Evolution of Health Care
in the United States
Dr. Joe Saviak
Shi and Singh, Delivering Health Care in
America, A Systems Approach, 2008
Visuals by Google Images
Chapter 3
Three major historical phases in American medicine:
1. Preindustrial Era – middle of the 18th century to latter part of the 19th
century
2. Postindustrial Era – starting in late 19th century
3. Current Era – the corporate era – growth of managed care, organizational
integration, information revolution, & globalization
 A key theme in this chapter is the evolution of the practice of medicine in
America – how it has been transformed from a weak, insecure, &
isolated trade in the first era to an independent, highly respected and
lucrative profession in the second era and how it will function within
the current era of corporatization.
Chapter 3
Preindustrial Era (middle of the 18th century to latter part of the 19th century)

From colonial times all the way to start of 20th century, American medicine lagged behind
Western Europe in medical science and medical education

In preindustrial era, medicine not developed as a profession or discipline – more of a trade –
all the tools of professionalization (formal education, licensing & exams for admission to the
profession, residency training, professional associations, continuing education, etc.) not present
5 Characteristics of Health Care in Preindustrial America:
1. Medical practice in disarray - unorganized trade - not a profession - free entry, intense
competition
2. Primitive medical procedures - bleeding, use of emetics and purgatives – expel the disease
3. Missing institutional core - institutions fulfilled a charity and welfare rather than a health care
function - almshouses (poorhouses) and pesthouses, dispensaries (outpatient) used for
apprenticeship and experimentation, a few voluntary hospitals but lack of sanitation, ventilation,
and trained nurses
4. Low demand for medical services - family-based care: self-reliance; physician services were
expensive mainly due to opportunity costs of travel; no health insurance; limited benefits from
medical treatment
5. Substandard medical education - training through apprenticeship under poorly-trained preceptors,
later, for profit schools were started by local physicians - no admission requirements, general
studies, little training in biological sciences, no laboratories or clinical observation
Chapter 3
Health Care in Preindustrial America
#1 – Medical Practice in Disarray

Anyone who declared that they were a physician and could attract/keep
customers was a physician! (might be clergy, tradesmen like barbers) – due to
unstable demand & low pay, a physician likely had a second occupation too - lack of
prestige, income, and status which is associated with being a doctor today

Profession was weak and disorganized – those who practiced medicine saw
others doing the same as competitors and not fellow members of a profession
#2 – Primitive Medical Procedures

Prevailing belief that diseases had to be expelled from the body – hence,
popular tools were use of bleeding, emetics (induce vomiting), diuretics (induce
urination) and purging

Surgeries were very limited due to lack of anesthesia and antiseptic techniques
which had not yet been developed

Diagnostic tools did not range beyond the physician’s five senses and
professional experience (no diagnostic technologies like the stethoscope, no Xrays, no clinical thermometer, no microscope for medical diagnosis)
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#3 – Lack of Institutional Care

No widespread development of hospitals prior to 1880s

Dispensaries – begun in Philadelphia in 1786 – financed by charitable contributions
& voluntary subscriptions – provide basic medical care & dispense drugs to
ambulatory patients (outpatient clinic) – functioned as a provider of health care
services to the poor and as a forerunner of the teaching hospital offering new
physicians clinical experience

Almshouses – a shelter for the poor offered by local govt. – primary function was
social welfare (food, housing) - health care was a secondary role (when residents got
sick)

Pesthouses – served to quarantine those with contagious diseases (cholera, typhoid,
smallpox) – operated by local govt.

Early hospitals which began to emerge in 1850s lacked resources & had
deplorable conditions – poor sanitation, inadequate ventilation, unhygienic
practices – mortality rate in both U.S. & European hospitals in 1870s was 74% people avoided hospitals unless absolutely forced to be there
Chapter 3
#4 – Low Demand for Medical Services

Family care was health care – the family, as the center of social and economic life,
was the natural locus of caring for the sick – employed folk remedies passed down
through generations - there was often little that a physician could do for a patient
that the patient’s family could not do.

The market for physicians’ services was limited by economic conditions. For most
people, the combined expense of the direct costs of the physician’s fees along with
the indirect costs of transportation (had to pay for travel of physician back and forth
– travel fees alone could easily outstrip the cost of the treatment) or the opportunity
cost of travel for the patient (lose a day of work on the farm to go to town) were
excessive - personal health services had to be purchased without the help of
government or private insurance – fee for service was the rule (payment at time
of treatment – each specific service is billed for)

Low and unstable demand for medical services meant it was difficult to make a
living as a physician – impeded growth & development of medicine as a profession
Chapter 3
#5 – Substandard Medical Education

From 1800 to 1850, medical training through apprenticeships – the
problem was the teacher himself was poorly trained

Medical schools began to emerge between 1800 and 1850 –
inexpensive to operate and profitable – taught by local physicians who
themselves lacked education/training- no admission requirements, general
studies, little training in biological sciences, no laboratories or clinical
observation
Chapter 3
Postindustrial Era (late 19th century through much of the 20th century)
Era of Professional Sovereignty for Physicians – emerge as a cohesive
profession with power & authority – physicians acquire and maintain very
strong influence over the design and operation of the U.S. health care
system
Factors which transformed U.S. health care in the postindustrial era:
1. Urbanization
2. Science and technology
3. Institutionalization
4. Patient Dependency
5. Cohesiveness and Organization
6. Licensing
7. Educational Reform
Chapter 3
#1 – Urbanization
 Family care no longer can be the primary form of health care - people
were distanced from their families – could no longer rely on family - women
entered the workforce – could no longer care for sick members of the family
full time
 Proximity of physicians and patients reduced opportunity costs – time &
travel costs reduced (paying physician travel fees had once been a real
obstacle) – physicians moved to cities to be near patients
 Proximity also increased physicians’ productivity – reduced cost &
enhanced productivity
Chapter 3
#2 – Science and Technology
 Series of groundbreaking medical discoveries during this era - 1846 –
Anesthesia, 1847 – Aseptic technique, 1860 – Sterilization techniques, 1865 –
Antiseptic surgery, 1895 – X-ray imaging, 1929 – Penicillin – made medicine
effective (superior to family care)
 Scientific advances conferred cultural authority on physicians as experts – society
would now depend on their superior knowledge and expertise so physicians no longer
viewed as the local barber - their prominence and prestige increases & cultural
acceptance & public trust of physicians as a profession increases – their cultural
authority (we trust them to make major judgments in our lives) also strengthened by
increased authority over key decisions (i.e. physician admits to hospital, determines
physical fitness for employee to return to work)
 Increasing complexity/sophistication of science & technology also means that only
those who are trained to utilize these tools can engage in the profession – family
members & neighbors not trained to use these tools – growth of science &
technology increased demand for medical services from physicians
Chapter 3
#3 - Institutionalization
 Modern hospital provided an institutional core – the institutional setting of
American health care changed from the family home to the modern
hospital
 Medical technology, professionalization, and urbanization
necessitated the pooling of resources in a new setting for the health
care – the modern hospital
 Hospitals had to depend on physicians to admit patients and keep the beds
filled
 Hospitals became indispensable for medical practice due to advances in
anesthesia and surgery, which created a demand for hospital services
 A symbiotic relationship developed – physicians needed hospitals for
services and hospitals needed physicians for patients – gave physicians
enormous influence over hospital policy
Chapter 3
#4 – Patient Dependency
 Increasing patient dependency enhanced the role of physicians –
physician no longer seen as a tradesman who you visit for a quick
procedure & who then has no continuing influence over your life or
decisions or the decisions of others concerning you
 Remember Parson’s sick role – sick person expected to seek treatment &
depends on doctor to a) legitimize their sickness b) exempt them from social
roles due to their sickness and c) provide competent care so the person can
get well & resume their social roles/tasks – patient is in a position of
dependency increasing the authority of the physician – reliant on their
judgment & expertise – greater cultural authority for physicians – what did
the doctor say?
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#5 – Cohesiveness and Organization as a Profession
 Specialization, educational reform, and professionalization led to the need for
patient referrals between physicians, sharing of ideas, and formal organization
 U.S. physicians remained independent of hospitals and corporations – private
practice was the dominant model and was fiercely protected by physicians –
 Corporate practice doctrine recognized in many states meant that a hospital or
insurer hiring a physician would constitute illegal practice of medicine so it was not
allowed – physicians who went to work for a hospital, company or insurer could
expect to be criticized by their fellow physicians – both legally and within their
professional culture, physicians sought to remain free from the control of
hospitals and corporations (keep a high degree of professional autonomy)
 American Medical Association – formed in 1847 – once organized at state &
county levels, it grew in influence - gained control over medical practice,
licensing, and education; for example, licensing was contingent on graduation from
AMA-approved schools.
 When physicians act collectively to advocate for & defend their professional priorities
& interests, this is known as organized medicine – the AMA is an example of
organized medicine – stands in contrast to uncoordinated actions of individual
physicians
Chapter 3
# 6 – Licensing
 Physician licensing and educational reform developed simultaneously
(they go hand in hand) – had to be graduate of AMA approved medical
school to be licensed – practical effect of licensing and educational
requirements was to provide a monopoly on the practice of medicine to a
single profession known as physicians (quite a contrast to the preindustrial
era where anyone who said they were a physician & could get a customer
to pay them was one!)
 It became illegal to practice without a license – physicians led the
campaign to restrict the practice of medicine – appeal to the public for
health, safety & quality and as a profession, it relieved competitive
pressures
 By 1896, 26 states enacted medical licensure laws
 Licensing is a creature of state law – a function of the police powers
exercised by states to regulate in the interests of health, safety, &
welfare of the public
Chapter 3
#7 – Educational Reform
 Harvard and Johns Hopkins reformed medical education – became the model –
set the standards
 Laboratory instruction and science were added to the curriculum –
strengthened faculty – added teaching hospitals
 Medical education became a graduate education – followed by completion of
Bachelor’s degree
 Proprietary schools closed – these were the local for profit enterprises started by
local docs – could not adhere to rising standards
 The AMA obtained control over medical education
 The Flexner Report – AMA hires the Carnegie Foundation to study the state of
medical education in America – report released in 1910 – its findings were widely
accepted by the public and profession – proposed new higher standards for medical
education (strict entrance requirements, better facilities) - forced proprietary schools
to close – state laws passed which required graduation from an AMA accredited
medical school to obtain a medical license
 Increased educational requirements improved quality of practice & enhanced
cultural authority
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Development of Specialization in U.S. Medicine
 In 1931, 17% of all U.S. physicians were specialists
 Today, roughly 60% of American physicians are specialists
 Unlike Britain, the structure of medical care delivery in the US did not develop around
a model of the primary care physician as the gatekeeper for all other medical care
such as specialized care (PCP having final authority on seeing a specialist) - in the
British system, the PCP is dominant and specialists occupy a secondary or
subordinate role – this is not the case in American health care where specialists
assume a prominent role in health care and patients could go directly to specialists,
and general practitioners did not stand between specialists and the medical market.
 Specialization has been the hallmark of 20th and 21st century American medicine.
 With the rise in managed care, primary care physicians now increasingly in the
gatekeeper role determining patient access to specialists.
 Primary care physician (PCP) to provide basic care plus ensure continuity,
coordination, & appropriateness of medical services for the patient during the
course of treatment
 The ratio of specialists to PCPs in U.S. health care brings both benefits and
consequences
Chapter 3
Development of Public Health in the U.S.
 Urbanization increased concerns about protecting the health of populations as deadly
outbreaks of communicable diseases became common from lack of sanitation, clean water,
& cramped living conditions (i.e. epidemics of cholera, smallpox, typhoid, TB).
 Most states created public health departments by the start of the 20th century. Idea was also to
fill gaps in the health care system - provide services not widely delivered by private or non-profit
sector health care
Main functions of Public Health:

Promotion of sanitation

Control of communicable disease

Regulation of food and water

Operation of state laboratories

Health education

Maintenance of vital statistics

Very limited medical care delivery:

Child immunizations

Maternity and child welfare

School health screening

Family planning

Substance abuse and mental health
Chapter 3
Development of Public Health in the U.S.

Organized medicine kept private practice separated from public health over
concern that it would invite government intervention and control (here’s what
each of us does in our health care system - clear public/private division of
roles/responsibilities)

With its focus on improved sanitation, clean water, & combating the conditions
created epidemics in our urban centers, the development of public health can
be credited with the remarkable drop in mortality from
infectious/communicable diseases and the dramatic rise in life expectancy
during the postindustrial era.

Now, chronic diseases have become the leading cause of illness, disability,
and death in the United States and other developed nations (diabetes,
hypertension). Almost 50% of all Americans may have one or more chronic
conditions. Leading cause of illness, disability and death in US since the 1920s –
chronic diseases account for 3 of every 4 deaths.

A health care system that is often geared towards treating acute illness needs
to be more focused on the full needs of persons with chronic conditions – we
prevent and manage chronic disease rather than curing it

Once again, a nation’s health care system needs to be designed with its
services, financing, workforce, research and technology to meet the premier
health challenges of the era.
Chapter 3
Development of Private Health Insurance
Three forces led to the need for health insurance in America:
1. Technological - advanced treatments were new & effective but expensive
2. Social - desirability of medical treatments – individuals & society placed an
increasing value on receipt of these services
3. Economic – people could not predict their future needs for medical care or
the costs - risk of catastrophic loss
Started as disability insurance – income protection during period of sickness
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Chronology of Events
1911 – blanket insurance policies became available (life, sickness, accidents,
nursing care)
1916-1918 – state employer mandates failed
1929 – Modern health insurance was born via the Baylor Plan - established by
J.F. Kimball for school teachers at Baylor University hospital in Texas - a
prepaid plan - The Baylor Plan (1929) introduced the concept of hospital
insurance, a prepaid plan based on capitation - became the model for Blue
Cross
The Great Depression provided the impetus for private health insurance.
People as well as institutions needed economic protection – people
needed protection from the economic consequences of sickness
(debt, costs) and hospitals needed protection from economic
instability (fee for service paid out of pocket drops during period of
economic recession or depression)
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Development of Private Health Insurance
1939 – The California Medical Assn started the Blue Shield plan to cover physician services
1940-1950s – wage freezes during World War II - insurance benefits became important in union
negotiations and tax-free status of health insurance benefits made health insurance a desirable
substitute for cash wages – during the World War II period, Congress implemented wage freezes.
Hence, it became popular to offer group health insurance in lieu of wages – in 1948, the US
Supreme Court ruled that employee benefits, including health insurance, were a legitimate part of
the union-management bargaining process. Health insurance then became a permanent
part of employee benefits in the postwar era - revision to the tax code also had a profound
effect. Employer contributions toward the purchase of health insurance became exempt from
taxable income for the employee - these 2 forces guaranteed that employer-based health
insurance would be the dominant feature of financing health care in America.
Between 1940 and 1950 alone, the proportion of the population covered by hospital insurance
increased from 9% to 57%.
The medical profession supported the private health insurance model - it worked well as a
financing model for their dominant mode of practice – fee for service private practice.
Blue Cross – provides insurance for hospital care
Blue Shield – provides insurance for physician care
In almost every state, physician and hospital insurance has been legally or functionally combined –
Blue Cross and Blue Shield
Chapter 3
Failure of a National Health Care System to Develop in America
Repeated attempts to create a national health care system in the U.S.
1914 - workers compensation – could have served as a model & been expanded beyond
worker injuries but private health insurance developed instead
1917 - The American Association of Labor Legislation attempted to expand its social
agenda by advocating national health insurance – of course, once employer-based
health insurance took hold, labor unions defended it
1940s – during Roosevelt administration, bills on national health insurance introduced in
Congress but failed to pass & President Truman became the first US President to
propose national health insurance
1993 - The Clinton Health Plan (Health Security Act of 1994: new series of state run
agencies called health care alliances which contract with providers for a set package
of benefits for enrollees – HMO, PPO, & fee for service available – mandated that
almost all business (large & small) participate in new system Who opposed the
Clinton Plan? 1) Providers 2) Single payer advocates who argued that it did not go
far enough Why did it fail? (even with a Democratic President & Democratic
Congress)? 1) lack of an effective marketing plan 2) strong & well organized
opposition (remember the “Harry & Louise” ads)
2010 – Affordable Care Act – stay tuned for discussion!
Chapter 3
Failure of a National Health Care System to Develop in America
Opposition is political, ideological, institutional, & rooted in aversion to higher
taxes
Main reasons why proposals favoring a national health care system have
historically been defeated in the United States (differences between Europe and
the United States)
1. No political threats - in Europe, national health insurance was utilized to pacify
popular discontent among the working class and insure against the threat of political
instability – America is also constitutionally designed as a decentralized decisionmaking system of governance with a clear preference against strong central authority
(federalism – insurance a state & local issue) – Europe had strong central
governments who could impose this type of single system – also, anti-German
sentiment during WWI made it difficult to advocate for the German model of national
health insurance at the time when these proposals were made before private
insurance would become dominant
2. Private infrastructure – unlike other nations, America developed a private sector
health care delivery & financing system so not surprisingly, physicians, hospitals, the
AMA, insurers, retail pharmacies, etc. opposed a change in model to a governmentrun system
Chapter 3
Failure of a National Health Care System to Develop in America
3. Influence of the medical profession – organized medicine was well organized for
this fight – in 1949, the AMA spent $1.5 million on an extensive public relations effort
to educate the American people & build popular opposition to “socialized medicine”
4. Historical opposition from labor unions – feared that government would usurp their
role as the provider of benefits to their members
5. Beliefs and values of the American middle class – preference for free market as
opposed to governmental solutions (innovation, quality, choice, competition, ability to
aid those in need through non-profits), belief in individualism and self-determination,
and distrust of government
6. Tax aversion - Americans already feel being overtaxed & the middle class is
already insured (not demanding to be insured – they are insured) – the middle
class favors helping others but often feel that existing programs already meet the
need & are resistant to paying more in taxes on this issue especially if they are
concerned that the reform will impact their access to or quality of their health care –
Americans tend to like the current quality of their health care don’t like the present
cost – not convinced that direct government intervention will successfully
lower costs but are concerned that it could affect their access or quality everyone is for reform until the question becomes “how are we going to do it and pay
for it and how will it affect me?”
Chapter 3
Development of Public Insurance Programs – Medicare and Medicaid
Both created in 1965 via amendments to the Social Security Act
Medicare - Title 18 of the Social Security Amendment of 1965 - covers the
elderly and disabled), federal program

Part A - hospital care, limited nursing home care in a skilled nursing facility

Part B - government subsidized insurance for outpatient services
Medicaid - Title 19 of the Social Security Amendment of 1965 - covers the
poor; eligibility is based on means test
Chapter 3
What we have is a private health insurance system for the middle class
and a public health insurance system for the indigent and elderly
What are the public policy arguments for public health insurance
programs? Rising costs of health care that these groups could not
generally afford, poorer health status compared to general population,
greater incidence and prevalence of disease, & greater need to utilize
healthcare services
What are the political reasons for public health insurance programs?
1) Medicaid – less public opposition for programs to meet the needs of the
indigent (middle class voters will not punish me for doing this) 2) Medicare growing size of the elderly population gave them greater political clout (this
large segment of typically high turnout voters will reward me for doing this)
*With any issue, make sure that you identify both the public policy
arguments and political incentives/disincentives for
support/opposition (As Appleby notes in his four classic questions: “If I
make this decision, who is going to be glad? How glad? Who is going
to be mad? How mad?”)
Chapter 3
Key differences between Medicare and Medicaid
Medicare
 No class distinction – not tied to income – no means testing – all eligible by
age regardless of income
 Uniform national standards for eligibility
 Uniform national set of benefits (benefits do not vary by state)
 Physicians could balance bill - charge patient above set fees to recoup the difference
(ask patient to pay what is not paid for by Medicare)
Medicaid

Federal matching funds to the states (55/45 split – Florida pays 45% of
Medicaid)

For the indigent only – based on a means test developed by each state to
determine income eligibility – available to all age groups (not age restricted like
Medicare)

Benefits vary by state

Physicians cannot balance bill

Very limited participation from physicians - unpopular with providers - an example
of how insurance coverage does not guarantee access (hard to provide without
providers!)
Chapter 3
Main Effects of Medicaid and Medicare
1. Opened access for a significant proportion of the uninsured population
2. Significantly contributed to a dramatic growth of healthcare expenditures – both programs are
financially unsustainable
3. Monitoring and regulation of healthcare facilities became linked to public financing (you
take Uncle Sam’s money so Uncle Sam can impose conditions on you as a provider and inspect
to ensure your compliance and penalize you for failure to adhere to those standards)
Why have proposals for a national health care system failed yet these two major public
insurance plans passed and have been accepted?
The main reason why proposals to create Medicaid and Medicare passed, whereas national health
insurance initiatives had failed, is that Medicaid and Medicare were designed to cover only the
most vulnerable populations. The proposals did not reengineer how the majority of the
Americans would receive health care. Hence, they were not opposed by a wide variety of
interest groups as earlier proposals for national health insurance had been.
The growing elderly population was becoming a politically active force among middle-class Americans.
For example, a bill introduced in Congress by Aime Forand in 1957 to extend Social Security
benefits to include necessary hospital and nursing home care was opposed by the AMA.
However, public hearings around the country, which were packed by the elderly, produced an
intense grassroots support to push the issue onto the national agenda.
Chapter 3
Corporate Era of Health Care
Three main features of the corporate era:
#1 - Corporatization

Medical care has become the domain of large corporations

High tech care in comfortable surroundings but cost control has remained unrealized – there was
a short term decrease in the rate of expenditures through managed care in the 1990s but overall,
managed care has not contained costs as promised

Managed care has become the primary vehicle for insurance and delivery - consolidation of
purchasing power on the demand side – can drive price down among providers with their large
market share (we have the patients so you will agree to capitation/discounted fees)

Integrated health care organizations - consolidation on the supply side – providers unite to
counteract managed care’s power - physicians have consolidated into large clinics or established
partnerships with hospitals. In addition, as a matter of survival in an increasingly corporatized
system, many physicians had to consolidate into large clinics, or form strategic partnerships with
hospitals. Consequently, a growing number of physicians have become employees of large
medical corporations (what a stunning reversal from an earlier era when physicians did everything
to resist corporate employment & influence over medicine).

Together, managed care and integrated delivery organizations have corporatized the
delivery of health care in the United States.
Chapter 3
#1 - Corporatization

Hospitals expanded services in other areas – focus on expanding outpatient services
(outpatient surgery, primary care, home health care, long-term care, specialized
rehabilitation) to compensate for losses in reimbursement for inpatient care under
Medicaid and Medicare – recoup lost revenues from reimbursement cuts in the 1980s
under the DRG-based prospective payment system.

Corporatization has made the health care system extremely complex from the
consumer’s standpoint – unlike free markets where the consumer should be in charge of
picking providers based on price and quality, the patient has not acquired more market
power in a 3rd party payer insurance system dominated by managed care – it’s corporate
but it’s not the free market.
#2 - Information Revolution
 Full benefits of an electronic health care system remain unrealized – major obstacles
will have to be overcome
 Telemedicine and telehealth - distant caregiving using telecommunication systems,
improves access in rural and isolated areas
 E-health - health care information over the Internet, empowers patients by reducing the
patient’s dependent role
Chapter 3
#3 – Globalization
 Information exchange, flow goods and services, interdependence of
economies
 Impacts of globalization expressing themselves in health care – good
& bad – in a number of important ways
Chapter 3
The good news is globalization
 In general, it has helped fuel the economies of many underdeveloped nations - developed
nations also gain certain economic advantages (e.g., outsourcing)
 Exchange of information on health promotion and disease prevention
 Consumers travel abroad to receive medical care in specialty hospitals that offer state-ofthe-art technology to foreigners at a fraction of what it would cost to have the same
procedures done in the United States or Europe. Physicians and hospitals outside the United
States are gaining clear competitive advantages because of reasonable malpractice costs,
minimum regulation, and lower costs of labor. Some county governments in Florida now offer this
option to employees (Osceola County)
 Telemedicine consultations - telecommunication infrastructure enables physicians in the United
States to transmit radiological images to countries such as Australia where they are interpreted
and reported back the next day.
 Health professionals move to other countries that present high demand for their services
and better economic opportunities than their native countries. For example, nurses from
other countries are moving to the United States to relieve the existing personnel shortage.
 Foreign direct investment in health services enterprises. For example, Chindex International,
a US corporation, provides medical equipment, supplies, and clinical care in China.
Chapter 3
The bad news is globalization
 Migration of trained professionals from underdeveloped to developed
nations creates shortages in the underdeveloped countries.
 Emerging economies are being targeted by tobacco companies.
 As these countries prosper they tend to acquire western lifestyles.
Changes in diet and exercise patterns, for instance, increase the
prevalence of chronic diseases (diabetes).
 Globalization has also increased the threat of infectious diseases.
 Bioterrorism threats in the US are also a byproduct of globalization.
Bioterrorism has created a new awakening for the role of public health in
protecting people against the threats of germs, chemicals, and other agents
used as weapons of mass destruction.
Critical Concepts - Chapter 3
Health Care in Preindustrial America
#1 – Medical Practice in Disarray

Anyone who declared that they were a physician and could attract/keep customers was a physician (might
be clergy, tradesmen like barbers) – due to unstable demand & low pay, a physician likely had a second
occupation too - lack of prestige, income, and status which is associated with being a doctor today

Profession was weak and disorganized – those who practiced medicine saw others doing the same as
competitors and not fellow members of a profession
#4 – Low Demand for Medical Services

Family care was health care – the family, as the center of social and economic life, was the natural locus of
caring for the sick – employed folk remedies passed down through generations - there was often little that a
physician could do for a patient that the patient’s family could not do.

The market for physicians’ services was limited by economic conditions. For most people, the combined expense
of the direct costs of the physician’s fees along with the indirect costs of transportation (had to pay for travel of
physician back and forth – travel fees alone could easily outstrip the cost of the treatment) or the opportunity cost
of travel for the patient (lose a day of work on the farm to go to town) were excessive - personal health services
had to be purchased without the help of government or private insurance – fee for service was the rule
(payment at time of treatment – each specific service is billed for)

Low and unstable demand for medical services meant it was difficult to make a living as a physician –
impeded growth & development of medicine as a profession
#5 – Substandard Medical Education

From 1800 to 1850, medical training through apprenticeships – the problem was the teacher himself was poorly
trained

Medical schools began to emerge between 1800 and 1850 – inexpensive to operate and profitable – taught by
local physicians who themselves lacked education/training- no admission requirements, general studies, little
training in biological sciences, no laboratories or clinical observation
Critical Concepts - Chapter 3
Postindustrial Era (late 19th century through much of the 20th century)
#2 – Science and Technology

Scientific advances conferred cultural authority on physicians as experts – society would now depend on their superior knowledge and
expertise so physicians no longer viewed as the local barber - their prominence and prestige increases & cultural acceptance & public
trust of physicians as a profession increases – their cultural authority (we trust them to make major judgments in our lives) also
strengthened by increased authority over key decisions (i.e. physician admits to hospital, determines physical fitness for employee to
return to work) - Increasing complexity/sophistication of science & technology also means that only those who are trained to utilize these
tools can engage in the profession – family members & neighbors not trained to use these tools
#3 - Institutionalization

Modern hospital provided an institutional core – the institutional setting of American health care changed from the family home to
the modern hospital - medical technology, professionalization, and urbanization necessitated the pooling of resources in a new
setting for the health care – the modern hospital

Hospitals had to depend on physicians to admit patients and keep the beds filled - Hospitals became indispensable for medical practice
due to advances in anesthesia and surgery, which created a demand for hospital services

A symbiotic relationship developed – physicians needed hospitals for services and hospitals needed physicians for patients – gave
physicians enormous influence over hospital policy
#5 – Cohesiveness and Organization as a Profession

U.S. physicians remained independent of hospitals and corporations – private practice was the dominant model and was
fiercely protected by physicians - corporate practice doctrine recognized in many states meant that a hospital or insurer hiring a
physician would constitute illegal practice of medicine so it was not allowed – physicians who went to work for a hospital, company or
insurer could expect to be criticized by their fellow physicians – both legally and within their professional culture, physicians sought
to remain free from the control of hospitals and corporations (keep a high degree of professional autonomy)

American Medical Association – formed in 1847 – once organized at state & county levels, it grew in influence - gained control over
medical practice, licensing, and education; for example, licensing was contingent on graduation from AMA-approved schools.

When physicians act collectively to advocate for & defend their professional priorities & interests, this is known as organized medicine –
the AMA is an example of organized medicine – stands in contrast to uncoordinated actions of individual physicians
#7 – Educational Reform

The Flexner Report – AMA hires the Carnegie Foundation to study the state of medical education in America – report released in 1910 –
its findings were widely accepted by the public and profession – proposed new higher standards for medical education (strict entrance
requirements, better facilities) - forced proprietary schools to close – state laws passed which required graduation from an AMA
accredited medical school to obtain a medical license
Critical Concepts - Chapter 3
Development of Public Health in the U.S.

With its focus on improved sanitation, clean water, & combating the conditions created epidemics in our urban centers, the
development of public health can be credited with the remarkable drop in mortality from infectious diseases and the dramatic
rise in life expectancy during the postindustrial era.

Now, chronic illnesses have become the leading cause of illness, disability, and death in the United States and other developed
nations. Almost 50% of all Americans may have one or more chronic conditions. Leading cause of illness, disability and death in US
since the 1920s – chronic diseases account for 3 of every 4 deaths.

A health care system that is often geared towards treating acute illness needs to be more focused on the full needs of persons
with chronic conditions – once again, a nation’s health care system needs to be designed with its services, financing,
workforce, research and technology to meet the premier health challenges of the era.
Development of Private Health Insurance
The medical profession supported the private health insurance model - it worked well as a financing model for their dominant mode
of practice – fee for service private practice.
Medicaid and Medicare
What are the public policy arguments for public health insurance programs? Rising costs of health care that these groups could not
generally afford, poorer health status compared to general population, greater incidence and prevalence of disease, & greater need to
utilize healthcare services
What are the political reasons for public health insurance programs? 1) Medicaid – less public opposition for programs to meet the needs
of the indigent (middle class voters will not punish me for doing this) 2) Medicare - growing size of the elderly population gave them
greater political clout (this large segment of typically high turnout voters will reward me for doing this)
The main reason why proposals to create Medicaid and Medicare passed, whereas national health insurance initiatives had failed, is that
Medicaid and Medicare were designed to cover only the most vulnerable populations. The proposals did not reengineer how the
majority of the Americans would receive health care. Hence, they were not opposed by a wide variety of interest groups as
earlier proposals for national health insurance had been.
Critical Concepts - Chapter 3
Main reasons why proposals favoring a national health care system have been defeated in the United States (differences between
Europe and the United States)
1. No political threats - in Europe, national health insurance was utilized to pacify popular discontent among the working class and insure
against the threat of political instability – America is also constitutionally designed as a decentralized decision-making system of
governance with a clear preference against strong central authority (federalism – insurance a state & local issue) – Europe had strong
central governments who could impose this type of system – also, anti-German sentiment during WWI made it difficult to advocate for the
German model of national health insurance at the time when these proposals were made before private insurance would become
dominant
2. Private infrastructure – unlike other nations, America developed a private sector health care delivery & financing system so not
surprisingly, physicians, hospitals, the AMA, insurers, retail pharmacies, etc. opposed a change in model to a government-run system
3. Influence of the medical profession – organized medicine was well organized for this fight – in 1949, the AMA spent $1.5 million on an
extensive public relations effort to educate the American people & build popular opposition to “socialized medicine”
4. Historical opposition from labor unions – feared that government would usurp their role as the provider of benefits to their members
5. Beliefs and values of the American middle class – preference for free market as opposed to governmental solutions (innovation, quality,
choice, competition, ability to aid those in need through non-profits), belief in individualism and self-determination, and distrust of
government
6. Tax aversion - Americans already feel being overtaxed & the middle class is already insured (not demanding to be insured – they
are insured) – the middle class favors helping others but often feel that existing programs already meet the need & are resistant to paying
more in taxes on this issue especially if they are concerned that the reform will impact their access to or quality of their health care –
Americans tend to like the current quality of their health care don’t like the present cost – not convinced that direct government
intervention will successfully lower costs but are concerned that it could affect their access or quality - everyone is for reform
until the question becomes “how are we going to pay for it?”
Critical Concepts - Chapter 3
Key differences between Medicare and Medicaid
Medicare
 No class distinction – not tied to income – no means testing – all eligible by age
regardless of income
 Uniform national standards for eligibility
 Uniform national set of benefits (benefits do not vary by state)
 Physicians could balance bill - charge patient above set fees to recoup the difference
(ask patient to pay what is not paid for by Medicare)
Medicaid

Federal matching funds to the states (55/45 split – Florida pays 45% of Medicaid)

For the indigent only – based on a means test developed by each state to determine
income eligibility – available to all age groups (not age restricted like Medicare)

Benefits vary by state

Physicians cannot balance bill

Limited participation from physicians - unpopular with providers—an example of how
insurance coverage does not guarantee access
Critical Concepts - Chapter 3
#1 - Corporatization

Medical care has become the domain of large corporations

High tech care in comfortable surroundings but cost control has remained unrealized – there was a short term decrease in the rate of
expenditures through managed care in the 1990s but overall, managed care has not contained costs as promised

Managed care has become the primary vehicle for insurance and delivery - consolidation of purchasing power on the demand
side – can drive price down among providers with their large market share (we have the patients so you will agree to
capitation/discounted fees)

Integrated health care organizations - consolidation on the supply side – providers unite to counteract managed care’s power physicians have consolidated into large clinics or established partnerships with hospitals. In addition, as a matter of survival in an
increasingly corporatized system, many physicians had to consolidate into large clinics, or form strategic partnerships with hospitals.
Consequently, a growing number of physicians have become employees of large medical corporations (what a stunning reversal from an
earlier era when physicians did everything to resist corporate employment & influence over medicine).

Together, managed care and integrated delivery organizations have corporatized the delivery of health care in the United
States.

Corporatization has made the health care system extremely complex from the consumer’s standpoint – unlike free markets where
the consumer should be in charge of picking providers based on price and quality, the patient has not acquired more market power in a 3rd
party payer insurance system dominated by managed care – it’s corporate but it’s not the free market.
The bad news is globalization

Migration of trained professionals from underdeveloped to developed nations creates shortages in the underdeveloped
countries.

Emerging economies are being targeted by tobacco companies.

As these countries prosper they tend to acquire western lifestyles. Changes in diet and exercise patterns, for instance, increase
the prevalence of chronic diseases (diabetes).

Globalization has also increased the threat of infectious diseases.

Bioterrorism threats in the US are also a byproduct of globalization.
Chapter 4
Health Services Professionals
Dr. Joe Saviak
Shi and Singh, Delivering Health Care in America: A Systems Approach (2008)
Jonas, Goldsteen, & Goldsteen, An Introduction to the U.S. Health Care System, 6th
Edition, (2007)
Visuals by Google Images
Chapter 4
The US health care industry is the largest and most powerful employer in
the nation - 3% of the total labor force - 16% of the Gross Domestic
Product in 2005 – 20% of U.S. economy by 2019 – major force in
Florida’s economy (by design – Scripps in Palm Beach & Burnham in
Orange Co.)
Health care will continue to grow because: 1) growth in population
2) aging of the population
Health care is a growth sector in the national workforce – expected to
increase by 27% between 2004 & 2014 compared to 12% average growth
in other professions
Where do health professionals work?

42.6% employed by hospitals

13% by nursing and personal care facilities

11.4% physician offices and clinics
Chapter 4
Key Issues Influencing the Growth and Composition of the Health Care Workforce:
 Expansion of the number and types of health services professionals influenced
by 1) population trends, 2) advances in research and technology, 3) disease
and illness trends, and 4) changes in health care
 Aging of the population increases demand and utilization
 New technology and treatments requires professionals who are trained in these
methods and specialize in their use
 Changing patterns in disease from acute to chronic require professionals formally
prepared to address the risk factors associated with chronic diseases, their
consequences and prevention
 The rise of managed care influences the health care workforce with a greater
shift from inpatient to outpatient care and an increased role for primary care
providers
 Non-physicians now perform duties traditionally assigned to physicians
 The imbalance in the ratio of generalists (primary care) to specialists
Chapter 4
Types of professionals:

Physicians

Nurses

Dentists

Pharmacists

Optometrists

Psychologists

Podiatrists

Chiropractors

Nonphysician practitioners

Health administrators

Allied health professionals

Therapists

Social Workers

Educators
Work places

Hospitals

Managed Care Organizations

Nursing Homes

Mental health facilities

Insurance firms

Pharmaceutical Companies

Outpatient

Community Health Centers

Mental Health Centers

School Clinics

Many others – you name a few
Chapter 4
Physicians
Central role in the system is to evaluate a patient’s health condition, diagnose abnormalities, &
prescribe a course of treatment - all states require a license to practice – “everything that
happens in the system flows from the physician’s pen”
Need to have graduated from an accredited medical school, successful completion of licensing
exam, and fulfilled residency requirement
MD - Doctor of Medicine
 95% of all physicians are MDs
 Trained in allopathic medicine - views medical treatment as active intervention to produce a
counter reaction to neutralize the effects of disease
 60% are specialists – 40% are generalists (primary care physician)
DO – Doctor of Osteopathic Medicine
 5% of all physicians are DOs
 Trained in osteopathic medicine - emphasizes the musculoskeletal system of the body such
corrections of joints or tissue - stresses preventative medicine (i.e. diet, environment, other
factors) - takes a holistic approach
 Most DOs are generalists
 Both MDs and DOs utilize accepted forms of treatment (drugs, surgeries) – employ same
methods but approach/philosophy is different
Chapter 4
Physicians – Generalists and Specialists
Primary Care Physicians (generalists)
 Train in family medicine/general practice, general internal medicine and pediatrics
 Provide preventative medicine - exams, immunizations
 Treat patients with the type of problems which occur more frequently but are less severe in
nature – problems which will respond to basic care
Specialists
 Physicians in non-primary care specialties
 Treat patients with problems which occur less frequently and require more complex
diagnostic or therapeutic approaches – problems which will respond to specialized care
 Must seek certification in a medical specialization
 Takes more years of advanced residence training plus years of practice
6 Major Functional Groups of Specialists:
1) Internal medicine
2) Broad group of medical specialties
3) Obstetrics/Gynecology
4) Surgery of all types
5) Hospital-based radiology, anesthesiology, pathology
6) Psychiatry
Chapter 4
Physicians – Generalists and Specialists
 Most physician contacts occur in physician offices – the #1 setting for
physician provided health care services
 76% of U.,S. physicians are domestically trained and 24% are
international medical graduates
 Specialists practicing in obstetrics/gynecology have the highest
operating costs and medical malpractice insurance premiums
Chapter 4
What are the defining differences between Primary Care and Specialty Care? (differences found
in the time, focus and scope of services provided to patients)
1. The PCP is the first contact to the health care system – the specialist is usually seen after
patient has seen a general practitioner
2. In managed care, primary care providers are “gate-keepers” - requires referral from a primary
care provider for patient to see specialist
3. Primary care is longitudinal (over time) – physician follows & guides patient through the entire
course of treatment – they coordinate care - they serve as patient advisors and advocates – it is a
continuing role and an ongoing relationship as opposed to a single treatment at a single point in
time which may be the case with specialized care (although not always – patient may be under
ongoing care with a specialist)
4. PC focuses on the whole person – it is holistic – it integrates all aspects of treatment – the
specialty concentrates on the specific disease, organ, disability or injury – specialty care is usually
episodic, more focused and intense type of condition and care and limited to an illness episode
5. PCPs spend much more time in ambulatory care settings (outpatient) – when training, PCPs
have to be in outpatient settings where they will be exposed to a high volume of patients with a
wide range of conditions whereas the specialist has largely trained in an inpatient setting
(hospital) where they are exposed to state of the art technology which treats the specific disease
or organ which is their specialty
Chapter 4
Increased Role of Hospitalists
 Historically, the primary care physician made the rounds at the hospital to visit
with their patients who were hospitalized
 Increasingly, this role is now being fulfilled by hospitalists – 12,000 now and
expected to grow to 30,000 in the coming years
 Hospitalists are physicians whose full time practice is within the hospital – they
are employees of the hospital
 PCPs initially resistant to this change with concern over discontinuity of care and
willingness of patients to accept this practice – initial research indicates that quality
and efficiency of care has been maintained by hospitalists – now accepted by both
primary care physicians and patients
 Focus now on optimizing their skills and expanding their roles – emerging as
their own profession and discipline
art technology
Chapter 4
Issues in Medical Practice
#1 - Involvement in the Development of Clinical Practice Guidelines
How do we promote the adoption of evidence-based medicine by all physicians?
 Objective is to avoid less effective treatments and widely varying response to the same condition
– ensure consistent and most effective choice of treatment – streamline clinical decisionmaking and improve the quality of care
 Research reveals that information alone does not do the job (simply telling physicians this is
the better form of care – guess it turns out that physicians are just like everyone else – more
information does not necessarily equal a change in attitudes/behaviors)
 Involving practicing physicians in the development & promulgation of practice guidelines is key
#2 - Threat of Compromise
 Physicians’ professional judgment compromised to meet managed care’s financial
arrangements
 If strong financial incentives are provided to physicians to favor low and inexpensive utilization by
managed care organization (i.e. discounted fees, capitation, etc. which rewards the physician for
employing less expensive remedies or reducing specialist referrals), will this affect their
professional judgment and the quality of patient care?
 Caught in dilemma – potential role conflict - pressure from government & MCOs/insurance
to contain costs & pressure from patients & their own professional standards to do
everything possible to benefit patients
 Dual role in managed care: 1) provide treatment to patients and 2) function as “gatekeeper” to
control utilization & costs
Chapter 4
#3 - Lopsided Medical Training

We are producing too many specialists

Medicare is a major funder of teaching hospitals to provide residency programs ($7
billion per year - $70,000 per resident) but when Medicare writes the check, it does not
specify whether the residents should be trained as generalists or specialists so guess
what happens? Hospital-based training generates more specialists

If we want to orient our system more towards primary care, training is an issue - people
will practice as they train so don’t be surprised when we keep ending up with more specialists
#4 - Aggregate Physician Oversupply

173% increase in the supply of physicians from 1950 to 1990

We are producing many more physicians but not necessarily where we need them

Maldistribution occurs when a surplus or shortage of physician types needed to maintain the
health status of a population – this maldistribution expresses itself in specialty (type of
physician) or in geography (locations of physicians influencing patient access)

Also, how do we determine how many we need? If we produce too few, we have a problem
and if we generate too many, that can lead to unnecessary health care expenses

One tool for addressing this challenge is the Physician Supply Model – a computerized
system which forecasts national needs of all types of physicians in U.S. through 2020 –
developed by Health Resources & Services Administration’s Bureau of Health Professions –
factors in demographic data, physician productivity data, rates of specialization
Chapter 4
# 5 - Geographic Maldistribution

Physician shortages outside metropolitan areas (counties with less
than 50,000 residents) – this affects access to primary care

Why are physicians more likely locate their practices in
urban/suburban areas as opposed to rural or more remote
communities? Greater prospects for higher income, more professional
interaction with colleagues, better access to facilities and technology with
major medical centers, more opportunities for continuing education and
professional growth, higher quality of life with more social and
recreational activities - longer working hours in rural areas and required
to frequently be on call, small financial rewards in rural areas, greater
degree of professional isolation

Shi and Singh (2008) identify the market model which is based on
consumer demand as explaining physician surpluses in urban/suburban
areas and shortages in rural communities
Chapter 4
#6 – Specialty Maldistribution
 An imbalance between primary and specialty care - from 1979 to 1999,
the number of primary care physicians increased by only 18% yet the
number of specialists increased 118%
 In the US, approximately 40.8% of the physicians are generalists and
approximately 59.2% are specialists – in other countries, 25-50% of
physicians are specialists
 Look at the ratio among recent medical school graduates – it’s a
challenge to motivate individuals to choose primary care practice - from
1998-2005, the % of 3rd year medical residents intending to practice in
general internal medicine went from 54% to 20%
Chapter 4
Reasons for specialty maldistribution:
1) Medical technology – we are a technology-oriented health care system (the medical model not necessarily a bad thing) – hospitals compete on the basis of the latest & newest
technology & insured patients request it – specialists deliver high tech treatment – more
technology, more specialists
2) Income – specialists make more $ (see Table 4-6 on p. 135 – I have med school loans to repay
– which practice will I choose?) - also, reimbursement methods from both public and private
insurance factor into this issue – historically, reimbursement rates through Medicare based on
physician practice cost which is higher with specialists so higher rates of reimbursement for
them and traditionally, insurance covered hospital-based invasive and diagnostic procedures
so specialized treatment would be covered – greater emphasis now on covering routine
preventive visits and consultations with primary care physicians
3) Specialty - oriented medical education – medical education emphasizes technology, intensive
care, and hospital-based care - Medicare funds residency programs in teaching hospitals
where specialized care will receive greater emphasis – we preach primary care but we train
for specialized care
4) Better work hours- more predictable work schedule
5) More prestige among the profession and public
6) Intellectual challenge – our physicians are among our best & brightest and they may gravitate
towards more complex problem-solving found in specialty practice
Chapter 4
Specialists are a good thing
 Provide high quality care to meet the needs of individuals with specific
diseases and disabilities – positive health outcomes
Too many specialists is not such a good thing
 High volume of intensive, expense and invasive procedures – surgeries grew at
two times the rate of population growth - this increases health care costs
 Specialist services have less impact in improving overall health status – why –
specialists deal with the disease or disability once we have the problem (the
cardiologist who performs open heart surgery) while primary care physicians can
provide primary and secondary prevention stopping the disease or disability before it
ever occurs or catching it early to treat/reverse it (they can address the risk factors or
conditions which produce the disease or disability in the first place) - specialists treat
the organ & not the patient – it’s important but it’s a narrowed focus
 Underserved populations do not always gain with more specialists – their
problem is access to primary care
Chapter 4
Given the causes of geographic and specialty maldistribution (issues #5 & 6), what measures
have been or can be employed to overcome problems related to physician maldistribution
and imbalance?

To alleviate the shortage of physicians, for example, new medical schools were instituted in
the underserved areas (inner city and rural).

Nurses in expanded roles (nurse practitioners) emerged as a viable option to remedy the many
facets of the health labor force problem. (assist with primary care)

Federal programs addressing specialty maldistribution include the National Health Service
Corps, the Migrant and Community Health Programs, support of primary care training programs,
and support of Area Health Education Centers.

Medical schools need to develop students’ competencies in skills, values, and attitudes
relevant to the practice of primary care. Their curricula can be oriented toward issues of special
concern to generalists, such as outpatient experience, public health concepts, disease prevention,
and cultural, ethnic, and population-specific knowledge.

Medical programs can provide students with opportunities to work with the poor,
minorities, and the uninsured and to practice in rural or underserved areas. The means of
financing medical training and physician services can be improved. The system of graduate
medical education payments through Medicare contributes to specialty-oriented training and
creates disincentives for primary care training. A possible solution is to encourage and
provide priority funding for primary care residency slots and primary care-related research.
Chapter 4
Given the causes of geographic and specialty maldistribution (issues #5 & 6), what
measures have been or can be employed to overcome problems related to
physician maldistribution and imbalance?

Teaching hospitals whose graduates actually go into primary care in underserved areas
should be rewarded.

Reimbursement/financial incentives to providers and patients should emphasize
preventive, primary care services and should stress the attributes of primary care.
Eliminate deductibles and co-pays when a patient is seeking primary care.

Since physicians tend to practice in affluent urban areas, it is necessary to differentially
reward providers who practice in “less desirable” areas or care for socially disadvantaged
populations. A more rational referral system may be established that achieves a reasonable
division of work based on the frequency and severity of health problems (better workload/work
schedule shared between generalists & specialists)

Managed Care – to reduce utilization and contain costs, managed care is operating to restrict or
reduce the demand and utilization of specialized medical services – managed care was not
created to fix this problem but by its operation, it is helping to address it.

Can you develop any other specific strategies to address the causes of geographic and
specialty maldistribution?
Chapter 4
# 7 - International Medical Graduates (IMG)
 Steadily growing – 25% of residency positions are filled by IMGs
 Help address the maldistribution issues! – initially locate to a medically
underserved community to practice – J-1 VISA program – citizenship in
exchange for 3 years of practice in an underserved community (rural, inner
city) but free to relocate afterwards (and they do) – not the single solution to
the issue of maldistribution but it has really become one of our main
solutions to the problem today – without the J-1 VISA program, many of our
more rural communities would not have any or as many docs to serve them
Chapter 4 – Other Key Professionals in the
U.S. Health Care System




Dentists
 Dental Hygienists
 Dental Assistants
Pharmacists
Other Doctoral-Level Health
Professionals
 Optometrists
 Psychologists
 Podiatrists
 Chiropractors
Nurses
 Registered Nurses
 Licensed Practical Nurses
 Advanced Practice Nurses



Non Physician Practitioners
 Physician Assistants
 Nurse Practitioners
 Certified Nurse Midwives
AH Professionals
 (includes many healthrelated professionals)
 See Chart 4-2, page 144
Health Services
Administrators
Chapter 4
Dentists
Dentists are the major providers of dental care. The major roles of dentists are to diagnose and
treat dental problems related to the teeth, gums, and tissues of the mouth.
All dentists must be licensed to practice. The licensure requirements include graduation from an
accredited dental school that awards a Doctor of Dental Surgery (DDS) or Doctor of Dental
Medicine (DMD) degree and successful completion of both written and practical examinations.
Most dentists practice in private offices as solo or group practitioners. Some dentists work in
dental clinics in private companies, retail stores, franchised dental outlets, or HMOs. The federal
government also employs dentists, mainly in the hospitals and clinics of the Department of
Veterans Affairs and the US Public Health Service.
Eight specialties recognized by American Dentist Association:

Orthodontics – straighten teeth

Oral/maxillofacial surgery – mouth and jaw

Pediatric dentistry

Periodontics – treat gums

Prosthodontics – artificial teeth or dentures

Endodontics – root canals

Public health dentistry – community

Oral pathology – disease of the mouth
Chapter 4
Health Professionals who work with Dentists
Dental hygienists

Do preventative dental care - clean, educate

Must be licensed
Dental Assistants

Help in the preparation, exam and treating of patients

Do not need licensure
Chapter 4
Pharmacists
The major roles of pharmacists are to dispense medicines prescribed by
physicians, dentists, and podiatrists, and to provide consultation on the proper
selection and use of medicines.
All states require a license to practice pharmacy.
The licensure requirements include graduation from an accredited pharmacy program
that awards a Bachelor of Pharmacy (BPharm) or Doctor of Pharmacy (PharmD)
degree, successful completion of a state board examination, and practical experience
or completion of a supervised internship. After 2005, the bachelor’s degree was
phased out, and a PharmD requiring six years of postsecondary education
became the standard.
Most pharmacists hold salaried positions and work in community pharmacies that
may be independently owned or are part of a national chain of drugstores,
grocery stores, or department stores.
Pharmacists also work in hospitals, managed care organizations, home health agencies,
clinics, government health services organizations, and pharmaceutical manufacturing
companies.
Chapter 4
Other Doctoral-Level Professionals
Optometrist (OD) - vision correction - Provide vision care with exams, diagnostics,
correction - need license – Doctor of Optometry (OD) - usually work in solo or group
practices
Psychologist (PhD) - mental health counseling and psychotherapy - Provide patients
with mental health care - Need license - Doctor of Philosophy (PhD) or Doctor of
Psychology (PsyD)
Podiatrist (DPM) - treat disease or deformities of the feet - Includes surgeries, medicine,
corrective devises - Need a license - Doctor of Podiatric Medicine (DPM)
Chiropractor (DC) - literally, hand manipulation. It is rooted in the belief that the health of
the spinal column and nervous system is central to well-being. Studies show that
chiropractic care is an effective form of treatment for back pain. Treatment by hand
manipulation, physiotherapy and dietary counseling - Help patients with neurological,
muscular, vascular problems - Believes body is self-healing - Do not prescribe
medicine or do surgery - Need license to practice - Doctor of Chiropractic (DC), 4
years
Chapter 4
Nurses

The largest group of health care professionals

Florence Nightingale – founder/pioneer of modern nursing – established nursing corps. for
British military during Crimean War (1854)

Profession grew and developed after World War I

Nurses are the major caregivers of sick and injured patients - addressing physical, mental
and emotional needs

American Nursing Association (ANA) definition: protection, promotion, & optimization of health
through diagnosis, treatment, & advocacy in caring for individuals & populations –
emphasis on caring relationship, scientific knowledge, & advancement of profession

All states require nurses to be licensed to practice as RNs. The licensure requirements include
graduation from an approved nursing program that awards an associate degree (ADN), diploma,
or bachelor’s degree (BSN), and successful completion of a national examination. ADN programs
take about 2 years and are offered by community and junior colleges. Diploma programs take 2 to
3 years and are offered by hospitals. BSN programs take 4 to 5 years and are offered by colleges
and universities.

Nurses work in a variety of settings, including hospitals, nursing homes, private practices,
surgicenters, community and migrant health centers, emergency medical centers, HMOs,
worksites, government and private agencies, clinics, schools, retirement communities,
rehabilitation centers, and patients’ homes.
Chapter 4
Two basic levels of licensed nurses:
1. RN - three avenues of RN education/preparation: Associate degree (ASN, Associate of
Science in Nursing, 2 years), Diploma (hospital program, generally 3 years), and
Bachelor’s degree (BSN, 4 years)
2. LPN (LVN) - 1 to 2 years at a community college
Expanding responsibilities for RNs:

Case management

Utilization review

Quality assurance

Prevention counseling

Training of other nurses

Primary care
Chapter 4
Nurses

Starting in the 80s, average length of stay started to decrease coupled with the downsizing of
hospitals – these factors caused demand for nursing to fall temporarily

Today, however, hospitals now treat much sicker patients than before and the work become more
intensive and more nurses needed in a wider range of health care settings such as home health
and nursing homes – more nurses are needed

Although there is research suggesting that the future supply of RNs will be sufficient to meet
future demands, it is projected that in 2020, the shortfall will be 340,000 RNs if current trends
continue
What reasons might explain this shortfall?
 Sluggish wages - low salaries & limited pay progression
 Low job satisfaction
 Inadequate career mobility
 Falling nursing enrollments
 Demand from other alternative hospital sites
 Poor professional image
 Greater career opportunities for women in other fields
 Working conditions - stressful working relationships with physicians can contribute to nurse burnout or shortages - nurse to patient ratios may contribute to nurses leaving the profession –
understaffing can increase burn-out & compromise quality of care
 In times of shortages, hospitals may extend work shifts or overtime of nurses exacerbating
problem of job satisfaction & increasing burn-out rate
Chapter 4
Nurse Reinvestment Act of 2002
 Public policy response to projected nursing shortfall
 Grants and scholarships to attract and keep nurses on the job
 Most money goes to nursing schools, but hospitals will benefit
 Grants to encourage nurses to obtain higher education, training, internships,
retention, to enhance role of nurses
What measures might attract and retain high quality professionals in nursing?
 Incentive packages for hiring
 Increasing pay and benefits of current nurses
 Introduce more flexible work schedules
 Offer tuition reimbursement
 Provide on-site day care assistance
Chapter 4
Advanced Practice Nurses

Nurses who have an education and clinical experience beyond what is required for a
Registered Nurse
Four main categories of APNs:
1. Clinical nurse specialists - Work in hospitals (vs. home health, clinics, or nursing
homes). Specialize in fields such as cardiac care, oncology, neonatal care,
psychiatric care.
2. Certified Registered Nurse Anesthetists - Trained to manage anesthesia during
surgery.
3. Nurse Practitioners - Trained to provide primary care services, often independent of
physicians.
4. Certified Nurse Midwives - Deliver babies and manage the care of mothers and
newborns before, during, and after delivery.
Chapter 4
Nonphysician Practitioners (NPs, PAs)
Nonphysician primary care providers include nurse practitioners (NP), physician
assistants (PA), and certified nurse midwives.
They play a critical role in the provision of health care, particularly primary care to
underserved populations.
Clinical professionals who practice in many areas similar to a physician, but do
not have a physician or DO degree – termed “delivery extenders”
NPs and PAs often give care equivalent to that provided by physicians. Moreover,
NPs have been noted to have better communication and interviewing skills
than physicians. Clients are more satisfied with NPs than with physicians
because NPs generally spend more time with the patients, express greater personal
interest in patients, and provide care at less cost.
CNMs are considered to be effective in providing access to obstetrical and prenatal
services in rural and poor communities.
Among the issues that need to be resolved before nonphysician primary care
providers can be used fully are: 1) legal restrictions to practice,
2) reimbursement policies, and 3) relationships with physicians.
Chapter 4
Physician Assistants

Emergence/development of this profession influenced by return of medical corpsmen from service
in Vietnam

Physician assistants are licensed to perform medical procedures under the supervision of a
physician. The supervising physician may be either on-site or off-site.

The major services provided by PAs include evaluation, monitoring, diagnostics,
therapeutics, counseling, and referral.

Specific functions include elicit patient history, determine patient health status, design
individualized treatment/disease management plan with physician, care management, &
perform routine medical procedures

Follows a medical model - focuses on disease

Widely accepted by patients

Most work in hospitals, clinics & multi-practice settings. They practice in offices, hospitals,
HMOs, clinics, nursing homes, mental health facilities, rehabilitation centers, community and
migrant health centers, and government institutions.

As of 1995, there were 68 accredited PA training programs that awarded a certificate, an
associate degree, a bachelor’s degree, or a master’s degree. Although the typical student has
already completed a bachelor’s program in another discipline, most of the programs grant a
bachelor’s degree upon graduation. PAs are certified by the National Commission on Certification
of Physician Assistants.

PAs have prescribing authority in most states.
Chapter 4
Nurse Practitioners (NPs)

Nurse practitioners are individuals who have completed a program of study leading to
competence as registered nurses in an expanded role. The training of NPs may be a
certificate program (at least 9 months’ training) or a master’s degree program (2 years’ fulltime
study). States vary with regard to licensure and accreditation requirements. There are more than
150 educational training programs nationwide. In addition, NPs complete clinical training in direct
patient care. Certification examinations are offered by the American Nurses Credentialing Center,
the American Academy of Nurse Practitioners, and specialty nursing organizations.

The primary function of NPs is patient education. NPs spend considerable time with
patients to make them understand the need to take personal responsibility.

Nurse practitioners emphasize wellness promotion, illness prevention, early intervention,
and illness management.

Follow a nursing model with health promotion and education

NPs have statutory prescribing authority in 47 states, and 49 states allow direct Medicaid
reimbursement for NP services.

Certified nurse midwives are registered nurses with additional training in midwifery, such as
maternal and fetal procedures, nursing, and patient assessment, from a nurse-midwifery program.
They manage gynecological and obstetric care and can be used as substitutes for
obstetricians/gynecologists. They are certified by the American College of Certified Nurse
Midwives to provide care for normal expectant mothers, and they refer abnormal or high-risk
patients to obstetricians or manage them jointly. Very few training programs exist for CNMs (9
certificate programs and 20 master’s degree programs).
Chapter 4
Nurse Practitioners (NPs)
Increasingly important role in our system of health care
Why increase in NPs in recent years?
1. Decline in quantity of primary care physicians so NPs taking up slack - from
1998-2005, the % of 3rd year medical residents intending to practice in general
internal medicine went from 54% to 20%
2. Health demands of Baby Boom population – NPs fill a growing market need
3. NPs able to provide more & more services & patients report higher levels of
satisfaction with NPs
4. Loosening of regulations in some states opening doors for NPs
Chapter 4
Allied Health Professionals

Constitute 60% of U.S. health care workforce - they are an integral part of the
healthcare delivery system and complement the physician and nursing work force.

Need created by the growth of technology and specialization in medicine.

They function in roles that are complementary to those of physicians and
nurses.

Allied health professionals can be divided into two broad categories:
1) technicians/assistants and 2) therapists/ technologists.
Two main categories:
1. Technologists and therapists - PTs, OTs, Speech therapists, Dieticians, Medical
technologists, etc.
2. Technicians and assistants - PT and OT assistants, laboratory technicians,
emergency medical technicians, dental hygienists, etc.
Assistants and technicians include physical therapy assistants (PTAs), certified
occupational therapy assistants (COTAs), medical laboratory technicians, radiologic
technicians, and respiratory therapy technicians.
Technologists and therapists include physical therapists (PTs), occupational therapists
(OTs), medical dietetics, speech-language pathologists, and social workers.
Chapter 4
Health Services Administrators
Health services administrators are employed at the top, middle, and entry levels of various
types of organizations that deliver health services.
Top-level administrators provide leadership and strategic direction, work closely with the governing
board, and are responsible for an organization’s long-term success. They are responsible for
operational, clinical, and financial out-comes of the entire organization.
Middle-level administrators may have leadership roles for major service centers such as outpatient,
surgical services, or nursing services, or they may be departmental managers in charge of single
departments such as diagnostics, dietary, rehabilitation, social services, environmental services,
or medical records. Their jobs involve major planning and coordinating functions, organizing
human and physical resources, directing and supervising, operational and financial controls, and
decision making. They often have direct responsibility for implementing changes, creating
efficiencies, and developing new procedures with respect to changes in the healthcare delivery
system.
Entry-level administrators may function as assistants to mid-level managers. They may supervise a
small number of operatives. Their main function may be to oversee and assist with operations
critical to the efficient operation of a departmental unit.
Their academic credentials would be: MHA - Master in Health Administration, MHSA - Master in
Health Serv Admin (HSA), MBA – Master in Business Administration, MPH – Master in Public
Health, MPA - Master in Public Administration/Affairs
Chapter 4
Challenges for Health Services Administrators:
 Financing and payment structures - changes in financing and
reimbursement - work with decreasing levels of reimbursement
 Pressure of uncompensated care
 Accountability for quality
 Community health service
 Demands by both public and private payers
 Impact of new public policies - new policy developments
 Competition – constantly changing competitive environment
 Maintaining integrity - integrity, ethics, and public’s trust
Critical Concepts - Chapter 4
Key Issues Influencing the Growth and Composition of the Health Care Workforce:

Expansion of the number and types of health services professionals influenced by population trends, advances in research and
technology, disease and illness trends, and changes in health care

Aging of the population increases demand and utilization

New technology and treatments requires professionals who are trained in these methods and specialize in their use

Changing patterns in disease from acute to chronic require professionals formally prepared to address the risk factors associated with
chronic diseases, their consequences and prevention

The rise of managed care influences the health care workforce with a greater shift from inpatient to outpatient care and an
increased role for primary care providers

Non-physicians now perform duties traditionally assigned to physicians

The imbalance in the ratio of generalists (primary care) to specialists
Physicians – Generalists and Specialists

Most physician contacts occur in physician offices – the #1 setting for physician provided health care services

76% of U.,S. physicians are domestically trained and 24% are international medical graduates

Specialists practicing in obstetrics/gynecology have the highest operating costs and medical malpractice insurance premiums
Too many specialists is not such a good thing

High volume of intensive, expense and invasive procedures – surgeries grew at two times the rate of population growth - this
increases health care costs

Specialist services have less impact in improving overall health status – why – specialists deal with the disease or disability (the
cardiologist who performs open heart surgery) while primary care physicians can provide primary and secondary prevention stopping the
disease or disability before it ever occurs or catching it early to treat/reverse it (they can address the risk factors or conditions which
produce the disease or disability in the first place) - specialists treat the organ & not the patient – it’s important but it’s a narrowed focus

Underserved populations do not gain with more specialists – their problem is access to primary care
Critical Concepts - Chapter 4
Issues in Medical Practice
#1 - Involvement in the Development of Clinical Practice Guidelines
How do we promote the adoption of evidence-based medicine by all physicians?

Objective is to avoid less effective treatments and widely varying response to the same condition – ensure consistent and most effective
choice of treatment – streamline clinical decision-making and improve the quality of care

Research reveals that information alone does not do the job (simply telling physicians this is the better form of care)

Involving practicing physicians in the development & promulgation of practice guidelines is key
#3 - Lopsided Medical Training

We are producing too many specialists – Medicare is a major funder of teaching hospitals to provide residency programs ($7
billion per year - $70,000 per resident) but when Medicare writes the check, it does not specify whether the residents should
be trained as generalists or specialists so guess what happens? Hospital-based training generates more specialists
Maldistribution occurs when a surplus or shortage of physician types needed to maintain the health status of a population – this maldistribution
expresses itself in specialty (type of physician) or in geography (locations of physicians influencing patient access)
Reasons for specialty maldistribution:
1) Medical technology – we are a technology-oriented health care system (the medical model - not necessarily a bad thing) – hospitals
compete on the basis of the latest & newest technology & insured patients request it – specialists deliver high tech treatment
2) Income – specialists make more $ (see Table 4-6 on p. 135 – I have med school loans to repay – which practice will I choose?) - also,
reimbursement methods from both public and private insurance factor into this issue – historically, reimbursement rates through
Medicare based on physician practice cost which is higher with specialists so higher rates of reimbursement for them and
traditionally, insurance covered hospital-based invasive and diagnostic procedures so specialized treatment would be covered –
greater emphasis now on covering routine preventive visits and consultations with primary care physicians
3) Specialty - oriented medical education – medical education emphasizes technology, intensive care, and hospital-based care Medicare funds residency programs in teaching hospitals where specialized care will receive greater emphasis – we preach primary
care but we train for specialized care
4) Better work hours- more predictable work schedule
5) More prestige among the profession and public
6) Intellectual challenge – our physicians are among our best & brightest and they may gravitate towards more complex problem-solving
found in specialty practice
Critical Concepts - Chapter 4
# 7 - International Medical Graduates (IMG)

Steadily growing – 25% of residency positions are filled by IMGs

Help address the maldistribution issues – initially locate to a medically underserved community to practice – J-1 VISA program –
citizenship in exchange for 3 years of practice in an underserved community (rural, inner city) but free to relocate afterwards (and they do)
– not the single solution to the issue of maldistribution
What measures might attract and retain high quality professionals in nursing?

Incentive packages for hiring

Increasing pay and benefits of current nurses

Introduce more flexible work schedules

Offer tuition reimbursement

Provide on-site day care assistance
Nonphysician Practitioners
Nonphysician primary care providers include nurse practitioners, physician assistants, and certified nurse midwives. They play a
critical role in the provision of health care, particularly primary care to underserved populations.
Clinical professionals who practice in many areas similar to a physician, but do not have a physician or DO degree – termed “delivery
extenders”
NPs and PAs often give care equivalent to that provided by physicians. Moreover, NPs have been noted to have better
communication and interviewing skills than physicians. Clients are more satisfied with NPs than with physicians because NPs
generally spend more time with the patients, express greater personal interest in patients, and provide care at less cost.
Among the issues that need to be resolved before nonphysician primary care providers can be used fully are legal restrictions to
practice, reimbursement policies, and relationships with physicians
Why increase in NPs in recent years?
1.
Decline in quantity of primary care physicians so NPs taking up slack - from 1998-2005,
the % of 3rd year medical residents intending to practice in general internal medicine went from 54% to 20%
2.
Health demands of Baby Boom population – NPs fill a growing market need
3.
NPs able to provide more & more services & patients report higher levels of satisfaction with NPs
4.
Loosening of regulations in some states opening doors for NPs
Critical Concepts - Chapter 4
Given the causes of geographic and specialty maldistribution (issues #5 & 6), what measures have been or can be employed to
overcome problems related to physician maldistribution and imbalance?

To alleviate the shortage of physicians, for example, new medical schools were instituted in the underserved areas (inner city and
rural).

Nurses in expanded roles (nurse practitioners) emerged as a viable option to remedy the many facets of the health labor force problem.
(assist with primary care)

Federal programs addressing specialty maldistribution include the National Health Service Corps, the Migrant and Community Health
Programs, support of primary care training programs, and support of Area Health Education Centers.

Medical schools need to develop students’ competencies in skills, values, and attitudes relevant to the practice of primary care.
Their curricula can be oriented toward issues of special concern to generalists, such as outpatient experience, public health concepts,
disease prevention, and cultural, ethnic, and population-specific knowledge.

Medical programs can provide students with opportunities to work with the poor, minorities, and the uninsured and to practice
in rural or underserved areas. The means of financing medical training and physician services can be improved. The system of
graduate medical education payments through Medicare contributes to specialty-oriented training and creates disincentives for primary
care training. A possible solution is to encourage and provide priority funding for primary care residency slots and primary carerelated research.

Hospitals whose graduates actually go into primary care in underserved areas should be rewarded.

Reimbursement/financial incentives to providers and patients should emphasize preventive, primary care services and should
stress the attributes of primary care. Eliminate deductibles and co-pays when a patient is seeking primary care.

Since physicians tend to practice in affluent urban areas, it is necessary to differentially reward providers who practice in “less
desirable” areas or care for socially disadvantaged populations. A more rational referral system may be established that achieves a
reasonable division of work based on the frequency and severity of health problems (better workload/work schedule shared between
generalists & specialists)

Managed Care – to reduce utilization and contain costs, managed care is operating to restrict or reduce the demand and utilization of
specialized medical services – managed care was not created to fix this problem but by its operation, it is helping to address it.

Can you develop any other specific strategies to address the causes of geographic and specialty maldistribution?