall immune activity. the pathogenesis of virulent microbes. With the molecular tools of the new ge- Magnitude and Areas netics, the genes responsible for the or- of Impact ganism’s virulence can be identified and isolated. The molecular genetic defini- Prophylactic vaccination to prevent can- tion of virulence has exciting and highly cers caused by viruses would prevent an promising implications for vaccines. estimated 850,000 cases of cancer each Given the side effects of antibiotics, in- year, roughly 11 percent of the global cluding the emergence of resistant bacte- cancer burden. Examples of such viruses ria, novel strategies for controlling and their secondary cancers are Epstein- infectious diseases are evolving. One of Barr virus and nasopharyngeal cancer, the most promising strategies, that of us- human papilloma virus (HPV) and can- ing molecular microbiology and whole- cer of the cervix, and hepatitis B virus gene sequencing to develop candidate and primary liver cancer. Because cervi- vaccines, will be the wider use of gene- cal cancer is diagnosed in 16,000 women specific vaccines.5 in the United States each year, the impact of a vaccine for HPV will be sub- Recent therapeutic vaccines are designed stantial. In addition, a live attenuated to attack certain chronic infections. Early HIV vaccine may be a realistic projec- cancer vaccines had few successes but tion by 2005, or even sooner. with the new knowledge and technology ushered in by molecular biology, med- A novel new vaccine against rotavirus, ical, and recombinant DNA technology, a major cause of childhood diarrheal anticancer vaccines are gaining increas- disease mortality in developing coun- ing attention. This resurgence of interest tries, which causes an estimated 600,000 in therapeutic vaccines reflects a new and deaths worldwide each year, is a live oral broadened understanding of the immune rotavirus vaccine. Incorporation of this system and its elements. vaccine into routine immunization could

Chapter 8: Medical Technologies 127 reduce severe rotavirus gastroenteritis by the risks of transmitting an infectious 90 percent. agent. Thus, increasing oxygen-carrying capacity is rapidly becoming the sole Could some diseases currently believed indication for blood transfusions, which to have a noninfectious cause be the in most cases is done by administering direct consequence of an infection by an packed red blood cells. The only major unidentified or unrecognized agent? If risk of blood transfusion, assuming the the recent connection of H. pylori infec- absence of human error in the pretrans- tion to gastric carcinoma and lymphoma fusion process, is transmission of an and the putative role of infectious prions infectious agent that has eluded detec- with Alzheimer’s disease are a prelude to tion by the battery of screening tests cur- the future, the answer is a resounding rently performed before a unit of blood is “yes.” Among immediate candidates for cleared for use. The principal concerns such an etiologic connection are other are the HIV and hepatitis viruses and cancers and rheumatoid arthritis. By the more recently the prion diseases, notably year 2010, prophylactic and therapeutic Creutzfeld-Jacob disease. Availability of vaccines will compete with rational drug donated blood in the United States has design for airtime. become a problem. Severe shortages of blood and blood products have affected Key Barriers several metropolitan areas, and in the near future continued short supplies are Clinical trials of HIV vaccines will be predicted from coast to coast. controversial and politically charged. Traditional approaches to vaccine devel- Historically, the armed services have opment, such as “whole killed” or atten- tried to develop artificial blood for mili- uated virus methods, raise special safety tary use under wartime conditions and concerns with HIV because a faulty vac- in natural disasters. The features of an cine that actually infects a recipient ideal blood substitute would be ready would have lethal consequences. Realis- availability, safety, long shelf life, effi- tic research goals for HIV vaccine may cacy, and compatibility across all blood focus on a product that can inhibit pro- types. Interest in artificial blood peaked gression to disease or lower viral load in in the 1980s because of the seriousness infected persons instead of preventing of transfusion transmission of HIV and actual infection. hepatitis infections, but the current and projected shortages of donated blood Artificial Blood have created a new level of urgency in developing suitable blood substitutes. Blood transfusions are given for two reasons: (1) to increase oxygen-carrying Magnitude and Areas capacity, and (2) to restore intravascular of Impact volume. Intravascular volume can be restored by other fluids, such as crystal- Hemoglobin-free fluids carrying dis- loids and colloids, which are free from solved oxygen have been approved for

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clinical use but because of their inability for cardiac bypass procedures and renal to achieve desired oxygenation of tissues dialysis as well as for transfusion. these products have been used sparingly in practice. Key Barriers Public’s reluctance to accept an artifi- Hemoglobin-containing products have cial product that is perceived to be been produced by using outdated human less valuable. blood or bovine blood. A serious draw- back of these hemoglobin products has Resistance from an entrenched blood- been kidney damage caused by the split- bank industry. ting of hemoglobin into fragments that High cost of artificial blood due to were shown to damage the kidneys. manufacturers’ need to have an early Human hemoglobin can be chemically return on investment in product stabilized to avoid this splitting, and development. refined blood substitutes based on human hemoglobin are now in advanced clinical Xenotransplantation trials. The obvious problems are the supply of outdated blood and the risk, Xenotransplantation—the transplanta- although reduced, of disease transmission. tion of cells, tissues, and whole organs from one species to another—had its A new company, Somatogen, has pro- modern beginning in the early 1960s duced a recombinant hemoglobin using with the transplantation of kidneys from E. coli. The recombinant hemoglobin chimpanzees to six human patients. But acts like human hemoglobin, and the these xenotransplants, and later other synthetic process can be programmed to grafts of solid organs across species, produce a product with an ideal oxygen- resulted in immune rejection after brief release curve free from adverse features periods of normal function in the new such as the hypertensive component of host. In contrast, allotransplantation— free hemoglobin. The recombinant transplantation within species—of bone hemoglobin, like stabilized human marrow and solid organs from related hemoglobin, has a half-life of 24 hours. and unrelated human donors has become Because four companies have products in highly successful because of satisfactory, the final stage of testing, Food and Drug although still less-than-ideal, means of Administration (FDA) approval of a sat- avoiding immune rejection, principally isfactory blood substitute may soon be by using immunosuppressive drugs and granted. Further refinements of synthetic avoiding major histoincompatibilities to hemoglobin molecules will lead to a the extent possible. near-ideal substitute for blood by 2010. Magnitude and Areas This fluid will have a shelf life of 1 year of Impact or longer; obviate the need for cross- match (i.e., be a universal source of The number of patients meeting strict blood); and carry no risk of infection. criteria for receiving transplants of kid- Such a product will be used routinely neys, lungs, livers, and hearts currently

Chapter 8: Medical Technologies 129 exceeds the supply of suitable donor new gene requires 14 months, but this organs. In the past 10 years, the number time will be shortened in the future. The of solid-organ allotransplants has short-term goal will be to use organs increased slightly more than 50 percent, from modified pig donors to bridge a with the greatest increase being in lung human recipient for a matter of months transplants. Over the same span of time, while awaiting a suitable human organ, the number of names on the waiting list and this may be possible within the next for all organs reached 75,000, in 2000, 2 years. The use of pig organs as bridges and more than 5,000 potential recipients will teach critical lessons essential to the died while awaiting a suitable donor creation of transgenic pigs whose organs organ. Availability of a suitable donor can be transplanted for permanent organ poses a particular problem for replacement, an ideal that should be infants and children because of organ attained within 10 years. Humans are size, and for ethnic minorities because presently living with xenotransplants of of a lack of suitably matched donors. nervous tissue mechanically transplanted to the brain for the treatment of Parkin- As indications for organ transplantation son’s disease, so the feasibility of organ have broadened, waiting lists grown, and xenotransplantation is not far-fetched. waiting times for suitable human organs lengthened, research on xenotransplanta- Transplantation of organs has been one tion has accelerated by using new knowl- of the great medical advances of the cen- edge and methods of molecular genetics, tury and the one modality that treats a transplantation biology, genetic engi- chronic disease successfully by replacing neering, and transgenic technology. Cur- the diseased organ. The present limita- rent xenotransplantation research focuses tion of solid-organ transplantation is the on the pig because of its size and favor- availability of donor organs, and for able biologic factors. both social and economic reasons, current waiting lists do not reflect the true The basic strategies fall in two areas: need for organ transplants in our popula- combined transplantation of bone mar- tion. The applications of xenotransplan- row and the solid organ; and modifica- tation go beyond eliminating the tion of the animal serving as the source waiting lists for solid organs as they are of the organ. Both strategies are now used. Chronic conditions, such as designed to avoid acute rejection. Com- diabetes and Parkinson’s disease, can bined transplantation, considered a high be successfully treated with xenotrans- risk but an equally high-reward strategy, plants, and xenotransplants of cells and depends on first successfully grafting the tissues can be used to transfer genes and foreign bone marrow into the patient, their gene products for the treatment of thus permitting later successful trans- genetic diseases, such as hemophilia, plantation of the solid organ. The strat- and acquired conditions, such as cancer. egy more likely to be successful is Pediatric organ transplants could be used genetic modification of the pig using in the treatment of congenital heart dis- transgenic technology. Introduction of a ease and as a prophylactic measure in the

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patient with Wilm’s disease. The poten- the year’s major scientific advance. In the tial is incredible. years since stem cells have vied for the public’s attention with the likes of gene Key Barriers and Indicators therapy, new drugs, and other medical advances. Particularly contentious has The principal scientific concern relates to been the debate over the ethics surround- disease transmission between animals and ing use of embryonic tissues. humans. The pig is known to harbor an endogenous retrovirus, but there is no Stem cells also reside in virtually every known transmission of any infection or tissue and organ throughout adult life, disease from pigs to humans. In theory, any and although small in number and diffi- infectious agent could be bred out of the cult to recover except in the bone mar- donor animal, but the threat of disease can- row, they do exist; they are known not be dismissed entirely, nor can the suc- generally as adult stem cells, to distinguish cessful treatment of a transmitted infection them from ESCs. Adult stem cells, too, be assured. Preliminary vaccination of the can be coaxed into cells of a different organ recipient is a feasible option that lineage or type, but their plasticity is could confer additional protection. An- restricted and they cannot reproduce other concern is excessive inbreeding, and indefinitely outside the body in the same one goal of creating herds of pig donors is manner as ESCs, hence their relatively to use as little inbreeding as possible. more limited potential. The principal attraction of adult stem cells concerns Two issues will need to be addressed: their immunologic compatibility if the the economic consequences of applying donor and the recipient are the same per- a new technology on a scale that today son, and certain cells in the bone marrow would seem to be vast but which is not have this potential. Another approach for precisely predictable, and the ethical and the avoidance of the immune rejection public policy implications of resource would be the creation of universal stem allocation and equity. cells lacking critical antigens, and this possibility is being pursued. Stem Cell Technologies Molecular signals have been identified that determine the future path of differen- Embryonic stem cells (ESCs), also called tiation of an uncommitted stem cell pluripotent stem cells, can generate all (ESC), and comparable molecular signals other types of cells in the body and there- can promote dedifferentiation of commit- fore hold great promise for replacing or ted cells. To date, stem cells can be coaxed repairing tissues and organs damaged to become cartilage, bone, blood cells, by disease. Although they were known to muscle, fat, neurons and related cells in exist in humans, their incredible plastic- the nervous system, and heart muscle. ity and myriad potential uses seemingly Other cell types, such as liver and pancre- burst onto the scene in 1999, the year atic islet cells, can be produced under that the journal Science declared stem cells appropriate conditions in vitro, and there

Chapter 8: Medical Technologies 131 seems little doubt that all cell types, Barriers including those in complex organs, such The principal and most predictable barri- as the kidney, can be produced as well. ers to forging ahead with the development of embryonic stem cell technologies Building organs rather than tissues may be political and ethical. The political has engaged the involvement of tissue barrier has some relationship to the con- engineers, who envision scaffolds com- trolling party at the federal level, but at posed of biodegradable polymers that present there is sufficient support for can be populated with specific cells to embryonic stem cell research and applica- create semisynthetic tissues and organs. tion among moderates of both parties Skin and bone have been the initial suc- that this may not be an issue regardless cesses, but more complex tissues and of who is in the White House. The ethi- organs will follow shortly. Creating an cal barrier to using ESCs is rooted in internal network of blood vessels is religious dogma and in the objections of entirely feasible and prototypes have ethicists who emphasize the risk of mis- been created in several laboratories. application. Both forces have powerful and articulate representatives, and, Magnitude and Areas although embryonic stem cell research of Impact will advance regardless, legal and legislative hurdles could delay its impact on the The magnitude is huge, really huge. health of individuals who could benefit Damaged heart muscle could be patched from the advances that may be possible. with cardiomyocytes grown from the patient’s own cells, diabetics could be implanted with clusters of pancreatic Wild Cards islet cells that will respond to glucose levels appropriately, and patients with Managed care organizations develop Parkinson’s disease could be treated suc- the analytical tools to make rational cessfully by dopaminergic neurons trade-offs among different therapeutic grown in special stem cell laboratories. modalities. Because of their cost-effectiveness, drug therapies offset a large These and similar examples are entirely share of medical costs. Drug spending feasible within 5 years, possibly even as a share of total health spending sooner. The more difficult task of build- increases from 9 percent to 20 per- ing solid organs to supply the rapidly cent. Meanwhile, overall health expanding demand of patients with expenditures decline. life-threatening organ failure will require more time for development, and Drug-resistant strains of staphylococ- although prototypes may become avail- cus and tuberculosis become common- able as bridges to definitive conventional place, not just in developing count- organ transplants before the end of the ries but also in more affluent parts of decade, fully functional replacements for the world’s population. This spurs a livers, hearts, and kidneys are unlikely to renaissance in antibiotics research, but become available until after 2010. not before millions of lives are lost.

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Image-guided surgery from remote tomies. Global centers of excellence locations—telesurgery—becomes a develop for those procedures, driving common practice mode for procedures many local specialists out of business. such as laparoscopies and chalecystec-

Chapter 8: Medical Technologies 133 Endnotes 3 Ronchi, E. Biotechnology and the new 1 Cannon, P., et al. Comparison of early revolution in health care and pharmaceuti- invasive and conservative strategies with cals. Special Issue on biotechnology. Science unstable coronary syndromes treated with Technology Industry Review 1996; 19:19–44. the glycoprotein IIb/IIIa inhibitor tiroﬁban. 4 Jenks, S. J. Gene therapy: Mastering the New England Journal of Medicine 2001; basics, deﬁning details. Journal of National 344:1879–1887. Cancer Institute 1997; 89(16):1182–1184. 2 Montalescot, G. Platelet glycoprotein 5 Moxon, E. R. Applications of molecular IIb/IIIa inhibition with coronary stenting microbiology to vaccinology. Lancet 1997; for acute myocardial infarction. New England 350:1240–1244. Journal of Medicine 2001; 344:1895–1903.

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Chapter 9 Information Technologies Will Health Care Join in the Information Age?

Over the next decade, health care in the be one of, if not the, prime catalyst of United States will at last be dramatically health care change over the next 10 affected by the revolution in communica- years. Can we then expect a shift toward tions and information technology that has the prevalence of automated customer been in process for the past 20 years. Most service, electronic information exchange, information technologies, which have and real-time data analysis that’s com- become a familiar part of the business monplace in those other industries? As landscape, are outgrowths of the increased health care tries to assimilate currently power and reduced costs of microproces- available technologies, new types of, and sors and lasers and the consequent cost uses for, information technology are reduction in both data processing and emerging at a rapid and increasing pace. computer memory. Indeed, most busi- How will health care adapt to incorpo- nesses in the United States are now filled rating a host of new technologies over with networked personal computer (PC) the next decade? technologies (see Figure 9-1) that have migrated into households within the past There are two key fundamentals. The 10 years (see Figure 9-2). first is to understand the underlying cutting-edge technologies that will Although health care industry spending emerge from other industries and that on information technology was esti- will enjoy mass diffusion by 2010. The mated to be as much as $21 billion in second is to understand which aspects of 2000,1 health care has lagged behind health care will be most affected by other industries in adopting technology- these technologies. enabled processes and has not experienced the dramatic changes in practices Base Technologies seen in finance, retail, distribution, and other industries. No health care company All of the applications and new processes has used technology to change the way of that will change health care’s use of doing business as dramatically as Wal- information depend on developments in Mart changed retailing, for instance, or base technologies. The most important Charles Schwab transformed securities underlying technologies are listed below, brokering. But it’s clear that changes in with brief explanations of what they do information technology will continue to now and what developments are likely.

Chapter 9: Information Technologies 135 Microprocessors. A microprocessor is the Figure 9-1. More and more PC usage by the workforce “brain” within computers that executes (Percentage of workforce using personal computers) their functions. Moore’s Law suggests Percent that, as has been true for 30 years, 80 microprocessors will continue to double in power every 18 to 24 months. This means that by the end of the decade, 60 PCs will have a processing capacity some 20 times faster than they have 40 today, and powerful processors will be found in virtually every manufactured

20 product, including clothes, furniture, and buildings, as well as cars and consumer electronics. Medical devices and 0 information systems will also benefit 1980 1985 1990 1995 2000 2005 from increased processing power. Source: IFTF; U.S. Bureau of Labor Statistics. Data storage. Enabled by the develop- Figure 9-2. Technologies in the home take off. ment, in the late 1980s, of cheap (Percentage of United States households with . . . ) lasers—the key to both compact discs and large-capacity optical storage systems—data storage capacity has fallen VCR in price to the point where technology planners believe that it will soon be Compact disc nearly free. Consequently very large (CD) player data sets, such as entire film outputs from years of MRI use, can be cap- Computer tured and stored. Those files are then accessible for searching, processing, and analyzing. Cellular phone 1999 1996 Wireless technology. Handheld wireless devices, also known as palm-top Laserdisc player 1993 devices, allow a clinician access to

0 25 50 75 100 computerized patient records without Percent requiring him to stay in one place. Their flexibility and functionality can Source: IFTF; Louis Harris & Associates, Television Bureau of Advertising, Recording Industry Association of America, International Recording Media Association. fit seamlessly into a clinician’s work- flow. Many medical schools are giving new residents handheld devices as both a study aid and part of their clinical toolbox, and analysts predict that 20 percent of physicians will be using handheld devices by 2004.

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Networking bandwidth and data com- missions are secure will be difficult to pression. Networks that permit infor- implement. mation transfer among computers have exploded in prevalence, speed, Internet and the World Wide Web. and utility. With higher-bandwidth Although the Internet as we know networks and with new techniques in it will scarcely be recognizable in a compressing data so that more infor- decade’s time, its current incarnation mation can be saved in the same provides a common format for view- amount of computer storage, larger ing, exchanging, and transacting amounts of data will be transferred at information of all kinds that is trans- higher speeds among more users. ferable among different computer Health care providers, especially radi- systems. In particular, the volume of ologists and others working together transactions conducted over the Inter- on large-image files, will benefit from net—as opposed to the simple one- this trend. way sharing of information—will increase dramatically. Information appliances. The most common information appliance is the 3-D computing. Data visualization is computer, but increasingly the com- the use of computing to represent ponents and functions of computers huge volumes of data in three dimen- will appear in telephones, televisions, sions on one computer screen. The and other devices. The class and num- ability to move, shape, and analyze ber of information appliances will data in ways that support decision accelerate dramatically. making will enable managers to view activities, classes of transactions, and Intelligent agents. Software programs entire organizations in whole and in that find and retrieve information over detail at the same time. a network that is likely to be helpful to an end user, even though the user Databases. A new class of both rela- doesn’t know where that information tional and object-oriented databases is coming from, will grow in popular- will increase the capacity to store, pre- ity. Current intelligent agents are sent, sort, and analyze data over the somewhat crude, but over the next next decade. Even though these new few years their filtering and retrieval database systems will be incompatible ability will increase dramatically. with older “legacy” databases, a considerable amount of older information Security and encryption. The transmis- will be extracted from those databases sion of medical and financial infor- by using techniques called “data ware- mation will depend on the full housing” and “data mining.” distribution of encryption technologies that permit secure transmission Sensors. The real world can connect of data. The underlying technology with computers by using devices such for encryption is developing fast, but as digital video cameras or blood pres- the procedures ensuring that all trans- sure monitors. A key change of the

Chapter 9: Information Technologies 137 next decade will be the fall in the cost Information systems in health care are of sensors, making sensors an integral used for administrative, clinical, and part of many computing devices and financial purposes. Most systems have information appliances. Their great elements of all three activities, but diffusion will allow the monitoring of administrative and financial transactions events that previously went unre- are already much more automated than ported or were very costly to track. most clinical ones. For example, about half of all claims are sent electronically, Given the progress made so far and the whereas well under 5 percent of physi- massive international commercial invest- cians use computers to record all clinical ment in information technology research information for an average patient. A and development, we can expect contin- similar difference exists among hospitals ued rapid advances in and diffusion of using computer systems to automate these basic technologies over the next their admission and registration func- decade. For health care, which has been tions but paper charts to record nursing behind the curve, both the application of activities. The adoption of electronic currently available information technolo- transactions varies dramatically by sector gies and the development of new tech- for the same type of transaction, with nologies will combine to cause dramatic physicians’ offices typically being the change. least automated.

Given that information systems will be The Issues: The Direction Is Clear, the Pace Uncertain used to convert health care from paper to electronic recording—but at a differ- While it’s possible to imagine some ent rate depending on the activity and incredible impacts of information tech- organization—there are some key ques- nology on health care, the implementa- tions: How fast will different types of tion of new information systems is a task technologies diffuse? What kinds of barely begun. There are all kinds of orga- organizations will use what types of nizational, financial, and educational technologies and for what purposes? barriers preventing adoption of different Who will pay for them and who will technologies and all kinds of difficulties benefit? While there will be no part of with their use when they are adopted. the health care system that doesn’t see Several major information system ven- change caused or enabled by information tures in health care have failed, particu- technology, we believe that four major larly clinical information systems. The areas will see the greatest impact. planned exchange of information over dedicated local networks (like the Com- The Forecast: munity Health Information Networks of Four Big Effects in the early 1990s) also went nowhere Health Care despite much effort. The next decade will see much greater change than in the Although health care will use informa- last. But we need to be clear about what tion technology in a variety of ways, we we’re projecting. think the most important effects will be

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in four main areas: has been impossible in the area of privacy, process-management systems and particularly in regard to the National clinical information interfaces Individual Identifier for patients. Con- data analysis gress failed to enact legislation governing such standards by August 21, 1999. telehealth and remote monitoring The original deadline for the Secretary of Process-Management Health and Human Services to publish Systems the final standards for privacy of individ- ually identifiable health information was Provider and Plan Management February 21, 2000. Systems Go Electronic The first major area where information Several prominent functions are starting technology will affect health care is to be performed electronically. These in the automation of basic business include claims submission, eligibility processes among providers and inter- verification, coordination of insurance mediaries and their customers. These benefits between providers, utilization processes include provider network con- review and precertification, materials tract administration, communications management, pharmacy claims, and uti- between different organizations over lization review and receipt of lab tests. administrative issues, such as patient So the technology-enabled processes that eligibility and claims submission, and manage the everyday interactions of the business and medical protocols used health plans, providers, and patients are in customer service centers. These devel- changing dramatically—and quickly. opments occupy the broad category of “electronic commerce.” These administrative links between providers and plans will be complemented Electronic commerce is being encouraged by better use of computing and tele- by cheaper and more flexible technolo- phony links among plans or providers gies, such as transactions conducted over and their members and payers, including the Internet and other open and cheaply employers. Telephone-based customer accessible computer networks. But the service centers with human staffs are major driving force behind the adoption likely to remain the largest single exam- of electronic commerce in health care is ple of this interaction, but other links the combination of mandated standards will be emblematic of this convergence for electronic data exchange and the reg- of technology and process. These include ulatory incentives to use them legislated automated enrollment by using interac- in the 1996 Kennedy–Kassebaum Act tive voice response (IVR) or the Internet, (Health Insurance Portability and Acces- administrative information and health sibility Act, officially known as HIPAA). information delivered by a combination While the low-hanging fruit of insurance of phone, mail, and computer, and even and administrative simplification stan- the development of online insurance dards have seen final rules published, sev- markets. These secondary electronic eral areas have been controversial and commerce developments will become have not yet been finalized. Consensus mainstream after 2005.

Chapter 9: Information Technologies 139 Clinical Information Nonetheless, many of the components Interfaces that would support an EMR, such as The EMR has been an elusive promise databases, networks, and computers, are of technology for at least a decade.2 The being put into place. Furthermore, the concept is that all medical information past few years have seen the development about a patient should be stored elec- of sophisticated software tools that sup- tronically to be accessed whenever, port clinical practice. What has been wherever, and by whomever needs it, missing to jumpstart the EMR is an eas- and that data need be input only once. ily usable interface that helps clinicians That system would loop information get information into and out of com- back from the patient to the physician, puter systems as fast as they can write on pharmacist, and case manager, permit- paper, or that at least gives them a payoff ting medical management in real time for investing in the system’s use. rather than retrospectively. This ideal would require ubiquitous use of infor- Over the next decade, ubiquitous information technology. But as Figure 9-3 mation appliances, sophisticated decision shows, as late as 2000, few physicians support systems, and voice recognition used the Internet in their everyday clini- will create interfaces with computing cal practice for more than research and systems that are much more clinician- reference information. friendly. Consequently, we’re likely to see more input of clinical observations into electronic databases and more infor- Figure 9-3. Eighty-ﬁve percent of physicians use at least one mation being fed back from these systems to clinicians at the point of care.

General medical research and news The clinicians’ interface will link to Access guidelines or protocols most areas of health information systems Submitting claims and claims status inquiry but will follow a close codevelopment Diagnostic reporting (order or lookup data) with aspects of clinical databases and Access pharmaceutical information analytical tools. So we will be moving Information technology support closer, incrementally, to an EMR. Communicate with patients (by email) Eligibility authorizations The rate of change toward prevalent use Purchase medical products of the EMR will depend on the econom- Referral authorization ics driving the adoption of these systems, Receive payments, earned remittance which currently can cost up to $50,000 Electronic medical records per clinician. While the price of the sys- Data analysis tems will fall, most of the cost actually Document patient encounters resides in the implementation and edu- Order and verify prescriptions cation that is required. Currently the initial training alone is estimated to be at 0 1020304050607080 least 48 hours per physician.3 Of course Percent there are advantages to using EMRs that Source: Health Technology Center, Internet Use by Medical Groups, 2001. are also measurable in cost terms, including faster access to data, lower rates of

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retesting as is required when original patient information, usually in a hybrid results can’t be found, and often more paper/computer approach. But the ideal accurate care as in the case of fewer of the EMR will not come about easily. adverse drug reactions.4 A number of other information systems challenges, such as a lack of capital and Both the increased importance of non- continued resistance from clinicians, physician clinicians and the fact that will mean that only a small percentage younger physicians have greater experi- of physicians and clinicians will be con- ence with computers will drive this ducting their practice using fully com- increased use of clinical information puterized medical records until later in technology. Many health care organiza- the decade. tions are also developing into an economic size and type that gives them the Within the move toward information ﬁnancial and management resources to systems that clinicians can integrate into automate clinical activities. Many orga- their daily work, two models are devel- nizations have announced plans to oping for the future EMR. One will implement clinical information systems focus on giving clinicians access to clini- for clinician use. Their reasons stem cal information, such as lab results, tran- partly from pressure from intermediaries scripts, and demographic data, that is and end payers for better reporting and currently already available over informa- partly from a belief that improving the tion networks. These systems will accept clinical process will give them a compet- physicians’ input in any way they can, itive advantage in the future. The eco- including voice, handwriting scans, and nomic value of automating the clinical free text. These systems will concentrate process will drive its adoption particu- on presenting as much relevant data to larly in payment environments that the clinician as possible and getting this reward lower costs, such as capitation. implementation widespread quickly.

In order to encourage physicians to use The other approach will also try to pro- this technology, more effort will focus on vide these data but will go the extra mile finding ways to educate and encourage to have physicians input their notes in a physicians to change their behavior. The structured format, either using check pursuit of that goal will lead to greater boxes or menus or allowing them to study of the clinical decision-making type. The system will then use natural process as a whole and the best way to language processing technology to codify use information technology to influence and assign values to their words. The decisions at the time they are made. idea is to capture and analyze physicians’ clinical assessments of patients, as that’s However, the dissemination of clinical where the most valuable information information systems into the daily prac- resides. The codifying of that clinical tice of clinicians will be a slow process. assessment will permit better analysis for Clinicians will start to use computers outcomes studies, provider profiling, and more as part of their regular work, eventually for assessing the value of including accessing and recording interventions in close to real time—

Chapter 9: Information Technologies 141 potentially changing the model of how plans and providers the tools to learn information about clinical practice is dis- much more about patients’ clinical out- seminated. This model demands far comes from particular interventions. more involvement from clinicians and This trend will lead to: more resources from their organizations and will probably diffuse more slowly. Better decision-making support for After 2010, these EMRs may include internal and competitive analysis, expert systems that support clinicians’ which will be aided by improved decision making and incorporate many computing that permits 3-D visual- of the analytical tools now being devel- ization of complex data sets. oped on the database side discussed Better understanding of patients’ like- below. lihood of future illness.

Data Analysis The ability to adjust payments to plans depending on the relative risk of The analysis of health care data is a illness of an enrolled population. This growth industry. In the next few years, “risk adjustment” will be based in more data will be collected from diverse part on a much wider use of patients’ input sources, including clinicians, self-assessment to understand their patients, other clinical data sources, and own health status. administrative and claims data systems. We are already seeing improvements in Medicare has started to use risk-adjust- the use of databases and data warehouses ment algorithms to change the amount it to store and link disparate data streams; reimburses health plans, considerably likewise, the ability of analysts to visual- increasing the importance of data analy- ize and deconstruct complex data sets is sis. Clinicians attempting to understand improving. Both data mining and data- the costs of care for their patients with base design will improve dramatically in different acuity levels won’t merely be the coming decade, but the most impor- seeing theoretical savings down the road tant aspect of this technology will be but instead will have to manage the care sophisticated data manipulation. Two they deliver in order to receive those sav- related trends in data manipulation are ings. Data mining is already being used likely to emerge from this core technol- by retail companies, computer marketers, ogy, both involving attempts to better and professional basketball teams—we understand the impact of clinical inter- expect dramatic growth in this type of ventions and in particular how clinical analysis in medical care over the next few interventions affect outcomes. years.

In the shorter term, a great deal of effort In the longer term, more codiﬁed and will be aimed at pulling clinical infor- analyzable clinical data will be available mation from what are largely adminis- directly recorded from the clinician– trative data sets. A new group of patient interface. The data will probably sophisticated “data jockeys” will give include patients’ genetic information

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and not only will provide greater under- Case Management Gets Automated standing about patients’ experiences and Plans and providers will use automated outcomes but also will better monitor techniques to case manage patients. Most the performance of both clinicians and use of case management will concentrate patients. The emergence of online ana- on the process of disease state or chronic lytical processing will permit close to care management. Disease management real-time analysis of the key information, organizations, whether providers or inter- such as the result of a particular intermediaries, will use protocols, clinical vention. This is in contrast to the retro- information, software, and infrastructure spective analysis that’s done today, and that have been developed to support that will be an addition to, and an improve- process. The protocols will make use of ment on, the analysis based on data min- mathematical models that assess appro- ing of administrative data sets described priate treatment for speciﬁc conditions in the previous paragraph. However, ana- and data collected on individual patients. lytical processing of clinical data will not The data will be manipulated both to be more than a fringe activity until a improve the treatment options of the majority of clinicians are using EMRs. individual patients and to add to larger That will take several years and won’t be databases. Case managers will use med- prevalent until well after 2005. ical records and protocols to track and assess treatment patterns, and the growth Some of this data analysis will be made of call centers will help deliver that infor- publicly available through regulatory mation to patients. agencies and bodies like the NCQA, which accredits health plans. Conse- Empowered Patients Get Informed quently, the ability of more organizations Some of the same technologies that and individuals to access information providers will use for medical manage- about the type and quality of care pro- ment will also have an impact on vided will increase later in the decade. patients independently. Patients will use them for a variety of health information Telehealth and Remote activities that will include shared deci- Monitoring sion making, psychosocial support groups, disease-speciﬁc information Combining Case Management, research, physician and provider assess- Patient Information Systems, and ment, information about alternative Remote Monitoring medicine, and patient self-care support In the long term, the impact of all these tools, such as software that tracks diet technologies will be greatest on patient and treatment regimens. Empowerment care. There are three main trends that of patients via information gathering will converge in their use of intercon- will center on use of the Internet and necting technologies to provide remote other online services, IVR, CD-ROMs, care. The trends are case management, video, and television, including video- patient information systems, and remote on-demand over cable and satellite net- telemetry. works.

Chapter 9: Information Technologies 143 Most of the activity already happening than 95 percent of households having the in this area has been inspired by patients processing and communications power of and is somewhat anarchic in nature. That a current top-end PC by the end of the won’t change any time soon, but there decade. will be significant entry of plans, providers, and other actors into this Sensors Boost Remote Telemetry arena who will try to impose a more The final piece of the puzzle needed structured use of information sources so for remote care to really take off is the that they can guide and track the treat- monitoring function that connects the ment of their patients. case managers to the patients. While education and self-care are necessary One problem we foresee is that the components that will be facilitated by chronically ill and elderly tend not to information technology, clinical assess- have the necessary technology in their ment of patients has to this point homes. In general, while half of Ameri- required that they either be at a medical can households had Internet access in facility or be attended to in their own 2000, that access is much more likely to homes by expensive labor, But a new be in households with higher income type of technology is becoming available and better education (see Figure 9-4). that will set off a revolution in remote By the year 2003, 63 percent of Ameri- care because it will provide the capacity can households will have appliances with for remote telemetry. The technology is processing power equivalent to a PC, the sensor, which converts analog, or increasing to 65 to 70 percent by 2006 real-life, signals into digital format, (see Figure 9-5). There is, however, a sig- which computer systems can understand nificant possibility that America’s infor- and therefore report on and react to. mation have-nots will not get access to the services associated with these tech- The sensors that are being created for nologies. Surveys of Internet use taken automobiles, video cameras, and all man- in 2000 show that only about 11 percent ner of other electronics will become of Internet users were age 65 years or cheap enough to drive their adoption in older.5 medical devices. Examples of how sensors may be used in remote telemetry Access to information technology will be include monitoring vital signs with an area of public policy contention in the wireless heart monitors; integrating dig- next few years, and possibly of some ital signal creation by wireless or inter- marker activity as manufacturers get the mittently wired monitors, such as capacity to introduce Internet-like ser- respiratory meters, blood pressure cuffs, vices in lower-cost devices, such as net- or blood glucose monitors, with patient, work computers, game machines, and plan, or provider information systems; TVs, and as these become affordable for and providing alerts from pharmaceuti- everyone. If these appliances can be used cal dispensers that a needed pill hasn’t for accessing online information, there’s been taken. At the back end of all these no reason to believe that they won’t be devices will be a link into the software nearly as common as color TV, with more for disease management or provider

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Inventing new ways of getting these Figure 9-4. Internet access is mostly for the wealthy and educated. technologies and the networks that sup- (Percentage of U.S. households with access, by education and income, port them into homes and smaller med-

By income ical facilities will be an area of focus over <$15K the next 10 years, and these new $15Ð24,999K approaches will draw on the experience $25Ð34,999K of other industries, notably entertain- $35Ð49,000K $50Ð74,999K ment. In addition to monitoring the $75K+ chronically ill, who tend to be high-end

By education resource users, similar technologies will

Chapter 9: Information Technologies 145 administration will be ubiquitous by dated organizations are more stable, after 2007. While great strides will have been 2005. By that time, the cost of the more made in other areas, the use of informa- complex clinical information systems tion systems by clinicians as an integral will have fallen to the point that its part of their work—the key vision of the widespread adoption need not be put off EMR—will only develop in the latter for economic reasons. After that, the part of the decade and will not be com- vision of an information-intensive indus- plete by 2010. However, the use of infor- try using information technology for mation systems will change the roles of consumer-friendly, high-quality, and the patient and the case manager inter- low-cost patient care can become a real mediary in the next 10 years. Patients possibility. will become more informed and involved in their own care plans, and intermedi- Wild Cards aries responsible for medical management will use information technology With a new generation of software extensively to assess cases in real time. and hardware, diffusion of clinical Physicians will adapt their practice to information technology happens fully adjust to this, but at a slow pace. in the next 3 to 5 years. The EMR becomes commonplace, patients’ The adoption of technology will depend records are standardized, and the clin- on the ability of health care organiza- ical care process dramatically tions to set aside capital for investment improves. and therefore depends on the ability of those organizations to become more like Early large-scale implementation of other types of corporations. While health information systems to support and care is moving in this direction (e.g., case manage the chronically ill show growth of physician groups), it will no cost-beneﬁt advantages compared remain a fragmented industry that, as it to traditional lower-end technology consolidates, will struggle with the care. Given the cost of system installa- adoption and deployment of information tion, the development of home moni- technology. The use of that technology as toring and case management remains an enabling driver to change health care in its current embryonic state. will not really be felt until those consoli-

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Endnotes mistakes that Brigham and Womens Hospi- tal more or less eliminated by switching to a 1 Sheldon Dorenfest & Co. computerized ordering system. See also 2 In its 1991 report, The Computer-Based Anderson, J. G., et al. Evaluating the poten- Patient Record, the Institute of Medicine tial effectiveness of using computerized listed areas of technology that, when inte- information systems to prevent adverse drug grated, would make up a computer-based events. Proceedings of AMIA Annual Fall Sym- patient record (CPR). The technologies posium 1997; 9:228–232. included databases and database manage- 5 Falling Through the Net: Deﬁning the Digital ment systems, workstations, data acquisition Divide. Washington, DC: National Telecom- and retrieval, image processing and storage, munications and Information Administra- data exchange and vocabulary standards, and tion, July 1999. Extreme Peaks Begin to system communications and network infra- Moderate as Adult On-line Usage Approaches structure. 50%. Interep Press Release, December 2000. 3 See Krall, M. A. Acceptance and perfor- 6 For instance, telemedicine today is a fringe mance by clinicians using an ambulatory activity in which physician consults occur electronic medical record in an HMO. over dedicated videoconferencing facilities. Proceedings of Annual Symposium of Computer This will stay a fringe activity, but some Applications in Medical Care 1995; 708–711 telemedicine will transmute into the use of for a generally positive description of the groupware (computer communications) to implementation of the Epic EMR at Kaiser share information between care teams and Northwest. the use of online environments for collabora- 4 See Bares, D. W., et al. Incidence of adverse tion between clinicians. In another example, drug events and potential adverse drug the production of digital signals from imag- events: implications for prevention. Journal ing equipment will dramatically increase of the American Medical Association ( July 5) radiologists’ ability to use computers to ana- 1995; 274(1):29–34. This describes the lyze and abstract information from X rays, problems with drug interactions and other MR images, and other imaging devices.

Chapter 9: Information Technologies 147 Health and Health Care 2010 Institute for the Future

Chapter 10 Health Care Consumers The Haves and the Have-Nots

We define “health care consumer” as any- Patients’ impact on the organization of one who receives or has the potential to care was also slight because employers receive health care services, regardless of and government, not patients, were—as whether or not that person pays for those they still are—the purchasers of health services directly. Although employers care for a majority of working adults. and government, not health care con- Employers typically offered little choice sumers, are the most frequent purchasers among health insurance plans to their of health insurance and thus pay for a employees, making it difficult for great deal of the care provided, we dis- patients to vote with their feet if they cuss them in this chapter only in the were dissatisfied with their coverage. context of their effects on individual Yet because traditional indemnity plans consumers. allowed free choice of provider, and because employers and government gen- Consumers are more actively engaged erally provided health care coverage as a in their own health care than in the defined benefit with low out-of-pocket past. Up until the mid-1980s, health costs, consumers’ lack of plan choice did care consumers in the United States not seem to affect their care or their generally had been passive recipients pocketbooks much, keeping dissatisfac- of care. Most patients submitted to tion low among insured consumers. The whatever procedures a physician recom- uninsured have made do with limited mended, and most were happy to let coverage from safety-net funding streams the system take responsibility for deci- and providers—a mix of public institu- sions about their care. By and large, tions and private charity—and have not mainstream Americans revered doctors had many advocates to speak for them. and trusted them—a culture sustained Although insured consumers and their by the large information gap between advocates have had some impact on highly educated doctors and the average insurance legislation over the years, they patient. It was a gap further reinforced have had little impact on the delivery of by doctors’ political and economic care. Their legislative voice has been power. Private physicians had a low muted in part because they haven’t had awareness of the gap between their many big issues to complain about. “customer service” and that of other services the public interact with, such As a consequence of these three factors— as eye care or retailing. a culture of respect for physicians and

Chapter 10: Health Care Consumers 149 their power sustained by an information ing the old culture of passivity and gap, employer- and government-medi- respect. A rapidly growing group of con- ated purchasing, and defined benefits sumers is trusting plans and providers with free choice of providers—consumers less, demanding more information and have had relatively little effect on the choice from providers and plans, engag- organization of American health care. ing in more self-care and self-manage- Until recently, providers (mostly hospi- ment of disease, and showing more tals and physicians in solo practice or interest in sharing their health care deci- small-group practice), health care plans, sions with providers. A study published and purchasers (mostly employers and in Health Affairs in 2000 showed that government) controlled how and where 55 percent of families had choices in care was provided, who got it, and how their health coverage, and an improved much it cost the individual out-of- likelihood of satisfaction because of these pocket in premiums, deductibles, and choices. Choice, self-care, and shared most recently, copayments. Individual decision making are the key elements consumers adapted to the system. of consumer empowerment covered by our forecast. That picture is changing. As a new, more educated and informed generation of Efforts by some payors to produce new baby boomer consumers moves through “digital health plans” create an opportu- the system and reaches the age where nity to provide health care and services they use more health care services, a new without the inefficiencies of the old culture of assertive skepticism is replac- processes during the next decade. The resolution of the political struggle over the patient’s rights to sue an HMO will potentially have a large impact on the The Three Modes of Empowerment economics of managed care during the next decade. Informed Choice of Plans and Providers: The combination of employers’ shifting to defined contribution programs and the increasing openness of provider networks available through plans will lead to a greater range of As baby boomers reach an age where choices of providers and plans. Consumers will demand more sophisticated they require doctor visits more fre- and comparative information about plans and providers to help them make quently, employers are beginning to pass these choices. more health care costs on to employees, Self-Care and Self-Management: Increasing consumer access to medical often by replacing defined benefits pro- information formerly known only to providers, combined with improved grams with defined contribution pro- remote sensing technologies, will facilitate greater involvement of patients in grams—thus potentially weakening their own health care, including preventive care (e.g., improving diet and employer mediation of consumption. lifestyle), treating acute episodes at home, and helping manage the course of their chronic diseases. The managed care revolution, triggered by escalating national health care costs Shared Medical Decision Making: Improved medical record systems and has limited consumers’ choice of increasingly sophisticated decision-support tools will facilitate patients’ ability to understand complex medical decision-making processes and become providers and forced them to negotiate a more active in choosing treatments that match their preferences and values. thicket of primary care gatekeepers, access charges for specialists, and triage

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them, and what impact the changes are The Aging Baby Boomers likely to have on providers, purchasers, Baby boomers make up the generation born between 1945 and 1964. The and plans. Will the overall impact on the ﬁrst baby boomers will turn 65 in 2010. The percentage of the population system within the coming decade be that is over age 65 has been steadily increasing in this century, but the baby striking, or a yawn? boomers will drive that percentage sharply higher (see Figure 10-1). Over the next 10 years, the baby boom cohort will begin to experience more chronic To get at the answer, we ﬁrst identify the and severe illnesses. Those who are “new consumers” will be a particularly strong voice for change. three tiers of coverage into which consumers currently fall and the key issues facing each tier. We then forecast the Figure 10-1. Population age 65 and older, 2000 to 2050 changes most likely to occur in each tier

Millions and their implications for the system. 100 We also take a look at some wild cards and identify a few emerging consumer

80 needs that health care services may be able to ﬁll in the future.

60 Three Tiers of Health 40 Care Consumers

20 2000 2010 2020 2030 2040 2050 Although legislators frequently hold up

Source: U.S. Census Bureau, Statistical Abstract, 2000. the ideal of a one-tier health care system, plans requiring major redistribution of resources have not been well received in Congress or by the public. The complexity of our existing system has created so nurses on telephones in order to get the many stakeholders that building consen- care they need. Combined with rising sus for a new one-tier single payer sys- out-of-pocket costs, these limits have tem has become a monumental task. In given the new, more informed and vocal reality, three tiers exist. consumers something to complain about. Change in the consumers’ role is deﬁ- The bottom tier is the rapidly growing nitely in the wind. group of Americans who lack access to the main system and are served largely Will the historically supply-driven health by an increasingly tattered safety net care market soon be forced to grapple because they are either uninsured or on with consumer demands? Will such Medicaid; currently, the number of unin- changes be large and noticeable by 2010, sured is about 42 million when mea- or only incremental? To answer these sured at a single point in time and about questions, we need to know which con- one-quarter of those are children. sumers are likely to drive change the most, what changes they are likely to The middle tier consists of those push most quickly, what forces will resist working Americans whose beneﬁts are

Chapter 10: Health Care Consumers 151 The top tier is made up of the Figure 10-2. Beneﬁts insecurity very wealthy and the more securely (Percentage of group without health insurance for at least 1 month out of employed, who have fewer restrictions 36 months, 1993 to 1996) on their care. The current system thus consists of a disenfranchised bottom tier All persons (the excluded consumer), an insecurely Male enfranchised middle tier (the worried consumer), and a securely enfranchised Female top tier (the empowered consumer).

Hispanic An alternative way to deﬁne the three Black tiers would be by the continuity of their White, non-Hispanic insurance—to look at who is continuously insured, insured on and off, and Under 18 continuously uninsured during a given period. If we examine the years between 18Ð24 1993 and 1996, we ﬁnd that about 71 25Ð34 percent of Americans were continuously insured, 25 percent lacked coverage 35Ð44 between 1 and 35 months, and 4 percent 45Ð64 were continuously uninsured (see Figure 10-2). These three groups were further 65+ divided along ethnic lines: 50 percent of No high school Hispanics lacked coverage for a month or diploma more as compared to 37 percent of High school diploma, no college African Americans and 25 percent of 1+ years of college whites.

Below poverty The problem with using continuity of

Above poverty coverage as a means of defining the tiers is that many who are continuously 0102030405060708090100 insured are nonetheless worried about Percent either the stability or the flexibility of Source: U.S. Census Bureau. their benefits. Furthermore, some of the insured have only very limited coverage, including those on Medicaid.

insecure because of threats to their jobs For those reasons, we have chosen to due to restructuring or ailing industries, define the three tiers by the degree to low reemployability, employer benefits which their benefits are adequate and cuts, restrictions on providers and treat- perceived to be secure. Although we rec- ments, or potential inability to pay the ognize that a fair amount of movement insurance premiums passed on to them goes on between tiers, the three tiers by their employers. themselves persist.

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In other sectors of the economy, such as The New Consumers: Who Are They? retail and banking, the new consumers We deﬁne new consumers as people who have at least two of the following have already initiated a revolution in the three characteristics: way goods are purchased and customers 1. Discretionary household income of $53,000 or more (in constant 1998 are served. These consumers are also nar- dollars) rowing the patient–provider information 2. At least 1 year of college education gap. They are no longer in awe of physi- 3. Experience with information technology (e.g., owns a PC) cians, and they will be the ﬁrst to demand change from health care plans and providers as they interact with the Figure 10-3. Description of new consumer attributes in 2005 system between now and 2010. In dis- cussing the key issues facing each tier, we highlight the points at which the new Own a PC consumers may have the most impact.

More than 1 year college education The Bottom Tier: The Disenfranchised and Never-Enfranchised Income >$50K/year The main issue for the disenfranchised, 1 0 1020304050607080 of course, is access to health care. This Percent tier consists of people under 65 who are uninsured, including a significant Source: IFTF; U.S. Department of Labor. number of children, or who have very limited insurance—mostly through Medicaid, and a very small number on both Medicare and Medicaid. In 2000, The consumers most likely to become 5 percent of the population in the empowered in the coming decade are the United States comprised adults covered “new consumers” (see Figure 10-3). In by Medicaid, 12 percent were uninsured contrast to traditional consumers, new adults, 5 percent were children on consumers have at least two of the fol- Medicaid, and 4 percent were uninsured lowing three attributes: at least 1 year of children, for a total of 26 percent of the college education, more than $50,000 in population in the bottom tier. household income, and experience with information technology (e.g., comput- Access to care for this tier is severely ers). Because education, income, and limited because the safety net has experience with information technology become frayed. People in this tier are closely linked, most of the disenfran- depend utterly on the limited resources chised bottom tier consists of traditional and strained generosity of safety-net consumers. Significant segments of the funding streams and providers. Even middle and upper tiers, however, are new those on Medicaid have limited choices. consumers, including a large proportion A significant proportion of people on of the baby boom generation. Medicaid are mothers and children

Chapter 10: Health Care Consumers 153 and employees of companies undergoing Children: Patients and Beneficiaries, but Not restructuring; and (2) early retirees (age Active Consumers 55 to 64 years) waiting for Medicare to In 1998, children under age 18 made up roughly 27 percent of the United kick in. We estimate that roughly 34 States population. Roughly one-third of this group, representing 9 percent of percent of the United States population the total population, lacked coverage for at least 1 month in a 36-month falls into the middle tier. period between 1993 and 1996. Although we include children in our estimates of the percentage of the The working group is worried because population falling into each tier—and the problem of uninsured children is a many of their employers are reducing or serious one—we do not discuss them further in this section because they are eliminating health care benefits or pass- generally not active purchasers of or participants in their health care and will therefore exert little influence over it. See Chapter 13 for a discussion of ing their costs on to employees, who children’s health. may be unable to pay. Unstable job security and uncertain reemployability also put middle-tier members at risk for sig- receiving AFDC. Their benefits depend nificant time periods without health on state budgets, where they compete for insurance. The coverage this group does resources with prisons and schools. have tends increasingly to be in the form of HMO or PPO coverage, which limits Generally poor and lacking a college edu- to some extent both covered procedures cation, most people in the bottom tier and choice of providers. will have serious trouble overcoming the information gap between providers and Some early retirees are insecurely enfran- patients. Even the new consumers in this chised because employers are increas- tier, the not-yet-insured recent college ingly cutting or restricting pension graduates who have not yet found stable health benefits. Those benefits may jobs, will have trouble—but most quickly include either managed care plans or tra- move up to the middle and top tiers. ditional indemnity insurance. In 2001, 25 percent of employers offered health benefits to workers who retire after less The Middle Tier: The Insecurely Enfranchised than 5 years of company service compared to 90 percent in 1984. The primary issue for the middle tier is benefits security. When unemployment Closely related to benefits security is the is high, this tier is insecure about main- issue of value. As employers cut their taining coverage. When unemployment premium contributions and reduce the is low, they are insecure about maintain- scope of the benefits they offer, costs are ing the flexibility and quality of cover- increasingly passed on to the consumers age. Although at any one time most of in this tier and value—the amount of this tier is insured, their benefits are not coverage per dollar spent—becomes secure for a variety of reasons. Adults in more of an issue. the middle tier include (1) working people with unstable job security, including The new consumer segment of this tier— employees and owners of small or down- which is growing rapidly—will be the sizing businesses, contract employees, most informed about their choices and

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the most likely to demand good infor- and offer a choice of several different mation to help them make those choices, health insurance plans. taking a step in the direction of empowerment. As independent agencies and, Medicare currently offers a rich benefits increasingly, health plans have begun to package, mostly FFS, although that is generate “report cards” for employers on changing as Medicare HMOs become plans and providers, the information- increasingly competitive. savvy new consumer segment may take advantage of them. As middle-tier mem- Like the middle tier, the top tier consists bers increasingly gain access to PCs at of a mix of traditional and new consumers, home and at work, the Internet will be a with significant numbers in each category. rapidly growing and easily accessible Most of those over 65 in the top tier are source of plan and provider information. traditional consumers. However, a large proportion of the group is made up of In contrast, most of the traditional con- baby boomers who will turn 50 during sumers in this tier have at most a high the next decade. These new consumers school education and thus tend to have will be interacting more and more with lower incomes and less exposure to infor- the system, and they will become a power- mation technology. The patient–provider ful force for change in the delivery of care. information gap will be hard for this segment of the tier to overcome, unless People in the top tier are generally con- there is access to intermediaries from a tinuously insured in any given 2-year disease management program. period. When they do lose their jobs, they are quickly reemployed thanks to their high level of education. In recent years, about 61 percent of the total The Top Tier: The Securely Enfranchised United States population has been continuously insured by a plan other than The primary issue for the securely en- Medicaid during any given 2-year franchised tier will be empowerment. period. Some are securely insured, some Although the changes that this tier dri- insecurely insured. About 13 percent of ves in the system will be slow and incre- the population is covered by Medicare, mental at first, they have the greatest usually supplemented by private insur- ability to effect change. This tier consists ance. We estimate that about 38 percent mainly of consumers who are (1) securely of the population constitute securely employed or highly employable, (2) very enfranchised consumers who thus fall wealthy and often self-insured, or (3) el- into the top tier of coverage. derly and on Medicare, either with or without supplemental private insurance. Summary of the Three Tiers Many members of this tier are employed by large companies, many of which offer About one-third of the United States plans with generous benefits designs, pay population currently falls into the mid- the lion’s share if not all of premiums, dle tier of coverage, with a bit less than

Chapter 10: Health Care Consumers 155 one-third occupying the bottom tier and infectious diseases, exacerbated by lack a bit more than one-third the top tier of proper care, from the lower tier into (see Table 10-1). New consumers, who the other two tiers. represent the largest potential for dri- Assumptions ving care delivery change in the next Lack of access to information and decade, are concentrated in the middle resources is a signiﬁcant barrier to and upper tiers. empowerment.

Advocates for the bottom tier will be Forecast and largely ineffective in changing legisla- Assumptions tion and the structure of care. The Bottom Tier: The Disenfranchised Struggling for access prevents people from putting energy into other aspects Forecast of empowerment. Because they largely lack a college The plight of the disenfranchised will education and have less access to infor- not become so visibly horrible that it mation, and because their energy is triggers the level of mass dissatisfac- focused on issues of access to care, this tion with the health care system that tier is unlikely to drive a consumer revo- would lead to comprehensive reform. lution or to be greatly affected by one. Although this group has many reasons The Middle Tier: The to protest, it lacks voice and clout. Their Insecurely Enfranchised advocates may push for legislation, particularly to cover children, but as a bloc Forecast these consumers have relatively little The portion of new consumers in the power over government or employers— middle tier and advocacy organizations their voter participation rates are lower representing them make up the first seg- than average, some are unemployed, ment that will want the system to pro- their incomes are low, and a sizable vide high-quality consumer-oriented group are minorities who face discrimi- information about performance. These nation in many arenas. The (ab)use of middle-tier new consumers are a rapidly emergency rooms by members of the growing group—demographic factors bottom tier for basic primary care is are driving a steady transfer of people, currently a costly problem, although about 2 percent a year, from the lower improved access to intermediaries or middle class into the new consumer primary care during the next decade group, and many of these are in the inse- would reduce this cost. If the problem curely enfranchised middle tier. of access is to be solved for this tier, the solution will likely be driven by advo- Because benefits insecurity and worries cacy groups and members of the other about coverage and out-of-pocket costs two tiers. A factor that might motivate are currently this group’s major issues— some action from the top two tiers especially during recessions—the first would be the spread of drug-resistant report cards have focused on the relative

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Table 10-1. The tiers of coverage

Traditional Consumers New Consumers The Securely age 18 to 64, no college education, age 18 to 64, college-educated, Enfranchised high-income workers (and spouses) high-income workers (and spouses) with no PCs but high job security, with high job security, with private (Roughly 38% of total with private managed care plans or managed care plans or fee-for- U.S. population) fee-for-service insurance (paid by service insurance (paid by employers or self) employers or by self) age 65+, no college education, age 55 to 64, early retirees, college- moderate to high savings/resources, educated, high savings/resources, no PCs, Medicare only or Medicare private managed care plans or fee- and private insurance for-service insurance (paid by children securely insured generous former employers or by self) age 65+, college-educated, moderate to high savings/resources, with PCs, Medicare + private insurance children securely insured

The Insecurely age 18 to 64, no college education, age 18 to 64, college-educated, Enfranchised low- to moderate-income workers middle-income workers (and (and spouses) with low job security, spouses) with PCs and low job (Roughly 34% of total in managed care plans (paid by security, in managed care plans U.S. population) employers or military) (paid by employers, by military, age 55 to 64, early retirees, no or by self) college education, low to moderate age 55 to 64, early retirees, incomes, in managed care plans college-educated, high incomes, in (paid by former employers who are managed care plans (paid by former not reassuring about keeping retiree employers who are not reassuring beneﬁts, or have already tried to about keeping retiree beneﬁts, or reduce them) have already tried to reduce them) children securely insured age 18 to 54, no college education, high-income but low-job-security workers (and spouses), with PCs, in managed care plans (paid by employers) children securely insured

The Disenfranchised age 18 to 64, no college education, age 18 to 34, temporarily uninsured, unemployed and/or very poor, some college, with PCs, no full-time (Roughly 28% of total U.S. uninsured or on Medicaid job yet or between early low-income population) children uninsured jobs children on Medicaid or other government assistance

Source: IFTF.

Chapter 10: Health Care Consumers 157 merits of health plans. Because many on their employers to keep their pension people in this tier work for small em- health benefits intact, but their numbers ployers, however, many do not have a are too small for their complaints to choice of plan. Thus employers initially stimulate major change. Employers are will be the biggest market for this type more concerned with pleasing young, of report card. educated employees. Older consumers will be heard primarily through their Report cards on plans are already stimu- high voting rates and through advocacy lating demand for similar report cards on groups like the American Association of providers, to help both employers and Retired Persons (AARP). Although their employees in this tier choose advocacy groups may change public pol- providers that offer the best value. icy, they may have less effect on provider behavior. Because provider report cards are consistent with the cost-efficiency goals of When the voices of the elderly tradi- plans, plans will continue to pursue their tional consumers in the middle tier are development both for hospitals and med- combined with those of the aging new ical groups and eventually perhaps for consumers in the top two tiers, the individual physicians. Providers will elderly may be a major force for changes object to such report cards, but they will in the organization of care at both the be given little choice in the matter. provider and plan levels. As they get Trusted intermediaries for processing sicker, they will push for greater security such information will become more of benefits and for greater flexibility, ser- numerous during the next decade. vice, and coverage in managed care plans and from providers. The older people in this tier, particularly the early retirees, are half new and half Assumptions traditional consumers. Although the tra- Increased choice leads to increased ditional consumers may complain more need for information. than they did in the past as American c Empowerment and access to informa- ulture shifts from passivity to active skep- tion will be tightly linked. ticism, they will not have enough access to information to narrow the patient– The Top Tier: The Securely provider information gap much, and thus Enfranchised will not be in the best position to demand change in the organization of their care. Forecast They will, however, be very experienced The aging upper-tier new consumers, with the system and motivated to though relatively small in numbers, improve their care. They also vote. now are growing rapidly as most of the Increasing their access to information baby boom generation turns 50 over would help them have a greater impact. the next decade. The growth of wealth occurring in society is still greatest in Health consumers who have not yet the older population, giving them access retired may be able to put some pressure to information and health care. As these

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informed consumers begin to encounter women will focus their demands on bet- the more chronic and severe illnesses ter customer service from plans and that accompany advancing age, they will greater access to more open networks of interact more frequently with providers providers. and plans in demanding change. Indeed, they have already begun to drive a shift Although continued employer mediation in the culture away from passive respect of health plan choices will limit new of providers and toward more active consumers’ direct impact on plans to engagement in their care. some extent, today’s employers do tend to listen to the needs of their young This segment will use all three major employees. New consumers will modes of empowerment: (1) choice of encounter health plan customer service plans and providers; (2) ability to provide issues simply in the process of signing self-care and self-management of their up for plans and choosing or switching chronic diseases; and (3) ability and primary care providers. They will desire to share medical decisions with encounter provider interaction issues their providers. By 2010, as the ﬁrst of when undergoing routine exams. They the baby boom cohort reaches 65, this will affect plans by complaining to their group will have paved the way for a revo- employers and pressuring employers to lution in the organization of care—a rev- complain to the plans or switch to more olution simultaneously being fomented customer-friendly plans. Those new con- in other sectors of the system, as noted in sumers who have a choice will simply the other chapters of this report. switch. Because they are not sick enough to see very many providers very often, Because the new consumers in the top their effect on changing provider interac- tier are information rich, and as health- tions and increasing shared decision related information sources like the making will be relatively small before Internet are growing rapidly, they are 2010. Beyond 2010, these young new increasingly marshaling enough infor- consumers will join the older group in mation to narrow the patient–provider driving a change toward patient-cen- information gap. They are not as pre- tered care. occupied with beneﬁts security as the new consumers in the middle tier are, In contrast to the young new consumers so empowerment becomes their most in this tier, the elderly are the sickest pressing issue. segment of the population, and they do interact frequently with providers. Most The youngest new consumers in this tier will purchase their care directly from are not very sick and so many of them do providers and can take their Medicare not interact with providers with the fre- money elsewhere if they don’t like a par- quency required to demand big changes. ticular provider. This gives them power Some do, however, particularly women of in the health care market. Because the childbearing age, who interact with elderly are also a large voting bloc and providers both for OB/GYN care and on have powerful lobbying organizations behalf of their children. Young men and like the AARP, they are a potent force

Chapter 10: Health Care Consumers 159 for both legislative and market change. generation ages and its voter partici- Although we estimate that two-thirds of pation increases. the elderly in the upper tier are traditional consumers whose impact on Most providers will not be motivated provider behavior will be greatly muted to bridge the patient–provider infor- by their inability to bridge the informa- mation gap, as that would reduce tion gap, even they will be influential their power and status. in supporting legislation that protects Information technologies that would their rights to privacy and dignity, aid shared decision making (e.g., the especially in end-of-life medical EMR or smart databases) will be fairly decisions. slow to develop, limiting the development of the shared decision-making Both traditional and new elderly conform of empowerment. sumers in this tier will also be outlets for the voices of their adult children, many of whom are baby boomer new con- Three Levels of Empowerment Will Arrive sumers. This baby boomer “sandwich at Different Times generation”— especially the women— interacts with the health care system Of the three elements of consumer through both its children and its par- empowerment in health care, informed ents. These more assertive and informed choice of providers and plans will baby boomers will attempt to intervene develop first as middle- and upper-tier with providers as advocates for their par- new consumers join forces with plans to ents, adding to the latter’s impact. If create report cards. We estimate that large numbers of the traditional elderly roughly 10 percent to 15 percent of all consumers begin to switch providers or people today have access to any informa- plans based on their children’s advice, tion on plan quality. In some areas, such they will act as amplifiers of the voice of information is published in newspapers the new consumer. This amplified or on the Internet, but in most it is not impact would be mostly in the direction yet available. We forecast that, by 2010, of more patient-centered care and better 50 percent of all consumers will have service but to some degree, as some of access to understandable comparative the elderly have children in the middle information on plan quality. Because tier, it might also push plans to address networks will become increasingly more middle-tier issues by offering more cov- open, however, such information will erage and better value. become less and less useful over time. Provider report cards will be increasingly Assumptions called for and are already being devel- Health care legislation empowering oped by some plans. patients will not be the primary force behind change in provider behavior The other two elements of empower- and plans, although it may begin to ment—self-care and shared decision have a larger effect as the baby boom making—depend more on the coopera-

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tion of providers, who right now are share decision making with their busy organizing themselves to resist the providers. We forecast that by 2010, strictures being imposed on them by 10 percent of all consumers will be managed care. Of these two elements, aware of the primary treatment choices self-care and self-management will be implicit in the health risks they face the next to emerge, in part because they and will share with their providers will be assisted by pressures from plans decisions about treatment paths, the to reduce costs. As the new consumers providers helping them to pick paths in rapidly gain access to information, both line with their personal preferences and online and through traditional media, values. Consumers with chronic ill- they will narrow the patient–provider nesses are likely to be at the forefront of information gap and make effective self- this shift. This element of empower- care possible and desirable. ment also has the most potential to transform the system in the longer term We forecast that, by 2010, 30 percent and improve health status. of health plan members will be able to identify the three most important threats On the down side, shared decision mak- to their health status, and a large pro- ing, if widely implemented, may exacer- portion of these folks will be actively bate the widening gap in access and engaged in executing elements of their health status between the information- treatment plans. Right now, we estimate rich new consumers and the information- that only 5 to 10 percent of members poor traditional consumers. Information engage in self-care or self-management. access is key to effective shared decision Medical technologies involving remote making. Ultimately, beyond 2010, this sensing of patients’ vital signs will has- could push us toward a two-tier system ten this development. in which the information “haves” have secure access to high-value, patient-cen- Shared decision making will be the last tered care whereas the information element of consumer empowerment to “have-nots” struggle for access, choice, take hold. Its tardy arrival is due partly and value. to provider resistance to change and partly to the fact that many medical All of these facets add up to a forecast for decisions are so complex that they incremental consumer-driven change by require a sophisticated informational 2010—not a full-blown consumer revo- infrastructure to assist both patients lution. Nonetheless, consumer forces will and providers. This infrastructure will build rapidly in the growing top tier be slow to emerge. The issue of conﬁ- by 2010, and this will shift the passive dentiality of medical records may fur- consumer culture signiﬁcantly in the ther slow the emergence of this direction of active skepticism. The com- infrastructure. The quality of medical bination of this shift, the push toward information available on the Internet self-care by cost-conscious plans, patients’ will also be a factor. We estimate that rights legislation supported by the elder- right now only 1 percent of consumers ly, and slow but steady improvements in

Chapter 10: Health Care Consumers 161 the information infrastructure will pre- Biosensors and other new medical pare the way for a major consumer revo- technologies reduce costs dramatically, lution when the baby boomers begin to rather than increasing them, and lead hit age 65 in 2010 and beyond. to do-it-yourself home care improving access in the process. Wild Cards Spillover of infectious diseases from a The “information poor” get “wired,” rapidly growing uninsured population gaining increased access to informa- into the middle and top tiers leads to tion, and thus become part of the national legislation to ﬁx the safety force for change. net, shrinking the bottom tier.

The press and media discover a role Congress and the president join forces for themselves in processing and to push through legislation to reduce repackaging health care information benefits insecurity, shrinking the mid- for the “un-wired information poor” dle tier. in order to increase their readership/ viewership. Congress and the president join forces to push Medicare entirely to HMOs or Employers switch en masse to a cut benefits drastically, shrinking the defined contribution system, making top tier—or igniting a revolution defined benefits obsolete and putting among the elderly. health care purchasing back in the hands of patients, thus converting health care to a demand-driven system well before 2010.

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Endnote

1 By “access to care” we do not mean convenience but rather ability to get even minimally adequate care when it is needed. This basic access is limited in this tier by inability to pay—either out of pocket, or for insurance —and by the poor quality and limited resources of the facilities available to those with limited ability to pay.

Chapter 10: Health Care Consumers 163 Health and Health Care 2010 Institute for the Future

Chapter 11 Public Health Services A Challenging Future

The goal of public health is to secure The History of health and promote wellness, for both Public Health in individuals and communities, by the United States addressing the societal, environmental, and individual determinants of health. The IOM describes the history of the As defined by the WHO, health is “A public health system in the United States state of complete well-being, physical, as “a history of bringing knowledge and social, and mental, and not merely the values together in the public arena to absence of disease or infirmity.” shape an approach to health problems.” By understanding the history of today’s Despite the merit of this intent, a lack public health system, we may forecast of consensus on the public health mis- how public health might look tomorrow. sion, inadequate capacity in the field, disjointed decision making, hobbled Before the 18th century, disease was leadership, and organizational fragmen- widely believed to be associated primar- tation led the Institute of Medicine ily with a person’s moral standing. Dur- (IOM) in 1988 to liken public health to ing the 18th century, there evolved a a “shattered vision.” Almost 15 years sentiment that disease could be pre- later, has that assessment borne out? vented, and an organized health infra- What does the future of public health structure began to develop. Galvanized look like today, and what will it look by industrial urbanization, by a realiza- like by the end of the decade? tion that both rich and poor were vulnerable to disease, and by the “great This chapter highlights some of the pub- sanitary awakening” of the early 19th lic health issues in the United States, century, the shape of public health reviewing briefly the development of the changed profoundly as society developed public health system and identifying a dynamic strategy to prevent disease broad social, political, and technological through public action and environmen- forces that will shape its future. tal hygiene. By the second half of the 19th century, public health was dramatically altered again as evolution of the germ theory grounded public health in science. (See Table 11-1.)

Chapter 11: Public Health Services 165 Table 11-1. Stages of relations between public health and medicine

Period Public Health Medicine

Pre 20th century era of infectious Focus on prevention: sanitary engineering, Focus on treatment: direct patient care disease: Cooperation environmental hygiene, quarantine within comprehensive framework

Early 20th century era of Establishment of targeted disease control; Establishment of the biomedical model of bacteriology: Professionalization Rockefeller Foundation report creates disease, Flexner Report leading to stan- science-based schools of public health dard science-based medical education

Post World War II era of Focus on behavioral risk factors, Pursuit of biological mechanisms of heart biomedical paradigm: Functional development of publicly funded medical disease, cancer, and stroke, success with separation safety net (Medicaid/Medicare) pharmacology, diagnostics, therapeutic procedures

Source: IFTF; Lasker, R., and the Committee on Medicine and Public Health of the New York Academy of Medicine. Medicine and Public Health: The Power of Collaboration. New York: NYAM, 1997.

Before the germ theory was propagated, the hands of professional health experts, public health’s efforts at disease control and programs were instituted that aimed to improve living conditions focused on specific disease transmission through environmental hygiene, routes, established immunization pro- whereas medical efforts focused on indi- grams and water sanitation as corner- vidual treatment by private physicians. stones of disease prevention, and There was a great deal of interdepen- expanded governmental participation in dence between the two. With acceptance public health efforts. of the germ theory, the new domains of public health and private medicine could The blurring of the distinction between no longer be readily distinguished, as population-based disease prevention and population health interventions—such as individual-based medical treatment screening, immunization, and the treat- extended into the 20th century. Roo- ment of communicable disease—were sevelt’s New Deal in the 1930s and provided to individuals, usually in a Johnson’s Great Society programs in the physician’s office. Problems deepened 1960s served as bookends for the expan- with the creation of the health care safety sion of the federal role in health plan- net that assigned to the public sector ning, promotion, education, and medical responsibility for patients unable financing. With the Social Security Act to obtain care in the private sector. and the Medicare and Medicaid pro- Whereas the public sector had tradition- grams, public health moved away from ally addressed the health of the popula- population-based approaches and became tion, it was now to provide a mixture of more involved in individual interven- population and personal health services. tions. As health care costs increased and the resulting economic burden became With this change, the responsibility for unbearable, the social vision again public health progressively was placed in changed as the focus turned to cost

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Figure 11-1. Changes in cause of death, 1900Ð1999

1900 1999

Pneumonia Heart disease

Tuberculosis Cancer

Diarrhea and Stroke enteritis Heart disease Chronic lung disease

Stroke Unintentional injury

Liver disease Pneumonia and influenza Injuries Diabetes

Cancer HIV infection

Senility Suicide

Diphtheria Chronic liver disease

0102030 40 0102030 40 Percent Percent

Source: Centers for Disease Control and Prevention. Control of infectious diseases, 1900Ð1999. Morbidity and Mortality Weekly Report 1999; 48:621Ð629.

containment. The last decades of the Public Health Achievements in the 20th Century 20th century ushered in the managed care system of health care delivery and Over the course of the century, infectious further diminished support for a popula- diseases diminished as a major cause of tion-based public health infrastructure. morbidity and mortality while chronic disease and behavioral health risks grew. The 20th century brought Americans Table 11-2. Ten public health achievements, 1900Ð1999 improved health and longevity, their life Vaccination expectancy lengthening by 30 years since 1 Motor vehicle safety 1900. According to the Centers for Dis- Safer workplaces ease Control and Prevention (CDC), 25 Control of infectious diseases of those years can be attributed to Decline in deaths from coronary heart disease and stroke advances in public health, which accom- Safer and healthier foods plished ten signiﬁcant achievements dur- Healthier mothers and babies ing the 20th century (see Table 11-2). Family planning Fluoridation of drinking water There is much cause for celebration over Recognition of tobacco use as a health hazard the accomplishments of the 20th century, and yet much still needs to be Source: Centers for Disease Control and Prevention. Ten great public health achievements—United States, 1900Ð1999. Morbidity and Mortality Weekly Report 1999; 48:241Ð243. done. (See Figure 11-1.)

Chapter 11: Public Health Services 167 Public Health Structure organizational framework that encom- and Function Today passes governmental, private, voluntary, The mission of public health, as viewed and individual activities. by the IOM, is the use of knowledge to The U.S. government is at the core of fulfill the public’s interest in reducing the public health system, acting as the human suffering and enhancing quality primary source of leadership and of life. The substance of this mission lies accountability. The IOM delineates three in organized community efforts that are functional pillars of public health that aimed at the prevention of disease and the government should guarantee: assess- the promotion of health. These efforts are ment, policy development, and assurance guided by public health principles, (see Figure 11-2). which include a scientific basis for action, an orientation toward prevention of ill- Involvement of the federal government ness and promotion of wellness, a popula- in public health efforts fluctuated dur- tion-wide perspective, community-based ing the 20th century. By the close of the participation and problem solving, and a century, federal intervention had been respect for diversity. Ideally, these efforts retracted, although the role of the fed- and principles are applied within an eral government continued to be important because of its capacity to address interstate and international health issues, to develop overarching national health Figure 11-2. The three pillars of public health policy, and to coordinate national health data and research. State governments now Assessment have the greatest responsibility for the The diagnosis of community health status and needs well-being of the state’s residents, not through epidemiology, surveillance, research, and evaluation of information about disease, behavioral, only because of the reductions in federal biological, environmental, and socioeconomic factors. intervention but also because of their constitutionally designated police pow- ers. It is local government that is on the Policy Development front line of public health action today, Planning and priority setting, based on scientific know- however. Local governments are critical ledge and under the leadership of the governmental to the public health system, providing an agency, for the development of comprehensive public operational mechanism for public health

health policies and decision making. Evaluation action and serving as a liaison among professional experts, different governmental divisions, and the community. Assurance The securing of universal access to a set of essential Myriad other institutions contribute to personal and community-wide health services through public health practice, including private delegation, regulation, or direct public provision of foundations, schools of public health, services. community-based organizations, private Source: Institute of Medicine, Division of Health Care Services, 1988. health care organizations, and community activist organizations. In this diversity of

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public health players lie both opportunity intrinsically supportive of effective pub- and challenge. Opportunity because public spending for social good. The other lic health problems tend to be complex is ﬁscally conservative, characterized by and require integrated, multidisciplinary market populism, and oriented toward responses. Challenge because these various increased privatization that would players can be uncoordinated and even intrinsically limit government’s involve- competitive in their efforts. ment in health reforms.

The first political vision is fundamen- Key Factors tally new, and the policies it would Affecting Public deliver are less certain. The second vision Health in America would definitely restrict government Today establishment of such policies as univer- Politics: The American sal health coverage, a patient’s bill of Dream Under rights, and overall increases in social, Reconstruction health, and public health spending. The mid-20th century was a time of expansion of prosperity and the American Socioeconomic and dream, but the recessions of the 1970s Political Factors and 1980s and government downsizing in the 1990s narrowed the government’s Socioeconomic status is the number one social vision. Welfare and affirmative predictor of poor health. The poor are action receded. Government privatized more than three times as likely as the the safety net, borrowed from Social wealthy to die prematurely or have a Security, and embraced free trade. By disability from illness,3 despite nearly 1999, government spending on infra- two-thirds of the money for public structure, education, and research had health being directed to medical safety- diminished from 24 percent of the fed- net services. Socioeconomic status is a eral budget to 14 percent.2 powerful factor among the determinants of intentional injury by homicide and Yet, at the end of the 20th century, new suicide. The issue is clearly socioeco- health challenges emerged, such as AIDS nomic status and not ethnicity because infection and environmental contamina- when rates of household crowding are tion, that required strong centralized used as an index of socioeconomic status, leadership and reintegration of popula- Caucasians and African Americans living tion-based approaches to public health. in comparable socioeconomic circumstances demonstrate similar rates of Two currents now flow through the homicide.4 The ill effects of poverty are mainstream, and one of them is likely particularly ominous in the light of an to dominate in shaping the next social increasing economic gap between the vision. One current is simultaneously rich and poor, which is independently populist, equitable, libertarian, pro- associated with a worse health status for environment, fiscally conservative, and the bottom economic tiers of society.

Chapter 11: Public Health Services 169 Global Forces Driving and Economic disparity in the United States Limiting Progress has been increasing. From 1977 to 1999, the after-tax income for the richest 1 per- Global issues ultimately create the con- cent of the population increased 115 per- text for public health today and into the cent, whereas the after-tax income for the future. They are highly integrated eco- poorest 20 percent declined by 9 nomic, social, political, and technologi- percent5 (see Figure 11-3). Moreover, cal forces that both drive and inhibit greater wealth is concentrated in a progress. smaller segment of society today than has been the case at any time since the The world’s economies are intercon- Great Depression. This disparity will nected more than ever before, and the have as large an effect on the future of advent of free-trade agreements and public health as any other factors consid- expanded world travel are rapidly chang- ered in this analysis. ing the context of public health in the United States. The main mechanism through which globalism is shaping public health is through the breakdown of natural and regulatory barriers to disease. Increased trade and travel are permitting diseases to spread to new populations that have no natural resistance and organisms to enter new envi- Figure 11-3. Changes in the share of national after-tax income held by ronments with no natural controls. various economic groups in the United States, 1977 and 1997 These forces of globalism are inevitably Percent 60 associated with health risks, including new infectious diseases, contaminated 1977 food, spread of emerging and drug-resis- 50 1997 tant disease, bioterrorism, and toxic substances, both legal and illegal. According 40 to CDC, since 1995, nearly 50 percent of all cases of measles reported in the 30 United States have been introduced from other countries,6 as have been the 20 inﬂuenza strains that affect the U.S. population every year. In 1997, 39 percent of 10 all patients with tuberculosis reported in the United States, and 67 percent in Cal- 7 0 ifornia, were foreign born. An increasing 20th 40th 60th 80th 100th Top 1% proportion of the foods Americans eat, percentile percentile percentile percentile percentile including 40 percent of fruits and 60 percent of seafood, is produced abroad, Source: IFTF; Shapiro, I., and Greenstein, R. The Widening Income Gap. Washington, DC: Center on Budget and Policy Priorities, 1999. where standards of pesticide use and sanitation can differ from the United States.8

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International free trade is also challeng- The next 10 years will see public health ing national and state health and safety professionals in the environmental health regulations. The primary issue is how to ﬁeld creating multisectoral relationships maintain and advance U.S. health and like never before. Their success in creat- environmental standards without violat- ing links to government environmental ing trade accords and while remaining agencies, environmental activist groups, competitive. Reconciling this issue from human rights groups, labor unions, and a public health perspective will be like technology agencies will be one of the walking a tightrope, with liability and primary determinants of the status of environmental and health risks all in the environmental health in the United balance. States over the coming decade.

The next 10 years will see increasing Three major areas will be of greatest international cooperation in vaccine importance: air quality, water quality, preparation, disease control, and envi- and food safety. ronmental and food safety. The reality and the perception of public health con- Air Quality cerns and solutions in the United States The good news is that Los Angeles no by the end of the decade will be much longer has the worst air quality in the more embedded in a global health and nation. While California has broken new economic context. Policymakers and ground with air quality improvements, public health professionals will increas- particularly in regard to motor vehicle ingly be called upon to protect the pub- emissions, other states have continued to lic and the environment in a way that pollute their air. The most important con- both withstands the pressures and cerns in this area are the improvement of advances with the opportunities of vehicular, diesel, industrial (especially global trade. power), and household product emissions.

Environmental Factors The bad news is that failure to improve air quality has profound repercussions on A fragmentation of the infrastructure and health, including its relation to cancer, information systems that supported envi- developmental problems, and asthma. ronmental health until the last quarter of the 20th century has weakened the abil- Asthma is one of the most common ity of public health agencies to protect chronic diseases in the United States and the communities they serve. While there is the ninth leading cause of hospital- are ample data available, there is little ization nationally. Despite medical usable information—a factor that has advancements in its diagnosis and treat- proved to be a serious barrier to public ment, the prevalence rates linked to health agencies’ ability to address emerg- asthma are increasing nationally, and ing health problems, to educate decision overall rates of death with asthma as makers and the public about speciﬁc the underlying cause—which decreased environmental hazards, and to evaluate from 1962 through 1977—have gradu- the effectiveness of interventions.9 ally increased again in all race, sex, and

Chapter 11: Public Health Services 171 Information Survey changed the measures Figure 11-4. Trends in asthma prevalence by region and year, 1980Ð1994 of asthma prevalence. Now, two measures are used, both restricted to persons with a Rate medical diagnosis of asthma. The ﬁrst is 70 referred to as lifetime asthma prevalence, 60 which includes those respondents with a

50 medical diagnosis of asthma at any time in their lives. In 1997, a total of 26.7 mil- 40 lion persons reported a physician diagno- 30 sis of asthma during their lifetime, which is substantially higher than the 12-month 20 Northeast prevalence measured before 1997. The Midwest 10 Southwest second measure is a 12-month attack prevalence, which includes the number of 0 1980 1981Ð83 1984Ð86 1987Ð89 1990Ð92 1993Ð94 persons with asthma who have had one or more attacks or episodes in the past 12 Source: Mannino, D. M., et al. Surveillance for asthma—United States, 1960Ð1995. Morbidity and Mortality Weekly Report 1998; 47 (SS-1):1Ð28. months. In 1997, the estimated prevalence of persons with asthma episodes or attacks was 11.1 million, lower than the Figure 11-5. Trends in asthma prevalence by year, 1980Ð1999 12-month prevalence estimated from the 60 question wording used before 1997 (see Figure 11-5). A sufﬁcient number of Self-reported asthma years with the new measures do not yet prevalence during the preceding 12 months exist to determine whether the trends in Episode of asthma or ashtma are increasing or decreasing. 50 asthma attack during the Both 12-month prevalence (before 1997) preceding 12 months and 12-month attack prevalence of asthma (since 1997) were higher among children aged 5–14 years, blacks com- 40 pared with whites, and females. Neither 12-month prevalence nor episodes or attacks of asthma varied substantially among regions of the United States (data 30 1980 1985 1990 1995 1996 1997 1998 1999 not indicated). The most substantial increases occurred among children from Source: Mannino, D. M., et al. Surveillance for asthma—United States, 1960Ð1995. Morbidity and 10,11 Mortality Weekly Report 1998; 47 (SS-1):1Ð28. infancy to 14 years of age. Allergic asthma costs an estimated $6.2 billion a year, according to the National Institute of Environmental Health Science. age strata. From 1980 to 1996, the prevalence of self-reported asthma in the Water Quality United States increased 74 percent (see Most attention to water quality has Figure 11-4). Beginning in 1997, the focused on drinking water, as public asthma questions on the National Health water systems are regulated under the

172 Chapter 11: Public Health Services Health and Health Care 2010 Institute for the Future

Two other sources of water contamina- Figure 11-6. Trends in waterborne disease outbreaks, 1971Ð1994 tion are also emerging areas for concern. According to the Environmental Protec- Number of outbreaks tion Agency, farm animal waste pro- 60 duced at concentrated animal feeding Individual operations has polluted 35,000 miles of 50 Noncommunity rivers in 22 states and has contaminated Community groundwater in 17 states. Animal-factory 40 pollution contributes to a range of physical and mental ailments in people, 30 including headaches, nausea, depression, and even death. The practice of feeding 20 animals large quantities of antibiotics also contributes to drug-resistant bacte- 10 rial infections. Although the number of hog farms in the United States has 0 dropped from 600,000 to 157,000 over 1971 1975 1979 1983 1987 1991 1995 1998 the past 15 years, the total hog inventory for the United States has remained Source: Centers for Disease Control and Prevention. Surveillance for waterborne disease outbreaks—United States, 1993Ð1994. Morbidity and Mortality Weekly Report 1996; constant because of the increased ani- 45 (SS-1):1Ð33. mal concentration in large-scale farms. Securing water safety in the future will require structural, regulatory, or redesign interventions in this domain.

The second area of concern is increasing federal Safe Drinking Water Act of evidence of microcontaminants and 1974, as amended in 1986. Probably as pharmaceuticals in water supplies. Hor- a result of this regulation, the number mone-disrupting contaminants such as of waterborne disease outbreaks reported DDT-like compounds and waterborne annually has been similar for each year perchlorate as well as other pesticides are from 1987 through 1994, except for an of particular importance. An emerging increase in 199212 and has decreased issue is that greater than expected quan- since then (see Figures 11-6 and 11-7). tities of active pharmaceuticals are turn- Some outbreaks have disclosed the vul- ing up in water, in large part excreted by nerability of large metropolitan areas. humans who have not entirely metabo- However, the capacity to treat drinking lized the medicines that they take. In water adequately in some metropolitan some cases, 50 to 90 percent of an areas is being stretched to its limit, and administered drug may be excreted.13 the problem cannot necessarily be reme- Drugs, however, are not traditionally died by further regulation. As a conse- considered pollutants and are regulated quence, municipalities increasingly primarily by public health agencies that will explore new technologies in water have little expertise in protecting natural sanitation. ecosystems and water supplies. The full

Chapter 11: Public Health Services 173 Figure 11-7. Patterns in waterborne disease outbreaks, 1997Ð1998

Etiologic Agent Water System

Community Parasitic 47.1% 35.3%

Unidentified 29.4% Chemical Individual Noncommunity 11.8% 23.5% 29.4%

Bacterial 23.5%

Water Source Deficiency

Treatment Well deficiency 70.6% 41.2% Distribution Spring system 5.9% Miscellaneous 5.9% 29.4% Surface water Untreated Well and 11.8% groundwater spring 23.5% 11.8% N = 17

Source: Centers for Disease Control and Prevention. Surveillance for waterborne disease outbreaks— United States, 1993Ð1994. Morbidity and Mortality Weekly Report 1996; 45 (SS-1):1Ð33.

impact of pharmaceuticals in the water estimates of the magnitude of foodborne supply is only beginning to emerge and illness in the United States are impre- may prompt new standards for drug cise. Since 1996, however, the Foodborne approval and cross-sector collaboration Diseases Active Surveillance Network in their control. (FoodNet) has collected data to monitor nine foodborne diseases at selected sites Food Safety in the United States. As compared to the Two main areas of concern in food safety 1996 data, 2000 FoodNet data indicate a are outbreaks related to foodborne decline in several of the major bacterial pathogens and pesticide use. and parasitic causes of foodborne illness.14 These declines might in part Each year, millions of people have a reﬂect annual ﬂuctuations, temporal foodborne illness, but because only a variations in diagnostic practices, or fraction of them seek medical care and implementation of disease prevention even fewer submit laboratory specimens, regulations. However, with the forces of

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increased international food trade and environmental standards as will the work increased fast-food consumption, con- of national and state governments. The stant vigilance over this system is global context will require environmen- required to secure ongoing declines. tal health professionals to think in new ways and build alliances across environ- Pesticide use has implications for both mental, labor, and technology sectors. food consumption and environmental or occupational exposure. Certain pesticides Technology are known carcinogens, and others are under suspicion. Of particular concern is Technological advancements are so fre- that these chemicals can be excreted in quent and often dramatic now that breast milk and that children consume change itself seems to be commonplace. the greatest concentration of pesticides. Technology holds the greatest implica- Mounting evidence shows that when tions for public health in the areas of children are exposed to ambient pesti- information, diagnostics, and genetic cides through proximity in or outside technologies. New information technolo- their home, their normal physical and gies are expanding public health’s capac- intellectual development are profoundly ity to conduct epidemiology, disease affected. In adults, occupational exposure surveillance, collaborative research, data- can be associated with bradycardia, based policymaking, and advocacy. At diaphoresis, nausea, headache, eye irrita- the same time, tremendous struggles tion, or muscle weakness, as well as with regarding privacy and data ownership, a potential for more severe effects, validity, and coordination have yet to be including cancer, over the long term. resolved. Again, international differences in agri- cultural practices as well as trade agree- Diagnostic technologies will continue to ments are major considerations in advance public health screening. New addressing these problems. technologies include more sensitive mammograms, noninvasive screening The Future of Air, Water, with enzyme-linked immunoabsorbant and Food Safety assays and polymerase chain reaction In all cases of air, water, and food safety, tests, and computer-aided detection of it is children and developing fetuses who abnormalities on pap smears and mam- have the most adverse health conse- mograms. These advances permit more quences of environmental threats. Grow- and better screening, and also make it ing evidence to this effect has created an easier to screen in nontraditional settings, increasing momentum to change the way such as jails and community outreach environmental health and safety stan- sites, allowing access to otherwise hard- dards are set. Within 10 years, the gold to-reach populations. standard for setting levels for contaminants will be based on child health fac- With progress in our understanding tors, with important implications for of genetic predispositions to disease, trade and industry. International accords the implications for public health screen- will have as great a role in the setting of ing and epidemiology are impressive.

Chapter 11: Public Health Services 175 However, biotechnology also ushers in a not know what it takes to achieve those new array of ethical struggles, as debate protections. People value the products of ignites issues of stem cell research, public health, such as clean water, a genetic screening, and international tri- clean environment, and control of com- als. Technology also helps drive the municable disease, but they do not as increase in resources expended on health greatly value the methods of public care, further diminishing the funds health, such as disease surveillance and available for public health services. screening. The better public health’s prevention strategies work, the more invisi- Public Health ble they are to the public’s eye. Frameworks and Ultimately, if the public does not value Strategies: Problems and support the means to the end, things of Perception will fall apart.

Public Health as Two tendencies, one reactive and one the “Also Ran” active, indicate that improvements in Ask most people on the street what pub- public awareness are possible. Resur- lic health means and they’ll tell you, gence in public support for public health “welfare.” Ask them what epidemiology reforms does occur, but largely as reac- means and they’ll either blush or tell you tion to a perceived crisis. It took 45,000 it’s the study of skin infections. Public stray dogs and an epidemic of dog bites health has an identity problem. for Los Angeles County to reverse an 8- year trend of funding cuts to its animal People often think of public health as control program. It has taken numerous publicly funded medical care for the mass shootings to galvanize the public poor. But while medicine and public and convince some politicians to take health are inextricably entwined, they steps toward gun control. It may require are also quite distinct. A physician’s vir- a worsening of problems, such as drug- tual black bag contains diagnostic tools, resistant tuberculosis or breaches in pharmaceuticals, treatments, and proto- water-supply sanitation by microcontam- cols. A public health professional’s inants, before the public becomes con- toolkit carries epidemiology and biosta- vinced that public health is not just for tistics, health education, program and people on the outskirts of society, but policy development and evaluation, rather is necessary for the well-being of screening, and advocacy. Americans can the entire population. Public health pro- see what doctors do any night of the fessionals need to realize that embedded week on television, but they have almost in these dilemmas are opportunities for no exposure to what public health pro- heightening public awareness and fessionals do. This lack of understanding support. of public health can forestall reinvigora- tion of the public health system. On a more positive note, another emerging trend—the rise of the “new con- Furthermore, while people value the pro- sumer”—could put public health on the tections offered by public health, they do radar screen before disaster strikes. The

176 Chapter 11: Public Health Services Health and Health Care 2010 Institute for the Future

new consumers not only are educated, impair public health agencies’ ability to they also have economic clout and are compete for talented personnel. very well-informed about their health. With mounting exposure to public Compounding the problem is the health information, the new consumers, administrative structure of public health if guided and organized, will serve as the agencies, which is not always well suited opinion leaders necessary for enhancing to a professional staff. Restrictive job the reputation and resources of public classifications, restrictions on recruit- health. Moreover, these information- ment and hiring, out-of-date time man- empowered consumers will become the agement requirements, and outmoded majority of the adult population around or counterproductive administration of 2005, and will bring with them a greater professional positions can make public value for prevention (see Chapter 10). health an uncompetitive field. Unlike the private sector, the public sector is Organizational and also restricted in its ability to reward Institutional Forces highly productive employees or lay off underachieving employees. Issues of public health leadership and professionalism, the organizational struc- Show Me the Money ture of public health, and public-private competition and accountability all influ- Inadequate funding is one of the great- ence the day-to-day functioning of the est barriers to the completion of public public health system. They also influence health’s mission and responsibilities. At the potential for policy formation that all levels of government, but particularly could alter the course of public health the local level, officials are hamstrung by in the future. limited funding and are often forced to follow the money rather than address Public Health Professionalism: public health problems. Although states A Crisis of Leadership have been given considerable flexibility in their use of block grants, this restric- Organizational factors that limit public tive funding mechanism has often com- health agencies’ capacity to provide the promised the ability of local agencies to leadership necessary to guarantee the meet the particular needs of their com- three pillars of public health include munities, especially as the grants are not uncompetitive wages, restrictive bureau- discretionary. cracies, and insufficient leadership training. Governmental public health officials’ average wages are half those in medical Organizational Challenges to and health services management and are Public Health less than one-third those of physicians.15 The states have considerable latitude in Increasingly, public health practice relies fulfilling their public health mission. on highly skilled professional staff, Partly because of that autonomy, the including epidemiologists, policy ana- organizational structures of different lysts, project directors, and information states’ public health agencies and their systems experts. Systemwide low salaries ties to related agencies vary widely.

Chapter 11: Public Health Services 177 Although greater uniformity is neither programs and training. To this day, likely nor necessarily desirable, organi- although the interests of public health zational variability can impede integra- and medicine overlap, an adequate tion and coordination of health and mechanism for coordinating activities social services. between the two sectors is lacking.

A particular difficulty lies in creating The problems resulting from this functional organizational ties between arrangement continue to weaken the public health and other agencies with public health system and are fourfold. overlapping missions, such as social services, environmental protection, environ- First, the disproportionate allocation of mental health, personal health care, and public health resources to publicly mental health agencies. When a new funded medicine drains capacity and health problem emerges, health systems attention from community-wide public sometimes create organizational barriers, service, assessment, and policy develop- establishing a separate program for it ment functions. At the state level, two- rather than integrating that program thirds of spending is for personal health into the existing infrastructure, as was services whereas spending for popula- the case with AIDS. The consequences tion-based health services is only 1.0 of these barriers can include lack of coor- percent of total health care expenditures. dination of program activities and policy Of this, the largest amount (26 percent) priorities, inadequate and out-of-date is for enforcing laws and regulations that data surveillance and information shar- protect the health and ensure the safety ing, and competition for limited of the public, whereas training (4 per- resources. The same problems exist cent) and research (2 percent) received between the government and private the smallest investments.16 sectors, especially with the institution of managed care. Second, in both the public and private sectors, there is limited cooperation and Reconciling Public coordination across public and personal Health and Private health services for the provision of essen- Medicine tial disease control functions. These services include screening, disease reporting, Perhaps the most significant example of partner notification and treatment, treat- an organizational threat to public health ment standardization, and diagnostic and efficacy involves the interplay of the treatment technology updates. public and private sectors in the provision of personal health services. With the Third, opening of Medicaid and Medi- spectacular biomedical discoveries and care reimbursements to the private sector their applications in the late 20th cen- has reduced the resources available to tury has come expansion of the private state and local public health agencies. medical sector, with concomitant further Initially, the public sector was able to reductions in financial and public sup- support some of its infrastructure and port of population-based public health provide care to the indigent through

178 Chapter 11: Public Health Services Health and Health Care 2010 Institute for the Future

relatively high Medicaid reimburse- ticular, they have begun exploring “pri- ments. Paradoxically, when private vatization” as a potential community- providers became eligible for those reim- based approach for assuring delivery of bursements, they successfully siphoned necessary public health services. Table off the majority of reimbursement 11-3 reviews findings from a Public income and the healthiest patients, leav- Health Foundation review of the privati- ing the public sector with the burden of zation experience.17 the indigent population but without the Medicaid/Medicare income. Moreover, However, when Medicaid and Medicare private-sector involvement did not fun- patients leave the public sector to enter damentally increase health care coverage private-sector care, public health loses for the poor. As a result, the cash- control over some of the services it has strapped public health agencies are left traditionally assured its patients. For providing medical care for the poor and example, Medicaid recipients, as a med- provide little public health care for the ically vulnerable population, often require overall population. “wraparound” care that provides services, such as transportation or translation ser- Fourth, as the government’s public vices, that help them gain access to or health agency became increasingly communicate with their medical provider. involved with the provision of medical Currently, when patients leave the public care, the general public came to confuse sector to enter private managed care public health with publicly funded med- programs, essential wraparound services ical services—with welfare. The conse- are not uniformly provided. The capacity quence of the public’s misunderstanding of government agencies to assess the pub- of the core functions of public health has lic’s health status, expenditures, and dis- diminished public support or sense of ease control measures is significantly collective responsibility for public health altered when patients enter the capitated actions. Some public health professionals world of private managed care. even suggest that the public health field should change its name to population The increasing delivery of health services health to clarify things! in managed care environments is of particular concern for the poor, but is also of Privatization: The Promise relevance to the general population. of Partnerships Between 1985 and 1998, the proportion Market forces that affect the delivery of of HMO members enrolled in investor- health care are significantly changing the owned plans increased sharply from 26 financial base and functional role of pub- percent to 62 percent. Between 1980 lic health agencies. With the emergence and 1998, the market share of group- of managed care, the trend toward down- model and staff-model plans decreased sizing governmental agencies, and the from 81 percent to 12 percent. A 1999 overall reductions in public health fund- study analyzing differences between for- ing, public health agencies have increas- profit and not-for-profit health plans ingly turned toward developing leaner, found that investor-owned HMOs more efficient delivery systems. In par- deliver a lower quality of care than do

Chapter 11: Public Health Services 179 Table 11-3. Factors in the process of privatizing publicly funded public and personal health services

Measure Finding

Reasons for privatization Implementation of state Medicaid waivers Effort to achieve cost savings and address ﬁscal concerns Downsizing and reorganizing government Effort to improve quality and efﬁciency

Barriers Personnel issues Philosophical differences Difﬁculty in ﬁnding able or willing partners in the private sector

Facilitators Involved community Maintenance of the government’s role in core functions of assessment, policy development, and assurance Public health agencies’ savvy in corporate skills and collaboration History of partnering Strong local health department leadership

Outcomes Public health agencies maintain service delivery components related to assurance and ultimate accountability Little impact on quality of services, except in the case of access, where access increases for clinical service and decreases for psychological services and health education Health departments evaluate and redirect revenues and expenditures regardless of privatization, although privatization allows them to focus on essential public health Privatization strengthens community relations, but occasionally can weaken them

Source: IFTF; Privatization and Public Health: A Study of Initiatives and Early Lessons Learned. Washington, DC: Public Health Foundation, September 1997. Research and writing supported by The Annie E. Casey Foundation, Baltimore, Maryland.

the not-for-proﬁt plans. Compared with atric hospitalization (70.5 versus 77.1 not-for-proﬁt HMOs, investor-owned percent). Staff-model and group-model plans had lower rates for all 14 health HMOs had higher scores on virtually all plan employer data and information set quality-of-care indicators.18 (HEDIS) quality-of-care indicators. In particular, the investor-owned plans Public health involvement in the recon- score lower in treatment of critical med- ciliation of these concerns has focused on ical conditions and preventive health increasing efforts to negotiate shared measures. Investor-owned plans had responsibilities either through govern- lower rates of immunization (63.9 versus ment mandate or partnerships. Public- 72.3 percent), mammography (69.4 ver- private partnerships are, to this date, sus 75.1 percent), Papanicolaou tests the most prominent and perhaps most (69.2 versus 77.1 percent), and psychi- promising vehicle for guaranteeing

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governmental assurance and assessment knowledge of public health professionals responsibilities and for transforming at all levels. managed care settings into productive protagonists for public health. Through Public health schools have an important public-private partnerships, the local role in shaping the future of public public health agency can engage the pri- health. While there is a need for acade- vate sector and community representa- mics and researchers in public health, it tives in building healthy communities. is critical also to prepare future public health officials with skills in leadership, Experimentation with several models is management, and negotiation. As a sub- currently under way, including models stantial proportion of current public serving the underinsured and the unin- health officials lack formal public health sured together with patients enrolled in training and are resistant to efforts to Medicare and private programs. For further professionalize the field, more example, Medicaid primary care case schools might follow the lead of schools management interlaces managed care and that are developing distance education FFS health services as an alternative to programs and creating nondegree certifi- the traditional HMO model. Introduced cation programs. in Texas in 1996, it quickly enrolled two- thirds of the state’s eligible enrollees and Community-Based Organizations may become the mainstream in other and Foundations states as well. Such an arrangement These organizations have the capacity fulfills the assurance function of the pub- to set political and program agendas lic health agency and streamlines the through grassroots actions and financ- agency’s assessment function as an added ing of new initiatives. Community- benefit to the community. based organizations are key members of any public-private partnership, as they Other Institutions: The are often among the strongest voices of Breadth of Public Health constituency groups and can also provide services directly. Lack of funding Universities consistently plagues community-based University graduate schools of public organizations, and innovative funding health are, in a sense, the caretakers of and public-private financing partner- the public health heritage. These schools ships will have to be developed in the train future public health professionals, future. The potential for conflicts of provide technical support to government interest resulting from new financing agencies, conduct basic research to fur- schemes will have to be evaluated. ther scientific understanding of health While community-based organizations determinants, and provide leadership seek funding, the foundations provide in public health ethics and health and funding, and in so doing they play a human rights issues. In so doing, they leadership role in setting public health are a force that can standardize and agendas and coordinating public health shape the skills, principles, capacity, and action.

Chapter 11: Public Health Services 181 The Future: Scenario Two: Scenarios and Dynamic Competition Rules Forecasts Local public health agencies continue to Outlook for Public-Private provide medical services, successfully Partnerships in Personal competing with the private sector for Health Care both Medicaid and private pay patients. Competition is both dynamic and effec- There are three possible scenarios and tive and is confined to the provision of three sets of key players whose leadership, medical services. In this area, the management skills, and negotiation capa- advances and achievements in each sector bilities would predict the likelihood of drive improvements in the other’s ser- particular scenario’s occurrence. The vices. For example, the public sector’s three players determining the outlook success in providing wraparound services for public-private relationships in per- pushes the private sector to improve its sonal health care include: own services in this area. Most of the larger public health functions are pro- public health agency directors vided by the public sector, although the private health care providers and orga- private sector does join in to some extent nizations for the sake of positive public relations. community-based organizations and Scenario Three: leaders Public Health in Tatters Unable to compete directly with the pri- Together, these players will lead their vate sector or to develop successful part- constituents through one of the follow- nerships, local public health agencies ing three scenarios. retreat from the provision of medical services, leaving only a skeleton framework Scenario One: Public-Private of services remaining in order to fulfill Community Partnerships their minimum mandates. The private In this scenario, the medical services now sector serves all of the insured population, provided by most government agencies leaving the government health care sys- are shifted to the private sector through a tems strapped for cash. Without the rev- variety of public-private partnerships. enues generated from Medicaid The public health principles—especially reimbursements and with no additional those of prevention, shared standards and funding, the public health functions of objectives, and community-based partici- assessment, policy development, and pation—potentiate this partnership. Pub- assurance are in tatters. The “invisible” lic health agencies maintain a watchdog work of public health, such as water and role to assure that vulnerable populations food safety, becomes very visible as public are served, but their focus returns primar- health systems begin to fail and outbreaks ily to assessment, policy development, and epidemics spread across the country. and population-level interventions, such In some areas, community leaders begin as health systems monitoring or monitor- to assist public health organizations ing of food and water sanitation systems. through the private nonprofit sector.

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Forecast of Beyond the pressures of dysfunction, the Future: there are several key determinants of Organizational Issues public health’s future. These include the status of community health needs and The future of public health promises community awareness, the relationship great struggle as public health leaders of the public health agency to the larger work to reinvigorate the infrastructure, community, and the capacity of both the approaches, and public attitudes that public and private sector to provide ade- support a collective responsibility for quate personal health services to the society’s well-being. It is not a question community. Key public health actions of whether there will be a future for will utilize policy, epidemiology, tech- public health—as long as people live nology, public-private community coali- together in society, public health will tions, and information-empowered exist. Rather, the future asks the ques- consumers. These are areas where focused tions of how much, for how many, and energy will yield the greatest return. how well?

In Particular . . . Such questions are not easily answered at present. Money is short, organizing Community coalitions. Coalitions estab- social vision is weak, and there predomi- lishing formal cooperative ties between nates a sense that public health is rele- community groups, private business, vant only to the poor. Our forecasts are private health care agencies, commu- based in this context. Nevertheless, there nity activists, and the government’s always exists the opportunity to chal- health agency will become increasingly lenge the future. We hope that, within common. Ideally led by a public these forecasts, public health profession- health ofﬁcial, these coalitions will be als will see opportunities to shape a new a powerful vehicle for building healthy era of public health that reaches its full communities. Their approach will be potential to secure health for all. to develop collaborative initiatives that mutually beneﬁt business and commu- During most of this decade, public nity. Their function for public health health will continue to be underfunded will be to monitor and assure access to and marginalized, and for the most part basic personal and public health ser- efforts to address the underlying prob- vices, to verify their quality, and to lems will be incremental. Breaches in provide some support to cash-strapped public health prevention systems will community-based organizations. It is also become increasingly evident in the possible that up to 45 percent of pub- areas of food and water safety, air pollu- lic health departments will be engaged tion, outbreaks of drug-resistant infec- in some type of public-private partner- tions, and resurgence of sexually ship by the year 2010. transmitted disease. As a result of these pressures, however, we think that gov- Managed care. While apparently des- ernment will begin to augment funding tined to be the dominant Medicaid and pay attention to these systems. personal health care model for this

Chapter 11: Public Health Services 183 decade, up to 25 percent of public in redirecting accountability to indus- health agencies still will compete with try, it will take some time to evaluate the private marketplace to provide its true value, as well as to expose its direct services to patients. Neverthe- weaknesses. less, managed care will look different at the end of the decade than it does Epidemiology. Epidemiology is the today. Competition and fiscal viability fundamental science of public health. are continuing to drive innovation and As public health problems become experimentation. Patients’ rights are more complex—both because of going to be increasingly protected, increased understanding of the prob- which will also force managed care lems and because of an increasingly to either respond or fold. Think inte- integrated mix of stakeholders—pub- gration: of public and private partner- lic health will rely on the scientific ships, of insured and uninsured foundation offered by epidemiology as populations, and of managed care one of its most useful guides and and FFS. allies. Genetic epidemiology will help to introduce new strategies for health Public health policy. At the national promotion and disease prevention— level, public health policy will although these strategies will not approach assurance functions primar- replace basic public health prevention ily in a piecemeal fashion but will approaches. In the area of health ser- include development of a patient’s bill vices evaluation, information technol- of rights and experimentation with ogy will enhance epidemiological safety-net incentive strategies. At the research. Constantly changing man- state level, the states will be very agement and payment structures will active in developing protections for make access to consistent and infor- patients within HMOs and publicly mative data sets difficult, however, funded personal health services sys- thereby presenting major challenges tems that are fiscally viable. States to solid epidemiological evaluation will also address access to controver- of health services. sial services, such as family planning. By the end of the decade, it is likely Universities. Educational institutions that there will be enough momentum will continue in their roles as and shared experience at the state researchers and advisors to policy- level to reinitiate federal-level com- makers and public health practition- prehensive personal and public health ers. Their role in training public care reforms. Along the way, another, health leaders will expand, especially more controversial, policy pathway through distance training programs increasingly will be taken: litigation. and joint degree programs. Universi- Following in the footsteps of the ties will also play a leadership role in tobacco suits, there will be more court studying and guiding ethical and challenges to the public and personal human rights debates regarding health status quo. While this emerging public health practices. approach is provocative, in particular

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Endnotes self-reported asthma prevalence—United States, 1998. Morbidity and Mortality Weekly 1 Centers for Disease Control and Prevention. Report 1998; 47:1022–1025. Ten great public health achievements— United States, 1900–1999. Morbidity and 12 Centers for Disease Control and Preven- Mortality Weekly Report 1999; 48:241–243. tion. Surveillance for waterborne disease outbreaks—United States, 1997–1998. 2 Executive Office of the President, Office of Morbidity and Mortality Weekly Report 2000; Management and Budget, 1999. 49 (SS04):1–35. 3 Lantz, P., et al. Socioeconomic factors, 13 Drugged waters: Does it matter that phar- health behaviors, and mortality. Journal of the maceuticals are turning up in water supplies? American Medical Association 1998; 279:1703. Science News (March 21) 1998; 153:187–189. 4 Centerwall, B. Race, socioeconomic status, 14 Centers for Disease Control and Preven- and domestic homicide. Journal of the Ameri- tion. Preliminary FoodNet data on the can Medical Association 1995; 273:1775. incidence of foodborne illnesses. Morbidity 5 Shapiro, I., and Greenstein, R. The Widen- and Mortality Weekly Report 2002; 51(15): ing Income Gap. Washington, DC: Center on 325–329. Budget and Policy Priorities, 1999. 15 Occupational Employment Statistics Survey by 6 Centers for Disease Control and Prevention. Occupation. Washington, DC: U.S. Depart- Measles—United States, 1997. Morbidity and ment of Labor, Bureau of Labor Statistics, Mortality Weekly Report 1998; 47:273–276. 1997. 7 Reported Tuberculosis in the United States 16 Measuring Expenditures for Essential Public 1997. Atlanta, GA: Centers for Disease Health Services. Prepared by Public Health Control and Prevention, July 1998. Foundation for the Office of Disease Preven- tion and Health Promotion, Office of Public 8 Putnam, J. J., and Allshouse, J. E. Food Health and Science, U.S. Department of consumption, prices, and expenditures, Health and Human Services. November 1970–95. Statistical Bulletin No. 939. Wash- 1996, Washington DC. ington, DC: Economic Research Service, U.S. Department of Agriculture, 1997. 17 Privatization and Public Health: A Study of Initiatives and Early Lessons Learned. Wash- 9 Public Health Foundation. Environmental ington, DC: Public Health Foundation, Health Data Needs: An Action Plan for Federal September 1997. Research and writing sup- Public Health Agencies. Submitted to the ported by The Annie E. Casey Foundation, Environmental Health Policy Committee Baltimore, Maryland. Subcommittee on Data Needs. June 18, 1997. 18 Himmelstein, D., et al. Quality of care in investor-owned vs. not-for-profit HMOs. 10 Mannino, D. M., et al. Surveillance for Journal of the American Medical Association asthma—United States, 1980–1999. 1999; 282:159–163. Morbidity and Mortality Weekly Report 2002; 54 (SS01):1–13. 11 Centers for Disease Control and Preven- tion. Forecasted state-specific estimates of

Chapter 11: Public Health Services 185 Health and Health Care 2010 Institute for the Future

Chapter 12 Mental Health The Hope of Science and Services

The mental health field is in transition. In spite of the many obstacles facing the In the next ten years, a series of influen- mental health world at this time, there tial forces will emerge that could address appear to be two forces for positive problems that have plagued this field for change in the next decade. The first basis a long time. Political support for par- for optimism derives from the hopes ity—insurance coverage of mental ill- held out by biological and genetic nesses that is comparable to that for research; the second is the implementa- more obviously physical disorders— tion of parity for insurance coverage of combined with new frontiers in enhanc- mental illnesses at the same levels as ing the scientific knowledge about “physical” illness. Neither of these forces mental illness, could provide a fortuitous will have all the answers for people with climate for change. In many instances, mental illness, and there will continue to these changes are inexorable and will be problems with the integration of pol- demand new solutions to challenge the icy and service systems. But there is current status quo. every reason to believe that changes will incrementally improve the situation for The main challenge for decision makers people needing mental health services in mental health is the growing recogni- over the next 10 years. tion that disability caused by mental disorders and serious mental illness is more Challenges significant than has previously been acknowledged. Shifting the focus from Our forecast for mental health is mortality rates to morbidity and disabil- affected by the many schisms that charity issues, the WHO report on the Global acterize society’s responses to mental ill- Burden of Disease states that mental illness ness: The world of research holds out will replace cancer as the number two hope for better diagnostic and treatment cause of disability in the next 10 years. In modalities, but the care systems of treat- the United States, the Surgeon General’s ment and rehabilitation, which are not report on Mental Health has confirmed integrated at present, may remain that in any one year, approximately 50 divided at the end of this decade. million Americans suffer from mental Although research is cautious about disorders, and that many do not seek help promising cures or cracking the genetic for their problem because of the stigma codes for major mental illnesses in the associated with this condition. near future, emerging genetic and

Chapter 12: Mental Health 187 biological knowledge in concert with Two additional national forces that will advances in imaging and computer tech- further affect the mental health world nology will radically transform research are anticipated demographic changes, methodology and generate useful infor- and changes in provider partnerships mation for clinical treatment and ratio- that will challenge the status quo. nal drug design. These will continue to grow rapidly in the near future and Mental health problems manifest them- will contribute substantially to changing selves differently in different age groups the face of mental health diagnosis and and in the context of varied cultural treatment. norms. The aging of America, along with the anticipated increase of an ethni- A defining difference between mental cally mixed population will have major and physical illness is the process by ramifications for the development of all which mental illnesses are diagnosed. health services, including mental health. Historically, the diagnosis of mental Given the requirements for sensitivity in illness has been dependent on clinical diagnosis and treatment of mental disor- judgment, based on patient-reported ders, the need for age- and culturally symptoms and clinician assessment of sensitive solutions is being endorsed but behavior and symptoms. Treatment will be difficult to implement across all strategies to date have focused on symp- systems of care. tom reduction (mainly through medications), and this emphasis has led to an Finally, the impending workforce “crisis” ideological divide between those commit- and its impact on services has been ted to pharmaceutical and technological emerging as a concern in the provider solutions and those who see medications world. At this time, there are strong as only a partial (admittedly important) calls to action to address the dwindling response to a “life crisis” condition. These numbers of qualified clinicians. The two forces, although not necessarily mu- clinical community has developed pro- tually exclusive, could compete for fund- jections in every field that call for ing if this schism persists. tremendous increases in professional groups. In many instances, these Perhaps the most powerful force that increases will not come to pass in 10 keeps mental health systems anchored in years unless extraordinary expenditures their respective camps is the funding are undertaken immediately. This is divide. The publicly funded mental unlikely to happen. What is more likely health world currently bears the largest is that the traditional mix of services will burden of responsibility for those with change. The growth of self-help groups, serious mental illness. This segregation and the eagerness with which these between those in the public health sys- groups are inviting research to demon- tem and those who are treated in the pri- strate their effectiveness, could challenge vate sector will continue to stigmatize professional programs. If voluntary and patients with severe mental illnesses; self-help programs deliver on their this divided system is not expected to objectives, and demonstrate to the payers materially change in 10 years. that their interventions are effective,

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payers are increasingly going to prefer a The impact that continued social denial self-care approach to treatment. about mental illness could have on the future of all knowledge-based economies Facing the Problem has been highlighted in both the World and the Facts Health Organization’s The Global Burden of Disease, and Mental Health: A Report of Mental illness generates fear in both the Surgeon General. Both reports bring those who experience it and those who mental illness into the forum of health come in contact with it. Historically, issues in general, and link physical and people with mental illness were hidden mental illness in ways that express their by their family members until the symp- similarities and not their differences. toms became too extreme to manage at home, when they were then admitted to The Surgeon General’s report notes that and hidden in institutions. Suicide, then in the United States about 20 percent of as now, was often a tragic outcome of the adult population is estimated to be this response. Societal fears and stigma affected by mental disorders during any colored and inﬂuenced funding levels for given year.1 Mental health and mental services as well as the types of services illness cannot be ignored as conditions that were developed to respond to men- that do not affect “ordinary” people any tal health needs. more.

Today, the hope for a more enlightened The WHO Global Burden of Disease response to mental illness is being report focuses on the loss of productivity espoused by people recovering from in developed nations due to mental mental illness, by their families, by men- health problems, and issues a wake-up tal health advocates, and by clinicians call for better management of these con- and scientists involved in discovering ditions. The most sobering fact emerg- new knowledge about mental illness. ing from this report is that unipolar The call for parity in access to services depression will replace cancer as the sec- for mental illness is perhaps the most ond leading cause of morbidity in the obvious sign of this new awareness. next decade. The WHO report introduced an important concept in estimat- Americans, however, are still not comfort- ing the effects of both morbidity and able with mental illness. They spend up mortality. This report noted that mor- to $11 billion in out-of-pocket payments bidity had far-reaching effects on a for mental health treatment, mostly to nation’s economy. Psychological condi- stop employers and insurance companies tions contributed 1 percent to mortality, from ﬁnding out about their condition. but comprised 11 percent of the disease When people with mental disorders seek burden worldwide. With this new yard- help, they prefer to go to their primary stick, the WHO developed three poten- care physician rather than a mental health tial scenarios for illness and disability in specialist. The use of the Internet for self- 2020 in developed regions of the world. help in mental health has been associated In all scenarios (baseline, optimistic, and with patient preference for anonymity. pessimistic), unipolar major depression,

Chapter 12: Mental Health 189 Table 12-1. Projected future causes of disability Baseline Scenario Optimistic Scenario Pessimistic Scenario

1. Iscemic heart disease 1. Iscemic heart disease 1. Iscemic heart disease 2. Cerebrovascular heart disease 2. Unipolar major depression 2. Cerebrovascular heart disease 3. Unipolar major depression 3. Cerebrovascular heart disease 3. Unipolar major depression 4. Trachea, bronchus and lung 4. Trachea, bronchus and lung 4. Trachea, bronchus and lung cancers cancers cancers 5. Road traffic accidents 5. Road traffic accidents 5. Road traffic accidents 6. Alcohol use 6. Alcohol use 6. Alcohol use 7. Osteoarthritis 7. Osteoarthritis 7. Osteoarthritis 8. Dementia and other degenerative 8. Dementia and other degenerative 8. Dementia and other degenerative and hereditary CNS disorders and hereditary CNS disorders and hereditary CNS disorders 9. Chronic obstructive pulmonary 9. Chronic obstructive pulmonary 9. Chronic obstructive pulmonary disease disease disease 10. Self Inflicted diseases 10. Self Inflicted diseases 10. Self Inflicted diseases

Source: Murray, Christopher, and Alan Lopez. Global Health Statistics. Harvard Center for Population and Development Studies, 1996.

alcohol use, and dementia rank in the within those who present with mental top ten causes of disability, with unipo- illness (about 3 percent). These people lar major depression being in the top tend to have more chronic conditions three causes among all three scenarios and to be high users of health services (Table 12-1). In addition, it is important (Table 12-2). to note that in many of the other conditions listed in these three scenarios (such This report conﬁrms that a huge number as alcohol in road trafﬁc accidents, and of people suffer from conditions related suicide attempts due to mental health to their mental health, and that the problems), mental disorders often play a magnitude of this impact is not yet fully major role. Mental illness will be a understood by the general public, payers, growing cause of primary and secondary providers, or public policymakers. disability in the years to come. Determining The Prevalence and Impact Priorities for of Mental Illness Public Spending

In addition to providing detailed infor- The Center for Mental Health Services, mation about the depth and prevalence which provides states with block grants of mental illness in this country, the Sur- for mental health services, has developed geon General’s report further notes that policies to ensure that states allocate clinicians and others need to be aware of these grants to serving the needs of “the high rates of co-occurring disorders most seriously emotionally disturbed

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Table 12-2. The most common mental health common disorders in the United States Condition Proﬁle Major Depression Affects approximately 19 million adults (age 18Ð54) each year Affects nearly twice as many women as men Is treatable, but two out of three do not seek help Is often the side effect of major illness such as heart attack, stroke, diabetes, and cancer, and increases the risk of heart attack Anxiety Disorders Affect more than 16 million adults Include panic disorder, obsessive-compulsive disorder, post-traumatic stress disorder, social phobia, and generalized anxiety disorder Often complicated by depression, eating disorders, and substance abuse Often more than one disorder Social Phobia Affects 5.3 million adults Women twice as likely although men more likely to seek help Typically begins in childhood, rarely after age 25 Often accompanied by depression and may lead to alcohol and other substance abuse Post-Traumatic Affects 5.2 million adults Stress Disorder Women more at risk Can affect any age group Depression, anxiety disorder, substance abuse can accompany PTSD Obsessive Compulsive Affect 3.3 million adults Disorders Affect both sexes equally Social and economic losses resulting from OCDs total $8.4 billion a year Bipolar Disorder Affects more than 2.3 million adults 20 percent die by suicide Affects both sexes equally Panic Disorders Affect 2.4 million adults Usually young adulthood (before age 24) Women twice as likely Also likely to be depressed or with substance abuse problems Schizophrenia Affects 2 million adults In men usually appears in late teens or early twenties, in women in their late twenties to early thirties Affects both sexes with equal frequency Patients suffer chronically throughout their lives Attention Deﬁcit Affects 3 to 5 percent of youths age 9Ð17 in any 6-month period Hyperactivity More boys (two to three times) than girls are affected Disorder (ADHD) Long-term impact on school work and social relationships Untreated disorder can lead to antisocial behavior, teenage pregnancy, drug abuse, injuries Suicide 31,000 adults committed suicide in 1996 Almost all had a diagnosable mental disorder, most commonly depression or substance abuse Men more likely than women, with white men over age 85 most affected in United States In 1997, suicide was the third leading cause of death in 15- to 24-year-olds

Sources: Mental Health: A Report of the Surgeon General, 1999, and “The Numbers Count: Mental Disorders in America,” NIH Publication No. 01-4584.

Chapter 12: Mental Health 191 children and seriously mentally ill these patients comprise the most severe adults.”2 This latter category of serious cases and dominate public spending, mental illness includes persons diag- often for the rest of their lives. nosed with schizophrenia, schizoaffective disorder, manic depressive disorder, Mental health has a two-tiered payment autism, severe forms of major depression, system with illness and impairment- panic disorder, or obsessive compulsive based inclusions and exclusions that are disorder. An additional criterion is the not, for the most part, paralleled in the level of disability faced by these individ- physical health care system. uals, defined as significant impairment for the previous 12 months that precluded their participation in many of the acts of Public Versus Private Spending daily living (eating, bathing, dressing), instrumental living skills (maintaining a Over the past decade, public payers household, managing money, taking (Medicare, Medicaid, state and local gov- medications) and functioning in a social, ernments) have assumed a growing share family or vocational/ educational con- of the mental health/substance abuse text. Children with diagnosable mental, treatment costs. In fact, the public sector behavioral, and emotional disorders are pays for almost two-thirds of substance also covered by federal block grant abuse treatment and more than half of funds. The definition also includes func- mental health treatment in America. tional impairments, which interfere with their ability to function within their We forecast that public payers will con- families, at school, or with their peers. tinue to absorb a larger share of expenses for mental health care. Their share of People with serious mental illnesses costs will increase even more dramati- account for 5.4 percent of the population cally if the economy destabilizes, the in most communities, while those with percentage of uninsured Americans holds more severe and persistent illnesses steady or increases over the next decade, account for 2.6 percent. and the number of individuals with serious mental illness increases in absolute Many conditions, such as schizophrenia, numbers. exist in young adults who are no longer eligible for health insurance coverage through their parents’ plans. Most pri- Mental Health Spending vate insurance coverage does not cover Grows Slower Than Spending for All Health the life long needs of these patients, Care leaving patients dependent on either their families or their state and local ser- Mental health and substance abuse vices. Hence, the more severe the mental spending growth averaged 6.8 percent illness, the more likely it is that the a year between 1987 and 1997, while patient will have to resort to the publicly national health expenditures grew by funded care system. Although they are a 8.2 percent.3 This slower rate of growth very small proportion of the population, in mental health spending in comparison

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to general health spending is most likely serve to offset the costs associated with the result of a trend to move patients out incarcerating individuals with mental of hospitals and into community-based illness. The costs of incarceration in state settings. The movement of patients out prisons per individual are estimated at of hospitals and into community-based an average of $20,000 per year.5 This services is due to the devolution of the ﬁgure does not include the costs associ- management of mental health services to ated with the health and mental health the local and community levels, and, in treatment for these prisoners. part, to the advent of managed behavioral health care over the past 10 years. Economic and Social Costs of Mental Illness Caveats In 1994, the total estimated economic Current estimates of spending on mental cost to society of mental illness was illness are low in comparison with the $204.4 billion. About $91.7 billion need. The proportion of those with men- (44.9 percent) of the total economic costs tal illness is expected to hover at around of mental illness were due to direct costs 20 percent by 2010. Given the overall for medical care. Costs associated with population growth anticipated for the loss of productivity due to illness were United States through 2010, the number calculated at 43.2 percent and with pre- of people needing care will outstrip mature death and lost productivity at growth in mental health spending. 8.1 percent.6 This serves as a warning that the gap is widening between addressing the needs Substantial health care costs for medical of people with mental illness in compari- treatment and other services are associ- son to those without mental illness. ated with anxiety disorders, schizophrenia, and affective disorders. Affective It is important to note, however, that disorders, such as depression, have retail prescription drugs accounted for a greater mortality costs due to premature growing share of mental health spending deaths (mainly suicides) than any of the from 1987 to 1997, rising from 7.5 per- other major mental health disorders. cent in 1987 to 12.3 percent in 1997. Anxiety disorders (such as panic disor- This cost will continue to climb, with ders, phobias, and generalized anxiety hundreds of drugs for mental illness in the disorders) have greater morbidity costs development pipeline.4 Emerging tech- (such as reduced or lost productivity) nologies such as PET, SPECT, and MRI than other major disorders. will add to the absolute costs spent on mental health care over the next decade. Table 12-3 estimates the economic costs for the various key disorders. The impact There are some potential offsets that of depression on workforce productivity might affect some costs. If new drugs are (especially in a knowledge-based econ- effective and allow for effective rehabili- omy), and the loss of productivity tation of those in jails, prescription ascribed to various mild to moderate drugs and other new technologies may mental health disorders are substantial.

Chapter 12: Mental Health 193 Table 12-3. Estimated economic costs of mental illness by type of disorder, 1994 (billions of dollars)7 Anxiety Affective Other Type of Cost Disorders Schizophrenia Disorders Disorders

Treatment/Health Care 14.9 23.7 26.3 26.8 Service Costs Mental Health Organizations 2.6 8.6 6.4 8.1 Short-Stay Hospitals .5 3.4 6.1 7.5 Ofﬁce-Based Physicians .5 .5 1.5 2.2 Other Professional Services .9 1.0 2.9 4.6 Nursing Homes 7.7 7.5 6.4 1.6 Drugs 1.5 .5 .5 .3 Support Costs 1.1 2.0 2.2 2.4 Morbidity Costs 47.8 15.0 3.1 22.4 (Productivity loss due to illness) Mortality Costs 1.8 1.8 10.7 2.2 (Productivity loss due to premature death) Other Related Costs .5 4.4 1.9 1.3

Total 79.8 68.4 68.0 79.4

Source: SAMSHA Statistics Source Book.

Change Agents in Research The National Institute for Mental Biological research, specifically in the Health (NIMH) provides national neurosciences, appears to hold the great- leadership in determining research est potential for generating new knowl- priorities for medical, neuroscientific, edge about mental illnesses and for and behavioral research. The NIMH developing more effective tools for the administers more than $170 million in prevention, diagnosis, and treatment of grants for adult and geriatric research, mental disorders. Although researchers child and adolescent treatment and are cautious about overstating the future, prevention, and services research and even small technological advances and clinical epidemiology.8 To accelerate incremental new knowledge about the pace of scientific discovery, the genetic risk and patterns of brain func- NIMH is advocating a strategy of tion are expected to generate useful, clin- shared knowledge, tools, and data. As ically relevant technologies or the largest publicly funded research treatments. By the end of this decade, organization with a national mandate new directions will be forged from infor- to develop new knowledge, the NIMH mation generated by research in biologi- will influence major changes in the cal sciences. mental health world.

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The NIMH’s stated research goals shape act on the central nervous system and both clinical and technical progress. The sense organs, addressing diseases such as agency’s three goals are Alzheimer’s, schizophrenia, depression, epilepsy, and Parkinson’s. In the year to understand mental illness 2000, there were at least 103 drugs in development for treating mental ill- to understand how to treat and pre- nesses.9 vent mental illness to assure an adequate national capacity These are not the only agencies involved for research and dissemination in mental health research. Foundations, the Substance Abuse and Mental Health Two essential partners of the NIMH are Services Administration (SAMHSA), the academic medical centers, which University programs, and private grants conduct most of the clinical research, fund a wide range of research projects. and the pharmaceutical industry, which Some, like the private initiatives in develops new medications, often in con- genomic research, closely mirror the junction with the NIMH and the acade- NIMH priorities and underscore the mic research community. consensus around the importance of genomic research in general. The academic research community is most often the generator of new knowl- Since we think that the outcomes of neu- edge, and the transfer of this knowledge roscience and technology are those likely to commercially viable treatment op- to have a material impact on options for tions links it to both the diagnostic and people with mental illnesses, we high- pharmaceutical industries. The academic light these issues in the forecast. This is community’s role in clinical trials and in not to say that there is no research on testing the efficacy and safety of new other psychosocial issues. The need to drugs makes it an integral partner with understand the mind as well as the brain the pharmaceutical industry. The com- is a stated goal of the NIMH and other mercial objectives of the pharmaceutical leaders in the field. But the reality of companies and the large budgets in- knowledge transfer continues to favor volved, however, lead to consumer criti- technological solutions; nontechnologi- cism that the scientific community is cal developments are not easy to imple- overly focused on pharmacological ment and therefore do not consistently solutions. affect service delivery, and in a field as fragmented and dispersed as this, we do Independent of the NIMH, the research- not expect a major impact in the next based pharmaceutical industry is estab- decade. Within this context, we looked lishing its own agenda in the private at the pace of change over the last two sector for the development of new drugs. decades and concluded that the patterns With a collective $30 billion research of the past will persist: pharmaceuti- budget in 2001 (up from $26.4 billion cals—aligned with two new partners, in 2000), pharmaceutical companies neuroscience research and computers— allocated $5.6 billion for products that will continue to drive the system by

Chapter 12: Mental Health 195 providing more effective therapies than delivery systems will give clinicians before. The mental health service world and their patients more effective will continue to embrace technological treatment options. The use of genetic opportunities faster than nontechnologi- data to target treatment responsiveness cal interventions. and to identify individuals likely to develop medication side effects is Forecast probable within the next 10 years. These innovations will have a sign- The following list highlights the major iﬁcant impact on changing services to research outcomes that are forecast to promote prevention and rehabilitation. occur in the next 10 years. New primary prevention strategies, Research in the neurosciences will cre- including genetic testing and tracking ate new information about the etiol- of high-risk individuals, will prompt ogy and genetic basis of major mental ethical debates and concerns about illnesses. privacy and conﬁdentiality.

Research in molecular biology and The Internet will emerge as a major genetics will provide greater diagnos- tool not only in fostering collabora- tic accuracy and better treatments in tion among scientists but also in dis- the mental health arena. By identify- persing research findings to clinicians ing susceptibility genes (the set of genes and, increasingly, the public. that create a predisposition to an illness), this research will also give rise to strategies to minimize the risk of Social responses to these advances onset, enhance patient resilience, and will manifest themselves in several control environmental triggers. ways. The first will be a widening schism between supporters of medi- A new terminology for describing cation management and those who serious mental illnesses will begin to feel that there is an overemphasis on emerge and replace the current symp- the use of technology to manage tom-based approach. mental health. Second, there will be controversy over any proposals for The overall research agenda will genetic testing regarding susceptibil- expand to include topics bearing on ity to disease. Finally, concerns over clinical practice, including relapse the confidentiality of mental health prevention and rehabilitation. information, and over the consent required to be in a research trial will New technologies (innovations continue to challenge researchers and in computer technology, drug- their agenda. development methodologies, and diagnostic imaging) will enable the The following section details the direc- rapid development of new pharma- tion this forecast could take in each of ceuticals; in addition, new drug- the areas identified above.

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Research in the brain cells) will open new treatment Neurosciences options, possibly including genetic In the field of neuroscience research, manipulation. All in all, this research molecular biology (including genetics, and the information it generates will pharmacology, and developmental provide greater diagnostic accuracy for research) and neuroimaging will provide all mental health problems in 10 years, pivotal information for understanding and this in itself will contribute greatly brain function, for diagnosing mental towards defining proper treatment illness, and for developing treatment and service requirements for various protocols. Rapid advances in computer conditions. technology will support this research. Identification of susceptibility genes is The results of the Human Genome Proj- expected to trigger greater research in ect will create an unprecedented body of understanding (and perhaps controlling) information about how the brain works. environmental issues that trigger the Key researchers warn against overstate- onset of various diseases. This includes ment of the impact of this research, and understanding factors that foster note that it could be decades before all resilience (since not everyone who is aspects of this research is concluded. susceptible or high risk is expected to Because 70 percent of genes are progress to an onset of that disorder) expressed in the brain and the central or prevent the onset altogether. This nervous system, genetic research will be is highly complex research, bringing the paramount preoccupation of major together the worlds of social environ- scientific research at the NIMH in the ment, stress management, coping strate- foreseeable future.10 gies, and family engagement in ways that research is not currently designed In the next 10 years, researchers are to explore. This research is only just likely to identify susceptibility genes, beginning (particularly in pediatrics), rather than a single genetic link, to most and will just be starting to explore its major mental illnesses. Susceptibility potential in 10 years. genes will be identified for schizophrenia, bipolar depression, and major The ability to diagnose mental disorders depression. Susceptibility genes have more accurately will lead to the need to already been identified for Alzheimer’s adopt new terminology, based more on disease and for many early childhood etiology and less on symptoms and psychiatric and hereditary problems.11 resulting in material changes in the DSM IV.12 While it is not expected Experts dismiss the development of any that the DSM IV will be replaced in “gene therapy” (one that actually fixes 10 years, we believe that it will begin defects in gene structure) in the next to incorporate these tools into the devel- 10 years. However, if stem cell research opment of diagnoses. Problems with develops and remains legal, the ability diagnostic accuracy have presented chal- to clone and differentiate cells (possibly lenges for clinicians, but the scientific enabling the replacement of damaged evidence being developed that will

Chapter 12: Mental Health 197 improve diagnoses should diminish less acute settings, including primary these problems in future. care practices.

Research in Pharmacology Some drugs may be available to slow down or delay the onset of the more Medications have had a profound effect severe symptoms of some diseases on service models in psychiatry, starting (e.g., Alzheimer’s disease). with drugs developed in the 1950s that enabled patients with schizophrenia to The use of genetic data to target treat- be treated in the community, rather than ment responsiveness and to identify in state psychiatric hospitals. Pharma- individuals likely to develop medi- cology research entered a new era with cation side effects is probable within the development of atypical antipsy- the next 10 years. The importance chotics about 10 years ago. In addition, of this research is that it will target the results of neuroscience research have individual variations—incorporating led to new and revolutionary ways of age, gender, and any identified varia- evaluating drug effectiveness. tions due to race and ethnic identity into the development of dosage and Over the coming decade, significant drug characteristics. pharmacological innovation is expected in the following areas: The important issue is that patients will have more choices. Not all patients will The life cycle of new drug-develop- choose to use drugs, but for those who ment methodologies will shorten con- do use them, the fact that the drugs will siderably and accelerate the speed at have fewer side effects, could be more which drugs enter the marketplace. effective, and work in a shorter time Science will enable pharmaceutical frame is very good news. And this is development to move away from likely to happen in the short space of time-consuming and costly trial-and- 10 years. error drug development, and toward rational drug design. The ability to Research in Neuroimaging refine and improve drugs rapidly will be a major change from the past. Three imaging tools poised to expand their functionality in the mental health More options to daily dosing, including world are Positron Emission Technology patches, injections, and slow-release (PET), Single Photon Emission Tomog- subcutaneous medications, will be raphy (SPECT), and functional Magnetic available for more drugs. These options Resonance Imaging (fMRI). SPECT and will increase therapeutic compliance for PET move studies of the brain from sta- some and enable many to manage their tic views to continuous observations that symptoms with less disruption to their enhance diagnosis and track the progress daily lives. New dosing options could of treatment; functional imaging allows also facilitate the shift of treatment into scientists to view brain function in real

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time. Rapid advances in these technolo- the capacity to store, interpret, model, gies will provide new information on: and analyze large quantities of information. The development of data banks on drug interactions early childhood development, and on signs of early onset of certain mental highly complex multidisciplinary data illnesses sets for neuroscientific and biologic the effects of aging research, cannot happen without the power of computer technology. brain development processes in early childhood Computer-aided drug design has become the development of brain disorders the norm. The ability to test compounds in high-throughput screening for bind- the impact of trauma ing to known neurotransmitter receptors These technologies will build on devel- will help to predict drug responses based opments now in use in cancer research on individual genetic variations. In 10 and treatment.13 As the cost of the tech- years, the ability to model human nology decreases, neuroimaging will response to various drugs is very likely become clinically available in mental and will also allow safer clinical testing health. Among the first to benefit will of new pharmaceuticals. be patients who have Alzheimer’s disease or a serious mental illness. The Internet will be a huge asset to researchers, clinicians, and consumers. Its role in the Human Genome Project Research in Computer has already been demonstrated since the Technology entire gene sequence is now available Advances in computer technologies have for researchers. The ability of clinicians greatly accelerated research in all areas of to connect and share research on an health, including mental illness. Com- international basis is just emerging, and puter technology has affected research in the availability of large data banks mental health in the following ways: makes the future world of research different from what we have known. In harnessing immense and rapid data addition, the Internet facilitates inter- analyses disciplinary communication among modeling and analyzing drug respon- research and clinical scientists. Clini- siveness, leading to “rational” drug cians’ ability to access the latest study design findings and to seek professional input into treatment plans for complex cases facilitating the Internet as a tool for will be enhanced in 10 years. Finally, researchers, as well as supporting consumers and family members will be clinicians and consumers who are able to access the latest research news searching for current information through the Internet, making them Computer technology’s contributions to more educated and more aware of their mental health research will derive from options for treatment.

Chapter 12: Mental Health 199 Research on Social the encryption of data and increasing Implications restriction of access to patient The role of medications in managing seri- information. ous mental illnesses is unlikely to change State, federal, or organizational regu- over the next 10 years. However, public lations around privacy will be enacted concern about the use of medications in and enforced, with appropriate penal- mental health will continue to grow. Cur- ties for violations. rent controversies over the increase in the use of psychopharmaceuticals in children Protocols for patients’ consent to par- and the proliferation of such drugs as ticipate in research trials will become Prozac and other mood-disorder medica- more complex.15 tions are a harbinger of things to come. The consumer movement is quite active Perhaps the greatest positive impact of in mental health areas and emphatically the new research will be in the reduction supports patient freedom of choice, espe- of stigma. The ability to demonstrate bi- cially in the area of drug treatment. ological evidence for mental illness will be a major factor in bringing both policy- Pressure to demonstrate the effectiveness makers and the public to a new under- of nonmedication alternatives to treat- standing of mental health disorders. ment for mild to moderate mental health disorders will result in more treatment choices for patients, and more evidence Emerging Research Topics about the effectiveness of combination As the Surgeon General’s report notes, therapies. “No gene is equivalent to fate for mental Social controversy over genetic testing illness.” Biological research provides will grow in the next decade. It is antici- road maps and clues to mental illness— pated that there will be increasing chal- but the brain is not the mind and the lenges in the courts on the grounds of need to understand such issues as factors human and civil rights violations of peo- that develop resilience to mental illness ple with mental illness. The impact of and that increase susceptibility to envi- various genetic studies, the long-term ronmental stressors are of growing inter- effects of drug trials, and disease risk est in research. Issues that affect the tracking in general will be controversial. quality of life for people recovering from In addition, advocacy groups will take up mental illness will also become a focus conﬁdentiality issues posed by genetic of research and treatment. testing. These groups will want regulations to govern the conditions under The following topics are being researched which genetic information can be used. and could be future forces for creating improved mental health treatment Conﬁdentiality of mental health infor- programs: mation will be addressed in 3 ways: large-scale multicenter trials that Technological solutions will become organize, study, report, and develop more sophisticated and will include implementation guidelines of best

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practice, including the use of Transferring Research to Practice pharmaceuticals The NIMH has acknowledged that clinical trials that include under- transferring knowledge from research to studied populations (e.g., children practice has been slow, sporadic, and not and older adults) always related to clinical practice. In response, the NIMH’s National Advisory epidemiologic and population-based Mental Health Council has established studies on how different racial and an ambitious agenda.16 It aims to pro- ethnic groups interact with the formal vide a more inclusive tone, to reﬂect mental health system clinical and consumer input, to look at whether the review process hinders or multicenter trials in primary care cen- dictates methodologies that are not ters where patients present a wide appropriate for all research, and to range of mental disorders develop new sampling and method- ological approaches. studies of new tools (including self- screening tools) for screening depres- Mental Health sion in primary care Services Changes in the Next Decade studies to determine the effective- Mental health care services are delivered ness of self-help models and support through two systems—one publicly groups in treating disorders, prevent- funded and the other privately spon- ing relapse, and providing mainte- sored. While this structure mirrors the nance services overall health system, mental health’s “two tiered” system results in people studies of the role of families, espe- with serious and disabling mental ill- cially those with a child affected by nesses being at greater risk of defaulting mental illness, in preventing relapse to the public system. There are two rea- and avoiding recidivism sons for this. First, some serious mental illnesses have their onset in late adoles- studies of alternative therapies, cence, when young people are no longer including herbal remedies covered by their parents’ health insurance but have not yet established ade- Among the current roster of studies quate employment bases to qualify for under way, those relating to the role of their own insurance. Second, given the the primary care sector and to the role discrepancies in current coverage for of rehabilitation after severe or acute mental illness, those who do have insur- mental illness are perhaps most likely ance soon exhaust their coverage for to produce changes in the mental health acute mental health beneﬁts. Their system. In both cases, new participants recourse at this point is either to pay for with new skills appear ready to formalize these services out of pocket or to qualify their role in managing mental illness. for public services. Such a shift does not

Chapter 12: Mental Health 201 occur as often with serious physical ill- responsible for the mental health needs nesses. The movement to achieve parity of people who are homeless or uninsured between physical and mental health or who cannot afford private mental insurance coverage is expected to bring health care. access to mental health services on a par with access to all other health services, According to a survey conducted by the but its impact on changing this two- researchers with the National Comorbid- tiered system will be evident only mini- ity Survey (NCS), 28.1 percent of the mally in the next 10 years. U.S. population was affected by a diagnosable mental or addictive disorder.17 Service Utilization The prevalence of mental disorders, excluding substance abuse, is estimated The publicly funded mental health sys- at around 20 percent for adults in the tem is the social safety net and provides United States. NCS research data further a substantial portion of care for people illustrated that people access a wide affected by serious mental illnesses: range of services, from highly specialized schizophrenia, schizoaffective disorder, mental health services to care provided manic depressive disorder, autism, severe by the “volunteer sector,” including fam- forms of major depression, panic disor- ily, friends, spiritual leaders, churches, der, and obsessive-compulsive disorder. and self-help groups. The percentage of Many of these people require multiple the adult U.S. population using mental social services (low-cost housing, trans- or addictive disorder services in one year portation, education, vocational assis- was reported as follows: tance, etc.), rely on county emergency departments for care, and have high rates 6.4 percent used their general medical of relapse. A small number need hospi- health system. talization in an acute setting. Those whose illnesses ﬁt the criteria of serious 5.9 percent used specialty mental illness often depend on the pub- mental/addictive health services. lic system to provide lifetime care. 3.0 percent sought services from other The public system also provides mental human services professionals. health services through community mental health and substance-abuse treat- 4.1 percent turned to the volunteer ment centers and in hospitals. Children services sector. receive mental health services through multiple agencies at their schools and The most important ﬁnding of this within the community. Juvenile and study is that when overlaps and dupli- correctional services provide mental cations of services were accounted for, health diagnosis and treatment (funded barely half (14.7 percent) of the 28.1 separately from the health system) for percent of the population with a mental inmates with mental health needs. In health need actually reported using the addition, the publicly funded system is health system. Making services more

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accessible, and helping people ﬁnd ser- ties simultaneously, but few programs vices will be a major challenge for the are organized to provide these services in mental health system in the near future. a coordinated way.

When patients do seek mental health services, there are a myriad of entry Forecast points through which they can obtain help. Each entry point has its own phi- The following list summarizes the major losophy and criteria for managing the changes anticipated in the mental health same condition. A patient with depres- service system during the next decade. A sion will receive very different services in detailed discussion of each issue follows. the voluntary services network, in the paid service sector (psychologists, psy- Unless the current service system chiatrists, other therapists), in the com- changes dramatically, growth and munity mental health system, and in change in population demographics emergency departments. will overwhelm it in 10 years. The aging of the population and the rapid This fragmentation of the mental health growth in the number of children and system is a well-documented problem. adolescents of diverse ethnic and racial Although mental health services are groups will significantly challenge available, and in some settings are orga- current systems. nized to facilitate links among services, Fragmentation and a lack of coordi- such coordination is not the norm. The nation within service delivery systems consistency with which referrals occur will continue to impede implemen- depends first on the patient’s ability to tation of service models that have pay for services and then on the system’s demonstrated good outcomes. referral services and relationships. People who are recovering from severe mental Technological advances will be a two- illnesses require regular and frequent edged sword. New technologies, espe- contact with medical services to organize cially pharmaceuticals, will be very their medication management. If the expensive and yet will be adopted care of these patients isn’t coordinated, rapidly within both the public and they often appear in hospital emergency private mental health service systems. rooms—a regular source of care for While new drugs may enable more people who are both mentally ill and compliance with medications and homeless. potentially ensure better outcomes, they will compete with all other men- The system is particularly fragmented tal health services for scarce financial when patients present with co-occurring resources. conditions (e.g., mental health disorders and substance abuse problems). Clini- The Internet will emerge as a major cians and researchers have demonstrated resource for consumers and service the need to address multiple co-morbidi- providers.

Chapter 12: Mental Health 203 The growing self-help movement will to the general population, and their men- take root alongside traditional service tal health outcomes are affected by the models. cultural context of services provided. The potential for creative solutions using Employers will expand Employee shared resources, telecommunications, Assistance Programs (EAPs) to and alternative settings for service is provide greater access to services great, but these improvements are earlier in the onset of mental health unlikely to be funded and implemented problems. before demographic changes increase the demand on clinical services. The workforce mix will change as will the roles of traditional service System Fragmentation providers in mental health. The role of psychiatry will become more Pockets of excellence exist within the focused on providing highly special- public mental health care system, and ized medical interventions for people these organizations have often led the with very complex mental illnesses; way in integrating services (such as primary care physicians will assume a Systems of Care initiatives for children). greater role in providing general men- Regrettably, integrated programs are tal health services; and nontraditional few and far between, and most parts of care providers will assist the tradi- the current mental health system will tional service system to meet expand- remain fragmented in the future. Public ing needs. health leaders have called for a “main- streaming” of mental health services, The Impact of Demographic underscoring the need to address mental Change health needs in the same way that we plan and fund other health programs. The population of the United States will Such a change will require massive re- increase from 273 million in 1999 to structuring of government agencies, over 300 million in 2010, or by roughly funding, and organizational policies, 10 percent in this decade. With experts and is unlikely to be accomplished in estimating that 20 percent of all Ameri- the next 10 years. However, there is no cans experience some form of mental doubt that these calls will increase as disorder each year, mental health care mental health’s links to all other health providers must prepare for a significant conditions are highlighted by scientific increase in the demand for services. The advances, and the barriers between the rate of population growth will be higher mental health profession and other health among groups that have special needs and professions will disappear over time. tend to have greater difficulty accessing mental health services. These vulnerable The Impact of groups include older people, children, Technological Advances and people of different ethnic and racial backgrounds whose mental health needs Medications and new diagnostic tech- are generally unmet. Their utilization of nologies will allow for quicker, more services varies dramatically in comparison effective management of various mental

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The number of psychiatric acute beds (in Service Coordination for People with Mental both specialized and general hospitals) Illness and Substance Abuse declined throughout the 1980s and Three percent of adults have both mental health and substance-abuse 1990s, and this reduction is expected to disorders. The Surgeon General’s report notes that these individuals are continue for the next decade even likely to use more health services. In addition, they have high rates of co- though more private psychiatric hospi- morbidity, which affects the service mix they need. In 1997, the Substance tals are now offering overnight ser- Abuse and Mental Health Services Administration (SAMHSA) reported that 21 most treatment models for substance abuse were outpatient-based and that vices. Inpatient days dropped from 475 clients of these treatment facilities were primarily young, with Caucasians per 1000 patients in 1988 to 275 per representing 57Ð61 percent of the client load and African Americans making 1000 in 1997. 22 State mental health up 21Ð25 percent. Less than half of the facilities reviewed by SAMHSA hospitals are excluded from accessing offered programs for those who were diagnosed with both disorders. Only federal community mental health service 38 percent provided programs for adolescents. Although more effective block grants awarded to states, and this pharmaceuticals will become available to manage substance abuse, the coordination of these medications with those for mental illness will require adds to the pressure on states to reduce considerable expertise.18 Consequently, this cohort of people with both the use of inpatient services. Some mental illness and substance abuse problems will continue to have limited experts argue that state mental hospitals access to effective, coordinated treatment programs. should be phased out entirely, but this is However, self-help programs such as Alcoholics Anonymous (AA) have unlikely to happen in the next 10 years. fueled a growing self-help movement for patients with both mental illness and substance abuse diagnoses.19 Given the growing use of medication As genetic links to mental illness are treatment for the two disorders, these groups have developed alternative discovered they will raise the issue of 12-step programs for their unique needs. Preliminary studies indicate that opportunities for prevention. Currently, self-help groups can be successful with co-morbid patients. Long-term studies are pending, but self-help programs for this group are expected there are few effective strategies for pre- to grow in future. venting the onset of mental illnesses. When scientists identify susceptibility genes for serious mental illnesses, testing individuals for risk could be the next illnesses and will increase the number of step. Without the availability of any real candidates for recovery programs. New prevention programs to offer these indi- medications will continue to reduce the viduals, the value of identifying risk will number of patients who require hospital- provoke heated ethical debates about ization and will shorten the length of patient consent, privacy, and the legiti- those hospitalizations.20 The number of mate use of genetic data. Hence the real psychiatric beds in hospitals will con- value of genetic screening will be lim- tinue to decline as inpatient admissions ited until there are effective prevention decrease, and the remaining beds will be services. primarily for the small numbers of patients who have acute crises. The elim- The Internet ination of daily dosing, better-deﬁned dosage levels, and fewer side effects The Internet is growing as a particularly should continue to improve symptom useful tool for people with mental disor- management and patient compliance and ders because of the anonymity it affords. allow more patients to utilize services in It has become a major source of informa- community-based settings. tion about, and communication among,

Chapter 12: Mental Health 205 people with mental health needs. In The impact of Internet technology on addition, the growing self-help move- mental health care is just beginning to ment and Internet use are mutually rein- be understood, and it is hard to predict forcing. At present there are over 200 how much material change in the service websites related to mental health, rang- delivery system will occur due to this ing from those of government agencies technology. Wireless transmission, sys- to advocacy organizations and support tems of access that do not require com- groups. The website of the National puters, and a technology that is Mental Health Self-Help Clearinghouse ubiquitous will offer opportunities that provides technical training, advice on we cannot now envision. Already, tech- establishing self-help groups, informa- nology makes it possible for clinicians to tion about local organizations, and data process prescriptions, manage appoint- about mental health policies. ments, and receive results using the Internet. Given the stresses forecast for As more patients seek the greater flexi- the mental health system, the Internet bility allowed by electronic communica- could provide major support to both tions, a growing cadre of clinicians will clinicians and patients. turn to the Internet as a means of providing clinical care.23 Although telemedicine is unlikely to replace the The Empowered Consumer and the Growing Self-Help initial development of a clinician-con- Movement sumer relationship, follow-up will be done on the Internet if the patient The new consumer movement in mental prefers. Some health plans already pro- health is expected to spearhead many vide Internet-based behavioral health changes within the service sector.24 The services for their enrollees (e.g., Epotec main contribution of this movement On-Line Behavioral Health). is to change the profile of the mental health consumer from a passive recip- The pace of these changes will accelerate ient of services to an active participant as the following barriers are overcome: in decision making about care. This recovery model emphasizes post-illness Concerns about patient privacy are rehabilitation and independence. As addressed. medical treatment outcomes improve and patients can be returned to func- User-friendly, inexpensive Internet tional independence, rehabilitation will access becomes available, making assume a greater treatment role both for Internet access as simple as a phone the chronically ill and for those with call is today. moderate to mild disorders. Licensure issues for the provision of support and clinical services across The recovery model reflects the belief states are resolved. that medical and pharmaceutical management is only part of the treatment Guidelines for telemedicine and clini- for mental health disorders. Individuals cal practice are developed. with chronic mental illnesses also need

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themselves and each other to cope,”26 Self-Help Within a Managed Care Plan but philosophy, structure, and approach Value Options, currently the third-largest managed behavioral care com- vary. Approximately 3 percent of pany in the United States, covers 3.8 million Medicaid recipients in six Americans who have a mental disorder states under 18 separate contracts. It has implemented a successful self- or illness participated in some form of care program to rehabilitate patients with serious mental illnesses within self-help group at any one time. state mental health programs. The goals are to help these individuals maintain an optimal state of recovery between episodes, to provide them with support, and to teach them to recognize potential signs of relapse and Self-help consumers are among the most take appropriate action to prevent relapses. intrepid users of online information and 27 Value Options uses a multi-system treatment model, which provides training resources, and self-help services will and the support required to set up self-help groups. Within four years of continue to proliferate on the Internet. implementing a self-help model, the numbers of groups within its service America Online, for example, hosts more area grew to 45 in 1998. Using a Quality of Life Interview Data questionnaire than 400 live self-help groups each they were able to demonstrate statistically significant improvement in social month.28 Studies have shown that par- functioning. They were also able to demonstrate higher levels of service ticipation in self-help groups can result penetration to serve a more seriously ill population than anticipated. in decreased perception of isolation, An important variable identified by Value Options in engendering success increased practical knowledge of an ill- was the support of their professional clinical service providers. Without ness, increased awareness of available this support, such programs not only do not come to the attention of their patients, but also affect patient confidence in participation. options, and increased ability to cope with an illness overall. In the long term, these benefits can lead to reduced rates of hospitalization, to better health, and to an increased sense of well-being. help rebuilding and maintaining family, social, and work relationships and skills Rehabilitation of patients affected by that will allow them to regain as much schizophrenia, severe depression, and functional independence as possible. other more serious illnesses is a major While most patients and advocates agree new trend. Successful rehabilitation and that medications are essential in many recovery of all patients will relieve pres- cases, they emphasize the need for adjunct sure on the mental health system.29 services that help prevent future episodes However, rehabilitating people with and re-establish patient self-esteem. chronic conditions will require additional resources and infrastructure since Self-help and peer support groups have these are new services, not currently in evolved from the consumer movement widespread use. Current programs, such and teach participants to overcome the as the Assertive Community Treatment “learned helplessness” that is brought on (ACT) program or Intensive Case Man- by dependence and social isolation. The agement (ICM) developed originally stigma attached to their disease exacer- through the Patient Outcomes Research bates these feelings.25 Self-help groups Team (PORTS) efforts of the NIMH are provide services using trained peer lead- widely adopted and endorsed by state ers and professionals and are based on the mental health departments. Another premise that “people with a shared con- popular model is the Clubhouse model, dition who come together can help which is widely implemented. Both of

Chapter 12: Mental Health 207 these models will find that their clients maintaining behaviors.31 In time, more and client needs will change in 10 years large employers will act to make sure since they will be using better medica- that such services are available to their tions, and that they will need a different employees. The cost of lost productivity mix of services than are provided today. will provide the economic motive, but Self-help models may have preempted employers and employees must also the more organized professional groups overcome the stigma attached to mental in anticipating the future needs of their disorders. community. The Changing Workforce As more research is conducted to assess the efficacy of self-help interventions, Primary Care. Primary care physicians self-help is likely to prove extremely have always been the first point of health cost-effective and to become a compo- care contact for patients. Historically nent of both public and private care. there has been evidence that mental disorders were not diagnosed and treated properly in a general medical setting. Employers and Lost Productivity Researchers in the field of general medicine feel that this is changing, and that Large employers are expected to emerge patient willingness to address mental as the real leaders in the area of men- health problems with their primary tal health system reform in the next care physicians is the first step in this decade. Employer interest in maintain- direction. ing the health of the workforce is a key ingredient in health system reform. In Patients’ personal preferences and fear of addition to the costs of treatment, the stigma of seeing mental health spe- depression is estimated to cost employers cialists will continue to lead them to $11.7 billion annually in absenteeism seek help from their primary care doctor. from work, and $12.1 billion in lost pro- A survey of five primary care practices ductivity.30 Coupled with the impact of reported that when patients were identi- substance abuse on employee productiv- fied as having “emotional distress,” 60 ity, these facts could prompt employers percent wanted counseling through their to look at issues that they feel the health primary care services, 33 percent wanted services sector is not handling in a medication, and only 5 percent wanted a timely manner. The real change in this referral to a mental health specialist.32 instance will be not in service delivery, but in including a variety of mental The number of practicing psychiatrists is health services within EAPs. expected to decline due to reductions in the numbers of medical students electing Some major corporations have already to enter this specialty. Primary care enhanced their EAPs to provide infor- physicians will have little choice but to mation, screening, and support for dis- continue to manage their patients’ men- ease prevention and mental health– tal health needs.

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Primary care will continue to develop for a wide range of patients. This is partnerships with psychiatrists and other inevitable, given the continued reduc- mental health clinicians, allowing more tions in the psychiatry workforce forecast patients to be treated in the primary care for this decade. setting. There are a number of multicenter trials testing new diagnostic tools Changes in the that will facilitate the screening of at- Workforce Mix risk patients in the primary care setting.33 Furthermore, new medications The following changes are forecast in will make it easier for primary care doc- the workforce mix as a response to new tors to manage the treatment of most therapies, innovative post-acute recovery mild to moderate mental illness on an programs, new technologies, and the ambulatory basis. These doctors will limited availability of psychiatrists in refer to psychiatrists only those patients the future: whose needs are severe or complex. Counselors, psychologists, and social The Role of the Psychiatrist. Just at a time workers will assume more significant when there are greater efforts to reduce roles in both the public and private the stigma associated with seeking men- mental health systems. Managed care tal health care, the numbers of mental already uses these clinicians to reduce health specialists are shrinking. Fewer the costs of care, and the future short- medical students are selecting psychiatry age of psychiatrists will generate more as a specialty, although the numbers of demand for these professionals. available residencies have remained steady. Within the sub-specialists, short- New diagnostic and treatment mod- ages of psychiatrists with interests in els—especially the development of gerontological psychiatry, childrens’ more effective drugs—will allow psy- mental health, and child development chiatrists to manage more patients could create major access problems in than in the past. In addition, the the future. Concurrently, resources to ability of primary care physicians to provide culturally competent services manage more patients with better that mirror the needs caused by growing medications will allow psychiatrists racial and ethnic diversity in the popu- to manage those with more complex lation will not meet the needs of the medication needs. population. More foreign-trained physicians will Leaders in the field have identified the take psychiatric residencies and will need for a new role for psychiatrists. In provide some relief to the public men- the coming decade, psychiatrists will tal health system in the next decade. provide specialist services that address the needs of patients who do not respond General practitioners will create to standard treatment protocols and new partnerships with mental health will also manage medication therapy professionals.

Chapter 12: Mental Health 209 of parity, the role of managed care in Complementary and Alternative Medicine (CAM) the public and private health care sys- If traditional providers cannot meet the growing demand for mental health tems, and the expansion of the civil care, there is every indication that other alternatives will emerge to augment, rights of people affected by mental ill- and even challenge, their roles. nesses. Progress in the effort to remove The use of Complementary and Alternative Medicines (CAM) is on the rise the stigma of mental illness will in part in the United States. In 1998, the Congress established the National Center determine the tenor of these discussions. for Complementary and Alternative medicine (NCCAM) at the National Institutes of Health to “stimulate, develop, and support research on CAM for Forecast the bene-fit of the public.”34 This reflects the fact that about one-third to one- half of Americans admit to using alternative therapies, and are expected to The U.S. Congress will follow the lead spend close to $27 billion a year on complementary therapies (an increase of the states and enact federal parity of almost 46 percent compared to expenditures in 1990), most of it paid for out of pocket.35 This spending exceeds out-of-pocket spending for all U.S. requirements in mental health and hospitalizations. In one survey, almost all patients were seeing a physician, substance abuse. but 72 percent did not tell their doctors they were using nontraditional medicines as well, prompting one researcher to advise mental health Eligibility for Medicaid will expand, clinicians to ask their patients about any other treatments they were but the portion of Medicaid funding receiving in order to manage drug interactions and to address conflicting allocated to mental health services advice.36 Almost two-thirds of U.S. medical schools offer courses in will grow more slowly than funding alternative medicine and 47 percent of doctors in one study admitted to for general health services. using alternative therapies themselves. Alternative medicine practitioners use herbs and vitamins, acupuncture, States will continue to shift responsi- spiritual healing, massage, guided imagery, hypnosis, and stress release for bility for mental health care to the patients who have anxiety and other mental health needs. Most people who counties, and state and county agen- use alternative medicine do so to maintain good health and prevent disease, cies will subcontract out specialized to “boost” their immune system, and to fight infections. Interest in alternative services. treatments has prompted pharmaceutical companies to add natural and herbal supplements to their commercial lines. In the private sector, managed behav- Some health insurance companies cover acupuncture and chiropractic care, ioral health care will thrive. but most alternative care is paid for directly by patients. A Milbank Memorial Fund report lists a wide range of health plans that recently have begun Parity in Federal providing some coverage for alternative medicine. The use of CAM will grow Legislation in the next 10 years, and traditional medicine will need to acknowledge that these practices appeal to people who perceive that there is a lack of interest The Mental Health Parity Act of 1996 within traditional medicine in holistic, integrated, mind/body care. imposed federal standards on mental health coverage offered under most employer-sponsored group health plans. Policy and That law prohibits employer plans from Legislation imposing annual or lifetime dollar limits on mental health coverage that are more Policymaking for mental health care restrictive than those imposed on med- is, and will continue to be, broadly dis- ical and surgical coverage. Three types of tributed among all three branches at insurance coverage are exempt, however: the federal, state, county, and municipal levels of government. Upcoming policy plans sponsored by an employer with debates will be dominated by the issues 50 or fewer employees

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group plans that experience an insurance in the private sector. Under increase in claims costs of at least this model, employees would have the 1 percent because of compliance option to choose a health plan (either in the open market or from a menu of plans coverage sold in the individual (non- laid out by an employer) that offers basic group) market or substantial mental health benefits. With federal parity enacted by 2010, Scientific evidence for the biological basis all plans would be required to provide at of mental illness, the gradual removal of least a minimal level of mental health mental illness stigmas, and the lobbying coverage, thus reducing the threat of efforts of better-organized consumers adverse risk selection. favor the expansion of parity. Before 2010, Congress will enact legislation to mandate more comprehensive coverage Parity in State Legislation for mental health benefits and ban the Many states have parity laws that exceed imposition of higher co-payments or the basic standards set by the federal deductibles for mental health care. statute. Some states require coverage only for a set of biologically based mental illnesses, whereas others are more The Federal Employee Health Benefits Program generous and include coverage for substance abuse. Studies show an increase in The Federal Employees Health Benefits insurance premiums from 1 to 4 percent (FEHB) program is required to provide in states that require full parity. The cost parity in mental health coverage for its increase to employers offering coverage 9 million federal employees and their depends upon the level of the benefits dependents. This program often serves as offered to employees before parity was a benchmark for private sector benefit enacted. Employers who formerly offered plans. Because of the FEHB require- very limited or no benefits see a higher ment, parity likely will be offered in the range of premium costs. Employers with private sector for all DSM IV illnesses by more generous prior benefits and who 2010, especially if initial studies of the use managed care approaches to mental cost-effectiveness of parity in the FEHB health see little or no difference or per- program are encouraging. haps a decline in premium costs.

A unique feature of the FEHB program The Uninsured is that beneficiaries choose from an extensive menu of health plan options; Efforts to expand parity will not affect they may elect to pay a minimum the uninsured and the underinsured, amount for a basic, “no-frills” package and no serious momentum is driving or to pay more for a plan with more lawmakers to find a way to provide benefits. This element of choice, com- mental health coverage for these popu- bined with out-of-pocket expenses for lations. In 2010, only 56 percent of increased coverage, serves as a template Americans will receive health insurance for a hybrid model of purchasing health from their employers or through the

Chapter 12: Mental Health 211 individual market. Public health pro- While federal funding for mental health grams (Medicare and Medicaid) will is increasing in absolute dollars, it is insure 29 percent, and 15 percent will decreasing as a percentage of the federal have no insurance, with the ranks of the health care budget. The Substance Abuse uninsured increasing by 500,000 per and Mental Health Services Administra- year through 2010. tion reports that expenditures for mental health and substance-abuse treatment We forecast that the gulf will widen represented 7.8 percent of all U.S. health between the “haves” and the “have nots.” care expenditures in 1997, down from Parity will mean nothing to the unin- 8.8 percent in 1987. This trend will sured, and people affected by chronic or continue over the next 10 years. severe mental illness will continue to be at risk for homelessness, incarceration, State and Local Spending and premature death. By and large, the states play a larger role than the federal government does in Funding and the Role of Managed Care financing mental health care. State- and county-funded mental health services are The public sector funds 53 percent of a catchall for people unable to obtain mental health care. Public sector services private health insurance. These services are directly operated by government are part of a complex web of social ser- agencies and include state and county vices that include health, social welfare, mental hospitals as well as services fi- housing, criminal justice, and education. nanced through Medicaid and Medicare. States distribute their funding for men- Both state Medicaid and private insurers tal health services in three ways: In 5 depend heavily on managed health care states, the state mental health agency to provide mental health services. runs local health centers and agencies; in 25 states, the state distributes money The federal government plays a smaller to county governments, which fund local role in financing care for mental illness agencies; and in 20 states, the state men- than in financing general health care, tal health agency directly contracts with generally about 35 percent of care, as local agencies. opposed to 46 percent. Federal programs include block grants for adults and chil- Most states rely on a discounted fee-for- dren with serious mental illnesses and service system for mental health services. disorders, as well as safety-net services If the federal government continues to for individuals who have severe mental allow the states greater flexibility in illnesses or who are indigent. In relative funding allocations for mental health spending terms, however, these grants services, more states will privatize their are small in comparison to other grant mental health systems through con- dollars for health care and they are less tracts with corporations. With costs important to mental health than they and administrative pressures increasing, are to substance-abuse prevention and states—especially the larger states—will treatment. continue to shift mental health care costs

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onto local entities, which will develop eral health care services). Consequently, county-based systems. The 750 local and a smaller proportion of Medicaid funds county mental health systems in the will be available for mental health ser- United States will assume an increasing vices over the coming decade. share of the cost of caring for the mentally ill. Medicaid Managed Care

Local systems with financial resources, Relationships between the states and determination, and skills can often pro- managed care organizations are tenuous, vide high-quality mental health care. with local forces in each community But many local governments—especially shaping the experience. Many states con- those in rural counties, many of which tract with private managed behavioral currently provide no mental health ser- health organizations (MBHOs), which vices at all—are shifting the risk to com- have the information systems manage- munity mental health organizations.To ment and financial management skills improve efficiency and reduce costs, we needed to administer programs for large believe that local and state systems will populations. But other states have ended become better integrated. As the states their contracts with MBHOs because continue to devolve mental health ser- the MBHOs have failed to provide care vices to the local level, local agencies for certain populations or have been will create integrated mental health pro- inaccurate or late in making provider grams funded through a single source. payments. Furthermore, MBHOs have complained that payment levels from Medicaid is the primary payer of public states are inadequate and, consequently, mental health services, and states rely are reducing their partnership with the heavily on Medicaid funding for com- Medicaid market. munity mental health services. Roughly 25 percent of individuals under age 65 We forecast that states and counties will who qualify for Medicaid by disability retain control of their mental health sys- status have a severe mental disorder. In tems but, despite the contentious issues all, Medicaid represents 19 percent of to- surrounding Medicaid managed care, tal mental health expenditures by payer. will continue to contract with private managed care organizations (MBHOs) Despite the exodus of the “welfare-to- for niche services, such as information work” population from the Medicaid systems management, utilization review, program, we forecast that the total pool and outcomes monitoring. This is also of people in Medicaid will increase over the preference of many MBHOs, which the next 10 years. These people will have found statewide comprehensive care require more general health services management contracts unprofitable and (particularly given the fact that many thus prefer to provide specialized man- individuals covered completely by Med- aged care services. Contracting out data- icaid are the Supplemental Security base management and data analysis will Income (SSI) population, most of whom remain cost-effective for state and local are disabled and require extensive gen- governments, which lack the hardware,

Chapter 12: Mental Health 213 software, and technical staff needed to combined with better care and treat- conduct data-intensive outcomes and ment, will serve to “normalize” the lives performance analyses. of those with mental illness. Specific issues will include: Private Sector Funding The Americans with Disabilities Act. The affordability and access provided The courts have been hostile to by MBHOs will allow managed care mental health claims under the Amer- organizations to retain a strong share icans with Disabilities Act (ADA), of the mental health care market in the holding that Congress did not intend private sector as well. Indeed, the eco- to include mental illness claims as a nomic viability of parity will largely disability issue. Legal analysts believe depend on the ability of managed care that laws patterned after the ADA organizations to control costs for mental will be enacted to guarantee nondis- health services through MBHOs. crimination in housing and employment to people affected by mental As parity mandates are strengthened, illness, however, and to ensure equal- employers’ demands for efficiency in ity in insurance coverage for those purchasing will lead managed care orga- with disabilities caused by mental nizations to offer integrated coverage illness. packages. The provision of mental health services in the private sector will thus Confidentiality. Concerns about be linked to, but not fully integrated confidentiality, especially in the con- with, general medical services. Although text of employer-sponsored mental researchers will discover more about the health care coverage, may impede biological nature of mental illness, treat- the integration of services. Without ment of serious mental illness will strongly enforced federal regulations remain a specialized field and will not to safeguard patient privacy, mental be integrated by insurers into general health care providers will hesitate to medical care coverage. share patient information with general medical organizations. Most likely, Civil Rights however, privacy rights will be expanded in the coming years. The burgeoning consumer advocacy movement will lobby successfully for Medical necessity. As MBHOs shift federal and state legislation to provide their attention from case management greater rights for people affected by of the provider–patient relationship to mental illnesses. At stake are issues such systemic outcomes issues, the defini- as guardianship, custody, family versus tion of “medical necessity” will individual rights, and employment and become less contentious. Insurers housing rights. The courts will also use the standard of “medical neces- extend the principles of equal opportu- sity” to approve or deny treatment. nity and nondiscrimination to the men- In the past, individuals with severe tally ill. These legal and judicial actions, mental illness who did not warrant

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institutionalization have been denied and stigma continue to be a drag on extended treatment by insurers who progress. judged the treatment as not being medically necessary. For those cases It seems unlikely—but not impossible— that reach the courts, judges are that the United States will develop and expected to apply a more pro-patient implement universal health coverage interpretation of “medical necessity.” during the next decade. It also seems unlikely that the nation will adopt a Outpatient civil commitment. The debate public health approach to mental health over state laws allowing for outpatient care, one that values prevention (both civil commitment (court-ordered out- primary and secondary) as much as it patient treatment for people whose values diagnosis and treatment. Without voluntary compliance with treatment a national mandate, health plans do not is poor) peaked in recent years and have the incentive to fund treatments will wane by the end of the decade. that could prevent chronic diseases from developing in adolescents or in older The Unﬁnished Agenda adults. Until that happens, it will be up to each health plan and the govern- Political will is always unpredictable, ment to include programs that add value but it is the catalyst to fostering change to society as an essential part of their in all national systems, mental health coverage. included. The political agenda of the executive, legislative, and judicial The realization of an integrated, coordi- branches could speed or delay the pace nated mental health system where proof progress toward mental health parity, grams are funded according to best- an integrated care agenda, and mental practice principles and outcomes, and health care reform. Public opinion and where mental health is an integral part public response to various events either of all health services, is unlikely to be ﬁres up political will or defeats it. realized within the next ten years. With mental health, public opinion

Chapter 12: Mental Health 215 Endnotes of Psychiatric Diagnosis. Pre-Meeting Brief- ing Papers, The Future of Mental Health 1 Fundamentals of Mental Health and Services. CMHS. 1998:7–10. Mental Illness. Mental Health: A Report of the Surgeon General. 1999. 12 Meltzet, Carolyn Cidis, et al. Serotinin in 2 aging, late-life depression, and Alzheimer’s Federal Register. 58, no. 96. Thursday disease: The emerging role of funcitonal May 20, 1993. Notice 29423. imaging. Neuropsychopharmacology 1998; 3 Mark, T., et. al. Spending on mental health 18(6):407–430. See also: Schuckit, M. A., and substance abuse treatment, 1987–1997. et al. Difficult differential diagnoses in psy- Health Affairs 19(4):108. chiatry: The clinical use of SPECT. Journal of Clinical Psychiatry 1995; (56):539–546. See 4 PhRMA. 2000 Survey, New Medicines also: Longworth, Catherine, G. Honey, and in Development for Mental Illness. T. Sharma. Functional imaging tomography www.phrma.org/charts/archive/2000/ in neuropsychiatry: Clinical review: Science mental_00.html. medicine and the future. British Medical Jour- 5 U.S. Department of Justice. State Prison nal (11 December) 1999; 318(7224): Expenditures, 1996. Bureau of Justice 1551–1554. Statistics. 13 Michels, Robert. Are research ethics bad 6 SAMHSA Sources: Rice, D. P. Costs of for our mental health. The New England Jour- Mental Illness. Unpublished Data. 1997. nal of Medicine (May) 1999; 340(18). The 1994 estimates are projections from 14 NIMH. Bridging Science and Service: A basic conceptual and analytic work done Report by the National Advisory Mental Health under contract with the Alcohol, Drug Council’s Clinical Treatment and Services Abuse and Mental Health Administration Research Group. NIH Publication No. 99- and presented in: Rice, D. P., S. Kelman, 4353. 1999. L. S. Miller, and S. Dunmeyer. The Economic 15 Regier, D. A., et al. The de facto US Costs of Alcohol and Drug Abuse, and Mental mental and addictive disorders service Illness: 1985. DHHS Publication No. (ADM) system. Arch of Gen Psychiatry (February) 90-1964. 1990. The 1994 costs were based 1993; 50:85–94. on socioeconomic indexes applied to the 1985 cost estimates by Dorothy Rice. 16 Ustun, Bedirhan T. The global burden of mental disorders. American Journal of Public 7 NIMH. Bridging Science and Service: A Report Health (September) 1999; 89:1315–1318. by the National Advisory Mental Health Coun- cil’s Clinical Treatment and Services Research 17 California Health Care Foundation. The Group. NIH Publication No. 99-4353. 1999. State of Behavioral Health in California. 2000. 8 R&D The Key to Innovation. Pharmaceuti- 18 cal Industry Profile 2000. www.phrma.org. Vogel, Howard, E. Knight, et. al. double trouble in recovery: Self-help for people with 9 NIMH. Genetics and Mental Disorders: Report dual diagnosis. Psychiatric Rehabilitation Jour- of the National Institute of Mental Health’s nal (Spring) 1998; 21(4). Genetics Workgroup. September 1997. CMHS. 19 The only exception to this will be in the 1998:7–10 needs for the elderly who will be entering 10 State, Mathew W., et. al. The genetics of the health system in larger numbers in the childhood psychiatric disorders: A decade of future. Their needs for nursing and hospital progress. American Academy of Child and Ado- services for multiple problems, of which lescent Psychiatry (August)2000; mental illness will be one, will be quite sig- 39(8):946–962. nificant and is discussed in Chapter 14. 11 Ibid, p. 14. See also: Pincus, Harold. Test 20 Witkin, Michael J., et. al. Highlights of your futurist skills: What Will Be the Future Organized Mental Health Services in 1994

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and Major National and State Trends. Mental Years. Pre-Meeting Brieﬁng Papers, The Health, United States 1998. CMHS, USDHS. Future of Mental Health Services. CMHS. See also: Mechanic, David. Emerging trends 1998:11–12 in mental health policy and practice. Health 29 Center for the Advancement of Health. Affairs 1998; 17(6):82–98. Depression Outlook Lifts with Ongoing 21 Saphir, Ann. Fiscally challenged: Psychi- Management and Care. Special Series: atric industry’s hope is in consolidation, Collaborative Management of Chronic focusing Services. Modern Healthcare. March Conditions. November 1999. 4(8). 27, 2000. 30 Alliance for Health Reform. Managed 22 Nichelson, D. W. Telehealth and the Care and Vulnerable Americans—Mental evolving health care system: Strategic oppor- Health Care Coverage. February 1998. tunities for professional psychology. Profes- 31 Brody, D. S. et. al. Patients’ perspectives sional Psychology: Research and Practice 1998; on the management of emotional distress (29):527–535. One example of an entrepre- in primary care settings. Journal of Internal neur in the area of telehealth is the “Dr. Medicine (July) 1997; 12(7):403–406. Bobs” website. Dr. Bob Hsuing, a Chicago psychiatrist and founder of this website posts 32 Katzelnick, David J., Gregory E. Simon, links to a wide variety of resources, and also et al. Randomized trial of a depression man- claims that he does not hesitate to use e-mail agement program in high utilizers of med- for communicating with his established ical care. Archives of Family Medicine (2000); patients. Also see www.mentalhealth.com, 9:345–351. See also: Spitzer, Robert L., et al. which lists a wide variety of information for Validation and utility of a self-report version consumers, including lists of common med- of prime-MD. JAMA. (November 10) 1999; ications, and organizations that consumers 282(18):1737–1744. might wish to use. 33 Sierles, F. S., and M. A. Taylor. Decline of 23 Van Tosh, Laura, Ruth O. Ralph, and U.S. medical student career choice of psychi- Jean Campbell. The Rise of Consumerism, atry and what to do about it. American Jour- A Contribution to the Surgeon General’s nal of Psychiatry 1995; 152:1416–1426. Report, 1999, provided by the author. 34 National Institutes of Health. General 24 Forquer, Sandy. Self Help and Recovery— Information about CAM and the NCAM. Quality Improvement Activity. Unpublished Publication M-42. NCCAM Clearinghouse. report. Colorado Health Hetworks, 1999. June, 2000. 25 www.medhelp.org/forums/MentalHealth/ 35 El Feki, Shereen. Dr Nature’s Surgery—The index.htm World in 2000. The Economist Publications. 26 AMA Cultural Competence Compen- 36 Yager, Joel. Use of Alternative Remedies dium. Section VII: Patient Support Materi- by Psychiatric Patients: Illustrative als, including Self-help Group Resources. Vignettes and a Discussion of the Issues. pp. 285–308. American Journal of Psychiatry (September) 1999; 156:1432–1438. 27 Madera, Edward J. The Mutual-Aid Self- help Online Revolution. www.cmhc.com/ 37 Milbank Memorial Fund. Enhancing perspectives/articles/art03987.htm. March the Accountability of Alternative Medicine. 27, 1998. January 1998. 28 Kane, John. Mental Health Treatments: What Approaches Will We Be Using in Ten

Chapter 12: Mental Health 217 Health and Health Care 2010 Institute for the Future

Chapter 13 Children’s Health A Good Investment

Children are among the healthiest able to protect themselves, either physi- populations in the United States. On cally or politically. When children’s average, those under age 18 account for needs, such as preschool programs, are 26 percent of the population and only discussed in policy circles, kids often lose 18 percent of inpatient hospital stays.1 out for simple lack of representation. Yet there’s been a public move in recent years to improve the health care of chil- Practically, we should work to improve dren. Indeed, after the Clinton adminis- child health because child health today is tration’s universal health care reform was a determinant of adult health tomorrow.2 defeated, the administration opted for a Morbidity in childhood is correlated more incremental approach and focused with morbidity and mortality in adult- on getting children health insurance. hood. Children are inexpensive to care President Bush’s 2001 budget proposal, for and offer a huge return on invest- “A Blueprint for New Beginnings,” ment. Preventing childhood diseases didn’t stray from this course but in- with immunizations and other forms of cluded a focus on education, plus tax preventive medicine such as well-child credits as priorities that will improve the care saves the system the later costs of well-being of America’s children. If chil- treating these diseases.3 A health care dren are so healthy, then what’s all the system that’s trying to slow the growth fuss? Why should a health care system of costs overall can’t afford not to embark already pushed to its limits put scarce on this critical strategy of child health resources toward caring for a population promotion and disease prevention, one that’s rarely very sick? that is often the ﬁrst to be cut in any conﬂict of resources. The short answer is, to keep them healthy and to improve their health sta- To ensure the future health of United tus where we can. The longer answer is States children, while at the same time both philosophical and practical. keeping down costs of the health care system as a whole, policymakers must Philosophically, we should insist on the ask themselves these questions: best possible health care for our children What keeps children healthy? for the same reason we bore them—they are our future. They are our legacy and How well are we doing? should be cared for because they aren’t What’s in store in the future?

Chapter 13: Children’s Health 219 What Keeps Kids Access to Health Insurance Healthy? Access or Other Financing and Environment “Simply put, health insurance is a pow- Two significant impacts on children’s erful predictor of children’s degree of health are their access to health care and access to and use of primary care. . . . their environment. Studies such as those The effect of insurance remained sub- led by Paul Newacheck of the Institute stantial and statistically significant even for Health Policy Studies at the Univer- after we controlled for several potentially sity of California, San Francisco, have confounding variables, such as family 10 shown that access to health services is income and children’s health status.” associated with improved health, and that access to some form of health insur- Private Health ance or health care funding is the best Insurance proxy for access to services.4,5 With the booming economy of the late In 2000, 88.4 percent of children had 1990s, employment-based coverage for health insurance coverage, reflecting a children increased from 58.1 percent in decline from 9.1 million to 8.5 million 1994 to 61.5 percent in 1999.11 (See uninsured children since 1999. The per- Chaper 4.) This increase happened centage of children covered by some because the percentage of children with form of health insurance has fluctuated a working parent increased, the percent- somewhat over the past decade, but age of children in families with incomes between 85 and 87 percent of children below the poverty level decreased, and have had health insurance since 1987.6,7 more children had a working parent employed in a large firm. The increase Even if children have health insurance, in employment-based coverage can, in they don’t necessarily get the care they part, be attributed to a combination of need. There aren’t enough pediatricians welfare reform and the strong economy, and other children’s health care providers both of which resulted in fewer adult to go around, especially in geographic women on welfare and more adult and socioeconomic areas traditionally women working. During these years of short of adequate health care services— an extremely robust economy and tight 8 rural and inner-city areas. And these are labor market, profitable companies were precisely the areas most susceptible to inclined to offer health insurance to the negative effects of another important attract and keep good employees. determinant of children’s health—their environment. Health insurance and Though the recent increases in covered health care are not enough to keep chil- children are heartening, their link to the dren healthy; a relatively clean, safe envi- health of the economy means fluctua- ronment is also important.9 How and tions in the unemployment rate will where children grow up have very spe- determine the number of children cov- cific effects on their health, with impli- ered in the future. Now and in the near cations for public policy beyond the future as the economy faces the “R” realm of health care. word—recession—companies are likely

220 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

to cut costs. They’ll ask employees to foot Medicaid Picks Up Some Slack more of their own health care premiums by no longer insuring dependents, or by With an estimated 8.5 million children eliminating health insurance altogether without health insurance in 2000, the where they can. While the average government has made a concerted effort monthly worker contribution for single to provide insurance and health services coverage has fluctuated up and down to as many uninsured children as possi- since 1993, family coverage has become ble.15 In 1965, Title XIX of the Social increasingly expensive to the worker. This Security Act established Medicaid, a cost shifting and cost sharing will be public health financing program for increasingly common as firms hire more low-income families and individuals. In part-time employees, as expected in the 2000, Medicaid insured 21 million chil- 12 next 10 years. Also, low-income work- dren. For most families covered through ers that make too much money to qualify Medicaid, private health insurance is for Medicaid are likely to decline health unavailable or unaffordable; with Med- insurance if co-pays become too great of a icaid, they gain access to medical, den- 13 financial burden. And what about those tal, vision, and behavioral health children without health insurance? services, including preventive care, acute care, and LTC, with little or no cost The majority of those working without sharing.16 Although Medicaid is not health insurance benefits are in service specifically designed to serve children, sector jobs, which are traditionally less the number of children who rely on likely to offer insurance at any time.14 Medicaid for coverage has grown in Also, almost 10 percent of the current recent years. American workforce is temporary, part- time, or contract workers. Such workers More than half a million children have are much less likely to receive benefits, joined the Medicaid rolls each year since and buying private health insurance is the late 1980s. The number of children prohibitively expensive for them. The enrolled in Medicaid increased substan- number of working Americans in service tially, from 9.8 million children in 1985 sector jobs is expected to increase by 20 to 21 million children in 1998. This is percent in the next 10 years; and just due primarily to the deliberate expansion over 70 percent of businesses will use of Medicaid to cover children above the part-time or temporary workers by then. poverty line, in compliance with the (Since 1970, most job growth has been Omnibus Budget Reconciliation Acts in the service-producing sector, a trend (OBRAs) of the late 1980s. This broad- expected to continue as nonhousehold ening program scope for low-income service-producing jobs are projected to families is reflected in trends in enroll- increase by 17.6 million between 1996 ment and spending. and 2006.) These changes could result in a decrease in the proportion of children As a result of these increases, 58.5 per- covered by their parents’ employers, cent of those eligible for Medicaid are with a corresponding drop in the num- children; Medicaid covers 25 percent of ber of children receiving basic care. America’s youth. In metropolitan areas,

Chapter 13: Children’s Health 221 the percentage of children on Medicaid age. Although disability benefits to is higher. Medicaid pays for more than more than 135,000 children were cut, 50 percent of births in New York City, their health care needs were met for example; and in the United States as through their Medicaid eligibility.22 a whole, Medicaid covers 39 percent of all births.17 Medicaid pays for a broad Partly as a result of this influx of eligible range of other services for children, children into Medicaid, many states are including well-child care, immuniza- moving children with special health care tions, prescription drugs, doctor visits, needs into managed care by means of and hospitalizations, as well as long- Medicaid health maintenance organiza- term care for disabled children.18 tions (HMOs). Managed care promises, among other things, disease-state man- The value of Medicaid is underscored by agement programs that have had mixed the contrast in outcomes between the success in treating the chronically ill at poor with Medicaid and the uninsured lower cost. In reality, the rapid expansion poor. Studies consistently show that the of managed care has unknown conse- uninsured fall well behind those with quences for children with chronic ill- Medicaid with respect to access to ser- nesses and disabilities. Since Medicaid vices, while those with Medicaid fare reimbursements are lower than Medicare favorably compared to the privately and private insurance reimbursements, insured.19 Children with Medicaid are some HMOs are opting out of the Med- only slightly less likely than privately icaid market.23 insured, nonpoor children to have a regular source of care and reasonable access The bulk of Medicaid spending does not to care, but poor uninsured children face go to care for adults and children in low- significant deficits.20 Also, few differ- income families. In 1998, the Health ences have been found in access to, use Care Financing Administration esti- of, or satisfaction with health care ser- mated the average annual cost of Medic- vices for children under Medicaid man- aid coverage per child to be $1,225, as aged care relative to Medicaid fee- opposed to the average Medicaid cost for-service.21 Though covered by Medic- per disabled person of $9,558 and per aid, groups at risk of less-than-optimal elderly adult of $11,235.24 Adults and access to health care are chronically ill children in low-income families make up and disabled children in poor families. 73 percent of enrollees, but account for While numerous state and federal pro- only 25 percent of Medicaid expendi- grams provide services and cash assis- tures, a fact that underscores the importance for them, recent changes in tance of early preventive care in keeping Supplemental Security Income (SSI) and total system costs down.25 Medicaid have fundamentally altered the financing of services for this popula- Ultimately, even though Medicaid is tion. In 1995, President Clinton picking up much of the slack left by announced cuts in SSI to disabled chil- decreasing private health insurance, the dren as a part of his welfare reform pack- quality of care may not be as high.

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largest expansion of government-paid Incremental Medicaid Expansion Is Nothing New health insurance since the formation of During the 1980s, Medicaid rapidly expanded beyond its AFDC base to Medicaid 32 years before, the Balanced cover increasing numbers of low-income children and their mothers. The Budget Act of 1997 (BBA) created Title following expansions occurred: XXI of the Social Security Act. This act Deficit Reduction Act of 1984 mandated coverage of all AFDC-eligible set aside more than $24 billion through children born after September 30, 1983, and extended coverage to 2002 in the form of the State Children’s AFDC-eligible first-time pregnant women and two-parent families. Health Insurance Program (SCHIP). The Consolidated Omnibus Budget Reconciliation Act of 1984 extended goal was to provide health insurance cov- coverage to all remaining AFDC-eligible pregnant women. erage for 5 million of those uninsured, Omnibus Reconciliation Act of 1986 (OBRA) allowed coverage of low-income children. pregnant women and children under age 1 up to 100 percent of the federal poverty level (FPL). These funds became available to states OBRA 1987 permitted coverage of pregnant women and children under on October 1, 1997, and states were age 1 up to 185 percent of the FPL required to develop federally approved Medicare Catastrophic Coverage Act of 1988 required coverage of all plans by the end of FY 1998 to receive pregnant women and children under age 1 up to 100 percent of the FPL, funding. Since then, many states have and allowed states the option to extend coverage to families with incomes substantially expanded eligibility for higher than 185 percent of the FPL. children’s health insurance. States are OBRA 1989 raised the minimum eligibility requirement to 133 percent required to provide matching funds of the FPL for pregnant women and children up to age 6. equal to 30 percent of their current OBRA 1990 mandated coverage for children born after September 30, Medicaid state-matching rate. The legis- 1983, with family incomes below 100 percent of the FPL.26 lation allocated an additional $4 billion over 5 years for, among other things, Medicaid’s early and periodic screening, diagnostic, and treatment (EPSDT) services represent the single most important source of financing and those states choosing to provide Medic- programmatic guidance for children’s public health programs. EPSDT aid coverage to children for a continuous requires states to periodically screen Medicaid-eligible children under 12-month period or states adopting pre- 22 years old for illnesses, abnormalities, or treatable conditions, and refer sumptive eligibility (allowing children them for definitive treatment. likely to be eligible for Medicaid to As a result of these policies, by 1999 Medicaid was the major insurer of receive coverage while awaiting final children, covering 25 percent of children under 18 and 27 percent of children determination). In 1999, 94 percent of 27 under age 6. Nationwide, the number of children covered by Medicaid grew children whose families earned up to in response to the expanded eligibility policy, particularly among those not 200 percent of the FPL qualified for receiving cash assistance, rising from 11.5 million in 1990 to more than 21 million in 2001. Medicaid or SCHIP. As of July 2000, 50 states, the District of Columbia, and five U.S. Territories have implemented SCHIP, covering over 2 million 28 Their SCHIP Came In . . . children.

With the continued enactment legisla- Of these approved plans, 15 states have tion, lawmakers have done considerably created a separate child health program, more than expand Medicaid eligibility. 23 states have expanded Medicaid, and In what The New York Times called the 18 states have developed a combination

Chapter 13: Children’s Health 223 of a separate state and Medicaid expan- providers for charity care, resulting in sion program. Prior to SCHIP, only 4 a squeeze on provision of services to states covered children with family children who remained uninsured incomes up to at least 200 percent of the despite SCHIP. Under SCHIP, a nom- federal poverty level. In 2000, 30 states inal amount of DSH funding was had plans approved to cover children returned to states with hospitals that with incomes up to at least this level. report treating a disproportionate share of low-income individuals. . . . but It May Be Leaky One popular option for implementing SCHIP was by expanding Medicaid, Though SCHIP is a windfall for unin- but many children eligible for Medic- sured children in the short run, in the aid do not enroll. Indeed, in his 1998 long run there may be problems with State of the Union address, President the legislation. Clinton encouraged increasing the Some critics were concerned that after enrollment of 3 million Medicaid- passing the SCHIP legislation, federal eligible-but-not-enrolled children. In and state legislators would rest on 1999, 63 percent of uninsured chil- their laurels and no longer be moti- dren with family incomes below 200 vated to take significant action on percent of the poverty line were eligi- behalf of the remaining uninsured ble for Medicaid or SCHIP but were children for the next 5 to 10 years. not enrolled. Aside from the stigma There are currently several minor mea- associated with public assistance pro- sures before Congress that would help grams, other reasons eligible children state agencies ease administrative bar- are not enrolled include fluctuating riers and improve enrollment processes eligibility requirements, plus complex so low-income families could more and lengthy applications—up to 12 easily enroll their children. In praising pages long in some states. Before what he considered the early success of SCHIP made provision for presump- SCHIP, President Clinton sponsored tive eligibility for a year from applica- enrollment initiatives through school tion, up to 4 percent of children on lunch programs and child care centers. Medicaid lost eligibility every month. These measures affect only children As a result of these stumbling blocks, eligible for public support; they don’t there are many different estimates of the touch the remaining uninsured chil- true number of previously uninsured dren in families above 200 percent of children for whom SCHIP will provide the poverty line. Many states have had health insurance. The Congressional a difficult time spending the SCHIP Budget Office estimated in 1997 that funds that Congress set aside, with the final BBA will cover a net gain of only 10 states successfully doing so by only 1.5 to 1.6 million of the 10 million the end of 2000. uninsured children, and will result in a SCHIP decreased Disproportionate 3.4 million gross gain in coverage.29 Share Hospital (DSH) funding, which Even with more generous estimates of has traditionally reimbursed safety-net 20 percent coverage of uninsured chil-

224 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

dren, SCHIP’s impact will be signiﬁcant new activity beyond the efforts already but not dramatic or sufﬁcient. undertaken by each state.

Uninsured Children Will Access to Health Be with Us Still Services: Enough Though the BBA makes strides toward Providers? providing for uninsured children, many The financial side of the healthy child children will remain without either equation is not all that needs attention. health insurance or a consistent source Even if we assume that in the near future of health care. In 1999, approximately children who need health insurance or 3.5 million uninsured children were in some other form of financing get it, families that earned more than 200 there’s still a long way to go to ensure percent of federal poverty level. These that children receive actual care by quali- children will remain without health fied pediatric providers. Like other clini- insurance even under SCHIP. This is a cal specialists, pediatricians and other problem. A recent study published in ancillary providers with pediatric training the Journal of the American Medical Asso- are not distributed evenly throughout the ciation found that the uninsured are four U.S. population, sometimes making it times more likely to report an episode difficult for the patients who most need of needing care but not getting it than health care services to attain them. those who are insured. Research shows that uninsured children are less likely Not Enough Pediatricians than insured kids to have a regular doc- to Go Around tor or receive routine preventive and dental care. Studies indicate that lack of Pediatricians monitor and treat the coverage negatively affects access to care physical, emotional, and social health of among low-income children—41 per- children from birth to young adulthood. cent of parents of eligible uninsured Thus, pediatric care encompasses a broad children postponed seeking medical care spectrum of health services ranging from for their child because they could not preventive health care to the diagnosis afford it. and treatment of acute and chronic diseases. Pediatricians also increasingly In Chapter 1’s middle scenario titled provide guidance and therapeutic inter- “The Long and Winding Road,” we ventions for a large number of behavioral forecast that 47 million Americans or problems, school difficulties, risk-taking 16 percent of the population will be behaviors, and environmental threats uninsured in 2010. Of that uninsured to the well-being of children. Not all group, 11.6 million will be children. health care providers are capable of this The SCHIP has been implemented in all range of activities. states, but the amount of money allocated to the program is preset and not In the United States, there are over enough to provide access to care for the 55,000 pediatricians, accounting for children in need. There will not be much more than 7 percent of the physician

Chapter 13: Children’s Health 225 population. Pediatrics is the third largest source of sick care. These alternatives are specialty after internal medicine and neither high quality nor cost-effective.32 family practice. Pediatricians are given the specialty training necessary to care Whether in an office or a clinic, family for seriously sick children. The main practitioners, international medical activity of more than 90 percent of pedi- graduates (IMGs), and pediatric nurse atricians is the provision of patient care practitioners provide primary care ser- in office-based and hospital-based set- vices to the majority of children who do tings. They provide approximately 50 not receive them from pediatricians. percent of all office-based visits for chil- There are many caring and skilled indi- dren and youth from birth to age 19 in viduals in these groups, with more gen- the United States, and pediatricians and eral, less specialized training. family practitioners combined provide The most specifically trained of these 90 percent of kids’ office-based visits. caregivers are family practice physicians, This proportion has increased steadily for who learn to care for children as a part of all age groups, from 39 percent in the family unit. Family practice grew 1976–77 to 50 percent in the 1990s.30 out of general practice in the 1960s. That average is a little deceptive, how- Since then, the number of general prac- ever. Pediatricians provided 72 percent tice physicians has decreased signifi- of all office-based visits for U.S. children cantly as medical students have chosen from birth to 2 years of age, but only 24 to become family practitioners instead. percent of all office-based visits for those There is an inequitable distribution of aged 10 to 19 years. physicians throughout the United States, Most pediatricians practice in metropoli- with less than 11 percent of physicians tan areas: Few serve rural or inner-city living in rural areas where 20 percent of communities.31 Even when health care the population lives. However, 54 per- coverage for poor children increases with cent of the physicians in rural areas are SCHIP, if a community has a limited in primary care versus 38 percent in number of health care providers, access metropolitan areas. to care remains limited. In 1999, there were 191,418 interna- Community health clinics play an tional medical graduates (IMGs), or important role in filling the need for medical students from other countries pediatric care. Studies have shown that who are studying in the United States.33 poor children, even those with Medicaid, They serve as an important part of the are much less likely than other children physician workforce, making up 25 per- to receive routine care in a physician’s cent of medical school graduates.34 office and more likely to receive care in Moreover, a disproportionate number community and hospital clinics. Though train in residency programs that provide better than no care at all, the routine ambulatory and inpatient services for the care children receive in community clin- urban poor and uninsured. After they ics is likely to lack continuity, which graduate, many remain in these under- results in parents using emergency served communities as a vital source of departments as their children’s usual pediatric care. Over the past 5 years,

226 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

policies addressing the oversupply of ment—broadly construed to include physicians in America, such as the Bal- socioeconomic status, the behavior of anced Budget Act of 1997, have targeted surrounding adults, the level of violence IMGs’ residency opportunities for cuts, in the community, pollution in the decreasing this source of providers for physical environment, and so on—is as poor children.35 important if not more so.37 In particular, the following environmental risk factors A much less expensive option for provid- increase the likelihood of illness for cer- ing health care to children is the pedi- tain children: atric nurse practitioner. Approximately Having poor or single parents 10,000 pediatric nurse practitioners are active in the United States today, the Exposure to toxic physical environ- majority of whom are involved in the ments such as substandard housing, air delivery of primary care services.36 More pollution, increased violence, and so on. than 60 percent of the members of the National Association of Pediatric Nurse Socioeconomic Environment Associates and Practitioners work in urban areas with populations of more Children’s access to health care and edu- than 100,000, increasing access for many cation, as well as the overall level of vio- poor, underserved families. There will lence and safety in their neighborhoods, likely be an increasing reliance on these is directly linked to their socioeconomic 38 mid-level providers in the future, as they status. Children’s socioeconomic status have shown they can meet the majority comprises more than just their parents’ of children’s primary care needs. income bracket. The parents’ level of poverty, their education, their employ- The quality of children’s individual ment status, and their household com- health services will change, driven by the position combine to determine the continuation of existing trends toward individual and community-based re- cost containment, medical and techno- sources available for maintaining good logical advances, and the pressure of health and treating the health problems managed care. These changes will occur that do occur, although access to re- as insurers, businesses, and governments sources is only a small part of the effect attempt to contain costs in a generally of socioeconomic status on health. healthy and cheap-to-care-for population, and medical schools and pediatric Children Living in Poverty training programs compete for funding National data show that the poverty rate under competitive ﬁnancial pressures. among children under age 18 increased from 19 percent in 1989 to 22 percent The Impact of in 1993 before declining again to 16.2 Environment percent (11.6 million children) in 2000, the lowest it has been since 1979.39 Access to health insurance and adequate care doesn’t tell the whole story of kids’ As you might expect, poverty rates are health. Studies have found that environ- not evenly distributed among ethnic

Chapter 13: Children’s Health 227 groups. In 1999, the poverty rates 15 percent were African American, non- among Hispanic children (30 percent) Hispanic; 16 percent were Hispanic; and African American children (33 per- 4.2 percent were Asian or Pacific cent) were almost twice those for white Islander; and 1 percent were American children (9 percent).40 And let’s be Indian or Alaskan Native. The percent- clear—by families in poverty, we don’t age of children who are classified as mean only those who are unemployed minorities increased from 26 percent and on welfare. The U.S. Census Bureau in 1980 to 36 percent in 2000 (see reported that the number of poor fami- Figure 13-1). lies with children, headed by someone who worked during the year, reached The Hispanic population has grown 3.8 million in 1999, higher than any more rapidly than other ethnic groups, year since 1975. Of all poor children, increasing from 9 percent of the child 78 percent lived in a family where some- population in 1980 to 16 percent in one (not always the head of the house- 1999. In the decade from 1995 to 2005, hold) worked in 1999, also a record high the number of Hispanic children is pro- and up from 61 percent in 1993. jected to increase by 30 percent, and by 2020, it is projected that more than one Education, ethnicity, and age are factors in five children in the United States will that strongly affect hourly wages and be Hispanic. Although the base is labor force activity and, hence, adult smaller, the percentage of children who earnings. Children who live with poorly are Asian or Pacific Islanders has also educated, relatively young, or Hispanic increased quickly, doubling from 2 to or African American adults are more 4.2 percent of all children between 1980 likely to be poor than are children who and 2000. This population segment is do not live in such families. By exten- expected to grow to 6 percent of all chil- sion, these are the families that are the dren by 2010. Between 1995 and 2005, least likely to be covered by adequate the number of Asian or Pacific Islander health insurance and services.41 The chil- children will increase by 39 percent. dren who live in these families are most at risk of living in poverty and with lit- This increasing diversity will affect the tle or no access to regular health care. delivery of health care for children. Eth- nic groups sometimes differ in cultural Increasing Ethnic Diversity attitudes toward health, in health needs, and in how they access services.42,43 For Ethnic and racial diversity has grown example, in some Hispanic cultures it is dramatically in the United States in considered impolite to complain of pain, the past three decades. This diversity is and thus someone in dire need of treat- projected to increase even more in the ment may remain undiagnosed. decades to come. As a result, ethnically diverse children are a rapidly growing Increasing diversity will also affect other sector of society. aspects of the environment, especially In 2000, 64 percent of American education. As more children who speak children were white, non-Hispanic; English as a second language enroll in

228 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

of 150,000 since high school enroll- Figure 13-1. U.S. ethnic diversity increasing at accelerating rate ment, which added 1.1 million students in the past decade, will climb by another Percent 100 100 1.9 million or 13 percent between 1997 White, non-Hispanic and 2007. This enrollment surge will Black, non-Hispanic be most dramatic in California, where the 80 80 Hispanic ranks of high school students are

Asian/ expected to jump by approximately 60 60 Pacific Islander 35 percent. Since level of education is American Indian/ linked to health status, those students 40 Projected 40 Alaskan Native who receive substandard education due to resource shortages will not be as healthy 20 20 as those who receive a better education. Household Composition 0 0 1980 1990 2000 2010 2020 Another much-discussed factor associ- Source: U.S Census Bureau ated with an increase in child poverty in recent years is the increase in single- Figure 13-2. Children 5Ð17 years old who speak a language parent, mother-only families. In recent other than English at home decades, the delay of marriage and hav-

Number of children in millions ing children, more couples living longer, 10 a high divorce rate, and a growing out- 9 of-wedlock birthrate have contributed to 8 a decline in the number of adults per 44 7 child per family. With fewer adults, a 6 family’s earning potential is reduced, 5 increasing the likelihood that children 4 in these families will be poor and thus 3 at risk for inadequate health care. 2 1 It is estimated that children in mother- only families are five times more likely 1979 1989 1992 1995 2000 to be poor than are children of two- Source: U.S Census, 2000 Census summary file 3: Age by language parent families.45 In 2000, 27.9 percent spoken at home by ability to speak English for the population 5 years and older. of children living in female households were living in poverty and nearly 69.8 percent of children living only with their nonworking mothers were living in schools, for example, there will be an poverty. Research indicates that poverty, increased need for multilingual teachers in turn, increases the risk that a child and resources (see Figure 13-2). Indeed, will experience significant health diffi- more teachers of all stripes will be culties. Children of unmarried mothers needed. A recent Department of Educa- are at higher risk for adverse birth out- tion report predicted a teacher shortage comes because their mothers are less

Chapter 13: Children’s Health 229 likely to have received adequate prenatal the proportion of women of childbearing care, less likely to have gained adequate age who are married (from 71 percent in weight during pregnancy, and more 1960 to 53 percent in 1995), a decline likely to have smoked during pregnancy. in births to married women (from 4 mil- This applies even when differences in lion in 1960 to 2.6 million in 1995), age and educational level are taken into and a decline in the birthrate for married account. Studies have shown that 8 to women (from 157 per thousand in 1960 12 years after birth, a child born to an to 84 per thousand in 1995). Some of unmarried, teenage high school dropout the decline in marriages reflects increases is 10 times as likely to be living in in cohabitation; 20 to 25 percent of poverty as a child born to a mother with unmarried women aged 25 to 44 were none of these three characteristics.46 in cohabiting relationships from 1992 to 1994. In 2000, 69 percent of American children lived with two parents, down Increases in households that are most from 78 percent in 1970. Also in 2000, likely to be below the poverty line and 22 percent of children lived with only thus more likely to encounter greater their mothers; 4 percent lived with only health difficulties will put even more their fathers; and 4 percent lived with stresses on a health care system that can neither parent. The number of female- ill afford them. parent households is projected to increase by 12 percent (from 6.4 to 7.2 million) between 1995 and 2010. The Physical Environment percentage of children living with two and Increasing parents is declining among all major Chronic Illness ethnic groups. By 2010, household composition will have changed, with A more obvious connection can be drawn only one in five households comprised between children’s physical environment of a mother, father, and children under and their health status. Air pollution has 18, compared with one in four currently. been linked with an increased incidence White children are much more likely of asthma, for example, and studies have than Hispanic children and somewhat shown associations between pesticide use more likely than African American chil- in the home and increased incidence of 47 dren to live with two parents. In 1999, childhood cancers. Other aspects of 77 percent of white children lived with physical environment such as stress and two parents, compared to 35 percent of violence have been linked to neuropsy- African American children and 63 per- chiatric illnesses in children, such as 48 cent of Hispanic children. post-traumatic stress disorder.

Among the factors contributing to the Asthma increased percentage of children living with just one parent is the sharp rise in Asthma in children has increased at births to unmarried mothers: from 18 approximately 5 percent per year since percent in 1980 to 33 percent in 1999. 1980 and is perhaps the best example of This increase is linked to a decline in a disease with a strong link to environ-

230 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

mental factors. According to the Ameri- more prevalent in black children than in can Lung Association, of the 26 million white children.52 Americans who have been diagnosed with asthma, 8.6 million are under the Asthmatics are profoundly influenced by age of 18. 3.8 million of these youth pollution. As an inflammatory disease, have had an asthma episode in the past asthma’s severity is directly affected by 12 months.49 Asthma affects 7 percent the number of particulates in the air. 53 of children. The number of cases has And though recent efforts to lower air risen nearly 80 percent in the past 15 pollution nationwide have met with years and the death rate for children 18 some success, national air pollution stan- years and younger increased by 78 per- dards are based on exposure limits for cent since 1982.50 The reason isn’t en- protecting the average person. But a tirely clear, but an increased prevalence child is not the average person. Chil- of asthma is correlated with social and dren’s respiratory systems are more vul- environmental factors such as poverty, nerable to lower levels of toxins than maternal smoking, family size, home adults’, and children spend considerably size, birth weight, and maternal educa- more time out of doors—at play and at tion. In 1990, asthma in children was school—where they are more likely to estimated to cost $6.2 billion per year. breathe airborne pollutants. Recently, In 2000, the cost was estimated to dou- the Environmental Protection Agency ble to $14.5 billion.51 announced new, tighter air pollution standards, but even these standards may Environmental causes of asthma are asso- be inadequate to protect children.54 ciated with an increased incidence in metropolitan areas and the prevalence Cancer of the condition among inner-city children is three times higher than national Another group of chronically ill children estimates. The highest prevalence of profoundly affected by their environ- asthma continues to be among African ment is those diagnosed with cancer. American inner-city children. Since Cancer follows unintentional injuries more urban African Americans than and homicide as the third leading cause whites tend to be poor, sociodemo- of death in children between 1 and 19 graphic factors have been suggested as years of age, and an estimated 2,300 the reason for this disparity. These fac- children died from cancer in 2000.55 tors include poorer environment (expo- The numbers of children getting a par- sure to industrial effluents, air pollution, ticular cancer are so small, however, that and potential allergens like dust mites recent increases in incidence may not be and cockroaches) and reduced access to statistically significant. or inadequate use of primary care. Other studies associate race with genetic pre- Factors contributing to the increase in disposition to asthma. African American cancer are unknown, as is the cause of children are particularly vulnerable to most cancers. Some argue that the rates the disease. In fact, asthma is 26 percent of childhood cancer have risen only

Chapter 13: Children’s Health 231 because detection methods are more dis- are becoming more prevalent. Whether criminating, while other studies point to such prevalence indicates a true increase increased exposure to environmental pol- in major depression in children or better lutants, such as home pesticides.56 detection methods remains open to further study. Nonetheless, the number of Overall childhood cancer incidence prescriptions for drugs such as Prozac increased by 10 percent between 1973 and Ritalin has increased tremendously. and 1991, then leveled off and declined Between 1990 and 1995, the number of slightly through 1996. Mortality has prescriptions for Ritalin among school- decreased steadily for all cancer sites aged children increased 260 percent. In a combined and most sites have decreased given year, major depression affects an by more than 50 percent. This decrease estimated 5 percent of 5- to 12-year-olds in mortality is evident in substantial and 10 percent of adolescents (the same increases in 5-year survival rates, from rate as adults). The condition is a major less than 30 percent in the early 1990s factor in the growing tragedy of teen to almost 75 percent in 1999. Decreased suicide—rates have tripled since the mortality from childhood cancers is due 1950s—and a common cause of school in part to technological and pharmaceu- failures and dropouts. Another neuro- tical advances in treatment. It also is psychiatric condition, ADHD, is esti- likely due to technological advances in mated to affect 4 percent of youth aged the state-of-the-art medical care given to 9 to 17—perhaps as many as 2 million most children with cancer. Seventy per- children.57 cent of children with cancer are enrolled in clinical cancer trials and are given Both depression and ADHD are linked access to the latest therapies and break- to factors in a child’s home environment, through technologies. according to a study by A. Leung and W. Robson.58 Those problems are also The National Cancer Institute predicts linked to low birth weight and the that cancer trends in children will amount of alcohol and drugs a mother remain ﬂat or decline through the year uses while pregnant. 2010. These predictions incorporate the potential positive impact of technologi- With diseases as varied as childhood cal advances in gene and vaccine therapy asthma and teen suicide attributed to and rational drug design. environmental effects, some health care policymakers are launching a two- pronged attack. First, they are support- Neuropsychiatric Conditions ing further studies of the perceived link between pollution and asthma, for Some neuropsychiatric conditions in example, or daily violence and teen sui- children, such as depression and atten- cide. Second, they are taking a holistic tion deﬁcit hyperactivity disorder approach, working with policymakers (ADHD), can be linked to environmen- outside the realm of health care to create tal factors such as stress and violence and better, healthier environments for chil-

232 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

dren; for example, working to improve dren are double or triple the expendi- housing standards, lessen air pollution, tures for the average healthy child, but or eliminate violence from neighbor- these costs can be contained by consis- hoods by means of gun control. tent, state-of-the-art care for those with access to health insurance. Those with- How Are We Doing? out access are not as well served by the system, and can use help in the form of a Currently, the United States health care better-integrated and more comprehen- system is not doing a bad job of caring sive community clinic system. for children. Most kids (88 percent in 2000) have access to health insurance The remaining 10 percent of children and, by extension, health services. use the largest proportion of medical services. These children have one or more By the same token, approximately 70 severe chronic illnesses that limit their percent of children can be considered to activity and ability to function. Within be generally healthy.59 These children this subpopulation, illnesses range in require little medical attention other severity from correctable birth defects than treatment of minor acute illnesses, such as congenital heart disease to ail- preventive checkups, and regular immu- ments for which treatment may be futile nizations. They are estimated to incur (such as pulmonary failure). Again, those less than 10 percent of all medical with health insurance are likely to get expenditures for children (see Figure the care they need, and severely disabled 13-3). children may be covered by Medicaid, depending on state requirements. Another 20 percent of children have minor chronic problems such as persis- The number of children with chronic tent ear infections, asthma, or allergies. conditions today is three times the The annual expenditures for these chil- number in the 1960s. This may be

Figure 13-3. Most kids are well covered—and are well.

Public and private health One or more severe insurance coverage chronic illness (80%) (10%)

Partial or no health Minor chronic insurance coverage problems (20%) (20%)

Healthy (70%)

Source: Newacheck et al.,1998, IFTF.

Chapter 13: Children’s Health 233 because data collection methods have age-adjusted prevalence rate of approxi- become more comprehensive and inclu- mately 53 per 1,000.60 Congenital heart sive, and some illnesses have been newly disease has a prevalence of about 3 per defined (e.g., ADHD is a relatively new 1,000 under age 18, but the diagnosis diagnosis). It may also be that clinical includes many different anomalies. Most innovations allow more children with other chronic illnesses have prevalences disabilities to survive longer, or that the below 3 per 1,000. Epilepsy, cerebral change is due to some combination of all palsy, diabetes, and Down’s syndrome of these factors. have prevalences of between 1 and 2.7 per 1,000. Conditions such as acute In 1998, 7 percent of children ages 5 leukemia, neural tube defects, cystic to 17 years old were limited in their nor- fibrosis, muscular dystrophy, hemophilia, mal activity by one or more chronic and hereditary metabolic disorders have health conditions. This is significantly prevalences that are considerably less higher than the 3 percent of children than one per 1,000. under 5 years old with limited activity, possibly because some developmental In the future, some incidence of chronic and learning disabilities are not diag- conditions may increase as a result of nosed until children enter school. technological innovations that now are saving the lives of increasing numbers of While children with moderate to severe premature and low-birth-weight babies. chronic illnesses and disabilities in the A recent study of extremely low-birth- aggregate may represent up to 10 per- weight babies (less than 1 kg) of higher cent of the childhood population, indi- socioeconomic status found that 20 per- vidually each diagnosis is infrequent to cent had significant disabilities, includ- rare. The most common chronic illness ing cerebral palsy, mental retardation, in childhood is asthma, which has an autism, and low intelligence with severe learning problems.61 As more of these babies enter the population, the costs of caring for them will be higher, and more Who Are Children with Special Health Care Needs? of them will slip through the cracks. Differences in the definition of children with special health care needs produce varying estimates of the size of this population. The CDC estimates Children’s Current Health that approximately 17 percent of children less than 18 years old have Status Indicators developmental disabilities.62 These are a diverse group of physical, cognitive, psychological, sensory, and speech impairments that may begin any time One way of measuring the health care during development, up to 18 years of age. system’s success in caring for children Different states and programs define the population differently and target is by using changes in global health their medical care services to specific subsets of the population, resulting in indicators as rough estimates of chil- overlapping services in some areas and no services in others. This lack of standard definitions blurs the lines between the mildly and severely disabled. dren’s overall health. While many mea- As a result, many states do not know how to fairly allocate the small share of sures can be used to assess the health their health care dollar intended for disabled children. status of America’s children, we have chosen those indicators for which trends

234 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

are changing. Generally, the changes low of 7.2 deaths per 1,000 live births in have been positive and child health has 1998. However, a comparison of health improved, but some positive trends indicators in industrialized countries overall hide negative trends in sub- found that in 1998 the United States populations. ranked 24th out of 29 in infant mortality even though it spends the most of Prenatal Care all industrial nations on health care as a The Department of Health and Human percentage of gross domestic product. Service’s 1990 goals for improving child One explanation is that large disparities health by the year 2000 included can still be observed in infant mortality improving maternal and child health rates across racial/ethnic subgroups in outcomes measured by early prenatal America. A recent study found that the care, infant mortality, and low birth infant mortality rate for children born into 63 weight. In 1999, 83.2 percent of poor families (13.5 deaths per 1,000 live babies were born to mothers who had births) was more than 50 percent higher begun prenatal care in the ﬁrst trimester than that for children born into families of pregnancy, compared with 75.8 per- with incomes above the poverty line (8.3 cent in 1990. By contrast, the rate of deaths per 1,000 live births).64 The link early prenatal care had fallen between between poverty and infant mortality 1980 and 1990 (see Table 13-1). helps explain why the infant mortality rate of African Americans, who have higher Infant Mortality poverty rates, remains more than twice The infant mortality rate has declined that of whites (13.9 compared to 5.8 steadily for the past 50 years, from 47.0 deaths per 1,000 live births in 1998). The deaths per 1,000 live births in 1940 to a current system is failing this population.

Table 13-1. Healthy People 2000 goals for maternal and child health 1991 1994 2000 Estimated Projected Year Indicator Race Rate Rate Goal 2000 Rate Goal Reached

Early prenatal Overall 76.2% of all births 80.2% 90% 88.2% 2002 care Black 61% 68.3% 90% 81.1% 2005 Hispanic 61% 68.9% 90% 84.7% 2002

Low birth weight Overall 7.1% of all births 7.3% 5% 7.7% Never Black 13.6% 13.2% 9% 12.4% 2026

Infant mortality Overall 8.9 infant deaths per 8.0 7.0 6.2 1998 1,000 live births Black 17.6 15.8 11.0 12.2 2002

Source: Healthy People 2000. Maternal and Infant Health Indicator Review, May 2Ð4, 1999. Website http://www.cdc.gov/nchs/about/otheract/hp2000/childhlt/mchb&w.pdf

Chapter 13: Children’s Health 235 Low-Birth-Weight Infants the entire child population within a Technological advances have increased the state, local and state public health agen- likelihood that smaller and more prema- cies have increased collaboration efforts ture babies will survive to their ﬁrst with private physicians. In 1998, only birthday and resulted in a decrease in 100 cases of measles were reported, down infant mortality. Though these life-saving from 28,000 cases in 1990, providing advances are awesome, there now are rela- impressive evidence of how successful tively more preterm deliveries and low- vaccination has been in increasing the birth-weight babies—a population with population’s immunity to measles. long-term, expensive health care needs. The Children’s Defense Fund estimates Nationally, 301,183 babies were born in that providing immunizations yields a 1999 weighing less than 2,500 grams ten-to-one economic return on invest- (about 5.5 pounds).65 The percentage ments to reduce medical expenditures. of low-birth-weight infants increased This part of the system seems to be from a low of 6.8 percent in 1985 to working. If we hit the goal of 90 percent 7.6 percent in 1999 and is projected to immunization, then the system will be continue to increase. Babies born to taking an important step toward keeping African American mothers are almost children healthy and long-term medical twice as likely to be of low birth weight costs down. as white babies. The Institute of Medi- cine identiﬁes a mother’s low level of As with other measures, there is a prob- education as a prominent risk factor for lem getting inner-city and rural children having a low-birth-weight baby, though immunized. In one study of Los Angeles education may be a proxy for socioeco- County, an 83.2 percent immunization nomic status.66 And since African Amer- rate in the overall population fell to ican women are more likely to have 57 percent for the inner-city subpopu- lower levels of education, they’re more at lation. Though some studies have proven risk for low-birth-weight babies. case management effective in increasing immunizations among inner-city popu- Immunizations lations, case management is costly because it is so labor intensive. The biggest Fully immunizing 90 percent of children problem appears to be with late-cycle by age 2 was another Department of immunizations, perhaps because parents Health and Human Services goal for with lower education don’t understand maternal and child health for the year the importance of going through the 2000.67 In 1999, 78 percent of children whole cycle, or because the lack of a con- 19–35 months of age were fully immu- sistent and single place to go for medical nized, up from 69 percent in 1994 and care creates gaps in coverage. Creating 55 percent in 1992. Childhood immu- consistent services will go a long way nizations help prevent serious illnesses, toward getting all children immunized such as polio, tetanus, whooping cough, regardless of socioeconomic status, which mumps, measles, and meningitis. To cre- may in the long run keep down the costs ate immunization registries and track of caring for this population.

236 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

Teen Pregnancy As mentioned earlier, children of one- After decades of declining birthrates parent families are more apt to live in among U.S. teens ages 15 to 19, they poverty, which means they are also more spiked during the late 1980s and early likely to have health problems. The 1990s, increasing from 50.2 births per health care system can help in at least 1,000 females in 1986 to 56.8 in 1995. two ways: by working to prevent births Teen birthrates have decreased recently, to unmarried teens and by targeting the to 49.6 in 1999, the lowest rate in 60 children of unmarried teens for extra years. The drop was more pronounced medical attention and follow-up. among young teens, ages 15–17, who registered a decline of 6 percent between Many teen pregnancy experts attribute 1998 and 1999 (see Figure 13-4). The the drop of teen births overall to the number of births to unmarried teenagers growing effectiveness of teen pregnancy was 2 percent lower in 1999 than in education and prevention campaigns. 1998. In addition, the number of births Experts believe the teen birthrate is for the youngest teenage group, ages falling, in part, because more teens are 10–14, dropped by 4 percent to the choosing to delay sexual activity and lowest level in 30 years. However, it is those who are sexually active are more important to recognize that “out-of- likely to use contraceptives. wedlock” births among teens continue to increase even as the overall teen birthrate If childbearing prevention programs has fallen. This means that fewer people focus solely on female teenagers, how- are marrying in their teens and having ever, they may be missing an important babies, and that more teens who are segment of participants in this problem. having babies are not married. Of sexually active 15- to 17-year-olds,

Figure 13-4. Unmarried, with children

Births per 1,000 adolescents 100 Black, non-Hispanic Black 80 Hispanic American Indian/ 60 Alaskan Native Total 40 White White, non-Hispanic 20 Asian/ Pacific Islander

0 1980 1985 1990 1995 1998

Source: America’s Children: Key National Indicator of Well-Being, Federal Interagency Forum on Child and Family Statistics, 2000.

Chapter 13: Children’s Health 237 29 percent have sexual partners who are ments and public health programs may 3–5 years older, and 7 percent have part- have resulted in signiﬁcant efforts by ners who are 6 or more years older.68,69 both to decrease teen smoking. Furthermore, while data are still scat- tered and preliminary, there seems to be The long-term detrimental effects of teen growing evidence that the births experi- drinking and smoking are obvious. enced by many young teens may be the Increased alcohol use results in increased result of coerced sex.70 Young adult men risk of accidents, violence, and high-risk in high-risk communities should be tar- sexual behavior. At the same time, smok- geted for education programs and held ers who start in their teens are less likely accountable for the children they father. to be able to quit.72 Though the recent trend is heartening, any increases in these behaviors will result in higher health care Smoking and Drug Use costs for the system in the future. In 2000, the National Institute on Drug Abuse reported good news with Violence and Crime the results of its annual national survey of illicit drug use among 8th, 10th, and The problem of violence shows itself in 12th graders.71 Use of illicit drugs in the two ways—violence perpetrated against preceding month among 12- to 17-year- children and violence perpetrated by olds remained stable for the fourth year children. The number of youth victims in a row. Since 1996 or 1997, there have of crime increased steadily between 1980 been decreases in the use of inhalants, and 1994 when it peaked and started hallucinogens such as LSD, and smoked declining (see Figure 13-5). methamphetamine. The few recent statistically signiﬁcant increases were in the One form of violence against children, use of Ecstasy, anabolic-androgenic child abuse and neglect, has declined steroids among 10th graders, and heroin from just over 900,000 children in use among 12th graders. 1998 to an estimated 826,000 victims of maltreatment in 1999 nationwide. Alcohol use among teens also peaked in The incidence rate of children victimized 1997 and has been declining since then, by maltreatment also declined to 11.8 as surveys taken in 2000 indicate, with per 1,000 children, a decrease from the 50 percent of 12th graders, 41 percent 1998 rate of 12.6 per 1,000.73 of 10th graders, and 22 percent of 8th graders reporting alcohol use in the In a trend that began in 1994, the num- preceding month. Cigarette use among ber of victimized children has decreased teens has also decreased, with 31 percent approximately 19.2 percent from a record of 12th graders, 24 percent of 10th of 1,018,692 in 1993. Parents continue graders, and 15 percent of 8th graders to be the main perpetrators of child mal- reporting use in the preceding month treatment. More than 87 percent of all in 2000. Recent attacks on the tobacco victims were maltreated by at least one industry by federal and state govern- parent. The most common pattern of

238 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

tims. In contrast, male parents were iden- Figure 13-5. Youthful victims of violence: Rate of serious violent crime tiﬁed as the perpetrators of sexual abuse victimization of youth, ages 12Ð17 by gender for the highest percentage of victims. Per 1,000 youths, ages 12Ð17

80 As for violence by children, the Depart- ment of Justice reported that as the adult arrest rate for murder fell 7 percent from 60 1978 to 1993, the juvenile murder rate surged by 177 percent, peaked in 1993,

40 and has been declining since then. At the same time, the arrest rate of teens for all violent crimes (involving use of force) 20 climbed 79 percent, almost three times the rise in the adult rate. Nationally, the juvenile violent crime arrest rate increased 0 from 305 per 100,000 youths ages 10 to 1980 1985 1990 1995 1998 17 in 1985 to peak at 517 in 1994. Source: America’s Children: Key National Indicator of Well-Being, Federal Interagency Forum on Child and Family Statistics, 2000. In response to this perception of an onslaught by a “wave of superpredators,” Figure 13-6. Serious violent crime offending rate pressure was put on Congress to treat 80 juvenile violent offenders like adults by locking them up with adult inmates. Such a tactic doesn’t do much for the 60 health of the juvenile offenders, however. Juveniles in adult jails commit suicide

40 eight times as often as other prisoners, are ﬁve times as likely to be sexually assaulted, and are twice as likely to be 20 beaten by staff.

Since 1995, juvenile arrests for violent 0 1980 1985 1990 1995 1998 crimes—murder, rape, robbery, and aggravated assault—have declined and Source: America’s Children: Key National Indicator of Well-Being, Federal Interagency Forum on Child and Family Statistics, 2000. in 1998 the juvenile violent crime arrest rate was at its lowest point in 10 years (Figure 13-6). Young people under age 15 accounted for more than half of the maltreatment (44.7%) was a child vic- decline of these arrests, suggesting that, timized by a female parent acting alone. despite perceptions from the media, per- Female parents were identiﬁed as the perhaps there was no wave of violent youth petrators of neglect and physical abuse crime. In fact, most (19 out of 20) juve- for the highest percentage of child vic- nile arrests were for nonviolent crimes.74

Chapter 13: Children’s Health 239 Adolescent Deaths old, 63 percent said they were worried Deaths from injuries—accidents, homi- they would die young, while 70 percent cides, and suicides—accounted for 75 were afraid of getting shot or stabbed at percent of all adolescent deaths among home or in school or feared they would 76 10- to 19-year-olds in 1998. While per- be hit by an adult. This anxiety affects ceptions of increasing violence in our children’s health in many ways, causing a country highlight the implications of higher incidence of conditions ranging this indicator, it is important to note from depression and suicide to the com- that accidents continue to account for far mon cold. Until these circumstances are more teen deaths than any other source. addressed by society at large, attempts to keep children healthy will remain Nonetheless, since 1985, a decline in incomplete. fatal teen accidents (primarily automobile accidents) has been offset by a dou- What’s in Store? bling in the number of homicides. The number of teen deaths due to accidents Balancing the positive trends of most reduced from 8,202 in 1985 to 6,565 in indicators of children’s health against 1994, while the number of teen homi- continuing discrepancies by social status cides ballooned from 1,602 to 3,569 (poverty, race/ethnicity, etc.) and our during the same period. The number of poor performance when compared with teen suicides increased slightly during other countries around the world, we the period (from 1,849 to 1,948). It is have to say the system appears to be important to note that rates of teen doing a mediocre job of keeping U.S. death vary greatly by geographic region, children healthy. But what’s in store for urbanization level, and state gun laws. the future? In general, motor vehicle death rates are higher in less densely populated settings The apparent success of the current and ﬁrearm homicide is higher in more health care system for children is some- densely populated settings.75 what a lucky accident—a precarious balancing act of public and private Despite some good news about decreas- resources. But the balance isn’t likely ing violence, the fact is that many chil- to hold for long. dren live with increasing anxiety induced by expectations of violence and For one thing, children are not a mono- even death. Moreover, children are not lithic, homogeneous group. The health oblivious to what’s happening around care needs of children vary dramatically them. In a recent study by Kaiser Family by age group. For example, prenatal care Foundation and Children Now, children and immunizations have the greatest aged 7 to 17, regardless of age, religion, impact for 1- to 3-year-olds, whereas or demographic group, said they were adolescent health care focuses more on “gripped by fears of violence and early social and behavioral concerns such as death because of physical, sexual, and substance abuse and pregnancy preven- drug abuse.” Of those aged 7 to 10 years tion. This wide range of diverse needs,

240 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

combined with poorly integrated public significant challenges in strengthening and private care, has created what Mad- that net to develop a coordinated and lyn Morreale, of Johns Hopkins Univer- integrated system of care for this popula- sity School of Hygiene and Public tion, in that the categorical funding Health, described as a “non-system” of streams often prevent consolidation of health care services for children.77 these overlapping or related services. A family trying to access services has no Neither public- nor private-sector efforts central place to go and must apply to have been sufficient to address the broad each agency separately. This takes the spectrum of child and adolescent health kind of resources and time that much of care needs. Private efforts consist of indi- the underserved population just doesn’t vidually focused primary health care that have. An obvious solution, then, is to is removed from—and not coordinated create a health care system for children with—population-based care. Public that has as close to “one-stop shopping” sector programs are extremely complex as possible, given the different levels of and lack coordination. government and private institutions involved. With the trend toward For example, federally legislated child increased public funding of children’s health programs implemented today health insurance, opportunities exist represent a mix of income-based entitle- for the creation of public-private part- ment programs (Medicaid and EPSDT), nerships that consolidate and link vital quasi-entitlement programs (Women, services. Infants and Children), categorical population or disease-specific programs Meanwhile, it seems that the population (immunization, pediatric AIDS, lead of children that makes the most demands poisoning, health care for the homeless, on the system—the chronically ill—is and family planning programs), and likely to increase in the next 10 years. age-specific entitlement programs (early Though tempered by advances in tech- intervention services for infants and nology, the number of children born toddlers with disabilities). “Gap-filling” with significant disabilities is growing. grant-funded programs (Title V prenatal Increasingly younger and smaller prema- and child health services) and categorical ture babies are being born and are surviv- grants to localities for community and ing, thanks to amazing and expensive migrant health centers are also included. neonatal technology. As more premature Health services, too, are embedded in babies of low birth weight survive into entitlement and categorical programs for childhood, the numbers of younger dis- education (special education and school abled are expected to increase. Techno- health services) and social services (Head logical advances also will increase the Start and family preservation programs). number of children who survive disabling accidents. The system as a whole is a threadbare, patchwork net ready to snap if too much Of the 500,000 children in need of long- more weight is added. Policymakers face term care, 330,000 are unable to play or

Chapter 13: Children’s Health 241 attend school because of conditions such citizens have increased from 8 to 13 per- as epilepsy, asthma, and cystic fibrosis. cent of the total population since 1950. The remaining 170,000 are severely dis- In 1960, children made up 79 percent of abled with cerebral palsy or mental the dependent population; by 2000, they retardation.78 made up approximately 65 percent. That percentage is expected to continue Most children with chronic illnesses decreasing through 2020. requiring long-term care are cared for 79 by their families at home. Children Not only are children a shrinking por- under 18 make up only 3 percent of the tion of the whole, but they have no total long-term care population. These voice—they cannot speak for themselves. children have disabling physical and/or They don’t vote, and for many of the cognitive conditions that leave them underserved, neither do their parents. unable to engage in age-appropriate The tendency to vote is tied to education activities or school. The definition of this level. Thus the majority voice of the population is problematic, as traditional voter is an older, more affluent voice that measures of function and disability for probably doesn’t recognize the needs of adults do not apply to children (that is, children’s health issues, especially for dressing and feeding themselves). As underserved populations. Voting is just more children move into the population one way that interest groups influence that needs long-term care, the system policy. As children become a smaller will be stretched even further. share of the “dependent population,” and the elderly share of the U.S. population Children Are Meant to grows, there may be less intergenera- Be Seen and Not Heard tional equity, and school bond initiatives and children’s health measures will give In any debate about allocating scarce way to expanding Medicare. resources, it always comes down to: Who has the political clout to get things done How much should we be concerned their way? The issue of children’s health about this silent population? As noted care may ultimately come down to a bat- previously, most kids are in pretty good tle between children and senior citizens shape. Most have health insurance and since together they make up the nation’s access to some form of health care ser- “dependent population,” or those persons vices. And even though these services are whose age makes them less likely to be fragmented, uncoordinated, and geo- employed than others. graphically patchy, the fact that, increas- This is a battle children have no chance ingly, one payer for those services—the of winning. government—picks up the tab means there are opportunities for stakeholders Though children represent a smaller per- to collaborate in each local community. centage of the population today than in 1960, they are nevertheless a stable and But a substantial proportion of chil- substantial portion and will remain so dren—about 20 percent—do not have into the next century. In contrast, senior access to insurance and have only diffi-

242 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

cult access to services. This is a large tions and other forms of preventive and significant group. These children are medicine saves the system the later not well served by the system, as it is; costs of treating these diseases by they need some help! Medicaid expan- tenfold, according to some estimates. sion and SCHIP have targeted these A health care system that’s trying to kids, but the two programs are likely to slow the overall growth of costs serve only a net gain of 1.6 million of can’t afford not to take this strategy the total of 11.6 million children who seriously. are likely to be uninsured in 10 years. And with the possible decrease in Don’t expect Medicaid to do it all. As employer-based health insurance in a the wave of reform was implemented worldwide economic slowdown, the through the Balanced Budget Act of number of uninsured is likely to increase 1997, the channel for replacing pri- even more (though experts are on the vate health insurance reductions with fence about the extent of the likely some form of public financing— decline in employer-based health insur- Medicaid and SCHIP—has been effec- ance). It will be important to watch the tively narrowed. Policymakers will local initiatives for children and the have to find other ways to make sure makeup of employee benefit packages children get access to health care. Pos- to see what the future of health care sibilities include school-based health holds for America’s children. programs that will teach children healthy behavior and make health care available to them on a daily basis. Implications of Current Trends for Children’s Plan for decreases in private insurance Future Health coverage. More employers will increase The current system of health care for employees’ share of their health insur- children is holding its own, but is ance premiums and decrease depen- unlikely to be able to handle additional dent coverage, and more employees stresses. These stresses are coming, how- will forgo coverage to save money, ever, in the form of decreasing private especially now that the world econ- health insurance, the likely inability of omy seems to be heading for recession. public financing to continue taking up Since health insurance is a good proxy the slack, a maldistribution of adequate for health care services, fewer children pediatric health care providers, and envi- will receive adequate health care under ronmental factors that are getting worse this scenario unless the booming econ- instead of better. omy rebounds quickly from a slowdown, and the labor shortage compels These trends have important implica- companies to offer full benefits, tions for children’s health in the future: including health insurance for dependents, to attract strong employees. Catch them early. Children are relatively inexpensive to care for and offer Make pediatric care available across the a huge return on investment. Prevent- board. Pediatricians are not adequately ing childhood disease with immuniza- distributed across the United States,

Chapter 13: Children’s Health 243 with most in metropolitan areas and must attempt to provide one-stop few in rural or inner-city communi- shopping for such families. ties. Although community health clinics play an important role in these Agree on a universal definition of “special areas, children who receive routine needs.” Different states and programs care in community clinics instead of define the population differently and physicians’ offices are likely to lack target services to specific subsets, continuity of care and to use emer- resulting in overlapping services in gency facilities as their usual source of some areas and no services in others. sick care. This is both expensive and For the system to best serve the people self-defeating. who need help the most, it must define these populations consistently Forge creative partnerships beyond health and act on these definitions. care. With diseases as varied as childhood asthma and teen suicide attrib- Pay attention to cross-cultural differences. uted to environmental effects, health Since many poor people belong to care policymakers must work with nonwhite ethnic groups, caregivers policymakers outside of health care to must try to reach these groups in new create better, healthier environments ways. Better translation services are a for children. Health care policymakers start, while cross-cultural health edu- can work with environmentalists, for cation programs are also important. example, to decrease air pollution in Programs that pay attention to the crowded urban areas, or with gun con- needs of diverse communities must be trol lobbyists to limit the violence to created, expanded, and financed for which children are often exposed. the long run.

Prepare to serve a growing chronically Work to decrease teen pregnancy. Although ill population. Because of new technolo- teen pregnancy as a whole is decreas- gies, more of the chronically ill will ing, out-of-wedlock teen pregnancy live longer, and more and earlier continues to increase. The children of preterm and low-birth-weight babies— these unwed mothers are often born a proportion of which are chronically with low birth weights and their atten- ill—will live past their ﬁrst year. The dant (and expensive) health problems. system must be prepared to care for the These same babies will be most at risk surge in these populations. for inadequate early health care and more expensive interventions later on. Create a system with one-stop shopping, School-based programs targeting these especially for the chronically ill. Cate- at-risk teen populations need to con- gorical funding streams prevent continue, with an increased focus on the solidation of overlapping or related role and responsibilities of young men. services. A family trying to access services has no central place to go for Work the environmental issues. For care and must apply to each agency certain populations, such as urban, separately. Health care stakeholders inner-city children exposed to air pol-

244 Chapter 13: Children’s Health Health and Health Care 2010 Institute for the Future

lution and the contaminants associ- communities and the privatization of ated with substandard housing (lead public health services, lead to the paint, cockroaches, dust mites), and widespread collapse of health care rural children exposed to pesticides, safety nets, triggering major infusions the environment seems to be a signif- of federal and state funds. This col- icant enemy of good health. The lapse will divert funds intended for powerful health care lobbies—those other health purposes and most likely for doctors and insurance compa- will be too little, too late. nies—can use their clout to inﬂuence local, regional, and federal legislatures Legislation sinks managed care. Con- to do the right thing in reducing comitantly, the American public’s these environmental dangers. appetite for new technology, including drugs, drives the nation’s health Wildcards care bill through the ceiling. A legislative backlash strikes the most The recession of the beginning of the vulnerable. new millennium grows deep and sustained, adding to the rolls of the unin- Not satisﬁed with the relatively small sured and Medicaid-eligible. Medicaid net gain in health insurance coverage reimbursements will not be able to that SCHIP and Medicaid provide for cover the increasing costs of care, leav- children, federal and state legislators ing millions with nowhere to turn for expand Medicaid to include children services. above 200 percent of FPL (with some familial contribution), reaching some Converging forces, such as the decen- of the 3.5 million uninsured children tralization of responsibility to local in that income bracket.

Chapter 13: Children’s Health 245 Endnotes chances. Contemporary Economic Policy (Octo- 1 Elixhauser, A., K. Yu, C. Steiner, and A. S. ber) 2001; 19(4):382–396. Bierman. Hospitalization in the United States, 10 Newacheck, P. W., J. J. Stoddard, D. C. 1997. Rockville, MD: Agency for Healthcare Hughes, and M. Pearl. Health insurance and Research and Quality, 2000. Health Care access to primary care for children. New Eng- Utilization Project (HCUP) Fact Book No. land Journal of Medicine (February 19) 1998; 1. Agency for Healthcare Research and Qual- 338(8):513–519. ity (AHRQ) Publication No. 00-0031. 11 Fronstin, P. Employment-Based Health 2 Barker D.J.P., C. Osmond, P. D. Winter, B. Benefits: Trends and Outlook. Employee Benefit Margetts, and S. J. Simmonds. Weight in Research Institute. May 2001. infancy and death from ischaemic heart disease Lancet 1989; 2: 577–580 and Guo, S.S., 12 Department of Labor. Futurework: Trends A. F. Roche, W. C. Chumlea, J. D. Gardner, and Challenges for Work in the Twenty-First and R. M. Siervogel. The predictive value of Century 1999. www.dol.gov/dol/asp/public/ childhood body mass index values for over- futurework/report/chapter4/main.htm#4b. weight at age 35 y. Am J Clin Nutr 1994; 59: 13 Duchon, L., et. al. Listening to Workers: 810–819 and Nieto, F. J., M. Szklo, G. W. Challenges for Employer-Sponsored Coverage in Comstock. Childhood weight and growth the 21st Century. New York: The Common- rate as predictors of adult mortality. Am J wealth Fund, Taskforce for the Future of Epidemiol 1992; 136: 201–213 Health Insurance for Working Americans. 3 Children’s Defense Fund, Immunizations, January 2000. http://www.childrensdefense.org/hs_tp_imm 14 Salisbury, D. EBRI Research Highlights: uniz.php. Retirement and Health Data. Employee Benefit 4 Newacheck, P. W., M. Pearl, D. C. Hughes, Research Institute. January 2001. and N. Halfon. The role of Medicaid in 15 U.S. Census Bureau. Health Insurance ensuring children’s access to care. Journal of Coverage: 2000. Current Population Reports. the American Medical Association 1998; 2001. 280:1789–1793. 16 Kaiser Commission on Medicaid and the 5 Newacheck, P. W,. et al. Health insurance Uninsured. Health Care for the Poor: Medic- and access to primary care for children. New aid at 35. Health Care Financing Review. Fall England Journal of Medicine 1998; 2000. 338:513–519. 17 Kaiser Commission on Medicaid and the 6 U.S. Census Bureau. Health Insurance Uninsured. State Health Facts, 1998. Kaiser Coverage: 2000. Current Population Reports. Family Foundation. www.kff.org/docs/state/ 2001. state.html. 7 Federal Interagency Forum on Child and 18 American Academy of Pediatrics, Com- Family Statistics. America’s Children: Key mittee on child health financing. scope of National Indicators of Well-Being, 2001. health care benefits for newborns, infants, Federal Interagency Forum on Child and children, adolescents, and young adults Family Statistics. Washington, DC: U.S. through age 21 years. Pediatrics 1997; Government Printing Office. 100:1040–1041. 8 DeAngelis, C., et al. Final Report of the 19 Lillie-Blanton, M. A Review of the FOPE II Pediatric Workforce Group. Pedi- Nation’s Progress and Challenges in Assur- atrics 2000; 106(5):1245–1255. ing Access to Health Care for Low-Income 9 Shogren, J. Children and the environment: Americans. Access to Health Care: Promises and valuing indirect effects on a child’s life Prospects for Low-Income Americans. Report of

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the Kaiser Commission on Medicaid and the 30 St Peter, R. F., et al. Changes in the scope Uninsured. Washington, DC. 1999. of care provided by primary care physicians. 20 Lyons, B. Welfare Reform and Medicaid New England Journal of Medicine (December Coverage of Low-Income Families. Testi- 22) 1999; 341(26):1980–1985. mony before the United States House of 31 DeAngelis, C., et al. Final Report of the Representatives Committee on Ways and FOPE II Pediatric Workforce Group. Pedi- Means, Subcommittee on Human Resources. atrics 2000; 106(5):1245–1255. May 16, 2000. 32 Stoddard, J. J., R. F. St Peter, P. W. 21 Health Care Financing Administration. Newacheck. Health insurance status and Impacts of Medicaid managed care on ambulatory care for children. New England children. Health Services Research 2001; Journal of Medicine (May 19) 1994; 36(1):7–23. 330(20):1452–1453. 22 Social Security Administration. Welfare 33 American Medical Association. Nonfederal Reform and Childhood Disability Factsheet. Physicians in the US and Possessions by February 1997. www.ssa.gov/pubs/ Selected Characteristics. www.ama- wrchild.html. assn.org/ama/pub/category/2688.html. 23 Hurley, R. E., and M. A. McCue. Partner- 34 National Conference of State Legislatures. ship Pays: Making Medicaid Managed Care The Health Care Workforce in Ten States: Work in a Turbulent Environment. Princeton, Education, Practice and Policy, Interstate N.J.: Center for Health Care Strategies Inc., Comparisons. Spring 2001

2000. Meyer, H. Medicaid: States give up a 35 real turkey. Hospitals and Health Networks. Council on Graduate Medical Education. November 1997. COGME Physician Workforce Policies: Recent Developments and Remaining 24 Health Care Financing Administration. Challenges in Meeting National Goals. A Proﬁle of Medicaid 2000 Chartbook. U.S. March 1999. www.cogme.gov/14.pdf.

Dept. of Health and Human Services. 36 www.hcfa.gov/stats/2Tchartbk.pdf. National Association of Pediatric Nurse Associates. About NAPNAP. 25 Urban Institute. Unpublished analysis of www.napnap.org/about.html.

Medicaid enrollees and expenditures, based 37 on data from Urban Institute as cited in Shogren, J. Children and the environment: Kaiser Commission on Medicaid and the Valuing indirect effects on a child’s life Uninsured. Health Care for the Poor: chances. Contemporary Economic Policy 2001; Medicaid at 35. Health Care Financing 19(4):382–396. National Academy Review. Fall 2000. of Sciences National Research Council. Accounting for Renewable and Environ- 26 Hakim, R., et al. Medicaid and the Health mental Resources. Survey of Current Business of Children. Health Care Financing Review 80(3):26–51. 2000; 22(1):133–140. 38 Szilagyi, P., and E. Schor. The health of 27 National Center for Health Statistics. 1999. children. Health Services Research (October) 28 Health Care Financing Administration. 1998; 33(4):1001–1039. The State Children’s Health Insurance Program: 39 U.S. Census Bureau. Poverty in the United Preliminary Highlights of Implementation and States. 1999.

Expansion. 2000. www.hcfa.gov/init/ 40 wh0700.pdf Federal Interagency Forum on Child and Family Statistics. America’s Children: Key 29 Congressional Budget Ofﬁce. Budgetary National Indicators of Well-Being, 2001. Implications of the Balanced Budget Act of 1997. www.childstats.gov. CBO Memorandum.

Chapter 13: Children’s Health 247 41 U.S. Census Bureau. Health Insurance Cov- 51 Center for Disease Control. Facts about erage Status by Selected Characteristics: 1990 to Asthma. www.cdc.gov/od/oc/media/fact/ 1998. Current Population Reports. Unpub- asthma.htm. lished data as cited in the Statistical Abstract 52 Evans, R. Asthma among minority of the United States: 2000. children: A growing problem. Chest 1992; 42 Newacheck, P. W., et al. Children’s access 101(6):368–371. to primary care: Differences by race, income, 53 Landrigan, P. J., Environmental hazards and insurance status. Pediatrics 1996; for children in the U.S.A. Int’l. Journal of 97:26–32. Occupational Medicine and Environmental 43 Montgomery, L. E., et al. The effects of Health 1998; 11(2):189–194. poverty, race, and family structure on us chil- 54 Environmental Protection Agency. dren’s health: Data from the NHIS, 1978 through 1980 and 1989 through 1991. Am J 55 American Cancer Society. Cancer Facts and Public Health 1996; 86:1401–1405. Figures, 2000. www.cancer.org/downloads/ STT/F&F00.pdf. 44 Schmitt, E. For First Time, Nuclear Fami- lies Drop Below 25% of Households. New 56 Chow, W., et al. Cancers in Children. In: York Times. May 15, 2001. Schottenﬁeld, D., et al., eds. Cancer Epidemi- ology and Prevention, 2nd ed. Oxford, MA: 45 U.S. Census Bureau. Poverty in the United Oxford University Press, 1996. States, 1999. 57 National Institute of Mental Health. 46 McLanahan, S. (1995). The consequences The Numbers Count, Mental Disorders in of nonmarital childbearing for women, chil- America. www.nimh.nih.gov/publicat/ dren, and society. In National Center for numbers.cfm#23. Shaffer, D., P. Fisher, M.K. Health Statistics, Report to Congress on out-of- Dulcan, et al. The NIMH Diagnostic Inter- wedlock childbearing. Hyattsville, MD: view Schedule for Children Version 2.3 National Center for Health Statistics. Ven- (DISC-2.3): description, acceptability, preva- tura, S. J., and C. A. Bachrach. Nonmarital lence rates, and performance in the MECA childbearing in the United States, 1940–99. Study. Methods for the Epidemiology of National Vital Statistics Reports, 48(16). Child and Adolescent Mental Disorders Hyattsville, MD: National Center for Health Study. Journal of the American Academy of Statistics, 2000. Child and Adolescent Psychiatry 1996; 47 Zahm, S. H., and M. H. Ward. Pesticides 35(7):865–877. and Childhood Cancer. Environmental Health 58 Leung, A. K., and W. L. Robson. Children Perspectives (June) 1998; 106(Suppl 3): of Divorce. Journal of Social Health (October) 893–908. 1990; 110(5):161–163. 48 Perry, B. Stress, Trauma and Post-trau- 59 Newacheck, P. W., and N. Halfon. matic Stress Disorders in Children. Child Prevalence and impact of disabling chronic Trauma Academy. 5 September, 1999. conditions in childhood. American Journal of www.childtrauma.org/ptsd_interdisc.htm. Public Health 1998; 88:610–617. 49 American Lung Association. Prevalence 60 Centers for Disease Control and Preven- Based on Revised National Health Interview tion. Measuring Childhood Asthma Preva- Survey. www.lungusa.org/data/ lence Before and After the 1997 Redesign data_102000.html. of the National Health Interview Survey— 50 American Lung Association. Trends in United States. Morbidity and Mortality Asthma Morbidity and Mortality. January Weekly Report, 1998. www.cdc.gov/od/oc/ 2001. www.lungusa.org/data/asthma/asth- media/mmwrnews/n2k1013.htm#mmwr2. mach_1.html#prevalence.

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61 Halsey, C. L., et al. Extremely low-birth- and Youth Trends. www.nida.nih.gov/ weight children and their peers. A compari- Infofax/HSYouthtrends.html. son of school-age outcomes. Arch Pediatr 72 Centers for Disease Control and Preven- Adolesc Med. 1996. 150:790–794. tion, National Center for Chronic Disease 62 National Center on Birth Defects and Prevention and Health Promotion. Women Developmental Disabilities. Developmental and Smoking: A Report of the Surgeon General. Disabilities. www.cdc.gov/ncbddd/dd/ 2001. www.cdc.gov/tobacco/sgr/ default.htm. sgr_forwomen/Executive_Summary.htm. 63 Healthy People 2000. Maternal and Infant 73 U.S. Department of Health and Human Health Indicator Review. www.cdc.gov/nchs/ Services. Child Maltreatment 1999: Reports about/otheract/hp2000/childhlt/mchb&w.pdf. from the States to the National Child Abuse

64 and Neglect Data System. www.acf.dhhs.gov/ Centers for Disease Control and Preven- programs/cb/publications/cm99/index.htm. tion, 1995. Kiely, John L. Poverty and Infant Mortality—United States, 1988. Morbidity 74 Meek, J. G. Juvenile Violent Crime and Mortality Weekly Report 44(49):922–927. Lowest in 10 Years. November 24, 1999.

65 www.apbnews.com/newscenter/ National Center for Health Statistics. breakingnews/1999/11/24/ Faststats A to Z, Birthweight and Gestation. juvenile1124_01.html. www.cdc.gov/nchs/fastats/birthwt.htm. 75 66 Centers for Disease Control and Preven- Institute of Medicine (IOM). Preventing tion, National Center for Health Statistics. Low Birthweight. Washington, DC: National Health, United States. 2000. Academy Press, 1985. 76 67 Kaiser Family Foundation/Children Now. Healthy People 2000. Maternal and Infant Talking with Kids About Tough Issues: A Health Indicator Review. www.cdc.gov/nchs/ National Survey of Parents and Kids. 1998. about/otheract/hp2000/childhlt/mchb&w.pdf. www.talkingwithkids.org. 68 The Alan Guttmacher Institute. Facts in 77 Morreale, M., and H. Grason. Health Brief, Teen Sex and Pregnancy. 1999. Services for Children and Adolescents: www.agi-usa.org/pubs/fb_teen_sex.html#tp. “Non-System” of Care. In: Stein, R.E.K., 69 Darroch J. E., D. J. Landry, and S. Oslak. ed. Health Care for Children: What’s Right, Age differences between sexual partners What’s Wrong, What’s Next. New York: in the United States. Family Planning Perspec- United Hospital Fund, 1997. tives 1999; 31(4):160–167. 78 Adler, M. ASPE (Assistant Secretary for 70 The Alan Guttmacher Institute. Sex Planning and Evaluation) Research Notes: and America’s Teenagers. 1994. Abma, J., Disability Among Children. January 1995. A. Driscoll, and K. Moore. Young women’s aspe.hhs.gov/daltcp/reports/rn10.htm. degree of control over ﬁrst intercourse: An 79 Szilagyi, P., and E. Schor. The health of exploratory analysis. Family Planning Perspec- children. Health Services Research (October) tives 1998; 30(1):12–18. 1998; 33(4):1001–1039. www.agi-usa.org/pubs/journals/3001298.html. 71 National Institute on Drug Abuse, National Institutes of Health. High School

Chapter 13: Children’s Health 249 Health and Health Care 2010 Institute for the Future

Chapter 14 Health and Health Care of America’s Seniors The Future Awaits Us

There’s a big change coming. The largest has increased dramatically in the 20th generation in recent history, the baby century and will continue to increase, boomers, is aging into the most service though less dramatically, over the next intensive and therefore expensive health decade.1 care period of their lives. Although the first of the baby boomers will not be The largest generation of the 20th cen- turning 65 until 2011, this chapter tury, the baby boomers, is moving into focuses on them and the future of health the final third of their lives and the time and health care for America’s seniors when their health care utilization because they are expected to transform increases with senescence, the natural the health care delivery system. In this decline of our bodies. This section fore- chapter we first describe seniors in terms casts the demographic changes in Amer- of changing demographic, economic, ica with special attention to the baby health, and social trends. We then boomers. Though baby boomers are not describe the health care delivery system the only people who will be aging in they will encounter. The final section America through 2010, their sheer num- addresses some of the implications of bers will test the capacity of the health this meeting. care system and much of the next 10 years will be spent preparing for their needs. Additionally, the baby boomer The Demographics of generation has transformed every institu- an Aging Population tion they have interacted with throughout their lives—and health care is next. Americans have witnessed incredible advances in health care during the 20th century. Technological advances in imag- The Baby Boom Generation: Definition and Impacts ing, vaccines, pharmaceuticals, and surgery have combined with social and Low fertility rates during the 1930s public health infrastructure changes, Depression were followed by high fertil- such as sanitation, to improve health and ity rates after World War II and the health care and enable people to live birth of 76 million baby boomers from healthier, longer lives. Life expectancy 1946 to 1964. Fertility rates began

Chapter 14: Health and Health Care of America’s Seniors 251 declining after 1964 and were accompa- stitute fully one-ﬁfth or 20 percent of nied by increasing longevity. the population—a sizable segment of all consumers, voters, home owners, and Described by the Census Bureau as a patients. Increasingly, every social insti- “human tidal wave,” the baby boom gen- tution and sector will be required to eration is technically deﬁned as those accommodate the needs of older people. born between 1946 and 1964. This Resources will have to be mobilized to cohort is 70 percent larger than the gen- serve them. eration born during the prior two decades and it is expected to live longer A critical concept in preparing to man- than any cohort before. Now in their age this sweeping transformation of soci- most economically productive years ety is the recognition that the (aged 39 to 57 in 2003), these transformation itself will happen sud- “boomers” currently comprise more than denly, not gradually or incrementally, one-third of the U.S. population. over the coming decade. It may seem common sense to say that the shape of Why 2010 Is a the “age wave” will match that of the benchmark Year baby boom from which it was spawned. But many health care planners do not As the baby boom generation ages, U.S. fully appreciate that the period from society will be transformed. While those now through 2010 is, relatively speak- over 65 years of age are now a relatively ing, a “quiet before the storm.” Because small part of the population—12 per- the baby boomers will not begin reach- cent—by 2030 this age group will con- ing the retirement age of 65 until 2011, the dramatic changes in population aging will not occur until after 2010— the benchmark year around which many Figure 14-1. Average annual growth rate of the elderly population, 1910Ð2050 issues in this chapter revolve.

Percent Thus, those considering the future of 3.5 health care for the elderly must plan for 3.0 two distinct time frames: 2.5

2.0 1995 to 2010 1.5 Older growth rate is declining. Between 1.0 1990 and 2010, the average growth rate of the older population will actu- 0.5 ally be lower than at any equivalent 0.0 1910Ð30 1930Ð50 1950Ð70 1970Ð90 1990Ð2010 2010Ð30 2030Ð50 period since 1910.

Source: U.S Bureau of the Census. General Population Characteristics, PC80-1-B1. Washington, Elderly population is increasing. Over DC: USGPO, May 1983; 1990. Census of Population and Housing, CPH-L-74, Modiﬁed and Actual Age, Sex, Race, and Hispanic Origin Data; Population Projections ot the United States the 15-year period 1995 to 2010, the by Age, Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports, Series P-25, No. 1130. Washington, DC: USGPO, 1993. population aged 65 and over will, however, increase 17.5 percent, from

252 Chapter 14: Health and Health Care of America’s Seniors Health and Health Care 2010 Institute for the Future

Figure 14-2. U.S. demographic proﬁle, 1995: Figure 14-3. U.S. demographic proﬁle, 2010: Middle-age spread of the baby boomers Baby boomers reach AARP territory.

Males Females Males Females 90+ 90+

80Ð84 80Ð84

70Ð74 70Ð74

60Ð64 60Ð64

50Ð54 50Ð54

40Ð44 40Ð44

30Ð34 30Ð34

20Ð24 20Ð24

10Ð14 10Ð14

> 01 > 01 12 10864204812 2 6 10 12 10864204812 2 6 10 Millions Millions

Source: U.S Bureau of the Census. Population Projections ot the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports, Series P-25, No. 1130. Washington, DC: USGPO, 1993.

33.5 million to 39.4 million or from Figure 14-4. U.S. demographic proﬁle, 2030: 12.8 percent to 13.3 percent of the Top-heavy baby boomers total population. In the year 2010, Males Females half of the U.S. population will be 37 90+ years or older, and the baby boomers 80Ð84 will be aged 46 to 64. 70Ð74 Watershed year. In 2010 the ﬁrst half 60Ð64 of the baby boom population (i.e., those aged 55 to 64) will be poised to 50Ð54 initiate the real “tidal wave of aging.” 40Ð44 By 2020, the population of these near- 30Ð34 elderly will have grown to 31.4 mil-

20Ð24 lion from their 1995 level of 21.1 million 10Ð14

> 01 2010 to 2030 12 10864204812 2 6 10 Period of most rapid growth. Over this Millions 20-year period, the elderly population Source: U.S Bureau of the Census. Population Projections ot the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050. will increase from 39.4 million to Current Population Reports, Series P-25, No. 1130. Washington, DC: USGPO, 1993. 69.4, the most rapid growth period for the elderly of the 21st century.

Chapter 14: Health and Health Care of America’s Seniors 253 One in five. By 2030, as the last of the The “Oldest Old” and Centenarians: A New Force baby boom cohort reaches retirement age, one out of five persons will be at Of particular significance in developing least age 65 and comprise slightly health care strategies for the elderly is over 20 percent of the total popula- the projected growth in the “oldest old,” 2 tion. the population aged 85 and above. The health and income status of a large proportion of this age group will be significantly compromised, raising serious Figure 14-5. Projection of the elderly population by age, 1995Ð2030 questions related to funding for the health, social service, and long-term care Number (in millions) 80 (LTC) needs of this population. Thus, estimating the future size of this high- 70 65Ð74 75Ð84 utilization group is critical. 60 85 and older

50 In 2000, 4.2 million people had reached age 85, and approximately 337,000 were 40 95 and older. By 2010, the number of 30 people aged 85 and older will increase to 20 5.7 million and the number aged 95 and

10 older will more than double to 666,000. By 2030, the number of people aged 85 0 1995 2000 2005 2010 2015 2020 2025 2030 and older will have grown to 8.5 mil-

Source: U.S Bureau of the Census. Population Projections of the United States by Age, Sex, lion. Race, and Hispanic Origin: 1995 to 2050. Current Population Reports, Series P-25, No. 1130. Washington, DC: USGPO, 1993. The number of centenarians in the United States is already rapidly growing Figure 14-6. Centenarians in the United States, 1995Ð2030 and will rise from approximately 50,000 Thousands in 2000 to 131,000 in 2010, by which 350 year women centenarians will outnum- Male ber men by more than ﬁve to one. 300 Female According to the middle series projec- Total 250 tion, by 2030 the number of centenari-

200 ans will nearly triple to 324,000 (271,000 women and 53,000 men) (see 150 Figure 14-6).

100 Gender Considerations 50 Women constitute the largest segment of 0 1995 2000 2005 2010 2015 2020 2025 2030 this fast-growing aging population. In

Source: U.S Bureau of the Census. Population Projections of the United States by Age, Sex, 2000, there were 20.6 million women Race, and Hispanic Origin: 1995 to 2050. Current Population Reports, Series P-25, No. 1130. Washington, DC: USGPO, 1993. aged 65 and older in the United States versus 14.4 million men, making 70 men

254 Chapter 14: Health and Health Care of America’s Seniors Health and Health Care 2010 Institute for the Future

for every 100 women. This gender dispar- men is projected to improve slightly over ity increases with age: at ages 65 to 74 time, the gender disparity is not expected years, there are 82 men for every 100 to change throughout the period 2010 to women; at ages 75 to 84, 65 men per 100 2030, leaving many very old women women; and beyond 85 only 41 men per without spousal income and/or care (see 100 women. Although life expectancy for Figure 14-7).

Diversity in Aging

Figure 14-7. Number of men per 100 women by age, 1995 and 2030 Over the long term, the aging population will be increasingly diverse due to Number higher birth and immigration rates of 100 ethnic and racial minority groups (see 1995 80 2030 Figure 14-8). Many of these diverse populations will be low-income, and/or 60 require specialized health care services as they age. 40 The older Latino population will grow 20 signiﬁcantly between 2000 and 2010, rising from 1.7 to 2.8 million. By 2050, 0 65Ð69 70Ð74 75Ð79 80Ð84 85Ð89 90Ð94 95+ 65+ this population will nearly triple to 7.8

Source: U.S Bureau of the Census. Population Projections of the United States by Age, million. The elderly African American Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports, Series P-25, population will rise from 2.8 to 3.4 mil- No. 1130. Washington, DC: USGPO, 1993. lion between 2000 and 2010, reaching 6.9 million by 2030. The number of Figure 14-8. Percent of population, 65 and older, by race and elderly Asian Americans will grow as ethnicity, 1995 and 2030 well, from 819,000 to 1.3 million by 2010. In spite of these changes, Cau- All races casian Americans will remain the dominant ethnic and racial proportion of White those over 65 years old and will grow by 4 million from 30 to 34 million Black between 2000 and 2010.3

Other races Summary 1995 Hispanic origin* 2030 The overall message to be taken from 051015 20 25 U.S. Census–based estimates of elderly Percent population growth is that the full *Hispanic origin may be of any race impact of aging will hit after 2010. Source: U.S Bureau of the Census. Population Projections ot the United States by Age, Between 2000 and 2010, the United Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports, Series P-25, No. 1130. Washington, DC: USGPO, 1993. States will remain in a period of quiet buildup to the crescendo of population

Chapter 14: Health and Health Care of America’s Seniors 255 aging. During this anticipatory period of less, economic discrepancies remain. relatively modest population growth, the Older women, minorities, and singles are most rapid growth patterns will be seen at the lowest end of the income scale, in the oldest old (those 85 and older) and and over the next decade, these dispari- older Latinos. ties will not diminish. If anything, the income gaps will grow larger with older After 2010, the first of the baby boom women, minorities, and non-married cohort will reach retirement age. Begin- elders receiving lower incomes than ning in 2010 and going until 2030, men, whites, and those who are “there will be an unparalleled increase in married.6 The linear relationship the absolute number of older persons [as between socioeconomic status and health the] baby boom cohorts . . . place tremen- and illness is well established. As more dous strain on the myriad specialized ser- elderly fall into poverty, we can expect vices and programs required of an elderly more of them to be in poor health. population.”4 Health and social service systems will face accelerated pressures In 1999, 66 percent of the 55- to 64- due to this unprecedented increase in year-old men and 52.1 percent of the the elderly population. women in the same age group were in the labor force. For people age 65 and It will be the post-2010 demographic older, the labor rates were 18.6 percent tidal wave that challenges the nation to for men and 10 percent for women.7 adjust its health and social service sys- Although the trend over the past decade tems, but it will be the planning and has been toward early retirement, the policy work done pre-2010 that deter- Bureau of Labor Statistics (BLS) projects mines U.S. success—private, public, and that labor force participation rates for personal—in meeting this challenge. those aged 55 years and older will increase by 5.5 percentage points from 8 The Economic Status 1998 to 2008. of Seniors The retirement age will start to increase Income, assets, and retirement timing for a number of reasons. By congressional are interrelated factors associated with mandate, beginning in 2000, the normal health status—and health care service retirement age for collecting a full Social use—of the elderly. This section provides Security pension will increase incremen- an overview of these topics. tally from its current level of 65 years to 67 years in 2022. At the same time, the The overall economic picture of the amount of reduced pension benefits one elderly has improved significantly since can collect at age 62 also will be low- 1970 when 4.8 million persons 65 years ered. In addition, Congress recently of age and older (24.6 percent of the eliminated the earnings limit on the total elderly population) lived below the amount that Social Security recipients poverty level. By 2000, the percentage between the ages of 65 and 69 can earn had dropped to 3.2 million (9.7 percent before having to forfeit part of their of the total), an historic low.5 Neverthe- Social Security benefits. Together, these

256 Chapter 14: Health and Health Care of America’s Seniors Health and Health Care 2010 Institute for the Future

rule changes should keep people in the ties whose health and life expectancy is workforce longer.9 lower than that for whites. Most disadvantaged by this policy change are Another reason the retirement age is minority males, many of whom may not likely to rise in the future is the trend live long enough to receive their retire- toward companies offering defined contri- ment benefits. bution pension plans instead of defined benefit plans. A Bureau of Labor Statistics The higher age of eligibility will also survey of medium to large employers have negative repercussions for women showed that, among full-time employees, in particular. With fewer years in the participation in defined benefit pension labor force, women often have more plans declined from 59 percent in 1991 to “zero” years of income under Social Secu- 50 percent in 1997.10 Defined benefit rity and therefore receive depressed bene- plans provide the maximum benefits fits under this program.13 Further, when taken at the earliest possible age of because women live six to seven years eligibility. In contrast, under defined con- longer than men, over time they are tribution plans such as 401(k)s, the more at risk for developing chronic ill- amount of benefits accrued depends on nesses. Already meager incomes will be the amount contributed to the plan by stretched to cover the associated costs of employers and employees, as well as on these illnesses. the rate of growth of the investments in the retirement fund.11 Taking early retirement to caregive (again, predominantly performed by A study by the American Association of women) will compound the dire financial Retired Persons (AARP) provides further situation for women dependent on Social evidence of prolonged labor force partici- Security. Although those who retire early pation, finding that 8 in 10 baby- are eligible for Social Security benefits on boomers plan to work during their a reduced basis at age 62, they do not “retirement years,” although not neces- qualify for Medicare until age 65. As a sarily at the same job and not necessarily result, for those not working or married full time.12 Declining age discrimination there is a gap in health insurance between and increasing labor force participation retirement and age 65. If the retirement among women also should contribute to itself is triggered by poor health, this raising the retirement age in the future. insurance gap can be a major concern. To the extent that these changes occur and the retirement age rises, the BLS Intergenerational Issues estimates may overstate the number of retirements occurring over the Conflict between the generations is 1998–2008 period. drawing increased media attention. Much of the new media focus is based The increasing age of eligibility for on concerns voiced by policymakers and Social Security (and potentially for analysts over how the rapid aging of the Medicare) will have particularly deleteri- population will affect health and retire- ous effects for racial and ethnic minori- ment programs. Some analysts and

Chapter 14: Health and Health Care of America’s Seniors 257 advocacy groups claim that older per- misplaced.22 For example, contrary to sons benefit from Social Security and myth, data indicate a very low incidence Medicare at the expense of workers and of financial transfers to older parents. In children; thus, these programs are called fact, there seems to be a far greater like- “unfair” and become a flashpoint for lihood that older parents will be giving intergenerational conflict. The critics financial help to children and grandchil- also say U.S. policy fails at “generational dren rather than receiving it.23 equity.”14,15 Recent data also confirm that competing Others say that “generational interde- intergenerational exchanges may have pendence” in financing programs such as the highest personal financial stakes for Social Security is essential. They point to women. This is because caregiving for factors beyond individual control (e.g., dependent children and/or parents is demographic and economic booms and most likely to diminish a woman’s— busts) that, without intergenerational rather than a man’s—formal work, with exchange, would result in unequal retire- “distinct [negative] implications for pen- ment incomes for different generations. sion eligibility, saving, asset accumula- Retirement health and income should tion and ultimately post-retirement not, they say, depend on the luck of the income.”24 historical draw and, therefore, multiple generations should share responsibility The Support Ratio for the current elderly population’s retirement.16,17 The complex and multilevel exchanges between generations are more than top- The central question in this ongoing ics for magazine articles and talk shows. debate is whether the “ties that bind”18 The magnitude and direction of these will hold together generations in some transfers of time, money, and space will type of interdependence or whether the directly influence the environment of hypothesized “age wars”19,20 and pro- aging over the next several decades. How jected “age-race collision” will material- can we quantify, and therefore predict ize for the demographic buildup period and plan for, the pace-setting factors in from the present to 2010.21 this fast-evolving environment?

Apart from the intergenerational hot- One measure that is widely used in dis- button issues centered on the large gov- cussing the present and future support of ernmental social and health programs, the elderly is the “support ratio” (some- other forms of intergenerational times called the “dependency ratio”) exchange involve more personal and characterized by the following formula: family-level mediums of exchange such as money, time, and space (e.g., shared Those in need of support : Those capable of providing support living arrangements). Recent trends in these areas indicate that some concerns A number of caveats regarding interpre- over intergenerational friction may be tation of this ratio should be made clear.

258 Chapter 14: Health and Health Care of America’s Seniors Health and Health Care 2010 Institute for the Future

First, not all youth and elderly require baby boomers reach retirement age. support, nor do all working age persons From 2010 to 2030, the total support provide direct support to youth and ratio is projected to increase 32 percent, elderly family members. Also, the num- rising from 60 to 79 children plus ber of working age adults does not equal elderly per 100 workers. the number of adults actually participating in the labor force. A support ratio, in The overall economic outlook for the other words, simply lays out the num- elderly is mixed. People will be living bers of one dependent population com- and working longer, but disparities in pared to the numbers of a working age economic status will exacerbate differ- population. ences in health status over time. In spite of media attention to intergenerational A support ratio is just a starting point conﬂict, most people seem to understand that requires further interpretation based that all generations have a common stake on other—often quite changeable— in social and economic policies that meet inputs and assumptions. For example, differing needs across the life cycle con- many interpretations of support ratios ﬂict.26,27 The challenge now is meeting may overestimate the degree of intergen- the needs of all generations without erational support (often termed “the bur- trading off the needs of one age group den”) required. This occurs because they for those of another. The full effect of do not take into account the increasing public policy changes for the elderly can labor force participation of women, the only be determined with time. effect of economic growth, or the potential of older persons to work longer. Health Status Of Seniors Nevertheless, the support ratio is a useful crude indicator of potential changes Seniors’ health status depends on a com- in the future levels of economic support bination of their economic circum- needed. The ratio described here pro- stances, access to health care, their vides a snapshot of the intergenerational genetic makeup, the environment in burden likely to be created in the com- which they live, and their risk behaviors. ing demographic transformation. By all of these measures, the health status of Americans has improved greatly The combination of child dependency this past century and will continue to and old age dependency is a good mea- improve. Nonetheless, as individuals age sure of the overall dependency burden on and the wear and tear of daily life begins the working age population. This total to take its toll on most bodies, the aver- support ratio will actually decline age person is more likely to suffer from a between 2000 and 2010, from 69.8 to chronic condition that increases his or 60 older persons and children per 100 her utilization of health care products persons of working age.25 The largest and services. This section describes those changes in the total support ratio will chronic conditions and the prevalence occur in the period post-2010 when the and shape of age-related morbidity.

Chapter 14: Health and Health Care of America’s Seniors 259 Leading Causes ple age, the probability of suffering from of Death more than one chronic condition 32 In 2000, the leading cause of death increases. Although many people who among persons age 65 or older was heart suffer from chronic conditions over age disease (1,712 deaths per 100,000 per- 65 live productive, full lives, 34 percent sons), followed by cancer (1,127 per of those age 65–74 and 45 percent of 100,000), stroke (422 per 100,000), those 75 years and older are limited in chronic obstructive pulmonary diseases their daily activities because of chronic 33 (310 per 100,000), pneumonia and illness. inﬂuenza (173 per 100,000), diabetes (150 per 100,000), and Alzheimer’s dis- For Americans 70 years of age and ease (139 per 100,000 persons). In 2000, older, the most common chronic condi- among persons age 85 and older, heart tions reported include arthritis, hyper- disease was responsible for 38 percent of tension, and heart disease (see Figure all deaths.28 Recently, reductions in mor- 14-9).34 In 2000, one-quarter and one- tality occurred for all of the above-listed third of the population 70 years and older diseases except pneumonia and suffered from visual and hearing impair- Alzheimer’s disease. ments respectively.35 A full 63 percent of women and 50 percent of men over 70 Chronic Conditions suffer from arthritis. Women also lead men in the prevalence of hypertension at Chronic conditions can affect individuals age 70 and older, although men take the at any age, but it is the single most lead in heart disease. important factor inﬂuencing the health, independence, and life expectancy of Depressive symptoms are an indicator of seniors. Chronic conditions are those general well-being and mental health that have persistent or recurring health among older Americans. Higher levels of consequences over many years. They are depressive symptoms are associated with illnesses or impairments that cannot be higher rates of physical illness, greater cured, and in some cases can interfere functional disability, and higher health with a person’s ability to accomplish care resource utilization. 36 In 1998, activities of daily living (ADLs.)29 about 15 percent of persons aged 65 to Although trends indicate that the preva- 69, 70 to 74, and 75 to 79 had severe lence of those whose lives will be limited symptoms of depression, compared with due to chronic conditions may be 21 percent of persons ages 80 to 84, and decreasing, because people will be living 23 percent of persons age 85 or older.37 longer, the absolute number of people This is much higher than the approxi- living with chronic conditions is mately 8 percent (19 million) of the gen- expected to increase.30 eral public that suffer from depressive disorders.38 Eighty-eight percent of those over 65 years of age live with some type of The negative or disabling effects of chronic illness or condition31 and as peo- chronic illness often develop slowly over

260 Chapter 14: Health and Health Care of America’s Seniors Health and Health Care 2010 Institute for the Future

the at-risk population, will an extended Figure 14-9. Most common chronic conditions among women and men, life span within this larger population 70 years of age and older also contribute to a greater prevalence of chronic disease? This has been a topic of Arthritis considerable debate. Some argue that the prevalence of chronic disease and disabil- Hypertension ity will indeed increase as life expectancy increases, leading to a “pandemic of Heart disease mental disorders and chronic diseases.”40 They predict that the extension of life Diabetes will bring a concomitant extension of disease and disability—and related Respiratory diseases higher medical costs. Increased longevity is seen as “the price of our success at sur- Stroke viving.” The anticipated boom in the Women 85+ population is cited as a particularly Cancer Men explosive factor in the projected

0204060 80 increased rate of frailty and depen- 41 Rate per 1,000 persons dency.

Source: Centers for Disease Control and Prevention, National Center for Health Statistics. 1994 National Health Interview Survey, Second Supplement on Aging. Based on interviews conducted between October 1994 and March 1996 with non-institutionalized persons. Percents are age However, many others say that the bur- adjusted. den of illness can be reduced by postpon- ing the onset of chronic infirmity relative to average life expectancy. Thus, the period of morbidity is compressed time. Although assistance is available for between an increased age of onset and a those who suffer from chronic conditions, relatively fixed life expectancy.42 In other the demand for these services outweighs words, we may have more elderly people the supply39. Informal caregivers—vol- with arthritis in 2020 than we do now, unteers who provide valuable and but new therapies and improved uncompensated care—often provide nec- lifestyles will allow a higher percentage essary assistance. The issue of caregiving of these people to live infirmity-free lives and social support networks for the for longer periods. This compression of elderly will be discussed later in this long-term disability into a shorter period chapter. For a further discussion on or proportion of life expectancy is called chronic conditions, please see Chapter 15. “compression of morbidity.” The “Compression of Morbidity” Factor Such predictions regarding changing morbidity—although still extremely After 2010, with increased numbers of controversial—could play an important elderly, the economic burden of chronic role in estimating future illness patterns, diseases will undoubtedly grow even in developing population projections, heavier. But beyond the increased size of and in policy development. The evidence

Chapter 14: Health and Health Care of America’s Seniors 261 nisms, policies, and patient and provider Figure 14-10. Disability increasing slower than projected expectations. However, the availability of new technologies and treatments, in 10 combination with high patient expecta- 1982 projected disability rate 9 tions, will drive the health care delivery system toward new methods of delivery 8 within well-established parameters. This section focuses on the health care deliv- 7 ery system and the personnel and Actual disability rate provider needs required to meet the 6

Disabled over 65 (in millions) over Disabled demands the elderly population will

5 place on the system. 19821989 1994 1996 1999

Source: Manton and Gu, 2001. Health care for the elderly encompasses a wide range of systems and services, including acute, chronic, skilled nursing, ambulatory, short-term, long-term, and to date for these two ideas seems to sup- socially oriented community-based per- port many of the ideas put forward by sonal care. This diverse system of pub- the “compression of morbidity” advo- licly and privately financed services is cates. For example, for the period from fragmented and highly uncoordinated. 1982 to 1999, the prevalence of chronic The juncture between acute and long- disability among the elderly declined term care is especially wide and variable. from 24.9 to 19.7 percent or 7 million Regulations, licensing requirements, and disabled over the age of 65.43 (See Figure nonuniform reimbursement mechanisms 14-10). Even assuming some continuing contribute to the lack of coordination trend toward more disease-free or dis- across the system. Cost-shifting among ease-delayed aging, however, the sheer programs is a financial symptom of the growth in the number of very old per- disjointedness. sons will clearly continue to boost demand for medical and long-term care Recently, efforts to contain rapidly rising services. health care expenditures and to integrate health systems have led to a gradual The Delivery System restructuring of this fractured terrain of and Providers for care for the elderly. Growth in capitated the Elderly health care and home health care have become two of the largest forces reshap- New technologies and the drive to con- ing health care for the elderly today. tain costs will reshape the health care delivery system for the elderly. Most of The devolving role of the federal govern- the infrastructure that determines the ment is another significant force altering nature and structure of the health care the systems of health and social services delivery system is well established and for the elderly. As state and local govern- reinforced by reimbursement mecha- ments assume more financial and pro-

262 Chapter 14: Health and Health Care of America’s Seniors Health and Health Care 2010 Institute for the Future

grammatic responsibilities for health and for elderly people. This uneven geo- long-term care, authority for priority graphic distribution of medical person- setting and resource allocation is becom- nel means that necessary care may be ing decentralized. The result—with all delayed for those who live far from med- the new opportunities for locally con- ical facilities and who must depend trolled trade-offs between programs, either on public transit or rides from population groups, and services—is friends, family, or caregivers. Since more variability and less certainty in the mobility is an issue for many in the scope and duration of delivered services elderly population, such delays may for the elderly. become more common. Telehealth demonstrations indicate that remote service delivery is a good way to “bridge The Health Care Workforce of the Future the gap” and provide health services to the elderly. Reimbursement and technol- Although the first baby boomers will not ogy infrastructure will determine the reach retirement age until 2011, changes effectiveness of this approach long-term. in Medicare and other restructurings of delivery systems are already occurring. Several of the top issues related to the Many questions remain—for example, supply and training of specific health about the magnitude and extent of care providers are discussed in the fol- chronic disability in the elderly in com- lowing sections. ing years and about changes in medical technologies. However, even with the Physicians considerable uncertainty, several baseline predictions about the composition of the The biological, psychological, pathologi- future health care workforce can be safely cal, and socioeconomic factors that define ventured. These predictions, mainly the aging process are not self-evident. extrapolations of current trends, include: That is, the elderly are not just people with more illness. Yet, many doctors more medical group practices; fewer treat them this way. Today, in fact, most solo practices primary care physicians and specialists more inter- or multidisciplinary sys- rely on their informal and anecdotal clin- tems; fewer single specialty practices ical experiences to shape their view of or nonintegrated provider groups what constitutes adequate care for the more inclusion within health net- elderly. Recent research into the chronic works of nurse practitioners (NPs), disabilities and special health-related cir- physician assistants (PAs), social cumstances of the elderly shows that workers, and physical therapists (PTs) attention to the whole constellation of age-related health parameters is often an ongoing shift from hospital-based necessary for a positive clinical and eco- to ambulatory and office-based care nomic outcome. The current concentration of physicians and nurses in metropolitan areas is To provide physicians with the broad another general trend with implications view of age-related health matters, formal

Chapter 14: Health and Health Care of America’s Seniors 263 training in geriatrics is necessary. In com- were certified under a 1988 grandfather ing years, increased attention to such clause that allowed practicing physicians training will be needed in order to fur- with experience in geriatrics to sit for a nish adequate numbers of primary care qualifying exam rather than obtain for- and consultative physicians with the mal training. Since this post-1988 expertise to meet the unique health care influx, many of these physicians have demands of an aging population. Trained themselves reached retirement age. geriatricians, for example, would be the States such as Florida and California are preferred providers for assessing patient taking significant legislative steps to function and treating functional disabil- increase geriatric training in medical ity.44 Their special training allows them schools, with apparent success as the to help elderly patients maintain the number of students that chose geriatrics highest degree of function and indepen- as a specialty exceeded 200 in 2000. dence and avoid costly institutionaliza- The federal government is also paying tion. Beginning to boost the supply of attention to the need for an increase in geriatricians now will also allow time for geriatric education by considering the development of an adequate core of med- Geriatric Care Act of 2001, legislation to ical school faculty and researchers with increase geriatric incentives and improve special knowledge of aging issues. Medicare reimbursement for geriatric care, as well as Health Resources and In 1999, Florida State University com- Services Administration’s (HRSA) recent missioned a study of geriatric education establishment of Geriatric Education in the United States. Forty of 140 U.S. Center grants to strengthen the multi- medical schools responded to the survey disciplinary training of health profes- and 39 of those schools reported includ- sionals in the diagnosis, treatment, and ing geriatric education in their under- prevention of disease in older graduate medical curriculum, a huge Americans.46,47 increase over 1995 when only 11 U.S. medical schools required geriatric educa- Once physicians leave medical school, tion. Thirty-eight of the responding the opportunities for formal geriatrics schools reported that their school had a training diminish. Today, most managed department and/or division of geriatrics.45 care plans and HMOs do not have additional time or resources to expend on the The Alliance for Aging Research and board certification process. Some man- UCLA’s Dr. David Reuben believe that aged care plans can barely allocate the by 2010 the United States will need time needed to train new physicians approximately 25,000 geriatricians (see with the skills to operate in a managed Figure 14-11). care environment. The time crunch will likely continue. Within the formal man- Currently, there are just 9,000 certified aged care structure, however, various geriatricians out of a total U.S. physician physician groups (e.g., independent population of more than 700,000. Most physician organizations, multispecialty of these aging specialists today are practices) may eventually take the lead internists or family practitioners who in postgraduate geriatrics education. The

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possible venues for such education substantial barrier for greater dental include mentoring within the group provider involvement.” This lack of practice itself, or training in community insurance coverage may explain why only settings, LTC facilities, hospitals, or about 55 percent of all older adults visit nearby medical schools. the dentist annually.48 In addition to this cost-reimbursement constraint, many Dentists elderly shun dental services for a more painfully obvious reason: they have not More dentists trained to serve elderly retained their teeth. This sizable popula- patients will be needed as well. These tion of Americans over age 65 without dental providers will require a special teeth—30 percent—is much less likely knowledge of, and clinical training in, to visit the dentist.49 the aging oral cavity—including preventive, restorative, and rehabilitative If the delivery of dental services to older approaches. persons remains economically unfavor- able, it will of course remain unattractive Financial disincentives in the current to dentists-in-training who carry an health care delivery system indicate that interest in the geriatric specialty. This the underlying demand for skilled geri- economic reality not only drives poten- atric dentists is unlikely to be met. In tial future specialists away from the ﬁeld, 1987, 80 percent of dental expenses for it also affects decisions about educational elderly Americans were paid out of program development and funding for pocket. According to an HRSA report, clinical training sites. Since additional “Inadequate reimbursement or lack of government subsidies for dental services sources of payment for dental care is a or training are not on the horizon and the majority of patients will continue to pay for dental services out of their own pockets, it is unlikely that the number of Figure 14-11. The growing gap: Anticipated number versus projected need for physicians trained in geriatrics geriatric dentists will increase.

40 Current statistics support this bleak

35 view. According to HRSA, “Clinicians with added competency in geriatric den- 30 Actual and projected number tistry and geriatric dental academicians of needed geriatricians 25 are not being developed in adequate 20 numbers to meet current and projected 50 15 workforce needs.” In a 1987 report, Actual and projected number of geriatrics 10 DHHS projected a need for 7,500 dental practitioners with advanced preparation 5 in geriatric dentistry in the year 2000, Number of Geriatricians (in thousands) 19901995 2000 2005 2010 2020 2030 and 10,000 in the year 2020. About 1,500 geriatric dental academicians Source: Alliance for Aging Research. Ten Reasons Why America Is Not Ready for the Coming Age Boom. Washington, DC: Alliance for Aging Research, 2002. would be needed in the year 2000, and 2,000 in 2020. However, in the last two

Chapter 14: Health and Health Care of America’s Seniors 265 decades just 100 dentists completed federal and state regulations require very advanced geriatric dentistry fellowships few RNs in nursing homes and thus or master’s level training programs. facility owners tend to hire more lower- pay nursing aides, licensed practical Nurses, Nurse nurses (LPNs), and licensed vocational Practitioners, and nurses (LVNs). In the early 1990s, RNs Physician Assistants working in nursing homes received just 86 percent of the typical acute-care As providers for much of the day-to-day wage and, not unexpectedly, the 5-year care given to elderly patients in acute- retention rate was just 40 percent. Data and chronic-care settings, nurses and demonstrated that as pay increased, physician assistants (PAs) likely will also retention rates increased accordingly. be in short supply in the decades ahead. The supply of those with special geri- These lower retention rates in LTC atrics training is almost certain to be apparently are closely related to lower inadequate, mainly because the current pay, and this becomes a particular prob- system is woefully unprepared to deliver lem for younger nurses. Thus, both such training. Consider these statistics opportunity and economic incentive are from a 1992 HRSA survey: failing to attract RNs into community and LTC facilities. 40 percent of nursing faculty had no gerontology or geriatrics preparation. As if these barriers were not enough, 77 percent of schools lack gerontol- nurses are also being squeezed out of the ogy-qualified clinical preceptors. elder care environment from the “high end” by the more highly trained nurse While the number of full-time positions practitioners (NPs) and physician assis- for RNs is expected to increase 18 per- tants. Demand is currently strong for cent overall by 2010, the demand for these advanced care “physician exten- full-time RNs in nursing homes is pro- ders,” especially among large health jected to increase by 30 percent, while plans, hospital systems, and medical the demand in community health set- groups looking to control costs. Man- tings will increase by 44 percent.51 Some aged care programs are leading the way predict that the supply of RNs will keep in supporting the use of non-physicians, pace with increased demands if, as in the including nurse specialists and nurse physician workforce, nurses shift away practitioners, as members of health care from hospital skill sets toward expertise teams fostering interdisciplinary care for more appropriate for the primary care elderly members.53 This use of nonphysi- setting, nursing homes, and skilled nurs- cians in a team approach will increase. In ing facilities.52 fee-for-service settings, however, political pressures can more easily influence That’s a big “if” given that recruiting licensing requirements, and physicians and retraining qualified personnel to are often reluctant to cede any responsi- provide direct care in long-term care bility or remuneration to those other remains a critical problem. Currently, than doctors; these turf issues mean that

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use of NPs and PAs will probably not clinical internship.55 Barriers to creation grow as fast in the shrinking fee-for-ser- of clinical PT internships include low vice sector. student interest in, and poor attitudes about, the elderly; inadequate numbers In summary, without new economic of qualified geriatric sites with knowl- incentives or legislative controls to edgeable practitioners; inadequate num- retrain or retain nurses in LTC facilities bers of PTs on staff; and an insufficient and nursing homes, the role of the RN variety of elderly patients in a single in health care for the elderly may dimin- geographic area. ish. Unless the current trend toward dis- placement from acute care hospitals Geriatric Physical Therapy was approved accelerates, RNs will not naturally as a specialty in 1989, with first exams migrate toward LTC facilities, and administered in 1992. In 1998, there LVNs, LPNs, and nurse’s aides will be were 78 board-certified Geriatric Clini- left to meet the bulk of the growing cal Specialists in the United States and elder care demand. only 50 new specialists will be added annually. The expectation that these spe- PHYSICAL THERAPISTS cialists will fill the anticipated demand for geriatric services is unrealistic. How- The rapid growth in demand for rehabil- ever, the new generation of board-certi- itation therapies by the elderly and fied specialists may serve as the nucleus nonelderly is already outpacing the sup- for a more widespread continuing educa- ply of physical therapists (PTs).54 In tion effort in PT geriatrics. Only if spe- 1993, the Bureau of Labor Statistics pro- cific coursework relating to rehabilitative jected physical therapy to be one of the methods for elderly patients is incorpo- fastest growing occupations in the coun- rated into the training curricula of all try, with rapid growth expected to con- PTs will the supply of adequately trained tinue well past 2000. Even with growth PTs be sufficient. somewhat tempered by cost-driven managed care access restrictions, the sharply Long-Term Care increased demand for geriatric physical therapy services at nursing homes and in Currently, the nursing home remains the home care settings should intensify the main option for formal long-term care overall physical therapy shortage as baby (LTC). An estimated 53 percent of all boomers move into retirement. elderly now require nursing home care in their lifetime, with the highest use According to the American Physical occurring after age 85. Therapy Association, 39 percent of current patients treated by PTs are over the Of the more than $100 million spent on age of 65. However, the training of most all LTC today, Medicaid pays 37.8 per- PTs is void of any significant formal cent, out-of-pocket costs account for geriatric component. Only 19 percent of 42.6 percent, Medicare pays 19 percent, PT programs report at least 75 percent and LTC insurance covers 1 percent.56 of their students complete a geriatric Nursing home costs still comprise the

Chapter 14: Health and Health Care of America’s Seniors 267 overwhelming share of the public bill, structure for home and community ser- constituting 85 percent of Medicaid LTC vices will need to overcome a LTC sys- expenditures in 1995.57 Medicaid expen- tem that is currently fragmented (i.e., ditures per elderly resident for all ser- without adequate transitions between vices averaged $967 in 1995, with a acute and chronic care) and difficult to range from $383 to $2,444. Medicaid access. Truly integrated systems of care nursing home expenditures per recipient will need to include some combination averaged $7,821, with a range from of the following features: $3,593 to $15,785. Combined acute care and LTC service (both financing and delivery) for the The U.S. approach to LTC relies heavily elderly on unpaid care by family members and other informal caregivers.58 Approxi- An organized continuum of services mately 70 percent of disabled elders rely and providers exclusively on help from spouses, chil- Case management to assure care conti- dren, or other informal sources,59 with the nuity across the acute care and LTC greatest burden and indirect cost of this delivery systems informal care falling heavily on women.60 Training for providers to promote awareness of patient-focused care Beyond the Nursing Home: Growing Demand for Capitation and other financing incen- Community-Based Services tives to contain costs61 The elderly express a clear preference to A few promising but isolated efforts at remain in the community; thus non- providing such integrated acute care and institutional services have grown sub- LTC now exist as small demonstration stantially in recent years. Despite this efforts. The PACE/On Lok program and demand, home and community-based the Social HMO currently reach several services are far from universally available thousand people nationwide. Oregon is and serve only a small percentage of the the sole state providing services to more potential LTC population. people in the community than in nursing homes. Clearly, for the majority of The rate of growth of these alternative elderly persons today, access to a full LTC programs may depend on demon- array of integrated acute-to-chronic and strated reductions in expenditures that medical-to-social services remains would otherwise have gone into nursing extremely limited. It is unlikely home care. However, such cost savings between now and 2010 that managed are far from a certainty. care will radically change this situation. Instead, most HMOs and other man- The next decade will bring a major shift aged care models for the elderly will in LTC emphasis toward home and com- remain a separate system providing pri- munity settings, a shift that will lay the mary and acute care. The search for the groundwork for even more significant ideal LTC financing and delivery system changes beyond 2010. The future infra- will continue.

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The Key Multigenerational But what do the various comparisons Challenge: Caregiving and descriptions of generational shift tell Intergenerational issues will also play us about the future of the typical Ameri- out in terms of caregiving for the elderly. can family? By far, the greatest implica- As already described, the increased tion of all current intergenerational longevity and an increase in the size of trends is that the United States will the aging population will result in more become a nation preoccupied by caregiv- people living with chronic care needs. In ing (see Figure 14-12). The multiple the past, care giving for an elderly parent forces driving the coming caregiving has been done by family members. We crunch are clear: forecast that caregiving for the elderly Increasing numbers of elders in will stress the health care system and quadruple-generation families 63 social support networks for a number of fundamental intergenerational shifts that Increasing age-related health prob- have already been set into motion.62 lems affecting both health care receivers and caregivers The average American has more parents than children. Modestly increasing growth in the participation of women in the labor A growing percentage of elders have force64 children who themselves are over 65. Continuing moderately low fertility Most married couples aged 51 to 61 rates have living parents, children, and grandchildren. As the baby boom generation ages and the need for caregiving increases, the supply of family caregivers is projected to decline. This decline can be traced to lower fertility rates in the caregiving generation and to family networks that are getting smaller and are becoming more Figure 14-12. The shrinking pool caregiving potential caregivers geographically dispersed. In 1980, there were 11 potential caregivers to every one 1980 older person. By 2000, this ratio had 11 to 1 already declined slightly to 10 to 1,65,66 2010 and it will continue to decline as the size 10 to 1 of the elderly population grows. By 2030 the ratio of potential caregivers to elders 2030 will be reduced to 6 to 1. 6 to 1 Gerontologists report that older persons 2050 strongly prefer to live independently of 4 to 1 children and relatives, and one-third Source: Robert Wood Johnson Foundation. Chronic Care in America: A 21st Century 67 Challenge. Princeton, NJ: Robert Wood Johnson Foundation, 1996. currently live alone. Because federal health policy for the aged does not cover

Chapter 14: Health and Health Care of America’s Seniors 269 long-term care (LTC), the only alterna- growth of multigenerational families and tive (other than impoverishment to the “sandwich generation” of “women in become eligible for Medicaid) is to seek the middle.”72,73 informal care. The following statistics provide a portrait of who is providing Although the overall outlook for the this informal care: health status of seniors is bright, a shortage of geriatric-trained providers and 75 percent of all elder care is provided informal caregivers will stress the deliv- by unpaid, informal caregivers. ery system in the future. 80 percent of caregivers today are female. Elder Health Care Nearly two-thirds (60 percent) of Financing Through caregivers of the elderly are them- Medicare selves either old or approaching old Public support such as Medicare and age.68 Medicaid will continue to be a critical Fully one-third of caregivers of the contributor to health care financing for elderly are age 65 years and older. the elderly. This section focuses on our forecast for Medicare. The toll of increased caregiving responsibilities will take many forms. One study MEDICARE TODAY shows that “over 40 percent of adult offspring . . . report that the time spent on Medicare is financed by a combination of caregiving tasks was equivalent to the payroll taxes, general revenues, and pri- time required by a full-time job.”69 vate premiums. The insurance program Research demonstrates deleterious finan- focuses almost exclusively on acute care, cial and health effects for the care- primarily hospital and physician services. giver.70,71 Because four of every five It also covers a limited amount of home caregivers are women, they will be espe- health services, particularly skilled care cially exposed to the competing pressure for periods of acute illness. Services such between paid and unpaid work. as chronic, long-term nursing home care and outpatient prescription drugs are not In terms of the working age population’s reimbursed by Medicare. responsibility for the elderly, there will be few major changes before 2010. Most Medicare patients also incur coinsurance significantly, from the present to 2010, and deductible costs for the care the “total societal support ratio” (the received. In fact, recent data indicate combination of child and old age depen- that Medicare covers only 44 percent of dency) will actually decline. The growing the total medical costs of the elderly—a focus of concern is the potential shortage difficult situation given that three of of informal caregivers (primarily every four Medicare enrollees have women). Already, however, U.S. society annual incomes below $25,000. To help is finding the determination, the forums, pay for medical coinsurance and uncov- and the terminology to deal with the ered benefits, about 71 percent of elderly

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Medicare beneficiaries carry some form of gress adopted Medicare changes in the private insurance to supplement Balanced Budget Act (BBA) of 1997. Medicare.74 Other facts about Medicare According to the Congressional Budget today include: Office,78 these changes will be phased in over the following decade and will reduce In 2000, 33.2 million elderly persons Medicare Trust Fund expenditures (95 percent of the total elderly popu- between 1998 and 2007 by $385.5 bil- lation) were enrolled in the Medicare lion. Even with this substantial reduc- 75 program. tion, however, the projected trust fund About 80 percent of enrollees actually deficit in 2007 remains at $30.8 billion. were assisted by Medicare funds; the More ominous is the fact that this deficit remaining 20 percent either did not occurs several years in advance of the use any covered services during the increase in Medicare expenditures year or did not reach the deductible expected after the 2010 arrival of the amount. Medicare-eligible baby boom generation. This makes it highly likely that further The largest relative increase in policy changes to increase revenues and Medicare enrollment since the begin- reduce costs will be developed and imple- ning of the program in 1966 has mented between now and 2010. One of occurred among those 85 years and the changes most likely to occur is a shift older. in expenditures to beneficiaries in the Total Medicare outlays in 2000 form of increased Medicare Part B contri- amounted to $214.9 billion.76 butions, deductibles, and co-payments above those already in the BBA of 1997. Medicare payments per enrollee in 2000 were more than 25 times the 1967 amount, rising from $217 in Shift of Enrollees to and 1967 to $5,490 in 2000, reflecting from Managed Care inflation in the medical care market The most striking change affecting the and market expansion of benefits. Medicare-eligible population since 1997 Medicare costs increase with age: in has been the rapid growth and subse- 1998, payments per enrollee averaged quent decline in managed care enroll- $3,973 for those 65 to 74 years of age ment. Early on it was hoped that and averaged $7,641 for those 85 offering enrollees HMO plans would years and older.77 result in lower overall costs to the program. The ability of plans to offer older Medicare Circa 2010 persons low monthly premiums and many benefits, including drug coverage, Under current law, annual Medicare was possible, to some extent, because spending is expected to approximately those enrollees choosing managed care double to $431.8 billion by the year plans were healthier than the overall 2007. A deficit in the Medicare trust Medicare population.79 Thus, Medicare fund is projected to occur before the year overpaid the plans relative to the true 2010. Anticipating such a deficit, Con- actuarial risk of their older members.

Chapter 14: Health and Health Care of America’s Seniors 271 As market penetration increased, how- prescription drugs), or continue to pull ever, and as members grew older, it has out of the program altogether. However, become more difficult for Medicare higher rates and reduced benefits also HMOs to “cherry pick” or dispropor- encourage disenrollment of the high-cost tionately enroll the relatively healthy users, with movement back into the fee- older population. That is, a higher pro- for-service delivery system—precisely portion of HMO members now have the opposite effect intended by risk- multiple chronic problems and disabili- adjusted payments. Policy changes stim- ties, and consequently are at risk for ulated by the 1997 BBA, such as higher health expenditures. As costs allowing only annual enrollment or dis- have increased for these members, and enrollment from plans (instead of premium payments have not, more and monthly disenrollment), will reduce more HMOs have pulled out of the pro- incentives to leave a plan when the maxi- gram altogether. mum annual coverage (e.g., for prescription drugs) has been reached. There is If managed care plans are to continue in also the possibility that the federal gov- the Medicare program, they must be able ernment will agree to pay higher reim- to seek out and retain potentially high- bursement rates to HMOs. In the cost Medicare members. To do this, the meantime, co-payments in the fee-for- federal government will need to imple- service Medicare program are likely to ment some form of risk adjustment in rise, forcing even more well-off elderly the per-member reimbursement. This into HMOs and intensifying the tempta- risk adjustment model will require infor- tion among current plan administrators mation systems that capture comparative to compromise the quality of care. patient data, and will need to be budget- neutral so that there is no increase in The Medicare Drug Benefit overall Medicare expenditures. Only such a budget-neutral system will sus- Over 85 percent (some say as high as 90) tain the financial viability of the of Medicare beneficiaries use at least one Medicare Trust Fund. As payments for prescription drug annually obtained high-risk groups increase (e.g., those through a supplemental policy, by with heart disease or in nursing homes), enrollment in a Medicare+Choice plan, the rates for other groups (e.g., those which includes coverage for prescription defined as healthy) must decrease. drugs, through Medicaid or some other public source (e.g., the Veterans Admin- Even with the introduction of risk- istration and state-sponsored pharmacy adjusted payments, HMO operating assistance programs), or out of pocket. In costs may climb faster than reimburse- 1996, 69 percent of Medicare beneficia- ment rates for the elderly. If this occurs, ries had coverage for prescription drugs plans are expected either to increase out- for the entire year but in 2000 that had of-pocket costs to members (both in the dropped to 50 percent.80,81 This was due form of higher premiums and co-pay- largely to the increase then decrease in ments) or to reduce benefits (e.g., reduc- Medicare HMO enrollment. However, it tions in the annual coverage for is predicted that increases in drug bene-

272 Chapter 14: Health and Health Care of America’s Seniors Health and Health Care 2010 Institute for the Future

fits from all sources will decline for the would work much the same as Part B in following reasons: which beneficiaries sign up for drug coverage and pay a premium. However, to Fewer beneficiaries will have access to work, the premium would have to be set employment-sponsored drug coverage so that enrollment would be near-univer- as a result of employers continuing to sal and high-cost users could still be cov- cut back retiree benefits or requiring ered. enrollees to pay much or all of the cost. Medicare HMOs will continue to Implications reduce their drug benefits and/or ter- minate their contracts. Today, 20 percent of Florida’s population is over 65 years old. By 2030, we will be Continuing growth in the cost of living in a nation of Floridas. The elderly drugs may cause further reductions in health and health care challenges that drug benefits and/or increased premi- Florida faces today will be challenges for ums. the entire country. Implications from this forecast point to some of the chal- Further, individuals who have no cover- lenges to the future health of American age, and must pay for prescriptions out seniors. of pocket, do so at a higher price than individuals covered by a plan because Be prepared for a larger population of plans receive discounts resulting from seniors and larger numbers of chronic ill- economies of scale. nesses. With an overall increase in life expectancy comes an overall increase Whether to add a prescription drug ben- in chronic disease. Today’s system, efit to Medicare for those in need has which focuses on acute conditions, is been debated for several years. Among just beginning to learn how to man- the considerations in defining a determi- age individuals with multiple comor- nation of need are: bid conditions. A shift away from acute, curative care of already-existing Annual income in relation to the fed- ailments toward prevention of ailments eral poverty level common to the elderly and disease Persistent lack of drug coverage over management across the continuum of an extended period care would improve the efficiency and efficacy of care interventions. Lack of stable drug coverage Be prepared to replace free “daughter care.” High out-of-pocket spending The caregiving burden is increasing, Total drug expenditures but working women are too busy to stay home with their family members. Chronic disease burden The caregiving drought will become Many experts believe that a new “part” to increasingly apparent as women find the Medicare program (e.g., Medicare alternatives to leaving the workforce Part C) would be the most financially and alternative funding for home viable and politically feasible. This plan health care.

Chapter 14: Health and Health Care of America’s Seniors 273 Train geriatricians and other clinicians Align Medicare incentives. To encourage properly. There are fundamental differ- a focus on prevention, Medicare fund- ences between health care needs of ing should support a holistic approach seniors and those of younger adults. to medicine that encourages early Seniors are more likely to suffer from diagnosis, upstream in the disease multiple, comorbid conditions. They process. Screening initiatives, such as are more likely to be taking multiple mammograms for women over 50 prescriptions. Many illnesses present years of age, that currently exist differently in seniors. The window of should be expanded to include more opportunity to alter the education of diagnostics and more diseases. the health care workforce to recognize Swallow the pill sooner rather than later. and integrate these differences before We all age one year at a time, but 75 the age wave bears down on the sys- million Americans are steadily mov- tem is quickly closing. ing toward a time in their lives when Prepare for the elder boomers. The baby they will need more care. Founda- boom is promising to revolutionize tional policy change and a focus on consumer demands on health care. prevention, disease management and They’ll demand a more customer- the continuum of care take time. The friendly system; organizations that sooner we start planning, the better provide better service will win prepared we will be. boomer loyalty.

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Endnotes 13 Ross, J. Implications for Women’s Retirement 1 National Center for Health Statistics. Income. Washington, DC: United States Gen- Health, United States, 1999, with Health and eral Accounting Office (GAO-HEHS-98-42), Aging Chartbook. Hyattsville, MD: National 1997. Center for Health Statistics, 1999 14 Peterson, P. Will America Grow Up Before It 2 U.S. Census Bureau. Population Projections Grows Old? New York: Random House, 1996. of the United States by Age, Sex, Race and His- 15 Longman, P. The Return of Thrift. New panic Origin: 1995 to 2050. Current Popula- York: Free Press, 1996. tion Reports, Series P-25, No. 1130. Washington, DC: U.S. Government Printing 16 Quadagno, J. The Myth of the Entitlement Office. 1992. Crisis. The Gerontologist 1996; 36:391–399. 3 U.S. Census Bureau. Age: 2000. Census 17 Binstock, R. The Oldest Old and ‘Inter- 2000 Brief. September 2001 generational Equity.’ In: Suzman, R., D. Willis, and K. Manton, eds. The Oldest Old. 4 U.S. Census Bureau. 65+ In the U.S. Cur- New York: Oxford University Press. 1992. rent Population Reports, Series P-23, No. 190. Washington, DC: U.S. Government 18 Kingson, E., J. Cornman, and B. Printing Office. 1996. Hirschorn. Ties That Bind: The Interdependence of Generations in an Aging Society. Cabin John, 5 Administration on Aging. Profile of Older MD: Seven Locks Press, 1986. Americans. 2000. www.aoa.gov/aoa/stats/ profile/#figure7. 19 Binney, E. A., and C. L. Estes. The Retreat of the state and its transfer of responsibility: 6 Meyer, M. Harrington. making claims as The intergenerational war. International Jour- workers or wives: The distribution of social nal of Health Services 1988; 18(1):83–96. security benefits. American Sociological Review 1996; 61:449–465. 20 Dychtwald, K. The 10 physical, social, spiritual, economic and political crises the 7 U.S. Census Bureau. The Older Population boomers will face as they age in the 21st cen- in the United States: March 2000 Detailed tury. Critical Issues in Aging 1997; 1:11–13. Tables (PPL-147). www.census.gov/ population/www/socdemo/age/ppl-147.html. 21 Hayes-Bautista, D., W. O. Schinck, and J. Chapa. The Burden of Support: The Young Latino 8 Dohm, A. Gauging the Labor Force Effects Population in an Aging Society. Palo Alto, CA: of Retiring Baby-Boomers. Monthly Labor Stanford University Press, 1988. Review. July 2000. 22 Soldo, Beth J., and M. S. Hill. Family 9 U.S. Department of Labor. Employee bene- structure and transfer measures in the health fits in medium and large private establish- and retirement study: Background and ments, 1997. USDL 99-02. January 7, 1999. overview. Journal of Human Resources 1995; 10 U.S. Department of Labor. Employee bene- 30:S138–S157. fits in medium and large private establish- 23 Rosenthal, C., A. Martin-Andrews, and S. ments, 1997. USDL 99-02. January 7, 1999. Mathews. Caught in the middle-occupancy 11 U.S. Department of Labor. Employee bene- in multiple roles and help to parents in a na- fits in medium and large private establish- tional probability sample of canadian adults. ments, 1997. USDL 99-02. January 7, 1999. Journal of Gerontology: Social Sciences 1996; 51B:S274–S283. 12 American Association of Retired Persons. Baby Boomers Envision Their Retirement: 24 Soldo, Beth J. Cross pressures on middle- An AARP Segmentation Analysis. February aged adults: A broader view. Journal of Geron- 1999. http://www.aarp.org tology: Social Sciences 1996; 51B(6):271–273.

Chapter 14: Health and Health Care of America’s Seniors 275 25 Table V. A2 Social Security Area Popula- 35 National Center for Health Statistics, tion as of July 1 and Dependency Ratios, by 2001 Fact Sheet. Series of Reports to Monitor Broad Age Groups, Calendar years Health of Older Americans. 1950–2000. Historical period. 36 Wells, K. B., et al. The functioning and www.ssa.gov/cgi-bin/cgcgi/@ssa.env well-being of depressed patients. Results 26 AARP, Public Policy Institute, and The from the Medical Outcomes Study. Journal Urban Institute. Coming Up Short: Increasing of the American Medical Association 1989; Out-of-Pocket Health Spending by Older Ameri- 262:914–919. cans. Washington, DC: AARP, 1994. 37 Health and Retirement Study, Older 27 Jacobs, L., and R. Shapiro. Myths and Mis- Americans, Key Indicators of Well-Being. understandings About Public Opinion To- 2000. ward Social Security. Paper presented at the 38 National Institute of Mental Health. National Academy of Social Insurance, Janu- Depression Research at NIMH. ary 29–30, 1998. Washington, DC. www.nimh.nih.gov/publicat/depresfact.cfm. 28 National Center for Health Statistics. 39 Robert Wood Johnson Foundation. Chronic Health, United States, 1999, with Health and Care in America: A 21st Century Challenge. Aging Chartbook. Hyattsville, MD: National Princeton, NJ: Robert Wood Johnson Foun- Center for Health Statistics. 1999. dation, 1996. 29 Chronic Conditions: A challenge for the 40 Kramer, M. The rising pandemic of mental 21st century. National Academy on an Aging disorders and associated chronic diseases and Society. November 1999. disorders. ActaPsychiatrica Scandinavica 1980; 30 Manton, K., and X. L. Gu. Analysis from 62:382–396. the National Long Term Care Survey. Proceed- 41 Cassel, C. K., M. A. Rudberg, and S. J. ings of the National Academy of Sciences. May 8, Olshansky. The price of success: Health care 2001. in an aging society. Health Affairs 1992; 31 Hoffman, C., D. Rice, and H. Sung. Per- 11(2):87–89. sons with chronic conditions: Their preva- 42 Fries, J. F. Natural death and the compres- lence and costs. Journal of the American Medical sion of morbidity. New England Journal of Association 1996; 26(18):1473–1479. Medicine 1980; 303(3):130–135. 32 Van Norstrand, J. F., S. E. Funer, and R. Suz- 43 Manton, K. G. and X.L.Gu. Changes in man, eds. Health Data on Older Americans: the prevalence of chronic disability in the United States, 1992. National Center for Health United States black and nonblack population Statistics, Vital and Health Statistics, Series 3, above age 65 from 1982 to 1999. Proceedings No. 27. DHHS Pub. No. (PHS) 93–1411. Hy- of the National Academy of Sciences. 2001; attsville, MD: Public Health Service, 1992. 98:6354–6359. 33 Trupin, L., and D. Rice. Health Status, 44 Alliance for Aging Research. Meeting the Medical Care Use, and Number of Disabling Medical Needs of the Senior Boom—The National Conditions in the United States. Disability Sta- Shortage of Geriatricians. Washington, DC: tistics Abstract Number 9. National Insti- Alliance for Aging Research. 1992. tute on Disability and Rehabilitation Research, June 1995. 45 Florida State University. A Study of Pro- grams that Train Physicians to Care for the 34 National Center for Health Statistics. Cur- Elderly. November, 1999. rent Estimates from the National Health Interview Survey: United States, 1994. Vital and Health 46 The American Geriatrics Society. Geriatric Statistics, Series 10, No. 193. DHHS Pub. Care Act Gains Support. Press Release. No. (PHS) 96-1521. Hyattsville, MD: Public www.americangeriatrics.org/policy/from_ Health Service, 1995. cap_4_01.shtml.

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47 American Dental Association. HRSA 57 Wiener, J., and D. Stevenson. Elderly Grants Target Improvement in Geriatric, People. Baltimore, MD: Johns Hopkins Uni- Rural Health Care. July 2001. versity Press, 1997. www.ada.org/prof/pubs/daily/0107/0725hrsa 58 Pepper Commission, U.S. Bipartisan Com- .html. mission on Comprehensive Health Care. A 48 National Center for Health Statistics. Call for Action. Washington, DC: U.S. Gov- 2001 Fact Sheet, New Series of Reports to ernment Printing Office. 1990. Monitor the Health of Older Americans. 59 Liu, K., K. Manton, and B. Liu. Homecare www.cdc.gov/nchs/releases/01facts/ Expenses for the Disabled Elderly. Health olderame.htm. Care Financing Review. 1996. 18(1):175–214. 49 National Center for Chronic Disease Pre- 60 National Center for Health Statistics. vention and Health Promotion. Oral Health 2001 Fact Sheet, New Series of Reports to for Older Americans. www.cdc.gov/nccd- Monitor the Health of Older Americans. php/oh/adultfacts2.htm. www.cdc.gov/nchs/releases/01facts/ 50 National Center for Health Statistics. olderame.htm. 2001 Fact Sheet, New Series of Reports to 61 Stone, R. Caregivers of the Frail Elderly: A Monitor the Health of Older Americans. National Profile. U.S. Department of Health www.cdc.gov/nchs/releases/01facts/ and Human Services, Public Health Service, olderame.htm. National Center for Health Services Research 51 National Center for Health Statistics. and Health Care Technology Assessment. 2001 Fact Sheet, New Series of Reports to Washington, DC: DHHS, 1987. Monitor the Health of Older Americans. 62 National Institute on Aging and the Sur- www.cdc.gov/nchs/releases/01facts/ vey Research Center. Study of Health, Retire- olderame.htm. ment and Aging. Bethesda, MD: University of 52 National Center for Health Statistics. Michigan. 1997. 2001 Fact Sheet, New Series of Reports to 63 Soldo, Beth J. Cross Pressures on Middle- Monitor the Health of Older Americans. Aged Adults: A Broader View. Journal of www.cdc.gov/nchs/releases/01facts/ Gerontology: Social Sciences 1996; 51B(6): olderame.htm. 271–273. 53 National Center for Health Statistics. 64 Fullerton, H. Labor Force 2006: Slowing 2001 Fact Sheet, New Series of Reports to Down and Changing Composition. Monthly Monitor the Health of Older Americans. Labor Review. November 1997. www.cdc.gov/nchs/releases/01facts/olderame.htm. 65 Hoffman, C., D. Rice, and H. Sung. Per- sons with chronic conditions: Their preva- 54 National Center for Health Statistics. lence and costs. Journal of the American Medical 2001 Fact Sheet, New Series of Reports to Association 1996; 26(18):1473–1479. Monitor the Health of Older Americans. www.cdc.gov/nchs/releases/01facts/ 66 Robert Wood Johnson Foundation. Chronic olderame.htm. Care in America: A 21st Century Challenge. Princeton, NJ: RWJ Foundation, 1996. 55 Nieland, V., N. Farina, and C. Edwards. Enhancement of the Age-Related Content and 67 Falcon, R., M. O’Hara-Devereaux, and J. Learning Experiences in Physical Therapy Curric- Stewart. The Future of Growing Old in Califor- ula: A Resource Manual. Fairfax,VA: APTA, nia: The Current Context, 1997– 2000. Menlo Department of Accreditation, 1990. Park, CA: Institute for the Future, 1997. 56 Levit, K. R., et al. Data view: National 68 Stone, R., G. Cafferata, and J. Sangl. Care- health expenditures. Health Care Financing givers of the frail elderly: A national profile. Review 1996; 18(1):175–214. The Gerontologist 1987; 27:616–626.

Chapter 14: Health and Health Care of America’s Seniors 277 69 Feldblum, C. R. Home health care for the 76 National Institute on Aging Fiscal Year elderly: Programs, problems and potentials. 2002 Congressional Justification. www.nia. Harvard Journal of Legislation 1985; nih.gov/fy2002_congress/index. 22(1):193–254. html#reducing. 70 Brody, E. Parent care as a normative family 77 Health Care Financing Administration, stress. The Gerontologist 1985; 25:10–29. Office of Strategic Planning. Health Care Fi- nancing Review: Medicare and Medicaid Sta- 71 Brody, E. Women in the Middle: Their tistical Supplements for years 1996 to 2000. Parent-Care Years. New York: Springer. 1990. 78 U.S. Congressional Budget Office. 72 National Center for Health Statistics. CBO Memorandum: Budgetary Implications 2001 Fact Sheet, New Series of Reports to of the Balanced Budget Act of 1997. Monitor the Health of Older Americans. Washington, DC: CBO, 1997. www.cdc.gov/nchs/releases/01facts/ olderame.htm. 79 Brown, R., et al. Do health maintenance organizations work for Medicare? Health Care 73 National Center for Health Statistics. Financing Review 1993; 15(1):7–24. 2001 Fact Sheet, New Series of Reports to Monitor the Health of Older Americans. 80 National Center for Health Statistics. www.cdc.gov/nchs/releases/01facts/ 2001 Fact Sheet, New Series of Reports to olderame.htm. Monitor the Health of Older Americans. www.cdc.gov/nchs/releases/ 01facts/ 74 Komisar, H. L., et al. Medicare Chart Book. olderame.htm. Menlo Park, CA: The Henry J. Kaiser Family Foundation, 1997. 81 The Commonwealth Fund. Prescription Drug Coverage Is Fragile for Beneficiaries. 75 National Center for Health Statistics. www.cmwf.org/media/releases/stuart_drug_ 2001 Fact Sheet, New Series of Reports to release02022000.asp?link=11. Monitor the Health of Older Americans. www.cdc.gov/nchs/releases/ 01facts/ olderame.htm.

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Chapter 15 Chronic Care in America An Evolving Crisis

The story of chronic care in the United will increase in the next decade, reaching States is the story of mismatched incen- 157 million by 2020 (see Figure 15-1).2 tives. Health care in the United States Approximately 50 million of these peo- has historically been built on Big Science ple will have some activity limitations, and dramatic technological interventions including 15 million who will be unable directed at acute episodes of disease. to perform a major activity associated That’s how we see health care, and that’s with their age group. Inadequate care of how we fund it. The better the drugs these chronic conditions not only affects and more expensive the machinery, the the quality of life for millions of people, better the care. But chronic illnesses it also exacts tremendous costs from soci- require a longer-term approach, an ety at large. approach that includes early diagnosis, patient education, lifestyle change, home As a result, every sector of the health care monitoring, and the prevention of severe industry—from pharmaceuticals to com- crisis. Americans are loath to give up our munity providers—is preparing to treat belief in the quick fix of science and the chronically ill, but currently these technology, even when faced with evi- efforts are diffuse and uncoordinated. dence that it isn’t always appropriate or How can such an advanced nation have a effective. health care delivery system so ill-prepared for treating the health care needs of Nearly a century after the threat of death its growing chronically ill population? from acute disease has been wrestled to This chapter identifies the key trends its knees by treatments, vaccines, and shaping the current chronic care system public health measures, our tax dollars and explores the outlook for the future. and health care policies still support a research and treatment industry dedi- Chronically cated to acute care. Misunderstood: The Who, When, and What Chronic illnesses now account for nearly of Chronic Illness 70 percent of all deaths in the United States. Heart disease, cancer, and strokes In its simplest definition, a chronic ill- were responsible for 59 percent of all ness is one with a long and indefinite deaths in 2000.1 Moreover, the number duration that has little prospect of of people living with chronic conditions immediate change, either for better or

Chapter 15: Chronic Care in America 279 125 million people were living with Figure 15-1. Prevalence of chronic conditions chronic conditions in the United States.

Millions of Americans affected 200 Chronic conditions are very individual in terms of symptoms or type of care 160 required, but they do share the following critical elements: 120 Chronic conditions cannot be “cured” 80 in the traditional sense of the word. People with such conditions will carry 40 the disease or disability with them for

0 months, years, or a lifetime. 2000 2020 (projected) The goal of treatment for people with

Source: Anderson, G., and J. R. Knickman. Changing the Chronic Care System to Meet People’s these conditions is to improve their Needs. Health Affairs. Vol. 20, No. 6, 2001. ability to live productive and pain-free lives, not to rid them of the condition. If people with these conditions receive for worse, even though symptoms of medical treatment, lifestyle education, disease may not always be apparent. and support early in their disease, many acute care episodes can be The National Health Interview Survey avoided. (NHIS) defines a chronic health condi- Some chronic illness leads to disabil- tion as one that has persisted for three or ity, or the long- or short-term reduc- more months. For analyses based on the tion of a person’s activity as a result of National Medical Expenditure Survey an acute or chronic condition. (NMES), the term “chronic condition” encompasses both chronic illness (the Many people who have chronic condi- presence of long-term disease or symp- tions lead active, productive lives, but toms, usually lasting three months or some experience significant difficulties as more) and chronic impairment (a physio- a result of their chronic conditions. logical, psychological, or anatomical Approximately 50 million of the almost abnormality of bodily structure or func- 125 million people who have chronic tion, including all losses or abnormali- conditions have a disability and 15 mil- ties, not just those attributable to active lion are limited in their activities by their pathology). condition. The prevalence of disability due to chronic illness increases with age A large and diverse population of people because the conditions common among suffers from a variety of chronic mal- the elderly tend to be more disabling. adies, including pediatric asthma, mental retardation, blindness, diabetes, and Those who study the people who experi- terminal cancer. In 2000, an estimated ence disabling effects of chronic illness

280 Chapter 15: Chronic Care in America Health and Health Care 2010 Institute for the Future

categorize them by their dependence on Differences in criteria and measurement others. In other words, they distinguish can affect the estimated size of the popu- the effects of chronic conditions that lation. Agreement among policymakers, limit people from being productive researchers, and advocates concerning themselves, from limitations that require how to measure and assess the needs of the time and assistance of other individ- the chronically ill will be critical to uals. The Activity of Daily Living (ADL) informing policy and programs in the measurement scale allows researchers, future. care providers, and policymakers to better understand the needs and challenges of the disabled population. The ADL The Chronically Ill Are Diverse scale categorizes the disabled population based on people’s ability to successfully Perhaps one reason chronic care doesn’t accomplish the activities of daily living get the attention it deserves is the com- within their limitations. This can be a mon misperception that equates chronic proxy for the severity of illness and the illness with the elderly and disability. expected needs. A person with a high Data from 1996 showed that although number of ADL limitations will need 88 percent of the elderly suffered from the most assistance. Speciﬁcally: one or more chronic conditions3 and approximately 40 percent of the chroni- Major Activities of Daily Living (ADLs) cally ill were disabled, the bulk of include eating/nutrition, dressing, chronic care patients were under 65 and personal hygiene, mobility, toileting, did not experience disability due to their and behavior management. chronic condition (see Table 15-1). For Instrumental Activities of Daily Living example, more than half of the 40 mil- (IADLs) include preparing meals, lion Americans affected by arthritis and shopping, using the telephone, man- other rheumatic conditions were younger aging money, taking medications, than 65. doing light housework, and other measures of independent living. Each age group is affected by a different set of chronic conditions. Eight percent As with most measurement scales, there of children between the ages of 5 and 17 is discrepancy among researchers regard- suffer from some ADL limitation due to ing how to capture and categorize ADLs. chronic disease.4 Asthma is one of the most common chronic ailments for kids; in 1996, 6.2 percent of children under Table 15-1. Most noninstitutionalized individuals with chronic conditions the age of 18 suffered from asthma.5 are under age 65. Approximately 400 children die of Age 0Ð17 18Ð44 45Ð64 65+ All ages asthma each year during severe asthma Percentage 14 31 29 26 100 attacks that could have been prevented with adequate diagnosis and treatment. Source: Hoffman, C., D. Rice, and H. Sung. Persons with Chronic Conditions: Their Prevalence and Costs. Journal of the American Medical Association 1996; 26(18):1473Ð1479. On the other hand, arthritis and cardiovascular disease, two of the seven most

Chapter 15: Chronic Care in America 281 prevalent chronic conditions, primarily high at 27.5 per 100,000. A consider- affect older adults. able proportion of the mortality differences may be attributed to social The type and prevalence of chronic con- phenomena, for example, later diagno- ditions differ not only by age, but also sis, lack of access to appropriate medical by race and economic status. More care, and other health determinants members of minority ethnic and racial such as socioeconomic status and envi- groups and more poor people die from ronmental conditions. chronic conditions than those who are Caucasian and wealthy. African Ameri- cans have higher mortality rates from The Chronically Ill Use heart disease, stroke, cancer, cirrhosis, More Services and Are Often Afflicted by and diabetes than do Caucasians. There Multiple Disabilities is also a widening gap in health outcomes between African Americans and People with chronic illnesses not only all other races for some chronic condi- die earlier than their “healthy” counter- tions, including asthma, diabetes, and parts; they often face higher rates of ill- several forms of cancer. For example, ness and hospitalization. Chronically ill the 5-year survival rate for cancer patients spend more time in doctors’ among African Americans diagnosed offices, emergency rooms, and hospital between 1986 and 1991 was 42 per- beds, but often don’t receive the kind of cent, compared to 58 percent for Cau- care they need when they need it—that casian Americans. Although the death is, before the need for care becomes rate from breast cancer among all acute. Specifically, chronically ill people women in the United States fell 10 account for 55 percent of all emergency percent between 1990 and 1995 (from room visits, 70 percent of all hospital 23.1 to 21 per 100,000), the rate for admissions, and 80 percent of all hospi- African American women remained tal stays. In a large study of health maintenance organization (HMO) enrollees, the average annual number of office visits for people with chronic conditions Table 15-2. Annual per-person office visits was between 68 and 154 percent higher Status/condition Number of office visits than for people without chronic condi- Healthy 2.57 tions, with the greatest number of visits attributed to respiratory conditions (see Asthma 5.12 Table 15-2). Depression 4.74

Diabetes 4.83 Individuals with chronic illnesses are also at greater risk for comorbidities, Emphysema 6.52 deﬁned as medical conditions that exist Hypertension 4.34 in addition to the most signiﬁcant chronic condition from which a person Source: Sachs Group, Inc. Tracking Usage Patterns of the Chronically Ill. Hospitals and Health Networks 1994; 68(20):84. suffers. For example, diabetes is the sev- enth leading cause of death in the

282 Chapter 15: Chronic Care in America Health and Health Care 2010 Institute for the Future

United States, increases the risk of heart tion, clinical treatment, and lifestyle attack or stroke twofold to fourfold, and changes and environmental improve- is the leading cause of new blindness, ments. Diabetes is an excellent example end-stage renal disease, and loss of lower of how some of the pain and costs of limbs. Approximately 85,000 diabetes- chronic illness could be avoided by early related, lower-extremity amputations detection and treatment. Early detection were performed in 1996.6 and treatment measures could reduce some of the ill effects of diabetes. For Chronic Illness and example, detection and treatment could Disease Are Expensive eliminate 90 percent of the new cases of blindness among adults age 20 to 74.8 In The direct costs of chronic illness alone 1995, an estimated 16 million people in in 1996 added up to $564 billion (in the United States had diabetes, although 1996 dollars), or more than 60 percent only 8 million were diagnosed with the of all personal health care expenditures disease. As much as half of the diabetes 7 in this country. Add to that the lost population is undiagnosed due to two productivity resulting from disability factors: the disease symptoms vary so and premature death and the total bill widely that without a blood sugar or increases by $234 billion. glucose tolerance test even a physician may not be able to diagnose diabetes in The onset of many chronic illness com- the early stages; and the cost of testing is plications can be delayed by early detec- not covered for a large part of the population (including the millions of underinsured or uninsured Americans).9

Figure 15-2. Prevalence of unmet need for assistance among persons with A second approach to limit the indirect need for ADL help, by age group costs of chronic illness is to provide home care to assist the disabled among 18Ð64 the chronically ill in their daily activities Bathing 65 and over to enable them to work. However, peo-

Eating ple with disability often don’t have access to home care or community-based Transferring beds services, and when they do, those ser- or chairs vices are inadequate. For example, Using toilet between 31 and 55 percent of people who require assistance with an activity of Mobility indoors daily living do not obtain such assistance (see Figure 15-2). As a consequence, Dressing between 37 and 71 percent of adults aged 18 to 64 years were unable to per- 0 60 10 20 30 40 50 form one of the six daily activities evalu- Percent ated (see Figure 15-3). Inability to get Source: Robert Wood Johnson Foundation. Chronic Care in America: A 21st Century Challenge. Princeton, NJ: Robert Wood Johnson Foundation; 1996. assistance can potentially lead to further disability; 49 percent of adults aged 18

Chapter 15: Chronic Care in America 283 Figure 15-3. The consequences of unmet need for help, by age group

Not bathed or showered 18Ð64 due to fear of falling 65 and older

Unable to follow special diet

Fell while moving out of bed or chair

Could not get to bathroom or changed often enough

Unable to fill prescriptions or buy needed medical supplies

Missed doctor or other medical appointment

0 10 20 30 40 50 60 70 80 Percent

Source: Robert Wood Johnson Foundation. Chronic Care in America: A 21st Century Challenge. Princeton, NJ: Robert Wood Johnson Foundation, 1996.

to 64 fell while moving in or out of bed require more limited assistance. Getting or chair, as did 58 percent of those over chronic care “right” is not just a matter 65 years old. of increasing the quality of life of those who suffer from chronic conditions—it Increased prevalence of chronic disease as can also bring about a more efﬁcient use the population ages only begins to of resources for society at large. explain why chronic illness is a major public policy concern. The cost of lost Chronic Care Today: economic productivity is high, consider- How We Got Here ing the large number of people whose work is restricted or terminated by a The number of people living with chronic chronic disease, and adding in the time disease is increasing due to medical and of those who tend to the chronically ill. social advances that allow us to live People with serious chronic conditions, longer, both with and without chronic such as severe mental retardation, need disease. As a result, providing treatment constant attention of a caregiver to avoid for the chronically ill in the future will injury and illness. Less obvious or severe only grow more important as the afﬂicted chronic illness, such as arthritis or populations continue to increase. Several chronic obstructive pulmonary disease, trends are contributing to the increase in can interfere with a person’s ability to chronically ill people and the growing perform normal activities and may importance of treatment.

284 Chapter 15: Chronic Care in America Health and Health Care 2010 Institute for the Future

Trends Leading to More as chemotherapy allow some patients to Chronic Illness live in remission for years. Such new pro- The population is aging. After 2010, when cedures, pharmaceutical treatments, and the first wave of the baby boom reaches patient self-management have enabled traditional retirement age, about one- people to live longer, healthier lives and third of the U.S. population will be over mitigate some of the negative impacts of the age of 65. Although there are good chronic disease. reasons—lifestyle changes and better drugs among them—to believe that Many patients are not effectively managing elder boomers will be healthier than chronic disease. Despite the advances that their parents, there will also be a greater help people live longer, patients diag- number of elder boomers. New medical nosed with chronic conditions don’t treatments for the leading causes of always have the ability, will, or support chronic disease and disability are to carefully follow the regimen of diet, expected to extend the life span of exercise, and medication their doctors patients with conditions such as heart prescribe. Because the effects of chronic disease and cancer. The number of illness often are not felt acutely from day extended lives with managed—but not to day, it is tempting to overlook them. eradicated—chronic illnesses will mean that, though the share of those with The number of patients who do not chronic illness may decrease, the adhere to strict, recommended treatment absolute number will actually increase. regimens is not surprising, given the lack of support for sustained behavior New treatments allow people to live longer modification, and the reliance on bio- with their disease. New treatments will medical and scientific breakthroughs for allow people to live longer with their treatment. As a society, we believe in the disease, and some diseases previously promise of science to save, to cure, to fix, identified as terminal can now be treated to forge a path to the future. In addition, as chronic illnesses. Both of these trends many individuals increase their risk of contribute to a growing population of developing a chronic illness by smoking, the chronically ill. For example, new drinking heavily, eating and sleeping pharmaceuticals for treating osteoporosis poorly, not exercising, and working and help people to maintain their bone mass worrying too much for their own good. and prevent fractures. Although osteoporosis isn’t fatal, illnesses that might Poor dietary patterns, physical inactivity, result from a fracture, such as pneumo- and other high-risk behaviors are key nia, can be life threatening. Even for risk factors for heart disease and cancer HIV/AIDS and cancer, where finding a and major contributors to chronic dis- “cure” has been evasive despite rigorous ease-related morbidity and mortality in research, new treatments are beginning the United States.10 More and more peo- to offer hope. Some HIV/AIDS patients ple are putting themselves—and often are now able to return to work and pur- others—at risk by working in high- sue other endeavors due to recently stress positions, driving dangerously, and developed drugs. Cancer treatments such failing to practice safe sex.

Chapter 15: Chronic Care in America 285 Suggested solutions to these problems and sanctions the trade of American pro- have been many, including: duce for South American cigars. Now that is a mixed message. Educating people about the dangers of their high-risk behaviors Our medical system is not geared toward acute Charging high risk-takers more for care. A focus on treating discrete, acute insurance coverage medical episodes and infectious diseases has created a U.S. health care system Making the products associated with badly suited to the needs of a chronically high-risk behaviors prohibitively ill population. Scientific breakthroughs expensive in the 19th century, particularly the Providing people with financial incen- developments of germ theory, water tives to abandon their high-risk purification, and pasteurization, dramati- behaviors cally reduced illnesses and premature Focusing on long-term changes by deaths caused by external forces. Indeed, educating children and young adults the virtues of medical science have been intensively. many. In this century, medical research has resulted in safer and more effective Why haven’t these solutions had a pow- surgical practices, the virtual annihila- erful effect? The answer lies in two dis- tion of polio in the developed world, and tinct cultural forces. First is the belief in antibiotics that kill microorganisms at science as a solution. Medical research the root of pneumonia and other bacter- has brought us to the brink of a cure for ial infections. cancer; to safe, effective, and available liver transplants; to medications that Unfortunately, these scientific break- reduce the suffering of substance abusers; throughs have been almost too successful. and to surgical procedures that suck While the discovery and availability of away unwanted fat. Why should we life-saving drugs, early disease-detection behave ourselves when we can do as we technologies, and surgical techniques wish, then let the health care system have increased, so have our expectations bear the burden of a cure? that all maladies can be cured or surgi- cally removed. As a society, we have put Second, for every “take-good-care-of- our money and our policies behind those yourself” message would-be patients beliefs, fueling growth in medical, surgi- receive from health care professionals and cal, and pharmaceutical research. The loved ones, they are bombarded with at focus on treating acute disease is further least 20 conflicting product advertise- exacerbated by a finance system that ments. Ads hawking the desirability of favors reimbursable procedures and smoking cigarettes, drinking alcohol, devices over treatment regimens that are enjoying rich foods, severely dieting, and complex and for which long-term out- gaining wealth and power by working in comes vary, depending on the individual. high-pressure positions pervade our society. Add the fact that our society also Because of scientific breakthroughs, the allocates tax subsidies to tobacco growers leading causes of illness and death have

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changed through the century from infec- of the elderly population relied exclu- tious to chronic diseases, which, by deﬁ- sively on informal caregivers. Not only nition, cannot always be cured. Our would an increase in prevention and pri- beliefs about what medicine can do, mary care interventions reduce the fre- however, have not evolved similarly. We quency and extent of hospitalizations, still make funding decisions that support but greater and better organized utiliza- medical and technological research based tion of home and community-based ser- on what scientists believe is possible vices would provide a more appropriate rather than what ordinary citizens need mix of care and reduce the cost of care to lead healthier lives. overall.12

Even individual providers are inade- Funding does not support integrated, long- quately prepared to treat chronically ill term care for the chronically ill. The financ- patients. Most physicians’ training leaves ing structure of America’s health care them in a poor position to provide pre- system clearly encourages the provision of vention and health promotion counsel- acute care services at the expense of coming. A recent study, for example, noted prehensive services over time for people that most doctors do not counsel their with chronic conditions. The greatest patients about behavior modifications amount of federal support is devoted to that could reduce their risk for heart dis- acute, episodic care that aims to cure. ease. The physicians counseled patients Private insurance and government pro- about exercise during only 19 percent of grams cover 92 percent of all hospital office visits, about diet during only 23 expenditures and 81 percent of charges percent of visits, and about weight for physician services.13 To date there has reduction during only about 10 percent been little insurance coverage for the of visits. Further, only 41 percent of cig- nonmedical services and nontraditional arette smokers were advised during office sites of care that assist people with visits to quit smoking.11 chronic conditions (see Figure 15-4).

Are these doctors always the best care- The federal government, the single givers for the chronically ill? People largest payer of health care services and with chronic conditions do require the the major insurer for the elderly, does services of highly trained medical spe- not finance a program specifically cialists at certain critical points. How- designed to cover long-term care. Home ever, most of the time these patients’ health care, homemaker services, adult needs could be met adequately by other day care, nursing home care, help with trained caregivers such as nurse educa- activities of daily living, housing with tors, home care providers, social workers, supportive services, and other social ser- and even informal unpaid caregivers— vices are not included in most health often family members. This is already benefits plans. Even when these services the case in a number of situations. In are included in a benefits package, the 1990, 83 percent of the disabled popula- coverage is limited by number of days or tion under the age of 65 and 73 percent hours of service. In the case of medical

Chapter 15: Chronic Care in America 287 Figure 15-4. Who pays for what? 2000 national health expeditures

Private health insurance Hospital Other private programs Home health Other government Nursing home programs Drugs

Medicaid Physician

Medicare

Other OOP

Source: Medicare and Medicaid Statistical Supplement, Health Care Financing Review, 1996.

equipment, dental services, and nursing health) and eligibility requirements that home care, for example, consumers pay must be met by the provider and the on average 26 to 52 percent of total patient (providers can be required to be expenditures out of pocket. nonprofit organizations, patients can be required to demonstrate financial need or The lack of incentives for organizations have a specific ethnicity, gender, age, and individuals that would provide ser- health status, or employment status).14 vices to the chronically ill is felt not only With these types of funding comes the in the relatively small total financial knowledge that the financial support is commitment, but also in the fragmented temporary, subject to shrinking during nature of the funding. Small pockets of times of economic uncertainty, or evapo- funds to support chronic care can be rating entirely with changes in the latest found in government and private stan- funding priorities of an organization’s dard coverage, special grants and pro- board. grams funded by disease-specific charities, national and local foundations, The fact that most health insurance is special legislation for programs in cer- employment-based also contributes to tain states, and local churches and non- the inaccessibility of health care services profit organizations. Some providers who for the chronically ill. People with dis- treat a high number of chronic patients abilities, the majority of whom are dis- employ part- or full-time grant writers abled due to a chronic condition, whose sole function is to find and apply represented roughly 15 percent (5.5 mil- for these special funds. lion people) of the uninsured in 1994, including one million disabled children With each funding source come limita- under the age of 18 (see Figure 15-5).15 tions on the types of services covered People over 65 are not included in this (hospital care, rehabilitation, home number, with the exception of the small

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One of the biggest challenges facing Figure 15-5. Source of health insurance coverage for persons with any people who have chronic conditions is disability, by age the integration of care across three con- Age tinua—time, providers (physicians, Private nurses, home care providers, social work- 0Ð4 Medicaid ers), and service settings (hospitals, nurs- Medicaid + Medicare Medicare ing facilities, home health agencies, 5Ð17 Uninsured community-based programs). The fragmented funding of providers and services 18Ð64 usually means that health care professionals who are working with a chroni- Total cally ill patient have no system and no expectations for communicating with 0 20 40 60 80 100 each other. Requiring the patient to Percent transmit information about treatment

Source: Meyer, J. A., and P.J. Zeller. Proﬁles of Disability: Employment and Health and services often means that informa- Coverage. Economic and Social Research Institute for the Henry J. Kaiser Family tion is lost. Even the most knowledge- Foundation’s Commission on Medicaid and the Uninsured. Washington, DC: Henry J. Kaiser Family Foundation, September 1999. able, intelligent, observant patient would have difﬁculty communicating all of his or her medical information to all percentage that does not qualify for providers. These problems are particu- Medicare. High premiums, coverage larly severe for patients with multiple denial for pre-existing conditions, and chronic conditions, a good portion of all restricted eligibility for public programs patients with chronic illness. Of people are some of the reasons people with 55 years and older who have arthritis, for chronic conditions lack health insurance. example, as many as 48 percent also have hypertension, 16 percent also have heart Lack of health insurance, inadequate cov- disease, 11 percent also have cancer, and erage, temporary funding, and higher 11 percent also have diabetes.17 premiums all translate into higher out- of-pocket costs for chronically ill At best, the state of chronic care today is patients. The per capita costs of care for unfocused and uneven. What will it be people with chronic conditions are three like in 2010? times higher than those for people without chronic conditions and the costs for Forecast individuals with comorbidities are two- and-a-half times higher than those for How is chronic care likely to evolve in people with only one chronic condition. the rest of this decade? As in the general Out-of-pocket expenditures on health health care forecast in Chapter 1, some care for older disabled persons (45–64 forecasts call for “Stormy Weather,” and years old) were expected to consume others are “On the Sunny Side of the nearly 30 percent of their annual income Street.” in 2000.16

Chapter 15: Chronic Care in America 289 Stormy Weather frequency than ever before, however, Public health will continue to be financially employers and health plans will continue strapped and undervalued. The public to be reluctant to make large invest- health sector, with its concentration on ments in prevention measures that pro- populations, prevention, and the non- vide only long-term payoffs—no matter medical determinants of health, poten- how important they are to the patient. tially has a lot to offer in the detection and prevention of chronic conditions. Teens will still think they’re immortal. However, this sector will continue to While the smoking rate among adults is face financial pressure, even in the declining, smoking rates among absence of a federal deficit, especially teenagers are on the rise. Each generation now that the economy is slowing down. of youths find new threats to ignore. For Efforts to deliver personal health care each generation, we can only try to services to uninsured populations will reduce the number of youths who ignore continue to divert attention and threats and try to keep them alive until resources from public health providers, their judgment improves. as the number of uninsured rises each year. The extent to which particular pub- Sick baby boomers will find themselves home lic health agencies focus on population- alone. The availability of informal care- based approaches to chronic disease will givers is projected to decrease in the depend on local community support, future, even as the demand for their ser- both in terms of finances and vision, and vices increases. Smaller family networks the charisma of their individual leaders. and the increasing participation of women—the traditional caregivers—at Underinvestment in long-term prevention higher levels in the workforce will con- strategies will persist. The majority of the tribute to the decline. Current studies commercial market, including health indicate that many of the remaining plans, insurers, and employers, will limit caregivers are in poor health themselves, prevention efforts to specific diseases— with increased risks of stress-related dis- those that either help insurers gain orders such as hypertension and heart National Committee for Quality Assur- disease.18 All such caregivers report ance (NCQA) accreditation or those that requiring support, information, and show a quick financial return on invest- occasional respite from caregiving in ment. In evaluating the effectiveness of order to continue providing care.19 The chronic care provided by managed care availability of formal and informal care- organizations, NCQA is concentrating givers will become critically important on four conditions: childhood asthma, as the baby boomers age. As of 2010, diabetes, coronary artery disease, and this country will face no fewer than 18 major depression. In order to meet years in which approximately one-third NCQA’s quality standards, many health of its population will be 65 or over.20 plans will ensure that their screening Given inadequate funding for home rates for all four conditions are high. health care workers and long-term care, Because people change employers and increased prevalence of chronic condi- health plan membership with greater tions, and reduced availability of unpaid

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informal caregivers, the baby boom gen- decline from 21.3 percent in 1994 to 17 eration faces the very real possibility of percent in 2010. Keep in mind, however, being sick and left home alone. that the absolute number of people with chronic conditions is likely to reach well Disparities in health status by race and eth- over 125 million by 2010. nicity are expected to persist. Despite significant health and health care advances that There will be more investment in long-term will benefit all chronically ill individu- disease management and coordinated care. als, disparities in health status by Some hope for growth in truly inte- race/ethnicity are expected to persist. grated services can be pinned on insur- This trend is attributable to a number of ers’ interests in disease management— factors, including access to health care, the coordination of inpatient, outpatient, and lifestyle and environmental factors. education, home, and community services after a patient has been identified as high risk for certain conditions. In the On the Sunny Side of the Street end, there are two critical factors that will influence the success of coordinated Those with chronic disease will live longer. disease management. More people will live longer, more fulfilling lives with chronic disease. This is First is the cost-benefit trade-off for the the result of a number of converging payer, whether public or private. The trends, from increased life expectancy to closer the relationship between cost out- increased availability of pharmaceutical lay and financial benefit for the payer, products that treat chronic illnesses. the more likely that payer will pursue disease management. For example, car- The prevalence of disability among the chron- diac programs that coordinate postsurgi- ically ill will decrease. The projections cal monitoring, education, and home given for the growth in chronic disease care and show short-term results in are calculated by applying the most reduced risk of rehospitalization or sec- recent rates of chronic disease and dis- ond surgery have an outstanding chance ability to projected changes in the U.S. to thrive. However, smoking cessation demographic distribution, implicitly and weight management programs have assuming that the rates of disease and a much looser and longer-term relation- activity limitations by gender and age ship with financial benefit, therefore a will remain constant. There is some evi- much lower likelihood of being funded. dence that the prevalence of disability In order for these programs to be effec- among the elderly is declining.21 It is tive, they require constant support and, not surprising, considering the advances if successful, may reduce an individual’s in overall health status achieved during risk of a variety of chronic diseases that the past century, that as younger cohorts would be costly to treat 20 years from age, they will have fewer health prob- now. Although many insurers report lems than their parents. If the trend con- that they offer disease prevention pro- tinues, the prevalence of disability for grams,22 a series of interviews with the elderly population is expected to health plan medical directors and

Chapter 15: Chronic Care in America 291 employer groups across the nation indi- eliminate all the effects and costs of cate that most are not investing in pre- chronic care, but they can be reduced if vention measures that provide a we diagnose chronic illnesses earlier, long-term payoff. Most organizations are intervene more consistently, and unlock looking for cost savings within the first the secrets to prevention and successful 18 to 24 months of introducing a pro- patient education. To use diabetes dis- gram. ease management as an example once again, the Diabetes Control and Compli- The second critical factor is the capacity cations Trial, a national 10-year study for disease management techniques to that involved 1,441 volunteers with manage patients with a wide variety of insulin-dependent diabetes, confirmed comorbidities. If an arthritic asthma that careful control of blood sugar pre- patient and an arthritic diabetic must be vented the onset or delayed the progres- “coordinated” through one continuum of sion of eye, kidney, and nerve damage by care for arthritis and another for the at least 50 percent. Another program, other diagnosis, and those providers do the Michigan Diabetes Control Pro- not communicate with each other, it’s gram’s Upper Peninsula Diabetes Out- not really a continuum of care from the reach Network (UPDON), showed that patient’s perspective. improvements in the quality of diabetes care and education reduced hospitaliza- Early intervention and disease management tions by 45 percent, lower-extremity will reduce the personal and financial cost of amputations by 31 percent, and the chronic illness. Prevention and behavior death rate by 27 percent for program changes can delay the onset of and dis- participants, compared to nonpartici- ability related to chronic diseases. There pants. is some evidence that middle-aged and older adults are more likely than are Health systems will attempt to organize younger adults to invest in behavioral around the patient’s chronic disease. Many changes that may improve their health hospitals and health systems have outcomes.23 Even for those who already attempted to create “integrated” deliv- suffer from a chronic condition, behav- ery systems over the past 10 years. How- ioral changes may delay the progression ever, plans for service integration are of their illness and related disability. For more often based on the demands for example, recent studies indicate that an physical plant and personnel and the exercise routine, even one for the frail potential for reimbursement than on elderly, increases muscle mass and bone patient needs. density and reduces the risk of falling. There’s a ray of hope: Even if young peo- There is, however, the National Chronic ple feel immortal, they can change their Care Coalition (NCCC), a 37-member ways later in life, and reduce their risk of group of nonprofit health systems work- becoming chronic patients. ing together to provide high-quality care for people with chronic conditions. Initi- Of course, even the best detection and ated by hospital systems, members are disease management procedures can’t required to have integrated care net-

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works already in place in their service ence will save us from our bad behavior. areas, to have a reputation for innova- The promising news is that belief struc- tion, and to have full board and CEO tures can and do change. They don’t support for active NCCC participation. change quickly or easily, but the pace of NCCC offers free online information and change should not be confused with the care guidelines and is involved in at least direction of change. The following are two large demonstration projects of examples of repeated, sustained actions national significance. The consortium turning the tide: has partnered with the State of Min- If Moms are against it, it must be bad. nesota’s Department of Human Services, One of the most effective campaigns and with the help of the Robert Wood in the United States to change societal Johnson Foundation, has proposed and acceptance of a particular high-risk been awarded a 5-year demonstration behavior has been Mothers Against project waiver from the Health Care Drunk Driving (MADD). MADD’s Financing Administration (HCFA). The campaigns at the public information project allows Medicare and Medicaid and legislative levels have, in 19 years, funds to be combined to provide a con- significantly contributed to changing tinuum of care for the elderly in the attitudes and laws about the accept- seven metropolitan counties of Min- ability of driving when intoxicated. neapolis/St. Paul. NCCC also has teamed This movement succeeded in gaining with the Alzheimer’s Association to cre- support, in part, because it targeted ate a project testing the effectiveness of the effect of drunk driving on the managed care for Alzheimer’s patients.24 safety of innocent bystanders, particularly children. Sensors will allow remote monitoring and facilitate disease management. As the size of The Marlboro Man and Joe Camel go on remote sensors decreases, and their ability indeterminate leave. Several states have to detect small changes in environments taken aggressive stances against ciga- increases, sensors will become an increas- rette smoking. They actively prose- ingly integral part of most disease man- cute retailers who sell tobacco to agement treatments. For a diabetic minors, heavily tax the sale of ciga- patient, for example, sensors will provide rettes, and use the tax dollars almost constant and passive communication exclusively on tobacco-related research between the patient and a provider about and high-profile antismoking cam- blood sugar levels as well as blood pres- paigns. Some states, such as Califor- sure and pulse. This will enable providers nia, have banned cigarette smoking in to conduct remote monitoring of their most public places. Preliminary data patients’ health status and potentially reveal that these efforts do indeed manage a component of disease without reduce tobacco consumption, albeit any extra effort for a patient. more slowly than some might hope.25 The critical factor in these programs is Belief structures can be changed. In the pre- their ability to slowly change the vious chapter, we discussed the critical American mind-set about the accept- importance of Americans’ belief that sci- ability of smoking. We forecast that

Chapter 15: Chronic Care in America 293 by 2010, smoking in public will have health care system already weak in the same stigma currently associated payment and personnel devoted to with drunk driving and the reduction long-term and chronic care. Political in smoking will contribute to a fur- priorities are unlikely to change dra- ther reduction in tobacco-associated matically until boomers feel the full chronic conditions. effects of a system unable to support good chronic care. By then, it may be It’s hip to be aware. What began as a too late to develop a coordinated sys- 1960s hippie revival of consuming tem able to deliver the high-quality natural foods and eschewing animal care they demand. flesh has become, with some twists and turns, a part of most Americans’ Profit will drive many initiatives. The consciousness. Today in most social power of profit, or the lack thereof, circles it is acceptable, if not com- will continue to be a strong influence mendable, to be aware of the fat con- on the decisions of health plans, insur- tent, fiber, cholesterol, and processing ers, and employers’ support of disease of the foods we eat, and to drink min- management programs. Those that eral water instead of alcohol. The show a short-term profit (heart disease widespread European outrage over programs) will get funded, and those bioengineered food products has not that don’t (smoking cessation) won’t. reached across the pond with full The long-term cost savings due to dis- force, but that is a next step for a ease management programs are diffi- growing number of Americans who cult to capture and do not factor well want to know where and what their into a short-term budgeting cycle. food was before they eat it. The mind-set that a return on investment must be immediate if funding is Implications to continue must change before the system will change. In the next decade, there is both hope and despair for changing the U.S. health Support for home care and less formal care- care system to better meet the needs of givers will be needed. With the unpaid, its citizens, especially regarding chronic informal caregivers of America (pri- care. The evolution of chronic care in the marily women) leaving for the work- next 10 years will have the following force, those left at home to care for the implications: chronically ill will be older people susceptible to chronic illness them- Here come the elder boomers. The impact selves. Without some type of orga- of the baby boom generation will con- nized home care system, the tinue to be strong as boomers age, chronically ill will continue to use the influencing attitudes, services, prod- more expensive care and technology ucts, and the success of new technolo- required for acute episodes. gies—the toys and tools of this generation. At the same time, how- Health insurance is not enough. Even the ever, aging boomers will increase chronically ill who are fully insured demands and financial stress on a pay as much as half their health care

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costs out of pocket. Medicare and for them. Depending on the type of Medicaid do a poor job of funding work they do, many people who long-term, chronic care. Already, require help dressing or living inde- many people can’t afford to be chroni- pendently may be gainfully employed cally ill and those numbers can only if they receive assistance. For example, be expected to grow. developments in voice-activated computers allow paraplegics to write any- Kids these days . . . The pressure to thing from interoffice memos to novels. “behave badly” will still be the initia- Minor adjustments in signs and office tion dance of youth. We can’t afford to procedures can allow a sight-impaired give up on programs targeted toward person to be an active participant in youth, however. The earlier they get many different types of knowledge the message, the better prospects they work. A study published by the Eco- have of avoiding chronic illness. Soci- nomic and Social Research Institute ety-wide programs for restricting reveals that 57 percent of Americans tobacco use and treating alcohol abuse with any disability and more than one- can also go a long way toward limiting third of those with a chronic disability the self-destructive behaviors of youth. that limits major life activities are employed or seeking work. Even Get over the blame game. Why have though some of these workers may efforts to increase early detection, edu- need help dressing themselves or trans- cate patients and the public, and pro- porting themselves to work, the great vide continuous monitoring not majority of disabled workers (87 per- become the cornerstone of the U.S. cent) need no accommodation or spe- health care delivery system? Some cial equipment once at work. If activists blame members of Congress limitations were more easily accommo- for funding high tech over high need. dated or social/personal support easier Others blame health care providers for to come by, many more Americans not taking greater interest in the could be “productive” once again. needs of chronically ill patients. And of course there are those who blame the patients themselves for not taking The poor need more help with chronic care. a more aggressive role in preventing Poor people suffer disproportionately illness and promoting their own from chronic illness. Prescription drug health. Each of these fingers of blame benefits available through Medicaid points at the result, not the source, of provide a strong foundation to man- our current dilemma. The true source age one aspect of chronic disease, but is the system itself, and these attitudes more social support must be available won’t change until the system to enable sustained behavior change changes. and to assist people who otherwise would not be able to work. In addi- The chronically ill and disabled can be pro- tion, affordable long-term care strate- ductive. Only a small percentage of gies must be in place to mitigate and chronic illnesses need to claim the pro- postpone the negative impacts of ductivity of patients and those caring chronic disease.

Chapter 15: Chronic Care in America 295 Funding must be harmonized. Any fund- beneﬁts of disease management and ing that does support chronic care in ultimately rationalize their effective- the current system often comes from ness in terms of cost-savings. so many disparate sources that no one person can keep track of them all. Perhaps the greatest hope for improve- Something must be done to centralize, ments in chronic care and reducing the if not the funding itself, then at least negative impacts of chronic disease in the way it’s managed, to give chroni- America lies in a sea change of beliefs cally ill patients as close to one-stop and attitudes toward science, health, and shopping as possible. Disease manage- wellness. Policies and programs that ment programs will be central to expand the deﬁnition of health, and achieving this coordination, as well as health care to include lifestyle and envi- to providing social support for people ronmental factors have the potential to suffering from chronic disease. As pre- transform individual and community viously stated, funding cycles must be health and, ultimately, reduce the bur- extended. This will help capture the den of chronic disease in America.

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Endnotes Reports (November 12) 1993; 42(44): 1 Minino A. M., and B. L. Smith. Deaths: 854–857. Preliminary data for 2000. National Vital 12 Alecxih, L., et al. Estimated Cost Savings Statistics Reports 49(12). Hyattsville, MD: from the Use of Home and Community-Based Al- National Center for Health Statistics, 2001. ternatives to Nursing Facility Care in Three 2 Anderson, G., and J. R. Knickman. Chang- States. Pub. No. 9618. Public Policy Insti- ing the chronic care system to meet people’s tute/AARP. 1996. needs. Health Affairs 2001; 20(6). 13 National Health Expenditures Projections: 3 Hoffman, C., D. Rice, and H. Sung. Persons 2001-2011. Health Care Financing Adminis- with chronic conditions: Their prevalence tration. Ofﬁce of the Actuary. National and costs. Journal of the American Medical Asso- Health Statistics Group. www.hcfa.gov. ciation 1996; 26(18):1473–1479. 14 Interviews with San Francisco Bay Area providers, 1997. 4 Forum on Child and Family Statistics. America’s Children: Key National Indicators of 15 Meyer, J. A., and P. J. Zeller. Proﬁles of Dis- Well-Being, 2000. Vienna, VA: National Ma- ability: Employment and Health Coverage. Eco- ternal and Child Health Clearinghouse, nomic and Social Research Institute for the 2000. childstats.gov/ac2000/ac00.asp. Henry J. Kaiser Family Foundation’s Com- mission on Medicaid and the Uninsured. 5 National Center for Health Statistics. Cur- Washington, DC: Henry J. Kaiser Family rent Estimates, From the National Health Inter- Foundation, September 1999. view Survey, 1996. (PHS) 99-1528. GPO stock number 017-01471-8. 16 Maxwell, S., M. Moon, and M. Segal. Growth in Medicare andOut-of-Pocket Spending: 6 Centers for Disease Control and Prevention. Impact on Vulnerable Populations. Urban Insti- Diabetes Surveillance, 1999. U.S. Department tute, December 2000. of Health and Human Services. www.cdc.gov/diabetes/. 17 Van Norstrand, J. F., S. E. Funer, and R. Suzman, eds. Health Data on Older Americans: 7 Trupin, L., D. Rice, and W. Max. Medical United States, 1992. National Center for Expenditures for People with Disabilities in the Health Statistics. Vital and Health Statistics, United States, 1987. Washington, DC: U.S. Series 3, No. 27. DHHS Pub. No. (PHS) Department of Education, National Institute 93–1411. Hyattsville, MD: Public Health on Disability and Rehabilitation Research. Service, 1992. 1995. 18 Gaynor, S. E., The long haul: The effects of 8 Centers for Disease Control and Prevention. home care on caregivers. Image Journal of Diabetes: A Serious Public Health Problem. At- Nursing Schools 1990; 22(4):208–212. Given, lanta, GA: CDC, 1999. B., and C. W. Given. Family caregiving for the elderly. Annual Review of Nursing Research 9 Diabetes Public Health Resource. Diabetes: 1991. A Serious Public Health Problem At-A-Glance 2000. National Center for Chronic Disease 19 Cloonan, P. A. Managing Home Care. Key Prevention and Health Promotion. 2000. Aspects of Caring for the Chronically Ill: Hospital and Home. New York: Springer Publishing 10 Health Insurance Association of America. Company, 1993. Source Book of Health Insurance Data. Wash- ington, DC: Health Insurance Association of 20 Baby Boomer Headquarters. 1999. America, 1996. www.bbhq.com. 11 Physician and other health-care profes- 21 Manton, K., and X. L. Gu. From the sional counseling of smokers to quit—United Cover: Changes in the prevalence of chronic States, 1991. Morbidity and Mortality Weekly disability in the United States black and non-

Chapter 15: Chronic Care in America 297 black population above age 65 from 1982 to 23 Tai Chi for Older People Reduces Falls, 1999. Proceedings of the National Academy of May Help Maintain Strength. News release Sciences of the United States (May 22) 2001; text from National Institute on Aging. 28(11). Washington, DC. May 2, 1996. 22 Health Insurance Association of America. 24 National Chronic Care Consortium. Source Book of Health Insurance Data. Wash- www.nccconline.org.

ington, DC: Health Insurance Association of 25 America. 1996. Centers for Disease Control Tobacco Infor- mation and Prevention Source. www.cdc.gov/tobacco.

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chapter 16 Disease Management Weaving Disease Management into the Fabric of Patient Care

What exactly is disease management? Asthma. More than 14.9 million peo- It’s as much a philosophy and a concept ple suffer from asthma in the United as it is a set of tools for delivering health States, and it is the number one cause care in a certain way. For the purpose of of pediatric admissions to hospitals. this forecast, we have defined disease With clinically proven medication management as an integrated, systematic and patient-education treatment approach to delivering care to popula- plans, a patient’s asthma can be con- tions of patients with specific chronic trolled significantly and the number diseases. of emergency room visits and asthma attacks reduced drastically. Disease Disease management integrates many managers have focused on self-care for clinical, business, and technology tools asthma patients; patient-education to improve health care quality and programs are commonly used to help patient satisfaction. The core concept is patients manage their own disease to eliminate unnecessary complications with peak flow meters and other self- from disease through patient and monitoring techniques. provider education and clinical protocols, among other approaches. Diabetes. About 15.7 million people in the United States have diabetes, The number one driver of disease man- with 5.4 million undiagnosed. agement is cost reduction. Therefore, Untreated diabetes can lead to cardio- disease management programs today are vascular disease, kidney failure, blind- provided by, purchased by, or created by ness, amputation, and death, but whoever is at financial risk for the cost of treatment is incredibly expensive. The health care. American Diabetes Association and other health organizations have cre- Diseases Being ated guidelines that recommend fre- Managed quent monitoring of blood glucose, regular foot and eye exams, and other The most common initial targets for dis- interventions to reduce dramatically ease management are asthma, diabetes, the incidence of damaging and costly and congestive heart failure (CHF). complications. The challenge for dis-

Chapter 16: Disease Management 299 ease managers is to incorporate these Step 2. Figure out what they need, proven interventions into the standard then do it: Care delivery practice of the primary care physicians Step 3. Find out if it’s working: Out- who treat diabetes or to develop and comes measurement contract for separate programs to ensure that this level of management Step 4. Bring the learning back to occurs. Step 1: Feedback.

Congestive heart failure. Disease man- Patient Identification and agement programs have repeatedly Assessment proven to be effective at keeping CHF patients out of emergency rooms and Identifying a population that will benefit hospitals. CHF affects more than 4.6 from disease management is an impor- million people in the United States. tant first step. Currently, disease man- The incidence of CHF is highest in agers search for specific clinical data in patients over age 65, and CHF is con- insurance data, pharmacy databases, or sistently one of the top five causes for patient-reported surveys to create a hospital admissions of the elderly. “patient utilization profile.” Effective CHF disease management programs use appropriate medica- Once patients have been identified, the tions, intense dietary therapy, frequent next step is to assess each patient’s over- monitoring of early warning signs, all health status. It is important to mea- and patient-education programs to sure the general health of the individual change lifestyle behaviors and to pre- at the time of enrollment in a disease vent hospital readmissions. management program to provide baseline data for measuring improvement These definitions and examples give and, once the data are aggregated, the some sense of what disease management success of the program is about. The next section explains how disease management is accomplished. Care Delivery

A Disease Most care within disease management Management Primer programs is delivered according to clinical practice guidelines that outline treat- It may sound all well and good in theory ment strategies, including those for to manage chronic diseases in order to patient monitoring and education. Clini- reduce or avoid acute episodes, but how cal practice guidelines outline standard- is it actually done? Disease management ized processes for managing patient care. is accomplished by using an assortment Most disease management programs of tools and techniques. There are four cover all aspects of managing care, basic steps: including:

Step 1. Find out who: Patient identiﬁ- Prevention—education and early cation and assessment identiﬁcation of the disease

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Clinical evaluation—screening, gram. In this way, feedback about finan- workup, and diagnosis cial, performance, or clinical outcomes plays a significant educational role in the Management—treatment and other improvement and refinement of the tools interventions and techniques of disease management. Maintenance—follow-up assessment and care Information Technology in Disease Management An asthma guideline, for example, could cover the use of inhalants as well as edu- The foundation on which these compo- cational programs for the family, admin- nents of disease management are built is istration of medication in emergency information technology. As health care rooms, and recommendations for ongo- has become more complex, the data ing maintenance. required to coordinate and track the care of patients have grown exponentially. It Outcomes Measurement is beyond the capacity of the human brain to maintain and integrate all of the As the field of outcomes measurement details of patient care, the latest in med- advances, the ability to identify, mea- ical research, and the applications of new sure, and track relevant indicators will medical technologies. The use of com- improve and will play an even more crit- puters and software designed to support ical role in disease management. Phar- clinicians and patients in managing macy Benefit Managers (PBMs) are chronic diseases is important. Without emerging as leaders in this field. As pre- information technology, the ability to viously mentioned, it is difficult to inte- track and monitor patients and their dis- grate data elements from across the ease states would be slow, burdensome, spectrum of care for any individual and nearly impossible patient or disease. PBMs, however, have created enormous banks of data through Drivers and Barriers their sophisticated networks of pharma- on the Path Ahead cies and mail order systems. With the right set of tools, processes, Feedback and interventions, disease management can help prevent acute episodes of Risk-adjusted outcomes data, reported to chronic disease and avoid care in high- physicians, have been demonstrated to cost settings. Given the market impera- be effective tools in moving physicians’ tive to cut costs, together with the push treatments toward best practices and from new entrants to stretch disease improving outcomes of care. Provider management into new areas, the disease education and feedback also target physi- management industry is poised to grow. cians’ understanding of and compliance with practice guidelines and their overall Even people with a few skeptical bones understanding of the disease and the left in their bodies might be impressed goals of the disease management pro- by the disease management cost savings

Chapter 16: Disease Management 301 reported in a recent survey by the boom generation ages—a demo- National Managed Health Care Congress graphic trend that will have far-reach- (NMHCC). Coronary artery disease and ing effects. People 65 years of age and hypertension savings top the list, with older constitute the fastest-growing 60 percent savings in the 1996–1997 fis- segment of the population. Their cal year. All together, disease manage- numbers will grow from 34 million in ment has saved health costs by 10 to 20 1995 to 39 million by 2010, a 15 per- percent, depending on the program. In cent increase. This “age wave” has had addition to disease management pro- and will continue to have a transfor- grams, NMHCC also surveyed managed mational effect on many institutions, care organizations and employers, both levels of government, and segments of of which reported savings to date as well society. As baby boomers access and as high expectations for their future use interact with the health care system of disease management programs. over the next decade, their expectations and preferences—their demands So is disease management the be-all, and sheer numbers—will transform end-all solution to what ails health care? this institution as well. Not clear. Our health care system is a Chronic disease: Number one on the chart. melting pot of professionally, adminis- Chronic disease and illness is the lead- tratively, financially, personally, and ing cause of death and morbidity in socially competing demands. In order to the United States. Already, more than understand how any new object thrown 100 million people are living with into the pot will fare, we must look at chronic disease, and this number will the forces that support the survival of the increase to 120 million by 2010—40 new object—drivers of change—and at percent of the population. With more the forces that would eject or consume than half a trillion dollars spent per the new object—barriers to change. year on care for these people, the impact of chronic illness on the health Driving Forces care industry will only continue to accelerate. Drivers of change are independent trends that can accelerate the adoption of a Cost containment: How to succeed in product, a service, or a concept. Trends business. The cost-containment imper- in the availability and use of technology, ative and competition in the business the physician–patient balance of power, of health care remain strong. National and the aging of the population, for health expenditures are just under 14 example, will in concert accelerate the percent of gross domestic product adoption of the tools and principles of (GDP) and are expected to grow at disease management within the next 5 6.5 percent per year. By 2005, to 7 years. Significant drivers of change national health expenditures will include the following: account for 15 percent of GDP, heading toward 16 percent by 2010. Two Surfing the age wave. The U.S. popula- important factors affect cost growth: tion is growing older as the baby chronic disease and illness and med-

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ical technology. Nationwide, direct moving the site of care out of the hos- medical costs for the treatment of pital and into the patient’s home, car, chronic disease exceed $500 billion or trailer park. Recent advances in annually and account for 45 percent of medical technologies are allowing new national health expenditures options in care and chronic disease management to emerge. Payer demands: Results. The primary interest of payers is reducing costs for New health care consumers: A little knowl- health benefits. With increases in edge, a lot of attitude. Traditionally, health premiums, these payers will health care consumers have been pas- increase pressure for better health and sive recipients of advances in medicine cost outcomes, particularly when rather than drivers of change. IFTF has many of the costs associated with identified an emerging demographic chronic illness can be avoided. As dis- group called “new consumers,” who ease management demonstrates sub- demand choice, control, information, stantial cost benefits, employers and and customer service—and are begin- other payers will begin to demand ning to make these demands in the that their insurers and providers use health care sector. Although new con- these programs. sumers have not been asking for disease management per se, they are Regulation: The road to good credit. demonstrating increasing interest in Accreditation by the National Com- managing their own health. mittee for Quality Assurance (NCQA) and procedures of the Health Plan Complexity and fragmentation. Our Employer Data and Information Set weakness could be a strength. The (HEDIS) put in place outcomes and melting pot of conflicting demands process indicators to demonstrate and that is the U.S. health care system is track provider accountability for spe- nowhere near the precipice of major cific disease states (e.g., routine structural reform. We will continue to retinopathy exams for diabetics). As have many payers, many vested inter- managed care organizations respond to ests, and many injustices until and accreditation and possibly to regula- unless economic and political forces tory requirements and market pres- present an opportunity for significant sures to be more accountable, they change. Until that day, disease man- will most likely accelerate disease agement is an approach that individual management efforts. and competing payers and providers can use to reduce costs, increase qual- Information and medical technologies: Suc- ity, and increase patient satisfaction. cess is the sweetest revenge for info-tech. Information technology, the Internet, Barriers to Change and new medical technologies are already having a dramatic impact on Despite these driving forces, a number of society and the health care system. factors have interfered with adoption of The revolution in communication and the tools of disease management and will information technologies is critical for continue to do so. Many of these barriers

Chapter 16: Disease Management 303 exist across different settings of care and nation rules. Individual patients are methods of payment. Some barriers, such often left to their own devices to navi- as difficulty obtaining reimbursement gate and negotiate the waters of cov- for services, are financially driven—but ered benefits, preexisting conditions, not all. Significant barriers to change and incomplete medical records. Until include the following: incentives are aligned and a strong business case is presented, health care Fragmented reimbursement: Too many con- is likely to remain fragmented rather tracts, not enough time. Providers and than integrated into any cohesive sys- health care organizations follow the tem resembling disease management. incentives they are offered when a large portion of their patient flow Physician resistance: Hey, you! Out of my springs from the source of the incen- sandbox!. Most physicians are trained tive—for example, Medicare. In a to deliver individual care to individual world of PPOs and open-panel health patients, with no feedback from exter- maintenance organizations (HMOs), nal sources. The population-oriented, physicians and hospitals frequently feedback-rich approach of disease manage hundreds of payer contracts. management is foreign to many If one payer gets into disease manage- providers. Moreover, these physicians ment in a big way but others do not, identify themselves as the managers of or if others focus on other diseases or diseases. Physicians often perceive dis- use different protocols, providers have ease management programs, whether little incentive to change their prac- from health plans or entrepreneurial tice patterns to adapt. companies, as controlling their practices and moving onto their turf. Short-term orientation: In the health care business, next Tuesday IS a long-term Patient indifference: Self-care is boring. forecast. Few health care players (pay- Patient noncompliance is a strong bar- ers or providers) have incentives to rier to implementing effective disease invest in interventions that will pay management programs. Fewer than off in the long term. Instead, because half of all Americans with chronic of employee turnover, health plan conditions follow their physician’s churn, and FFS reimbursement, most medication and lifestyle guidance— interventions are oriented toward adding up to more than $100 billion short-term payoffs. annually in unnecessary medical costs and lost productivity. Although Fragmented delivery system: Is anybody in patients may be interested in self-care, charge here? The traditional health concrete lifestyle and behavioral care system simply is not a system; it changes are difficult to influence. is not user friendly and coordinated. Instead, it is a set of independent Inadequate information technology: Does businesses, individuals, and entrepre- anyone know where the patient went?. neurs with areas of expertise, business Information technology investment in interests, and market segments over the health care industry is relatively which competition rather than coordi- limited when compared to that in

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other industries; the banking industry, there was to know about us, our family, for example, invests 7 to 10 percent of and our ailments. But the knowledge revenues in information technology, and extent of information now required whereas health care invests only 2 to 4 to know all there is to know about medi- percent. Most of the investment in cine is beyond the capability of the information technology that does exist human brain. Computers will be used to in health care goes toward administra- integrate much of this information. The tive or financial information systems, Internet makes publicly available mas- not clinical. Even when clinical infor- sive amounts of information. Consumers mation is recorded electronically, want access to this information, and they computer systems in different offices will want to take advantage of this shift are often incompatible and compile from dependence on the knowledge and disparate data elements, making inte- experience of physicians to that of multi- gration of information across offices ple information brokers on the World difficult. Wide Web. With this shift of power in the form of information control, health What does the future hold? To create a care will move from a physician-driven forecast, these drivers and barriers must industry to a consumer-driven industry. be taken in balance to determine the This shift in power could completely pace of change. The final section of this transform the financing and delivery of chapter offers a forecast of the industry health care. for the next 5 to 10 years. By 2005, disease management will: Forecast Go where disease management has never Disease management is at the crossroads gone before: Move beyond chronic care. of advances in medical and information Grab ’em when they’re young: Focus technologies and increases in consumer more upstream. demand and cost consciousness. Each of these forces on its own could power and Wake the patient: Involve the consumer. influence the future. Together, they have Join the Jetsons: Include more medical the potential to create major break- and information technologies and the throughs in the future of health and Internet. health care. When new medical interventions, technologies, and needs meet, Not forget who pays the bills: Continue watershed events can occur. to be aligned with financial risk. Graduate from trend to tradition: Be A shift in power is occurring in health woven into the fabric of much of care. Historically, physicians were the patient care. unquestioned owners of medical knowledge, and they had tremendous power The degree to which each of these charac- and authority in the care process. Many teristics appears in a given regional long for those simpler days, when one health care market depends on the bal- person, the family doctor, knew all that ance of power between the drivers for and

Chapter 16: Disease Management 305 barriers to change. We forecast that the Cost will remain a driver of this push to pace of change will be significant in the move upstream in the disease manage- first four areas identified and that the ment process, because moving upstream other two areas will remain stable. Specif- is often cheaper than an expensive hospi- ically, here is how we map our forecast. talization. In addition, the need to satisfy the consumer will drive care closer The Move Beyond and closer to the home, the workplace, Chronic Care and the school.

Disease management programs have Increased Consumer focused on high-volume chronic condi- Involvement tions such as asthma, CHF, and diabetes. We forecast that this trend will continue Consumers increasingly will become and that the focus will increasingly move involved in decisions about the manage- beyond single chronic conditions. Pro- ment and treatment of their health and grams that have been effective in the man- medical care. For consumers of health agement of one chronic condition will services, the Internet provides a portal to apply the tools and techniques they’ve information that has never before been mastered to other chronic conditions, easily accessed. Our forecast is that expanding the scope of the program. direct-to-consumer marketing of all health care services will increase. This Focusing More Upstream includes pharmaceuticals, traditional and nontraditional treatment options, med- To focus more upstream means to inter- ical literature, and providers. vene earlier in a known disease process with a known outcome. This implies the Medical and Information identification of factors that have led up Technologies to or caused that outcome. In the case of CHF, the goal has been to reduce severe The explosions in medical and informa- disease complications that result in hos- tion technologies during the past 10 years pitalizations. Years of research have iden- are revolutionizing the identification and tified the factors that contribute to CHF management of diseases. Computing complications. Now, by focusing on power and speed of communication upstream factors, the number of compli- among researchers has a ripple effect of cations can be greatly reduced and many more rapid dissemination of research of them eliminated. results to the lay community, thereby increasing public understanding and As we learn more about disease processes knowledge about many diseases. and the causes of poor outcomes, includ- Advances in medical technology will ing genetic predisposition of disease (the radically change how we manage diseases ultimate in upstream intervention is in in the future, by moving us toward less- vitro or even in the zygote), the manage- invasive therapies and devoting more ment of poor outcomes of disease will attention to the behavioral causes of move even further upstream. disease.

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The World Wide Web: Faster than Spider- the physician’s office, emergency man. The ability to communicate room, and hospital to the patient’s information with lightning speed body and home. Sensors are already through the Internet provides being used to monitor insulin levels, researchers, providers, and consumers blood pressure, and infections with the latest developments before they hit the printing press. The com- Financial Risk puting power available to medical Disease management will continue to be researchers today gives them the abil- provided by those individuals and insti- ity to manage and manipulate larger tutions at financial risk for the care of and more complex databases than ever the patient. Financial risk can reside before. with the patient, the provider, or the The road map of your genes: The Human insurance company. We forecast that dis- Genome Project. The Human Genome ease management will be recognized as Project will take us further in the an important strategy to reduce costs management of diseases than any associated with avoidable disease compli- other discovery of the 20th century. cations. Providing disease management The mapping of the human genome services will be easier in the future as opens the doors to early detection, in advances in information and medical utero, of genetic predisposition to dis- technologies improve our ability to com- ease. By 2005, medical technologies municate and increase our level of acces- and new information on inherited dis- sible information about patients and eases gleaned from this project will their diseases. permit the identification of children who are predisposed to a disease many The Patient Care Process years in advance of the first symptoms. Disease management—the systematic, By 2010, vaccines, research on gene integrated delivery of health care to a therapy, and the use of more efficient defined population—will be most cost- vectors to deliver genetic material to effective when applied where current specific targets will radically change care processes are inconsistent and current methods of preventing and focused on physician office–and hospital- treating chronic conditions such as based care. Our forecast is that disease diabetes, asthma, cancer, and possibly management will continue to expand even neurodegenerative diseases such across comorbid and chronic conditions as Alzheimer’s. and move to high-volume, routine pri- Sensors: Chips that sense and tell. Sensors mary care problems such as urinary tract, will change not only the way we iden- respiratory, ear, and other localized infec- tify diseases but also the way we com- tions. As the concepts and techniques of municate information about the status disease management gain wider accep- of our health and disease to our selves tance, disease management will become and our providers. The use of sensors part of the fabric of the care delivery will move the monitoring and treat- process and cease to exist as a separate ment of many chronic diseases from care strategy.

Chapter 16: Disease Management 307 The Pace of Change expanding into other diseases—will continue for the next 5 years. This will take Most care delivered today (approxi- place primarily as a collaboration mately 90 percent) does not incorporate between established organized delivery disease management strategies. Most systems and entrepreneurial companies, patients are seen by independent physi- whose strengths and weaknesses are com- cians in solo or small-group practices, in plementary—they need each other in the settings that rarely lend themselves to near term. the type of organization, management, and information systems required for Here’s a breakdown of the evolution of effective disease management. Many are disease management in different settings. in the process of doing so, but few have been able to adopt disease management Health Insurers across the board for all patients with chronic diseases: the investment is too Most health insurers have not been in large, and the near-term benefits have the position of managing diseases not been sufficiently proven to warrant a actively; they have either managed costs complete shift. Moreover, only so much through utilization management or (in “organizational capital” exists, and man- certain regions) delegated the responsi- agers have to choose their priorities. bility for management to IPAs or medical groups. Health insurers’ interest in As a result, the pattern we see now—ini- disease management is increasing, driven tially targeting narrowly defined popula- by benefits consultants who are putting tions for disease management and then disease management into requests for

Table 16-1. The pace of adoption of disease management

Fast Movers Slow Movers Large medical groups Small-group or solo practices Integrated delivery systems Independent practice associations or preferred provider organizations Health plans with delivery system Fee-for-service reimbursement providers Capitated reimbursement/other risk-bearing organizations Fragmented care providers Organizations in competitive markets Groups specialized in single-disease focus Organizations with capable information technology systems

Source: IFTF.

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proposals and by the insurer’s need to motivated providers. Yet few IDSs with demonstrate both better outcomes and health plans have fully integrated disease lower costs to their customers. management among their products and services. These organizations have moved Forecast: During the next 5 years, disease slowly because of the difficulty of chang- management activity among health ing entrenched organizational structures, insurers will increase substantially, bureaucracies, and power relationships. though from a very small base. Insurers’ Moreover, many IDSs do not have infor- initiatives will take three main forms: mation systems that allow them to integrate and analyze information to Lease, don’t buy. Most plans will con- intervene in clinical practice. tract with disease management companies for some of their high-cost Forecast: The move toward disease man- diseases. agement will happen the fastest in IDSs associated with a health plan. They will Do-it-yourselfers. A smaller number be driven by competitive pressures of (20 percent) will purchase tools and cost, quality, and accountability. How to components of disease management undertake disease management will be a and apply them to their membership make-or-buy decision for these IDSs. on their own. This will occur primar- Information systems capable of support- ily in the areas of risk identification ing disease management will be a major and population management—areas enabling factor after 2005. that can use data already in an insurer’s claims database. Straight to the source. Some insurers Integrated Delivery Systems Without Health will develop a strong consumer-ori- Plans ented approach to health and disease management. They will both build Integrated delivery systems that don’t and buy components to achieve this. have an affiliation with a health plan— Blue Shield of California’s website, such as not-for-profit hospital chains that mylifepath.com, is an example of this have integrated medical groups (e.g., approach. Sutter Health)—are moving considerably more slowly toward disease management. Integrated Delivery Systems With Health Plans Forecast: Hospital-based IDSs and other IDSs not associated with health plans Large IDSs that include a health plan, will move more slowly toward disease such as Kaiser Permanente, Lovelace management programs. They will be (Health Systems), and Harvard Pilgrim more open to outsourcing their disease Health Care, were originally created to management programs than fully inte- reflect the underlying philosophy of what grated systems. They will base their is now known as disease management— make-or-buy decisions for disease man- involving plan members in keeping agement mainly on financial considera- themselves healthy with the support of tions, often short-term.

Chapter 16: Disease Management 309 Large Medical Groups physicians are in small-group practices of Large medical groups (of more than 25 two to six physicians physicians) will be slower to adopt disease management than the larger IDSs, Forecast: Small-group practices and because as smaller enterprises, they have independent physicians will see more less management sophistication and less and more of their patients enrolled in access to capital to invest in the infra- disease management programs in which structure needed for disease manage- the health plan enrolls the patient and ment. Their interest in creating disease leaves the MD out of the loop. In the management programs will hinge to a long run, information technology could large degree on how they are reimbursed level the playing ﬁeld by allowing for services. smaller providers to demonstrate outcomes and to manage their practices Forecast: As medical groups take on more effectively. more risk (in selected geographic areas and specialties), they will become more Summary focused on the cost equation. Medical Disease management poses opportunities groups with strong medical leadership— and threats to all players in the health medical directors and physician leaders care industry. The opportunities are most who are able to inspire, cajole, or brow- obvious for those involved with informa- beat their colleagues into adopting the tion and medical technologies. However, techniques of disease management—will the apparent threat to providers, health move the fastest. plans, and others can be seen as an opportunity—albeit one that must be Small-Group Practices developed and nurtured. and Independent Physicians Change in the delivery model of health Finally, small medical groups (of fewer care is inevitable, just as it has been in than 10 physicians) and independent every other industry affected by an physicians are and will be least capable increase in the use of technology and of developing and participating in dis- consumer demand for accountability. ease management. They don’t have the How this change is perceived, imple- capital, management sophistication, or mented, and assessed in the future will critical mass to be signiﬁcant disease depend to a great extent on how the cur- management players. The majority of rent players respond.

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Chapter 17 Health Behaviors Small Steps in the Right Direction

Public health researchers in 1993 stated but also secondhand tobacco smoke have what public health professionals had come paradigm-shifting public health known for a long time—that the ulti- responses including restrictions on mate cause of death for people in the smoking in public and some private United States is often the consequence of enterprises, landmark litigation holding a combination of underlying behavioral industry accountable for health conse- and environmental causes.1 Examining quences, and restrictions on advertising. the top ten causes of death in the United States, those researchers illustrated the Without refuting either the substantial links between biomedical diseases and effect of those behaviors on public health their underlying causes (see Table 17-1). and society overall or the far-reaching significance of the strategic responses to These classifications reveal an underlying them, this chapter centers attention on complexity in which behavioral, social, other behaviors associated with major economic, environmental, and cultural public health problems. These behaviors forces are inextricably related to determi- include the abuse of alcohol, the use of nants of mortality. This list of underly- illicit drugs alone and in relation to the ing causes of death can therefore be a transmission of infectious diseases, the use guide to prioritizing and developing suc- of firearms, and the use of tobacco as it cessful prevention strategies for improve- relates to the adoption of other risk ment of the public’s health. behaviors. These practices are associated with significant injury and loss to both To that end, it is useful to assess the individuals and the general public in trends of several of the underlying causes terms of mortality and morbidity, eco- of death. Issues related to toxins and pol- nomic consequences, and loss of personal lutants are discussed elsewhere in this and workforce productivity. We focus on volume as they concern environmental these behaviors because we believe they health (see Chapter 11). Poor diet, lack represent the issues that, in the coming of exercise, and resultant obesity are decade, will be the most hotly contested, increasingly acknowledged to be serious mark the greatest departure from tradi- health risks to the individual. With tional understanding, and spark the widespread recognition of the health greatest innovation in the coming risks associated with not only primary decade.

Chapter 17: Health Behaviors 311 Although drugs and alcohol differ in the Table 17-1. Biomedical and underlying causes of death in the forms of social dysfunction they wreak, United States in 1990 they also have much in common. For Top Ten Biomedical Determinants example, the abuse of either increases: Cardiovascular disease Cancer instances of unintentional injury, espe- Cerebrovascular disease cially in motor vehicle crashes Chronic obstructive pulmonary disease the incidence of morbidity, disability, Unintentional injury and untimely mortality Pneumonia and inﬂuenza the danger of harm to the fetus during Diabetes pregnancy HIV/AIDS Suicide the likelihood of engaging in unsafe Homicide sexual practices Top Ten Underlying Causes* the spread of infectious disease—espe- Tobacco cially HIV/AIDS and hepatitis Poor diet disruptions of family life and house- Lack of exercise hold roles and responsibilities Alcohol Infectious agents the incidence of domestic violence, Pollutants/Toxins sexual assault, and suicide Firearms the commission of crimes, including Sexual behavior homicide Motor vehicles Illicit drug use In addition, alcohol and illicit drugs pre-

*The original list combined poor diet and lack of exercise, for a total of nine causes. sent special risks for young people, and Source: McGinnis, J. M., and Foege, W. H. Review. Actual causes of death in the United States. the number of potential years of life lost Journal of the American Medical Association (November 10) 1993; 270(18):2207Ð2212. to alcohol- and drug-related injuries are as signiﬁcant as those lost to heart disease and cancer—the two leading causes of Alcohol and Drug death in the United States. Abuse in America Abuse, addiction, and their consequences Alcohol and drug abuse are among the appear in every socioeconomic stratum, most pervasive health and social prob- educational level, geographic region, and lems in the United States today. More ethnic and racial group. The following than one-half of American adults have a data are drawn from several major close family member who has or has had national studies, including the 1999 alcoholism.2 In a 1997 survey conducted National Household Survey on Drug by the Gallup Organization, 45 percent Abuse, and the 1998 Health Services of Americans reported that they, a family Research Outcomes Study, and are consis- member, or a close friend had used illegal tent with those in several other major drugs. studies.3

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1979 peak of 25 million users, although The Scope of the Alcohol and Illicit Drug Abuse patterns by age category vary dramati- Problem in the United States cally (see Figure 17-1). Overall levels have remained stable over the past 8 years, but are higher than the lowest levels ever measured. Marijuana is the most frequently used illicit drug (see Figure 17-2). Among Levels among youths ﬂuctuate at high levels, but may have started to current drug users, 75 percent reported decline. marijuana use, and 18 percent of mari- Use of illicit drugs by people age 18 to 25 is increasing. juana users also used other drugs. An estimated 1.5 million people—0.7 per- Youths’ initiation of marijuana and cocaine are at historically high levels. cent of the U.S. population—were cur- Males, youths, urban populations, and less educated people have the rent users of cocaine in 1999. That highest levels of drug use. percentage has remained fairly stable over the past few years, and it represents a 74 Males, urban populations, and more educated people have the highest percent decrease from the 1985 peak of levels of alcohol consumption. 5.7 million users. The estimate of current Youths and young adults engage in higher levels of binge and heavy crack users was 413,000 in 1999. drinking.

The public is well aware of the problem. Who Is Using and Who Is Abusing?

Age. According to 2001 figures, the Of the 227 million people in the United highest rates of illicit drug use were States age 12 and older in 2001, 48 per- among young people age 18 to 25 cent had used alcohol at least once in the (18.8 percent). The levels then decline past month. Of those 12 and older, about in successively older and younger age 20 percent engaged in binge drinking, groups. In contrast, a majority of peo- defined as having five or more drinks on ple 18 and older use alcohol, but rates the same occasion at least once in the past of binge drinking and heavy drinking month; and 5.7 percent were heavy are significantly higher in the 18-to- drinkers, who had had five or more 25 age group than among older adults. drinks on the same occasion at least 5 different days in the past month. Race. Illicit drug use for African Amer- icans (6.9 percent) is slightly higher The proportion of people using alcohol in than that for whites (6.8 percent) and the United States has remained relatively Hispanics (6.8 percent)—although stable overall for the past few years. In among the young there are no differ- 2001, 7.1 percent of those 12 and older ences across those racial groups. were using illicit drugs. That percentage Among youths aged 12 to 17, the rate constitutes 15.9 million Americans— of illicit drug use was highest among although 78 million Americans report American Indians/Alaskan Natives (23 having tried illicit drugs at some time in percent).Whites have the highest rates their life. The total number of people of alcohol use (31 percent), followed using illicit drugs has remained stable by Hispanics (24 percent) and African since 1992, at levels roughly half the Americans (19 percent).

Chapter 17: Health Behaviors 313 Education. Illicit drug use is highly Figure 17-1. Prevalence of illicit drug use by age cohorts (percentage of age correlated with educational status. cohort, 1979Ð1997) Young adults who have not completed

Percent using in past month high school have the highest rate of 40 illicit drug use (10 percent) and col-

Age 18Ð25 lege graduates have the lowest (5 percent). Conversely, the higher the level 30 of education, the higher the proportion of people in the group who use Age 26Ð34 alcohol. In 2001, 65 percent of college 20 graduates used alcohol as compared to Age 12Ð17 33 percent of people who had not graduated from high school. 10 Interactions. The level of alcohol use Age 35+ was strongly associated with illicit drug use in 1999, as in prior years (see 0 Figure 17-3). Within each educational 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 level, the more a person drinks alco- Source: Substance Abuse and Mental Health Services Association, National Household Survey on hol, the more likely it is that the per- Drug Abuse, 1998. son will also take drugs.

Figure 17-2. Marijuana is the drug of choice. Concern for the Young

Drug other Alcohol use among young people has than marijuana insidious consequences because youths (24%) who drink alcohol are at greater risk for the development of a serious alcohol disorder. For example, youths who initi- Exclusive ate alcohol use when they are 15 years old Marijuana plus marijuana use are 4 times more likely to become alcohol (56%) other drug dependent as people who start drinking (20%) at or after the age of 21 (see Figure 17-4).

Source: Substance Abuse and Mental Health Services Association, National Household Survey on Especially as it affects the young, the Drug Abuse, 2001. interaction of alcohol, drug, and tobacco use should be considered. Young smokers are 12 times more likely to also take illicit drugs and are 16 times more likely to drink alcohol heavily than are young Gender. Males consume higher levels nonsmokers. Among young people who of both illicit drugs and alcohol than were heavy drinkers in 1999, 66.7 per- do females (8 versus 4.5 percent for cent were illicit drug users; among non- drugs, and 59 versus 45 percent for drinkers, only 5.5 percent used illicit alcohol). drugs (see Figure 17-5).

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In 2001, 28.5 percent of all those 12 to Figure 17-3. Association of alcohol and illicit drug use (Percentage of 20 years old reported that they used alco- drinkers also using illicit drugs, by level of alcohol consumption) hol. These young people are more likely

Percent to engage in binge drinking and heavy 35 drinking. In the young adult population of 18- to 25-year-olds, levels of binge and 30 heavy drinking have ﬂuctuated over the

25 past few years, but remain high. Illicit drug use among 12- to 17-year- 20 olds, after increasing for several years, 15 declined slightly from 11 percent to 9 percent between 1997 and 1999. How- 10 ever, use of illicit drugs by young adults 18 to 25 years of age rose to its highest 5 level, increasing to approximately 19 per-

0 cent in 1999 from 14.5 percent in 1997. Heavy Binge Average Non- drinkers drinkers drinkers drinkers Adolescents’ perception of risk associated

Source: IFTF; Substance Abuse and Mental Health Services Association, National Household with drug use is another factor to moni- Survey on Drug Abuse, 2001. tor in evaluating trends in drug use. The trend in perceived risk mirrors the trend in the use of marijuana among youths. Figure 17-4. Prevalence of lifetime alcohol dependency or abuse, and age of drinking onset Over the years, as the perceived risk decreased, drug use increased—and vice Percent versa (see Figure 17-6). 50 The Consequences of Substance Abuse 40 The Toll in Injuries Caused by

30 Percent dependent Substance Abuse Injuries, both intentional and unintentional, are a major contributor to 20 untimely death, disability, and lost pro- Percent abuse ductivity. The two leading causes of 10 death from injury are motor vehicle accidents and ﬁrearms, together accounting for more than half of all injury-related 0 ≤12 14 16 18 20 22 ≥25 deaths, and much of the time, alcohol and illicit drugs are on the scene. Age of drinking onset

Source: National Institute on Alcohol Abuse and Alcoholism, Ofﬁce of Policy Analysis, 1998. Alcohol- and drug-related injuries accounted for 638,484 emergency room

Chapter 17: Health Behaviors 315 visits in 2001. Alcohol is a factor in Figure 17-5. Interaction of drugs, tobacco, and alcohol almost 60 percent of all fatal falls and, (Percentage of illicit drug use among youths who do and do not smoke together with other drugs, ﬁgures in 40 and drink heavily) percent of all fatal automobile crashes Percent and up to 65 percent of adult 70 drownings.4,5 In fact, alcohol is impli- Do behavior cated in 100,000 deaths each year, 60 Don't do behavior mostly from unintentional injuries, homicides, and suicides. The estimated 50 relative risk of accidental death is 2.5 to 8 times greater among males who are 40 heavy drinkers or alcohol dependent than among the general population.5 Trauma 30 victims are often found to be intoxicated, and a history of trauma is a marker for 20 the early identiﬁcation of alcohol abuse.

10 Risk-function analysis for social consequences, which assesses the probability

0 of occurrence of speciﬁc consequences at Smoking Binge drinking speciﬁed levels of alcohol consumption,

Source: IFTF; Substance Abuse and Mental Health Services Association, National Household associates alcohol with diminished social Survey on Drug Abuse, 1998. functioning and increased harm.

Alcohol and Drugs Causing Figure 17-6. Trends in perceptions of availability and risk of regular use, compared with 30-day prevalence for twelfth graders Morbidity and Untimely Death After smoking and obesity, substance Use Risk & Availability abuse is the third leading preventable 50 100 cause of mortality in the United States Availability today. As many as 11 percent of pre- 40 80 Risk ventable deaths in the United States are related directly to alcohol and illicit 30 60 drug use. Alcohol accounts for 5 percent of premature deaths, and cirrhosis, alco- 20 40 Use holic psychoses, and nondependent abuse of alcohol make alcohol a major con- 10 20 tributing cause of hospitalizations.

0 0 The National Highway Trafﬁc Safety 1975 1978 1981 1984 1987 1990 1993 1996 1998 Administration reports that 40 percent Use: Percent using one Risk: Percent saying Availability: Percent of fatal motor vehicle accidents in 1999 or more in past 30 days great risk of harm in saying fairly easy or regular use very easy to get involved alcohol. Illicit drug use is a major contributor to deaths due to over- Source: Monitoring the Future Study, University of Michigan, 1998. dose, suicide, homicide, motor vehicle injuries, and HIV/AIDS. Furthermore,

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drug-related deaths increased 42 percent A 1993 study of more than 2,000 Amer- from 1990 to 1995, reaching 14,218. As ican couples showed that rates of domes- Figure 17-7 shows, both drug-related tic violence were almost 15 times higher visits to the emergency room and levels in households where husbands were often of heroin- and cocaine-related visits have drunk than in homes where husbands increased. were never drunk. Alcoholism and child abuse, including incest, are tightly inter- Domestic Violence twined as well. Between 25 and 50 per- Violent behaviors between family cent of men who commit acts of members causing physical and emo- domestic violence have substance abuse tional harm are prevalent throughout problems. Not only do abusers tend to the world. More than 1 million children be heavy drinkers, but also the people in the United States are known victims they abuse are more likely to abuse alco- of abuse and neglect, one-quarter suffer- hol and other drugs over the course of ing physical abuse and another quarter their lifetime. Battered women are more being sexually abused or emotionally likely to abuse alcohol and other drugs, mistreated. suffer depression, attempt suicide, and abuse their own children.6,7,8 Spousal and child abuse are as clearly Drugs, Alcohol, and Crime related to alcohol abuse as are motor vehicle injuries. Alcohol and/or illicit Violent crimes now affect some 11 mil- drug use is a factor in more than 50 per- lion victims annually, and drugs, alcohol, 9 cent of all incidents of domestic violence. and crime go together. Of the 1.7 million men and women in the nation’s jails and prisons in 1997, 4 out of 10 reported using alcohol, and 6 out of 10 reported being under the inﬂuence of Figure 17-7. Trends in drug-related emergency room visits, 1982Ð2000 illicit drugs at the time of their offense. Thousands The U.S. Department of Justice reports 700 that 35 percent of violent assaults Total involve the use of alcohol. Each year, 37 600 Cocaine Heroin percent of all rapes and sexual assaults 500 involve alcohol use by the offender, as do 400 15 percent of robberies, 27 percent of aggravated assaults, and nearly 25 per- 300 cent of simple assaults. 200 Not only is substance abuse a cause of 100 crime, it is a crime. More than a million 0 arrests—over one-third of all arrests in 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 the United States—are made each year for intoxicated driving, liquor-law violations, Source: Substance Abuse and Mental Health Services Administration, Health and Human Services Drug Abuse Warning Network, 1997 and 2001. drunkenness, and other statutory crimes concerning alcohol and drugs. America

Chapter 17: Health Behaviors 317 has one of the highest incarceration rates Figure 17-8. Incarcerations in federal and state prisons and in the industrialized world (868 per local jails, 1985Ð1997 100,000 population), and drug violations

Thousands alone accounted for three-quarters of the 1,800 growth in the U.S. inmate population between 1985 and 1995 (see Figure Federal prisons 99,175 inmates 1,500 State prisons 17-8). According to FBI records of arrests Local jails from 1970 through 1997, arrests for drug 1,200 abuse violations reached their highest lev- 1,059,588 inmates els ever in the United States. The number 900 of arrests for drug abuse violations almost doubled for adults (from 629,196 in 1985 600 to 1,019,621 in 1997) and more than doubled for juveniles (from 68,122 in 300 567,079 inmates 1986 to 154,761 in 1997).10

0 HIV/AIDS and Sexually 1985 1987 1989 1991 1993 1995 1997 Transmitted Diseases Source: IFTF; Substance Abuse and Mental Health Services Association, National Household Alcohol and drug use contribute to the Survey on Drug Abuse, 1998. spread of HIV/AIDS and other sexually transmitted diseases. Impaired judgment Figure 17-9. Drug use and AIDS (Percentage of new AIDS cases by about having sex and about condom use exposure category, June 2000; 43,293 total cases) increases the risk of spreading an infectious disease. Behaviors associated with

Men who have drug use, such as the exchange of sex for sex with men drugs and needle sharing, increase expo- Other, not identified (33%) (24%) sure to infectious diseases. More than 40 percent of AIDS cases among women are

Injecting drug use drug related. There is also evidence that Blood transfusions (22%) (1%) alcohol and other drugs weaken the immune system, thereby increasing sus- Heterosexual contact (16%) ceptibility to infection and disease. In fact, drug use is now the second-largest Men who have sex with men and inject risk factor for HIV infection in the drugs (4%) United States. As of mid-2000, approximately one-ﬁfth of all new AIDS cases Source: Centers for Disease Control and Prevention. HIV/AIDS Surveillance Report, Mid-Year Edition, 2000. were among people using drugs by injection (see Figure 17-9).

The Costs

It is difﬁcult to put a monetary value on the human suffering and loss of life associated with alcohol and other drug prob-

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feel the burden. The economic problems, Figure 17-10. Economic costs of alcohol and drug abuse which are increasing annually in absolute and proportionate terms, include:

rising share of total health care Total expenditures related to alcohol and drug use Alcohol diminished workforce productivity lower household incomes, in turn affecting family members 1985 Drugs 1995 diversion of government funds from other programs into alcohol and drug 0 50 100 150 200 250 300 treatment Billions of dollars The Health Care System Note: Comparison reﬂects results of cost of illness studies. Source: IFTF; Substance Abuse and Mental Health Services Association, National Household A large part of the national health care Survey on Drug Abuse, 1998. bill is for medical expenses related to the use or abuse of alcohol, tobacco, and other drugs. Many general hospital beds are occupied by patients with alcohol-related lems, but other, more direct costs add up medical conditions. When hospital to big dollars. Alcohol and other drug admissions are related to alcohol or illicit use is a factor in many of this country’s drug use, the disorders tend to be more most serious and expensive problems, severe and more expensive than in other including—in addition to the injuries, admissions. Health care costs related to health risks, and crimes just described— substance abuse do not stop at the abuser. teen pregnancy, failure at school, escalat- Children of alcoholics average 62 percent ing health care costs, low worker more hospital days, 24 percent more inpa- productivity, and homelessness. tient admissions, and 29 percent longer stays than do other children. Alcohol and illicit drug abuse in the United States cost society $276.3 billion National health care expenditures related in 1995, reﬂecting a 90 percent increase to alcohol and drug abuse totaled $11.9 from 1985. Alcohol abuse accounted for billion in 1997, with $6.4 billion for 60 percent of the total and drug abuse alcohol abuse and $5.5 billion for drug accounted for the remaining 40 percent abuse. That cost was small compared to (see Figure 17-10). the social costs of $294 billion in 1997 that can be attributed to substance Most of the costs are borne by the gov- abuse. It is primarily the public that ernment and the individual substance pays for these expenses: 64 percent ($7.6 abusers, although families, businesses, billion) of total spending on alcohol and the health care system, and society also drug abuse came from public sources,

Chapter 17: Health Behaviors 319 including Medicare, Medicaid, and other High employment levels among drug federal, state, and local agencies. and alcohol abusers is good news for the substance abusers, but it is bad The Workplace news for the workplace. Compared to other workers, employees reporting Drug and alcohol abuse costs U.S. busi- current alcohol or drug abuse were 2 to nesses more than $110 billion a year in 2.5 times more likely to have worked lost workdays, accidents, and increased for three or more employers during the insurance rates. Although illicit drug past year and to have skipped one or users are less likely to be employed more days of work during the past than people who do not use drugs, month. Compared to their drug-free or about 76 percent of all current adult alcohol-free coworkers, alcohol and illicit drug users and heavy drinkers are drug users generally are less depend- employed full or part time. The overall able, are less productive, have more rate of current illicit drug use among unexcused absences, are more fre- full-time employees dropped from a quently ﬁred, and switch jobs more high of 17.5 percent in 1985 to a low often (see Figure 17-11). The abuse of 7.4 percent in 1992, and since then problem is most serious among workers has remained stable; it was 6.9 percent in the restaurant, construction, and in 2001. transportation industries.

The Politics of Problems Related to Alcohol and Figure 17-11. The workplace consequences of drug and alcohol abuse: Employment history and absenteeism Drug Abuse

Percent It is clear that alcohol- and drug-related 14 problems are profound and seem Illicit drug use intractable. An overview of U.S. policy 12 No illicit drug use Heavy drinking efforts to reduce alcohol and drug abuse 10 No heavy drinking in the 20th century highlights the foundations of future directions for substance 8 abuse politics and policies. 6 U.S. policies on alcohol and drugs are 4 best understood in their historical and 2 social context. Before Prohibition ended in 1933, the alcohol policy was domi- 0 > Three employers Skipped at least one nated by judgments concerning an indi- in past year day in past month vidual’s behavior rather than by an

Source: IFTF; Substance Abuse and Mental Health Services Association, National Household understanding of alcohol abuse as both Survey on Drug Abuse, 1998. a disease and a social phenomenon. Pro- hibition’s policy legacy is a supply-side

320 Chapter 17: Health Behaviors Health and Health Care 2010 Institute for the Future

approach that incorporates criminal law, The Dominance of the drug interdiction, and incarceration Criminal Justice System more frequently than rehabilitation. From 1991 to 2001, federal spending for Despite ever growing awareness that drug control programs increased from these Prohibition-based strategies are $11 billion to more than $18 billion. largely ineffective and economically The criminal justice system has consis- unsustainable, they have been the cor- tently received about half of these funds, nerstones of national policy for more whereas treatment and prevention than 80 years—culminating in the receive a third of total funding, and national War on Drugs of the 1980s. other supply-side strategies and interdiction consume the remaining amount. No Accompanying this approach were change to these strategic and spending arrests, fines, property forfeiture, and priorities is in sight. imprisonment for producers, sellers, and buyers. The cost to arrest, try, sentence, and incarcerate people found guilty for Determining the Solutions: The Promise of Public the more than 4 million alcohol- and Health other drug-related offenses committed each year is over $60 billion annually. Although the legacy of the War on This expenditure is a tremendous drain Drugs still dominates alcohol and drug on U.S. resources. Incarcerating prisoners policy in the United States, there are is now the most rapidly growing expense signs of preliminary shifts in national faced by governors and state legislatures. policy. The National Drug Control Strat- egy of 2001 attempts to approach drug Policy on the control of drugs and alco- control as a continuous process rather hol continues to be inadequate. Two par- than a battle with a definitive end. It ticular pressures help to explain the also addresses the interaction of drug, policy impasse. alcohol, and tobacco use. It emphasizes prevention and treatment efforts and The Bifurcation of Alcohol makes a priority of tobacco and alcohol and Drug Policy use by underage youths. The National Although both alcohol and drugs are Drug Control Strategy may finally be addictive agents, U.S. policy and preven- viewing alcohol and drug problems tion strategies approach them quite dif- through a public health lens. But once ferently, starting with the distinction in the politicians and the public focus on their legal status. Each has its own set of public health, what will they see? stakeholders, advocates, and opponents. Efforts to develop a comprehensive, coor- Ecological Approaches dinated policy are debilitated primarily The public health community has begun by a lack of coordination between the to shift emphasis away from individual- criminal justice system and the public based strategies toward broader ecologi- health field. cal approaches. The main goal of

Chapter 17: Health Behaviors 321 individual-based strategies is to increase facing children in America today. How- the individual’s knowledge and change ever, how to address youths’ alcohol and his or her behavior. Although they are drug use is highly controversial. Effec- important, individual-based interven- tive, environmentally based, youth- tions are ultimately limited by the focused strategies must break through greater environment, where social current controversy if they are to shape drinking and experimentation are the future. encouraged. In contrast, ecological public health strategies address alcohol and Demand for Treatment Is drug abuse as an interplay of individual, Increasing, but Who Will Pay? biological, community, family, environ- Research shows that treatment not only mental, and policy influences. For exam- reduces substance abuse but reduces ple, by working in concert, education crime as well. Criminal activity, includ- and rehabilitation programs, peer sup- ing income-producing crimes and vio- port groups, regulation of alcohol out- lent and disorderly offenses, declines by lets, restriction of advertising, media 23 to 38 percent following substance- advocacy, and taxation can reduce alco- abuse treatment. Each dollar spent on hol and drug abuse risks for an entire drug treatment saves Americans $7 by community. The success or failure of an reducing or avoiding costs related to ecological approach to alcohol and drug criminal justice, health care, and welfare abuse is held in the balance by several activities. key issues that are highly controversial and unresolved. They include youth-tar- Despite these findings, there is a serious geted interventions, funding for treat- gap between the need for and the provi- ment and rehabilitation, and the sion of rehabilitation services. In 1997, economic dynamics that shape the use 1.9 million people were enrolled in and abuse of alcohol. treatment programs and another 7.4 million were on waiting lists. To fulfill the potential of alcohol and drug reha- Youth Focus: Prevention bilitation, the chasm between this need Strategy or Politics? and the resources available to meet it With high levels of illicit drug use must be bridged (see Figure 17-12). among 12- to 17-year-olds prevailing, and with mounting evidence that early Economic Forces in use increases the risk of addiction, help- Alcohol Use and Abuse ing young people to stay away from Two main factors are evolving in the alcohol and drug abuse is one of the understanding of economic forces in alco- most urgent issues on the substance- hol use and abuse. The first is the mount- abuse agenda. Public sentiment sup- ing evidence that the public’s ports the science. Recent survey data on consumption of beer, wine, and spirits is American attitudes toward children’s sensitive to tax, and ultimately price, health issues show respondents citing increases. The second is the evidence sug- “drugs/drug abuse” and “alcohol” gesting that alcohol abuse and depen- among the top five serious problems dence correspond with lower earnings

322 Chapter 17: Health Behaviors Health and Health Care 2010 Institute for the Future

ently political, and any future advance- Figure 17-12. Reported past year illicit drug or alcohol problem relative to ments must shoulder the legacies of the treatment (millions of people, 1998) past and the problems of today. In this context, we make the following forecasts. Drug-related 1.9 health problem Alcohol and drug use and health effects. Drug use in the teenage and young Drug-related 3.5 adult populations will continue to be psychological problem high, although recent changes in national drug policy may result in Drug addiction 4.1 some decline. High levels will continue to be driven by marijuana use, Drug treatment 0.963 conﬂicting media messages, peer pressure, risk-taking behavior, and the Alcohol addiction 9.7 popular sentiment that “all use is not abuse.” Alcohol and drugs will continue to be among the leading causes Alcohol treatment 1.7 of morbidity, disability, and prema-

0246810 ture mortality in the United States. Millions of people Prevention and treatment. The high levels of new users initiating drug Source: IFTF; Substance Abuse and Mental Health Services Association, National Household Survey on Drug Abuse, 1998. and alcohol use have important implications for substance-abuse prevention efforts and treatment and income levels. The effects of eco- services. Demand for treatment will nomic forces differ between moderate and increasingly place pressure on these heavy drinkers, and strategies and con- already strapped services. As drug- clusions must consider variations in alco- using baby boomers age, they will hol consumption. As more sophisticated bring their drug-related problems methodologies and enhanced data sets with them, increasing demands on develop, approaches can increasingly medical and Medicare services shape substance-abuse prevention efforts because of their large numbers and and policy. because their aging will lead to increased medical complications. The Forecast for Prevention efforts will increasingly Alcohol and Drugs target adolescents, both to protect Few of the problems of alcohol and drug the well-being of individuals and abuse in the United States are likely to be society and to buffer the already over- resolved within the next 10 years. burdened treatment services. Improving the overall quality of the social and physical environment holds Economic and social costs. Without radical the greatest promise for reducing the change in policy, overall costs of alco- costs of alcohol and drug abuse in society. hol and drug abuse—and their conse- However, addressing these issues is inher- quences in terms of such events as

Chapter 17: Health Behaviors 323 motor vehicle accidents and incidents address the problem. Researchers will involving firearms—will remain in seek greater understanding of the dis- the billions. Even with increases in tinctions in approaches needed for dif- prevention- and treatment-oriented ferent groups such as youth, women, efforts, the time frame for resolution and heavy drinkers. Concurrently, of current problems is likely to exceed efforts increasingly will focus on harm this 10-year forecast, especially con- reduction, with mounting pressure on sidering that long-term consequences the government to work on suppres- of alcohol and drug abuse will have a sion of consumption. delayed impact on health care systems and government. Injury Prevention: A Focus on Guns Community-based organizations. Expect to see more states and local communi- Accidents don’t just happen. Injury pre- ties experimenting with ecological vention experts say that there is no phys- approaches and strategies. Citizen-led ical event of a health-threatening nature initiatives will scrutinize local ordi- that cannot be avoided or its negative nances regarding alcohol sales and consequences reduced. And yet, in the advertising, galvanizing local officials, United States, unintentional injuries and advocates, and parents to seek out violence are a major cause of death, dis- ways to reduce the influences of alco- ability, and lost productivity for people hol and drugs in their neighborhoods under 55. In 1995, injuries were respon- and to stage community events. sible for nearly 150,000 deaths, 2.6 million hospitalizations, over 36 million The alcohol industry and taxation. visits to the emergency room, and $260 Despite some evidence that increased billion in societal costs.11,12 Motor vehi- taxation of alcohol may reduce its pur- cle injuries, while generally declining, chase by younger and poorer people, remain the number one injury-related future use of this strategy is unlikely, cause of death. Disturbingly, what fol- considering the tangled relationship lows this largely unintentional injury- between politics and industry contri- related cause of death is intentional butions. Industry lobbying will firearm-related homicide and suicide. remain strong, as evidenced by the alcohol industry’s recent end to its Fortunately, major advances in injury self-imposed ban on advertising of prevention over the past 30 years liquor. reduced motor vehicle injury to historically low levels. Epidemiology, the core Strategies. Although the government science of public health, has been a key will continue to place the bulk of its tool in these efforts by providing the funding in supply-side and criminal research to prevent and control injuries justice measures, prevention strategies through legislation, environmental will continue. The focus increasingly changes, and education. Over the 23 will be on ecological approaches to years from 1968 to 1991, the motor

324 Chapter 17: Health Behaviors Health and Health Care 2010 Institute for the Future

vehicle traffic fatality rate declined ity. In addition, to adequately address nearly 30 percent13 because of develop- firearm injury, public health profession- ments in legislation, roadway and vehi- als must coordinate with a complex array cle design, driver and pedestrian of fields and institutions that address education, protective equipment, and criminal justice, violence, mental health, the establishment of emergency medical substance abuse, and poverty. These fac- services systems. Future improvements tors have required injury prevention pro- will result from the use of devices to fessionals to break new ground and are detect and prevent driver drowsiness, catalyzing a flurry of policy, litigation, vehicle-mounted sensors to warn of and manufacturing, and advocacy actions and avert collisions, and stricter laws govern- reactions. All told, the future of firearm ing drinking and driving injury prevention is incredibly dynamic, and its unique challenges may generate Firearms in America innovations useful to the broader field of injury prevention. There are over 200 million guns in the United States.14 Nearly 40 percent of By 1993, firearm injuries and expenses U.S. households have at least one gun seemed to be spiraling out of control, and nearly one-quarter have a handgun.15 and the CDC estimated that by the year These firearms are not just mounted 2001, firearms would surpass motor above the hearth. Rather, many are vehicles as the leading cause of injury 13 involved in killing and injuring people: death in the United States. However, in 1997, there were 32,436 gun-related levels of firearm death seem to be cycli- deaths in the United States—more than cal, and gun deaths have declined over 88 deaths every day.16 Indeed, rates of 18 percent since 1993, with the decline firearm death and injury are higher in occurring more in homicides and unin- 16 the United States than in any other tentional injuries than in suicides. If industrialized country.17 Particularly that trend continues, within a few years chilling, the United States has the high- firearm-related deaths could be at their 19 est male teen homicide rate and child- lowest point since the 1950s. hood firearm death rates in the industrialized world.18 Who Gets Hurt

Solutions to firearm injury, while lying Youths, males, and minorities are the within the public health framework, also main victims of gun injuries. Men, present prevention specialists with young men in particular, are on average unique challenges. No other consumer 6 times more likely to die by firearms product (except tobacco) remains outside than are women. African Americans are the jurisdiction of a federal agency that 2.5 times more likely to be killed by can regulate its safety, is embroiled in firearms than are whites. African Ameri- constitutional and cultural controversies, can men 15 to 24 years old are nearly 5 and is consistently and lethally involved times more likely to die by firearms in intentional injury and criminal activ- than white men in that age group.20

Chapter 17: Health Behaviors 325 related mortality. In 1997, 54 percent of Figure 17-13. Trends in homicide rates by method, 1985Ð1999 all gun deaths were suicides, and 42 percent were homicides. Guns are the Rate per 100,000 method of choice for nearly 60 percent of 15 people who commit suicide.16 In homes with guns, the risk of suicide is nearly 5

12 times higher than in homes without guns.23 As with homicides, suicide rates Total have declined since the mid-1990s, but 9 to a lesser degree. Suicide rates among senior adults are consistently the high- Firearm est, although youth suicide is also at a 6 historical high. Rates for African Ameri- can youths have increased disproportion-

3 ately, with ﬁrearms accounting for 96 Nonfirearm percent of the increase (Figure 17-14).

0 Unintentional Shootings 1985 1987 1989 1991 1993 1995 1997 1999 Unintentional firearm deaths, represent- Year ing only about 3 percent of all firearm- Note: Variance from the regression line not shown. related fatalities, have been in steady Source: U.S. Department of Justice, Homicide Trends in the U.S., Bureau of Justice Statistics, 2001. decline but still firearms killed nearly a thousand people in 1998.18 It is estimated that over 17,000 people each year are treated for unintentional, nonfatal Homicides gunshot wounds in hospital emergency departments. Unintentional shootings Firearms are the weapon of choice in are also significant because they may be approximately 70 percent of U.S. homi- highly preventable, and because children cides, and of these firearm-related deaths, are often the victims.24 86 percent involve handguns.21 In homes with guns, the homicide of a household At What Price? member is nearly 3 times more likely 22 than in homes without guns. Youth The sticker shock of firearm injury—as homicide rates climbed sharply until measured in hospitalization, rehabilita- 1994, and while consistently declining tion, and lost wages—is impressive. The since then, remain high, especially cost per firearm-related fatality is higher among 15- to 19-year-olds (see Figure than for any other class of fatal injury. 17-13). Firearm injury also tends to generate more costly morbidity.25 A 1999 study Suicides estimated that gunshot injuries in 1994 Less recognized than homicide, suicide is produced $2.3 billion in lifetime med- a significant contributor to firearm- ical costs.26 Gunshot injuries due to

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and may in fact be the building blocks Figure 17-14. Adolescent suicide: A black and white comparison, 1980Ð2000 of real change in the state of ﬁrearm (Suicide rates for blacks and whites age 15 to 19, by year—United States) injury in the United States.

Rate per 100,000 Overall firearm mortality is going 14 down, with declines in homicide and unintentional shootings occurring 12 faster than suicide. Young people, males, and minorities experience the 10 greatest firearm injury and mortality burden. Unintentional and nonfatal 8 firearm injuries also cause significant morbidity and mortality. If overall 6 trends continue, gun violence will soon reach its lowest level in decades. White 4 With a wide array of interventions Black recently implemented, there is uncer- 2 tainty as to the exact causes of the 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 decline, making a forecast of future Year injury levels unstable. Each firearm Source: Centers for Disease Control and Prevention. Suicide Among Black Youths—United States, injury continues to be expensive, and 1980Ð1995. Morbidity and Mortality Weekly Report (March 20) 1998; 47(10):193Ð206. the associated costs are high for the public sector and for society at large.

Surveillance and research on firearm use is increasing and will likely be a assaults accounted for 74 percent of total potent tool for reducing gun use in costs. Another study estimated that in crime and for understanding the 1990, total lifetime (medical and indi- nature of firearm injuries and preven- rect) costs of firearm injuries would reach tion strategies. However, much more $20 billion.27 These costs represent a needs to be done before surveillance huge potential liability for health care can be considered truly comprehensive providers and payers, especially since the throughout the country. more serious the injury, the greater the government contribution. A significant number of firearm experts suggest that that debate has Forces Driving Firearm reached an impasse on issues such as Injury Prevention the Second Amendment right to bear The future of firearm injury prevention arms or the risks and benefits of gun 28 will be shaped by the following factors: ownership. Instead, they call for a focus on policy that regulates guns as The past several years have delivered consumer products, restricts gun own- an array of prevention strategies that ership based on criminal history, and depart from traditional approaches curtails illegal gun commerce. With

Chapter 17: Health Behaviors 327 broad public support (see Table 17-2), Efforts to reduce firearm injuries are these strategies may shape the preven- increasingly focused on the distribution framework for the coming decade. tion and manufacture of firearms, in particular on regulation of handguns Firearm regulation tends to lack ade- as consumer products and reduction of quate comprehensiveness and coordi- the illegal sale of guns. While some nation at the federal level, with some controversy exists concerning specific important exceptions. Most change in strategies, evidence is mounting that gun policy is originating from state- regulations such as licensing and reg- level activity, but is characterized by istration laws, background checks, great variability: some state regula- and purchasing limits can be effective tions strengthen firearm control, while in limiting the distribution of others may weaken firearm injury pre- firearms and in decreasing their vention. Most local regulatory action involvement in crime. At the same continues to be limited by state pre- time, there is still no federal regula- emption laws and public-private busi- tory agency to provide consumer ness arrangements. product oversight and the lethality of guns and ammunition is increasing.

Table 17-2. Support among national poll respondents for policies to Lawsuits are increasingly common. regulate firearms Similar to the reframing of guns as Percent who favored or consumer products, litigation strongly favored prohibition attempting to hold manufacturers and All Respondents sellers responsible for the damage Policy Respondents who owned guns their products cause is on the rise. Regulation of guns as Hoping to imitate the success of consumer products tobacco litigation, these suits argue Childproofing 88 80 that firearm manufacturers can design Personalization 71 59 and market their products in ways Magazine safeties 82 75 that are less likely to cause death and Loaded chamber indicators 73 60 injury. While the success and implications are uncertain, the reward could Prohibition of gun purchases for people convicted of crimes be great and the plaintiffs are lining up to sue. Violence or illegal use of firearm 83Ð95 70Ð91 Alcohol or drug abuse 71Ð92 59Ð89 The Forecast for Firearms Reduction of the illegal sale of guns Tamper-resistant serial numbers 90 85 Current firearm injury prevention policy One-gun-per-month 81 53 will require time to reach its full effect, Mandatory handgun registration 82 72 making precise levels of associated changes in firearm injury uncertain Source: IFTF; Teret, S. P., et.al. Support for new policies to regulate firearms. New England Journal of Medicine 1998; 339(12):813Ð818. within the 10-year time frame of our forecast. However, a growing body of

328 Chapter 17: Health Behaviors Health and Health Care 2010 Institute for the Future

evidence on the effectiveness of and sup- ing knowledge of which interventions port for innovative firearm injury pre- work, may build the bridge between vention strategies makes it likely that broad public support for reductions in improvements in the field will be pro- firearm injury and social action. nounced in a longer-term, 20- to 30- year, scenario. Lawsuits against the gun industry will continue to increase. The impact of these The network of surveillance systems suits will not be felt immediately and across the country is developing, facilitat- the long-term consequences are uncer- ing rigorous evaluation of new preven- tain, even if the plaintiffs are successful. tion programs and policies. Investment For example, it is possible that many in the power of information will shape gun manufacturers will go bankrupt in debate and reduce controversy, ulti- the course of these proceedings, which mately having a major impact on future could ironically consolidate gun manu- policy and program development. facturer power.

Guns will be scrutinized more often by Tobacco Use policymakers as “consumer products” and Health and increasing legislative pressure will attempt to control their manufacture and From decades of research on tobacco use design. While the National Rifle Associ- and its negative effects on health, ation will resist these efforts, it is likely tobacco has been identified as the single that the more fiscally vulnerable manu- greatest preventable contributor to dis- facturing industry will be receptive to ease and premature death in the adopting certain standards. However, nation—greater than illicit use of drugs, unless firearms are brought under the motor vehicle accidents, firearms, toxic purview of a federal consumer product agents, microbial agents, and alcohol regulatory agency, progress toward safer combined.29 It kills more than 400,000 guns will be slow. Americans each year and causes heart disease; cancers of the lung, larynx, In parallel, the public will gradually mouth, esophagus, and bladder; and unwrap the gun from the American flag, chronic lung disease. Approximately $50 change focus from the final user of billion of total medical costs each year firearms to the manufacturer and distrib- are directly attributable to tobacco use.30 utor, and increasingly identify with firearms as consumer products. Increased Over the past 25 years, significant grassroots organization of victims, such progress has been made in the health and as the Bell Campaign (using the Mothers medical fields documenting the adverse Against Drunk Driving model), physi- health effects of tobacco use and their cians, and police organizations will lead related costs. The body of scientific the way, along with increased participa- knowledge about tobacco use and its tion by foundations. This rise in focused effects on human health is massive and community activism, grounded in grow- incontrovertible. A causal relationship

Chapter 17: Health Behaviors 329 exists between cigarette smoking and of existing laws, restricting tobacco disease; further, nonsmokers also incur advertising and licensing, and increasing serious health problems from environ- penalties for selling to minors. mental tobacco smoke (ETS) or secondhand smoke. Use of smokeless tobacco The past two decades have also seen causes a number of serious oral health greater recognition of the health hazards problems, including cancer of the resulting from exposure to ETS. ETS is a mouth, periodontitis, and tooth loss. combination of smoke exhaled by the Cigar use causes cancers of the larynx, smoker and the smoke that comes from mouth, esophagus, and lung. Today, the burning end of a cigarette, cigar, or tobacco use is the leading preventable pipe. The U.S. Environmental Protection cause of morbidity and premature mor- Agency concluded in January 1993 that tality in the United States. ETS kills an estimated 3,000 adult nonsmokers from lung cancer each year.32 What’s more, nonsmokers exposed to Historical Overview ETS have higher death rates from cardio- In the past, helping people quit smoking vascular disease than unexposed non- was the primary focus of efforts to reduce smokers.33 To help control the effects of tobacco use. This strategy has been a crit- ETS, workplaces have begun shifting to ical one, since smoking cessation at all smoke-free environments, as have restau- ages reduces the risk of premature death. rants and bars. In recent years, however, the focus of tobacco control has expanded to include strategies to prevent kids from starting to The Tobacco Settlement smoke, limit exposure to ETS, and stop On November 16, 1998, the attorneys minors’ access to tobacco products. general of eight states and the nation’s four major tobacco companies agreed to Efforts to prevent individuals from start- settle more than 40 pending lawsuits ing to smoke center on controlling youth brought by states against the tobacco access to tobacco products because industry. approximately 90 percent of all initiation of tobacco use occurs among persons Many supporters of the settlement 18 years of age or younger.31 Initiation of nationwide worked to ensure that settle- smoking at younger ages is associated ment funds were earmarked for health with a longer duration of smoking and and health care purposes. Unfortunately, an increased likelihood of nicotine in many states this effort was unsuccess- dependence.31 The decision to use ful. Instead of creating health-focused tobacco is nearly always made in the tobacco settlement trust funds, many of teenage years and about one-half of the ﬁrst payments are being placed into young people who take up smoking con- general funds or going to other social tinue to use tobacco products as adults. programs. Many believe this outcome to Therefore, communities have begun tak- be a huge loss that reﬂects, in part, the ing steps to restrict youth access. Some lack of political clout of members of the policies include stepping up enforcement tobacco control community at large.

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Today’s Challenges and uptake of smoking as adult smokers Racial/Ethnic Disparities either quit or die. The average young Although lung cancer incidence and death smoker begins at age 14.5 and is a daily rates vary widely among racial/ethnic smoker by age 18. Unfortunately, data groups, lung cancer is the leading cause of indicate that the industry has been suc- cancer death for African Americans, His- cessful in reaching its goal. An interesting panics, Asian Americans/Pacific Islanders, finding in these data concerns smoking and Native Americans as well as whites, among 12- to 17-year-olds in ethnic com- with rates of tobacco-related cancers high munities. Despite the data cited above among African American men.34 Further- indicating high rates of smoking preva- more, it has been observed that immigrant lence among adult African Americans and populations, especially Southeast Asian Native Americans, in 1997 youths of color male immigrants, have high rates of experienced lower smoking prevalence smoking that may buoy the smoking rates than whites, with a striking differ- rates among racial/ethnic groups. ence of 9 percentage points between white youths (12.5 percent) and African Ameri- Nationally, cigarette-smoking prevalence can youths (3.6 percent). increased in the 1990s among African American and Hispanic adolescents after Smokers Are Not Uniformly several years of substantial decline Counseled to Quit by Health Care among these adolescents. Educational Providers attainment accounts for only some of the Although smokers cite a physician’s difference in smoking behaviors. advice to quit as an important motivator Declines in smoking prevalence were for cessation, physicians and other health greater among African American, His- care clinicians, such as dentists, often fail panic, and white men who were high to assess smoking status and even to school graduates than among those with advise smokers to quit. It is estimated less formal education. Further, members that more than 70 million people are of racial/ethnic groups are less likely currently enrolled in some type of man- than the general population to partici- aged health care plan. Despite the man- pate in smoking cessation groups and to aged care industry’s stated interest in receive cessation advice from health care prevention, an alarming 68 percent of providers. Research suggests that barri- smokers report getting no help from ers may include limited cultural compe- their doctor or health insurance plan to tence of health care providers and a lack stop smoking (see Figure 17-15). of transportation, money, and access to health care. Other social and cultural fac- Since 1997, national guidelines have tors are likely to further account for been available from the Agency for these differences. Health Care Policy and Research regarding smoking cessation. All major health Smoking Prevalence Rates Among care agencies and associations recom- Children Age 12 to 13 Are Increasing mend routine tobacco use cessation The continued financial strength of the counseling for adults and adolescents tobacco industry relies on youth initiation who smoke.

Chapter 17: Health Behaviors 331 pneumonia, chronic middle ear infections, Figure 17-15. Few smokers report getting help to quit smoking. and greater rates of asthma. (Responses to the question: How much help did you get from your doctor or health insurance plan in the past 12 months to try to quit smoking?) Lack of Strong, United No response Leadership Among Tobacco (4%) Control Stakeholders to Design an Effective A lot of help Strategy to Outfox the (14%) Tobacco Industry No help A little help (68%) Throughout communities in America, (14%) tobacco control forces are mobilized to counter the tobacco industry. Historically the tobacco control forces in many states have been guilty of infighting that has weakened their effectiveness. And the size Source: California Managed Health Care Improvement Task Force Survey of Public of the “force” is small. On the heels of los- Perceptions and Experiences with Health Insurance Coverage, UC Berkeley and Field Research Corporation, 1997. ing the battle to use the tobacco settlement dollars for health, there is a clear need for statewide leadership and replenished resources. The Impact of Not Counseling Smokers to Quit The new leadership could assist in on Pregnant Women, Their Families, Children, and reframing the tobacco control issue to one Unborn Children of population health improvement— highlighting the role of tobacco use in Women who smoke during pregnancy statewide rates of morbidity and mortality. are more likely to have the following: Greater efforts could be made to educate pregnancy complications, premature the public and policymakers about effec- birth, stillbirth, and babies with low tive strategies to decrease tobacco use. For birth weight, a leading cause of infant example, coverage of nicotine replacement mortality.35 Further, it has been shown therapies by health plans is limited, that prenatal smoking and ETS compro- despite the evidence of their role in assur- mise the fetal and neonate immune sys- ing smoking cessation. Further, many tem, thereby leaving a newborn more believe that the war against the tobacco susceptible to infectious disease.36 There industry is over—noting the absence of is also significant evidence that a dose- smoking in public places and the decline response relationship exists between pre- of smoking rates from 1955 to 1990. natal smoking and the incidence of Sudden Infant Death Syndrome (SIDS). The Future of Tobacco ETS exposure in young children has been found to be a significant risk factor for The challenges that exist in tobacco several acute upper and lower respiratory control today are legion. Investments in tract illnesses such as bronchitis and any or all of the areas above could lead to

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improved health and productivity for Wild Cards many Americans. In addition to these issues, consideration should be given to Alcohol and Drugs the following areas: Medical technologies, particularly Continue to strengthen local and statewide rational drug design, ignite a tidal policy development to prevent tobacco use. wave of drug abuse as a new genera- In communities across America, the tion of “designer” drugs that bind to tobacco industry is making consider- speciﬁc mood receptors in the brain able progress in introducing the pub- enter the illegal drug market. lic, especially young adults, to its products. Tobacco control experts The alcohol industry follows the point to problems with continued use tobacco industry—up in smoke. Pub- of signage in storefronts, sponsorships, lic opinion turns against the alcohol and promotions. Of particular concern industries with growing organization is bar promotions in which ads are of nondrinkers’ rights groups. placed in entertainment newspapers to bring young adults to bars where cig- A deep economic recession leads to arette samples are distributed. Also, a further loss of access to emergency on college campuses, students are care that will follow the accompany- being recruited to set up parties at ing erosion of the large municipal which cigarettes are distributed. hospitals that care for major These are examples of local practices injuries. that could be addressed through enforcement of existing laws as well as Injury Prevention the adoption of new policies. Kids organize a Stop the Pain Cam- Support community and statewide efforts paign, striking a moral chord with to prioritize use of tobacco settlement funds the public that even politicians can’t for health and health care programs. resist—comprehensive federal gun Although efforts to use the tobacco control legislation is passed. settlement to fund health and health care programs have failed in many A long economic recession sets in states, initial plans are under way in across America: unemployment, some states to urge the legislatures to crime, and gun violence rise to reconsider the issue next year. The unprecedented levels. outcome of this policy change would improve the health of large numbers A wave of new high-tech weapons, of people. To achieve this goal, such as laser weapons and polymer tobacco control stakeholders will need guns, hits the streets. Government assistance with strategic planning and and emergency systems are not pre- public education activities, as well as pared, so initially high injury rates an infusion of new leadership. result.

Chapter 17: Health Behaviors 333 The United Nations and the WHO The FDA regulates tobacco as a create a treaty restricting small arms drug. Smoking rates, especially trade. All but the United States ratify among youths, decline to the treaty, resulting in international unprecedented levels. sanctions against the United States until the gun industry is stopped. The public becomes apathetic about the health consequences of smoking, Tobacco the media become bored with the smoking issue, the tobacco control The public supports increased taxes movement fragments, and nothing on cigarettes. Congress passes a hefty more is done to change smoking per pack tax that cuts youths’ con- behaviors. sumption of cigarettes in half.

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Endnotes 25th ed. K. Maguire and A. Pastore, eds. Baton Rouge, LA: Justice Department, 1 McGinnis, J. M., and Foege, W. H. Review. Office of Justice Programs, Bureau of Justice Actual causes of death in the United States. Statistics, Claitors Publishing Division, Journal of the American Medical Association December 1998. (November 10) 1993; 270(18):2207–2212. 11 2 Grant, B., and Dawson D. Age at Onset of National Vital Statistics System, National Alcohol Use and Its Association with DSM- Center for Health Statistics, CDC; Johns IV Alcohol Abuse and Dependence. Results Hopkins Center for Injury Research and from the National Longitudinal Alcohol Epi- Policy. demiologic Survey. Journal of Substance Abuse. 12 Bonnie, R. J., Fulco C. E., and Liverman 9(January):103. C. T., eds. Reducing the Burden of Injury, 3 The National Household Survey on Drug Advancing Prevention and Treatment. Commit- Abuse defines current alcohol or illicit drug tee on Injury Prevention and Control, Divi- use as consumption at least once in the past sion of Health Promotion and Disease month; binge drinking as five or more drinks Prevention. Institute of Medicine.Washing- on the same occasion at least once in the past ton DC: National Academy Press, 1999. month; and heavy drinking as five or more 13 Centers for Disease Control and Preven- drinks on the same occasion at least 5 differ- tion. Deaths resulting from firearm- and ent days in the past month. Results from the motor-vehicle-related injuries—United study include people living in households States, 1968–1991. Morbidity and Mortality and in some group quarters, such as dormi- Weekly Report (January 28) 1994; 43(3). tories and homeless shelters. 14 Guns in America: National Survey on 4 National Center for Statistics and Analysis, Private Ownership and Use of Firearms, by National Highway Traffic Safety Administra- Philip J. Cook and Jens Ludwig. National tion, U.S. Department of Transportation. Institute of Justice, Research in Brief. May Alcohol Involvement in Fatal Crashes 2000, 1997. U.S. Department of Justice. NCJ March 2002. 165476. 5 Eighth Special Report to the U.S. Congress 15 Johns Hopkins Center for Gun Policy and on Alcohol and Health, National Institute Research, National Opinion Research Center. on Alcohol Abuse and Alcoholism, 1993. Fall 1998 National Gun Policy Survey: Ques- 6 Collins, J. J., and Messerschmidt, M. A. tionnaire with Unweighted Frequencies and Epidemiology of alcohol-related violence. Weighted Percentages. Baltimore, MD: The Alcohol Health and Research World. Johns Hopkins Center for Gun Policy and 17(2):93–100. Research, 1999. 7 U.S. Department of Health and Human 16 Hoyert, D. L., Kochanek, K. D., and Services, National Institute on Alcohol Murphy, S. L. Deaths: final data for 1997. Abuse and Alcoholism, 1993. National Vital Statistics Reports 1999; 47(19). 8 Widom, C. S. Child Abuse and Alcohol Use. 17 Krug, E. G., et al. Firearm-related deaths Research Monograph 24: Alcohol and Inter- in the United States and 35 other high- and personal Violence: Fostering Multidisciplinary upper-middle-income countries. International Perspectives. Rockville, MD: National Insti- Journal of Epidemiology (April) 1998; tute on Alcohol Abuse and Alcoholism, 1993. 27(2):214–221. 9 U.S. Department of Justice, Bureau of Jus- 18 Centers for Disease Control and Preven- tice Statistics, Crime in the United States, tion. Rates of homicide, suicide and firearm- Washington, DC. related death among children—26 industri- 10 Sourcebook of Criminal Justice Statistics. alized countries. Morbidity and Mortality Weekly Report (February 7) 1997; 46(5).

Chapter 17: Health Behaviors 335 19 Wintemute, G. J. The future of ﬁrearm Promotion. Adult Tobacco Use in California: violence prevention: building on success. Health Impact and Cost 1997. Journal of the American Medical Association 30 Smoking Cessation: Clinical Practice (August 4) 1999; 282(5):475–478. Guideline No. 18. Agency for Health Care 20 National Vital Statistics Reports. June 30, Policy and Research, U.S. Department of 1999; 47(19). Health and Human Services, Rockville, MD, 1996, p. 5. 21 Federal Bureau of Investigation. Uniform Crime Reports for the United States: 1997. 31 Gemson, D. H., et al. Laying down the Washington, DC: U.S. Department of law: reducing illegal tobacco sales to minors Justice, 1998. in central Harlem. American Journal of Public Health 1998; 88:936–939. 22 Kellermann, A. L., et al. Gun ownership as a risk factor for homicide in the home. New 32 Making Your Workplace Smoke-Free: A England Journal of Medicine 1993; Decision Maker’s Guide. U.S. Department of 329:1084–1091. Health and Human Services, and Center for

23 Disease Control and Prevention, Ofﬁce of Kellermann, A. L., et al. Suicide in the Smoking and Health, 1996, p. 2. home in relation to gun ownership. New Eng- land Journal of Medicine 1992; 327:467–472. 33 Steenland, K., et al. Environmental

24 tobacco smoke and coronary heart disease in Sinauer, N., Annest, J. L., and Mercy, J. A. the American Cancer Society CPS-II cohort. Unintentional, nonfatal ﬁrearm-related Circulation 1996; 94:622–628. injuries. Journal of the American Medical Associ- ation 1996; 275:1740–43. 34 U.S. Department of Health and Human

25 Services. Tobacco Use Among U.S. Racial/ Miller, T. R., and Cohen, M. A. Costs. Ethnic Minority Groups—African Americans, In The Textbook of Penetrating Trauma. R. R. American Indians and Alaska Natives, Asian Ivatury and C. G. Cayten, eds. New York: Americans and Pacific Islanders, and Hispanics: Williams & Wilkins, 1996. A Report of the Surgeon General. Atlanta, GA: 26 Cook, P. J., et al. The medical costs of U.S. Department of Health and Human Ser- gunshot injuries in the United States. Journal vices, Centers for Disease Control and Pre- of the American Medical Association (August 4) vention, National Center for Chronic Disease 1999; 282(5):447–454. Prevention and Health Promotion, Office on Smoking and Health, 1998. 27 Max, W., et al. Shooting in the dark: Esti- mating the cost of firearm injuries. Health 35 DiFranza, J. R., and Lew, R. A. Morbidity Affairs (Winter) 1993; 12(4):171–185. and mortality in children associated with the

28 use of tobacco products by other people. Teret, S. P., et al. Support for new policies Pediatrics1996; 4:560–568. to regulate ﬁrearms. Results of two national surveys. New England Journal of Medicine 36 Castellazzi, A. M., et al. Effect of active (September 17) 1998; 339(12):813–818. and passive smoking during pregnancy on

29 natural killer-cell activity in infants. Journal Centers for Disease Control and Prevention, of Allergy and Clinical Immunology 1999; Ofﬁce on Smoking and Health/ National Cen- 103(1):172–173. ter for Chronic Disease Prevention and Health

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Chapter 18 Expanded Perspective on Health Beyond the Curative Model

Until recently, biomedical understand- based data over other information and ing of disease and the deﬁnition of health accepts evidence-based approaches to as “the absence of disease” provided the treatment over those less rigorously fundamental framework in which mod- derived. The curative model has created a ern medicine evolved and the curative hierarchical structure of relationships model of medical care predominated. among health professionals: physicians The curative model narrowly focuses on who command the most biomedical the goal of cure; that is, the eradication knowledge also command the most of the cause of an illness or disease. authority. Our society has granted this Although cure is unquestionably an authority to physicians and has entrusted appropriate goal, other goals are impor- them with the role of granting or denying tant as well: restoring functional capac- the legitimacy of matters related to health ity; relieving suffering; preventing and disease. Thus, indirectly, the medical illness, injury, and untimely death; pro- profession has deﬁned health in the nar- moting health; and caring for those who row meaning of disease according to a cannot be cured. curative biomedical model.

Cure-oriented medicine reveres the In the past quarter century, the record of “hard” medical sciences, and it ignores biomedical discovery and progress has behavioral phenomena that are not been spectacular, and yet on critical entirely explained by biological science. analysis our ability to diagnose and treat Effective cure is presumed to be contin- disease has had no more than a modest gent on diagnosis gained from knowl- impact on the public’s health. Despite edge of disordered function. Treatment is improved diagnostic and therapeutic supposed to be derived from empirical capabilities and an unprecedented expen- research on clinical outcomes. In fact, on diture of resources, we are not the most careful analysis, a significant component healthy of populations among the devel- of medical practice is neither knowledge- oped nations. Perhaps an obsession with based nor supported by evidence. disease has unintentionally relegated health to a position of secondary impor- The cure-oriented approach to medicine tance. The health care delivery system is and health is highly invested in a biomed- still organized, staffed, and financed on ical perspective that values scientifically- the assumption that its central task is to

Chapter 18: Expanded Perspective on Health 337 use biomedical interventions to provide Impairment of any component of care for people facing acute episodes of health can predispose to or cause dis- illness. ease and create an unhealthy state.

From many quarters comes evidence that Mental, social, and spiritual factors, our view of health should be expanded to singly and collectively, influence encompass mental, social, and spiritual behavior and therefore health. well-being. An expanded view of health integrates the concepts of curative medi- An expanded view of health assumes a cine (absence of disease) with public particular meaning for the elderly, age health (absence of excessive mortality, 65 years or older, who currently consti- morbidity, and risk factors for disease), tute 13 percent of the population. Less and adds productive functioning and concerned about life’s span than about well-being. This expanded view of health life’s quality during the remaining life recognizes the importance of mental fac- span, this cohort embraces all elements tors, social support, income, and behavior of health with the same tenacity of in avoiding disease and disability. The younger generations. Evidence shows expanded view of health moves beyond that maximum human life span is fixed attention only on disease to incorporate and that improvements in health can the concept of salutogenesis, the generation affect only mean life span and not maxi- and maintenance of health.1 mum attainable life span. Nonetheless, all adult generations want to postpone The American public expects accurate the effects of aging and to avoid or miti- and timely diagnosis and treatment of gate age-related disabilities. Concern illness and disease, but this same public about aging thus becomes a largely unar- has new expectations for avoiding illness ticulated part of the equation for health, and disease and wants more attention and it requires special consideration as directed to chronic diseases, aging, and we develop a much broader concept of terminal care at the end of life. The pub- what health and being healthy means to lic’s understanding of health and its all segments of the population. interest in healthy lifestyles have advanced remarkably in the past decade. Socioeconomic status is a powerful deter- As individuals, each of us wants to be minant of health and disease. Therefore, healthy and fully functional. To achieve recognizing and understanding the rele- this, we must adopt an expanded view of vance of an expanded definition of health health that adds, to physical health, to the lower socioeconomic segments of essential mental, social, and spiritual the population will be critical to improv- components. This expanded definition of ing the collective health of the nation. health has three implications: Improving the health of the middle- and upper-income segments of the population For individuals to function at their is important, but it is clearly insufficient best, health as defined here is a neces- if achieving substantial improvement in sary precondition. our national health status is the goal.

338 Chapter 18: Expanded Perspective on Health Health and Health Care 2010 Institute for the Future

Finally, who can and will integrate an of health predisposes one to, or creates, expanded view of health into the plan- an unhealthy state. Although this may ning and delivery of health care, and seem to be stating the obvious, the con- what should be the roles of government, cept is critical to understanding the sig- providers, employers, and consumers in nificance of an expanded view of health advocating changes that recognize and and the factors that determine it. respect this new definition of health? This multifaceted question will be Contributors and addressed in a later section of this chap- Determinants of Health ter, but posing the question at this point may heighten sensitivity to the issue. Physical. In the traditional meaning of health and disease, disease represented Definition of Health disordered form and function whereas health was the absence of disease. A definition of health must have equal Physical health and well-being is applicability to everyone: to the fully essential to good health but taken well; to those who are unwell because of alone is insufficient. Physical health disease or illness that is treatable or even incorporates functional as well as curable and for whom the goal is a structural integrity. Impairment of return to health; and to that growing function in the biomedical view of segment of the population with genetic disease is assumed to have an organic or acquired impairment, such as those basis. “Functional” is used in another with chronic disease or disability. Fur- way that may be confusing because in thermore, the definition of health must clinical practice “functional” describes at the same time represent an objective a set of symptoms that have no to be attained and a yardstick by which organic basis. Thus, in medical prac- to judge the state of health. Health can tice, a “functional” illness is one that be applied to an individual, a commu- has no known physical (organic) nity, or a nation, and in each instance the causes and is assumed to reflect men- goal is to be as healthy as possible within tal (including emotional) factors. constraints that cannot be changed. Mental. Mental factors include more Perfect or ideal health is a state of com- than the absence of mental illness. plete physical, mental, social, and spiri- They extend to emotional states (e.g., tual well-being. For the vast majority of depressed feelings short of clinical our population, being healthy means depression), dispositions (e.g., hostil- functioning as fully as possible under ity, optimism), and beliefs and expec- present circumstances. Health is a com- tations (e.g., self-esteem, self-control, posite of interdependent components self-efficacy). Mental factors, such as that, even if less than perfect, are opti- stress, depression, and inability to mal for the individual. As it is used in an change lifelong habits, contribute to expanded definition of health, each of the the onset of some disorders, the pro- four components of health is a necessary gression of many, and the manage- contributor. Neglect of any component ment of all. Understanding the role of

Chapter 18: Expanded Perspective on Health 339 mental factors in health and disease without which a person cannot be may be the most important contribu- fully healthy. Evidence clearly shows tion of an expanded view of health. the powerful influence of social support on recovery from myocardial Social. This term has two different infarction and breast cancer. meanings in relation to health. Social position or status refers to the tiered Spiritual. Spirit is the thinking, moti- structure of society and the activity of vating, and feeling part of humankind its members. This meaning of “social” and involves a code of ethics and phi- cannot be dissected neatly from the losophy. Spirituality usually, but not more descriptive use of socioeconomic necessarily, involves belief in a higher status. The position of an individual, a power. A spiritual person has a set of family, or a community in the social beliefs that give meaning to life, and order is an ordering of employment, for many this belief provides a basis for income, wealth, education, voice, and faith and trust in an otherwise disor- health status. In this context, the derly and unfeeling world. A growing multiple social and economic factors body of evidence supports religious that influence health are central not involvement as an epidemiologically only to the development of disease but significant protective factor that pro- also to its treatment and outcome. motes healthy behavior and lifestyles. When shared in a community, it also The other meaning of “social,” and provides social support, which buffers the one implied in using “social well- stress and enhances coping mecha- being” in the expanded view of health, nisms. The consistency and robustness relates to relationships rather than to of studies involving the role of spiritu- social order. This is the term “social” ality in health have led to the emer- as reflected in “sociable,” and refers to gence of a growing area of research companionship, enjoying the com- called the “epidemiology of religion.” pany and support of family and That spiritual factors promote good friends, and often having intimate and health, aid in recovery from illness, supportive relationships with one or and contribute to the state of well- more individuals or groups. The social being that characterizes health has interaction often takes place in a com- generated growing support: the ques- munity of people in the same or a tions are how and why? The mental, similar socioeconomic stratum. social, and spiritual components of health may have distinctive but simi- A recent body of research has focused lar salutary effects mediated through on the role of social networks in main- psychoneuroendocrine pathways.2 taining individual health. Social networks build communities and Stress contribute to social capital. Social engagement and social support, Stress is unavoidable, and although the regardless of an individual’s socioeco- socioeconomically disadvantaged may nomic status, are basic human needs have fewer means and mechanisms for

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coping with stress and are thus more on people in lower socioeconomic vulnerable to it, all of us are exposed to groups lead to allostatic load, sustained stress on an almost daily basis. Some allostatic responses, and a downward amount of stress is part of life and is spiral toward poor health, illness, and both natural and normal, but when stress untimely death. is sustained and unrelieved it has deleterious effects on the function of endocrine Socioeconomic Status and immune systems, lowering resis- as a Determinant of tance and increasing vulnerability to ill- Health ness, disease, and accelerated aging. This mechanistic explanation has garnered Whether social class is measured by scientific support, although any claim for income, education, employment grade, thoroughly understanding this complex or prestige, it determines the resources series of interactions is premature. that are available to meet life’s challenges and thereby influences the control Research is under way to examine how that one has in shaping life. In 1980, the the biological consequences of adapta- publication of the Black Report showed tions to stress interact with other fac- the statistical association between illness tors and what impact this has on health. and social class in England and Wales. Nancy Adler and Bruce McEwen, Physical and mental health, the statistics among others, have promoted the con- showed, ran parallel to social rank. With cept of an allostatic (adaptive) system the introduction of universal health care that includes stress-induced activation through the National Health Service in of the hypothalamic-pituitary-adrenal the United Kingdom, these differences axis, the autonomic nervous system, the in health status among different socio- cardiovascular system, the metabolic economic groups were not reduced but systems, and the immune system.3 actually became greater! This observa- Allostatic response systems are coupled tion provided early evidence that the closely with an individual’s psychologi- availability of universal health care does cal makeup, prior experience, and avail- not eliminate the root cause of lower able resources for coping with stress. health status among the socioeconomi- Stress turns on an allostatic response, cally disadvantaged. In England, com- and as long as the response is time lim- moners die sooner than aristocrats, ited, protection dominates over adverse sergeants have more heart attacks than consequences. However, weeks or years generals, office clerks are more depressed of repeated exposure to elevated levels and anxious than office managers. In of stress can result in allostatic load, America, the lower middle class is more with resultant damaging physiological mortal, morbid, symptomatic, and dis- consequences. Allostatic load can result abled than the upper middle class. With from frequent stress, from inability to each step down the educational, occupa- shut off responses when stress is termi- tional, and income ladders comes an nated (a feature of aging), or from inad- increased risk of health-related symp- equate allostatic responses. Inability to toms, illness, chronic disease, and early control their lives and the daily stresses death.

Chapter 18: Expanded Perspective on Health 341 Research into health and illness has now Talking to the Doctor recognized the contribution of social, The relationship between the patient’s income, health risk behaviors, the economic, and environmental factors to prevalence of physicians’ discussion of these behaviors, and patients’ health, and a critical body of evidence is receptiveness to advice was examined in a random sample of 6,549 beginning to document the influence of 4 Massachusetts state employees. these factors on morbidity and Depression was reported by 31 percent of patients with incomes less mortality.6 However, the fact that a than $20,000 and 8 percent of those with incomes greater than $80,000. group of determinants—social isolation, Low-income patients were much more likely to attempt to change social class, and depression—predict behavior on their physician’s advice than were those with higher incomes. health outcomes across all diseases has Physicians were more likely to discuss diet and exercise with high-income been largely ignored in mainstream patients and more likely to discuss smoking with low-income patients. medical research on disease. Recognizing shared determinants of health rather than only those unique to specific diseases will enrich and modify our under- Socioeconomic status (SES) exhibits a standing of how internal and external linear relationship to the incidence of ill- factors interact to produce health or lead ness and avoidable death. Universal to illness and disease. Recognition and health insurance would have an imper- acceptance of the seminal role of ceptible effect on reducing the socially upstream determinants of disease by the driven inequalities in health: SES differ- medical establishment, policymakers, ences in health are evident in countries and funding sources can create a virtual with universal coverage; differences can transformation in our approach to creat- be shown between levels at the upper ing healthier individuals, communities, range of the SES hierarchy; and SES dif- and nations. ferences appear in a wide range of diseases, some of which are treatable and What’s New? Why Now? others that are not. The answer to “What’s new?” is straight- Cross-national studies have shown the forward: dependence on a biomedical importance of the size of the gap model to define disease and health has between the wealthy and the less well been rendered insufficient by a growing off. In any given society, the greater the body of evidence that health involves gap in income between the rich and the much more than freedom from active poor, the lower is the average life disease or illness and that upstream envi- expectancy. This consistent observation ronmental and psychosocial determi- explains why a country as wealthy as the nants of disease deserve parity with United States, which spends more conventional biological theories. The money per capita on health care than any answer to “Why now?” is more complex, nation in the world but has an ever- but the reasons revolve around three fac- widening gap between rich and poor, tors. First, an increasingly empowered endures an average life expectancy that is public expects more than our existing conspicuously low among the developed system of health care provides. When nations.5 individuals become ill or impaired by

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full health, greater attention to the man- “Alternative,” “Holistic,” “Expanded”: agement of chronic diseases, and elimi- What’s in a Name? nation of upstream determinants of The search for a label that adequately captures the essential concepts diseases that are predicted by socioeco- embedded in an expanded view of health has been a colossal failure. No nomic status. single word or phrase seems to capture what it means to view health and disease through a wider lens, to define health as a state that moves outside A coincidental factor is the new domi- of a biomedical model, and to realize that upstream determinants of disease go beyond genetic endowment and access to care to even more critical nance of managed care organizations. socioeconomic, behavioral, social, and environmental factors. Labels in the Managed care is organized to function contemporary lexicon, such as “mind-body” and “holistic,” have connotations according to the fundamental precepts of of their own and further fail the test of descriptive accuracy. public health, health promotion, epi- “Alternative medicine,” “integrative medicine,” and “complementary medicine” demiology, and population-based medi- merit similar objections as labels, although these descriptors contain cine. Assuming responsibility for the elements that pass the test of compatibility with an expanded view of health. health of a defined population, as capi- The public’s acceptance and use of alternative or complementary medical tated managed care organizations do, practices must be interpreted as an indication that these alternative creates a compelling incentive to providers fulfill some unmet need. Interestingly, much of “alternative” medicine is practiced in a way similar to biomedicine but using different improve and maintain the population’s forms of intervention and treatment—for instance, using herbs instead of health. An expanded view of health is prescription drugs. the formulation of the desired goal— Concluding that no single term or phrase could satisfy the goal, we decided good health—for a population as well as to follow the lead of the Center for the Advancement of Health and use the for each of its members. An expanded descriptive label of “an expanded view of health,” leaving an open field for view of health also requires an under- creative lexicographers. An expanded view of health maintains and extends standing of upstream determinants of beyond the biomedical model. An expanded view of health applies not only health and illness, which in turn pro- to individuals but also to communities and even nations; and each vides insight into the roles of socioeco- component in an expanded view of health has been validated by evidence submitted to scientific scrutiny. It is the evidence-based foundation of an nomic factors, behavior, and social expanded view of health that makes it such a powerful summons to rethink capital. An expanded view of health was and then redirect our approach to health, illness, and healing. no less relevant to the practice of medicine in the era preceding managed care than it is today, but the public’s changed expectations of physicians and managed chronic disease or aging and seek med- care’s new focus on health maintenance ical care, they want a healing relation- and disease prevention have made it ship with clinicians. Second, unless appear so. corrective measures are implemented very soon, a growing segment of our Consumer population, spanning all socioeconomic Expectations classes but most severely affecting those at the bottom, will be exposed to avoid- Led by health-conscious seniors and a able illness and disease and excessive generation of baby boomers who seem to mortality. Third, the nation’s bill for view aging as an option subject to free health care and health-related disability choice, the medical establishment is con- will continue to rise until an expanded fronting a mandate to move beyond the view of health promotes maintenance of curative model to become engaged in

Chapter 18: Expanded Perspective on Health 343 quences of their patients’ unhealthy Evidence-Based Studies: behavior, such as obesity, tobacco use, What the Research Shows and sexually transmitted disease. A med- Psychological and social factors—how we think, feel, and behave— ical curriculum reconfigured by an profoundly influence the onset of some diseases, the progression of many, expanded view of health would require a and the management of nearly all. course in behavioral psychology. In a large study covering 13 years, depressed and socially isolated persons were four times more likely to have a heart attack than those Their needs unmet in biomedicine, mil- who were not depressed or isolated.7 lions of Americans flock to practitioners A 7-year follow-up of women diagnosed with breast cancer showed that of alternative medicine in growing num- those who confided in at least one person in the 3 months after surgery had a 7-year survival rate of 72.4 percent, as compared to 56.3 percent bers. Medical practitioners should not for those who didn’t have a confidant.8 become providers of alternative medi- In another study, women with advanced breast cancer who attended cine, and vice versa. Unlike any time in weekly therapy groups survived an average of 18 months longer than the past, the medical establishment will women who did not get such support. Four years later, one-third of the be more open to adopting an expanded support group attendees were still alive whereas all of the non- view of health and enlarging the scope of attendees had died.9 medical practice—not with the inten- In a study examining the correlation of social ties to susceptibility to tion of introducing alternative method- common cold viruses, increased diversity in types of ties to friends, family, work, and community was significantly associated with increased ologies but rather with the goal of host resistance to infection.10 providing more comprehensive medical In a study examining 232 elderly patients who had elective open heart care to patients. Does this mean that for surgery, those who did not participate in any group and did not receive the first time your own physician may strength and comfort from religion had three times the risk of dying as ask you about your own social support, those who lacked one or the other.11 spiritual practices, and allostatic load? Quite possibly.

Deteriorating Health preserving health and preventing illness Conditions and disease. The public believes that medicine has overpromised cure as the The issue most urgently in need of reso- be-all and end-all. Preventive mainte- lution is the deteriorating health status nance, after all, is standard procedure for of a growing segment of our population. other industries. Although the enlight- To argue that this is a socioeconomic ened consumer wants to be healthier and problem caused by macroeconomic forces understands the importance of maintain- and erosion of social capital, and not a ing good health, a quick-fix mentality matter of health, indicates a failure to still encounters difficulty in understand- recognize their connectedness and inter- ing the hard work of health. Today’s dependence. In fact, separation of socio- physicians were taught nothing about economic status and health is artificial, changing their patients’ behavior, and and this basic tenet is embedded in an with only on-the-job experience as a expanded view of health. The emerging source of knowledge, most physicians reality is that a growing segment of the falter when confronted with the conse- population in the world’s richest nation

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is unhealthy despite a per capita expen- Quite apart from concern about distribu- diture on health care that is the largest tive equity, why should the higher- among developed countries. Health sta- income classes become concerned about tus declines with socioeconomic status, poor health conditions among the less amidst a dizzying array of alarming advantaged? The reasons are as follows: observations: use of illicit drugs, alcohol, and tobacco by a generation of young The cost of preventable illness and people growing up in an environment disease is enormous and is increasing without social order and support and one due to premature births, teenage in which risky behavior is de rigueur; a pregnancies, AIDS, avoidable hospi- growing population of underinsured and talizations, communicable diseases, uninsured, many of whom lack financial and the consequences of substance resources for access to basic health care as abuse and other risky behaviors. To the health care safety net unravels; a the direct cost of providing health rapidly expanding population of the care must be added the indirect costs elderly with significant health needs, of lost productivity and chronic dis- such as preventive services, social sup- ability as a consequence of poor port, and the treatment of depression; health. and at all levels of society, avoidable illness and disease attributable to igno- Communicable diseases are a major rance, unhealthy behavior, lack of public health concern that is amplified education, and disintegration of family by the worldwide emergence of drug- structure and social support. resistant infectious agents, involving not only common infections like E. coli Certain mental, social, and spiritual mat- and Staphylococci but less common ters fall directly into an expanded scope infections, such as tuberculosis, HIV, of health care and can be dealt with by and even plague. Any reservoir of a physician or other health professional disease constitutes a direct threat to all without outside intervention. Other Americans because we share the same socioeconomically driven health concerns air, water, food, space, and transporta- cannot be resolved by the health profes- tion—and even needles and medical sions, and by their nature these issues devices. We ignore the problem at our will require major shifts in political and own peril. social policy and cooperation from other professions for significant change to Global Health occur. When the medical profession Perspective adopts an expanded view of health, as it almost certainly will, it acknowledges As we enter the next century, cardio- the direct relevance of upstream determi- vascular disease, depression, and injury- nants of health and disease that have related death and disability will be received little or no attention because of major health-related concerns.12 An the profession’s historical focus on a bio- individual’s behavior and allostatic medical model of disease. response to life’s stresses create a profile

Chapter 18: Expanded Perspective on Health 345 of risk factors for developing and dying fic accidents, industrial injuries, personal from cardiovascular disease. Risk-pro- assaults, alcohol- and drug-related acci- moting behaviors—smoking, alcohol dents and criminal behavior, in-home abuse, sedentary lifestyle, and unhealthy injuries, and spousal abuse. The myriad eating habits—have a dominant role in factors in this melange of misery have the evolution of cardiovascular disease, social, cultural, mental, behavioral, and stress-related factors promote disease racial, environmental, occupational, eco- progression and affect recovery from acute nomic, and circumstantial elements that events such as myocardial infarction. with few exceptions have been consid- Social and mental factors often contribute ered outside the scope of medical educa- to the course of cardiovascular disease, tion and practice. A study of intentional either in promoting its progression or in and accidental injuries inevitably exposes favoring full recovery from an acute the major role that socioeconomic status episode of clinical illness. plays in causing injury, either directly or indirectly. Social, mental, and spiritual Depressive illness and risk-taking health is incompatible with the risky, behaviors are subjects that have been antisocial, and violent behavior that largely excluded from consideration in a often leads to serious injuries and their traditional biomedical model of disease. consequences. The prevention of injuries Depressive illness—clinically signifi- and injury-related morbidity and mor- cant but falling short of disabling major tality, formerly considered the responsi- depression—affects a surprisingly large bility of public health officials, must proportion of the elderly population, become a legitimate concern of medicine and among the nonelderly, including and other health professions. adolescents, depression directly or indirectly causes poor health. An expanded The Future: view of health recognizes depressive ill- Shifting Paradigms ness as a cause of disability to be as legitimate as diabetes, asthma, and pep- Thomas Kuhn pointed out that scientific tic ulcer. Because depressive illness advances come in the form of paradigm looms so large as a major health con- shifts only when existing conceptual cern, the rapid adoption of an expanded models break down and are no longer view of health that addresses its cause able to explain observable facts.13 New and treatment becomes a matter of high paradigms will emerge later in this cen- priority. tury by expanding the definition of health. An expanded view of health is Injury-related death and disability the engine that will drive the paradig- involves the innocent as well as the matic shifts shown in Table 18-1. guilty, the cautious as well as the care- less, the abuser as well as the abused. The first shift is from rigid adherence to The emergency room log in any major the biomedical model to an expanded, hospital records the consequences of traf- multifactorial view of health. While the

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scientiﬁc model looks only at biological of ancillary services have proven the indicators of health, the expanded model value of chronic disease management by goes beyond this to include social, men- reducing the frequency and severity of tal, and spiritual, as well as physical, acute episodes of illness. In increasing health. This shift in focus will lead to numbers, health plans and large medical the regular provision of psychosocial and groups are forming their own teams to other services that currently are not in manage populations of chronically ill the health care mainstream. How the patients or “carving out” their care to medical community acts to encourage multispecialty networks that assume full the shift will greatly affect the speed responsibility for all patient care needs and degree to which it happens. on a per capita basis.

A second shift will be from attention The shift in focus from individuals to solely on acute episodic illness to the groups reflects several factors. In the management of chronic illness. This traditional model, a physician–patient shift is already beginning in the treat- relationship implied a contract in which ment of certain populations, such as physicians vowed to do everything for patients with end-stage renal disease, their patients that might be of possible diabetes, and asthma. Chronic disease benefit even if the benefit had marginal management programs have evolved value. The terms of this contract recog- rapidly because they provide better care nized no financial restraints, and in a at lower cost across the health care con- FFS system of care the cost was not a tinuum. Protocols, case managers, pre- major consideration. As managed care vention strategies, and the coordination has evolved over the past decade, the principles of population-based health care, already being practiced in the public health system, are beginning to be exploited and adopted by the Table 18-1. Paradigm shifts private sector.

Biomedical Expanded View Community-centered health care is Rigid adherence to the Expansion to incorporate a multifactorial population-based medicine as it applies biomedical model view of health to defined groups of people. As in pub- Attention solely to acute Chronic illness management lic health, the central theme is using episodic illness finite resources to achieve the best Focus on individuals Focus on communities and other defined populations health outcome for the entire popula- Cure as uncompromised Adjustment and adaptation to disease for tion. The importance that an expanded goal which there is no cure view of health assigns to the mainte- Focus on disease Focus on diseased person and the nance of health and prevention of dis- disease ease fits perfectly into a public

Source: IFTF. health–population-based model of health and health care.

Chapter 18: Expanded Perspective on Health 347 Cure-oriented medicine recognized a The Paradigm Shift: cure as the objective and measure of suc- Evolution or cess, and it used diagnosis and treatment Revolution? as the means of obtaining it. Pallia- Amid signs that the shift is under way, tion—lessening the severity of disease it is sobering to be reminded that insti- without curing it—was viewed as a com- tutionalized values and processes change promise and deserving of less interest slowly, and that change may not follow and attention. Many chronic diseases, a direct linear progression from “what such as asthma, diabetes, cardiovascular was” to “what will be.” To be sure, con- disease, and multiple sclerosis, and the sumers who want a more personalized conditions that accompany the aging relationship with health professionals process are by their nature incurable. An have spoken, and this message will result expanded view of health care promotes in a less formal and more symmetrical individual adjustment and adaptation to physician–patient interchange. However, live with these conditions comfortably. this manifestation of change may be The functionality and quality of life for more cosmetic than fundamental. those afflicted can be immeasurably improved by using available palliative With little doubt, by the year 2007, the measures: The aging of our population impact of an expanded view of health and the longer survival of patients with will be recognizable although neither chronic diseases will shift greater atten- dramatic nor widespread. Physicians will tion to the health benefits of palliative be reluctant change makers because the interventions. generations of physicians in the current workforce learned, believe in, and prac- The final shifting paradigm moves from tice according to the biomedical, bipolar an exclusive focus on the disease to a view of disease and health. Interviews broader focus on the importance of the with practicing physicians provide ample person bearing the disease. The diseased evidence that medicine’s disdain for soft person not only has an illness with science—and in their view the psycho- organic manifestations but is also an social sciences are soft—is alive and well. individual with unique and relevant In time, many will be converted to pro- social, mental, and spiritual characteris- ponents of an expanded view of health, tics. Also, many chronically ill patients but inroads by 2005 will be modest. Eco- suffer from multiple comorbid condi- nomic rewards for attention directed tions, and the focus on one disease could toward social, mental, and spiritual well- subordinate the impact of something being do not exist in current reimburse- equally debilitating. Restoration of the ment guidelines. However, by 2005 the patient’s health requires elimination of principles underlying an expanded view the disease if that is possible, but in of health will become general knowledge. addition it requires that attention be This knowledge, reinforced by evidence directed to the patient’s mental, social, that health and recovery from disease are and spiritual well-being in keeping with profoundly affected by social, mental, an expanded view of health. and spiritual factors, may create a

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momentum that could accelerate the par- 2005, we do not expect major change to adigm shift in the years following. Unless occur until the middle of the following political forecasts are mistaken, by 2005, decade. It will be an evolution rather no significant legislation will be enacted than a revolution, the progress of which that will remedy socioeconomic will be painfully slow unless and until inequities. Health plans may expand the medical establishment openly adopts mental health benefits in response to con- an expanded view of health. It will need sumer pressure, but the impact of this to bring the full force of its professional change will be limited. position to bear in declaring that mental, social, and spiritual factors are legitimate By 2010, the new physicians entering components of health. Physician-led practice will have been educated in a dif- advocacy is a necessary prerequisite for ferent school of thought, and this new meaningful change in the way that con- generation will understand an expanded sumers, providers, employers, health view of health. Today, almost two-thirds plans, governments, and legislators of the nation’s 125 medical schools think about health and its immediate include courses on spirituality, up from determinants. We bet on physicians to only three in 1993. They will need no get the ball rolling, but predicting when convincing to practice accordingly, if the is a matter of pure speculation. practice environment permits. They will augment a growing number of older colleagues in advocating major restructuring of programs to correct socioeconomic Wild Cards ills. The year 2010 will see the begin- A major economic recession could post- ning of major government initiatives by pone crucial legislation and govern- legislators who understand the intercon- mental programs and at the same time nectedness of socioeconomic status, the expand the socioeconomically disad- public’s health, and the nation’s produc- vantaged segment of the population. tivity. At the most fundamental level, legislators will have the political will to An educated public, a groundswell of invest in community-level programs community involvement, and a criti- because, for the first time in our history, cal number of federal and state legisla- they can justify the expenditure of pub- tors with the political will to provide lic funds for programs that fully benefit financial support for programs that the nation’s health, productivity, and provide educational opportunities, economic welfare. training for skilled jobs, health care including mental health care, and This forecast may seem overly opti- public health services that focus on mistic. For certain, change will be incre- behavioral modification could drive mental and geographically uneven. the pace of change at a more rapid rate Although 2010 will look different from than we forecast.

Chapter 18: Expanded Perspective on Health 349 Endnotes 7 Pratt, L.A., et al. Depression, psychotropic 1 McKinley, J. B. Preparation for Aging. medication, and risk of myocardial infarc- Keikkinen, E., et al. (eds.) New York: tion. Circulation 1996; 94:3123–3129. Plenum Press, 1995. 8 Maunsell, E., Brisson, J., and Deschenes, L. 2 Kiecolt-Glaser, J. K. Psychoneuroimmunol- Social support and survival among women ogy and health consequences. Psychosomatic with breast cancer. Cancer 1995; Medicine 1995; 57:269–274. 76:631–637. 9 3 McEwen, B. S. Hormones as regulators of Spiegel, D., et al. Effect of psychosocial brain development. Acta Paediatrica 1997; treatment on survival of patients with 422:41–44. metastatic breast cancer. Lancet 1989; 2:888–890. 4 Taira, D. A., et al. The relationship 10 between patient income and physician dis- Cohen, S., et al. Social ties and susceptibil- cussion of health risk behaviors. Journal of the ity to the common cold. Journal of the Ameri- American Medical Association 1997; can Medical Association 1996; 277:1940-1944. 278:1412–1417. 11 Oxman, T. E., Freeman, D. H., and Man- 5 Adler, N., et al. Socioeconomic inequalities heimer, E. D. Lack of social participation or in health. Journal of the American Medical religious strength and comfort as risk factors Association 1993; 269:3140–3145; Wilkin- for death after cardiac surgery in the elderly. son, R. G. Income distribution and life Psychosomatic Medicine 1996; 57:5–15. expectancy. British Medical Journal 1992; 12 The Global Burden of Disease. Murray, 304:165–168. C.J.L, and Lopez, A. D. (eds.). Cambridge, 6 Gruman, J. Introduction for superhighways MA: Harvard University Press, 1996. for disease. Psychosomatic Medicine 1995; 13 Kuhn, T. The Structure of Scientiﬁc Revolu- 57:207. tions, 3rd ed. Chicago: University of Chicago Press, 1996.

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Appendix The Reactions

As an appendix to the forecast, the and care that went into creating these Foundation and the Institute asked essays. The utility of any forecast lies eleven national experts to comment in its ability to help people understand on different aspects of the forecast, the landscape of the future and either focusing on their areas of expertise. prepare for it or attempt to change it. Dr. Francis Collins, Ms. Laurie Flynn, These eleven experts have added the wis- Ms. Irma Godoy, Dr. Alan Guttmacher, dom gained from their years of experi- Mr. Charles Kahn, Mr. David Lansky, ence in the ﬁeld to our portrait of the Ms. Molly Mettler, Mr. Kevin B. Piper, landscape, enriching our description of Dr. H. Denman Scott, Dr. Kenneth what lies ahead. Shine, and Mr. Gail Warden all contributed their ideas to this Appendix. In addition, Tina Grande, Julie Koyano, These experts wrote essays that reﬂect and Danielle Gasper, of the Institute for their opinions of the Institute’s portrait the Future, and Maureen Cozine and Ann of the future. Collectively, they consti- Searight, of The Robert Wood Johnson tute an original, thoughtful, and realis- Foundation, all assisted with the compi- tic counterpoint to the forecast, offering lation and production of these essays. both support for and disagreement with the scenarios of the future. With thanks, Wendy Everett Both the Foundation and Institute staffs Director are grateful to these authors for the time Institute for the Future

The Reactions 351 Author Biographies

FRANCIS S. COLLINS, M.D., PH.D., is association com-mittees concerned with a physician-geneticist and the director of the care of the severely mentally ill, the the National Human Genome Research quality of mental health care and family Institute, of the National Institutes of support, as well as research and ethical Health (NIH). In that role, he oversees a aspects of the treatment of mental complex multidisciplinary project aimed illness. She is also the recipient of many at mapping and sequencing all of the service awards and commendations from human DNA, and determining aspects national foundations and associations, of its function. Prior to joining the NIH, including three from the American he was a member of the faculty at the Psychiatric Association. Ms. Flynn is the University of Michigan. Dr. Collins author of several articles, books, and obtained his undergraduate degree in book chapters on health services for the chemistry at the University of Virginia, mentally ill and family support. She has and a Ph.D. in physical chemistry at Yale a daughter with a serious mental illness. University. Recognizing that a revolution was beginning in molecular biology and IRMA GODOY is a young, Spanish- genetics, he changed ﬁelds and enrolled speaking mother living in Florida. She in medical school at the University of has cancer of the thyroid and is North Carolina. After a residency and uninsured. chief residency in internal medicine in ALAN E. GUTTMACHER, M.D., Chapel Hill, he returned to Yale for a is fellowship in human genetics. His currently senior clinical advisor to the accomplishments have been recognized director at the National Human Genome by election to the Institute of Medicine Research Institute, of the National and the National Academy of Sciences, Institutes of Health. His major and numerous national and international responsibilities are educating health awards. professionals and the public about the use of genetics in clinical medicine and LAURIE M. FLYNN has served as the working toward incorpo-rating genetic executive director of the National medicine into the nation’s health care. Alliance for the Mentally Ill (NAMI) Previously, Dr. Guttmacher was associate since 1984. NAMI is the nation’s professor of pediatrics and medicine at leading grassroots advocacy organization the University of Vermont College of dedi-cated solely to improving the Medicine, where he directed the quality of life for people with severe Vermont Regional Genetics Center and mental illnesses and their families. Ms. Pregnancy Risk Information Service. Dr. Flynn is a member of many national Guttmacher is a graduate of Harvard advisory boards and professional College and Harvard Medical School. He

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com-pleted a residency in pediatrics and decision making. In 1995, Ms. Mettler a fellowship in medical genetics at began directing the Healthwise Children’s Hospital of Boston and Communities Project, a community- Harvard. He is a fellow of the American based health education project. Its vision Academy of Pediatrics and of the is to make the 278,000 residents of four American College of Medical Genetics. southwestern Idaho counties the most empowered, best informed medical CHARLES N. KAHN III, M.P.H., consumers in the world. The project won president of the Health Insurance the 1996 Spirit of Innovation Award, co- Association of America (HIAA), is a sponsored by InterHealth and 3M Health nationally known health policy expert Care. Ms. Mettler holds a master’s degree specializing in health care finance. Prior in social work from the University of to his current position, he was vice Washington. president of HIAA and directed the Office of Financial Management Education at the Association of H. Denman Scott, MD, MPH, is University Programs in Health director of the Brown Center for Primary Administration. He has taught health Care and Prevention, serves as physician- policy at Johns Hopkins, George in-chief, Department of Medicine, Washington, and Tulane universities. Memorial Hospital of Rhode Island. Dr. Mr. Kahn serves on the board of visitors Scott's extensive experience in public of Indiana University’s School of Public health and health policy combined with and Environmental Affairs and is on the his roles as an educator and practicing Medicare Competitive Pricing Advisory physician make him uniquely qualified to Committee. He holds a B.A. degree from lead this collaborative research center. He Johns Hopkins University and an also heads up two of the Center's grants- M.P.H. degree from the Tulane School of Reach Out and Volunteers in Health Public Health and Tropical Medicine. Care, which are funded by the Robert Wood Johnson Foundation. The grants MOLLY METTLER, M.S.W., is senior vice support initiatives and provide technical president of Healthwise, Inc., a not-for- assistance to organizations throughout profit research and development group the United States that provide health care located in Boise, Idaho. Healthwise is for the uninsured and underserved. care best known for the Healthwise Handbook, for the uninsured and underserved. His now in its 14th edition. Ms. Mettler is previous administrative posts include known nationally as an expert in medical serving as Director of Health for the State self-care program design, medical of Rhode Island, and Senior Vice consumer issues, and patient President for Health and Public Policy at empowerment. She devotes her time the American College of Physicians. A speaking to national audiences and sought after speaker and lecturer, Dr. writing about how to empower patients Scott has published extensively on public and improve doctor-patient partnerships, health and healthcare topics in peer- and on the concept of shared medical reviewed publications.

Author Biographies 353 KENNETH I. SHINE, M.D., is president health care systems. Mr. Warden is an of the Institute of Medicine, of the elected member of the Institute of National Academy of Sciences, and Medicine, of the National Academy of professor of medicine emeritus at the Sciences. He is a mem-ber of the board University of California, Los Angeles of trustees of The Robert Wood Johnson (UCLA) School of Medicine. He is Foundation and director emeritus and UCLA School of Medicine’s immediate past chairman of the board of the past dean and provost for medical National Committee on Quality sciences. Dr. Shine’s research interests Assurance. He is chair-man of the Health include metabolic events in the heart Research and Educational Trust and serves muscle, the relation of behavior to on the board of the National Resource heart disease, and emergency medicine. Center on Chronic Care Integration. He Currently he is clinical professor of recently was named chairman of the medicine at the Georgetown University National Forum on Health Care Quality School of Medicine. A cardiologist and Measurement and Reporting. Before physiologist, Dr. Shine received his A.B. joining Henry Ford Health System in from Harvard College in 1957 and his April 1988, Mr. Warden was president M.D. from Harvard Medical School in and chief executive officer of Group 1961. His advanced training was at Health Cooperative of Puget Sound, in Massachusetts General Hospital (MGH), Seattle. Prior to that position, he was where he became chief resident in executive vice president of the American medicine in 1968. Following his Hospital Association and executive vice postgraduate training at MGH, he held president and chief operations officer of an appointment as assistant professor of Rush-Presbyterian-St. Luke’s Medical medicine at Harvard Medical School. Center. He is a graduate of Dartmouth College, with a master’s degree in health GAIL L. WARDEN, M.H.A., is president care management from the University of and chief executive officer of Henry Ford Michigan. He holds an honorary doctorate Health System, in Detroit, one of the in public administration from Central nation’s leading vertically integrated Michigan University.

354 Author Biographies Health and Health Care 2010 Institute for the Future

Francis S. Collins and Alan E. Guttmacher The Human Genome Project and Our Future Health

Francis S. Collins is As the forecast appropriately highlights, individualize the use, and also, when director of the National both genetic mapping and testing needed, the avoidance, of specific drugs. Human Genome Institute, should have real and important impacts It has long been obvious that many National Institutes of Health. on health and health care in the coming drugs have desired effects in only a por- decade. These are not, however, the only tion of people who use them. Similarly, Alan E. Guttmacher is means by which the products of the many drugs have undesired effects, senior advisor to the director Human Genome Project (which is now sometimes even lethal ones, in only a for clinical affairs, National slated to completely sequence the human portion of those who use them. While Human Genome Institute, genome by 2003) will significantly affect many factors contribute to both drug National Institutes of Health. health care between now and 2010. The efficacy and toxicity, genetically deter- area of pharmacogenomics, for instance, mined drug metabolism is often the key should not only grow considerably in the influence. At present, clinicians are next ten years, but during that time will rarely able to individualize drug use likely start to have a demonstrable effect through knowledge of a specific patient’s on health and health care. genetic makeup, and instead usually must rely on a “trial-and-error” approach New genetic knowledge and techniques that may delay effective therapy for some will allow both more rational drug time. Within the coming decade, how- design and more rational drug use. In ever, the computer chip-based technol- terms of drug design, genetics will pro- ogy the forecast cites should enable vide new insights into the basic molecu- clinicians to make informed decisions lar pathophysiology of many disorders, about which of several potentially useful thus allowing development of drugs that drugs will be most efficacious for a given attack many disorders at an earlier and patient before prescribing, rather than more vulnerable stage of their path much later. Furthermore, the ability to toward the disease state. This will predict which individuals will suffer sig- amount to treating the cause instead of a nificant toxicity from a specific agent downstream consequence. In terms of will broaden the clinician’s armamentar- drug use, the next decade should also ium, by allowing use of pharmaceuticals witness the start of what promises to be now usually avoided because of serious a major change in how drugs are pre- side effects that may occur in only a scribed, using information from genes to small proportion of patients using them.

The Reactions 355 In considering key barriers, the forecast vidualize patient care, in terms of diag- correctly draws attention to the need to nosis, treatment, and prevention. This educate health professionals if genetics will allow each of us, in consultation is to have an optimal effect on health. with our health care providers, to use However, it is not only the provider but knowledge of our personal genetic dis- also the patient who must be more ease predispositions to construct an indi- knowledgeable for such success to occur. vidualized dietary, behavioral, and Moreover, since the “new genetics” medication strategy to preserve health. spawned by the Human Genome Project will be of use in the care of virtually all Indeed, as this application of genetics individuals, rather than the relative few becomes real, it will help move medicine for whom genetics has thus far been clin- away from its present emphasis on treat- ically germane, there is a need to educate ment of morbid illness toward one of the entire population about genetics. health preservation. This is especially true if this “cutting- edge” area of medicine is to benefit the It is in the area of cancer that the entire population, rather than only those Human Genome Project and the resul- of certain socioeconomic and educational tant “new genetics” will have their earli- backgrounds. est large impact. However, in the coming decade, genetic medicine will The forecast properly emphasizes the also start to be a significant influence in promising area of gene therapy, but in many other areas, including cardiovascu- doing so may suggest too strongly that it lar and neuropsychiatric medicine. is through gene therapy that genetics Indeed, genetics’ impact will start to be will have its greatest effect on health. so widespread as to become the proper, Especially in the coming decade, the in fact necessary, purview not only of the greatest impact of genetics will come specialist but also of the primary care from DNA-based diagnostics and the provider. opportunity it will begin to offer to indi-

356 The Reactions Health and Health Care 2010 Institute for the Future

Laurie M. Flynn A New Image of Mental Health

Laurie M. Flynn is No area of health care will see more understanding of the workings of the executive director of the change in the next decade than mental human brain—and medicine’s improved National Alliance for the health. There are many reasons for this, ability to control the symptoms of men- Mentally Ill. as outlined in the forecast. Several of the tal illness—have profound implications. factors driving health care broadly will In the near term we will be able to treat have a special impact in mental health. severe depression, the most deadly men- The three biggest drivers of change are tal disorder, more effectively, and per- science and research, the information haps reduce the rising suicide rate. More revolution, and consumerism. than 30,000 lives are lost each year to suicide, with the fastest rates of increase Science and Research in the elderly. Better-targeted treatments and new medications will also help peo- During the 1990s, the congressionally ple who have schizophrenia—the most designated “Decade of the Brain,” we disabling and devastating mental illness. saw a revolution in our understanding of A new generation of antipsychotic drugs mental disorders. Rapid advances in neu- now offers real hope for improved out- roscience have provided evidence that comes for people with this illness, which serious mental illnesses are brain disor- is also the most frequent diagnosis ders. Sophisticated electronic imaging among the homeless population. techniques allow researchers to see into the living brain. Scientists are able to With limited dollars in the health care discern which areas of the brain are mal- system, the new science will help policy- functioning in speciﬁc illnesses, and we makers understand the difference may soon be able to target treatments between common mental health prob- more effectively. More than a dozen new lems, such as stress, and serious brain medications for serious mental illness disorders. Health insurance parity legis- were introduced in the 1990s and more lation in many states makes this distinc- are expected in the next decade. These tion now, with equal insurance coverage new drugs are both more effective at mandated for schizophrenia, bipolar dis- treating symptoms and have fewer side order, depression, and other severe ill- effects. nesses for which ongoing medical treatment is vital. It is likely that there Given that severe mental illness affects will be a move to recognize these and 5 percent of the population, this new other chronic mental illnesses as part of

The Reactions 357 physical medicine—and to include these experiences help each other cope with diagnoses in “medical listings” in insur- mental illness. In the next decade, self- ance policies. help will take a larger role in mental health services. Many of the functions of As with all of health, treatment for men- a traditional Employee Assistance Pro- tal disorders will be increasingly evi- gram will soon be offered more effec- dence based. Over the next few years, tively and inexpensively via Web-based state and county mental health authori- services. A major beneﬁt of the openness ties will not reimburse treatment that and availability of this information will cannot meet this important criterion. be a dramatic reduction in stigma. It Thus, speciﬁc proven interventions, will cost employers a little more to pro- especially newer medications and vide mental health treatment, but sav- research-based Assertive Community ings will accrue in the long run as Treatment programs, will become the productivity remains strong and disabil- dominant modes of therapy. For many ity associated with more severe illness is patients, a combination of medication reduced. and intensive community care will offer long-term stability for their conditions. Consumerism

The Information Revolution New psychiatric medications will be advertised directly to millions of poten- The information revolution, especially tial customers, further changing the bal- the rise of the Internet, will have a star- ance of power in the doctor-patient tling effect on the recognition and treat- relationship. Pharmaceutical companies ment of mental health problems. The have demonstrated the strength of cus- Internet affords anonymity, which is still tomer demand as a market force, and we important given the stigma attached to can expect more and more aggressive mental disorders. Today consumers can advertising as new products come into a access a wide range of information sites, highly competitive market. with all manner of guidance on treatment options. Research results will The increased focus on severe mental ill- become accessible as consumers go ness, driven by new treatments and online to evaluate whether and where to insurance parity legislation, will push get therapy. Conﬁdential screening for policymakers to deal with some tough possible symptoms of illness, online issues. Concerns about protection of question-and-answer sessions with prac- human subjects in research has already titioners, and even psychotherapy online made headlines, as some ethical lapses all are part of the future. Highly popular become known. The National Bioethics chat rooms already dominate mental Advisory Commission report will lead health sites, which are among the most to attempts at more stringent regula- popular destinations on the Internet. tions, and the resulting debate may slow Virtual support groups are forming as the pace of clinical trials that lead to people with a wide array of issues and introduction of new medications. In the

358 The Reactions Health and Health Care 2010 Institute for the Future

end, society should be able to accommo- pressure for improved and innovative date the need for stronger protections community services and, in some cases, for vulnerable subjects and keep the mandated treatment will help ease this pace of new research on track. public health crisis. The huge gap between what we know about mental ill- There are even thornier concerns about ness and what we do to help those with the persistence of homelessness and the severe disorders will narrow. By the end random violence that are signs of a frag- of the decade, a new image of mental mented and inadequate public mental health will take hold, with a focus on health system. Spurred by a landmark early recognition, effective treatment, Surgeon General’s report on mental rehabilitation, and recovery for most health, legislators will seek more patients. Mental health will be under- accountability for the hundreds of mil- stood as an integral part of general lions of dollars now supporting a failed health and essential to optimal function- public mental health system. Sustained ing and total well-being.

The Reactions 359 Irma Godoy My Story: One of 44 Million

Irma Godoy is an I don’t know anyone who has health got so worried. You know it was bad, uninsured patient. insurance. At least, no adults in my fam- because I won’t tell you what a sacrifice ily, nor any of my neighbors, have insur- it was to scrape up the money for a pri- This is her legislative ance. It’s not that they don’t work. All of vate doctor. Every time that he could, testimony. my brothers, my father, and my husband my husband would give me money to work in construction, but they don’t get put away. I used a coffee can on a shelf, health benefits. They wouldn’t go to a in the closet, which coincidentally was doctor, anyway. If they ever miss a day of next to a figurine of La Virgen de la work, they’d risk not having a job to Guadalupe. Once, my mother saw the come back to. coffee can and asked me about it. I told her it was for the medical tests. During I, on the other hand, have visited so the hurricane, I needed to borrow money many clinics that I’ve lost count. I out of the pot. When I put my hand in, sought prenatal care at a medical mobile there was a clove of garlic and a twig of unit that I saw parked in front of the yerba buena (peppermint). I laughed and local school. I climbed in and it felt like cried at the same time. My mother had a boat. The nurse practitioner was very thought the can was an offering to the concerned about me, not because of the Virgin for a cure! pregnancy but because of my thyroid. She referred me to the public hospital. Not to say I didn’t pray. I did. I desper- That’s when I got caught up in a tangle ately needed to know what was going on of clinics. They did so many tests, but I in my body. No doctor or nurse would could never get a definitive answer. After ever explain what it was all about. I was the delivery, the baby had to stay in the embarrassed to take too much time, they hospital for a week. I would go every day seemed so busy. I don’t know what was and spend the day there. After a week, worse: the sickness in my body or the they released him. Then I had to have worrying about it. I was so upset that I gallbladder surgery, which I didn’t want. became strange, not myself, arguing and crying without reason. I think it was the But that wasn’t the real problem. Appar- feeling of impotence and powerlessness. I ently, there was something wrong with would be so worried about dying and my thyroid. Scans, biopsies, and blood leaving my two children. This made my tests didn’t show anything definite. We head pound, my heart ache, and my

360 The Reactions Health and Health Care 2010 Institute for the Future

stomach feel like I had swallowed lead mar- It’s almost as if I had two lives, the one in bles. Thank God for my family. I don’t Mexico and the one here. The one before know what would have happened if I were being a mother. The one before being sick. alone. I feel for those old people who are so I feel so young and the burden so heavy. lonely. But, even though I have a life-threatening illness, I feel lucky. Somehow I’ve been able When we ﬁnally saved enough to go to a to hold on to the life strings of a safety net, private doctor, he told me that I needed an though sometimes if feels like a delicate operation, but, of course, we couldn’t afford thread. I know of others who haven’t been it. We tried an indigent care fund, but I blessed with the generous hearts of volun- didn’t meet the requirements. I fell teer doctors and nurses. Those who haven’t through the cracks. I went back to the been able to access care, who postpone it, mobile van not knowing where else to go. deny the pain, or cover the symptoms. They then referred me to a free clinic, a trailer on the grounds of a church. I needed A neighborhood boy recently died of a to bring the necessary paperwork to be burst appendix. I don’t blame his parents. accepted. I knew it would take a long time They had taken him to the hospital before for an appointment there. But, really, I did- and he had been released. They just hesi- n’t have a choice, and I am so glad I found tated a bit too long, thinking of the inter- them. The doctor and her staff were angels. minable debt. I know another woman who She said that we would start again and redo is diabetic but can’t pay for her insulin, so the studies and the blood work. They had a she injects half the amount. Others get vit- volunteer doctor who was a specialist, who amin shots, hoping that will tide them over cared for me for free. The whole ordeal took until they can get to the doctor. All of this about two years. It was a sinister web and I seems strange in a great country where felt like I was walking a tightrope. At 23 everything is in such abundance, so orderly years old, uninsured, and with two babies, I and neatly planned. ﬁnally got a diagnosis: thyroid cancer.

The Reactions 361 Charles N. Kahn III Health Insurance in America: A Future of Wild Cards

Charles N. Kahn III is One of the most interesting trends in the In this case, the change in approach president of the Health health insurance market over the past should lead to minor savings from Insurance Association of two years has been the decline in the spending and, more important, to a new America. growth of HMO enrollment. This recent challenge in the marketplace for others decline is relatively small, just a few per- fielding more deeply managed coverage. centage points of covered Americans, but contrasts the trend envisioned in the Besides the forecast concerning the forecast. The Institute for the Future nature of health insurance coverage in the (IFTF) staff predicts a three-tier health United States, IFTF also examines the insurance system with HMOs as the pre- factors behind the growth in the number dominant form of coverage used by of uninsured Americans; the potential Americans. The forecasting business is changing role of employers in financing tough in regard to health care coverage insurance, particularly small businesses; in this nation. However, the strength of and wild-card factors that could alter the the HMO model as the coverage product future of health insurance. of preference appears to be waning, due to consumer demand for coverage with The Uninsured fewer restrictions on choice of providers and a growing regulatory aversion to The number of uninsured is increasing aspects of managed care. faster than even projected in this forecast. The forecast assumes that 44 mil- Further, key players in the health insur- lion Americans will be uninsured by ance market are now reluctant to associ- 2002, yet current projections put the ate their products with the HMO label. number of uninsured at that number And, one company, United Healthcare today, in 2000. Two factors appear to be Group, recently decided to cease precer- driving that number. First, welfare tification for most procedures or treat- reform is reducing the Medicaid rolls. ments, a move away from controls Second, coverage by small employers has commonly used in HMOs as well as been relatively static since 1996— other managed care products. Part of the although on the one hand, other employ- reason United Healthcare was able to ers have added to the number of insured make this change was that much of its Americans, while on the other, corporate business is already PPOs or indemnity. restructuring is leaving many to fend for

362 The Reactions Health and Health Care 2010 Institute for the Future

their own benefits as they become con- tive forms of coverage becoming more tractors rather than employees. These popular and pervasive. Further, many trends in insurance can be sustained by physicians have become alienated from the system for some time, but eventually insurers in this new era of managed care, may be politically destabilizing, particu- and they have fueled this consumer anxi- larly if there is an economic downturn ety. Many HMO-centered companies and insured middle-class citizens have been compelled to offer products becomes anxious about their coverage. with out-of-network options, and the PPO is now the product of choice for Role of Employers many Americans and their premium- paying employers. This last point flies in A case can be made that the models for the face of predictions that the PPO was insurance coverage may look different a transitional product that would ulti- from those predicted, that the employer- mately be replaced by closed-network based system is doing a better job of cov- HMOs. ering Americans than is described. Between 1993 and 1997, the number of Wild Cards Americans with employer coverage increased from 145 million to 152 mil- The general future of the employer-based lion, and there is every reason to believe system of coverage and the private vol- that trend will continue. untary system in the United States could be significantly affected by certain wild As IFTF points out, besides the elderly, cards described in the forecast. IFTF’s disabled, and categorically indigent, wild cards illustrate the challenge to the most Americans receive their health cov- current system from the political right, erage through employment. In the late where an individualized system for pur- 1980s and early 1990s, employers, in chasing insurance, based on some type of response to growing health care costs voucher for all or part of the premium and a weak economy, demanded that payment, is espoused by key policymak- insurers contain the growth of health ers. On the left side of the political spec- insurance premiums paid for employees trum, there is not much talk of a single and their dependents. In response, many payer, government-run system, but there traditional health insurers, as well as a are potential factors that could under- number of new players in the market, mine the current system and lead to a turned to managed care in the form of government takeover. On the other side, the HMO product as the coverage model certain policymakers on the political of choice. right would like to see the United States move away from the employer-based sys- This generation of managed care prod- tem to one with individualized choice ucts tended to limit choices of doctors and taxpayer subsidy for coverage and hospitals. And, despite the fact that through income-related tax credits, HMOs turned out to have a good record rather than the current tax exclusion for on quality care, consumer anxiety and employer-purchased premiums. preferences have resulted in less restric-

The Reactions 363 The single-payer alternative increases in health insurance market. The attorneys likelihood if certain additional wild who have brought these class-action suits cards turn events in a problematic direc- clearly intend to change the nature of the tion for the current private system, or way insurance is provided in America. turn to this idealized individual system. These wild cards are health care costs, The combination of these new wild cards which are driving premiums to double- and those in the forecast may determine digit increases this year; legislation at the future of the nation’s private health the federal level enabling health insurers care system. However, at the end of the and employers to be sued for punitive day, the major factors may be the insur- damages by consumers; and the class- ance industry’s ability to mold and reﬁne action suits that challenge basic health managed care to build bridges to the plan management and payment policies. physician community, which has become Continuous double-digit inﬂation in alienated from the carriers, and to reduce health care costs could make premiums consumer anxiety about coverage—all unaffordable for many employers, and while keeping cost growth within the class-action suits, if they are not acceptable bounds for employers. The thrown out by the courts, could threaten industry does not have an easy task in the viability of major companies in the the decade to come.

364 The Reactions Health and Health Care 2010 Institute for the Future

Molly Mettler That Patient Is Not Diabetes Case #115491 —She’s Me

Molly Mettler is “May you live in interesting times,” was The Juggernaut of senior vice president of intoned by the ancient Chinese as a Chronic Illness Healthwise, Inc. curse. According to the cultural dictates Why pick on disease management and of the time, fortune smiled on those who chronic illness as ground zero for change? lived and prospered in periods of stabil- Because it’s huge, it’s costly, and it’s accel- ity, predictability, and calm. “Interesting erating. Consider this—by the year 2010: times” implied just the opposite. Alas, the Institute for the Future forecasts Some 120 million Americans, about “interesting times” in health and health 40 percent of the total population, care over the next decade. Perhaps, will be living with a chronic illness. though, within the curse lies the seed of Of those, 40 percent will have at least a blessing. However wild and bumpy the two such conditions. health care ride will be over the next ten The direct medical costs of chronic years, we might see the emergence of a conditions in the United States will sane, centered, and effective system that total $600 billion per year. will balance cost and quality by shifting The leading edge of the baby boomers power to the consumer. will be hitting age 65, heralding a relentless inﬂux of new chronic-care Welcome to the world of consumer-cen- patients with each passing year. tered care and to the most dramatic and fundamental shift of all: the consumer This has all the makings of a crisis in management of chronic disease. The care of enormous proportions. If we try blossoming of new consumer attitudes, to extend today’s approach to chronic the codiﬁcation of evidence-based medicare, which is fragmented, system-cen- cine, and the reach of the Internet are tric, and non-empowering, the system combining to turn the current-day prac- simply will collapse. We can’t train tice of disease management upside down. enough providers to meet the need. These trends, all documented by the There is a widening gap, made even forecast, point to a future in which the more apparent with the aging of the majority of chronic illness care will be population, between the health care custom designed for and by each indi- needs of the people and the medical vidual patient. remedies of the health care system.

The Reactions 365 Shortcomings of the statisticians, and clinical teams alone. Current System Effective disease management will require full patient involvement and a The trend toward population manage- strong, vital doctor-patient partnership. ment is helpful, but mass interventions for chronic disease will miss the mark. Patient involvement is a given, as the While myriad disease management pro- forecast points out. More and more of us grams are being introduced into the will expect and demand a formative role health arena, and providers and payers in so personal an issue. We’ll want and are jousting over who gets to develop the expect highly personalized treatment protocols and guidelines, the daily bur- interventions and support. We’ll demand den of the illness is borne by the patients to see not the XYZ Guidelines for and their families. Asthma Management, but the Liz Jones Program for Asthma Management, the Current disease management materials Bob Smith Plan for Living with Dia- and programs do not always meet the betes, and more. Luckily, the tools are needs of the individual patients. Long on there to support mass personalization. “shoulds” and short on acceptance of per- Evidence-based medicine, personal sonal values and preferences, typical dis- health assessments, information therapy, ease management becomes an issue of support groups, and much more are as “managing patient compliance” rather close as a modem and a mouse. Voice than encouraging patient choice, involve- recognition, virtual reality, videoconfer- ment, and adherence. Simply preaching encing, and interactive multimedia tech- to a person with diabetes that he must nologies will provide self-management lose weight, exercise, change his diet, take tools never before imagined. his medicine, and prick his finger once a day will most likely bring on nothing but Diagnosis of chronic illness is a life- depression and ennui. For payers and pro- changing event for patients and their viders, it is an illness to be managed; for loved ones. Serious illness provides patients, it is part of the fabric of everyday patients with an opportunity to move to life. Health care provider time for patient a new level of health care empowerment, education and support is constrained in self-determination, and perhaps even a the office, and, for the most part, does not higher level of wellness and personal extend to the home, which is the 24/7 growth. frontline of illness management. Finding a way to actively involve the patient as a Health is such a profoundly personal member of the provider team will pro- thing: we, the consumers of health care, duce far more positive results. do not think of Diabetes Case #115491, What’s a Health Care System we think of Mom, Dad, spouse, us. It to Do? makes sense for us to think through how we ourselves can become the ultimate The consistent application of best prac- managers of our own health. In order for tices for disease management is not a all of us to survive and flourish, the matter to be left to systems-thinkers, health system needs to help us do that.

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Kenneth I. Shine The Future Practice of Medicine

Kenneth I. Shine is president For an enterprise to account for one-sev- The Institute for the Future forecasts a of the Institute of Medicine. enth of the gross domestic product of the slow transition from a world of indepen- United States, while functioning in dent entities to one of more corporate sys- many ways as a cottage industry, is tems. The crucial challenge remains to remarkable. As noted in the forecast, 40 maintain patient-oriented professionalism percent of all ofﬁce-based physicians still in the health care system. While a diverse deliver care in individual or two-physi- set of corporate structures will persist, the cian practices. It is only recently that any best hope for professionalism is an increas- serious effort has been made to collect ing role of physician managers and corpo- information about what works and what rate structures controlled by providers. does not work in the everyday practice of Accomplishing such a goal will take medicine. Information systems, com- determination, leadership, and capital. puter and telecommunications technologies that have revolutionized other The forecast assumes some acceleration aspects of life in America, have only in the rate of decrease of hospital beds to barely begun to be applied effectively in 2 percent per year, suggesting that beds health care. The computerized patient will decline to something more than record functions superbly in some iso- 670,000 in 2010 and that “hospital ser- lated parts of the health care system, yet vices will stabilize at approximately 32 many hospitals’ information systems percent of health spending after 2002.” cannot communicate within a hospital, I suspect that these projections have the much less with other institutions. right direction, but underestimate veloc- ity. The continued explosive growth of The trends toward group practice are procedures that can be carried out in the compelling and the progressive increase ambulatory arena, improved techniques in employed physicians is important. for shortening lengths of stay, and the These developments are crucial if infor- increased recognition that it will take mation systems are to be effectively used substantial rather than minimal, incre- not only to monitor quality of care, but mental steps to decrease the inventory of also to collect ﬁscal and demographic unused beds will accentuate these data that would allow physician groups processes. Moreover, the progressive to negotiate contracts and to manage growth of expenditures for pharmaceuti- their revenue and expenses. cals and devices will increase their share

The Reactions 367 of the health care dollar at the expense of make true consolidation of hospitals dif- hospital and physician expenditures. ficult, these changes are inevitable. Cost- Indeed, today in the Boston and New containment efforts place great strain on York areas, hospital expenditures are the cross-subsidy for education and now in the range of 25 to 27 percent of research in academic health centers, but the health care dollar. In-patient hospital medical faculties have been extremely beds will continue to play a smaller and slow to accept that academic health cen- smaller role in the overall health care ters must be operated efficiently and cost system. effectively. The lack of accurate cost accounting, which has only recently been The roles of multidisciplinary group introduced in some academic medical practice and ambulatory technology have centers, has made discussion of cross- only slowly been recognized by academic subsidies abstract and unreliable. health centers. Many hospitals have continued to have positive financial results A number of funding options are dis- from in-patient services financed through cussed in the forecast analysis. The pro- Medicare, while losing money on gressive decline in the proportion of care Medicare services in the ambulatory provided through the fee-for-service arena. It does not make sense for hospi- mechanism is inevitable. Not only are tals to run physician offices as more and the incentives wrong in the fee-for-ser- more patients are enrolled in Medicaid vice system, but the system encourages and Medicare managed care plans, the an increase in volume in order to make children’s health insurance plan, and up for any decrease in price—well exem- other strategies for covering the unin- plified by experiences in the Canadian sured. Hospitals that do not have conve- province of Ontario. It is likely that a nient, efficient, cost-effective ambulatory blended reimbursement system, which services will lose these patients to sites includes both capitation and a variety of and physicians who can meet patient reinsured risk reimbursements, is likely needs and demands. The separation of to emerge for the health care system in outpatient services so that they are man- general, including Medicare. Through aged by faculty practice plans, which are capitation, physicians and other responsible for revenue and expenses, and providers have incentives to provide pre- are equally responsible for quality of care ventive services and cost-effective pri- and patient satisfaction, will increase the mary care. Through some form of effectiveness of these services. Moreover, risk-based reimbursement, providers can any rational use of government monies be insured against catastrophic illnesses for graduate medical education will and reduce the impact of high-cost diag- require that the significant portion of noses. Due to a growing surplus of these funds be put in the care of the fac- physicians, especially specialists, physi- ulty who are educating students and resi- cian incomes increasingly will decline; dents in the ambulatory arena. this is well documented now in Califor- nia and Minnesota. But if groups of Although local politics, particularly as providers can learn to manage their prac- related to employment, will continue to tices, capitation can dramatically reduce

368 The Reactions Health and Health Care 2010 Institute for the Future

the amount of nonmedical administra- emerged as the most rapidly growing tive interference and oversight. organizational strategy over the past several years. They reflect physicians’ desires Three additional wild-card items should for autonomy and patients’ desires for be emphasized. First, serious increases in choice. But they remain inefficient and insurance coverage for the uninsured ultimately will have to be modified. The would have a major impact on the health notion that an individual physician care system. This will have a salutary accepts patients from multiple managed effect in reducing uncompensated care care organizations restricts the interests and could decrease many of the problems of any one organization to invest in infor- associated with adverse selection, privacy, mation systems or to develop systems for and related system problems. It will not quality of care. necessarily help academic health centers, which are likely to lose significant num- This forecast states that “although bers of individuals covered by Medicaid patients will be involved in all stages . . . managed care, and by other insurance most of the action will be driven exter- plans if patients have an option to go to nally by employers, governments, and more user-friendly environments. This is health insurers.” This may underestimate an important reason for improving acces- the growing importance of consumerism sibility and convenience, as well as qual- in the United States and the potential for ity of care, for all patients seeking real partnerships to emerge between ambulatory services at academic health providers and patients. Physicians should centers. Second, a serious financial reces- welcome such partnerships as a way to sion, prolonged for more than a year or enlist the public’s help in dealing with two, could dramatically accelerate change the monoliths in the insurance and man- in all aspects of the health care system, as aged care industry. This would require the number of uninsured rise, corporate some real sharing of information and profits fall, and unemployment increases. responsibility, but it is another impor- Individual practice associations have tant wild card in forecasting the future.

The Reactions 369 Gail L. Warden Challenges and Opportunities in Seeking a Balanced Health System

Gail L. Warden is When the Institute for the Future made of the transition to Year 2000 informa- president and CEO of its ten-year forecast for health care tion technology standardization. Henry Ford Health System. providers, it was correct in its prediction that continued organizational change, a Demand for Efficiency and changing role of intermediaries, a poten- Productivity tial oversupply of hospital beds and physicians, and a struggle over control of The demand for efficiency and produc- medical management will be major tivity is also increasing as providers are issues facing all provider organizations. forced to do more with fewer resources, The major factor that the ten-year fore- and as they realize that some of the cast did not anticipate was the impact of mergers and joint ventures of the early the Balanced Budget Act on the health and mid 1990s have not achieved the care delivery system. The Balanced Bud- savings that were expected or intended. get Act severely limited resources. It Further, providers’ market share of forced important choices by health care patients has not grown as expected, and organizations about the services they the leverage for improvement of services could afford. It brought about a rational- has been difficult. ization of services, more consolidation of organizations, and an increased emphasis Managed Care on productivity. Consequently, the landscape began to change. As it changes, Managed care has continued to grow and challenges and opportunities present in doing so has had an effect on cost and themselves in the following areas. quality. Despite the HMO backlash, most consumers and employers like Upward Cost Pressures managed care, and as was predicted, the government purchasers are moving Med- It is clear that upward cost pressures in icaid and Medicare beneficiaries into health care are here to stay. Overall managed care programs. Care manage- spending will increase as the population ment continues to be a challenge, but ages, as the demand for leading-edge the goals are sound: to ensure quality technology and pharmaceutical innova- and appropriateness of care, to address tions continues, and as we book the cost utilization opportunities, to provide

370 The Reactions Health and Health Care 2010 Institute for the Future

accountability, and to enhance the Health Care as a Commodity opportunities for managing risk. Most Health care has become a commodity, organizations are giving priority to and as such, we see spot buying of preadmission screening, consolidated expensive procedures, carve-out compa- pharmacy cost-management strategies, nies specializing in highly profitable disease-specific utilization management, product lines and disease management, coordination of benefits, and health plan and virtual systems built by linking contract reviews. carved-out services. The Voice of Consumers Personnel Shortage The voice of consumers has put them in charge, as we see increased demand for The greatest resource constraint in the provider and insurer responsiveness and a future will be the shortage of personnel. greater focus on patient satisfaction, There is a serious nurse shortage across the especially in an encounter with the country, particularly in bachelor of science health care system. The demand for graduates and nurse practitioners. More alternative or complementary medicine physicians, particularly young physicians, and a strong emphasis on choice also are migrating to group practices. Within seem to be recurring themes. those group practices there continues to be unrest about the fact that physicians feel they’ve lost their autonomy, their income- Information Technology earning potential is flat, and they suffer Information technology is driving the the burdens of managed care. In some future of provider organizations, and in cases this physician unrest is leading to the long run, the use of information threats of unionization, and even the technology through automated medical American Medical Association is support- records and the Internet may be as ing such a movement. important as the introduction of antibiotics in the 1940s. The Purchasers Prevail

Competition Based on Quality While the power of the private and governmental purchaser continues to pre- Health care providers and insurers are vail, we see a number of changes. Group competing on quality, and quality has health care purchases are expanding. become a differentiating factor for pur- Purchasers are leading the way and creat- chasers. A greater emphasis and investing a more informed consumer. Perfor- ment is being placed on quality mance measures are more speciﬁc and measurement and reporting through the publicly reported. Value-based health establishment of the National Forum on care is coming into its own as the Quality Measurement and Reporting. emphasis changes from providing sick Further, evidence-based medicine is care toward maintaining health status, becoming the gold standard for patient disease prevention, and productivity of care. the workforce.

The Reactions 371 The Future Provider organizations of the future will become financially and organizationally The future, as of the beginning of the lean, customer driven, and community millennium, appears to be one in which focused. They will use a series of relation- we will have collaborative networks of ship-building and model-redesign strate- providers, payers, and purchasers; well- gies that enhance horizontal and vertical informed consumers making decisions integration. They will focus on product based upon empirical data; and an orga- differentiation and improving core nized continuum of care that is virtually processes, and will continue to recognize linked with high quality and efficiency the importance of community benefit by across episodes of illness and pathways to partnering with community organiza- wellness. tions to meet local health care needs.

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H. Denman Scott Public Health Services: A Challenging Future

H. Denman Scott is director of The report gives a gloomy assessment of ment, but public health at all levels the Brown Center for Primary public health over the past thirty years should be proud of accomplishments Care and Prevention and is and predicts that “public health will in this area. Physician-in-Chief of the continue to be under funded and mar- Department of Medicine, ginalized.” Many public health depart- Unintentional injuries and gun vio- Memorial Hospital of Rhode ments have been overwhelmed by lence have been redefined as public Island demand for personal health services from health issues thanks to the leadership the growing millions of uninsured. It is of many public health professionals. highly probable that this stress on public These leaders have influenced policy health will continue over the next and designed programs that have and decade. As difficult as this problem is, are reducing morbidity and mortality. there is a more rosy perspective in the The next decade should see much domain of disease prevention and health more progress. promotion. Consider these five examples. Since the publication in the mid- Over the past thirty years morbidity 1960s of the first Surgeon General’s and mortality from heart disease has report on smoking and health when steadily declined by almost fifty per- almost half of Americans smoked cig- cent as a result of healthier life styles, arettes, millions of Americans have treatment of hypertension and elevated quit and millions more have chosen cholesterol, and effective treatment of never to take up the habit. We still disease once expressed. Much remains have much to do with a national to be done and the next decade should smoking rate of 25 percent. In the see further improvements. next decade other states would do well to emulate programs California, Min- Vaccine preventable diseases have vir- nesota, and Utah where the smoking tually disappeared. Newer vaccines rates have fallen to about 18 percent such as H. influenzae B have been in the California and Minnesota, and widely deployed to all population to just over 13 percent in Utah. groups because of federal support for vaccine purchase and the diligent HIV/AIDS has evoked a massive efforts of local health departments to national effort over the past eighteen reach all vulnerable children. There years. Remarkable advances in preven- are still opportunities for improve- tion and treatment have occurred.

The Reactions 373 Persistent, painstaking work over the keep the mission and goals of public next decade may give us the ultimate health before the people on a regular solution to this scourge-a safe, effec- basis. Over the next ten years those tive vaccine. responsible for enunciating the mission of public health would be well advised to The U.S. Surgeon General recently employ frequently the tools of social released Healthy People 2010, a docu- marketing to define in concrete terms ment that outlines goals for several hun- the goals of public health. The future dred public health problems. As its image of public health may remain a bit predecessors have, this new compilation fuzzy, but social marketing can make it will focus the attention of Congress, much sharper than it is today. state legislatures, and local elected officials on an array of possibilities. The Public Health and Private document is a superb example of public Medicine health assessment and will play a key role in policy development at all levels of In many communities the local health government. What actually occurs over department has become the provider of the next ten years will reflect the politics medical services for those who cannot and priorities of our communities and afford a private physician or for those our nation. Public health professionals in whom a private physician will not see. large numbers will have essential roles in The typical scenario depicts a wide gulf bringing expertise and evidence to these between the public health clinic and the debates. private practitioners office.

The Identity of Public Health There is another important scenario emerging in many communities, one of The report correctly notes the confusion remarkable collaboration between public among the public about the definition of health and the private sector. In one ver- public health. On the one hand, the defi- sion public health nurses, employed by nition embraces myriad dimensions, the local health department, are working many risk factors, and involves numer- with private physicians. The nurses per- ous interest groups. On the other hand, form medical screening and case man- many people construe public health as agement services which permit the narrowly focused on the poor. However, doctors to see patients in their offices- individuals do relate and react to an outpatients whose social and economic break of meningitis in their schools or problems would ordinarily overwhelm pesticide contamination of their drink- the office staff’s capacity to deal with ing water. Moreover, they are impressed them. In another version public health when a health department manages these clinics are working with groups of med- threats with skill and dispatch. Once ical and surgical specialists, and dentists concluded, these episodes recede from to provide services either in their clinics the public’s mind and are replaced by or in the doctor’s office. The participat- other concerns. The challenge is how to ing physicians and dentists either volun-

374 The Reactions Health and Health Care 2010 Institute for the Future

teer their services or accept reduced fees. continue each year for the foreseeable These arrangements are helping to solve future. It is, therefore, necessary that the long-standing problem of obtaining local communities without functional specialty services for the patients of the public private coalitions be encouraged public health clinics. to learn about and emulate the communities with well-developed programs. Local leadership inspires and sustains these programs. Leaders in medicine, public Other Themes health, dentistry, hospitals, health insurance companies, and local elected officials World population mobility, environmen- have in various combinations come tal hazards in food, water, and air, the together to create thriving programs that definition of the human genome, and benefit the health of several hundred to information technology are complex several thousand individuals. They do not themes discussed in the report. They will solve the massive problem of access to care surely impact public health, but to what for the underserved and uninsured, but extent is difficult to predict. Not men- they make important contributions in tioned in the report but worthy of note community after community. is the threat of bioterrorism. These areas all require regular scrutiny and periodic As this decade proceeds, it is unlikely assessment to take advantage of opportu- that some form of universal insurance nities to improve public health and to will come about. The health needs of the avoid policies deleterious to our health uninsured are with us this year, and will or our our liberties

The Reactions 375 Kevin B. Piper Health Care Purchasing in 2010

Kevin B. Piper is director of The Institute for the Future performed care purchasing—as a strategy, policy the National Health Care an outstanding service by laying out a set, and management discipline—is the Purchasing Institute and vice road map for the future of health and cornerstone of major public and private president of the Academy for health care in America. By anticipating sector efforts to improve the performance Health Services Research and the future transformations of health and of America’s health care system. Health Policy. health care, we are better positioned to influence the nature and consequences of As a strategy, health care purchasing is change. about leveraging the economic power of purchasers to generate greater value for However, there was a notable omission the dollar invested in care. The pur- from the Institute’s forecasts: the future chaser’s policy set of contract specifica- of health care purchasing by public and tions, performance measures and private employers and public programs standards, and beneficiary education like Medicare and Medicaid. Purchasers, reflects a new performance-oriented para- particularly leading Fortune 500 compa- digm. As a management discipline, nies like General Motors and General health care purchasing is all about the Electric, are actively leveraging their effective deployment of incentives, sys- market power to improve quality of care. tems, and techniques to achieve direct They are leading the way for what will accountability of health plans and be a dramatic transformation of health providers for their substantive results, care purchasing over the coming decade. clinical and financial.

Forecast Most purchasers instinctively understand the strategic intent of the results-driven To help address the lack of a forecast for approach, despite lingering challenges in health care purchasing in the Institute’s conceptualization and execution for some excellent report, the following describes traditional, regulatory-oriented pur- two major forecasts for the increasingly chasers. Further, many organizations are inﬂuential world of purchasing: actively embracing the basic policy set of results or value-based purchasing in their managed care contracting. However, Health Care Purchasing as a health care purchasing’s greatest promise Management Discipline resides in its development as a unique At its core, health care purchasing is management discipline, an equal in rigor about an economic exchange of value, to the traditional corporate disciplines of denominated in cost and quality. Health ﬁnance, human resources, and marketing.

376 The Reactions Health and Health Care 2010 Institute for the Future

For a number of reasons, health care pur- Patient safety standards to save the chasing is steadily evolving as a manage- lives of employees and beneficiaries. ment discipline. First, the participants, Practices to empower and directly whether in the public or private sector, incentivize consumers to choose share a common set of core values cen- higher quality health plans and tered on maximizing the clinical and providers. financial performance of the health care system for the joint benefit of beneficiaries and stockholders or taxpayers. Sec- ond, purchasing executives perform a Three Tiers of Health Care separate, distinct, and increasingly com- Purchasing plex managerial function requiring plan- By 2010, the world of health care pur- ning, direction, organization, control, chasing will be roughly divided in three execution, and evaluation—the hall- parts: marks of any management discipline. Active purchasers of health care Finally, health care purchasing is further defined by its reliance on a unique Passive purchasers of health care knowledge base and skill set. This Defined contributors knowledge base and skill set—distinct from health care purchasing’s sister disci- The active purchasers of health care, plines of finance and human resources— which will include many Fortune 500 is built upon a number of other areas, companies and some state Medicaid pro- including business and public adminis- grams, will engage in value-based pur- tration, economics, human resources, chasing using the tools described above. business law, decision theory, actuarial While they will represent only a seg- science, and information technology. ment of the total marketplace, each is a multi-billion dollar purchaser and will By 2010, health care purchasing will be greatly determine the baseline of con- readily accepted as a management disci- tracts, tools, and practices used by other pline in its own right, with a significant employers and government agencies. impact on the provision of health care to They will serve as the knowledge leaders employees and public program beneficia- and standard barriers for the buying of ries. The impact of this professionaliza- health care in America. tion process will be felt through greater acceptance and wider use of value-based The passive purchasers will still function purchasing tools to drive quality largely as payors of health care, albeit improvements at the health plan and through premium-based health plans. provider levels. These tools will include: Most employers, particularly small and Incentives—financial and non-finan- mid-sized companies, will not try to cial—to reward the higher performing actively leverage their buying power to plans and providers, including tar- affect outcomes. However, as health care geted results-based payments, purchasing advances as a management increased patient volume, and market- discipline with a refined toolset, these place recognition. passive purchasers will increasingly

The Reactions 377 follow the lead of their active colleagues for purchasers, defined contribution will in such areas as performance standards become commonplace. While fraught and patient safety protections. The real with complications, the defined contri- unknown here is whether the federal bution approach still affords some oppor- Medicare program, the nation’s largest tunity for leveraged buying. For buyer of health services, will continue to example, employers could still use per- be a passive payor or ultimately evolve formance standards to pre-qualify avail- into an active purchaser. Necessity able plans. In addition, it has the would say yes, while history and politics potential of bringing consumers back would say no. into the purchasing process. However, the positive impact of defined contribu- The final tier—and potentially the tions, if any, will be highly dependent on largest segment—will be employers the continued engagement of employers using the defined contribution approach as purchasers and the underlying deci- to paying for employee health care. If sion support systems made available to patient rights legislation creates liability consumers.

378 The Reactions Health and Health Care 2010 Institute for the Future

David Lansky Health & Health Care 2010 Commentary—Consumer Power as a “Wild Card”

The forecast at once excites us about the In the 1990s, it was widely thought that possibilities for biomedical break- a market-based health system would throughs and reminds us of our historic focus on quality care when group pur- failure to use medical technology appro- chasers used their clout to demand popu- priately, equitably, and humanistically. lation health improvements. But the While today’s consumers are seeking experience has been disappointing. It new health care arrangements consistent turns out that public sector purchasers with an “expanded view of health”— are constrained by intensely political fac- alternative providers, self-care resources, tors and private sector purchasers lack support groups, web sites, and health market mass, are fearful of interfering in media, and today’s experts are noting an employee-provider relationships, and array of demographic, cultural, and envi- have not resolved the tension between ronmental shifts that seem to cry out for their roles as population health managers new forms of health care delivery, the and as agents of individual needs. dominant health care systems respond with only trivial changes. In the past decade, it has become commonplace to observe that medical care As we look at the decade ahead, is there has a small influence on human health. any reason to think that the professions Why, then, do we spend 15% of our and managers who control our $1.2 tril- national wealth on it? As the number of lion health system will undertake fun- uninsured climb and the quality defi- damental redesign of that system? Will ciencies of our system become more evi- sudden insights, or the maturing of a dent, it may be time for a more probing newer generation of physician leaders, re-thinking of the role of the institu- or the oscillations in Federal health tional health care system in our society. financing create an environment that facilitates reallocation of health care The next decade may witness many inter- resources to optimize health? We can esting experiments and improvement ini- appreciate the richness and subtlety of tiatives, but it is not primarily about the forecast, but ultimately wonder: improving systems of care or introducing what will it take to materially change breakthrough medical technology. It will our health system? be primarily about shifting the power to

The Reactions 379 decide what’s important from our historic centered on the patient and embrace a medical leadership to the public itself. more complete picture of health? Alas, there is only one unequivocal stake- holder for the quality of health care—and Consumer action—both organized and it’s the one you see when you look at a frail personal—is the necessary prerequisite parent, a sick child, or in the mirror. A to the reengineering of our health care meaningful transfer of power to consumers system. For group and individual con- will be difficult and complex, but it’s sumer action to succeed, several transi- essential to the proper organization of tions must occur. health care in a democratic society. Increasing numbers of Americans In one wave of health care “reform” after must see their doctor as a partner and another, various large institutions have advocate, rather than an omniscient wrestled for control over the allocation of and unbiased healer. health care resources—dueling each Consumers must amplify their per- other for the right to extend their partic- sonal decisions, by telling their stories ular paternalism over the judgment of to each other, to the media, to their the patient and family. Should the doctor children, and to their health care decide what’s right for the patient? No, providers. the health plan should decide. No, the employer should decide. No, the govern- Consumers must have the ability to ment should decide. In what other area direct their health care dollars to the of life would we cede our personal ability services and service providers that to make vital decisions to our employer they value. or an expert—our housing, our chil- Consumers must learn about and dren’s education, our food? embrace the moral implications of In hundreds of focus groups, surveys, their own health care decisions, and and interviews we have found that ordi- understand the interdependency of all nary Americans—particularly those who of us in managing financial and health need vital health care services—are able risks. to articulate their needs in a complex Consumers must develop a policy and balanced way. But in equal measure, agenda that facilitates system reengi- we hear that they cynically question the neering. They must ask their political health system’s interest in meeting those parties and representatives to permit needs and feel powerless to alter the innovators to reallocate health dollars behavior of this vast, impenetrable array where they do the most good. of institutions. Nothing in the behavior of the medical professions, the govern- Physicians and other health profes- ment, the insurance industry, or the pri- sionals must support their patients’ vate employers gives American interest in taking more responsibility consumers confidence that their health for health and health care decisions. needs will be met. Where, then, should we look for the energy and focus that Some of these trends will occur without could allow the health system to become the say-so of any politician, doctor, or

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employer—just because they are intrin- movement to their portfolio of activities, sic to modern society. But others won’t or perhaps a new organization will happen until there is sufﬁcient, focused emerge to channel the public’s anxiety public pressure to permit the millions of about healthcare. The “wild card” of the well-intentioned health care providers next decade may be the massed demand and policy leaders to “do the right of consumers to take back their health thing”. Existing consumer organiza- care from the system that has been so tions—unions, advocates, service agen- unresponsive. cies—will need to add support of this

The Reactions 381 Health and Health Care 2010 Institute for the Future

Glossary

Listed below are brief explanations of common health care terms used in this forecast. Many of these glossary terms and resource citations are taken from the Public Health and Health Care Administration Glossary of Terms Web page of the University of Washington (http://weber.u.washington.edu/~hserv/hsic/resource/glossary.html).

Academic Medical Center Ambulatory Care (AMC) Medical services provided on an outpa- A group of related institutions including tient (nonhospital) basis. Services may a teaching hospital or hospitals, a med- include diagnosis, treatment, surgery, ical school and its afﬁliated faculty prac- and rehabilitation. tice plan, and other health professional schools. Beneﬁt Package

Adjusted Average Per Services covered by a health insurance Capita Cost (AAPCC) plan and the financial terms of such coverage, including cost sharing and limita- A county-level estimate of the average tions on amounts of services. cost incurred by Medicare for each beneficiary in the FFS system. Adjustments Capitation are made so that the AAPCC represents the level of spending that would occur if A method of paying health care each county contained the same mix of providers or insurers in which a fixed beneficiaries. Medicare pays health plans amount is paid per enrollee to cover a 95 percent of the AAPCC, adjusted for defined set of services over a specified the characteristics of the enrollees in period, regardless of actual services pro- each plan. See also Medicare Risk Con- vided. tract. Case Management Aid to Families with Dependent Children (AFDC) Monitoring and coordinating the deliv- Program ery of health services for individual patients to enhance care and manage A federally financed program for single- costs; often used for patients with spe- parent families, designed to provide wel- cific diagnoses or who require high-cost fare for single parents who cannot, or extensive health care services. without assistance, take proper care of their children.

Glossary 383 Case Mix more than the price, the hospital has to The mix of patients treated within a par- absorb the difference. Originally each ticular institutional setting, such as the DRG was intended to contain patients hospital. Patient classification systems who were roughly the same kind of like DRGs can be used to measure the patient in a medical sense and who spent hospital case mix. about the same amount of time in the hospital. The groupings were subse- quently redefined so that, in addition to Copayment medical similarity, resource consumption A fixed amount of money paid by a was approximately the same within a health care plan enrollee (beneficiary) at given group. the time of service. The health plan pays the remainder of the charge directly to Direct Contracting the provider. This is a method of cost sharing between the enrollee and the Direct contracting usually refers to a ser- plan and serves as an incentive for the vice (e.g., substance abuse treatment) enrollee to use health care resources that an employer contracts directly to wisely. save money on its employees’ health plan, leaving employees free to choose Deductible among other eligible providers for their primary, obstetric, pediatric, and other The amount of money an insured person medical care needs. must pay “at the front end” before the insurer will pay. The reason for introduc- Disproportionate Share ing this concept into health care cover- Hospital (DSH) age is primarily to discourage unnecessary use of services, and also to A Medicare term for a hospital serving a reduce insurance premiums, as all claims higher than average proportion of low- have a minimum amount that the income patients. insurer will be spared on every claim. Enrollee Diagnosis-Related Group (DRG) A person who is covered by health insurance. A hospital patient classification system developed at Yale University. The cur- ERISA rent payment system for Medicare is based on the federal government’s set- The Employee Retirement Income Secu- ting a predetermined price for the “pack- rity Act. ERISA exempts self-insured age of care” in the hospital (exclusive of health plans from state laws governing physician’s fees) required for each DRG. health insurance, including contribution If the hospital can provide the care for to risk pools, prohibitions against disease less than the DRG price, it can keep the discrimination, and other state health difference; if the care costs the hospital reforms.

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Fee-for-Service (FFS) Group-Model HMO

A method of paying the provider what- An HMO that pays a medical group a ever fee he or she charges on completion negotiated, per capita rate, which the of a specific service. group distributes among its physicians, often under a salaried arrangement. Gatekeeper Health Care Provider The person responsible for determining the services to be provided to a patient An individual or institution that pro- and coordinating the provision of the vides direct medical services (e.g., physi- appropriate care. The purposes of the cian, hospital, laboratory). This term gatekeeper’s function are (1) to improve should not be confused with an insur- the quality of care by considering the ance company, which “provides” insur- whole patient, that is, all the patient’s ance. problems and other relevant factors; (2) to ensure that all necessary care is Health Plan Employer Data obtained; and (3) to reduce unnecessary and Information Set care and cost. When, as is often the case, (HEDIS) the gatekeeper is a physician, she or he A set of standardized measures of health is a primary care physician and usually plan performance. HEDIS permits com- must, except in an emergency, give the parisons between plans on quality, access first level of care to the patient before and patient satisfaction, membership and the patient is permitted to be seen by a utilization, financial information, and specialist health plan management. Graduate Medical Education (GME) Health Insurance

The period of medical training that fol- Insurance that covers the patient for lows graduation from medical school, health care, including physician and hos- commonly referred to as internship, resi- pital services. dency, and fellowship training. Health Insurance Gross Domestic Product Purchasing Cooperative (GDP) (HIPC) A local board created under managed The total current market value of all competition to enroll individuals, collect goods and services produced domesti- and distribute premiums, and enforce cally during a given period; differs from the rules that manage the competition. the gross national product by excluding net income that residents earn abroad.

Glossary 385 Health Maintenance Medicaid Organization (HMO) A state/federal health benefit program A managed care plan that integrates for the poor who are aged, blind, dis- financing and delivery of a comprehen- abled, or members of families with sive set of health care services to an dependent children. Each state sets its enrolled population. HMOs may con- own eligibility standards. tract with, directly employ, or own participating health care providers. Medical Loss Ratio Enrollees are usually required to choose from among these providers and, in The ratio of benefits paid out to premi- return, have limited copayments. ums collected for a particular type of Providers may be paid through capita- insurance policy. Low loss ratios indicate tion, salary, per diem, or prenegotiated that a small proportion of premium dol- FFS rates. lars were paid out in benefits, while high loss ratios indicate that a high percent- Health Plan age of the premium dollars were paid out as benefits. An organization that acts as an insurer for an enrolled population. Medical Savings Account (MSA) Independent Practice Association (IPA) A health insurance option consisting of a high-deductible insurance policy and a An HMO that contracts with individual tax-advantaged savings account. Individ- physicians or small physician groups to uals would pay for their own health care provide services to HMO enrollees at a up to the annual deductible by with- negotiated per capita or FFS rate. Physi- drawing from the savings account or cians maintain their own offices and can paying out of pocket. The insurance pol- contract with other HMOs and see other icy would pay for most or all costs of FFS patients. covered services once the deductible is met. Managed Care Medicare Any system of health payment or delivery arrangements where the plan The federal health benefit program for attempts to control or coordinate use of the elderly and disabled that covers 35 health services by its enrolled members million Americans or about 14 percent in order to contain health expenditures, of the population for an annual cost of improve quality, or both. Arrangements over $120 billion. often involve a defined delivery system of providers with some form of contractual arrangement with the plan.

386 Glossary Health and Health Care 2010 Institute for the Future

Medicare Risk Contract Network-Model HMO

A contract between Medicare and a An HMO that contracts with several dif- health plan under which the plan ferent medical groups, often at a capi- receives monthly capitated payments to tated rate. Groups may use different provide Medicare-covered services for methods to pay their physicians. enrollees and thereby assumes insurance risk for those enrollees. A plan is eligible Out-of-Pocket Expense for a risk contract if it is a federally qualified HMO or a competitive medical Payments made by an individual for plan. medical services. These may include direct payments to providers as well as Medigap Insurance payments for deductibles and coinsurance for covered services, for services not Privately purchased individual or group covered by the plan, for provider charges health insurance policies designed to in excess of the plan’s limits, and for supplement Medicare coverage. Benefits enrollee premium payments. may include payment of Medicare deductibles and coinsurance and balance Outcome bills, as well as payment for services not covered by Medicare. Medigap insurance The result of a medical intervention on a must conform to one of ten federally patient. standardized benefit packages. Part A Medicare Morbidity Medical Hospital Insurance (HI) under A measure of disease incidence or preva- Part A of Title XVIII of the Social Secu- lence in a given population, location, or rity Act, which covers beneficiaries for other grouping of interest. inpatient hospital, home health, hospice, and limited SNF services. Beneficiaries Mortality are responsible for deductibles and copayments. A measure of deaths in a given population, location, or other grouping of Part B Medicare interest. Medicare Supplementary Medical Insur- National Health ance (SMI) under Part B of Title XVII of Expenditures (NHE) the Social Security Act, which covers Medicare beneficiaries for physician ser- Total spending on health services, pre- vices, medical supplies, and other outpa- scription and over-the-counter drugs and tient treatment. Beneficiaries are products, nursing home care, insurance responsible for monthly premiums, costs, public health spending, and health copayments, deductibles, and balance research and construction. billing.

Glossary 387 Partial Capitation Preferred Provider Organization (PPO) An insurance arrangement where the payment made to a health plan is a com- A health plan with a network of bination of a capitated premium and providers whose services are available to payment based on actual use of services; enrollees at lower cost than the services the proportions speciﬁed for these com- of nonnetwork providers. PPO enrollees ponents determine the insurance risk may self-refer to any network provider at faced by the plan. any time.

Per Diem Payments Prepaid Group Practice Plan Fixed daily payments that do not vary with the level of services used by the A plan in which speciﬁed health services patient. This method generally is used to are rendered by participating physicians pay institutional providers, such as hos- to an enrolled group of persons, with a pitals and nursing facilities. ﬁxed periodic payment made in advance by or on behalf of each person or family. An HMO is an example of a prepaid Personal Health Care Expenditures group practice plan.

These are outlays for goods and services Primary Care related directly to patient care. Primary care is the provision of inte- Point-of-Service (POS) Plan grated, accessible health care services by clinicians who are accountable for A health plan with a network of addressing a large majority of personal providers whose services are available to health care needs, developing a sustained enrollees at a lower cost than the services partnership with patients, and practicing of nonnetwork providers. POS enrollees in the context of family and community. must receive authorization from a primary care physician in order to use net- Primary Care Case work services. POS plans typically do Management (PCCM) not pay for out-of-network referrals for primary care services. A Medicaid managed care program in which an eligible individual may use services only with authorization from his or Practice Guideline her assigned primary care provider. That An explicit statement of what is known provider is responsible for locating, coor- and believed about the beneﬁts, risks, dinating, and monitoring all primary and costs of particular courses of medical and other medical services for enrollees. action, intended to assist decisions by practitioners, patients, and others about appropriate health care for speciﬁc clinical conditions.

388 Glossary Health and Health Care 2010 Institute for the Future

Prospective Payment Risk Selection

A method of paying health care Enrollment choices made by health plans providers in which rates are established or enrollees on the basis of perceived risk in advance. Providers are paid these rates relative to the premium to be paid. regardless of the costs they actually incur. Single-Specialty Group Practice Public Health Physicians in the same specialty pool Activities that society does collectively their expenses, income, and offices. to ensure conditions in which people can be healthy. This includes organized com- Skilled Nursing Facility munity efforts to prevent, identify, pre- (SNF) empt, and counter threats to the public’s An institution that has a transfer agree- health. ment with one or more hospitals, provides primarily inpatient skilled nursing Relative Value Scale (RVS) care and rehabilitative services, and An index that assigns weights to each meets other specific certification require- medical service. The weights represent ments. the relative amount to be paid for each service. The RVS used in the develop- Solo Practice ment of the Medicare Fee Schedule con- A physician who practices alone or with sists of three cost components: physician others but does not pool income or work, practice expense, and malpractice expenses. expense.

Resource-Based Relative Staff-Model HMO Value Scale (RBRVS) An HMO in which physicians practice A relative value scale that is based on the solely as employees of the HMO and resources involved in providing a service. usually are paid a salary.

Risk Adjustment Supplemental Insurance

Increases or reductions in the amount of Any private health insurance plan held payment made to a health plan on behalf by a Medicare beneﬁciary, including of a group of enrollees to compensate for Medigap policies and postretirement health care expenditures that are health beneﬁts. expected to be higher or lower than average.

Glossary 389 Supplemental Medical Third-Party Payer Insurance (SMI) An organization, private or public, that The part of Medicare through which per- pays for or insures at least some of the sons entitled to Part A Medicare, the health care expenses of its beneﬁciaries. Hospital Insurance Program, may obtain Third-party payers include commercial assistance with payment for physician’s health insurers, Medicare, and Medicaid. services, diagnostic tests, and other outpatient services. Individuals participate Underwriting voluntarily through enrollment and the payment of a monthly fee. The process by which an insurer determines whether and on what basis it will Tertiary Care accept an application for insurance. Some insurers use medical underwriting to Care of a highly technical and specialized exclude individuals, groups, or coverage nature, provided in a medical center— for certain health conditions that are usually one afﬁliated with a university— expected to incur high costs. for patients with unusually severe, complex, or unusual disorders. Tertiary Utilization Review (UR) care is the highest level of care. The review of services delivered by a Tertiary Care Center health care provider to evaluate the appropriateness, necessity, and quality of A large medical institution, usually a the prescribed services. The review can teaching hospital, that provides highly be performed on a prospective, concur- specialized care. rent, or retrospective basis.

390 Glossary Health and Health Care 2010 Institute for the Future

Index

A America Online (AOL), 207 Acquired immunodeficiency syndrome American Association of Health Plans, 5 (AIDS), 81, 318, 345. See also HIV/AIDS American Association of Retired Persons Activities of Daily Living (ADL), 281, 283 (AARP), 158–160, 253, 257 Adler, N., 341 American Hospital Association (AHA), Adult stem cells, 131 84–87, 90, 104 Advisory Committee on Genetic Testing, American Indian population. See Native 121 American/Alaskan Native population Advocate EHS (Chicago), 79 American Lung Association, 231 Aetna, 48 American Medical Association, 96–97, 99 Affective disorders, 193 American Physical Therapy Association, 267 African American population, 3, 19, 20, Americans with Disabilities Act (ADA), 214 101, 152, 169, 205, 228, 230, 231, 235, America’s Children: Key National Indicator of 236, 255, 283, 313, 325, 331 Well-Being (Federal Interagency Forum Age wars, 258 on Child and Family Statistics), 239 Agency for Health Care Policy and Research, Anderson, G., 280 331 Annie E. Casey Foundation, 180 Aid To Families with Dependent Children Antibiotics, 21, 114 (AFDC), 223 Antiviral therapies, 113 Aiken, L., 103 Anxiety disorders, 193 Alcohol abuse, 9–10, 22, 23, 238, 294, 311; Arthritis, 281–282 and age, 313; association of, and drug Artificial blood, 7, 128–129 abuse, 315; as behavioral health problem, Artificial intelligence (AI), 73 312–324; bifurcation of, and drug Asian American/Pacific Islander population, policy, 321; and concern for young, 314; 3, 19, 20, 228, 255, 331 costs of, 316–317; and crime, 317–318; Assertive Community Treatment (ACT) and domestic violence, 317; economic program, 207 forces in, 322–323; forecast for, Association of American Medical Colleges, 323–324; and gender, 314; and health 96, 99 care system, 320; and interactions, 314; Asthma, 171–172, 281–282, 299–300, 306, and morbidity and untimely death, 316; 348; childhood, 121, 230–231 politics of problems related to, 320–321; Attention deficit hyperactivity disorder and promise of public health, 321–323; (ADHD), 232, 234 and race, 313; scope of, in America, 313; and sexually transmitted disease, 316; B toll in injuries caused by, 315–316; in Baby boomers, 2, 3, 17–19, 285, 302; aging, workplace, 320; youth focus on, 322 151, 251–256 Alcoholics Anonymous (AA), 205 Balanced Budget Act (BBA; 1997), 2, 42, Alliance for Aging Research, 264, 265 223–225, 227, 243, 271 Allotransplantation, versus Balanced Budget Amendment (1997), xenotransplantation, 129 48–49 Alzheimer’s Association, 293 Behaviors, health. See Health behaviors Alzheimer’s disease, 120, 121, 128, 195, Bell Campaign, 329 197, 293, 307 Best practices, 83 Ambulatory surgery centers, 89 Big insurance, 61

Index 391 Biochemistry, 113 trends contributing to increasing need Biotechnical advances, 21 for, 284–289. See also Chronic conditions Black Report, 341 Chronic Care in America: A 21st Century Blue Cross, Blue Shield, 38, 52 Challenge (Robert Wood Johnson Boston, 74–75 Foundation), 269, 283, 284 Breast cancer, 283 Chronic conditions, 260–261, 280, 302. See Bureau of Economic Analysis, 29 also Chronic care Bureau of Health Professionals, 96–97; Clinical investigators, 102–103 Division of Nursing, 103, 104 Clinton Care, 93 Bush, G. W., 219 Clinton, W. J., 51, 219, 222, 224 Clubhouse model, 207 C Cocaine, 313 California, 48, 54, 69, 74–75, 80, 85, 101, Columbia/HCA, 87 170, 171, 229, 264; State of, Combinatory chemistry, 112 Department of Finance, 21 Committee on Medicine and Public Health California Medical Association, 48 (New York Academy of Medicine), 166 Cancer, 81, 231–232, 285, 329 Community coalitions, 183 Capitation, 5, 13, 47, 74, 75, 77, 141, 268. Community Health Information Networks, See also Global capitation 138 Cardiovascular disease, 81, 281–282, 348 Competition, managed, 70 Care delivery organizations: background, 78; Complementary and Alternative Medicine forecast, 79–82; and group practice, 80; (CAM), 210 issues for, 78–79 Compliance, patient’s, 83 Case management, 83, 143 Computer Technology, 199 Catholic Healthcare West, 79 Congestive heart failure (CHF), 299–300, Census of Population and Housing, 252 306 Centenarians, 254 Congressional Budget Office, 224, 271 Center for Advancement of Health, 343 Consolidated Omnibus Budget Center for Health Policy Research, 99 Reconciliation Act (COBRA), 49, 223 Centers for Disease Control and Prevention Consumer Reports, 58 (CDC), 23, 167, 170, 174, 234, 261, Consumer revolt, 92 318, 325, 327 Consumers: demands, 53 Centers of excellence, 79 Consumers, health care: and benefits Children Now, 240 insecurity, 152; bottom tier of, 153–154; Children’s Defense Fund, 236 children as, 154; empowered, 3; Children’s health: and access to health excluded, 4; forecast and assumptions for, insurance or other financing, 220–225; 156–160; middle tier of, 154–155; and and access to health services, 225–227; new consumers, 2–4, 153; summary of assessment of progress in, 233–240; three tiers of, 155–156, 157; three future of, 240–245; impact of modes of empowerment for, 150; three environment on, 227–230; physical tiers of, 151–162; top tier of, 155 environment and increasing chronic Coronary angioplasty, 118 illness in, 230–233; and special health Coronary artery disease, 302 care needs, 234 Corporate physician practice management Children’s Health Insurance Program (PPM), 81 (CHIP), 42 Council on Graduate Medical Education Choice, 150, 160 (COGME), 96, 97, 99 Chronic care: beyond, 306; and description Crime, 238–239, 317–318 of chronic illness, 279–284; evolving Criminal Justice System, 321 crisis of, 279; forecast, 289–294; CT scanning, 117 implications of evolution of, 294–296; Current Population Reports, P-25, 252–255

392 Index Health and Health Care 2010 Institute for the Future

D Domestic violence, 317 Data compression, 137 Down’s syndrome, 120 Data storage, 136 Drug abuse, 9–10, 238, 311; and age, 313; Databases, 137 association of, and alcohol abuse, 315; as DDT, 173 behavioral health problem, 312–324; Death: adolescent, 240; biomedical and and concern for young, 314; costs of, underlying causes of, in 1990, 312; 316–317; and crime, 317–318; and changes in cause of, 167; leading causes domestic violence, 317; economic forces of, among seniors, 260 in, 322–323; and education, 314; Deficit Reduction Act (1984), 223 forecast for, 323–324; and gender, 314; Delivery systems, integrated, 79, 309–310 and health care system, 320; and Demand management, 84 interactions, 314; and morbidity and Demographics, 2–4; and burden of disease, untimely death, 316; politics of 17–23; and household income, 20–21; problems related to, 320–321; and and increasing diversity, 19–20; and promise of public health, 321–323; and increasing longevity, 17–19; and shifting race, 313; scope of, in America, 313; and burden of disease, 21–23 sexually transmitted disease, 316; toll in Dentists, 265–266 injuries caused by, 315–316; in Depression, 22, 189, 190, 195, 197, 232, workplace, 320; youth focus on, 322 260, 282, 342, 346 DSM IV, 197, 211 Destiny Health, Inc., 52 Detector technology, 114–115 E Diabetes, 282, 283, 292, 299–300, 306, 348 E. coli, 7, 345 Diabetes Control and Complications Trial, eBenX.com, 52 292 Economic and Social Research Institute, 295 Diagnosis-related groups (DRGs), 74, 76, 84 Economic disparity, 170 Digital health plans, 150 Economic Report of the President (1999), 19 Disease, burden of, 92; chronic disease, eHealthInsurance, 52 mental illness, lifestyle behaviors and, Electrolithotropter, 114 21–23; and demographic trends, 17–23 Electron-beam CT scanning, 115 Disease management, 55–56, 82, 84; care Electronic commerce, 139 delivery for, 300–301; and diseases being Electronic data interchange (EDI), 51 managed, 299–300; drivers and barriers Electronic medical record (EMR), 7, 14, to, 301–305; feedback, 301; and 140–143, 146 financial risk, 307; forecast, 305–307; Electronic visits, 55 information technology in, 301; and Embryonic stem cells (ESCs), 131–133 integrated delivery systems (IDS) with Emphysema, 282 health plans, 309; and integrated Employee Assistance Programs (EAPs), 204, delivery systems (IDS) without health 208 plans, 309; and large medical groups, Employee Benefits Research Institute, 39 310; outcomes measurement for, 301; Employee Retirement Income Security Act pace of change in, 308–309; patient care (ERISA), 49, 63 process in, 307; patient identification Employment-Based Health Benefits: Trends and and assessment for, 300; and small-group Outlook (Fronstin), 30 practices and independent physicians, Empowerment, consumer, 3, 150; three 310 levels of, 160–162 Disproportionate Share Hospital (DSH) Encephalitis, 113 funding, 224 Encryption, 137 Diversity: in aging, 255; and chronic illness, Energy sources, 114 281–282; increasing, 3, 19–20, 228–229 Environmental Protection Agency, 173, 231 DNA, 114, 122 Environmental tobacco smoke (ETS), 330, 332

Index 393 Epidemics, new, 92 Geriatric Care Act (2001), 264 Epidemiology, 9, 175–176, 184, 324 Geriatric Clinical Specialists, 267 Epilepsy, 195 Geriatric Education Center, 264 Epotec On-Line Behavioral Health, 206 Geriatric Physical Therapy, 267 ESA, 145 Germ theory, 165, 166 Evidence-based medicine (EBM), 68, 71–72 Global Burden of Disease, The (World Health Organization), 22, 187, 189 F Global capitation, 74, 75, 77. See also FACCT.com, 58 Capitation Federal Bureau of Investigation, 318 Global Health Statistics (Murray and Loez), 190 Federal Employees Health Benefits Plan Great Depression, 170, 251 (FEHBP), 62, 211 Great Society, 166 Federal Interagency Forum on Child and Greenstein, R., 170 Family Statistics, 239 Group Health Administration of America, 5, Fee-for-service (FFS) programs, 2, 5, 69, 36 72–77, 155, 181 Group practice, 80, 81 Firearms, use of, 311; in America, 325; cost Growth rates, health care: changing trends of, 326–327; forces driving injury in, 25–33; forecast, 29–32; historical prevention in, 327–329; forecast, trends in, 25–28; issues in, 26–28; and 328–329; and homicide, 326; and injury market dynamics, 28–29; and private prevention, 324–329; and suicide, 326; sector, 25–26; and public sector, 26 support for regulation of, 328; and Gu, X. L., 262 unintentional shootings, 326; victims of, Guns. See Firearms; Health behaviors 325–326 Florida, 20, 264, 273 H Florida State University, 264 H. pylori, 128 Focus factories, 55 Harmonic imaging, 116 Foege, W. H., 312 Harvard Center for Population and Food and Drug Administration (FDA), 129, Development Studies, 190 334 Harvard Pilgrim Health Plan, 38, 309 Foodborne Diseases Active Surveillance Head Start, 241 Network (FoodNet), 174 Health: beyond curative model of, 337–349; FoodNed. See Foodborne Diseases Active and consumer expectations, 343–344; Surveillance Network contributors and determinants of, For profit/nonprofit divide, 87 339–340; definition of, 339–340; and FPA Medical Management, 59 deteriorating conditions, 344–345; Fronstin, P., 30 expanded perspective on, 342–343; Functional imaging, 116–117 global perspective of, 345–346; Functional Magnetic Resonance Imaging paradigm shifts in, 346–349; and (fMRI), 198 socioeconomic status as determinant, 341–342; and stress, 340–341 G Health Affairs, 36, 150, 280 Gabel, J., 36, 49 Health and Human Services Drug Abuse Gallup Organization, 312 Warning Network, 317 Gender, 254–255, 314 Health behaviors: and alcohol and drug Gene therapy, 7; areas of impact of, 125; abuse in America, 312–324; barriers to, 125–126; in mental health classifications of, 311; and firearms, research, 197; overview, 123–124 324–329; and tobacco use, 329–334 Genetic testing: ethics of, 121; future of, Health care: beyond the curative model of, 122–123; and mapping, 7 337–349; demographics, 2–4; hospitals Genometrics, 122 and physicians, 5–6; legislation, 1–2;

394 Index Health and Health Care 2010 Institute for the Future

medical and information technologies 86–89; occupancy, 85; prevalence of, and, 6–7; payers and costs, 4; plans and 87–88; reduction in variation in, 89; insurers, 5; processes and medical spending, 92; tax status of, 87, 90 management, 8; and public health, Hospitals and Health Networks, 282 8–10; three scenarios for, 10–14 Human Genome Project, 197, 199, 307 Health Care Financing Administration, 25, Human immunodeficiency virus (HIV), 113, 26, 28, 29, 31, 32, 39, 40, 58, 92, 222, 285 288, 293 Huntington’s disease, 120 Health Care Outlook Physicians Survey Hypertension, 282, 302 (1997), 75 Health Insurance: and disease management, I 308–309; employer-sponsered, 38; Illinois, 20 forecast, 39–42; issues, 37–39; and Imaging technologies, 6–7, 114–117 Medicaid, 41; and Medicare, 40–41; Immunizations, 236 private, 39–40; and scope of Income, increasing household, 20–21 employment-based coverage, 35–37; Incrementalism, 12 three-tiered model of, 35–44; types of, Independent Practice Associations (IPAs), 42–43; and uninsured, 41–42 48, 52, 68, 69, 80 Health Insurance Portability and Infectious disease, 10–14, 311 Accountability Act (HIPAA), 7, 49, 51, Influenza, 113, 170 52, 58 Information appliances, 137 Health Plan Employer Data and Information Information technology, 5, 7–8, 49–50, 54, Set (HEDIS), 71, 139, 180, 303 58, 61; and clinical information interfaces, Health reform efforts of 1992-1994, 1–2 140–142; and data analysis, 142–143; in Health Resources and Services disease management, 301, 306–307; Administration (HRSA), 104, 264, 265 health care industry spending on, 135; and Health Services Research Outcomes Study, new tools for managed care, 50–51; and 312 process management systems, 139; Health Technology Center, 140 progression of, into health care, 145–146; HealthGrades.com, 58 telehealth, remote monitoring and, Healthy People 2000, 235 143–145 Heart disease, 22, 285 Inpatient specialist, 101–103 HEDIS. See Health Plan Employer Data and Institute for the Future (IFTF), 19–23, 29, Information Set 32, 39, 40, 43, 72, 90, 92, 96, 97, 103, Henry J. Kaiser Family Foundation, 289 136, 145, 153, 166, 170, 180, 233, 303, Hepatitis, 312 308, 315, 316, 318–320, 323, 328 Herceptin, 121 Institute of Medicine (IOM), 59, 165, 168, Hispanic population, 3, 19, 20, 101, 152, 236 228–230, 255, 256, 313, 331 Instrumental Activities of Daily Living HIV/AIDS, 9, 128, 312, 316–318. See also (IADLs), 281 Acquired immunodeficiency syndrome; Integrated delivery systems, 79, 309–310 Human immunodeficiency virus Intelligent agents, 137 HMO Act (1973), 49 Intensive Case Management (ICM), 207 Hoffman, C., 281 Intensivists, 101–102 Homicide, 240, 326 Interactive voice response (IVR), 139, 143 Horizontal integration, 79 Intermediaries, 83; background to, 69–74; Hospital beds, 85, 86, 88–90, 92; case manager, 72–73; direct to provider, oversupply of, 68 73; high-end FFS broker, 73; and low- Hospitalists, 101–102 tier safety-net funding recipients, 73–74; Hospitals: death of, 84–86; financial success multiplication in types of, 71–74; of, 86; forecast for, 89–90; issues for, provider-partner, 73; role of, 67–68

Index 395 International medical students (IMGs), 95, barriers to information technology 96, 226 implementation, 52–54; and public International Recording Media Association, health, 183–184 136 Management services organization (MSO), Internet, 8, 50, 52, 55, 58, 137, 140, 143, 80 144, 196, 199, 205–206, 306 Mannino, D. M., 172 Interstudy, 5 Manton, K., 262 Marijuana, 313, 314 J Market dynamics, 28–29 Johns Hopkins University, 80, 241 Massachusetts, 74–75, 342 Johnson, L. B., 166 McEwen, B., 341 Journal of the American Medical Association, McGinnis, J. M., 312 225, 281, 312 M.D. Anderson Cancer Center, 79 Measles, 113, 170 K Med Partners, 59 Kaiser Family Foundation/Health Research MedCath, 79 and Educational Trust, 39, 48, 57, 240 Medicaid, 4, 12, 25–33, 41, 68, 71, Kaiser Permanente, 38, 69, 309 151–153, 166, 178, 221–225, 243 Kennedy-Kassebaum Act, 71, 139 Medical management, 8; background to, 82; Knickman, J. R., 280 battle over control of, 68; for the Kuhn, T., 345 chronically sick, 83–84; issues in, 82–83; and medical managers, 102 L Medical technologies, 6–7; and advances in Labor markets, 38 imaging, 114–117; and artiﬁcial blood, Laparoscopy, 118–119 128–129; and disease management, Lasker, R., 166 306–307; and gene therapy, 123–126; Leapfrog Group, 54, 57 and genetic mapping and testing, Legislation, 1–2 120–123; and minimally invasive Leung, A., 232 surgery, 117–120; and rational drug Licensed practical nurses (LPNs), 103, 266, design, 112–113; and stem cell 267 technologies, 131–133; and vaccines, Licensed vocational nurses (LVNs), 266, 267 126–128; and xenotransplantation, Little, J. S., 37 129–131 Long-term care (LTC), 221, 254, 266, Medicare, 2, 4, 11–13, 25–33, 40–41, 67, 267–270 68, 71, 84, 153, 155, 166, 178; Los Angeles, 20, 39, 171, 176, 236 Catastrophic Coverage Act (1988), 223; Louis Harris & Associates, 98, 136 drug beneﬁt, 272–273; GME, 86, 88, Lovelace Health System (New Mexico), 79, 91, 101; PSN legislation, 88; Trust 309 Fund, 271 Medicine and Public Health: The Power of M Collaboration (Lasker), 166 Magnetic resonance imaging (MRI) Medscape, 52 technology, 115, 117, 119, 193 Mental disease, 113 Magnetic resonance technology (MRN), 115 Mental health: challenges in, 187–189; Managed behavioral health organizations economic and social costs of, 193; and (MBHOs), 213, 214 incarceration, 193; most common Managed care: and cost consequences of disorders in, 191; parity for, 187; and regulation, 51–52; drivers, 49–51; as prevalence and impact of mental illness, experiments in reinvention, 47–64; 190; priorities for public spending in, forecast, 54–60; issues, 47–49; and 190–193; public versus private spending patterns of power, 60–63; and potential in, 192; social implications of, 200

396 Index Health and Health Care 2010 Institute for the Future

Mental Health: A Report of the Surgeon General, MRI. See Magnetic resonance imaging 189, 191 Mullikin Medical Centers (Southern Mental Health Parity Act, 210 California), 79 Mental health policy and legislation: and Multiple sclerosis, 348 civil rights, 214–215; and Federal Employees Health Benefits program, N 211; forecast, 210; funding and role of National Advisory Mental Health Council managed care in, 212; and Medicaid (NIMH), 194, 195, 201, 207 managed care, 213–214; and parity in National Association of Pediatric Nurse federal legislation, 210–211; and parity Associates and Practitioners, 227 in state legislation, 211; and private National Cancer Institute, 120, 232 sector funding, 214; and state and local National Center for Complementary and spending, 212–213; unfinished agenda Alternative Medicines (NCCAM), 210 of, 215; and uninsured, 211–212 National Center for Human Genome Mental health research: change agents in, Research, 121 194–201; in computer technology, National Chronic Care Coalition (NCCC), 199–200; emerging topics in, 200–201; 292, 293 forecast, 196; in neuroimaging, 198–199; National Committee on Quality Assurance in neurosciences, 197–198; in (NCQA), 60, 71, 143, 290, 303 pharmacology, 198; on social implications, National Comorbidity Survey (NCS), 202 200; transferring, to practice, 201 National Drug Control Strategy, 321 Mental health service changes: and changing National Health Interview Survey (NHIS), workforce, 208–209; and employers and 172, 280 lost productivity, 208; forecast, National Health Service (United Kingdom), 203–204; and growing self-help 341 movement, 206–208; and impact of National Health Statistics Group, 28 demographic change, 204; and impact of National Highway Traffic Safety technological advances, 204–205; and Administration, 316 Internet, 205–206; and service National Household Survey on Drug Abuse coordination for people with mental (1999), 312, 314–316, 318, 319, 323 illness and substance abuse, 205; and National Individual Identifier, 139 supplementary and alternative medicine, National Institute for Mental Health 210; and system fragmentation, 204; in (NIMH), 194, 195, 197 utilization, 202–203 National Institute of Environmental Health, Meyer, J. A., 289 172 Miami, 39 National Institute on Alcohol Abuse and Michigan Diabetes Control Program, Upper Alcoholism, 315 Peninsula Diabetes Outreach Network National Institutes of Health, 102–103, 121 (UPDON), 292 National Managed Health Care Congress Microcontaminants, 173 (NMHCC), 302 Microprocessors, 136 National Medical Expenditure Survey Milbank Memorial Fund, 210 (NMES), 280 Minneapolis/St. Paul, 293 National Mental Health Self-Help Minnesota Department of Human Services, Clearinghouse, 206 293 National Rifle Association, 329 Molecular modeling, 112 National Telecommunications and Morbidity and Morality Weekly Report, 167, Information Administration (NTIA), 145 172, 174, 327 Native American/Alaskan Native Morreale, M., 241 population, 19, 20, 228, 313, 331 Mothers Against Drunk Driving (MADD), NCQA. See National Committee on Quality 293, 329 Assurance

Index 397 Nephrology, 81 Pharmacology, research in, 198 Networking bandwidth, 137 Pharmacy, 57 Neuroimaging, 198–199 Physical therapists (PTs), 263, 266, 267 Neurologic disease, 113 Physician practice management (PPM) Neuropsychiatric conditions, 232–233 corporation, 81 Neuroscience research, 197–198 Physicians: and foreign medical degrees, 92, New Consumers, 49–52. See also Consumers, 95–96; future supply and demand of, health care 95–103; geographic distribution of, New Deal, 166 100–101; in group practice, 80; New England Economic Review, 37 inadequate diversity among, 101; new New England Journal of Medicine, 328 role for, 101–102; and number of New York, 20 specialists, 98–99; for seniors, 263–265; New York Academy of Medicine, 166 surplus of, 68, 92 New York City, 39, 85 Physician’s assistants (PAs), 5, 105–108, New York Times, 223 263, 266, 267 Newacheck, P., 220, 233 Polycystic kidney disease, 120 North American Free Trade Agreement Positron Emission Technology (PET), 193, (NAFTA), 92 198 Nurse practitioners (NPs), 5, 105–108, 263, Positron emission tomography, 116 266–267 Poverty, 227–228 Nurses, 103–105; and nurse practitioners, 5, Preferred provider organizations (PPOs), 2, 105–108, 263, 266, 267; and registered 68, 72, 77, 154, 304 nurses, 103–105, 266, 267; and seniors, Privacy, 51 266–267 Private medicine: and promise of partnerships, 179–181; reconciling O public health with, 178–181 Ocular coherence tomography (OCT), 115 Privatization: factors in process of, 180; and Office of the Actuary, 28 promise of partnerships, 179–181 Omnibus Budget Reconciliation Acts Privitization and Public Health: A Study of (OBRAs), 221, 223 Initiatives and Early Lessons Learned Open networks, convergence of, 68–69 (Public Health Foundation), 180 Organizational change, continued, 67 Productivity, lost, 208 Prohibition, 320 P Promina (Atlanta), 79 PACE/On Lok program, 268 Prospective payment system (PPS), 74 Pacific Business Group on Health (PBGH), Provider service networks (PSNs), 14, 91, 92 58 Providers: and care delivery organizations for PacifiCare, 54 the next decade, 78–82; and fate of Palliative intervention, 348 hospitals, 84–92; forecast for, 71–74; Parkinson’s disease, 114, 130, 195 and hospitals, 84–92; and Patient information systems, 143 intermediaries, 68–74; and medical Patient Outcomes Research Team (PORTS), management, 82–84; reimbursement 207 models for, 74–78; resistance of, 53; and Patients’ Bill of Rights, 52 themes of future delivery system, 67–68 Payers, 4 Prozac, 200, 232 Pediatricians, 225–227, 243–244 Psychiatrist, role of, 209 Pesticides, 173, 175, 230, 232 Public health, 8–10; achievements of, in Pew Health Professions Commission, 96–98, twentieth century, 167; and air quality, 103, 107 171–172; and community coalitions, Pharmacists, 107–108 183; and community-based organizations Pharmacogenomics, 113, 120–121 and foundations, 181; crisis of leadership

398 Index Health and Health Care 2010 Institute for the Future

in, 177; and economic disparity, 170; S and environmental factors, 171; and Sachs Group, Inc., 282 epidemiology, 184; and food safety, Safe Drinking Water Act, 172–173 174–175; frameworks and strategies for, Sageo, 52 176–178; future organizational issues Salutogenesis, 338 for, 183–184; global forces driving and Samatogen, 129 limiting progress in, 170–171; goal of, SAMSHA Statistics Source Book (Substance 165; history of, in United States, Abuse and Mental Health Services 165–169; key factors affecting present Administration), 194 American, 169–175; and managed care, Scenarios, 10–14 183–184; organizational challenges to, Schizophrenia, 22, 195, 197 177–178; and outlook for public-private Second Amendment, 327 partnership in personal health care, 182; Security, 137 policy, 184; and politics, 169; Self-care, 150, 161 reconciling, with private medicine, Self-help movement, 206–208 178–181; scenarios and forecasts for, Seniors: delivery system and providers for, 182; socioeconomic and political factors 262–267; demographics of, 251–256; in, 167–170; stages of relationships economic status of, 256–259; and health between, and medicine, 166; structure care ﬁnancing through Medicare, and function of, 168–169; and 270–273; health status of, 259–262 technology, 175–176; three pillars of, Sensors, 137–138, 144–145, 307 168; universities and, 181, 184; and Sexually transmitted diseases, 318 water quality, 172–174 Shapiro, I., 170 Public Health Foundation, 180 Shared decision making, 150, 161 Single Photon Emission Tomography Q (SPECT), 193, 198 Quality of Life Interview Data, 207 Single-specialty carve-out, 81 R Social Security Act, 166, 221; Title XIX, RAND Corporation, Quality Assessment 221; Title XXI, 223 Tools, 60 Social Security system, 2, 256–258 Rational drug design, 6, 199 Southern California, 75 Recombinant DNA technology, 114, 127 Specialists, 98–99 Recording Industry Association of America, Spirituality, 340 136 Stanford University, 59 Recovery model, 206–207 Staphylococci, 345 Registered nurses, 103–105, 266, 267 State Children’s Health Insurance Program Regulation, 53 (SCHIP), 223–226, 243, 245 Reimbursement models, 74–78; forecast, Statistical Abstract, 2000, 10 77–78; issues in, 76 Stem cell technologies, 131–133, 176, 197 Remote monitoring, 143 Streptomyces, 114 Remote telemetry, 144–145 Stress, 340–341 Retiree beneﬁts, 36 Structure-based design, 112 Retroviral vectors, 123–124 Substance abuse, 9–10, 205, 238. See also Reuben, D., 264 Alcohol abuse; Drug abuse Rice, D., 281 Substance Abuse and Mental Health Services Risk adjustment, 142 Administration (SAMHSA), 195, 205, Ritalin, 232 212, 314–320, 323 Robert Wood Johnson Foundation, 269, Suicide, 189, 240, 326 283, 284, 293 Sung, H., 281 Robson, W., 232 Supplemental Security Income (SSI), 213, Roosevelt, F. D., 166 222

Index 399 Support ratio, 258–259 United States General Accounting Ofﬁce, 31 Surgeon General, 189, 200, 205 University of California, Berkeley, 332 Susceptibility genes, 196 University of California, Los Angeles, 264 Sutter Health, 309 University of California, San Francisco Medical Centers, 59; Institute for Health T Policy Studies, 220 Task Force on Genetic Testing, 121 University of Michigan, 316 Technological change, 6–8, 53 University of Pennsylvania, 103 Teen pregnancy, 237–238 Urban Institute, 31, 40 Telecommunications and Information Administration, 145 V Telehealth, 8 Vaccines, 7, 21; areas of impact of, 127–128; Telemetry, 144–145 barriers to, 128; medical technology in, Teret, S. P., 328 126–127. See also Immunizations Texas, 20 Value Options behavioral care company, 207 3-D computing, 116, 119, 137, 142 Vertical integration, 78; demise of, 68–69 Tiered access, 3 Vietnam War, 28–29 To Err Is Human (Kohn, Corrigan, and Violence, 238–239, 317 Donaldson), 59 Virtual integration, 79 Tobacco use, 9–10, 23, 238, 293–294, 311; Virtual physician-group cooperative, 80–81 and counsel to quit, 331; future of, Virtual reality modeling, 112 332–333; and health, 329–334; historical overview of, 330; increase W among children aged 12 to 13, 331; Wales, 341 racial/ethnic disparities in, 331; and Wall Street, 81, 87 Tobacco Settlement, 330 War on Drugs, 321 Transgenic drug industry, 114 Waterborne disease outbreaks, 174 Widening Income Gap (Shapiro and U Greenstein), 170 Uninsured, 36–37, 41–42, 225 Wilm’s disease, 130 United Healthcare, 48, 69 Wireless technologies, 136 United Kingdom, 341 Workforce, health care: and future United Nations, 334 employment, 106–107; future supply United States: aging population of, 17–19; and demand in, 95–108; and nurses, economic boom of late 1990s, 21 103–105; and pharmacists, 107–108; United States Bureau of Labor Statistics and physicians, 95–103; and physicians’ (BLS), 39, 136, 256, 257, 267 assistants, 105–106 United States Census Bureau, 3, 4, 18–21, Workplace, drug and alcohol abuse in, 320 39, 145, 151, 152, 228, 229, 252–255; World Health Organization (WHO), 22, Money Income in the United States, 22 167, 187, 189, 334 United States Department of Commerce, World War II, 28 145 World Wide Web, 305, 307 United States Department of Education, 229 Worried consumers, 4 United States Department of Health and Human Services, 104, 235, 236 X United States Department of Justice, 239, 326 Xenotransplantation, 7, 129–131 United States Department of Labor, 90, 153 United States Environmental Protection Z Agency, 330 Zeller, P. J., 289

400 Index