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An environmental analysis report
Health Care
Trends
2008
Health Care Trends 2008 was produced by the American Medical Association (AMA) Council on Long
Range Planning and Development:
Cathy O. Blight, MD, chair
Neil H. Brooks, MD, vice chair
Michael S. Ellis, MD
Hillary Johnson, MD, PhD
Marilyn K. Laughead, MD
Saul M. Levin, MD
Justin Mahida, medical student
Richard M. Peer, MD
David M. Shapiro, MD
H. Hugh Vincent, MD
With special thanks to:
Donald W. Zeigler, PhD, director long range healthcare trends and secretary to the council, for undertaking
the research and analysis that underlies this report and for drafting the document
And with acknowledgments for contributions from:
Carolyn A. Evans, MD, former council chair
Olga Mengin, former student member
Carl K. Rust II, MD, former council member
Bruce Balfe, former vice president of planning for the AMA
Janice Robertson, secretary of the AMA Council on Constitution and Bylaws
Carrie Domangue, staff assistant
Copyright 2008 American Medical Association. All rights reserved.
In producing this publication, the AMA Council on Long Range Planning and Development has consulted and cited sources believed to be
knowledgeable. However, the AMA does not warrant that the information is in every respect accurate and/or complete. The AMA assumes no
responsibility for use of the information contained in this publication. The AMA shall not be responsible for, and expressly disclaims liability for,
damages of any kind arising out of the use of, reference to, or reliance on, the content of this publication.
This publication is for informational purposes only. The AMA does not provide medical, legal, financial or other professional advice, and readers
are encouraged to consult a professional adviser for such advice.
AMA Health Care Trends 2008
Table of contents
Introduction
Demographics of the U.S. population.................................................................................................................1
Health status of the population...........................................................................................................................7
Health care resources.........................................................................................................................................16
Medical education.............................................................................................................................................24
Health care expenditures...................................................................................................................................32
Health care coverage and access........................................................................................................................39
Third-party payers..............................................................................................................................................49
Medical practice.................................................................................................................................................56
Quality measures . .............................................................................................................................................64
Public health infrastructure and services . ........................................................................................................71
Globalization......................................................................................................................................................80
Science and technology in medicine.................................................................................................................90
Information and communication technologies ................................................................................................99
Patient expectations and perceptions..............................................................................................................107
Index................................................................................................................................................................116
AMA Health Care Trends 2008
Introduction
Welcome to Health Care Trends 2008. Produced by the American Medical Association (AMA), this resource provides
valuable information on the trends in medicine that are affecting:
•
•
•
•
Physicians
Patients
Hospitals and other health care facilities
Medical schools
• Academic physicians
• Researchers
• Policymakers Designed to stimulate thinking about how the direction of changes in medicine is influencing the delivery of patient
care, and how physicians and medical associations might work together to shape tomorrow’s health care system,
Health Care Trends draws from an extensive review of professional, governmental and nongovernmental sources to
present such topics as:
• Health status and demographics of the U.S.
population and the effects on public health,
lifestyle behaviors and disease
• Factors affecting health care spending,
professional liability, third-party payers,
Medicare, Medicare Advantage, Medicaid
• Changes in the physician work force and the
impact on patients, hospitals and other health
care facilities
• Patient expectations and perceptions regarding
health care access, quality of care and alternative
sites of care (e.g., retail-based clinics)
• Trends in physician income, medical practice
arrangements, managed care and patient care settings
• Globalization, medical tourism, climate change
and global trade agreements and their effects on
health and the medical profession
• Health information technology and its effects on
medical records, health information exchanges
and e-prescribing
• Changes in medical education and physician
continuing professional development and
implications for patients, physicians, medical
schools and the profession
Updated every two years by the AMA Council on Long Range Planning and Development, Health Care Trends has
been used by physicians, academics, the public, AMA Board of Trustees (BOT) members and others for presentations,
reference, teaching and advocacy.
As you use this resource, we hope you will share your feedback by completing our online survey (www.ama-assn.org/go/
healthcaretrends). Health Care Trends may not necessarily reflect AMA policy, but your involvement enables the AMA
Council on Long Range Planning and Development to better identify and make recommendations to the AMA-BOT
and, in doing so, help shape AMA policy.
We welcome your comments and suggestions on this resource—as well as insights you may have on health care trends
or potential issues on the horizon.
Sincerely,
Cathy Blight, MD
Chair, AMA Council on Long Range
Planning and Development
Neil Brooks, MD
Vice Chair, AMA Council on Long Range
Planning and Development
AMA Health Care Trends 2008
Demographics of the U.S. population
Figure 1. U.S. population: Projections for race and ethnicity
2000
2010
2020
2030
2040
2050
80
% of population
70
60
50
40
30
20
10
0
White,
non-Hispanic
Hispanic
Black
Asian
All other races
Data from the U.S. Census Bureau.25
a
The U.S. population is growing increasingly older and more ethnically diverse. Due to the recent
downturn in the economy, the percentage of those living in poverty also grew in the past few years.
These demographic trends make Medicare and Medicaid reform top priorities for Congress.
Trends
• F rom 1950 to 2005, the total resident population of the United States increased from 151 million to 296 million,
representing an average annual growth rate of 1.2 percent.1(p35) Overall, the country’s population is expected to
continue to grow, increasing from 282.1 million in 2000 to 420 million in 2050. However, after 2030 the rate of
increase might be the slowest since the Great Depression as the size of the baby boomer population continues to
decline. Still, the nation’s projected 49 percent population increase during the next 50 years would be in sharp
contrast to most European countries, whose populations are expected to decline by midcentury.1(p3)
• B
etween 2000 and 2005, the population of most five-year age groups grew. Five age groups experienced declines.
The largest decline (7.5 percent) was among the population aged 35 to 39. The fastest-growing population was the
population aged 55 to 59.2
1
Older population
• F rom 1950 to 2005, the population 65 years of age and over grew, on average, 2.0 percent per year, increasing from
12 million to 37 million persons. The population 75 years of age and over grew the fastest (2.8 percent per year),
increasing from 4 million to 18 million persons.1(p35)
• T
he first baby boomers (those born 1946–1964) will reach 65 in 2011, and the number of older people will increase
dramatically during the 2010–2030 period to 71.5 million, or 20 percent, of the U.S. population.3
• P
rojections indicate that the rate of growth for the total population from now until 2050 will be slower, but older
age groups will continue to grow more rapidly than the total population. By 2029, all of the baby boomers will be
aged 65 years and over. As a result, the population aged 65–74 years will increase from 6 percent to 10 percent of
the total population between 2005 and 2030.
As the baby boomers age, the population 75 years of age and over will rise from 6 percent to 9 percent of the
population by 2030 and continue to grow to 12 percent in 2050. By 2040, the population aged 75 years and over will
exceed those 65–74 years of age.1(p35)
Gender
• I n 2005, women outnumbered men by 4.4 million. The female population is projected to continue to outnumber
the male population, growing from a difference of 5.3 million in 2000 (143.7 million females and 138.4 million
males) to 6.9 million (213.4 million females and 206.5 million males) by midcentury.1(p3),2
An increasingly diverse population
• M
ore than one in 10 Americans was born in another country, and today’s immigrants and refugees are more likely
than in the past to come from non-English-speaking cultures, work in service occupations and achieve lower
educational levels.4
• I f current trends continue, the population of the United States will rise to 420 million in 2050, from 296 million in
2005, and 82 percent of the increase will be due to immigrants arriving between 2005 and 2050 and their U.S.-born
descendants. Of the 117 million people added to the population during this period due to the effect of new immigration,
67 million will be the immigrants themselves and 50 million will be their U.S.-born children or grandchildren.
• N
early one in five Americans (19 percent) will be an immigrant in 2050, compared with one in eight (12 percent)
in 2005. By 2025, the immigrant, or foreign-born, share of the population will surpass the peak during the last great
wave of immigration a century ago.5
• T
he Latino population, already the nation’s largest minority group, will triple in size and will account for most of
the nation’s population growth from 2005 through 2050. Hispanics will make up 29 percent of the U.S. population
in 2050, compared with 14 percent in 2005. Births in the United States will play a growing role in Hispanic and
Asian population growth; as a result, a smaller proportion of both groups will be foreign born in 2050 than is the
case now.
• T
he non-Hispanic white population will increase more slowly than other racial and ethnic groups; whites will
become a minority (47 percent) compared to all other groups combined by 2050.5
• T
he Asian population is projected to grow 213 percent, from 10.7 million to 33.4 million. Its share of the nation’s
population is expected to double, from 3.8 percent to 8 percent.1(p3)
• T
he black population is projected to rise from 35.8 million to 61.4 million in 2050, an increase of about 26 million,
or 71 percent. That would raise its share of the country’s population from 12.7 percent to 14.6 percent.1(p3)
2
• T
here were an estimated 11.6 million unauthorized immigrants living in the United States as of January 2006. An
estimated 6.6 million unauthorized residents were from Mexico. An estimated 8.4 million of the total 11.6 million
unauthorized immigrants living in the United States were from the North American region, including Canada,
Mexico, the Caribbean and Central America. The next leading regions of origin were Asia (1.4 million) and South
America (970,000).6
Disparities in health care and health outcomes
• R
acial or ethnic minority population groups (other than Asians) rate their overall health worse than non-Hispanic
whites. While poor or low-income people of all races report worse health status than higher-income people,
differences in overall health status by race/ethnicity persist even within income groups. Minority Americans
frequently report higher prevalence of specific health problems, such as diabetes or obesity, which can have serious
consequences for health and longevity.7
• T
he poorer health status of racial and ethnic minority Americans is also reflected in higher death rates for many
common causes. For example, infant mortality rates, as well as overall mortality ratios at different age groups, are
higher among African Americans and American Indian and Alaska Natives than among other groups. African
Americans experience higher death rates from heart disease and cancer.7
• M
any ethnic minority groups view their health care situations differently and, often, more negatively than whites.
A substantial proportion perceived discrimination in receiving health care, and many felt that they would not
receive the best care if they were sick. Problems with communication can affect quality of care for many racial and
ethnic minorities.8
• A
pproximately 47 million people aged 5 or older living in the United States (17.9 percent of the population) speak
a language other than English at home. Of these, 11 million speak English not well or not at all.9
Changing work force
• F or the past several decades, the U.S. labor force has consistently posted high growth rates. These elevated rates
are likely to be replaced by a much lower growth rate over the 2006–2016 decade (to a civilian labor force of
164.2 million in 2016), principally for two reasons: the baby boomer generation is aging and retiring, and the labor
force participation rate of women appears to have peaked.
• T
he labor force will continue to age. The 55-years-and-older work force is expected to grow by 46.7 percent over
this period, more than five times the growth projected for the aggregate labor force.10
• P
ersons with lower levels of educational attainment were generally more likely to be unemployed than those
with higher levels of educational attainment. Among persons 25 to 64 years old, about 86 percent of those with
a bachelor’s or higher degree participated in the labor force in 2005, compared with 76 percent of those who had
completed only high school. Whites, blacks and Hispanics aged 25 to 64 with a bachelor’s or higher degree had
labor force participation rates that were about the same (86 to 87 percent).11
• T
he number of workers belonging to a union rose by 311,000 in 2007 to 15.7 million. Union members accounted
for 12.1 percent of employed wage and salary workers (down from 20.1 percent in 1983). A total of 7.5 percent of
private-sector and 35.9 percent of public-sector workers were unionized.
• U
nion membership grew most strongly in construction, health services and child care, even though education,
training and library occupations had the highest unionization rate among all occupations (37.2 percent), followed
closely by protective service occupations (35.2 percent).12
3
• T
he U.S. incarceration rate reached 751 per 100,000 (2,259,000 inmates) in 2006, up from 686 per 100,000
(1,932,000 inmates) in 2000.1(p128),13 The United States ranks first in the world in rates of incarceration due to
higher levels of violent crime, harsher sentencing laws, including those related to combating illegal drugs, and
a lack of a social safety net. The inmates in federal and state prisons and local jails are disproportionately poor
and minority. The U.S. rate is followed by that of Russia (627 per 100,000). England’s rate is 151 per 100,000;
Germany’s is 88 per 100,000; and Japan’s is 63 per 100,000.14
Changing economic conditions
• A
lthough poverty in the United States declined in the 1990s, it resurged after 2000. Between 2000 and 2006, the
official poverty rate increased from 11.7 percent to 12.3 percent, or 36.5 million.15
• H
owever, under a more comprehensive, alternative measure that incorporates the recommendations of the
National Academy of Sciences, 17.7 percent were poor—16 million more poor persons than under the official
measure. This suggests a greater increase in the number of families not able to meet basic needs than is reflected by
the official poverty statistics.16
• T
he prevalence of severe poverty (income below 50 percent of the poverty threshold, or less than $10,000 per year
for a family of four in 2005) increased by 22.7 percent (from 4.4 percent to 5.4 percent). Except among the most
affluent, U.S. household income has decreased. The gap between the rich and poor has widened in the United
States, as it has elsewhere in the world.17
• P
overty rates in 2006 varied by demographic groups: blacks (24.3 percent), Hispanics (20.6 percent), Asians
(10.3 percent) and non-Hispanic whites (8.2 percent).
• B
oth the poverty rate and the number in poverty decreased for people aged 65 and older (9.4 percent and
3.4 million in 2006).
• T
here were 12.8 million children under the age of 18 in poverty in 2006 representing a poverty rate of 17.4 per
1,000 (up from 13.1 in 2000). Among those aged 18 to 64, 20.2 million were considered in poverty with a poverty
rate of 10.8 per 1,000 (up from 9.6 in 2000).15,18 In 2008, the Department of Health and Human Services poverty
guidelines for a family of four in the lower 48 states was $21,200 per year.19
• Children accounted for one in three poor persons in the United States.20
• A
bout 20 percent of the U.S. population resides in primary medical care health professional shortage areas, i.e.,
areas that may have shortages of primary medical care, dental care or mental health providers, and that may be
urban or rural. They may be population groups or medical or other public facilities.21
• A
lthough, in some cases, illness can lead to poverty, more often poverty contributes to poor health by its
connection with inadequate nutrition, substandard housing, exposure to environmental hazards, unhealthy
lifestyles, and decreased access to and use of health care services.22
Education contributes to jobs, income and health
• I n 2007, 86 percent of all adults 25 and older reported they had completed at least high school, and 29 percent at
least a bachelor’s degree.
• M
ore than half of Asians 25 and older had a bachelor’s degree or higher (52 percent), compared with 32 percent
of non-Hispanic whites, 19 percent of blacks and 13 percent of Hispanics. The proportion of the foreign-born
population with a bachelor’s degree or more was 28 percent, compared with 29 percent of the native population.
However, the proportion of naturalized citizens with a college degree was 34 percent.23
4
• A
dults with higher levels of education were generally more likely to participate in the labor force than adults
with less education. For example, the 2005 unemployment rate for adults (25 years old and over) who had not
completed high school was 7.6 percent, compared with 4.7 percent for those who had completed high school and
2.3 percent for those with a bachelor’s or higher degree.11
• A
dults with advanced degrees earn four times more than those with less than a high school diploma.23 More
education, in addition to being associated with more income, is also a predictor of better health; less education is a
predictor of health disparities.20,24
Predicted impacts for patients
• W
ithout Medicare reform and an adequate safety net for the younger population, the health status of the
U.S. population is likely to decline.
• Persons with poor literacy skills will continue to be less likely to understand medical advice.
Predicted impacts for physicians
• P
hysicians who are in training today, except for pediatrics, will spend more of their practice time in the future
treating older patients.
• P
hysicians will be treating more non-English-speaking patients and will be challenged to provide translation
services. This unfunded mandate will be a significant financial burden on some physician practices unless
translating technology is perfected and made more available.
• P
hysicians will need to be better prepared to address increasing multicultural and multilingual demands and
communications needs of low-literacy patients.
Other predicted impacts
• H
ealth disparities will challenge local and national government programs to provide culturally proficient health
care and will likely alter patterns of health care to meet the needs of diverse populations.
• P
redicted economic and demographic trends may jeopardize the ability of employers and governments to provide
health coverage, a situation that could lead to fundamental changes in the financing and delivery of health care.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
5
References
1. Health, United States, 2007. Hyattsville, MD: National Center for Health Statistics; 2007.
2. Age and sex distribution in 2005. US Census Bureau Web site. www.census.gov/population/www/pop-profile/files/dynamic/AgeSex.pdf.
Accessed September 15, 2008.
3. Older Americans 2004: Key Indicators of Well-being. Federal Interagency Forum on Aging-Related Statistics Web site. http://agingstats.gov/
Agingstatsdotnet/Main_Site/Data/2004_Documents/Population.pdf. Accessed September 15, 2008.
4. Larsen LJ. The Foreign-born Population in the United States: 2003. Current Population Reports P20-551. Washington, DC: US Census Bureau;
2004. www.census.gov/prod/2004pubs/p20-551.pdf. Accessed September 15, 2008.
5. Passel JS, Cohn D. US Population Projections: 2005–2050. Washington, DC: Pew Research Center; 2008.
6. Hoefer M, Rytina N, Campbell C. Estimates of the Unauthorized Immigrant Population Residing in the United States: January 2006.
Population Estimates: August 2007. Washington, DC: US Department of Homeland Security; 2007. www.dhs.gov/xlibrary/assets/statistics/
publications/ill_pe_2006.pdf. Accessed September 15, 2008.
7. Key facts: Race, ethnicity & medical care, 2007 update. Kaiser Family Foundation Web site. www.kff.org/minorityhealth/upload/6069-02.pdf.
Accessed September 15, 2008.
8. Blendon RJ, Buhr T, Cassidy EF, et al. Disparities in health: perspectives of a multi-ethnic, multi-racial America. Health Aff (Millwood).
2007;26(5):1437–1447. doi:10.1377/hlthaff.26.5.1437.
9. Summary Tables on Language Use and English Ability: 2000 (PHC-T-20). US Census Bureau Web site. www.census.gov/population/cen2000/
phc-t20/tab01.pdf. Accessed September 15, 2008.
10. Toosi M. Labor force projections to 2016: more workers in their golden years. Mon Labor Rev. 2007;130(11). www.bls.gov/opub/mlr/2007/11/
art3exc.htm. Accessed September 15, 2008.
11. Snyder TD, Dillow SA, Hoffman CM. Digest of Education Statistics 2006 (NCES 2007–2017). Washington, DC: National Center for Education
Statistics, US Dept of Education; 2007:555.
12. Union members in 2007 [news release]. Washington, DC: US Department of Labor, Bureau of Labor Statistics; January 25, 2008. www.bls.gov/
news.release/union2.nr0.htm. Accessed September 15, 2008.
13. Prison brief—highest to lowest rates. International Centre for Prison Studies Web site. www.kcl.ac.uk/depsta/law/research/icps/worldbrief/
wpb_stats.php?area=all&category=wb_poprate. Accessed April 24, 2008.
14. Liptak A. Inmate count in US dwarfs other nations’. New York Times. April 23, 2006. www.nytimes.com/2008/04/23/us/
23prison.html?_r=1&scp=1&sq=&st=nyt&oref=slogin. Accessed September 15, 2008.
15. Poverty Status of People by Family Relationship, Race, and Hispanic Origin: 1959 to 2006. US Census Bureau Web site. www.census.gov/hhes/www/
poverty/histpov/hstpov2.html. Accessed September 15, 2008.
16. Garner TI, Short KS. Creating a consistent poverty measure over time using NAS procedures: 1996–2005. www.bls.gov/ore/pdf/ec080030.pdf.
US Bureau of Labor Statistics working paper 417. Published April 2008. Accessed September 15, 2008.
17. Woolf SW. Future health consequences of the current decline in US household income. JAMA. 2007;298(16):1931–1933.
18. Poverty: 2006 Highlights. US Census Bureau Web site. www.census.gov/hhes/www/poverty/poverty06/pov06hi.html. Accessed September 15, 2008.
19. 2008 HHS Poverty Guidelines. US Department of Health and Human Services Web site. http://aspe.hhs.gov/poverty/08poverty.shtml. Accessed
September 15, 2008.
20. Woolf SH, Johnson RE, Phillips RL Jr, Phillipsen M. Giving everyone the health of the educated: an examination of whether social change
would save more lives than medical advances. Am J Public Health. 2007;97(4):679–683.
21. Shortage designation. Bureau of Health Professions, US Department of Health and Human Services Web site. http://bhpr.hrsa.gov/shortage.
Accessed August 6, 2008.
22. Health, United States, 2006. Hyattsville, MD: National Center for Health Statistics; 2006.
23. Educational Attainment in the United States: 2007. US Census Bureau Web site. www.census.gov/population/www/socdemo/education/cps2007.html.
Accessed September 15, 2008.
24. Metzler M. Social determinants of health: what, how, why, and now. Prev Chronic Dis. 2007:4(4). www.cdc.gov/pcd/issues/2007/oct/07_0136.htm.
Accessed September 15, 2008.
25. US Census Bureau. US Interim Projections by Age, Sex, Race, and Hispanic Origin. Washington, DC: US Census Bureau; 2004. www.census.gov/
ipc/www/usinterimproj. Accessed September 15, 2008.
6
AMA Health Care Trends 2008
Health status of the population
Percent of population
Figure 2. The graying U.S. population: Age projections 2000-2050
2000
2010
2020
2030
2040
2050
60
50
40
30
20
10
0
19 and under
20–64
65 and over
Data from the U.S. Census Bureau.36
a
As the U.S. population continues to grow older, the incidence of chronic disease will increase. At the
same time, an increasing percentage of morbidity and mortality is associated with personal behaviors
(e.g., diet/inactivity, substance abuse), which mitigates the impact of the significant medical
breakthroughs that have eradicated some diseases and improved treatment options for others. The
current health care infrastructure was designed to treat acute illness, and it needs to evolve to also
more effectively treat chronic illness and address personal behaviors associated with poor health.
Trends
Life expectancy
• A
mericans’ average life expectancy at birth continues its long-term upward trend, and reached 78.1 years in 2006,
up 0.3 years from 2005. Life expectancy for women was 80.7 years, and for men, 75.4 years. The disparity between
the sexes—5.3 years—has been declining since it peaked at about eight years in 1979.1
• W
hite women had the longest life expectancy, at 81 years, followed by black women (76.9 years), white men
(76 years) and black men (70 years). The gap between men and women is markedly greater in blacks (6.9 years)
than in whites (five years).1
7
• B
y 2005, the median age of the U.S. population was 36.2 years—older than the highest median age ever recorded
in a census (35.3 in Census 2000).2
• Life expectancy at age 65 increased during the past century. Average life expectancy at age 65 for women is 20
years, up from 12 years, and among men life expectancy at age 65 is 17 years, up from 12.3(p50)
• C
urrently, 35 million Americans are over age 65, and that number is growing rapidly. By age 65, statistics indicate
that individuals have at least one chronic disease (e.g., hypertension or arthritis). In any given year, health care
expenditures tend to be concentrated among a relatively small segment of the population.
• S
eniors, a higher portion of whom have multiple chronic conditions, use the most drugs, have the highest number
of physician visits and require care by a larger variety of specialists than others in their cohort group.4
• T
here is a growing disparity in mortality depending on race, income and geography, and a stagnation or increase in
mortality among the lowest-income segment of the population.
• L
ife expectancy in certain areas of the country, however, has not followed the national upward trends. From 1983
to 1999, 19 percent of women and 4 percent of men in the United States saw either no change or a decline in life
expectancy. Life expectancy for women declined by an average of 1.3 years from 1983 to 1999 in 180 counties,
while men’s life expectancy declined by 1.3 years in 11 counties. The majority of these counties were in the deep
South, along the Mississippi River, and in Appalachia, extending into the southern portion of the Midwest and
into Texas.5
• F emale mortality increased primarily due to chronic diseases related to smoking, obesity, high blood pressure and
type 2 diabetes. HIV/AIDS, homicide and type 2 diabetes were significant factors for men.5
Mortality
• T
he age-adjusted death rate for the United States decreased from 798.8 deaths per 100,000 population in 2005 to
776.4 deaths per 100,000 population in 2006.1
• G
enomics plays a part in nine of the 10 leading causes of death in the United States6 (see the “Science and
technology in medicine” chapter in this series.
• A
ge-adjusted death rates decreased significantly between 2005 and 2006 for 11 of the 15 leading causes of death:
diseases of heart, malignant neoplasms, cerebrovascular diseases, chronic lower respiratory diseases, accidents
(unintentional injuries), diabetes mellitus, influenza and pneumonia, septicemia, intentional self-harm (suicide),
chronic liver disease and cirrhosis, and essential hypertension and hypertensive renal disease. Age-adjusted
death rates for Alzheimer’s disease, nephritis, nephrotic syndrome and nephrosis, Parkinson’s disease, and assault
(homicide) did not change significantly between 2005 and 2006.1
• A
fter decades of decline, there has been little recent progress in lowering the U.S. infant mortality rate. In 2006,
infant mortality decreased slightly to 6.7 deaths per 1,000 live births. It was 6.8 in 2004 and 6.9 in 2000. However,
there has been a 77 percent drop in the infant mortality rate from 1950 to 2004.1,3(p52)
• R
ates of infant mortality have declined for most racial and ethnic groups, but large disparities remain. For blacks,
it was 13.3 deaths per 1,000 live births, more than double that of whites. During 2001–2003, the infant mortality
rate was highest for infants of non-Hispanic black mothers. Infant mortality rates were also high among infants of
American Indian or Alaska Native mothers and Puerto Rican mothers. Infants of mothers of Cuban origin had the
lowest infant mortality rates.1,3(p52)
• T
he United States ranks below most industrialized nations in the 30-member Organization for Economic
Cooperation and Development, or OECD, in terms of several key health care indicators: 24th in life expectancy,
27th in infant mortality and last in obesity.7
8
• A
2008 report compared the United States to 18 other industrialized countries and found that “by 2002–04 the
United States had among the highest death rates from causes amenable to health care of the countries studied,
for both males and females.” There would be 101,000 fewer deaths per year if the United States had the mortality
rates of France, Japan and Australia. The report concluded that “the slow decline in US amenable mortality has
coincided with an increase in the uninsured population.”8
Disparities
• R
acial and ethnic disparities in health care persist despite considerable progress in expanding health care services
and improving the quality of patient care. Since 2000, substantial progress was made in eliminating racial and
ethnic disparities for new cases of congenital rubella syndrome, measles, rubella and mumps. However, disparities
continue based on family income and in multiple racial and ethnic populations.9
• A
ccording to the 2003 Institute of Medicine report “Unequal Treatment,” minorities are less likely than whites to
receive needed services, including clinically necessary procedures, even after correcting for access-related factors,
such as insurance status.
• A
frican Americans and Hispanics tend to receive a lower quality of health care across a range of disease areas
(including cancer, cardiovascular disease, HIV/AIDS, diabetes, mental health, and other chronic and infectious
diseases) and clinical services.
• D
isparities are found even when clinical factors, such as stage of disease presentation, co-morbidities, age and
severity of disease are taken into account.
• D
isparities are found across a range of clinical settings, including public and private hospitals and teaching and
non-teaching hospitals.
• D
isparities in care are associated with higher mortality among minorities who do not receive the same services as
whites (e.g., surgical treatment for small-cell lung cancer).10
Chronic disease
• A
s the U.S. population continues to grow older, the incidence of chronic disease will increase. At the same time,
an increasing percentage of morbidity and mortality is associated with personal behaviors (e.g., diet/inactivity,
substance abuse), which mitigates the impact of the significant medical breakthroughs that have eradicated some
diseases and improved treatment options for others. The current health care infrastructure, which is designed to
treat acute illness, will less effectively treat chronic illness and address personal behaviors associated with poor
health.3(p109)
• F ive chronic diseases—heart disease, cancers, stroke, chronic obstructive pulmonary diseases and diabetes—
account for two-thirds of all deaths in the United States. Health care for people with chronic diseases accounts for
75 percent of the national total health care costs.11 Declines in coronary disease prevalence overall (during 1981–
2004) have plateaued. This change may be attributable to increasing obesity and diabetes mellitus.12
• C
hronic diseases account for 1.7 million deaths each year, which is 70 percent of all annual deaths in the United
States. These diseases also cause major limitations in daily living for almost one in 10 Americans, or about 25
million people. Although chronic diseases are among the most common and costly health problems, they are also
among the most preventable.13
• P
ersons with high prevalence of chronic medical conditions (diabetes, heart disease, hypertension, cancer, mental
disorders and several other conditions) were significantly more likely than average to incur high financial burdens
for health care.14
9
• A
mong 45- to 64-year-olds, the leading causes of death were cancer, heart disease, stroke, diabetes and chronic
lower respiratory diseases. These conditions accounted for 70 percent of all deaths in this age category. In
2001, diabetes was the underlying cause for more than 14,000 deaths. Moreover, diabetes was mentioned as a
contributing factor on the death certificates of almost twice as many additional deaths.15
• Of those aged 65 and over, heart disease accounted for one-third of all deaths and cancer accounted for one-fifth.15
Personal behaviors and lifestyle
• A
n increasing percentage of morbidity and mortality relates to personal behaviors and, therefore, is mostly
preventable. The leading causes of death are tobacco (435,000), poor diet and physical inactivity (400,000),
alcohol consumption (85,000), infectious diseases (90,000), microbial agents (75,000), toxin agents (55,000),
motor vehicle crashes (43,000), firearms (29,000), illness associated with sexual behaviors (20,000) and illicit use
of drugs (17,000).16
• I n 2005, 23.0 percent of high school students smoked cigarettes on one or more of the past 30 days compared with
36.4 percent in 1997.17
• I n 2006, 21 percent of U.S. adults were current cigarette smokers. This prevalence changed little since 2004,
suggesting a stall in the previous seven-year decline in cigarette smoking among adults in the United States.
• I n 2005, approximately 33 percent of U.S. adults consumed fruit two or more times per day, and 27 percent ate
vegetables three or more times per day: 29 percent among men and 36 percent among women. However, the most
recently recommended levels are three to five servings of fruit and four to eight servings of vegetables per day.18
• I n 2005, about 33 percent of high school girls and 24 percent of boys did not engage in the recommended amount
of moderate or vigorous physical activity.19
• I n 2005, less than half of the adult U.S. population engaged in recommended levels of physical activity. However,
from 2001 to 2005, the prevalence of engaging in regular physical activity increased among both U.S. men and
women, with the largest increases reported among non-Hispanic black women and men.20
• A
Centers for Disease Control and Prevention (CDC) study estimates that approximately one in four (26 percent)
young women between the ages of 14 and 19 in the United States, or 3.2 million teenage girls, is infected with at
least one of the most common sexually transmitted diseases—human papillomavirus (HPV), chlamydia, herpes
simplex virus, and trichomoniasis. “Given that the health effects of STDs for women—from infertility to cervical
cancer—are particularly severe, STD screening, vaccination and other prevention strategies for sexually active
women have been included among the highest public health priorities.”21
• A
substantial proportion of high school students engage in behaviors that place them at risk for chronic diseases of
obesity, diabetes and asthma.19
• T
he percentage of preschool-age children (2–5 years of age) who are overweight almost doubled from the span
1988–1994 (7 percent) to the span 2003–2004 (14 percent). In 2003–2004, 17–19 percent of children and
adolescents were overweight.3(p40)
• Overweight children and adolescents are more likely to become obese as adults.22
• I n a 2006 federal report, overall, nearly six in 10 adults (58.7 percent) were overweight. About four in 10 adults
(39.2 percent) were in the healthy weight range, and 2 percent of adults were underweight.23 More than one-third
of adults, or more than 72 million people, were obese in 2005–2006. Obesity rates have increased dramatically in
the past 25 years. No significant difference in obesity existed between men and women. Adults 40–59 years old
were more likely to be obese compared with younger and older individuals. Non-Hispanic black and Mexican
American women were more likely to be obese than white women.24
10
• A
mong obese adults, just over 65 percent were ever told by a health care provider that they were “overweight.”
Obese women were more likely than men to be told they were overweight.24
• A
lcohol is the most widely used drug among youth and causes serious and potentially life-threatening problems
for adolescents and young adults. During 2002–2004, there were on average each year more than 230,000 alcoholrelated emergency department visits among underage adolescents 14–20 years old.
• R
ates of emergency room visits for males 18–20 years old were more than twice those of male adolescents
14–17 years old, and rates for older female adolescents were more than three times those of younger female
adolescents.3(p36) High per-occasion consumption, commonly called binge drinking (five or more standard drinks
for men, four or more women), is common among U.S. adults, with 14.3 percent having one binge episode in the
past 30 days. Young people aged 18–25 had the highest rates. Per capita binge-drinking episodes have increased,
particularly since 1995. Binge drinking is strongly associated with alcohol-impaired driving.25
• S
ubstance abuse disorders are among the most common medical disorders affecting Americans. An estimated
22.5 million Americans aged 12 and older have such a disorder in any given year (9.4 percent of the U.S.
population).26
• I n a British study, the combination of four simply defined health behaviors predicts a fourfold difference in the
risk of dying for middle-aged and older people. The four health behaviors were (1) not smoking, (2) not being
physically inactive, (3) having a moderate alcohol intake (one to 14 units a week) and (4) having a high fruit and
vegetable intake (as indicated by plasma vitamin C level .50 mmol/l). The risk of death decreases as the number of
positive health behaviors increases. Finally, they can be used to calculate that a person with a health score of 0 has
the same risk of dying as a person with a health score of 4 who is 14 years older.27
• U
nintentional and violence-related injuries are leading causes of death and disability among Americans aged 1–24.
Among teens and young adults (15–24 years old), the leading cause of death is unintentional injuries (45 percent),
of which nearly three-quarters are the result of motor-vehicle traffic-related injuries. Homicide and suicide are the
next two leading causes of death for this age group.15
• A
mong 18 countries with detailed national injury death data available for analysis, the United States had the fifthhighest injury death rate for teens and young adults 15–24 years old. Only Colombia, South Africa, Brazil and Puerto
Rico had higher rates. For older adults 65 years and over, the U.S. rates were comparable with those of South Africa,
Brazil and Canada, but were lower than rates in Denmark, Mexico, Nicaragua, Austria, Colombia and Chile.28
• S
ince 2000, there have been declines in nonfatal motor vehicle injuries, residential fire deaths, hip fractures, dog
bites, physical assault (for example, sexual assault and physical fighting among students), nonfatal firearm-related
injuries, weapon-carrying on school property, and physical assault by current or former intimate partners and rape.
On the other hand, nonfatal head injury hospitalizations, firearm-related deaths, nonfatal poisonings, deaths from
poisoning or from suffocation, and injury-related emergency department visits have increased.29
Infectious diseases
• T
he Healthy People 2010 Midcourse Review indicated that vaccination rates of all age groups demonstrated progress.
Objectives have been reached for diphtheria, polio, hepatitis, bacterial meningitis, pneumococcal infections,
meningococcal disease, group B streptococcal disease, hospital-acquired infections, immunization rates of children
and vaccine safety.
•Among children 19 to 35 months old, achieving and maintaining effective vaccination coverage levels for
universally recommended vaccines moved toward their 2010 targets. However, there have been reversals in
cases of Haemophilus influenzae (Hib), cases of pertussis, hepatitis B in men who have sex with men, invasive
penicillin-resistant pneumococcal infections in persons aged 65 years and older, and Lyme disease.9
11
• N
ew state-of-the-art vaccine production and inventory management techniques have greatly increased the
efficiency and profitability of vaccine manufacture in the United States, but they have also exacerbated the nation’s
vulnerability to vaccine supply shortages. For example, “just in time” business practices (i.e., deliberately reducing
inventory levels and delivering products only on an as-needed basis) discourage stockpiling. They may create the
incentive to under produce (which could potentially lead to shortages), and they lead manufacturers to move
production facilities to locations outside the country (potentially raising concerns about supply and complicating
Food and Drug Administration oversight).30
• A
ntibiotic resistance has been called one of the world’s most pressing public health problems. The number of
bacteria resistant to antibiotics has increased in the past decade. Nearly all significant bacterial infections in the
world are becoming resistant to the most commonly prescribed antibiotic treatments.
• A
ccording to the CDC, tens of millions of antibiotics prescribed in doctors’ offices each year are for viral
infections, which cannot effectively be treated with antibiotics. Doctors cite diagnostic uncertainty, time pressure
on physicians and patient demand as the primary reasons why antibiotics are over-prescribed. Parent pressure
makes a difference. For pediatric care, doctors prescribe antibiotics 65 percent of the time if they perceive parents
expect them, and 12 percent of the time if they feel parents do not expect them.31
• T
he role of direct-to-consumer advertising in promoting such overuse is unclear, though there is little question that
advertising lowers the clinical threshold for prescribing.32
• S
trong STD prevention, testing and treatment can play a vital role in comprehensive programs to prevent sexual
transmission of HIV. Furthermore, STD trends can offer important insights into where the HIV epidemic may
grow, making STD surveillance data helpful in forecasting where HIV rates are likely to increase.33
Predicted impacts for patients
• P
atients are subjected to intense drug advertising and request medications when a health care provider may have
determined they are not needed. Patients may request antibiotics when treating nonbacterial infections.
• W
ith the aging of America, the prevalence of acute illness and chronic disease will increase, placing more pressure
on Medicare and Medicaid.
• E
nd-of-life decision-making also will become increasingly important, and there will be an increased need to
provide palliative care. Patients and their families will come to expect, if not demand, these services and care.
• D
ue to the growing prevalence of chronic conditions, more Americans will require medical care and/or supportive
services in their homes.
• E
lderly patients with multiple chronic conditions will become increasingly frustrated with the U.S. health care
system unless the system changes to provide more coordinated care.
Predicted impacts for physicians
• Governments, employers and accrediting bodies will require increased accountability for patient outcomes.
• P
hysicians will see increasing numbers of patients with several chronic diseases. These patients will require
improved coordination of care and, therefore, physicians may have to spend more time coordinating patient care.
Payment for coordinating care will be an issue.
• A
s electronic medical records become more universally utilized, coordination of care will become less
labor-intensive.
• A shortage of critical care specialists is expected due to the increased needs of the aging population.
12
• P
hysicians will experience increased pressure from baby boomers to increase quality and decrease the cost of
health care.
• P
hysicians will face increased pressure to integrate effective clinical preventive services (screening, counseling,
preventive medication) and community services (group education and community resources, policy change,
environmental change), e.g., tobacco and obesity, to address fully the opportunities for prevention.34,35
• S
hortages and unpredictable supplies make it more difficult for physicians to administer vaccines to patients
according to recommended schedules and doses.
• P
hysicians will be treating patients with pre-symptomatic illness, diffusing the age-specific orientation to diseases
and moving disease management to a lifetime coordination of care.
Other predicted impacts
• P
ublic health programs at all levels will be under increased pressure to expand their activities despite
decreased funding.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
13
References
1.Heron MP, Hoyert DL, Xu J, Scott C, Tejada-Vera B. Deaths: Preliminary Data for 2006. Hyattsville, MD: National Center for Health
Statistics; 2006. National Vital Statistics Reports; vol 56 no 16. www.cdc.gov/nchs/data/nvsr/nvsr56/nvsr56_16.pdf. Accessed September 15, 2008.
2. Population Profile of the United States. Age and Sex Distribution in 2005. US Census Bureau Web site. www.census.gov/population/pop-profile/
dynamic/AgeSex.pdf. Accessed September 15, 2008.
3. Health, United States, 2007. Hyattsville, MD: National Center for Health Statistics; 2007.
4.Anderson G. Chronic care and the private sector: partnerships for solutions. Paper presented at: 2001 Health Sector Assembly; October 30,
2001; Baltimore, MD.
5. Ezzati M, Friedman AB, Kulkarni SC, Murray CJL. The reversal of fortunes: trends in county mortality and cross-county mortality disparities
in the United States. PLoS Med. 2008;5(4):e66. doi:10.1371/journal.pmed.0050066.
6. Frequently asked questions. National Office of Public Health Genomics Web site. www.cdc.gov/genomics/faq.htm. Accessed September 15,
2008.
7.SourceOECD. Health at a Glance 2007: OECD. In: SourceOECD Social Issues/Migration/Health. 2007;23:1–198. http://lysander.sourceoecd.org/
vl=12185521/cl=35/nw=1/rpsv/health2007/index.htm. Accessed September 15, 2008.
8. Nolte E, McKee CM. Measuring the health of nations: updating an earlier analysis. Health Aff (Millwood). 2008 Jan–Feb;27(1):58–71.
9.Centers for Disease Control and Prevention, US Dept of Health and Human Services. Immunization and infectious diseases. In: Healthy People
2010 Midcourse Review. 14-3–14-18. www.healthypeople.gov/data/midcourse/pdf/fa14.pdf. Accessed September 15, 2008.
10.Smedley BD, Stith AY, Nelson AR, eds. Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care. Washington, DC: National
Academies Press; 2003:7.
11. Centers for Disease Control and Prevention, US Department of Health and Human Services. The Burden of Chronic Diseases and Their Risk
Factors: National and State Perspectives. Bethesda, MD: National Institutes of Health; 2004:2–3.
12.Nemetz PN, Roger VL, Ransom JE, Bailey KR, Edwards WD, Leibson CL. Recent trends in the prevalence of coronary disease: a populationbased autopsy study of nonnatural deaths. Arch Intern Med. 2008;168(3):264–270.
13. Chronic disease prevention. Centers for Disease Control and Prevention Web site. www.cdc.gov/nccdphp. Accessed September 15, 2008.
14. Banthin JS, Bernard DM. Changes in financial burdens for health care: national estimates for the population younger than 65 years, 1996 to
2003. JAMA. 2006;296(22): 2712–2719.
15. Health, United States, 2002. Hyattsville, MD: National Center for Health Statistics; 2002.
16. Mokdad AH, Marks JS, Stroup DF, et al. Actual causes of death in the United States, 2000. JAMA. 2004;291:1238–1245.
17.Centers for Disease Control. Cigarette smoking among adults—United States, 2006. MMWR Morb Mortal Wkly Rep. 2007 Nov
9;56(44):1157–1161.
18. Centers for Disease Control. Fruit and vegetable consumption among adults—United States, 2005. MMWR Morb Mortal Wkly Rep. 2007 Mar
16;56(10):213–217.
19.Centers for Disease Control. Youth risk behavior surveillance—selected Steps communities, 2005. MMWR Morb Mortal Wkly Rep. 2007 Feb
23;56(SS02):1–16.
20.Centers for Disease Control. Chronic Disease Prevention. Prevalence of regular physical activity among adults—United States, 2001 and
2005. MMWR Morb Mortal Wkly Rep. 2007 Nov 23;56(46):1209–1212.
21. Nationally representative CDC study finds 1 in 4 teenage girls has a sexually transmitted disease [news release]. Centers for Disease Control
and Prevention Web site. www.cdc.gov/STDConference/2008/media/release-11march2008.pdf. Accessed September 15, 2008.
22.Childhood overweight. Centers for Disease Control and Prevention Web site. www.cdc.gov/nccdphp/dnpa/obesity/childhood/index.htm.
Accessed September 15, 2008.
23. Adams PF, Schoenborn CA. Health behaviors of adults: United States, 2002–04. National Center for Health Statistics. Vital Health Stat.
2006;10(230):57.
24. Ogden CL, Carroll MD, McDowell MA, Flegal KM. Obesity Among Adults in the United States—No Change Since 2003–2004. Hyattsville, MD:
National Center for Health Statistics; 2007. NCHS data brief no 1. www.cdc.gov/nchs/data/databriefs/db01.pdf. Accessed September 15, 2008.
25.Naimi T. Alcohol misuse in the US: framing the problem, adopting solutions, and further engaging the AMA. Educational session presented
at: American Medical Association Interim Meeting; November 13, 2006; Las Vegas, NV.
26.Mark TL, Levit KR, Vandivort-Warren R, Coffey RM, Buck JA; and SAMHSA Spending Estimates Team. Trends in spending for substance
abuse treatment, 1986–2003. Health Aff (Millwood). 2007;26(4):1118–1128.
27.Khaw KT, Wareham N, Bingham S, et al. Combined impact of health behaviours and mortality in men and women: the EPIC-Norfolk
Prospective Population Study. PLoS Med. 2008;5(1):12. doi:10.1371/journal.pmed.0050012.
28. Bergen G, Chen LH, Warner M, Fingerhut LA. Injury in the United States: 2007 Chartbook. Hyattsville, MD: National Center for Health
Statistics; 2008:2. www.cdc.gov/nchs/data/misc/injury2007.pdf. Accessed September 15, 2008.
29.Centers for Disease Control and Prevention, US Dept of Health and Human Services. Injury and violence prevention. In: Healthy People 2010
Midcourse Review. www.healthypeople.gov/data/midcourse/pdf/fa15.pdf. Accessed September 15, 2008.
30.Institute of Medicine. Initial Guidance for an Update of the National Vaccine Plan: A Letter Report to the National Vaccine Program Office.
Washington, DC: The National Academies Press; 2008.
31.Get smart: know when antibiotics work: frequently asked questions. Centers for Disease Control and Prevention Web site. www.cdc.gov/
drugresistance/community/anitbiotic-resistance-faqs.htm. Accessed September 15, 2008.
14
32. Almasi EA, Stafford RS, Kravitz RL, Mansfield PR. What are the public health effects of direct-to-consumer drug advertising? PLoS Med.
2006;3(3):e145. doi:10.1371/journal.pmed.0030145.
33.CDC fact sheet: the role of STD prevention and treatment in HIV prevention. Centers for Disease Control and Prevention Web site.
www.cdc.gov/std/hiv/stds-and-hiv-fact-sheet-press.pdf. Accessed September 15, 2008.
34. Guide to Clinical Preventive Services, 2007: Recommendations of the US Preventive Services Task Force. Rockville, MD: Agency for Healthcare
Research and Quality; 2007. AHRQ Publication 07-05100. www.ahrq.gov/clinic/pocketgd07. Accessed September 15, 2008.
35.Ockene JK, Edgerton EA, Teutsch SM, et al. Integrating evidence-based clinical and community strategies to improve health. Am J Prev Med.
2007;32:244–252.
36.US Census Bureau. US Interim Projections by Age, Sex, Race, and Hispanic Origin. Washington, DC: US Census Bureau; 2004. www.census.gov/
ipc/www/usinterimproj. Accessed September 15, 2008.
15
AMA Health Care Trends 2008
Health care resources
Figure 3. Supply of total active physicians: From 2000 projected to 2020
100,0000
2020
800,000
2015
2010
600,000
2005
400,000
2000
200,000
0
a
b
Primary
care
Other
medical
specialties
Surgical
specialties
Other
specialties
Total
Includes total active MDs and DOs. Physicians aged 75 and older are excluded.
Adapted from the U.S. Department of Health and Human Services.30
The United States continues to debate the adequacy of the current and future supply of physicians.
While the general consensus is that overall physician supply per capita will remain relatively stable
over the next 15 years, there is less agreement on future demand for physician services. Accurate
projections of physician supply and requirements not only help preserve a physician supply that is
balanced with demand but also help the nation achieve its goal of ensuring access to high-quality,
cost-effective health care. The time needed to train physicians, as well as the time needed to change
the nation’s training infrastructure, suggests that we must know at least a decade in advance of major
shifts in physician supply or requirements.30
Optimal patient care is delivered by the health care team, which includes physicians, nurses and other health care
professionals. Concern about the lack of a systematic health care work force planning mechanism is intensifying.
The complexity of the physician work force equation and the risk of an imbalance in the physician total supply and
specialty distribution is growing and cannot be rectified quickly due to the length of training for graduate medical
education.1 Growing shortages of nurses and other non-physician health professional providers further exacerbate the
problem, jeopardizing the ability to provide safe, high-quality care. Shortages of some physician specialties and some
allied health professionals are severe in some areas.
16
Trends
Physicians
• I n 2006, there were a total of 921,904 physicians in the United States. The number rose from 334,028 (1970),
467,679 (1980) and 615,421 (1990).2
• A
lthough physician primary care specialties showed a fairly steady decline as a percentage of total physician
population in the 36-year period—40.2 percent (1970), 36.5 percent (1980), 34.7 percent (1990), 32.6 percent
(2006)—they demonstrated a percentage growth of 124 percent from 123,354 physicians in 1970 to 300,907 in
2006.2
• A
ccording to Vermont Senator Bernie Sanders, overall growth in the number of primary care physicians “has been
totally due to the number of international medical students training in America … [and] [w]e are increasingly
dependent on [IMGs] to meet our needs.”3
• T
wenty-eight percent of physicians were female in 2006, while in 1975 the proportion was one in 11. International
medical graduates (IMGs) comprised 17.1 percent of total physicians in patient care activities in 1970, 19.4 percent in
1980 and 25.7 percent in 2006.2
• W
hites account for the largest proportion of all physicians with known ethnicity (71.4 percent), followed by
Asians (15.8 percent), Hispanics (6.4 percent) and blacks (4.5 percent).2
• I n 2005, 252,000 physicians were 55 or older, part of a dramatic trend in which retirements/departures are rising
faster than new physicians are entering the practice. Physicians departing practice will be about 14,000 per year in
2010 and 22,000 in 2025, while there will be about 25,000 new physicians in 2010 and a little more than 25,000
per year in 2025.4
• I n 2006, 38.5 percent of U.S. physicians were under 45 years old. The 45–54 age interval accounted for the highest
percentage of total physicians (24.3 percent).2
• S
urveys indicate that availability of part-time work and/or more flexible scheduling and less paperwork would likely
entice older physicians to remain in practice beyond planned retirement.4
Employment
• A
ccording to the American Medical Association (AMA) Health Care Careers Directory (2008–2009), employment
of all physicians is projected to grow faster than the average for all occupations through the year 2014 due to
continued expansion of health care industries. The growing and aging population will drive overall growth in
demand for physician services, as consumers continue to demand high levels of care using the latest technologies,
diagnostic tests and therapies. In addition to employment growth, job openings will result from the need to replace
physicians who retire over the 2004–2014 period.5
• T
he projected future shortage of physicians is driven by likely changes in both the supply and the demand for
physicians. On the demand side, key factors include: (1) the growing U.S. population (more than 25 million each
decade); between 1980 and 2005, the U.S. population grew by more than 70 million people (31 percent) while
medical school enrollment remained essentially flat; (2) the rapid increase in the number of people over the age of
65 (who use twice as many physician services per capita each year than those under 65); (3) advances in medicine
that prolong life and improve the quality of life for millions of Americans; and (4) the rising expectations of
Americans along with increasing wealth that will motivate and enable them to use more services.6
17
• O
n the supply side, key factors include: (1) the aging of the physician work force (36 percent of active physicians
are over 55 and most will retire by 2020) and (2) a new generation of physicians, who value lifestyle and do
not appear willing to work the long hours that prior generations of physicians have worked. At current levels of
training, the physician-to-population ratio will peak before 2020 and then fall, just as the baby boomers begin to
reach 75 years old.6
• A
s of 2007, there were 7,128 physicians certified in geriatric medicine and 1,596 certified in geriatric psychiatry.
According to one estimate, by 2030 these numbers will have increased by less than 10 percent; others predict a
net loss of these physicians because of a decreased interest in geriatric fellowships and the decreasing number of
physicians who choose to recertify in geriatrics. According to the Alliance for Aging Research, by 2030 the United
States will need what may not be attainable—about 36,000 geriatricians.7
• T
he number of graduates from U.S. medical schools has been virtually flat since 1980. As a result, a very large
number of active physicians now are nearing retirement age. In 2005, a little more than 12,000 active physicians
reached age 63; by 2017, this number will grow to more than 24,000.6
• T
here are growing reports that many of today’s young physicians are choosing to work fewer hours than their older
counterparts regardless of their gender. As a result, the future physician work force may effectively be 10 percent
lower than their aggregate numbers suggest.6
Physician recruitment
• A
ccording to a 2007 Merritt, Hawkins & Associates physician recruiting survey, several trends have been apparent
from 2003 to 2006. Foremost is the re-emergence of primary care, demand for which peaked in the 1990s during
the heyday of managed care, but has since declined, while demand for surgical and diagnostic specialists increased.
In the mid-1990s, approximately 75 percent of Merritt, Hawkins & Associates’ physician search assignments were
for primary care physicians. By the early to middle part of this decade, this trend was reversed and about 75 percent
of search assignments were for surgical or diagnostic specialists.8
• T
he 2007 Merritt Hawkins survey also indicates that hospitals, medical groups and other organizations have again
shifted their recruiting emphasis toward primary care (with family practice and general internal medicine the most
requested physician search assignments) while pediatricians, which have been flat or declining for almost 10 years,
also rose. Search assignments for obstetricians/gynecologists increased in the 2006–2007 review period, after several
years of flat or declining growth. Unable to find an adequate number of gastroenterologists, cardiologists and other
internal medicine sub-specialists, some facilities are recruiting general internists to pick up the slack.8
• W
hile still strong relative to the early parts of this decade and the 1990s, there is a drop in demand for radiologists,
cardiologists, general surgeons and orthopedic surgeons relative to the previous three years. There is a significant
decline in demand for anesthesiologists—likely a result of the increased number of specialists being trained in these
areas rather than a decline in procedures requiring anesthesia.8
• D
emand is up significantly for hospitalists, who are seen by some as effective at enhancing quality of care,
reducing medical errors and managing costs. In addition, by relieving office-based physicians of inpatient work,
hospitalists can increase medical staff retention and satisfaction rates. However, because so many internal medicine
practitioners are choosing to practice as hospitalists, the supply of general internists for other practice settings has
become constrained. At the same time, the growing number of older patients is creating more demand for general
internists, making this one of the most difficult search assignments to fill today.8,9
• H
ospital employment of physicians is increasing as many physicians seek the security and relative simplicity of
an employed position. Financial incentives offered to recruit physicians generally are up, while the use of signing
bonuses has increased. Physician recruitment was a national challenge in virtually all 50 states in 2006–2007.8
18
• A
n increasing number of hospitals are employing physicians. Direct employment of physicians by hospitals was
one hallmark of managed care in the 1990s, but the practice was largely dropped as hospitals found the physician
employment model problematic. The 2007 Merrit Hawkins review shows that 43 percent of 2006–2007 physician
search assignments were for hospital settings, up significantly from 23 percent in 2005–2006 and from 19 percent in
2004–2005.8
• M
any physicians, specialists in particular, are seeking hospital employment for relief of the stress of high
malpractice rates, the struggle for adequate and timely reimbursement, administrative duties, and the general risks
and hassles of private practice. Hospital employment is viewed favorably by many physicians today and hospitals
offering employed positions may enjoy an advantage over those that do not. In addition, many hospitals believe it
is more practical to employ physicians than to assist them in establishing independent practices.8
Rural communities and inner cities
• R
ural and inner-city areas continue to face problems in securing access to physician care. Among physicians, those
in family practice were much more likely than primary care physicians in other specialties to work in rural areas
and health professions shortage areas (HPSAs). Compared with primary care physicians overall, nurse practitioners
and certified nurse-midwives also tended to have a greater proportion of their members in rural areas and HPSAs.10
Supply of non-physician providers
• A
lthough the per capita supply of primary care physicians rose an average of about 1 percent per year over the
past decade, the per capita supply of non-physician primary care professionals (physician assistants and nurse
practitioners) rose faster—an average of about 4 percent and 9 percent per year, respectively. The per capita supply
of primary care dentists remained relatively unchanged.11
• N
ursing is the largest health care occupation, with 2.4 million registered nurses (RNs) in the nation’s work force.
In 2004, about 60 percent of nurses worked in hospitals in inpatient and outpatient departments.5 The employment
projection for nurses from 2002 to 2014 is expected to increase by 29.4 percent.12
• C
omparing the baseline supply and demand projections suggests that the United States had a shortage of
approximately 168,000 full-time equivalent (FTE) RNs in 2003, implying that the current supply would have to
increase by 9 percent to meet estimated demand. By 2020, the national shortage is projected to increase to more
than 1 million FTE RNs, if current trends continue, suggesting that only 64 percent of projected demand will be
met. The growth and aging of the population, along with the nation’s continued demand for the highest quality of
care, will create a surging demand for the services of RNs over the coming two decades. At the same time, because
many RNs are approaching retirement age and the nursing profession faces difficulties attracting new entrants and
retaining the existing work force, the RN supply remains flat.13
• I n 2004, the average age of RNs climbed to 46.8 years, the highest average age since the first comparable report was
published in 1980. Just over 41 percent of RNs were 50 years old or older (33 percent in 2000 and 25 percent in
1980). Only 8 percent of RNs were under the age of 30, compared with 25 percent in 1980.14
• T
he future use of non-physician providers providing direct patient care is one variable affecting demand for
physicians. In 2007, there were 120,000 nurse practitioners in practice.15
• I n 2008, there were 79,706 people eligible to practice as physician assistants, or PAs, and 68,124 people in clinical
practice.16
• A
ccording to the AMA’s Health Care Careers Directory, there will be a shortage of as many as 157,000 pharmacists
in 2020. By that year, while there will be a need for fewer dispensing pharmacists, as well as a huge demand for
pharmacists to counsel patients and, depending on the scope-of-practice changes, participate in therapeutic
decision-making and monitoring of patients.5,17
19
• A
2002 study suggested the need for additional pharmacists by the second and third decades of the 21st century.
The study did not anticipate the increased work participation of older pharmacists and educational expansion
that have occurred. The new supply projections considerably lessen but do not eliminate the 157,000-pharmacist
deficit projected for 2020, especially when reductions related to FTE participation are taken into account. The
unevenness of age distribution poses a potential problem in the near future as the pharmacists currently in the
48- to 55-year age group, a relatively large cohort, begin to retire and turn over responsibilities to the current
39- to 47-year age group, which is much smaller in number. Sufficiency, not only in terms of numbers but also in
terms of leadership and management potential and experience, may be questionable.18
Non-physician providers’ scope of practice
• T
he scope of practice of non-physician providers continues to expand.19,20 Some states have granted a wide range
of prerogatives to non-physician providers. In the aggregate, the practice prerogatives of NPs overlap a subset of
the services that physicians generally have provided, encompassing levels of care that can be categorized as routine
general care.21
• U
se of collaborative practice agreements between physicians and non-physician providers is growing beyond
traditional arrangements.
• P
harmacists are pushing to be designated as “disease-state managers” for certain chronic illnesses and are playing a
larger role in formulary oversight.
• T
o the extent that Medicare recipients convert to managed care plans, more health care services will likely be
provided by non-physicians.
• M
any states have enacted legislation mandating that private health care plans include reimbursement for particular
groups of non-physician providers.
Hospitals
• T
here were 4,927 community hospitals in 2006, down from 5,830 in 1980. Nongovernmental not-for-profit
community hospitals were down to 2,919 from 3,322 in the same period. State and local governmental community
hospitals declined to 1,119 from 1,778 while investor-owned (for-profit) hospitals rose to 890 from 730 from the
year 1980 to 2006.22 The number of physician-owned limited-service hospitals has risen dramatically from 68 in
2000 to 177 in 2007, with an additional 85 facilities in development.23
• I t is expected that work force shortages will present significant challenges to most hospitals. Hospitals will face a
shortage of nurses, therapists, pharmacists and other care providers. The supply of geriatricians is declining with
nearly one in three training slots unfilled. There are also projections for shortages in cardiology, orthopedics and
general surgery.24
• By 2030, hospital care delivered to baby boomers is expected to more than double. More boomers will be admitted
to the hospital, visit the emergency department (ED) and use outpatient services. By 2030, more than half of all
adult hospital admissions will be for people older than 65. In 2004, 38 percent of admissions were over age 65 and
are predicted to be 56 percent in 2030.24
• U
ninsured patients—and those who have no primary care doctor—flock to emergency rooms for routine coverage,
clogging the systems, and hospitals lose revenue dispensing charity care through emergency rooms and many
collapse into bankruptcy or give up emergency care.25
•Between 1997 and 2004, the median ED wait time increased 36 percent. Patients needing emergency attention
waited 40 percent longer, while median waits for acute myocardial infarction patients increased 150 percent.26
•ED waits are linked to ED closures and an increase in total ED visits; between 1994 and 2004 the number of
ED visits increased from 93.4 million to 110.2 million annually, while the number of EDs fell by as much as
12.4 percent.
20
•Other likely contributors include inpatient bed shortages leading to bottlenecks in the ED; an increasing
number of uninsured; population aging; shortages of staffing, space and interpreters; and difficulties assuring
non-ED follow-up care.26
• A
2008 analysis of more than 4,500 hospitals by Alvarez & Marsal found that more than half are technically
insolvent or at risk of insolvency. While 56 percent of all hospitals are located in urban areas, 62 percent of
potentially insolvent hospitals were urban institutions. Potentially insolvent hospitals had a median occupancy rate
of 43 percent compared to 53 percent of hospitals (more than 25 beds) nationally. Hospitals with 100 to 300 beds
represented 44 percent of all 4,927 hospitals in the American Hospital Association’s AHA Hospital Statistics, but
46 percent of potentially insolvent hospitals.22
• H
owever, many nonprofit hospitals that do not handle large numbers of uninsured patients have seen earnings
rise dramatically in recent years. According to the Wall Street Journal, the combined net income of the 50 largest
nonprofit hospitals had net income jump nearly eightfold to $4.27 billion between 2001 and 2006. Seventy-seven
of the nonprofit hospitals were in the black in 2006, whereas just 61 percent of for-profit hospitals were profitable.27
• H
istorically, most U.S. hospitals have been recognized as “charitable organizations” exempt from taxes under
Section 501(c)(3) of the U.S. Tax Code, which required a substantial amount of care for the poor. Since Medicare
and Medicaid, however, the hospital industry advocated for a more flexible exemption “community benefit”
standard. With the growing gap between many nonprofit hospitals’ profitability and what they give back to the
community, there is increased pressure to justify their tax-exempt status.27
• T
he trend in increased margins of nonprofit hospitals results from increased Medicare reimbursement, demanding
upfront payments from patients, raising list prices for procedures and services to several times’ actual cost, selling
patients’ debt to collection companies, focusing on expensive procedures, and issuing tax-exempt bonds and
investing the proceeds in higher-yielding securities.27
• P
hysicians are banding together and establishing profitable services outside of hospitals in alternate settings, e.g.,
MRI and day surgery. Hospitals claim that there may be incentives for physicians to steer more complex and
costly patients to community hospitals, which compromises the not-for-profit hospitals’ ability to offer essential
services such as emergency and trauma services and uncompensated care.23,28 Hospitals are seeking alternative
organizational structures that create an alignment of physician and hospital incentives with institutional missions.22
Predicted impacts for patients
• Patients will experience reduced access to primary care physicians due to growing shortages.
• P
atients are increasingly confused about how to access care. They will need assistance not only differentiating
between physicians and independent non-physician providers but also choosing between them as well as selecting
the appropriate site of care.
• I nadequate Medicare payment changes to post-hospital facilities will force many such facilities to close and limit
patient access.
• Reduced funding for teaching hospitals will negatively affect access to care for the poor and uninsured.
• D
ue to the increased overcrowding in EDs, patients may be subjected to ambulance diversions in some cities,
longer waiting times once they are admitted to the ED, often long delays in the ED awaiting bed availability,
and prolonged pain and suffering. With the aging of America, this problem is likely to get worse. According to
the Centers for Disease Control, older Americans (i.e., 75 years and older) have the highest rate of emergency
department visits, with 65 visits per 100 persons per year.
• U
nless resources are reallocated to prevent ED overcrowding, the benefits of early intervention for time-sensitive
conditions may be less attainable for all Americans.
21
Predicted impacts for physicians
• D
emand for physicians to manage non-physician providers (e.g., delegating routine work, specialty care and
wellness care) will continue to grow. Under the best circumstances, collaborative practice arrangements can
increase physician productivity.
• I t is less clear what roles these non-physician providers will fill. Some predict they will largely replace primary care
physicians, whereas others foresee an increased role for non-physician providers as members of medical-surgical
specialty care teams.1
• H
ealth plans will encourage physicians to develop collaborative practice arrangements with a wide range of
independent practitioners.
• P
ayers will increasingly want proof that services provided by physicians are more cost-effective and of higher
quality than services provided by non-physician providers.
• In some areas, physicians may have difficulty finding hospital facilities to treat their seriously ill patients.
• I nstead of purchasing physician practices, hospitals will begin treating physicians more like clients in order to
secure more referrals.
• P
hysicians will become increasingly frustrated by the multiple effects of hospital ED overcrowding, particularly as
they affect physicians’ abilities to deliver quality care in a timely fashion.
Predicted impacts for hospitals and health care facilities
• I npatient days will continue to drop as new interventions and pharmaceuticals help to reduce length of stay and
admissions. However, those patients being treated in hospitals will be sicker and need more specialized care.
• H
ospitals will need to continue to look for solutions to the problem of ED overcrowding. Part of the solution may
involve a re-examination of the Emergency Medical Treatment and Active Labor Act, or EMTALA, requirements,
given the lack of reimbursement to emergency physicians and hospitals for uncompensated care.29
• Hospitals will be forced to realign their employee mix in order to address staff shortages and rising wages.
• The reduction in number of hospital beds and pressures on other health care resources will challenge the capacity
of the U.S. health system to respond effectively to epidemics and other health catastrophes.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
22
References
1.Kirch DG, Vernon DJ. Confronting the complexity of the physician workforce equation. JAMA. 2008;299(22):2680–2682.
2. Smart DR, Sellers J. Physician Characteristics and Distribution: 2008 Edition. Chicago, IL: American Medical Association; 2008.
3. Associated Press. Number of US primary care doctors down. USA Today. February 12, 2008.
4. Salsberg E. Physician workforce trends and the AAMC-AMA surveys of physicians over and under 50: findings and implications. AMA
Grand Rounds Lecture; May 16, 2007; Chicago, IL.
5. American Medical Association. Health Care Careers Directory (2008–2009). 36th ed. Chicago, IL: American Medical Association; 2008.
6. Salsberg, E. Addressing healthcare workforce issues for the future. Presentation to the Senate Committee on Health, Education, Labor, and
Pensions (HELP); February 12, 2008. www.aamc.org/advocacy/library/workforce/testimony/2008/021208.pdf. Accessed September 15, 2008.
7. Institute of Medicine, National Academy of Sciences. Retooling for an Aging America: Building the Health Care Workforce. Institute of Medicine
Web site. www.iom.edu/Object.File/Master/53/507/HealthcareWorkforce_RB.pdf. Accessed September 15, 2008.
8. 2007 review of physician and CRNA recruiting incentives. Merritt Hawkins & Associates Web site. www.merritthawkins.com/pdf/
2007_Review_of_Physician_and_CRNA_Recruiting_Incentives.pdf. Accessed September 15, 2008.
9. McMahon LF. The hospitalist movement—time to move on. N Engl J Med. 2007;357(25):2627–2629.
10. Grumbach K, Hart GL, Mertz E, Coffman J, Palazzo L. Who is caring for the underserved? a comparison of primary care physicians and
nonphysician clinicians in California and Washington. Ann Fam Med. 2003;1:97–104.
11. Steinwald AB. Primary care professionals: recent supply trends, projections, and valuation of services. Statement before the Senate Committee
on Health, Education, Labor, and Pensions; February 12, 2008. GAO publication 08-472T.
12. US Census Bureau. Statistical Abstract of the United States: 2008. Washington, DC: US Census Bureau; 2008:393.
13. What is behind HRSA’s projected supply, demand, and shortage of registered nurses? Health Resources and Services Administration Web site.
ftp://ftp.hrsa.gov/bhpr/workforce/behindshortage.pdf. Accessed September 15, 2008.
14.The Registered Nurse Population: Findings from the 2004 National Sample Survey of Registered Nurses. Health Resources and Services
Administration Web site. ftp://ftp.hrsa.gov/bhpr/nursing/rnpopulation/theregisterednursepopulation.pdf. Accessed September 15, 2008.
15. Frequently asked questions: why choose a nurse practitioner as your healthcare provider? American Academy of Nurse Practitioners Web site.
www.npfinder.com/faq.pdf. Accessed September 15, 2008.
16. Facts at a glance. American Academy of Physician Assistants Web site. www.aapa.org/glance.html. Updated July 1, 2008. Accessed September
15, 2008.
17.Pal S. Pharmacist shortage to worsen in 2020. US Pharm. 2002;27:12.
18. Knapp KK, Cultice JM. New pharmacist supply projections: lower separation rates and increased graduates boost supply estimates [published
online October 5, 2007]. J Am Pharm Assoc. 2007 Jul–Aug;47(4):463–470. www.medscape.com/viewarticle/563246. Accessed September 15,
2008.
19.Reuben DB. Better care for older people with chronic diseases: an emerging vision. JAMA. 2007;298(22):2673–2674.
20. Grumbach K, Bodenheimer T. Can health care teams improve primary care practice? JAMA. 2004;291:1246–1251.
21. Cooper RA, Laud P, Dietrich CL, et al. Roles of nonphysician clinicians as autonomous providers of patient care. JAMA. 1998;280:788–794.
22. Hospital Insolvency: The Looming Crisis. Alvarez & Marsal Healthcare Industry Group Web site. www.alvarezandmarsal.com/en/global_services/
healthcare/resources/downloads/Hospital-Insolvency-The-Looming-Crisis-Report.pdf. Accessed September 15, 2008.
23. American Hospital Association. Trendwatch. Chicago, IL: American Hospital Association; 2008.
24. American Hospital Association. AHA Hospital Statistics, 2008 edition. Chicago, IL: American Hospital Association; 2008.
25. Emergency room delays [editorial]. New York Times. January 19, 2008. www.nytimes.com/2008/01/19/opinion/19sat3.html. Accessed September
15, 2008.
26. Wilper AP, Woolhandler S, Lasser KE, et al. Waits to see an emergency department physician: US trends and predictors, 1997–2004 [published
online January 15, 2008]. Health Aff (Millwood). 2008;27(2)w84–w95. doi:10.1377/hlthaff.27.2.w84.
27. Carreyour J, Martinez B. Nonprofit hospitals, once for the poor, strike it rich: with tax breaks, they outperform for-profit rivals. Wall Street
Journal. April 4, 2008. http://online.wsj.com/article/SB120726201815287955.html. Accessed September 15, 2008.
28. Gabel JR, Fahlman C, Kang R, Wozniak G, Kletke P, Hay JW. Where do I send thee? Does physician-ownership affect referral patterns to
ambulatory surgery centers? Health Aff (Millwood). 2008;27(3):165–174.
29. EMTALA informational Web site. www.emtala.com. Accessed September 15, 2008.
30. Physician Supply and Demand: Projections to 2020. US Department of Health and Human Services Web site. ftp://ftp.hrsa.gov/bhpr/workforce/
PhysicianForecastingPaperfinal.pdf. Published October 2006. Accessed September 15, 2008.
23
AMA Health Care Trends 2008
Medical education
Figure 4. U.S. medical school applicants and matriculants, 1996–2007
80,000
Total Applicants
70,000
Men
60,000
Women
50,000
40,000
30,000
20,000
10,000
0
a
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Adapted with permission from the Association of American Medical Colleges.24
In 2007, the number of medical school applicants continued to increase. Rising medical school debt,
inability to attract a sufficient number of minorities—particularly Hispanic—and precarious financing
of teaching hospitals continue to be major concerns that need to be addressed.
Trends
In 2007, the number of medical school applicants continued to increase. Rising medical school debt, inability to
attract a sufficient number of African Americans, Hispanics and Native Americans, preferences for specialization over
primary care, and precarious financing of teaching hospitals continue to be major concerns. These must be addressed
as the nation seeks to ensure an adequate medical work force to meet the changing needs of society.
Medical school applicants
• T
here were 546,817 applicants to medical school in 2007 (13 applications per applicant), up from 391,118 in 2003.
Women made up 48 percent of applicants in 2007.1
24
• O
verall, the academic credentials of applicants to medical school in 2007 were stronger than ever before, with
the highest Medical College Admission Test, or MCAT®, scores and cumulative grade-point averages on record.2
In addition, over the past five years there has been an increase in applicants’ average amount of experience in
premedical activities, including time spent in medical research and community service in clinical and nonclinical
settings.3
• T
he 2007 medical school applicant pool included more individuals from racial and ethnic minorities. The number
of male African American applicants and male Hispanic applicants both increased by 9.2 percent (higher than the
growth rate of the total applicant pool). The number of African American males who ultimately were accepted and
enrolled in medical school in the fall of 2007 increased by 5.3 percent, a rate nearly double that of the first-year
entrant increase overall. Hispanic male first-year enrollees remained at the same level as 2006.3
Medical school enrollment
• T
he 2007 entering class to U.S. medical schools was the largest in the nation’s history.3 In June 2008, the number
of first-year enrollees totaled almost 17,800 students, a 2.3 percent increase over 2006.4
• A
n annual survey on medical school expansion, released in 2007 by the Association of American Medical Colleges
(AAMC), indicated that first-year enrollment in U.S. medical schools is estimated to grow 21 percent (3,400
students per year) by the year 2012 to 19,900 students.5
• T
he total planned first-year enrollment for the 2012–2013 academic year is 19,909 at both existing and new
medical schools. This is an increase of 3,421 (20.8 percent) in first-year enrollment compared with the total
baseline first-year enrollment for the 2002–2003 academic year. The targeted 30 percent growth in first-year
enrollment will be reached by 2017 but will be two years short of the AAMC’s goal.6
• C
urrent projections indicate there will be at least a 20 percent increase in the number of Doctor of Medicine
(MD) matriculants in U.S. medical schools from 2002 to 2013. Class size expansion at existing medical schools
typically is “in place,” i.e., enrolling students of existing or nearby facilities or through a regional campus model.
The regional campus model traditionally has clinical education on the regional campus during the third and fourth
years with a smaller number offering first- and second-year basic science/preclinical curricula.7
• A
new trend is to create branch campuses that offer all four years of medical education while operating under the
accreditation umbrella of the main medical school campus.7
• T
otal medical school enrollment was 70,225 in 2007, up (6.67 percent) from 65,834 in 2002. Women made up
48.3 percent of matriculants in 2007.8
• T
uition and fees have increased 11.1 percent between 2001 and 2006 and at a faster pace at public medical
schools.9
• M
ost students defer loan repayment until completion of their three-year residency. However, one relevant change
has been a stiffening of the terms of repayment. While repayment was at a 2.82 percent annual interest rate in
2004, it rose to 6.8 percent in 2007 on federal Stafford loans. While today’s graduates commit approximately
9–12 percent of their after-tax income for educational debt service, projections by AAMC are that graduates of
the class of 2033 will start repaying 25–31 percent of the after-tax income.9
• T
he level of medical student debt continues to rise. According to the AAMC, the average total educational debt
of medical school graduates was $120,000 for public institutions and $160,000 for private schools in 2006. In 2001,
debt upon graduating was $86,000 and $120,000, respectively. Notably, indebtedness for public medical school
graduates is now increasing more rapidly than it is for private school graduates.9
• T
he AAMC projects the debt of both public and private medical school graduates will approximate $750,000
in 2033.9
25
Medical school graduates
• I n 2006, 28.8 percent of the U.S. population was black or African American, Hispanic/Latino, or Native
American, yet these groups accounted for only 14.6 percent of medical school graduates. Nationwide, only
6 percent of practicing physicians are members of these minority groups.3
Conflict of interest
• O
ver the past decade, concern about the consequences of financial conflict of interest by academic medical centers
has increased dramatically because they severely compromise the integrity of the institution and undermine public
confidence. Concern arises when financial interests affect or reasonably appear to affect institutional processes.10
• A
2006 national survey of deans from all 125 accredited U.S. allopathic medical schools found that the majority
of institutions have adopted organizational structures that separate research responsibility from investment
management and from technology transfer responsibility. However, gaps exist in institutions informing their
institutional review boards of potential conflicts of interest in research projects.11
• T
here is increasing federal and state attention to industry-academy relationships, e.g., support for continuing
medical education, gifts to clinicians, the sale of physician-prescribing data and pharmaceutical company efforts to
intimidate researchers critical of their product(s).10
Medical school faculty
• T
he number of full-time medical school faculty continues to increase. In the 2007–2008 academic year, 128,377
individuals held full-time faculty appointments, representing an increase of 12 percent since 2003–2004.4 One
reason for the substantial increase in faculty is that medical schools derive more than 35 percent of their total
revenue from faculty practice and more than 32 percent from grants and contracts (including direct and facilities/
administrative costs). Considerable medical faculty efforts are required to maintain these revenue streams.12
Expectation of competencies
• T
he Accreditation Council for Graduate Medical Education (ACGME) has linked the accreditation of
postgraduate training programs with demonstration that their physicians-in-training achieve competency in
systems-based practice and practice-based learning and improvement. However, the potential effect of teaching
quality improvement (QI) methods to clinicians is uncertain.13
• E
mployers of physicians report that new graduates need more preparation for their roles in the new health care
environment. Leaders in medical education have delineated the new competencies needed to effectively manage
care in a complex and changing health care environment. These include an understanding of the health care
system, evidence-based medicine, quality improvement, system-based care, cost-effectiveness, health promotion
and disease prevention, population-based care, and the ethical issues surrounding clinicians’ divided responsibility
for both individual patients and groups.14
• C
hanging the systems that deliver care has become the cornerstone of QI. In essence, raising medicine’s level of
performance by changing care systems is a process of experiential learning. However, educational programs appear
to be more effective in improving knowledge about QI, attitudes toward health systems and participation in QI
activities. On the whole, programs improved knowledge about QI more often than clinical outcomes, and few
controlled studies demonstrated only positive (rather than mixed or negative) outcomes.15
Graduate medical education
• I n the 2007–2008 academic year, there were 106,012 active residents, the highest ever recorded. Doctors of
Osteopathy (DOs) represent 6.4 percent of residents and have increased each year in ACGME-accredited programs
from the years 2002–2003 to 2007–2008.16
26
• T
he number of residency positions continues to exceed the number of U.S. medical school graduates. International
medical graduates (IMGs) currently are filling these additional positions.
• T
he number of IMGs who are U.S. residents is increasing. For academic year 2007–2008, 28,824 (27.2 percent)
resident physicians were IMGs. For the 2007–2008 academic year, of those for whom residency was known,
34.2 percent of the IMG physicians were U.S. citizens and 21.7 were permanent residents.
• W
hile the U.S. Hispanic population is growing rapidly, the number of Hispanic native citizen resident physicians
has not kept pace. Of resident physicians on duty in August of 2004, 6.6 percent were of Hispanic origin. On
Dec. 1, 2007, that number rose slightly to 7 percent.
• T
he proportion of medical student and resident physician education that takes place in ambulatory and
community-based settings is increasing. However, the availability of community physicians to participate in
teaching is being adversely affected by pressures for increased productivity and efficiency in their practices.
• T
otal graduates in family medicine general internal medicine and general pediatrics are the foundation of U.S.
health care, providing 52 percent of all ambulatory care visits, much inpatient care, 80 percent of patient visits for
hypertension, and 69 percent of visits for both chronic obstructive pulmonary disease and diabetes. Total generalist
graduates increased in the early 1990s, reaching 9,348 in 1998. However, by 2005, the number had fallen to
7,289—only 1 percent above the 1995 level—during the decade in which the U.S. population grew by almost
12 percent.17
• A
mong general practice, only family medicine experienced increases in graduate numbers, climbing to 3,305 in
2005—25 percent above 1995 levels. However, this masks a 40 percent decline from 73 percent to 48 percent
in U.S. allopathic medical school graduates entering family medicine residencies between 1998 and 2005.
Recruitment of IMGs and osteopathic graduates accounted for the increase. Osteopathic family medicine
residencies provided 10 percent of family medicine graduates in 2005.17
• G
raduate medical education is primarily supported by revenues from delivery of patient care. Traditionally, most
payers have implicitly financed graduate medical education because its costs are included in teaching-hospital
charges. Medicare, which is the largest single funding source, provides teaching hospitals with somewhat higher
prospective payments to help cover the indirect costs of graduate medical education. Additionally, Medicare makes
separate payments to teaching hospitals to help cover the direct costs of graduate medical education.18
• R
ising concerns over health care costs in general have created an atmosphere that jeopardizes the financing of
graduate medical education. Some payers are even reimbursing teaching hospitals at the same rates that are paid
to non-teaching hospitals. In addition, federal policymakers have implemented limits on Medicare financing of
graduate medical education and are considering further reductions. As a result of these trends, it is becoming more
difficult for teaching hospitals to cover their costs.18
• Academic facilities face increased competition from tertiary care provided outside of teaching institutions.
• T
he ACGME’s new residency duty hours standards went into effect for the 2003–2004 academic year. Residents
can now work a maximum of 80 hours a week. ACGME reported that many programs and sponsoring institutions
have added physician assistants and nurse practitioners to their staffs and created night float schedules in order to
comply.19
• I n response to work-hour regulation, many internal medicine programs redistributed rather than reduced residents’
inpatient clinical experience. Hours allotted to educational activities did not change, but most programs saw a
decrease in intern attendance at conferences, and many reduced third-year elective time.20
27
Physician continuing professional development
• T
he importance of continuing medical education (CME) will grow as physicians are increasingly held accountable
by the public, payers and the government for their clinical competence.
• O
verall financial support of CME is threatened by a lack of support by managed care, a reduction in discretionary
funds available to individual physicians and a pharmaceutical industry shift of dollars into direct-to-consumer
advertising instead of support of professional education.
• T
he profession’s policies and practices regarding the ethics of gifts from pharmaceutical and medical device
companies have come under increasing scrutiny by the general public, government agencies and physicians
themselves. Management of this issue will directly affect how the CME activities will be funded in the future, and
the extent to which they will continue to be self-regulated by the profession.
• T
he Joint Commission requires all licensed independent practitioners and other practitioners privileged through
the hospital medical staff process to participate in CME as an adjunct to maintain clinical skills and current
competence.21
• S
ixty-one boards require CME for license re-registration. Some states also mandate CME content, such as
HIV/AIDS, risk management or end-of-life palliative care. In addition, many states also require that a certain
percentage of CME be AMA PRA Category 1 Credit™, as measured, for example, through the American Medical
Association Physician’s Recognition Award (PRA). Forty-eight states accept the AMA PRA certificate or
application as equivalent for purposes of licensure re-registration.22
• According to the 2008 Physicians’ Preferences in CME Survey, 93 percent of respondents take CME to obtain credit
or fulfill licensure and other requirements, 80 percent to obtain the latest clinical data, and 71 percent to validate
their current patient treatment/management strategies.23
• A
possible red flag in the CME survey is that respondents earned fewer CME credits in the 12 months prior to the
survey, an average of 48 CME credits, down 57 in the 2007 study. In addition, 24 percent indicated earning
17 percent in 2007 vs. 19 percent in 2006.
• W
hen physicians were asked why they reported fewer CME credits, in order of response were time pressures,
certified activities did not meet their needs and employer restrictions on attendance/reimbursement.
• D
espite time pressures, physician respondents earned 41 percent of their credits by attending out-of-town
meetings—a big increase from 32 percent in 2007. Nineteen percent indicated obtaining credits by attending local
meetings, down from 24 percent the previous year.
• P
hysicians earned 11 percent of their credits through online CME, up from 7 percent the previous year. Internet
point of care (POC)—online self-directed learning—was the most popular online CME method, chosen by
64 percent of respondents, compared with 62 percent the previous year.
• W
hen it comes to delivery formats at meetings, physicians say that lectures with question-and-answer components
were the most effective in motivating them to change their behavior, followed by case-based learning and hands-on
skills-building sessions.
• I nternet POC is poised to increase even more in the near future, as 46 percent of doctors said they plan to use that
method in the next 12 months, compared with 26 percent in the 2007 survey.
• A
dvances in information technology have the potential to enhance the efficiency and effectiveness of the delivery
of virtual medical education across the continuum (undergraduate, graduate and continuing medical education).
• Specialty boards are becoming more involved in CME, as are state licensing boards.
28
Predicted impacts for patients
• T
he lack of diversity among current medical students could have implications for the quality of and access to
services for segments of the underserved population.
• T
he health care safety net for patients is in jeopardy because many poor, uninsured and underinsured obtain their
health care from teaching facilities that are experiencing financial difficulties. The availability of medical resources
in the inner city and some rural communities are particularly threatened.
• A
s the cost of medical education continues to increase and medical students feel forced to choose more lucrative
specialties over primary care, patients will find it more difficult to obtain primary care.
Predicted impacts for physicians
• T
rends in the cost of medical education and the related student debt indicate hardship for all physicians and their
families—but particularly for primary care doctors.
• T
he number of full-time clinical faculty has been increasing, but clinical faculty are being pressured to spend more
time in patient care to help support the institution financially, leaving less time for education and research.
• Physicians are going to be more accountable for providing ongoing proof of their clinical competence.
• P
ublic outcry and media attention on medical errors and physician competency, coupled with the wide availability
of medical information (accurate or not) to the general public will intensify demands that physicians demonstrate
current mastery of their fields by means of continuing professional education.
• T
o the extent that physicians will not travel to traditional CME offerings, this puts traditional CME providers (e.g.,
specialty societies and university CME departments) at risk. As live CME programs become too expensive, more
physicians will access CME through the Internet.
• T
echnology and time constraints are transforming CME activities into more personalized and interactive events
that are self-initiated by the physician. CME is moving closer to a “just in time,” or point of care, format.
Predicted impacts for medical schools
• M
edical schools and academic health centers will increasingly be required to be more accountable for how their
funds are spent (e.g., will engage in mission-based budgeting, creating a separate budget line for education, research
and patient care).
• M
edical schools will have to identify sources of funding to support education outside the academic medical center.
Sources of monetary and non-monetary compensation for volunteer faculty will need to be identified.
• I n addition to basic biomedical research, medical schools will have to move into other areas of research, e.g.,
clinical research, behavioral research and health services research.
• I ncreased competition from other tertiary centers will affect the financing of both medical schools and teaching
hospitals. It also will affect access to patients to support the education of medical students and resident physicians.
• There will be increasing competition for residency positions in some specialties and geographical locations.
• N
ew ways to ensure that medical students and resident physicians acquire professional values will need to be
developed.
29
Predicted impacts for the profession
• T
he profession will be called upon to validate the competence of individual physicians during their training and
while they are in practice. New tools and services will be required.
• G
lobal demand for standardized, accessible CME or continuing physician professional development activities will
continue to grow as technical and political barriers are reduced.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
30
References
1. A
ssociation of American Medical Colleges. Future medical school applicants, part I: overall trends. Analysis in Brief. May 2007;7(3).
www.aamc.org/data/aib/aibissues/aibvol7_no3.pdf. Accessed September 15, 2008.
2. MCAT scores and GPAs for applicants and matriculants to US medical schools, 1996–2007. Association of American Medical Colleges Web
site. www.aamc.org/data/facts/2007/2007mcatgpa.htm. Accessed September 15, 2008.
3. 2007 US medical school entering class is largest ever. Enrollment increases, more black and Hispanic males apply [news release]. Washington,
DC: Association of American Medical Colleges; October 16, 2007. www.aamc.org/newsroom/pressrel/2007/071016.htm. Accessed September
15, 2008.
4. Barzansky B, Etzel SI. Medical Schools in the United States, 2007–2008. JAMA. 2008;300(10):1221–1227
5. US medical school enrollment projected to rise 21 percent by 2012 [news release]. Washington, DC: Association of American Medical
Colleges; May 1, 2008. www.aamc.org/newsroom/pressrel/2008/080501.htm. Accessed September 15, 2008.
6. Association of American Medical Colleges. Projections of future medical school enrollment. Analysis in Brief. Apr 2008;8(3). www.aamc.org/
data/aib/aibissues/aibvol8_no3.pdf. Accessed September 15, 2008.
7. Association of American Medical Colleges. Challenges and strategies of medical school expansion. Analysis in Brief. Feb 2008;8(2).
www.aamc.org/data/aib/aibissues/aibvol8_no2.pdf. Accessed September 15, 2008.
8. US medical school applications and matriculants by school, state of legal residence, and sex, 2007. Association of American Medical Colleges
Web site. www.aamc.org/data/facts/2007/2007school.htm. Accessed September 15, 2008.
9. Medical School Tuition and Young Physician Indebtedness: An Update to the 2004 Report. Association of American Medical Colleges Web site.
https://services.aamc.org/Publications/showfile.cfm?file=version103.pdf&prd_id=212&prv_id=256&pdf_id=103. Accessed September 15, 2008.
10. Rothman DJ. Academic medical centers and financial conflicts of interest. JAMA. 2008;299(6):695–697.
11. Ehringhaus SH, Weissman JS, Sears JL, Goold SD, Feibelmann S, Campbell EG. Responses of medical schools to institutional conflicts of
interest. JAMA. 2008;299(6):665–671.
12. Barzansky B, Etzel S. Educational programs in US medical schools, 2004–2005. JAMA. 2005;294:1068–1074.
13. Boonyasai RT, Windish DM, Chakraborti C, et al. Effectiveness of teaching quality improvement to clinicians: a systematic review. JAMA.
2007;298(9):1023–1037. doi:10.1001/jama.298.9.1023.
14. Ladden MD, Peters AS, Kotch JB, Fletcher RH. Preparing faculty to teach managing care competencies: lessons learned from a national
faculty development program. Fam Med. 2004;36(suppl):S115–S120.
15. Batalden P, Davidoff F. Teaching quality improvement: the devil is in the details. JAMA. 2007;298(9):1059–1061.
16. Brotherton SE, Etzel SI. Graduate Medical Education, 2006–2007 JAMA. 2008;300(10):1228–1243.
17. Colwill JM, Cultice JM, Kruse RL. Will generalist physician supply meet demands of an increasing and aging population? [published online
April 29, 2008]. Health Aff (Millwood). 2008;27(3):232–241. doi:10.1377/hlthaff.27.3.w232.
18. American Academy of Orthopaedic Surgeons. The financing of graduate medical education [position statement]. American Academy of
Orthopaedic Surgeons Web site. www.aaos.org/about/papers/position/1109.asp. Accessed September 15, 2008.
19. ACGME duty hours standards now in effect for all residency programs: residency programs must comply with new standards or face loss
of accreditation [news release]. Accreditation Council for Graduate Medical Education Web site. www.acgme.org/acWebsite/newsReleases/
newsRel_07_01_03.asp. Accessed September 15, 2008.
20. Horwitz LI, Krumholz HM, Huot SJ, Green ML. Internal medicine residents’ clinical and didactic experiences after work hour regulation: a
survey of chief residents. J Gen Intern Med. 2006;21(9):961–965.
21. Documenting CMEs. Joint Commission Web site. www.jointcommission.org/AccreditationPrograms/Hospitals/Standards/FAQs/Medical+Staff/
Cont+Ed/doc_cmes.htm. Accessed September 15, 2008.
22. American Medical Association. State Medical Licensure Requirements and Statistics, 2008. Chicago, IL: American Medical Association; 2008.
23. Hosansky T. Bias in the hot seat. MeetingsNet Web site. http://meetingsnet.com/cmepharma/cme/education_pharmaceutical_industry_
marketing_012808/index.html. Accessed September 15, 2008.
24. Association of American Medical Colleges. U.S. Medical School Applicants and Matriculants 1982–83 to 2007–08 [chart]. Association of
American Medical Colleges Web site. www.aamc.org/data/facts/charts1982to2007.pdf. Accessed September 15, 2008.
31
AMA Health Care Trends 2008
Health care expenditures
Figure 5. High out-of-pocket spending climbs across
income groups, 2001–2007
Percent of adults ages 19-64
75
75
2007
2007
66
60
60
57
2001
53
50
48
45
2001
53
50
45
41
36
35
33
30
30
26
30
36
36
26
21
18
15
17
15
10
0
0
Total
Low
income
Moderate
income
Middle
income
High
income
Spent 5% or more of income annually
on out-of-pocket costs and premiums
a
Total
Low
income
Moderate
income
Middle
income
High
income
Spent 10% or more of income annually
on out-of-pocket costs and premiums
Adapted with permission from the Commonwealth Fund.19
The trend continues of increasing financial burdens among the privately insured. Projections estimate
that both overall private health insurance costs and out-of-pocket spending will continue to rise by
about 6–7 percent annually through 2016. However, growth in incomes is unlikely to keep pace
with increases in the cost of care. Trends indicate that many Americans are underinsured and going
without needed medical care.20
Health care costs continue to rise faster than GDP. Continuing technological growth and demographic trends will
keep upward pressure on health expenditures for the foreseeable future.
Trends
Short-term slowing in medical care spending
• I n 2006, national health care expenditures rose 6.7 percent to $2.1 trillion. This growth was slightly faster than the
6.5 percent rate in 2005, which marked the slowest growth since 1999.1
32
• T
he health spending share of GDP is expected to reach 16.3 percent in 2007 and reach $2.2 trillion.2 This share
has remained relatively stable since 2003 as a result of slower health spending growth (which peaked in 2002 at
9.1 percent) and relatively strong U.S. economic growth, which has increased more than 6 percent each year since
2004. In 2006, health spending growth outpaced nominal GDP growth by 0.6 percentage point.1
• F rom 2007 to 2017, growth in national health spending is anticipated to remain around 6.7 percent per year,
yielding an estimated $4.3 trillion in health spending in 2017 with the health share of GDP of 19.5 percent—
nearly one-fifth of the economy.2
• U.S. health care spending exceeds that of other developed countries, both in per capita and percent of GDP.3
• T
he average share of income per person devoted to health care has been increasing over time. In 2006, per capita
spending reached $7,026, up from $4,790 in 2000.1 The amount spent per person increased 78 percent between
1996 and 2006.4
• A
ccording to the Commonwealth Fund Commission’s 2008 Results from the National Scorecard on U.S. Health
System Performance, U.S. health insurance administrative costs as a share of total health spending are 30 percent to
70 percent higher than in countries with mixed private/public insurance systems, and three times higher than in
countries with the lowest rates.5
• P
erformance measures of health system efficiency remain especially low, with the United States scoring 53 out
of 100 on measures gauging inappropriate, wasteful or fragmented care; avoidable hospitalizations; variation in
quality and costs; administrative costs; and use of information technology. Lowering insurance administrative
costs alone could save up to $100 billion a year at the lowest country rates.
• P
rivate health insurance in the United States is characterized by complex benefit and cost-sharing designs and
high rates of turnover in plan enrollment. Health plans also incur significant marketing and underwriting costs.
•The administrative costs of health care have been increasing rapidly in the United States: from 2000 to 2006,
per capita administrative costs increased 68 percent, from $289 to $485 per person, vs. a 47 percent increase in
national health expenditures per capita.
•Insurance administrative costs as a share of total national health expenditures are more than three times higher
in the United States than in countries with the lowest rates (Finland, Japan and Australia) and 30 percent to
70 percent higher than in three countries where private insurance plays a substantial role (Germany,
Switzerland and the Netherlands).
•Reducing U.S. insurance overhead to this midrange through greater standardization, streamlined functions
and more continuous coverage would save up to $51 billion annually. This is enough to fund half the cost of
providing comprehensive coverage to all the uninsured in the United States. Lowering rates to the benchmark
countries would save more than $100 billion per year.
• T
he rising cost of health care is causing Americans financial pain and leading to a reduction in savings in general,
and retirement savings in particular.
• I n 2006, private sector spending on health care increased more than $378 million for a total of more than
$1,135 billion over 2000. The growth rate in private sector spending grew 5.5 percent in 2006, the slowest rate
of growth since 1997.1
• I n 2006, growth of total public sector spending on health care rose 8.2 percent to $970.3 billion. Medicare
spending rose 18.7 percent to $401.3 billion in 2006, the fastest rate of growth in Medicare since 1981.1 In 2007,
Medicare spending growth is projected to slow to 6.5 percent and is expected to account for 20.7 percent of
national health spending by 2017.2
33
• M
ajor shifts in payers for prescription drugs were seen in 2006. Medicare’s share rose dramatically as it absorbed
drug spending once paid out-of-pocket, by private insurance, or by Medicaid (on behalf of those eligible for both
Medicaid and Medicare). In 2005, total national prescription drug spending was $200.7 billion, of which 2 percent
was Medicare, 19 percent Medicaid, 24 percent out-of-pocket, 48 percent private insurance and 7 percent other
government. In 2006, those percentages changed dramatically for Medicare and Medicaid: 18 percent Medicare,
9 percent Medicaid, 22 percent out-of-pocket, 44 percent private insurance and 7 percent other government.4,6
• M
edicare spending has also grown as a share of the economy from less than 1 percent when it was started in 1965
to about 3 percent today. It is projected that Medicare spending will make up nearly 4 percent of GDP by 2016 and
reach more than 11 percent of GDP in 2080, albeit growing at a slower pace.7
• T
he Congressional Budget Office predicts that under current law, federal spending on Medicare and Medicaid
measured as a share of GDP will rise from 4 percent today to 12 percent in 2050 and 19 percent in 2082.8,9
• G
rowth in federal government spending ($449.5 billion in 2006) for health care was 9.2 percent in 2006, up from
7.1 percent in 2005, largely due to Medicare Part D.
• T
otal Medicaid spending reached $175.7 billion in 2006, representing a slowdown in growth from 11.0 percent in
2003 to -1.9 percent in 2006, the first drop in Medicaid spending since the program was created in 1965, which was
largely due to Medicare Part D replacing Medicaid drug coverage for dual eligibles.1
• P
hysician spending remained about 18 percent of total national health expenditure for all professional services
from 1999 to 2004. However, administrative spending has grown steadily from 6.21 percent to 8.1 percent during
that period.
• W
hile more details are not available on each spending category, in 2006, spending on physician and other clinical
services reached $447.6 billion, an increase of 5.9 percent—the slowest rate of growth since 1999. Growth in
physician prices, as measured in the national health expenditure, increased 1.9 percent in 2006—1.5 percentage
point slower than in 2005. The slowdown in physician price growth was partly attributed to a freeze in the
Medicare conversion factor for physician services in 2006. Private insurers appear to have followed the low
Medicare price update in setting prices for privately financed physician services.1
• A
verage annual percentage growth for physician and clinical services (further breakdown not available) in 2006
was 5.9 percent in 2006, with projections of remaining 5.9 percent from 2006 to 2017.2
• S
pending for physician and clinical services is expected to continue its recent decelerating trend and slow
0.2 percent point to 5.7 in 2007. Physician spending growth is anticipated to average 5.9 percent per year through
2017. Projected shortages of primary care physicians and the continued merger of practices are expected to apply
upward pressures, while possible changes to benefit structure in the form of higher cost-sharing requirements are
anticipated to mitigate spending growth.2
• I n 2006, hospital spending increased by 7.0 percent, up from the 6.9 percent growth in 2003, but a 0.3 percent
slowdown from 2005 and a gradual deceleration from 8.2 percent growth in 2002. Total hospital spending was
$648.2 billion. Hospital spending accounted for 30 percent of the aggregate increase between 2002 and 2004.1
Overall hospital spending growth is expected to be 7.5 percent in 2007, an increase of 0.4 percentage point. Total
hospital spending is projected to gradually slow from 7.2 percent in 2008 to 6.4 percent by 2017.2
• S
lower price growth in non-compensation costs, particularly malpractice costs, drove the slowdown in hospital
inpatient prices as compensation price growth remained relatively stable. The severe nursing and other staff
shortages along with increased utilization of health care services are key drivers of rising costs.
• I n 2006, U.S. spending in nursing homes and home health care rose 3.5 percent to $124.9 billion, the slowest
growth since 1999, and a deceleration from 4.9 percent in 2005.1
34
• I n 2006, after six consecutive years of slowing growth, prescription drug spending growth accelerated.1 Prescription
drug spending reached $216.7 billion, up 3.5 percent.
• A
ccording to projections, prescription drugs will have an annual percentage growth as part of the national health
expenditures of 8.2 percent from 2006 to 2017 whereas physician and clinical services will rise 5.9 percent.2
• S
everal drugs approved and introduced in 2004 and 2005 contributed to the growth in use in 2006, particularly
among hypnotics (insomnia drugs), which experienced faster growth in use than any other class of drugs. Changes
in the mix of drugs (brand vs. generic, and therapeutic mix), lower overall rebates and increases in the average
units per prescription also contributed to the 2006 growth in drug spending.1
• I mplementation of Medicare Part D caused major shifts in the sources of funds used to pay for drugs. In addition,
these shifts and the movement toward greater enrollment in Medicare managed care plans caused the growth in
Medicare’s administrative and net cost of insurance to accelerate.1
• I n response to tremendous growth in prescription drug spending, several governors are petitioning Congress and
the Food and Drug Administration to allow the reimportation of lower-cost U.S.-manufactured prescription drugs
from Canada.10
• S
tates have found ways to reduce the cost of prescription drugs for both the states and their residents, such as
reimportation of drugs for various groups (including state employees).11
• H
ousehold spending on health grew 6.2 percent in 2006 and reached $611.6 billion. Faster growth in household
spending was primarily attributable to increased Medicare premium payments associated with Medicare Part D.1
• O
ut-of-pocket spending accounted for 12 percent of national health spending in 2006. This share has steadily
declined since 1998, when it accounted for 15 percent; over the longer term, the share has fallen from 47 percent
in 1960. However, when overall household spending (including out-of-pocket spending, private health insurance
premiums, and Medicare premiums and payments) is calculated, the household burden of financing health care has
remained fairly flat as a share of personal income since 2003.1
• U
nless conditions change, by 2025 the elderly will be spending nearly 30 percent of their income on out-of-pocket
health care costs, up from 22 percent in 2000.12
Less optimism for longer-term control of costs
• T
he four-year period (2002–2006) of slowing of the rate of growth of personal health spending may be short-lived.
Developments in local markets signal concern about accelerating cost trends in the future.13
• H
ospitals have been expanding capacity of specialized facilities needed to serve patients with the latest
technology.13 The development and diffusion of medical technology may be a primary factor in the persistent
difference between health spending and overall economic growth, and new medical technology may account for
about half or more of real long-term spending growth.14
• H
ospital “specialty service line” strategies continue to identify the types of services that are most profitable. Cardiac
procedures often top the list.13
• M
ore entrepreneurial physicians have recognized the opportunity for particularly high returns from facility (as
opposed to professional), payments for procedures such as imaging, endoscopies and cardiac tests, which are
performed in outpatient settings, as well as outpatient surgery. By performing profitable ancillary services in their
offices, physicians may compete with hospitals.13
35
• A
s more providers have an increased financial stake in the provision of services, self-referral incentives apply to a
much larger portion of health care spending than in the past.13
• L
oosening managed care restrictions has led to resurfacing of a “medical arms race,” which health policy researchers
predict will lead to more spending on health services.13
• W
hile increased patient cost-sharing through higher deductibles, coinsurance and copayments helped restrain costs
early in the decade, the cost-sharing trend has slowed recently, partly in response to slower growth in premiums.
Moreover, growth in consumer-directed health plans is still too small to have much impact on the aggregate degree
of patient cost-sharing in private insurance and overall spending trends.
• W
hile employer interest in health promotion has increased sharply, development of effective measures is at an
early stage.13
• A
t the macro level, the recent slowdown in health care spending may be the lagged impact of the 2001 recession.
Thus, the more recent years of economic recovery may lead to high health spending.13,15
• A
nother macro factor foretelling increases in spending on health care is the trend in obesity prevalence. The
impact will be direct but also indirect through its effect on the incidence of diabetes, hyperlipidemia and heart
disease that will continue for many years.13,16
• T
he combination of patent expirations for “blockbuster” drugs, the greater availability of generic medications and
a relative paucity of new drugs may suppress rising costs. This may be offset by the rapidly growing use of specialty
pharmaceuticals that reflect the achievements of biotechnology research.13
• W
ith GDP growth starting to slow and most forecasters predicting further slowing, concerns about health cost
trends are likely to only increase.
• O
ver the past 30 years, research from the Dartmouth Atlas and others has shown little change in practice and
spending across U.S. states, regions and hospitals despite evidence that care and spending varies significantly.
Variations in supply-sensitive care (e.g., the number of specialists per capita) are largely due to differences in local
capacity and a fee-for-service payment system that ensures that current capacity remains fully deployed.17
Professional liability
• A
ccording to a 2007 state rate survey for ob-gyn, general surgery and internal medicine, rate increases have
become less common and the size of those increases has become smaller. There is a growing percentage of rates
that decreased or did not change, with about half remaining the same between 2006 and 2007. Moreover, insurer
withdrawals from markets are not happening with the frequency that they were at the height of the most recent
crisis. The recent decreases notwithstanding, rates in many states remain at historic highs. Some physicians face
rates that are more than three times what they were before the start of this most recent liability crisis.18
Predicted impacts for patients
• A
s baby boomers enter retirement age, pushing up Medicare expenditures, younger cohorts will complain more
intensely about having to pay for the health care of the elderly.
• M
edicare beneficiaries will continue to have to pay substantially more out of their own pockets for health care.
Supplemental insurance will likely reduce prescription drug benefits as a covered service. As a result, medication
compliance may continue to drop.
• T
he current professional liability crisis has reduced patient access to certain specialties and will likely raise the cost
of health care.
36
Predicted impacts for physicians
• P
hysicians will continue to face pressure to reduce health care costs, creating dilemmas for physicians in providing
appropriate health care services to patients, limiting liability risks and possibly affecting relationships with patients.
• V
ariations in care and spending across the country, the potential for savings that it implies, and the possible
collapse of primary care will promote interest in payment reform to support improved care coordination by
fostering effective “medical homes” for patients with chronic illness and others.17
• C
oupled with falling reimbursement from payers, medical liability premiums are a serious financial burden on
physicians, and therefore affect patient access to care.
• A
t a minimum, the rising cost of liability insurance will force physicians to practice more defensively (e.g., order
more tests, avoid performing high-risk procedures) and at worst will reduce the number of physicians in some
specialties. The forces driving physicians to practice defensively are at odds with the pressures to contain health
care costs.
• A
s the costs of care increase, managed care will continue to evolve, possibly creating instability in the health care system
for patients and physicians and increasing the likelihood of an initiative for some sort of universal coverage plan.
• A
s health care costs rise, consolidation in managed care companies will increase, decreasing competition. A few
companies will dominate the market.
• D
ue to the rising cost of medical liability insurance, more physicians will consider going without coverage
or retiring.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
37
References
1.Catlin A, Cowan C, Hartman M, Heffler S; National Health Expenditure Accounts Team. National health spending in 2006: a year of change
for prescription drugs. Health Aff (Millwood). 2008;27(1):14–29. doi:10.1377/hlthaff.27.1.14.
2. Keehan S, Sisko A, Truffer C, et al; National Health Expenditure Accounts Projections Team. Health spending projections through 2017:
the baby-boom generation is coming to Medicare [published online February 26, 2008]. Health Aff (Millwood). 2008;27(2):w145–w155.
doi:10.1377/hlthaff.27.2.w145.
3. OECD Health Data 2007: Statistics and Indicators for 30 Countries, December 2007. Organization for Economic Development Web site.
www.oecd.org/health/healthdata. Accessed September 15, 2008.
4. Snapshot: health care costs 101. California Healthcare Foundation Web site. www.chcf.org/documents/insurance/HealthCareCosts08.pdf.
Accessed September 15, 2008.
5. Commonwealth Fund Commission on a High Performance Health System. Why Not the Best? Results From the National Scorecard
on U.S. Health System Performance, 2008. Commonwealth Fund Web site. www.commonwealthfund.org/usr_doc/
Why_Not_the_Best_national_scorecard_2008.pdf?section=4039. Accessed September 15, 2008.
6. Poisal JA, Truffer C, Smith S, et al; National Health Expenditure Accounts Projections Team. Health spending projections through 2016:
modest changes obscure part D’s impact [published online February 21, 2007]. Health Aff (Millwood). 2007;26(2):w242–w253. doi:10.1377/
hlthaff.26.2.w242.
7. Healthcare Spending and the Medicare Program: Data Book June, 2007. MedPAC Web site. www.medpac.gov/documents/Jun07DataBook_Entire_
report.pdf. Accessed September 15, 2008.
8. Orszag PR. The long-term outlook for health care spending, November 2007. Congressional Budget Office Web site. www.cbo.gov/
ftpdocs/88xx/doc8807/11-13-2007-LT-Health-Presentation.pdf. Accessed September 15, 2008.
9. The Long-Term Budget Outlook, December 2007. Congressional Budget Office Web site. www.cbo.gov/ftpdocs/88xx/doc8877/12-13-LTBO.pdf.
Accessed September 15, 2008.
10. The number of uninsured Americans continued to rise in 2004. Center on Budget and Policy Priorities Web site.
www.cbpp.org/8-30-05health.htm. Accessed September 15, 2008.
11. State Pharmaceutical Assistance Programs (SPAPs) and discount programs. National Governors Association Web site. www.nga.org/portal/site/
nga/menuitem.1b7ae943ae381e6cfcdcbeeb501010a0/?vgnextoid=67d1c82444991110VgnVCM1000001a01010aRCRD&vgnextfmt=print. Accessed
September 15, 2008.
12. Levit K, Smith C, Cowan C, et al. Trends in US health care spending, 2001. Health Aff (Millwood). 2003;22(1):154–164.
13. Ginsburg PB. Don’t break out the champagne: continued slowing of health care spending growth unlikely to last. Health Aff (Millwood).
2008;27(1):30–32. doi:10.1377/hlthaff.27.1.30.
14. How changes in medical technology affect health care costs. Kaiser Family Foundation Web site. www.kff.org/insurance/snapshot/
chcm030807oth.cfm. Accessed September 15, 2008.
15. Catlin A, Cowan C, Heffler S, Washington B; National Health Expenditure Accounts Team. National health spending in 2005: the slowdown
continues. Health Aff (Millwood). 2007;26(1):142–153.
16. Thorpe KE, Florence CS, Howard DH, Joski P. The impact of obesity on rising medical spending [published online October 20, 2004]. Health
Aff (Millwood). 2004;Suppl Web Exclusives:W4-480–486. doi:10.1377/hlthaff.w4.480.
17. Wennberg JE, Fisher ES, Goodman DC, Skinner JS; The Dartmouth Institute for Health Policy and Clinical Practice. Tracking the Care of
Patients with Severe Chronic Illness: The Dartmouth Atlas of Health Care 2008. Lebanon, NH: Dartmouth Medical School; 2008.
18. American Medical Association. Professional Liability Insurance Rates and Distribution of Rate Changes: 2003–2007. Chicago, IL: American
Medical Association; December 2007.
19. High Out-of-Pocket Spending Climbs Across Income Groups, 2001–2007 [figure]. Commonwealth Fund Web site.
www.commonwealthfund.org/usr_doc/Collins_losinggroundbiennialsurvey2007_figures.ppt?section=4039. Accessed September 15, 2008.
20. Banthin JS, Cunningham P, Bernard DM. Financial burden of health care, 2001–2004. Health Aff (Millwood). 2008;27(1):188–195.
doi:10.1377/hlthaff.27.1.188.
38
AMA Health Care Trends 2008
Health care coverage and access
Figure 6. Indicators of access to care for the U.S. population
25
20.0
20
2007
17.5
16.1
2003
15
13.2
12.3
11.0
10
8.0
8.4
6.3
5.2
5
0
3.9
Unmet
need
Delayed
care
All people
a
7.2
Unmet
need
Delayed
care
Insured people
Unmet
need
Delayed
care
Uninsured people
Adapted with permission from the Center for Studying Health System Change.13
The recent jump in the number of uninsured, the growing fiscal crisis in many states, which may
jeopardize Medicaid funding, and employer concerns about the rising cost of health care premiums
will fuel new debates about the role of the government vs. the private sector in offering health
benefits. The pressure is mounting for new approaches to health coverage.
Trends
Overall coverage patterns
• B
oth the percentage and the number of people without health insurance increased in 2006. The percentage
without health insurance increased from 15.3 percent in 2005 to 15.8 percent in 2006, and the number of
uninsured increased from 44.8 million to 47.0 million.1
• T
he increase in the number of uninsured U.S. non-elderly between 2004 and 2006 was 3.4 million. This is a
somewhat greater increase on an annual basis than in the previous four years despite an improvement in the
economy. Overall, of the 3.4 million increase, 700,000 were middle-income Americans and 800,000 were higherincome Americans. The majority (2.0 million), however, were below 200 percent of the federal poverty level
(FPL), of which about three-quarters were adults for whom there was no change in public coverage to offset the
decline in employer coverage.2
39
• T
here were 89.6 million Americans under the age of 65 who were uninsured for some or all of the two-year period
2006–2007. This constitutes more than one in every three non-elderly Americans.3
• S
eventy-five percent of the growth in the uninsured occurred in the South and West. The Midwest had the lowest
uninsured rate in 2006 at 11.4 percent, followed by the Northeast (12.3 percent), the West (17.9 percent) and the
South (19.0 percent). The Northeast and the South experienced increases in their uninsured rates in 2006, from
11.7 percent and 18.0 percent, respectively, in 2005.1
• T
he uninsured rates for people living inside metropolitan statistical areas (MSAs) increased from 15.3 percent to
15.8 percent between 2005 and 2006. In 2006, the uninsured rate was higher among people living within principal
cities (19.0 percent) than among people living in the suburbs (13.8 percent). The percentage of the uninsured that
lived outside MSAs increased from 15.0 percent to 16.0 percent between 2005 and 2006.1
Coverage by age
• I n 2006, 65.5 percent of the children in poverty were insured by Medicaid. Children in poverty were more likely to
be uninsured (19.3 percent) than the population of all children (11.7 percent).2
• I n 2006, the percentage and the number of children younger than 18 years old without health insurance
(11.7 percent and 8.7 million) were higher than in 2005 (10.9 percent and 8.0 million). From 2004 to 2006,
500,000 low-income, 400,000 middle-income and 100,000 high-income children lost coverage.2
• C
hildren 12 to 17 years old were more likely to be uninsured than those under 12—12.6 percent compared with
11.2 percent. The uninsured rate in 2006 for children 12 to 17 years old was not statistically different from the rate
in 2005. About 22.1 percent of Hispanic children did not have any health insurance in 2006, compared with
7.3 percent for non-Hispanic white children, 14.1 percent for black children and 11.4 percent for Asian children.
The uninsured rates for non-Hispanic white, Asian and Hispanic children in 2006 were not statistically different
from their respective rates in 2005.1
• M
ore than 13 million young adults aged 19 to 29 are uninsured, the fastest-growing age group among the uninsured
population. Turning 19 is a critical milestone. Employer health plans often do not cover young adults as dependents
after age 18 or 19 if they do not go on to college. Medicaid and the State Children’s Health Insurance Program
(SCHIP) reclassify all teenagers as adults on their 19th birthday.4
• C
ompared with older age groups, adults aged 19–29 continue to be most at risk of being underinsured: only 41
percent were insured all year and not underinsured in 2007.5
• M
any young adults have entry-level, low-wage (36 percent of workers between ages 19 and 29 have jobs that pay
less than $10 per hour) and temporary jobs that often do not offer health coverage, and public coverage options for
low-income young adults are very limited.6
• W
hile many discussions about uninsured young adults cite their relatively good health (the “invincibles”) as a
reason why they have chosen to forgo health insurance, the data show that those in the best health are actually
the least likely to be uninsured. About 27 percent of young adults in excellent or very good health are uninsured,
compared with about 40 percent of those in worse health.6
• T
he loss of employer coverage, Medicaid coverage and SCHIP coverage shows up dramatically in uninsured rates of
young adults, particularly those in low-income families. Among 19- to-29-year-olds in families with incomes below
the poverty level, more than half are uninsured, compared with about one in five low-income children aged 18 and
under. About 42 percent of young adults in families with incomes between 100 percent and 199 percent of poverty
are uninsured.4
40
• T
he largest gap in the current system is for people under age 65 who do not have access to employer coverage and
are not eligible for Medicaid, SCHIP or Medicare, as in the case of those too disabled to work. With their high
premiums and underwriting, individual insurance plans—which cover just 6 percent of the under-65 population—
have proven to be an inadequate substitute for employer group coverage.4
Income and coverage
• T
he likelihood of low- and moderate-income families having coverage through an employer has always been lower
than that of higher-income families and has declined over the past six years.4
• I n 2005, 53 percent of people with incomes less than $20,000, and 41 percent of people in households with
incomes between $20,000 and $40,000, reported a time when they were uninsured in the prior year.4
• T
he likelihood of being covered by health insurance rises with income. In 2006, 75.1 percent of people in
households with annual incomes of less than $25,000 had health insurance coverage. Health insurance coverage
rates increased with increasing consecutive household income groups to 91.5 percent for those in households with
incomes of $75,000 or more.1
• A
2007 Families USA report found that nearly one in four Americans under the age of 65—61.6 million people—
is in a family that will spend more than 10 percent of its pretax income on health care costs in 2008. The vast
majority of these people (82.4 percent) have health insurance. And 17.8 million non-elderly Americans—more than
three-quarters of whom have health insurance—are in families that will spend more than 25 percent of their pretax
income on health care costs in 2008.7
•Nearly one-third (32.6 percent) of people in families that will spend more than 25 percent of their pretax
income on health care costs in 2008 are from families earning between $30,000 and $75,000 per year.
•Between 2000 and 2008, the number of people in families that spend more than 10 percent of their pretax
income on health care will have risen by nearly 19.9 million. The number of people in families spending more
than 25 percent of their pretax income on health care costs will have increased by 6.2 million between 2000
and 2008.
Minority coverage
• S
ixty-two percent of working-age Hispanics and 33 percent of African Americans were uninsured for some time
during 2005, compared with 20 percent of whites in the same age group.4
• E
ighty percent of Hispanics in households with incomes under 200 percent of the FPL experienced a time when
they were uninsured over a four-year period, compared with 66 percent of African Americans and 63 percent of
whites in that income group. This is in spite of the fact that Hispanics in lower-income households were more
likely than either African Americans or whites in the same income group to have been continuously employed full
time over that period.4
• I n 2006, the uninsured rate for non-Hispanic whites was statistically unchanged at 10.8 percent. The uninsured
rate for blacks increased in 2006 to 20.5 percent, from 19.0 percent in 2005, while the uninsured rate for Asians
decreased to 15.5 percent in 2006, from 17.2 percent in 2005. Among Hispanics, both the uninsured number and
rate increased in 2006 to 15.3 million and 34.1 percent, from 13.9 million and 32.3 percent in 2005.1
Coverage for the disabled
• A
n estimated 1.7 million disabled people are in the waiting period for Medicare, which may last two years. Of
those, about one-third have coverage through a former employer or though a spouse’s employer, just over a third are
covered by Medicaid, 9 percent purchase coverage through the individual insurance market, and 15 percent—or
nearly 265,000 people—are without health insurance.4
41
• M
ore than two in five disabled Medicare beneficiaries aged 50–64 said that they had been uninsured just prior to
entering the Medicare program.4 Acquisition of Medicare coverage was associated with improved trends in selfreported health for these previously uninsured adults, particularly those with cardiovascular disease or diabetes.8
Public sector coverage
• The gap between public coverage and employer-based coverage is widening.4
• T
he number of people covered by government health programs was statistically unchanged from 2005 at 80.3
million in 2006, while the percentage of those covered decreased from 27.3 percent in 2005 to 27.0 percent in
2006. The percentage of people with Medicaid coverage (12.9 percent) and the percentage of people covered by
Medicare (13.6 percent) both were statistically unchanged between 2005 and 2006. The numbers of people insured
by Medicaid and Medicare were statistically unchanged at 38.3 million and 40.3 million, respectively.1
• M
edicaid and SCHIP play a critical supporting role, covering an additional 28 million adults and children, or
11 percent of the under-65 population. Medicare covers 39 million people, mostly those over age 65.4
Private sector coverage
• The number of people with health insurance increased to 249.8 million in 2006 (up from 249.0 million in 2005).1
• I n 2006, the number of people covered by private health insurance (201.7 million) and the number of people
covered by government health insurance (80.3 million) were not statistically different from 2005.1
• M
ore than two-thirds (67 percent) of adults under age 65 who do not have health insurance are in families where
at least one member works full time.4
• E
mployer-based coverage forms the backbone of the United States’ voluntary, mixed private–public health
insurance system; more than 160 million non-elderly workers and their dependents, or 62 percent of the under-65
population, have job-based coverage.4
• A
majority of Americans (59.7 percent) were covered by a health insurance plan related to employment for some
or all of 2006, a proportion that was statistically lower than that of 2005 (60.2 percent in 2005).1
• E
mployers with high rates of employer-sponsored insurance included manufacturing, finance and public
administration. Low rates of insurance include services, construction and retail trade. Seventy percent of the
increase in uninsured workers from 2000 to 2006 occurred in service and construction industries. Workers in small
firms or who were self-employed had lower employer coverage rates.2
• W
orkers who are employed in firms with fewer than 50 employees are less likely to have coverage through an
employer than are those employed by larger companies.4
• L
ower-wage workers in small firms are at particularly high risk for not being offered health benefits, not being
eligible for such benefits or not having the financial means to “take up” coverage. Nearly two in five lower-wage
workers in small firms are uninsured—more than twice the rate of higher-wage workers in small firms.4
• A
n estimated 34 million workers are in nonstandard jobs, meaning they are either self-employed or in temporary,
part-time or contract positions.
• J ust one in five nonstandard workers has health insurance through his or her employer, compared with threequarters of regular, full-time employees.
• About one-quarter (24 percent) of nonstandard workers are uninsured, vs. 12 percent of regular full-time workers.4
42
• E
ven when lower-wage workers are eligible for COBRA benefits, the full cost of the premium is often unaffordable,
particularly as a share of an unemployment benefit. Despite the availability of COBRA coverage, more than half of
unemployed adults under age 65 are uninsured, which is more than three times the rate for employed adults.4
• C
OBRA-eligible low-income workers who leave their jobs are much more likely to be uninsured than higher-wage
workers. They have fewer options than higher-wage workers have for coverage through a new job or through a
spouse.4
• J ust as they are less likely to be offered employer-based coverage in general, lower-wage workers are far less likely to
be eligible for COBRA. Many who leave their jobs were uninsured while they were working.4
Premiums
According to the Kaiser Family Foundation and Health Research and Educational Trust (Kaiser/HRET) 2007
Employer Health Benefits Survey9:
• T
he average annual total premium cost is $4,479 for single coverage and $12,106 for family coverage. Premiums
for employer-sponsored health insurance rose an average of 6.1 percent in 2007, less than the 7.7 percent increase
reported in 2006, but still higher than the increase in workers’ wages (3.7 percent) or the overall inflation rate
(2.6 percent).
• T
he recent moderation in premium trends has not reversed the erosion in the percentage of employers offering
health benefits that occurred between 2000 and 2005. During that period, the percentage of employers offering
coverage fell from 69 percent to 60 percent. While the offer rate seems to have stabilized with lower premium
increases and a reasonably strong economy—it is essentially unchanged over the past three years—it is unclear
what conditions would be necessary for the employer offer rate to move back toward the higher levels that were
present at the beginning of the decade.
• B
etween spring 2006 and spring 2007, insurance premiums increased an average of 6.1 percent for employersponsored health insurance, a slower rate than the 7.7 percent increase in 2006. This is the fourth consecutive
year with a lower rate of growth than the previous year, and the lowest rate of growth since 1999, when premiums
increased 5.3 percent. Even as premium growth moderates, the rate of increase continues to be higher than the
growth in workers’ earnings (3.7 percent) and inflation (2.6 percent).
• B
etween 2000 and 2007, the total number of firms offering health coverage declined by 9 percentage points (from
69 percent to 60 percent), with small businesses being the most likely to drop coverage.
• H
istory suggests that premium trends are cyclical, and after four years of downward premium trends, it is unclear
how much longer this relative lull in premium growth will continue before pressures on health insurers to improve
profitability will push premium trends on an upward path.
• H
ealth insurance premiums have risen substantially. Between 2000 and 2007 alone, the average annual premium
for job-based family health coverage rose from $6,351 to $12,106, an increase of more than 90 percent. During the
same period, the average worker’s share of annual family premiums rose from $1,656 to $3,281, an increase of more
than 98 percent.7
Insurance plans
According to the 2007 Kaiser/HRET survey9:
• T
he majority (57 percent) of covered workers are enrolled in preferred provider organization (PPO) plans. Health
maintenance organizations (HMOs) cover 21 percent, followed by point-of-service (POS) plans (13 percent),
high-deductible health plans with savings options (5 percent) and conventional plans (3 percent).
43
• H
MO enrollment continues to be significantly higher in the West (29 percent) than in all other regions. In
contrast, a lower percentage of covered workers are enrolled in HMO plans in the Midwest (15 percent). A higher
percentage of covered workers are enrolled in PPO plans in the Midwest (66 percent), and fewer are enrolled in the
West (43 percent). For POS plans, enrollment is lowest in the Midwest, at 10 percent. HMO enrollment is higher
among workers in state and local government (33 percent) than among workers in other industries.
• The majority of covered workers are employed by a firm that contributes at least half of the premium.
• H
igh-deductible health plans with savings options (HDHP/SOs) are defined as: (1) health plans with a deductible
of at least $1,000 for single coverage and $2,000 for family coverage offered with a health reimbursement
arrangement, or HRA (referred to as HDHP/HRAs), and (2) high-deductible health plans that meet the federal
legal requirements to permit an enrollee to establish and contribute to a health savings account, or HSA (referred
to as HSA-qualified HDHPs.
• I n 2007, 10 percent of firms offering health benefits offered an HDHP/HRA, an HSA-qualified HDHP or both.
Five percent of covered workers were enrolled in HDHP/SOs in 2007. The average premiums for single coverage in
HDHP/HRA and HSA-qualified HDHPs, and the average premium for family coverage in HSA-qualified HDHPs,
are lower than the overall average premiums for plans that are not HDHP/SOs.
• I n 2007, 10 percent of firms offering health benefits offered an HDHP/HRA, an HSA-qualified HDHP or both.
This is a higher percentage than was reported for 2006 (7 percent), but the difference is not statistically significant.
Among firms offering health benefits, 3 percent offer an HDHP/HRA, and 7 percent offer an HSA-qualified
HDHP. Larger firms are more likely than smaller firms to offer an HDHP/HRA, an HSA-qualified HDHP or both.
For example, 18 percent of firms with 1,000 or more workers offer an HDHP/SO, compared to 10 percent of firms
with three to 199 workers, and 13 percent of firms with 200 to 999 workers.
• T
wenty-two percent of firms that offer health benefits offer a flexible spending account (FSA). An FSA allows
employees to set aside funds on a pretax basis to pay for medical expenses not covered by health insurance.
• S
ixty-one percent of firms that offer health benefits allow employees to use pretax dollars to pay for health
insurance premiums as allowable under Section 125 of the Internal Revenue Service Code. Almost all large firms
(200 or more workers) do so at 92 percent, vs. 60 percent of small firms (three to 199 workers).
• N
ineteen percent of firms that offer health benefits offer long-term-care insurance. The difference between small
firms (three to 199 workers) and large firms (200 or more workers) is not statistically significant.
• T
hirty-four percent of covered workers are employed by a firm that offers long-term-care insurance. Workers in
large firms (200 or more workers) are more likely than workers in small firms (three to 199 workers) to be offered
this benefit (43 percent vs. 19 percent).
• A
s observed in previous years, small percentages of employers report that they are likely to restrict eligibility or
drop coverage altogether. Less than 1 percent of firms say they are very likely to restrict eligibility for benefits in the
next year. Similarly, about 1 percent of firms say they are very likely to drop coverage in the next year.
• T
he vast majority of employers who have continued offering coverage have been forced to shift some of the burden
of rising health care costs to their workers, usually by increasing the amount that workers are required to pay
toward insurance premiums, reducing coverage and relying on more cost-sharing for certain services. For example,
more than 95 percent of people with job-based coverage are now required to pay hospital-specific cost-sharing, and
more than 90 percent are in tiered drug plans that charge more for some drugs than for others.7
44
In the Kaiser/HRET 2007 survey9:
• A
mong those employers that offer benefits, large percentages of firms report that in the next year they are very or
somewhat likely to increase the amount workers contribute to premiums (45 percent), increase deductible amounts
(37 percent), increase office visit cost-sharing (42 percent) or increase the amount that employees have to pay for
prescription drugs (41 percent).
• A
lthough firms report planning to increase the amount employees have to pay when they have insurance, few firms
report they are somewhat or very likely to drop coverage (3 percent) or limit eligibility (5 percent) in the next
year. And even though the HDHP/SO offer rate or enrollment did not increase significantly from 2006, one-fifth of
firms report being somewhat likely (18 percent) or very likely (2 percent) to offer an HSA-qualified HDHP in the
next year, and almost one-quarter report being somewhat likely (21 percent) or very likely (3 percent) to offer an
HDHP/HRA in the next year.
• I n addition to any general plan deductible, more than 95 percent of covered workers face cost-sharing when
admitted to the hospital or when they have outpatient surgery.
• A
s health care costs consume a growing share of family budgets, many families are forced to look for new ways
to pay for care. With the majority of doctors’ offices and hospitals now accepting payment by credit card, paying
via credit card is becoming increasingly common. For example, Visa reports that in 2001 Americans charged
$19.5 billion in health care services to Visa cards. In addition, credit cards and loans marketed specifically for the
purchase of medical care are becoming more common.7
• T
he employer-sponsored health benefits market did not experience large changes in 2007. Employers and
employees benefited from the continued moderation in the rate of premium increases, compared to the much
higher growth rates earlier in the decade.9
• W
ith health insurance moving toward greater patient cost-sharing, the number of underinsured rose from
16 million for those aged 19–64 in 2003 to 25 million in 2007. Underinsured are those insured all year but
reporting at least one of three indicators: (1) medical expenses amounted to 10 percent of income or more; (2)
among low-income adults (below 200 percent of the FPL), medical expenses amounted to at least 5 percent of
income; and (3) health plan deductibles equaled or exceeded 5 percent of income. Underinsured adults were more
likely to forgo needed care than those with more adequate coverage and had rates of financial stress similar to those
of the uninsured.4,5
• I n total, 42 percent of U.S. adults were underinsured or uninsured in 2007, up from 35 percent in 2003—
a 60 percent increase. The rate of increase was steepest among those with incomes above 200 percent of the FPL,
where underinsurance rates nearly tripled.4,5
• O
ne in five Americans—59 million people—reported not getting or delaying needed medical care in 2007,
up from one in seven—36 million people—in 2003. While access deteriorated for both insured and uninsured
people, insured people experienced a larger relative increase in access problems compared with uninsured
people.10
• D
ata from the Kaiser/HRET annual survey indicate that HMO enrollment dropped to 21 percent in 2005 from
25 percent in 2004. During the same period, PPO enrollment increased from 55 percent to 61 percent of total
enrollment.9
• D
espite a slowdown in earnings growth, industry profitability remains strong. HMOs reported a $7 billion profit for
the first half of 2005, representing a $1.2 billion, or 21.2 percent, increase over the $5.76 billion earned during the
first half of 2004.11
45
The U.S. Census Bureau reported that 9.1 percent of people with health insurance purchased it directly, down from
9.2 in 2005, 9.3 percent in 2004 and 9.2 percent in 2003.1,9
• T
here is no census of the medically uninsurable. But in 2006, insurers turned down 11 percent of all individual
applicants for medical reasons, including 22 percent of those 50 or older, according to America’s Health Insurance
Plans, an industry trade group.12
• T
hirty-five states have programs for high-risk applicants whom no private company is willing to insure. Although
high-risk pools have existed for three decades, they cover only 207,000 people, according to the National
Association of State Comprehensive Health Insurance Plans. Premiums typically are as much as twice the standard
rate in some states, but are not enough to pay claims. That has left states to cover about 40 percent of the cost,
which is increasingly passed on to consumers through assessments on insurance premiums.12
• A
lmost all of the state pools impose waiting periods of up to a year before covering the health conditions that
initially made it impossible to obtain insurance. In some states, fiscal pressures have forced heavy restrictions in
coverage and enrollment. Florida, which has 3.8 million uninsured people, closed its pool to new applicants in
1991, and the membership has declined to 313.12
Consequences of gaps in health insurance coverage for the health and
economic security of families
According to testimony before a U.S. House Subcommittee in November of 2007, Sara Collins of the Commonwealth
Fund reported4:
• P
eople who spend any time without coverage report significantly higher rates of cost-related access problems, are
significantly less likely to have a regular doctor or medical home, and are less likely to say that they always or often
receive the health care they need when they need it.
• M
ore than half of working-age adults who had been uninsured during 2005 reported problems paying medical bills
during that time or were paying off accrued medical debt, compared with 26 percent of those who had been insured
all year.
• F orty percent of uninsured adults with medical bill problems reported that they were unable to pay for basic
necessities like food, heat or rent, and nearly 50 percent had used all their savings to pay their bills.
• T
he Institute of Medicine estimates that 18,000 avoidable deaths occur each year in the United States as a direct
result of individuals being uninsured.
• T
he aggregate, annualized cost of uninsured people’s lost capital and earnings from poor health and shorter life span
falls between $65 billion and $130 billion for each year without coverage.
• G
aps in coverage for uninsured people with chronic health conditions may have long-run cost implications for the
health system, and the Medicare program in particular.
Predicted impacts for patients
• P
oor-quality health care is particularly devastating and can have long-term implications for uninsured adults with
chronic health problems.
• Uninsured patients will likely experience more difficulty accessing care as the safety net continues to deteriorate.
• P
atients with pre-existing conditions may be considered uninsurable and must resort to state high-risk insurance
pools for coverage.
46
• I ncreased financial burden associated with out-of-pocket expenses may force an increasing number of Americans
to make difficult choices between not getting or delaying needed medical care or forgoing other necessities.
• P
eople with medical debt will continue to be more likely to delay or forgo care. Insured people with medical
debt are more than twice as likely to go without a needed prescription than those without debt (24 percent
vs. 9 percent).
• A
s health costs increase, more employers will cease providing health insurance benefits to employees and/or their
families. The result will be an increase in the number of uninsured, a development that will add pressure for a
national strategy to achieve universal coverage.
• I f the economy continues to slow and health insurance premiums continue to rise, employees will likely be
expected to share more of the cost of premiums and face higher deductibles and copayments. Companies that
continue to offer insurance will be motivated to shift costs and responsibilities to employees. In exchange,
employees will want more choice and control over health care, but not the administrative burden.
• C
overage/access will remain “tiered”—wherein divisions exist between consumers with considerable discretionary
income and insurance; consumers with some insurance but little or no choice of coverage; and the uninsured.
• I nsurance products with low premiums and high out-of-pocket costs may become more popular as the costs of
health coverage plans are shifted to the individual and family.
• R
elentless growth in health insurance premiums and out-of-pocket costs will continue to make spending on health
care a growing burden.
• T
he public will remain concerned about the cost of health care, but will be most concerned about being subjected
to limited choice and higher levels of copayments. Public dissatisfaction will be a factor in the next attempt at
health system reform.
Predicted impacts for physicians
• The rising number of uninsured will create increased pressure for health system reform.
• T
he public, policymakers and health care providers will become increasingly frustrated with the lack of universal
access and the effects that the uninsured have on the public’s health, and they will push for health system changes.
• P
hysicians will continue to be frustrated by health plan interference with clinical decision-making as health plans
try to contain costs.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
47
References
1.DeNavas-Walt C, Proctor BD, Smith J; US Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States: 2006. Current
Population Reports, P60–233. Washington, DC: US Government Printing Office; 2007. www.census.gov/prod/2007pubs/p60-233.pdf. Accessed
September 15, 2008.
2. Holahan J, Cook A. The US economy and changes in health insurance coverage, 2000–2006 [published online February 20, 2008]. Health Aff
(Millwood). 2008;27(2):w135–w144. doi:10.1377/hlthaff.27.2.w135.
3. Families USA. Wrong Direction: One Out of Three Americans Are Uninsured. Publication No. 07-108. Washington, DC: Families USA; 2008.
http://familiesusa.org/assets/pdfs/wrong-direction.pdf. Accessed September 15, 2008.
4. Collins SR. Widening gaps in health insurance coverage in the United States: the need for universal coverage. Invited testimony before the
Subcommittee on Income Security and Family Support, Committee on Ways and Means, United States House of Representatives Hearing
on “Impact of Gaps in Health Coverage on Income Security.” November 14, 2007. www.commonwealthfund.org/usr_doc/
Collins_wideninggaphltins_testimony_11-14-2007_1076.pdf?section=4039. Accessed September 15, 2008.
5. Schoen C, Collins SR, Kriss JL, Doty MM. How many are underinsured? Trends among US adults, 2003 and 2007 [published online June 10,
2008]. Health Aff (Millwood). 2008;27(4):w298–w309. doi:10.1377/hlthaff.27.4.w298.
6. Schwartz K, Schwartz T. (June 2008). Uninsured Young Adults: a Profile and Overview of Coverage Options. Kaiser Commission on Medicaid
and the Uninsured publication No. 7785. www.kff.org/uninsured/upload/7785.pdf. Published June 30, 2008. Accessed September 15, 2008.
7. Families USA. Too Great a Burden: America’s Families at Risk. Publication No. 07-113. Washington, DC: Families USA; 2007.
www.familiesusa.org/assets/pdfs/too-great-a-burden.pdf. Accessed September 15, 2008.
8. McWilliams JM, Meara E, Zaslavsky AM, et al. Health of previously uninsured adults after acquiring Medicare coverage. JAMA.
2007;298(24):2886–2894. doi:10.1001/jama.298.24.2886.
9. Claxton G, DiJulio B, Finder B, et al. Employer Health Benefits: 2007 Annual Survey. Menlo Park, CA: Henry J. Kaiser Family Foundation;
2007. www.kff.org/insurance/7672/upload/76723.pdf. Accessed September 15, 2008.
10. Cunningham PJ, Felland LE. Falling Behind: Americans’ Access to Medical Care Deteriorates, 2003–2007. Tracking Report No. 19, Center for
Studying Health System Change, Washington, DC. www.hschange.com/CONTENT/993. Published June 2008. Accessed September 15, 2008.
11. HMOs earned $7 billion in first half of ’05 [news release]. Jupiter, FL: Weiss Ratings Inc.; January 30, 2006. www.weissratings.com/NEWS/
Ins_HMO/20060130hmo.htm. Accessed September 15, 2008.
12. Sack K. McCain plan to aid states on health could be costly. New York Times. July 9, 2008. www.nytimes.com/2008/07/09/us/politics/
09health.html. Accessed September 15, 2008.
13. Indicators of Access to Care for the U.S. Population [figure]. Center for Studying Health System Change Web site. www.hschange.com/
CONTENT/993. Accessed September 15, 2008.
48
AMA Health Care Trends 2008
Third-party payers
Figure 7. Uninsured and underinsured adults: 2007 compared with 2003
Percent of adults (ages 19-64)
who are uninsured or underinsured
100
75
68
72
Underinsured
Uninsured during year
35
49
48
14
9
25
27
28
26
2003
2007
Total
a
24
42
50
0
19
2003
2007
Under 200% of poverty
17
4
11
13
16
2003
2007
200% of poverty or more
Adapted with permission from the Commonwealth Fund.8(p29)
As the number of adults without insurance has steadily grown, so has the number of “underinsured”—
those who are insured all year but have medical bills or deductibles that were high relative to their
incomes. Between 2003 and 2007, there was a significant jump in moderate- or higher-income
individuals becoming underinsured.
Trends
Private sector
• I n 2006, private health insurance premiums per enrollee grew just 5.2 percent, largely because of the introduction
of Medicare Part D. For 2007, premiums were expected to grow 6.0 percent and remain steady at 6.2 percent in
2007 and 2008. A mild cycle in premium growth is expected through 2017 with acceleration to 6.9 percent in 2009
and a subsequent gradual slowdown to 5.9 percent by 2017.1
• T
he pressure to lower health care costs has continued unabated, forcing health plans to follow a number of
strategies to remain economically viable (e.g., consolidating rapidly to increase market share and obtain economies
of scale, increasing premiums, denying coverage for services, and reducing physician and hospital payment).
49
• C
onsolidation of insurers has reduced competition in hundreds of markets across the country. Assessing
consolidation of insurers, a 2007 American Medical Association study found that one health insurer dominates the
market in a majority of 313 metropolitan statistical areas (MSAs) in 44 states. In 96 percent (299) of the MSAs,
at least one insurer has a combined HMO/PPO market share of 30 percent or greater. In 64 percent (200) of the
MSAs, at least one insurer has a combined HMO/PPO market share of 50 percent or greater.2
• I n 2005, UnitedHealth Group and WellPoint Inc. continued to grow their markets. United bought PacificCare and
WellPoint purchased the last remaining for-profit Blue Cross company, WellChoice. In addition, UnitedHealth
purchased Definity Health and WellPoint purchased Lumenos in efforts to enter the consumer-driven health plan
(CDHP) market. The other large players also entered the consumer-driven field. CIGNA bought ChoiceLinx, a
small player in the consumer-driven market, and Aetna is building its own CDHPs.3
• A
s a result of mergers and acquisitions since 2000, the top two insurers today, WellPoint and United, have
memberships of 35.4 million and 32.4 million, respectively, totaling more than 67.8 million covered lives.
Together, WellPoint and United control approximately 36 percent of the national market for commercial health
insurance. In 2004 and 2005, 28 mergers valued at a total of $53.8 billion were completed or announced, which
exceeded the value of all the deals completed in the previous eight years. In the past 12 years, out of more than
400 mergers, the Department of Justice has challenged only two.2,4
• I n 2008, while businesses and individuals are dropping coverage in the wake of higher insurance premiums, the
nation’s largest publicly traded health plans indicate that they “will not sacrifice profitability for membership,”
according to WellPoint President and CEO Angela Braly.4
• A
nother strategy to reduce costs that is increasingly being utilized by health plans is the creation of rental
networks, or silent PPOs. PPOs lease their provider lists and associated discounts to organizations that may not
have networks of their own (e.g., smaller health plans, workers’ comp plans). These discount arrangements reduce
physician payments by as much as $3 billion a year.5
• Managed care companies are beginning to credential physicians based on outcomes and patient satisfaction.
• A
ccording to the American Hospital Association, hospitals, in particular, now enjoy stronger bargaining power and
are having more success negotiating higher reimbursement rates. Hospitals’ newfound strength stems partially from
the reduction in excess capacity and the increased consolidation that occurred during the mid-1990s.6
• H
ospitals are less willing to accept unfavorable payment rates and are willing to forgo being in a health care plan’s
provider network. Thus, insurers are placed in the position of either terminating a hospital from their network and
risk the wrath of employers or offering higher reimbursement rates.6
• D
rawing on 2003 data and updating research from 1996 to 1999, researchers found that Medicaid is a less
expensive method of providing health insurance to low-income populations than current private insurance plans.
Differences in the 1990s between private and public insurance were primarily attributable to differences in provider
payment rates. However, the 2003 data showed the differences were from higher out-of-pocket spending under
private health insurance.7
• A
substantial body of research indicates that even if low- and moderate-income families can obtain private
health insurance, higher cost-sharing—especially higher deductibles—makes it harder for many families to afford
medical care.7
• A
ccording to the Commonwealth Fund Commission 2008 Results from the National Scorecard on US Health
System Performance, private health insurance in the United States is characterized by complex benefit and costsharing designs and high rates of turnover in plan enrollment. Health plans also incur significant marketing and
underwriting costs. Administrative costs have been increasing rapidly in the United States: From 2000 to 2006,
per capita administrative costs increased 68 percent, from $289 to $485 per person, vs. a 47 percent increase in
national health expenditures per capita.8
50
•Insurance administrative costs as a share of total national health expenditures are more than three times
higher in the United States than in countries with the lowest rates (Finland, Japan and Australia) and
30 percent to 70 percent higher than in three countries where private insurance plays a substantial role
(Germany, Switzerland and the Netherlands).
Medicare
• I n 2007, the Medicare program provided health benefits to 44 million, approximately 37 million aged 65 and older
and another 7 million with permanent disabilities who are under age 65 or have end-stage renal disease or
Lou Gehrig’s disease.9
• I n 2006, Medicare benefit payments totaled $374 billion, or 12 percent of the federal budget, and 20 percent of the
nation’s total health care spending.10
• O
f all Medicare beneficiaries in 2007, 78 percent were non-Hispanic white, 10 percent were non-Hispanic black
and 8 percent were Hispanic.11
• E
ighty percent of the 44 million elderly and disabled people on Medicare have their health bills paid by the
traditional fee-for-service (FFS) program, and 20 percent (8.7 million) get their Medicare benefits through private
health plans that receive payments from Medicare, now called Medicare Advantage (MA) plans.
Medicare Advantage
• I n 2006, the majority of MA plans provided drug coverage, and most enrollees were in a plan with a coverage gap,
also known as the “doughnut hole.”12 After a precipitous drop between 1999 and 2002, MA programs saw a rapid
rise in both the number of plans and enrollees. The number of Medicare enrollees in private health plans increased
from 5.3 million (across 285 contracts) in 2003 to 8.7 million (across 602 contracts) as of June 2007.11
• M
edicare enrollment is projected to continue to shift from FFS toward managed care over the next decade.
By 2017, 27.5 percent of eligible Medicare beneficiaries are expected to enroll in an MA plan, compared with
16.4 percent in 2006.1
• M
A plans receive 12 percent extra from Medicare in relation to the costs of caring for the same beneficiaries in
the traditional Medicare program.13 Moreover, in general, MA enrollees tend to be in better health than their
counterparts in traditional Medicare. MA plans also enroll a smaller share of beneficiaries under age 65 who have
permanent disabilities.12
• I n a 2006 study of MA, costs for beneficiaries in poor health would actually have been higher than FFS in 19 of the
88 MA plans examined. Despite the high payments, relative to FFS costs, these plans may not always be a good
deal for sicker beneficiaries who use more health services.14
• R
ather than achieving intended savings, such plans have generally increased program spending. In 2006, Medicare
paid $59 billion to MA plans—an estimated $7.1 billion more than Medicare would have spent if MA beneficiaries
had received care in Medicare FFS.15
• T
he current MA payment system increases Medicare expenditures over the long run, cuts short the life of the
Part A trust fund by two years and increases Part B premiums by $2 per person per month.12
Medicare Part D prescription drug program
• T
he Medicare Modernization Act of 2003 established a voluntary outpatient prescription drug benefit for people
on Medicare, known as Part D, that went into effect in 2006.9 Part D is the outpatient prescription drug benefit,
delivered through private plans that contract with Medicare, either stand-alone prescription drug plans (PDPs) or
Medicare Advantage prescription drug (MA-PD) plans.16
51
• A
ll 44 million elderly and disabled beneficiaries have access to the Medicare drug benefit through private plans
approved by the federal government. Part D plans are required to provide a “standard” benefit (or one that is
equivalent) and may provide enhanced benefits. Individuals with modest income and assets are eligible for
additional assistance with premiums and cost-sharing amounts.
• P
art D is funded by general revenues, beneficiary premiums and state payments, and accounted for 9 percent of
benefit spending in 2007. The Department of Health and Human Services (HHS) estimates that Part D spending
will total $45 billion in 2008 and $55 billion in 2009.17
• L
egislation prohibits Medicare officials from negotiating rates with pharmaceutical companies, instead requiring
that prices be set by marketplace negotiations between drug companies and health plans. In order to convince drug
companies not to scale back retiree health coverage, the legislation provides $71 billion in subsidies to companies
that retain retiree coverage.
• M
edicare replaced Medicaid as the primary source of drug coverage for “dual eligible” beneficiaries (i.e., those with
coverage under both Medicare and Medicaid) even though the Medicare coverage is typically less comprehensive.16
In addition, beneficiaries with low incomes and modest assets are eligible for assistance with premiums and costsharing under Part D plans.9
• A
s of January 2008, HHS reported that 25.4 million beneficiaries are enrolled in Medicare Part D plans, an
increase of 1.5 million since January 2007. Another 10.2 million have creditable drug coverage through retiree
plans. Of this total, 6.7 million retirees are in plans in which their employers receive tax-free subsidies equal to
28 percent of drug expenses between $275 and $5,600 per retiree in 2008. Another 4.0 million are estimated to
have other sources of creditable coverage, such as from Veterans Affairs.
• P
art D enrollment is highly concentrated, with the top two firms—United Healthcare and Humana—accounting
for more than 40 percent of Part D enrollees in 2007. Based on HHS estimates, as of January 2008, 4.6 million
beneficiaries, or 10 percent of the Medicare population, still lack credible drug coverage.17
Medicaid
• M
edicaid is not a single national program, but a collection of 50 state-administered programs, each providing
health insurance to low-income state residents. Each state initiative is governed by various federal guidelines, and
the federal government contributes between 50 percent and 78 percent of the cost.16
• M
edicaid spending growth declined for the first time in the program’s 40-plus year history in 2006, falling by
0.2 percent. This drop followed several years of very rapid spending growth, as total Medicaid expenditures rose
from $205.7 billion in 2000 to $315.0 billion in 2005—an average annual increase of 8.9 percent.
• T
he slowdown in Medicaid spending in 2006 was caused by the decline in enrollment increases for the aged
and the disabled at the same time that the majority of this population shifted drug coverage from state Medicaid
programs to the new federal Medicare Part D benefit.
• H
owever, Medicaid spending was projected to increase 8.9 percent in 2007, the highest single-year growth rate
since 2003 (9.1 percent), driven by growth in hospital care (11.4 percent), home health care (13.7 percent), and
other personal care services, including home- and community-based services (14.4 percent). Medicaid spending
is expected to grow at an average of 7.9 percent per year through 2017 and to increase as a share of national
health spending from 14.8 percent in 2006 to 16.8 percent in 2017. Home health care and other personal care are
expected to be the fastest growing services.1
• M
edicaid enrollment among the aged and disabled grew about 2.9 percent per year between 2000 and 2003.
Enrollment for families increased 11.6 percent between 2000 and 2002 and another 7.1 percent between 2002 and
2003. Enrollment growth was largely attributable to the economic slowdown.18
52
• E
nrollment growth among the disabled and the elderly fell from an average of nearly 3.0 percent per year from
2000 to 2005 to less than 2.0 percent from 2005 to 2006, while the number of non-disabled adults and children
enrolled in Medicaid actually declined in 2006. Additionally, spending growth was affected by the more limited
effect of a reduction in per-enrollee spending growth for a few key services. Even though Medicaid enrollment
growth has largely tracked the continuing erosion of employer-sponsored insurance, for the first time since the late
1990s there was virtually no growth in Medicaid enrollment in 2006.19
• T
he implementation of the new Medicare Part D drug benefit in January 2006 shifted coverage of prescription
drugs for dual eligibles from Medicaid to Medicare. However, even without this shift, total Medicaid spending
would have increased by only 4.05 percent, considerably slower than in previous periods.19
• F ederal and state spending for Medicaid totaled $310.6 billion in 2006. The spending growth decelerated at the
federal level from 7.3 percent in 2005 to -1.9 percent in fiscal year 2006. There are projections to 2017 of increases
of 9.8 percent federal and 8.0 percent state and local Medicaid.1
• I n the typical 2003 state budget, Medicaid is second in size only to elementary and secondary education programs,
accounting for about 21.4 percent of state budgets. While Medicaid grew substantially in the 1990s, states now may
be forced to scale back their programs because of fiscal problems.20
• F orty-eight percent of Medicaid beneficiaries receive health care services through a broad array of managed care
arrangements. The shift to managed care has not resulted in the cost savings expected, but has affected delivery of
care.21
• T
he State Children’s Health Insurance Program (SCHIP) is targeted to children whose parents’ income is just
above the Medicaid threshold. Federal spending for SCHIP was $4.3 billion in 2003, with an enrollment that
reached 3.9 million in June 2003. SCHIP’s growth accounts for the sharp decrease in the number of uninsured
children since 1999.22
• I n the fiscal year 2007, the total number of children with SCHIP coverage increased by 299,045 (7.3 percent),
resulting in total SCHIP enrollment of 4,412,000 in June 2007. This growth represents the highest annual rate of
growth of children covered by SCHIP since the number enrolled grew by 9.4 percent from June 2002 to June 2003.
The number of children enrolled in SCHIP increased in 34 states and the District of Columbia.23
• A
s states continued to recover from the effects of the economic downturn and experienced strong revenue growth,
more states implemented positive policy changes that increased outreach and enrollment efforts, simplified
enrollment procedures, and expanded eligibility and benefits. The Medicare, Medicaid and SCHIP Extension Act
of 2007 maintains current funding levels for the program of $5 billion per year; however, there is an additional
appropriation of $1.6 billion in fiscal year 2008 and another $275 million in fiscal year 2009 (only through
March 2009) to address states that have projected shortfalls.24
• N
otwithstanding the anticipated decline in employer-sponsored insurance and the long-term-care needs of the
baby boomers, Medicaid spending as a share of national health spending is expected to average 16.6 percent from
2006 to 2025—roughly unchanged from 16.5 percent in 2005—and then increase slowly to 19.0 percent by 2045.
Growth in government revenues is projected to be large enough to sustain both Medicaid spending increases and
substantial real growth in spending for other services.25
Predicted impacts for patients
• Patients will have fewer choices of insurance plans.
• P
atients in nursing homes and subacute facilities will be forced to navigate between the often conflicting Medicare
and Medicaid regulations.
53
• S
ome tax policies could help low-income families pay premiums for basic private insurance. However, such families
might then face out-of-pocket spending for deductibles, copayments, coinsurance or benefit exclusions that create
barriers to care. Since low-income people have no or low marginal tax rates, the tax deduction on out-of-pocket
expenses offers little financial benefit.7
Predicted impact on physicians
• P
hysicians’ frustration with their inability to care properly for patients due to both the restricted range of treatment
choices their patients have and the micromanagement of clinical decision-making will grow (unless health
insurance coverage is expanded and restrictive features are removed from plans).
• U
nder the guise of cost control, physicians will continue to be confronted with attempts by the federal government
and managed care organizations to reduce physician payments, restrict referrals and substitute services of nonphysician providers for physicians’ services.
• T
he continued focus on cost containment will increasingly strain the patient-physician relationship. Physicians
will need to focus on their ethical responsibilities to advocate for patients in addition to putting patients’ interests
first in clinical decision-making.
• P
hysicians, particularly those in solo and small group practices, are being adversely affected by the leverage exerted
by health plans. For example, health plans are able to negotiate steeper discounts, lower capitated rates and
increased control over aspects of patient care. Health plans also are insisting on “all products” clauses. Physicians
are increasingly being presented with unfair contracts that are presented on the basis of “take it or leave it.”
• S
elf-employed physicians will continue to demand antitrust relief to allow them to join together to negotiate with
health plans.
• B
ecause failures of some major teaching hospitals and community hospitals are imminent, physicians will face
increasing problems in caring for patients in hospital settings. Physicians may be forced to find alternative sites for
delivering patient care, a situation that may precipitate an increase in physician joint ventures.
Predicted impacts for hospitals
• H
ospitals will be forced to make hard decisions about the mix of services offered. Financial losers will close, raising
problems for access and quality of care in some communities.
• R
estrictions on financing have reduced investments in hospital infrastructure, leading to less modern equipment,
and if the trend continues, quality of care will be jeopardized.
• H
ospitals continue to struggle with confusing federal laws prohibiting denial of emergency care to patients, the
so-called patient anti-dumping statute. The anti-dumping laws are causing hospitals to be caught in the financial
crossfire between managed care plans and the federal government.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
54
References
1. Keehan S, Sisko A, Truffer C, et al; National Health Expenditure Accounts Projections Team. Health spending projections through 2017:
the baby-boom generation is coming to Medicare [published online February 26, 2008]. Health Aff (Millwood). 2008;27(2):w145–w155.
doi:10.1377/hlthaff.27.2.w145.
2. American Medical Association. Competition in Health Insurance: A Comprehensive Study of U.S. Markets: 2007 Update. Chicago, IL: American
Medical Association; 2007. www.ama-assn.org/ama1/pub/upload/mm/368/compstudy_52006.pdf. Accessed September 15, 2008.
3. HealthLeaders-InterStudy Analysts. Top 10 managed care trends for 2005 and 2006. HealthLeaders News. January 16, 2006.
4. Berry E. Health plans say they’ll risk losing members to protect profit margins. AMNews. May 19, 2008. www.ama-assn.org/
amednews/2008/05/19/bil10519.htm. Accessed September 15, 2008.
5. Guglielmo WJ. The secret world of silent PPOs. Med Econ. 2006;83(2):22–25.
6. American Hospital Association. Beyond health care: the economic contribution of hospitals. Trendwatch. April 2008. www.aha.org/aha/
trendwatch/2008/twapr2008econcontrib.pdf. Accessed September 15, 2008.
7. Ku L, Broaddus M. Public and private health insurance: stacking up the costs [published online June 24, 2008]. Health Aff (Millwood).
2008;27(4):w318–w327. doi:10.1377/hlthaff.27.4.w318.
8. Commonwealth Fund Commission on a High Performance Health System. Why not the best? Results from the National Scorecard on US Health
System Performance, 2008. Commonwealth Fund Web site. www.commonwealthfund.org/usr_doc/Why_Not_the_Best_national_scorecard_2008.
pdf?section=4039. Accessed September 15, 2008.
9. Medicare: a Primer. Kaiser Family Foundation Web site. www.kff.org/medicare/upload/7615.pdf. Accessed September 15, 2008.
10. Medicare Spending and Financing [fact sheet]. Kaiser Family Foundation Web site. www.kff.org/medicare/upload/7305-02.pdf. Accessed September
15, 2008.
11. Healthcare Spending and the Medicare Program: A Data Book, June 2007. MedPAC Web site. www.medpac.gov/documents/
Jun07DataBook_Entire_report.pdf. Accessed May 10, 2008.
12. Medicare Advantage [fact sheet]. Kaiser Family Foundation Web site. www.kff.org/medicare/upload/2052-10.pdf. Accessed September 15, 2008.
13. Cohn J. What really ails Medicare. Am Prospect. April 21, 2008. www.prospect.org/cs/articles?article=what_really_ails_medicare. Accessed
September 15, 2008.
14. Biles B, Nicholas LH, Guterman S. Medicare Beneficiary Out-of-Pocket Costs: Are Medicare Advantage Plans a Better Deal? New York, NY: The
Commonwealth Fund; May 2006.
15. Cosgrove J. Medicare Advantage: Higher spending relative to Medicare fee-for-service may not ensure lower out-of-pocket costs for
beneficiaries. Testimony before the Subcommittee on Health, Committee on Ways and Means, House of Representatives; February 28, 2008.
www.gao.gov/new.items/d08522t.pdf. Accessed September 15, 2008.
16. Sparer MS. The role of government in US health care. In: Kovner AR, Knickman JR, eds. Jonas and Kovner’s Health Care Delivery in the United
States 8th ed. New York, NY: Springer Publishing Co; 2005.
17. Medicare: the Medicare prescription drug benefit [fact sheet]. Kaiser Family Foundation Web site. www.kff.org/medicare/upload/7044_08.pdf.
Accessed September 15, 2008.
18. Holahan J, Ghosh A. Understanding the recent growth in Medicaid spending, 2000–2003 [published online January 26, 2005]. Health Aff.
doi:10.1377/hlthaff.w5.52.
19. Medicaid enrollment and spending trends. Kaiser Family Foundation Web site. www.kff.org/medicaid/upload/7523_02.pdf. Accessed September
15, 2008.
20. Mann C, Pervez F. Medicaid Cost Pressures for States: Looking at the Facts. Georgetown University Health Policy Institute Policy Brief; January
2005. http://hpi.georgetown.edu/pdfs/medstatebudget.pdf. Accessed September 15, 2008.
21. Kaiser Commission on Medicaid and Uninsured Web site. www.kff.org/about/kcmu.cfm. Accessed September 15, 2008.
22. Kenney G, Chang DI. The State Children’s Health Insurance Program: successes, shortcomings, and challenges. Health Aff (Millwood).
2004;23(5):51–62.
23. Smith V, Rousseau D, Marks C, Rudowitz R. SCHIP Enrollment in June 2007: an Update on Current Enrollment and SCHIP Policy Directions.
Kaiser Commission on Medicaid and the Uninsured; January 2008. www.kff.org/medicaid/upload/7642_02.pdf. Accessed September 15, 2008.
24. State Children’s Health Insurance Program (SCHIP): Reauthorization History. Kaiser Family Foundation Web site. www.kff.org/medicaid/
upload/7743.pdf. Accessed September 15, 2008.
25. Kronick R, Rousseau D. Is Medicaid sustainable? Spending projections for the program’s second forty years [published online February 23,
2007]. Health Aff (Millwood). 2007;26(2):w271–w287. doi:10.1377/hlthaff.26.2.w271.
55
AMA Health Care Trends 2008
Medical practice
Figure 8. Percentage change in projected population and patient visits per
year, for adults (aged 20 and older) and children (up to age 19): 2005–2025
Percent change relative to 2005
25
20
15
10
5
0
2005
2010
a
Adult visits
Adult population
Child visits
2015
2020
Child population
2025
Adapted with permission from Health Affairs.23
Ambulatory care visits will increase 29 percent as a result of the increasing proportion of elderly people.
At the same time, the child population will rise 12 percent, and projected patient visits will increase
13 percent. It is reasonable to expect a 29 percent increased workload for adult care generalists and a
13 percent increase for child care generalists. Whether the future supply of generalists will increase to
meet this workload will depend on numbers of graduates entering the work force and on rates of attrition.23
Physicians’ practice arrangements are continuing to evolve; an increasing proportion of physicians are employed
and/or are providing their services through medical systems—e.g., integrated delivery systems, large group practices
and health maintenance organizations (HMOs). Physicians have less discretion in how they practice medicine.
Increasingly, corporate policies and directives influence the practice of medicine. There will continue to be efforts to
measure quality and outcomes in order to respond to calls for more accountability by payers and patients.
Trends
Practice arrangements
• P
opulation growth and aging will increase family physicians’ and general internists’ workloads by 29 percent between
2005 and 2025. There is an expected 13 percent increased workload for care of children by pediatricians and family
physicians. However, the supply of generalists for adult care will increase only 2 percent if the number of graduates
continues to decline through 2008. There will be deficits of 35,000–44,000 adult care generalists, although the supply
for care of children should be adequate.1
56
• W
ithout interventions, shortages of 35,000–44,000 generalists are likely by 2025, and shortages of nurse
practitioners (NPs) and physician assistants (PAs) are anticipated as well. The nation’s primary care foundation
is increasingly threatened, but shortages could be alleviated if interventions produced four additional generalist
graduates in each family medicine and internal medicine residency program annually.1
• B
ased upon American Medical Association (AMA) data, there were 240,773 physicians in 19,913 group practices
in the United States in 2005. The AMA defines “group practice” as the provision of health care services by three
or more physicians. The five most common specialties found in groups were internal medicine, pediatrics, family
medicine, obstetrics/gynecology and general surgery. Group physician positions represented only 10.2 percent in
1965 but have represented more than 30 percent of all physicians since 1991.2
• I n 2001, 33 percent of non-federal, postgraduate physicians, among physicians in non-institutional settings, were
in solo practice, 11 percent were in two-physician practices, 9 percent were in three-physician practices, 22 percent
were in four- to eight-physician practices and 25 percent were in groups of more than eight physicians (percentages
do not sum to 100 due to rounding).3
• T
he proportion of physicians in solo and two-physician practices decreased significantly from 40.7 percent in
1996–1997 to 32.5 percent in 2004–2005, according to a national 2007 study from the Center for Studying Health
System Change. At the same time, the proportion of physicians with an ownership stake in their practice declined
from 61.6 percent to 54.4 percent as more physicians opted for employment. Both the trends away from solo and
two-physician practices and toward employment were more pronounced for specialists and for older physicians.
Physicians increasingly are practicing in midsize, single-specialty groups of six to 50 physicians.4
• D
espite the shift away from the smallest practices, physicians are not moving to large, multi-specialty practices, the
organizational model that some health policy analysts believe to be best able to support care coordination, quality
improvement and reporting activities, and investments in health information technology (HIT). However, certain
medical sub-specialties, such as oncology, gastroenterology and pulmonology, are moving to larger practices more
than others.4
• T
raditionally, most office-based physicians worked in solo or small group practices. During the height of tightly
managed care, physicians further coalesced into larger multi-specialty groups and independent practice associations,
or IPAs, in hopes of reaping the referral benefits of having primary care physicians and achieving a scale that might
keep financial risks of capitation manageable. In 1996, only 15.6 percent of clinically active physicians practiced
in groups of more than 10 physicians. By 1999, 18.5 percent did so. At the same time, hospitals formed tighter
affiliations with physicians, such as in physician-hospital organizations, or PHOs, to steer referrals.5
• T
he smallest practices have been declining in favor of larger group practices and physician employment, and these
trends may accelerate. In particular, market forces may once again favor the development of large, multi-specialty
practices, primarily because of the greater leverage they can exert in negotiating private payment.5
• T
o the extent that larger practices gain market share on the basis of quality and cost performance (for example,
by investing in HIT), this change will be positive. Physicians’ ability to earn higher incomes with perhaps lower
productivity pressures in large practices than in smaller ones will lead more physicians, especially those just
entering practice, to opt for larger and better organized practices.5
• T
o increase efficiency, patient visits might be shortened and return visits reduced, but access difficulties and brevity
of visits may continue to frustrate patients. Physicians complain that time limitations are making it impossible to
follow recommended disease guidelines and preventive services.1
• A
2004 report described staffing at eight large prepaid group practices (PGPs) serving more than 8 million enrollees
at Kaiser Permanente and two other HMOs. Even after characteristics of the patient populations and outside
referrals are accounted for, these PGPs have a physician-to-population ratio that is 22–37 percent below the
national rate.6
57
• G
eneralists’ income is less than half that of many procedurally oriented specialties, and income disparities are
increasing. Further, education in inpatient-oriented tertiary care centers provides a powerful socializing influence
toward specialization. Medical students perceive that generalists lack the leisure time enjoyed by many specialists,
and huge educational debts are reported in surveys to divert graduates from primary care.1
• M
edical schools vary widely in the proportion of their graduates entering family medicine and probably general
internal medicine and general pediatrics. This variation is associated with schools’ commitment to education of
generalists.1
• E
ach generalist specialty is sponsoring a model of primary care, the “medical home.” The medical home is intended
to provide rapid access for acute problems and care management for chronic illnesses. Collaborative teams of
physicians, NPs and/or PAs provide office, hospital and home care, using telephone and e-mail consultations and
electronic medical records. The medical home concept proposes to increase efficiency and quality of care, and also
satisfaction for patients, physicians and the team.1
• T
he medical home is designed to reduce spending through greater coordination of care, reduced hospitalizations
and added emphasis on consultation rather than referral. However, shortages of generalists and NPs/PAs will limit
its applicability. Further, reimbursement reform is essential to realign incentives for primary care teams to provide
more comprehensive care.1
• A
ccording to researchers of the Dartmouth Atlas, a major limitation of medical home models may be their narrow
focus: Without collaboration from specialists to ensure both communication and collaborative decision-making,
and without financial incentives that encourage both hospitals and specialists to reduce overuse, primary care
coordination may not be successful in the care of patients with severe chronic illness.7
• S
ome specialists provide primary care, but they also face increasing demand and are less likely to perceive
themselves as the patient’s primary care physician than are generalists. Most specialists do not provide the full
scope of primary care services for most patients.1
Managed care
• D
espite physician complaints, most still contract with managed care plans. After remaining stable since
1996–1997, the percentage of U.S. physicians who do not contract with managed care plans rose slightly from
9.2 percent in 2000–2001 to 11.5 percent in 2004–2005, according to a national study from the Center for
Studying Health System Change. While physicians have not left managed care networks in large numbers, this
small but statistically significant increase could signal a trend toward greater out-of-pocket costs for patients and a
decline in patient access to physicians. The increase in physicians without managed care contracts was broad-based
across specialties and other physician and practice characteristics.8
• M
ost hospitals, clinics and physician practices are in compliance with the 2003 Health Insurance Portability and
Accountability Act (HIPAA) Privacy Rule. However, misunderstandings still linger and health care providers
remain worried about breaking the law inadvertently. Moreover, many clinical researchers are searching for ways to
continue research that has been hampered by the privacy rule requirements.9
Career satisfaction
• E
conomic pressures, increasing levels of insurance and governmental regulation, continuing professional liability
pressures, and less time for family and self all play a role in the current downward spiral of physician satisfaction
with the practice of medicine. (The dissatisfied physician is two to three times more likely than the satisfied
physician to leave medicine).
• D
issatisfaction is correlated with a decrease in the quality of patient care with a resultant negative impact on
patient safety. Work-hour restrictions have resulted in no change in academic performance and a marked decrease
in psychological distress, improved career satisfaction and decreased emotional exhaustion.10
58
• P
hysicians can struggle with work-life balance yet remain highly satisfied with their careers. Burnout is an
important predictor of career satisfaction, and control over schedule and hours worked are the most important
predictors of work-life balance and burnout.11
• R
elationships between hospital boards and medical staffs have been showing signs of strain nationwide as hospitals
attempt to exert more control over medical staffs and more physicians open facilities that compete with hospitals.12
• S
ome hospitals and physicians will develop effective partnering strategies. However, competitive pressures will
make relationships between other hospitals and physicians, and among medical groups, increasingly tense.13
• C
urrent trends in payment systems, work settings, favored services and accountability mechanisms that characterize
physician practice are more likely to contribute to higher spending, more tiering of access to care by ability to pay,
and a greater role for larger practices that include both primary care and specialist physicians.5
Patient care settings
• The locus of patient care continues to shift from the inpatient to the outpatient setting.
• C
onvenient care clinics (CCCs) are expanding nationwide. Currently there are three major CCC entities:
MinuteClinic, RediClinic and the Little Clinic. Wal-Mart also has about 75–80 clinics, with plans to increase that
number by 400 within two years.
• T
he retail clinics in pharmacies and supermarkets, which tend to be staffed by NPs, are a market response to
constraints on primary care access. This could lead to a substitution in primary care of personnel who require less
training than physicians do. But if the services provided by retail clinics turn out to be more profitable per unit of
time than other primary care activities, this trend could further discourage physicians from entering primary care.5
• T
he boom in retail store clinics may be showing signs of slowing. In May of 2008, the largest operator, CVS
Caremark Corp., which owns 500 MinuteClinic facilities, reported scaling back expansion. Clinics are difficult to
manage and take longer to break even. Walgreen Co., however, still plans to more than double the number of its
clinics by the end of 2008. Walgreen is expanding co-branded stores with hospital systems.14
• I ndustry experts indicate that the cost of setting up an in-store clinic is about $500,000, requiring funding from
large corporations or hospital systems.14
• C
ontinued experimentation with CCCs presents potential opportunities for physicians and medical systems
through supervision, protocol development, follow-up care, and providing immediate referral services and more
complex medical needs for those falling outside of the model’s protocol of care.15
• Physicians have expressed concerns about continuity of care and liability issues related to CCCs.
• P
rimary care physicians are taking care of fewer patients in hospitals, with full-time hospitalists assuming the care
of hospitalized patients. As a result, primary care physicians are dropping their active medical staff membership to
reduce their inpatient care and emergency on-call burdens.5
• S
ome physicians will provide “concierge medicine,” or comprehensive services for limited numbers of patients for
a retainer fee. These include comprehensive acute and chronic illness care, as well as rapid telephone, e-mail and
office access. As patients’ advocates, physicians coordinate care with specialists and may be more likely to obtain
consultative assistance than to refer patients away. If it achieves sufficient critical mass, this arrangement could
become a “transforming technology,” reshaping primary care but aggravating generalist shortages.1
• C
oncierge practices and practices that do not accept insurance (cash only) will become more common than they
are today, but will still affect only a small minority of physicians and affluent consumers.13,16
59
Patient-physician relationship
• T
he increasing prominence of cost containment in medical practice and resulting pressures on physicians to
see more patients in a day may fundamentally change the nature of the patient-physician relationship. This
relationship depends on trust, which requires time to develop.17
• T
he shifting of patients from one managed care plan to another is causing significant disruption in the patientphysician relationship, resulting in patients viewing the physician as “just another provider” instead of as their
personal physician.
• T
he growing numbers of non-English-speaking patients are forcing physicians to rely on interpreters to
communicate with patients. Studies have found, however, that information can be distorted or lost in the
translation.
• P
hysicians in high-minority practices depend more on low-paying Medicaid, receive lower private insurance
reimbursements and have lower incomes. These constrained resources help explain the greater difficulties reported
by these physicians in delivering care—such as coordination of care, ability to spend adequate time with patients
during office visits and obtaining specialty care—that relate directly to physicians’ ability to function as their
patients’ medical home.18
• A
lthough minorities are less likely to have a usual source of care than whites, physicians treating greater
percentages of minority patients were not significantly more likely to report an inability to maintain continuity of
care than those treating fewer minority patients.18
• P
hysicians in high-minority practices were more likely than those in low-minority practices to report language or
cultural barriers to communication with patients as a major problem affecting quality. They also more frequently
reported that inadequate time during office visits was a major problem that affected their ability to provide highquality care (24 percent vs. 11 percent).18
• P
atient access to health care information, some of which may be inaccurate, will continue to increase—a situation
that will require physicians to spend more time with patients. Yet physicians are being pressured by insurers to
spend less time with patients.
• A
2006 nationwide survey by the National Center for Complementary and Alternative Medicine and AARP found
that nearly half of all adults aged 18 and older report using some form of complementary alternative medicine
(CAM) during their lifetime and more than a third of adults reported CAM use in the past year, with people aged
50–59 most likely to report using CAM. Many adults also use over-the-counter medications, prescription drugs or
other conventional medical approaches to manage aspects of their health.19
•While 63 percent of the 1,559 individuals aged 50 or older who were surveyed have used one or more CAM
therapies, 69 percent of those who reported using CAM had not discussed it with a physician because the physician
never asked (42 percent); they did not know they should discuss it with their physician (30 percent); or there was
not enough time during the office visit to discuss it (19 percent). Additional barriers include patient perceptions that
physicians are unwilling to discuss CAM therapies or will react negatively to disclosure of CAM use.
• F or decades, liability insurers and their attorneys counseled doctors and hospitals to “deny and defend” any aspect
of their practice that a patient might perceive as a shortcoming, since admitting fault or even expressing regret for
medical errors might invite litigation and imperil careers. However, a different approach of promptly disclosing
medical errors and offering earnest apologies and fair compensation appears to improve patient communication
and may be a better strategy for addressing the malpractice crisis. Currently 34 states have enacted laws making
apologies inadmissible in court. Four states have gone further and protected admissions of culpability; seven require
that patients be notified of serious unanticipated outcomes.20,21
60
Increasing accountability for evidence-based practice
• W
hile development of practice guidelines presents physicians with the formidable challenge of staying abreast of
medicine’s rapidly expanding knowledge base, compliance with standards is seen as an important component of
professionalism.
• T
here is greater physician accountability for quality of care as government, health plans, private purchasers and
accrediting bodies seek to assert influence over both quality assurance and quality improvement. Standardized
measurement of quality performance is being promoted as a basis for benchmarking to give physicians private
feedback, linkage of performance to financial and other incentives through pay-for-performance (P4P) models, and
public reporting of providers’ performance.5
• P
erformance measurement and incentive programs for physicians have gained momentum in the past few years,
particularly with the introduction of quality-reporting initiatives by professional organizations, accrediting agencies
and Medicare.5
Scope of practice
• A
s the medical practice environment becomes more competitive and as medical technology advances, disputes
about scope of practice by specialty are increasing.
• A
shift to doctoral-level training, new board certification based on a physician exam—the United States Medical
Licensing Examination, or USMLE—and growing demand in new practice settings such as retail clinics point to
potential further expansion of NP autonomy and scope of practice. Given the intensifying shortage of primary care
providers and work force demands, there is an increasing need for collaboration between NPs and physicians.
Physician income
• T
he physician compensation of 60 percent of polled specialties failed to keep up with the 3.2 percent inflation
in 2006 (increases in the Consumer Price Index), according to the Medical Group Management Association.
Physicians, especially those in primary care, are working harder and their production increased at a faster rate than
their compensation. Median compensation for all primary care physicians rose just 2 percent in 2006. Specialists
reported an even lower rate of median compensation gains, with a 1.7 percent overall increase.22
• I n 2001, 88 percent of physicians had at least one managed care contract, compared with 94 percent in 1998.
Among physicians with managed care contracts, the percentage of practice revenue from managed care contracts
decreased from 56 percent in 1998 to 40.8 percent in 2001.
• T
o the degree that primary care physicians are key to caring for patients with chronic diseases, large multi-specialty
practices and hospitals may seek a higher proportion of these physicians by offering higher incomes. This incentive
would be in addition to the long-standing strategy among multi-specialty practices to pay primary care physicians
more than they typically earn in independent practice because of the specialty referrals they can generate.5
• C
omplementary and alternative medicine will likely continue to expand. However, medical practices are not
generally expected to take advantage of this as a revenue opportunity.13
Predicted impacts for patients
• W
ith fewer physicians accepting managed care contracts, there will be a trend toward greater out-of-pocket costs
for patients and a decline in patient access to physicians.
• Patients will be taking a more active role in their medical decision-making.
• P
atients may receive less attention from their physicians as their doctors seek to see more patients due to declining
income and to satisfy their contracts with insurers.
61
Predicted impacts for physicians
• P
hysicians will continue to search for better organizational structures to obtain access to data for the management
of patients, to increase their patient base and to reduce the administrative hassles of practice.
• P
hysicians will face increasing pressure to offer a complete package of services (one-stop shopping) for patients,
especially for care of chronic diseases.
• W
ith increased competition for medical services, physicians are going to need to be more acutely aware of patients’
needs and expectations. Physicians will need to focus more on convenience factors, including the expansion of
hours, reducing waiting times and other strategies that may increase patient satisfaction.
• O
ngoing automation of back-office operations and electronic medical records requires standardization to provide
optimal benefit.
• Physicians will be increasingly asked by patients to discuss, or even justify, their diagnoses and treatment decisions.
• P
atients increasingly tend to view physicians as technicians and increasingly are willing to switch physicians.
Physicians are finding it more difficult to find time to learn about their patients’ personal circumstances because of
pressures to decrease individual visit time and the lack of a long-term relationship with the patient.
• A
rethinking of medical education to prepare physicians to practice in the changing environment and the
changing face of the patient-physician relationship will occur.
• M
edicine will continue to be a demanding career field. Increasingly, physicians must have a broad range of skills.
This reinforces the need for continuing medical education.
• Disease and demand management programs for well patients will proliferate.
• T
he incentives from P4P programs, benefit structures such as high-performance networks that favor more-efficient
practices, and increasing price and quality transparency could all cause the relative earnings of physicians in large
practices to rise, to the extent that these practices deliver higher-quality, more-efficient care.5
• M
edicare may make fee-for-service payment more accurately reflect rising costs and incorporate more per episode
and capitated elements into the payment system, revamping incentives for physicians.5
• A
s workload increases, generalists in regions with greater supply may accept more patients, but elsewhere they
will close their practices to new patients. Overworked physicians will place priority on patients’ most urgent
problems and be less able to provide comprehensive care. If a patient’s problems are complex, the physician is
likely to refer the patient to a sub-specialist for diagnosis and management, relieved that the patient is no longer
his or her responsibility. For complex patients, referral results in more referrals with follow-up by many specialists.
Duplication of service occurs, and the patient might be uncertain who is his or her doctor. Problems will be
compounded in physician shortage areas, where one-fifth of the U.S. population resides. The downstream effect is
likely to be further declines in students’ interest in primary care.1
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
62
References
1. C
olwill JM, Cultice JM, Kruse RL. Will generalist physician supply meet demands of an increasing and aging population? [published online 29
April 2008]. Health Aff (Millwood). 2008;27(3): w232–w241. doi:10.1377/hlthaff.27.3.w232.
2. Smart DR. Medical group practices in the US, 2006 edition. Chicago, IL: American Medical Association; 2006
3. Wassenaar JD, Thran SL, eds. Physician Socioeconomic Statistics: 2003 Edition. Chicago, IL: American Medical Association; 2003:91.
4. Liebhaber A, Grossman JM. Physicians Moving to Mid-Sized, Single-Specialty Practices. Health Systems Change Tracking Report Report No. 18.
www.hschange.org/CONTENT/941. Published August 2007. Accessed September 15, 2008.
5. Pham HH, Ginsburg PB. Unhealthy trends: the future of physician services. Health Aff (Millwood). 2007;26(6):1586–1598. doi:10.1377/
hlthaff.26.6.1586.
6. Weiner JP. Prepaid group practice staffing and US physician supply: lessons for workforce policy. Health Aff (Millwood). 2004;Suppl Web
Exclusives:W4-43–59.
7. Wennberg JE, Fisher ES, Goodman DC, Skinner JS; The Dartmouth Institute for Health Policy and Clinical Practice. Tracking the Care of
Patients with Severe Chronic Illness: The Dartmouth Atlas of Health Care 2008. Lebanon, NH: Dartmouth Medical School; 2008.
www.dartmouthatlas.org. Accessed September 15, 2008.
8. O’Malley AS, Reschovsky JD. No Exodus: Physicians and Managed Care Networks. Health System Change Tracking Report No. 14.
www.hschange.com/CONTENT/838. Published May 2006. Accessed September 15, 2008.
9. Wilson JF. Health insurance portability and accountability rule causes ongoing concerns among clinicians and researchers. Ann Intern Med.
2006;145(4):313–316.
10. Weinstein L, Wolfe HM. The downward spiral of physician satisfaction. Obstet Gynecol. 2007;109(5):1181–1183.
11. Keeton K, Fenner DE, Johnson TRB, Hayward RA. Predictors of physician career satisfaction, work-life balance, and burnout. Obstet Gynecol.
2007;109(5):949–955.
12. Albert T. Mounting tension over autonomy: courts referee doctor-hospital battles. Am Med News. July 21, 2003.
13. Medical Group Management Association, American College of Medical Practice Executives, MGMA Center for Research. February 24, 2007.
Strategic plan—environmental assumptions (over the next 3–7 years). www.mgma.com/workarea/showcontent.aspx?id=52. Accessed September
15, 2008.
14. Armstrong D. Health clinics inside stores likely to slow their growth. Wall Street Journal. May 7, 2008. http://online.wsj.com/article/
SB121011939298572319.html. Accessed September 15, 2008.
15. Langston EL. Convenient care clinics merit a closer look by physicians [commentary]. Am Med News. May 5, 2008. www.ama-assn.org/
amednews/2008/05/05/edca0505.htm. Accessed September 15, 2008.
16. Linz AJ, Haas PF, Fallon F Jr, Metz RJ. Impact of concierge care on healthcare and clinical practice. J Am Osteopath Assoc. 2005;105(11):
515–520.
17. Berenson RA. Consumer-directed doctoring: the doctor is in, even if insurance is out. Statement before the Joint Economic Committee.
www.urban.org/publications/900708.html. Posted April 28, 2004. Accessed September 15, 2008.
18. Reschovsky JD, O’Malley AS. Do primary care physicians treating minority patients report problems delivering high-quality care? [published
online April 22, 2008]. Health Aff (Millwood). 2007;26(3):w222–w231. doi:10.1377/hlthaff.26.3.w222.
19. AARP and National Center for Complementary and Alternative Medicine. Complementary and Alternative Medicine: What People 50 and Older
Are Using and Discussing with Their Physicians. Washington, DC: AARP; 2007.
20. Sack K. Doctors start to say ‘I’m sorry’ long before ‘see you in court.’ New York Times. May 19, 2008. www.nytimes.com/2008/05/18/
us/18apology.html. Accessed September 15, 2008.
21. Wojcieszak D, Banja J, Houk C. Sorry Works! Coalition: making the case for full disclosure. Jt Comm J Qual and Patient Saf. 2006;32(6):
344–350.
22. Medical Group Management Association. Physician Compensation and Production Survey: 2007 Report Based on 2006 Data. Denver, CO:
Medical Group Management Association; 2007.
23. Colwill JM, Cultice JM, Kruse RL. Percentage Change in Projected Population and Patient Visits Per Year, For Adults (Age 20 and Older)
and Children (Up to Age 19), 2005–2025 [figure]. In: Will generalist physician supply meet demands of an increasing and aging population?
[published online April 29, 2008]. Health Aff. 2008;27(3):w232–w241. doi:10.1377/hlthaff.27.3.w232.
63
AMA Health Care Trends 2008
Quality measures
Figure 9. Quality measurement tools
Although still in an early stage, quality measurement is evolving rapidly. Physicians will face
increasing demands for information to support quality assessment and rating and will have to
spend more time explaining quality measures to patients. Patients may be confused about what this
information means and how to use it. Quality measures will be used by payers to try to reduce payment.
Physician professionalism is grounded in the obligations to society and individual patients to achieve optimal health
outcomes and to responsibly use health care assets. The profession and society are confronted by the related challenges
of escalating health care costs, increasingly complex and expensive medical innovations, pervasive consumer demand
for interventions, an increasing problem with access to care, and concerns about the quality, safety and appropriateness
of medical care delivery. As a result, new performance measurement initiatives have arisen that significantly affect the
relationship between patients and their physicians as greater public reporting of performance data influences patient
and consumer decisions.1
The American health care system offers millions of patients access to care provided by highly skilled, committed
professionals and first-rate health care institutions, as well as the advantages of the latest innovations in clinical
research, technology and treatment. At the same time, the system is marked by serious and pervasive deficiencies
in quality.2
64
Trends
• According to the Dartmouth Atlas’ “Tracking the Care of Patients with Severe Chronic Illness,” depending upon
where patients live, and which hospital or health care organization they are loyal to, patients with chronic illnesses
receive very different care: The frequency of primary care visits per Medicare enrollee varies by a factor of almost
three; visits to medical specialists by more than five; and hospitalizations for congestive heart failure and chronic
obstructive pulmonary disease by more than four. Spending on patients with serious chronic illness varies by a
factor of nearly three.3
• A
ccording to the Commonwealth Fund Commission 2008 Results from the National Scorecard on US Health System
Performance, evidence shows that care typically falls far short of what is achievable. Quality of care is highly
variable, and opportunities are routinely missed to prevent disease, disability, hospitalization and mortality.
Across 37 indicators of performance, the United States achieves an overall score of 65 out of a possible 100 when
comparing national averages with benchmarks of best performance achieved internationally and within the
United States.4
• T
he United States now ranks last out of 19 countries on a measure of mortality amenable to medical care, falling
from 15th as other countries raised the bar on performance. Up to 101,000 fewer people would die prematurely if
the United States could achieve leading, benchmark country rates.
• A
positive exception to this overall trend occurred for quality metrics that have been the focus of national
campaigns or public reporting. A key patient safety measure—hospital standardized mortality ratios—improved by
19 percent from years 2000–2002 to years 2004–2006. This sustained improvement followed widespread availability
of risk-adjusted measures coupled with several high-profile local and national programs to improve hospital safety
and reduce mortality. Hospitals are showing measurable improvement on basic treatment guidelines for which data
are collected and reported nationally on federal Web sites. Rates of control of diabetes and high blood pressure,
two common chronic conditions, have also improved significantly. These measures are publicly reported by health
plans, and physician groups are increasingly rewarded for results in improving treatment of these conditions.
An advancing national quality movement
• I n 1996, the Institute of Medicine (IOM) launched a quality initiative that was focused on assessing and improving
the nation’s quality of health care.
• T
he first phase of its initiative documented the status of the quality of health care in the United States and
developed a framework for further study. The second report established six aims for improvement. Health care
must be: safe, effective, patient-centered, timely, efficient and equitable.
•The third phase is focusing on putting into operation IOM’s vision of a more patient-responsive 21st-century
health system by working with clinicians and health care organizations, employers and consumers, foundations
and research, government agencies, and quality organizations. Efforts focus on reform at overlapping levels
of the system: the environmental level, the level of the health care organization, and the interface between
clinicians and patients. The overriding conclusion is that quality is mainly a systems problem requiring a
systems solution.5
• D
ata, analytic tools, methodologies and processes for performance evaluation are developing at a rapid pace.
So also have the range and consequences of initiatives that employ the results of performance assessment. Of
particular interest and concern to many physicians, and other stakeholders with an interest in enhancing the
quality of delivered health care, are recent efforts that seek to evaluate and publicize the cost of care delivery
separate from any measurement of the quality of that care.1
• M
ore than 100 pay-for-performance (P4P) programs have been implemented, but the programs are using different
performance standards. The lack of a single set of guiding principles that has been vetted by multi-stakeholder
groups is a growing concern among physicians and entities such as the National Quality Forum (NQF), of which
the American Medical Association (AMA) is a member.6
65
• T
he AMA-convened Physician Consortium for Performance Improvement® (PCPI) establishes performance
measures, many of which have been endorsed by the NQF and are being used in Centers for Medicare & Medicaid
Services (CMS) projects.
• N
QF-endorsed voluntary consensus standards are widely viewed as the gold standard for measurement of health
care quality. When a measure is NQF-endorsed™, it carries the full weight of formal consensus of more than
375 health care providers, consumer groups, professional associations, purchasers, federal agencies, and research
and quality improvement organizations. Standards are vetted through NQF’s formal Consensus Development
Process to achieve special legal standing as voluntary consensus standards and are evaluated against NQF’s criteria
to ensure they are important, scientifically acceptable, usable and feasible. When the federal government adopts
standards, federal law obligates that they are voluntary consensus standards.7
• T
he CMS is developing and implementing quality-of-care measures in hospitals, physicians’ offices, nursing homes
and other health care facilities. These measures are reviewed by a number of organizations through a national
consensus endorsement process.8
• T
he Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 authorized a variety of
efforts aimed at improving health care quality and efficiency. The MMA sought to improve efficiency through
contractor reform, adoption of health information technology, implementation of the Medicare prescription drug
benefit and strengthening of the Medicare Advantage program. In addition, the MMA authorized the CMS to
implement a number of demonstration projects designed to improve quality of care and efficiency.
• I n 2004, the Department of Health and Human Services and the CMS launched the Physician Focused Quality
Initiative, which includes the Doctor’s Office Quality (DOQ) Project. DOQ was designed to develop and test a
comprehensive, integrated approach to measuring the quality of care for chronic disease and preventive services in
doctors’ offices.
• I n 2007, the CMS launched the Physician Quality Reporting Initiative (PQRI), a voluntary reporting program to
improve quality through the use of clinical performance measures developed through the PCPI.9
•Practices that report on the designated set of quality measures can earn a bonus payment of up to 1.5 percent
of total allowed charges for covered Medicare physician fee schedule services, based on claims submitted for
services provided. Speculation exists that the program is a precursor to Medicare’s P4P system and may become
mandatory into the future. This program is seen by some as a way to learn how to report performance measures
without penalties.10
• I n July 2008, CMS announced that more than $36 million was to be paid out under its PQRI program to health
professionals who reported data on the quality of care delivered between July 2007 and December 2007. The
average incentive payments for the first round of the program were $600 to individual physicians and $4,700 to
group practices. The largest payment to a practice was more than $205,700.
• T
he program included participants from all 50 states and several U.S. provinces. Health professionals in Florida
and Illinois received the majority of the payments, totaling $3 million and $2 million, respectively. CMS
indicated that these PQRI payments were “a first step toward improving how Medicare pays for health care
services.”11
• T
he National Committee for Quality Assurance (NCQA) continues to measure the performance of health plans
on a number of clinical indicators. Accredited health plans today face a rigorous set of more than 60 standards
and must report on their performance in more than 40 areas in order to earn NCQA’s seal of approval. And even
more stringent standards are being developed. These standards promote the adoption of strategies that will improve
care, enhance service and reduce costs, such as paying providers based on performance, leveraging the Web to give
consumers more information, disease management and physician-level measurement.12
66
•In 2007, NCQA reported a sharp increase in the number of preferred provider organizations (PPOs) reporting
on the quality of care they deliver—a total of 141 PPOs, up from 80 PPOs in 2005—with a record 82 million
Americans being enrolled in such health plans.
•Among the notable quality improvements in 2006: immunization rates among children and adolescents (nearly
80 percent in commercial plans, up from 77.7 percent in 2005; 73.4 percent in Medicaid, up from 70.4 in
2005); adults over 50 were more likely to be screened for colon cancer (54.5 percent in 2006, up from 52.3
percent in 2005). Rates of appropriate treatment for adults with acute bronchitis and rheumatoid arthritis also
rose significantly in 2006.
•However, NCQA reported that fewer Healthcare Effectiveness Data and Information Set, or HEDIS, measures
showed significant increases from 2005 to 2006, and some areas have not shown significant improvement over a
number of years. Measures in mental illness treatment have shown frustratingly little improvement over several
years, suggesting the need for benefit redesign and focused quality improvement strategies.
•Some health plans continue to perform at exceptional levels. If the entire health care system could perform
as well as the top 10 achievers, NCQA estimates that as many as 75,000 lives could be saved each year and
expenses for hospital care would be reduced by as much as $3.7 billion.
•Improvements in the delivery of evidence-based care in just four areas of medicine have saved the lives of as
many as 124,600 Americans: beta-blocker treatment after a heart attack (4,400–5,600 lives saved); cholesterol
management for patients with cardiovascular conditions (10,100–17,000); controlling high blood pressure
(56,800–98,600); and poor glycosylated hemoglobin (HbA1c) control (2,000–3,400).
•The NCQA’s Physician Practice Connections (PPC) recognizes physician practices that use information in a
systematic fashion to enhance the quality of patient care. Meeting PPC standards means that practices:
• Know and use their patients’ medical histories.
• Work to improve patients’ health over time—not just during office visits.
• Follow up with patients and other providers to get the best results.
• Manage populations, as well as individuals, using evidence-based care.
• Employ electronic tools to prevent medical errors.
• Encourage better health habits and self-management of medical concerns.
•Physician practices that meet PPC standards are posted to the NCQA Web site as a recognized site along with
physician names. NCQA distributes this list broadly for inclusion in provider directories.
Increasingly, business coalitions are using quality data in selecting providers
• M
any P4P efforts sponsored by employers and health plans currently use NCQA recognition to determine
eligibility for rewards.12
• B
ridges to Excellence is a not-for-profit organization developed by employers, physicians, health care services,
researchers and other industry experts to foster significant advances (“leaps”) in the quality of care. The
organization recognizes and rewards health care providers who implement comprehensive solutions in the
management of patients and deliver safe, timely, effective, efficient, equitable and patient-centered care. Bridges to
Excellence administers Physician Office Link (POL), which provides financial rewards for recognized physicians.
POL advocates for use of information systems in physician office practices to enhance the quality of patient care
according to NCQA measures. Practice sites that implement specific processes to reduce errors and increase quality
can earn up to $50 for each patient covered by a participating employer.13
67
• L
eapfrog Group is another business coalition whose membership represents large corporations and public agencies
that buy health benefits for their enrollees. The group’s mission is to trigger giant “leaps forward” in the safety,
quality and affordability of health care by:
• Supporting informed health care decisions by those who use and pay for health care
• Promoting high-value health care through incentives and rewards
• L
eapfrog’s 37 regions cover more than half of the U.S. population and 62 percent of all hospital beds in the
country. More than 1,300 hospitals participate in the Leapfrog hospital annual survey that rates hospitals on a
range of quality and safety practices. Leapfrog ratings are posted on the Leapfrog Web site and are available to the
public. Endorsed by the NQF, the practices are:
•Computer physician order entry (CPOE)—with CPOE systems, hospital staff enter medication orders via
computers linked to software designed to prevent prescribing errors. CPOE has been shown to reduce serious
prescribing errors by more than 50 percent.
•Evidence-based hospital referral—consumers and health care purchasers are urged to choose hospitals with
the best track records (e.g., by referring patients to hospitals offering the best survival odds for complex medical
procedures).
•Intensive care unit (ICU) physician staffing—staffing by intensivists with special training in critical care
medicine has been shown to reduce the risk of patients dying in the ICU by 40 percent.
•Leapfrog Safe Practices Score—the NQF-endorsed Safe Practices cover a range of practices that, if utilized,
would reduce the risk of harm in certain processes, systems or environments of care. Included in the 30 practices
are the three “leaps” above. The fourth “leap” assesses a hospital’s progress on 27 NQF safe practices.14
Trends by organized medicine to define best practices
• U
ntil recently, efforts to measure clinical performance and improvement had focused primarily on health plans,
hospitals and other health care organizations. Recognizing the lack of physician-level measures, the AMA
convened the PCPI in 2000. PCPI currently includes representation of more than 100 medical specialty and state
medical societies.2
• P
CPI continues to develop new performance measures. As of January 2008, PCPI had developed 216 evidencebased clinical performance measures, including the 91 measures included in the PQRI program, organized into
32 clinical topics or conditions.2
• K
ey barriers include member concern about data collection and misuse of the measures, lack of resources for
development, and problems with data collection. Facilitators for addressing performance measures were strong
leadership and the perception of increasing pressure for accountability.
• W
hile private-payer initiatives are important, the clear intentions of the CMS to enter the P4P game are a critical
catalyst for moving forward physician performance measures (PPM) adoption by physician specialty societies.15
• M
easure-development activities constitute a fundamental change in physician specialty societies’ participation in
self-regulation.
• P
PM adoption by physician specialty societies may be nearing a tipping point. Strong external forces are pushing
for PPM adoption, and several vanguard societies are leading the way as a shrinking majority continues to watch
developments. Crossing the tipping point would appear to require continued external pressure for increased
accountability, leadership focused on adoption of PPM, additional resources (both infrastructure and technical)
and attention by policymakers to concerns raised by society membership.15
68
Inappropriate focus on cost
• C
urrent P4P strategies for physicians use an efficiency index, or EI, and often focus more on cost reductions and
significantly less on specific changes needed to improve care. However, evidence based on work with roughly
900 primary care physicians and 2,500 specialists at the Rochester (New York) Individual Practice Association
demonstrates that focusing directly on reducing overuse improves cost efficiency without the barriers imposed by
the efficiency index methodology.16
More intensive pressure to show quality, cost-effective and patientcentered care
• P
atients, the business community, government, and private and public payers are increasing the intensity of their
call on the medical profession to demonstrate high quality, cost-effective and patient-centered care.
• S
takeholders are increasingly frustrated by variations in the quality of care, the difficulties they perceive in getting
information about quality and cost, and their assessment that the current model of health care delivery and
payment is fiscally unsustainable.4
• Priority is being placed on value-based purchasing.17
Predicted impacts for patients
• P
atients, particularly those enrolled in consumer-driven health plans, will increasingly be seeking information
about quality (and price of care options) to help them make informed decisions about their health care. While
more information will become available about medical procedures and their effectiveness, some of the information
will be inaccurate or contradictory. At the very least, information may cause confusion and, in the worst case, may
even support poor health care choices.
• P
atients will increasingly use the Internet or other means in search of data that rate physicians, hospitals and other
health care providers. The basis for interpreting this information properly will likely be incomplete or unavailable.
• B
ecause care for seriously ill patients varies so substantially across regions and hospitals, patients and their families
can benefit from the insights about providers available to them. In some communities, patients may be able to
choose hospitals or other sites where the intensity of care is most in keeping with their personal preferences,
especially at the end of life.
Predicted impacts for physicians
• P
hysicians will face increasing demands to provide information to support quality assessment and “rating,” and will
have to spend more time explaining quality measures to patients and defending their record.
• Q
uality measures will be used by payers to try to negotiate payment rates and other terms. Physician report cards,
clinical outcome measurement and clinical practice guidelines will affect the image of physicians. Physicians will
become increasingly frustrated trying to keep apprised of the P4P standards being used by the various health plans
in which they participate.
• Physicians and patients may eventually benefit from incentives to incorporate performance measures in practice.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
69
References
1. Physician Consortium for Performance Improvement. Position Statement: the Linkage of Quality of Care Assessment to Cost of Care Assessment.
American Medical Association Web site. www.ama-assn.org/ama1/pub/upload/mm/370/linkagequalitycost.pdf. Accessed September 15, 2008
2. Stead SW. Physicians’ Guide to Implementing Medicare’s Physician Quality Reporting Initiative: An Insider’s View, 2008. Chicago, IL: American
Medical Association; 2008.
3. Wennberg JE, Fisher ES, Goodman DC, Skinner JS; the Dartmouth Institute for Health Policy and Clinical Practice. Tracking the Care of
Patients with Severe Chronic Illness: The Dartmouth Atlas of Health Care 2008. Lebanon, NH: Dartmouth Medical School; 2008.
4. Commonwealth Fund Commission on a High Performance Health System. Why Not the Best? Results from the National Scorecard on US Health
System Performance, 2008. Commonwealth Fund Web site. www.commonwealthfund.org/usr_doc/Why_Not_the_Best_national_scorecard_
2008.pdf?section=4039. Accessed September 15, 2008.
5. Crossing the quality chasm: the IOM Health Care Quality Initiative. Institute of Medicine Web site. www.iom.edu/CMS/8089.aspx. Accessed
September 15, 2008.
6. Pay-for-Performance Programs: Guiding Principles and Design Strategies. National Quality Forum Web site. http://216.122.138.39/pdf/reports/
P4P.pdf. Published October 6, 2005. Accessed September 15, 2008.
7. National Quality Forum endorses consensus standards for quality of hospital care: patient safety in hospitals focus of 48 NQF-endorsed
measures [news release]. Washington, DC: National Quality Forum; May 15, 2008. www.qualityforum.org/news/releases/
051508-endorsed-measures.asp. Accessed September 15, 2008.
8. Quality initiatives overview. Centers for Medicare & Medicaid Services, US Department of Health and Human Services Web site.
www.cms.hhs.gov/QualityInitiativesGenInfo. Accessed September 15, 2008.
9. Stead SW. Physicians’ Guide to Implementing Medicare’s Physician Quality Reporting Initiative: An Insider’s View, 2007. Chicago, IL: American
Medical Association; 2007.
10. Coker Group. Medicare’s Pay for Reporting Bonus (PQRI) – What’s in it for you? Presentation at: American Medical Association Group and
Faculty Practice Educational Series; February 21, 2008. Chicago, IL.
11. Kaiser Family Foundation. CMS to pay physicians more than $36M in incentives for participating in quality reporting initiative. Kaiser Daily
Health Policy Report. July 16, 2008. www.kaisernetwork.org/daily_reports/print_report.cfm?DR_ID=53329&dr_cat=3. Published July 16, 2008.
Accessed September 15, 2008.
12. National Committee for Quality Assurance. The State of Health Care Quality: 2007. Washington, DC: National Committee for Quality
Assurance; 2007.
13. Bridges to Excellence Web site. www.bridgestoexcellence.org. Accessed September 15, 2008.
14. Fact sheet. Leapfrog Group Web site. www.leapfroggroup.org/media/file/The_Leapfrog_Group_Fact_Sheet_03_2008.pdf. Published March, 2008.
Accessed September 15, 2008.
15. Ferris TG, Vogeli C, Marder J, Sennett CS, Campbell EG. Physician specialty societies and the development of physician performance
measures. Health Aff (Millwood). 2007;26(6):1712–1719. doi:10.1377/hlthaff.26.6.1712.
16. Greene RA, Beckman HB, Mahoney T. Beyond the efficiency index: finding a better way to reduce overuse and increase efficiency in
physician care [published online May 20, 2008]. Health Aff (Millwood). 2008;27(4):w250–w259. doi:10.1377/hlthaff.27.4.w250.
17. Robinson JC. Slouching toward value-based health care. Health Aff (Millwood). 2008;27(1):11–12.
70
AMA Health Care Trends 2008
Public health: Infrastructure and services
Figure 10. Ten great public health achievements in the United States, 20th century
• Vaccination
• Safer and healthier foods
• Motor-vehicle safety
• Healthier mothers and babies
• Safer workplaces
• Family planning
• Control of infectious diseases
• Fluoridation of drinking water
• D
ecline in death from coronary
heart disease and stroke
• R
ecognition of tobacco use as a
health hazard
During the 20th century, the health and life expectancy of Americans improved dramatically. Since 1900, the average
life span of persons in the United States has lengthened by greater than 30 years; 25 years of this gain are attributable
to advances in public health, particularly improved sanitation and nutrition. These achievements reflect the successful
response of public health to the major causes of morbidity and mortality of the 20th century. In addition, these
accomplishments demonstrate the ability of public health and the medical profession to meet an increasingly diverse
array of public health challenges.1–4
Trends
Evolving focus of public health
• P
ublic health increasingly addresses determinants of health, the behavioral and environmental forces that cause
70 percent of avoidable mortality.3,5
• According to the American Public Health Association, these are the emerging issues for the next decade:
•Emerging infectious diseases, including influenza, monkeypox, Dengue, methicillin-resistant Staphylococcus
aureus (MRSA), extensively drug-resistant tuberculosis (XDR TB), West Nile and food-borne (E. coli 0157:H7
and salmonella)
71
•
•
•
•
•
•
•
Chronic diseases
Emergency preparedness
Climate change (see the “Globalization” chapter in this series)
Injury mitigation
Public health research
Infrastructure
Health reform, including evidence-based quality care for all and moving from a sickness to a wellness system6
Infectious disease prevention
• P
ublic health monitors infectious disease outbreaks and identifies strategies to contain or stop the spread of these
diseases, ranging from tuberculosis to severe acute respiratory syndrome (SARS) to food poisoning to influenza.7
•Influenza and its complications, for example, kill about 36,000 Americans each year, mainly the elderly and
younger patients, whose ability to fight disease has already been compromised. Influenza also leads to more than
200,000 hospitalizations per year. Despite dramatic evidence of the success of the flu vaccine, efforts to expand
flu shot campaigns have been impeded by economic and scientific challenges. Less than half of Americans who
are in a segment of the population for which vaccination is recommended actually get vaccinated each year.
•An anti-vaccine grassroots movement continues to make it harder for physicians to deliver vaccines.
These groups are working at the state level to pass legislation that would remove school entry requirements
as supported by American Medical Association (AMA) policy and put up barriers to immunization by
undermining public trust in the system that recommends vaccination.
•The federal government set national health targets in 2000 through its Healthy People 2010 project. Twentythree of the 67 immunization and infectious disease objectives and sub-objectives met or exceeded their targets.
Progress had been made in diseases preventable through universal vaccination, diseases preventable through
targeted vaccination, infectious diseases and emerging antimicrobial resistance, vaccination coverage and
strategies, and vaccine safety. However, in five areas conditions moved away from 2000 targets.
•Increasing numbers of invasive Haemophilus influenzae (Hi) infections caused by either Haemophilus influenzae
type b (Hib) or Hi of unknown type were noted in children under age 5. The number of cases of invasive Hi
increased from 163 cases in 1998 to the most recent total of 259 cases in 2003.
•The number of cases of pertussis in children under age 7 increased, and the objective moved away from its
target.
•Cases of hepatitis B among men who have sex with men increased from 5,209 cases in 1997 to 5,510 in 2003,
moving away from the 2010 target of 1,302 cases. This change appears to be associated with a resurgence in
unsafe sexual practices.8
•Pneumococcal infections due to penicillin-resistant bacteria increased from eight new cases per 100,000 persons
aged 65 years and older in 1997 to 10 new cases in 2002, moving away from the target of seven. Antibioticresistant pneumococci are spreading in part due to the overuse of antibiotics.
•Within endemic states, annual cases of Lyme disease climbed from a baseline of 17.4 to 32.5 new cases per
100,000 population. When the federal goal of 9.7 cases per 100,000 population was set in 2000, it was based on
the availability of a Lyme disease vaccine. However, the only vaccine for Lyme disease licensed by the Food and
Drug Administration (FDA) was removed from the market by the manufacturer in 2002.
•The number of reported measles cases has declined from 763,094 in 1958 to fewer than 150 cases reported per
year since 1997. During 2000–2007, a total of 29–116 cases (mean: 62; median: 56) were reported annually.
However, from Jan. 1, 2008, to April 25, 2008, a total of 64 confirmed cases were preliminarily reported to the
Centers for Disease Control and Prevention (CDC). Of the 64 cases, 54 were associated with importation of
measles from other countries into the United States.9
72
•Despite a high coverage of two doses of mumps-containing vaccine, a large mumps outbreak (6,584
cases) occurred in 2006, with the highest incidence among persons 18–24 years old. The outbreak was
characterized by two-dose vaccine failure, particularly among midwestern college-age adults who probably
received the second dose as schoolchildren. A more effective mumps vaccine or changes in vaccine policy
may be needed to avert future outbreaks and achieve elimination of mumps.10
Chronic disease prevention
• T
here has been a major emphasis in the past several decades on studying chronic diseases, including things like
cancer, diabetes and heart disease, which are responsible for the deaths of more than 75 percent of Americans.
Public health professionals research strategies and “interventions,” such as changes in diet and lifestyle, which help
people lead healthier lives.7 (See the “Health status of the population” chapter in this series.)
Disease, disaster and bioterrorism preparedness
• P
ublic health is on the front lines of the country’s defenses to prevent or contain major disease outbreaks, including
those caused by an act of bioterrorism, or to provide wide-scale treatment to the survivors of major disasters.7
• State-level preparedness is inadequate:
•Ten states do not have adequate plans to distribute emergency vaccines, antidotes and medical supplies from
the Strategic National Stockpile.
•A total of 21 states do not have statutes that allow for adequate liability protection for health care volunteers
during emergencies.
•A full 12 states do not have a disease surveillance system compatible with the CDC’s National Electronic
Disease Surveillance System.
•Seven states have not purchased any portion of their federally subsidized or unsubsidized antivirals to use during
a pandemic flu.
• Six states and Washington, D.C., lack sufficient capabilities to test for biological threats.11
Injuries from motor vehicle crashes
• I njuries from motor vehicle crashes are the leading cause of death among persons 1–24 years old. Each year in
the United States, motor vehicle crashes account for 42,000 deaths, 3.4 million nonfatal injuries and 2.4 million
vehicle crashes, costing an estimated $200 billion. The cost components include productivity losses, property
damage, medical costs, rehabilitation costs, travel delay, legal and court costs, emergency services (such as medical,
police and fire services), insurance administration costs, and the costs to employers.6
Public health infrastructure
• T
he nation’s public health infrastructure is the resources needed to deliver the essential public health services to
every community. This includes people who work in public health, the information and communication systems
used to collect and disseminate data, and state and local public health organizations. This complex web of practices
and organizations has been characterized as being in “disarray.”12
• I n addition to fragmented responsibilities, there is a lack of clear roles among state, local and federal health
agencies. There are no minimum standards, guidelines or recommendations for levels of capacity or service required
of state and local health departments, resulting in wide differences in services and competencies across state and
local agencies.
73
• P
roblems arise from federal funding that are largely based on categorical or program grants, which are often
restrictive and lack a system of accountability.7
• T
here is a greater need for adequate and continuing training in public health core competencies for state and local
health departments.
• There is a need for state-level information technology to train the public health work force in the field.
• T
here is ineffective communication between state, federal and local health departments, including with the
U.S. Department of Homeland Security and other agencies involved in community-based and national disaster
response.
• R
esponse has been slow when there is a need to rapidly shift the allocation of resources from chronic diseases to
emergency situations such as bioterrorism and infectious disease outbreak.8
• W
hile there is a movement to privatize public services, these pressures have been resisted by public health
professionals.13
Legislative authority
• A
Model State Public Health Act has been developed to provide a systematic approach to the implementation of
public health authority and responsibilities.14
• M
any public health laws at the federal, state and local levels are antiquated and internally inconsistent, and not all
states have incorporated the recommendations of the model act.
Public health work force
• M
ost public health agencies are seriously understaffed and have serious needs to upgrade the skills of their
employees. Worker qualifications have been eroding over time.
• A
recent 2007 survey confirms a growing shortage in the public health work force and work force crisis facing state
public health agencies.
• The work force is aging faster than the rest of the American work force, with many retirees in the next few years.15
• P
hysicians head fewer than one-quarter of local health departments leaving elected officials or nonmedical
administrators to manage outbreaks.16
Professional education lacking
• A
part from some recent material on bioterrorism preparedness, education of physicians, nurses and other health
care professionals has little content on public health and community resources, or on the ways that health care
professionals can play leadership roles in communitywide health initiatives. Similarly, education of public health
professionals conveys little about the minute-to-minute practice of medicine.16,17
Public perceptions
The American public strongly favors increased federal funding to improve the nation’s public health system.
• A
bout 65 percent of Americans believe federal efforts to research and prevent disease should be increased. Cancer
ranks as Americans’ top health concern, followed by heart disease, chemical terrorism, obesity and diabetes.
74
• A
mericans’ concern about emergency health threats, including biological and chemical terrorism and food
contamination, has grown dramatically since 2006.
• A full 53 percent of Americans feel the country is unprepared for a pandemic flu outbreak, and 45 percent of
Americans believe the country is unprepared to respond to a biological terrorism attack.18
Predicted impacts for patients
• I n the event of a catastrophe, the true “first responders”—families and neighbors—lack education and training
programs.
• C
omprehensive community emergency preparedness plans will incorporate education of patients, especially the
elderly, disabled and chronically ill.
• T
he lack of public awareness regarding the importance of immunization, together with continuing suspicion by
some of vaccines for children, poses a significant public health risk for patients and their families.
• The loose-knit and weakening safety net makes it more difficult for patients to access services during a crisis.
• P
atients will have increased access to community resources that promote health and wellness through health
departments, park districts, schools, hospitals and workplaces.
Predicted impacts for physicians
• P
hysicians may be frustrated and underutilized by the lack of training and by a preparedness system unable to
identify and mobilize health professionals before and during an emergency.
• P
hysicians will be expected to diagnose and treat illnesses caused by exposure to biological, chemical or radiologic
agents, and to emerging and spreading diseases.
• S
tate and local medical societies may be expected to increase collaboration with the public health community on
issues of population health and emergencies.
• P
ublic health and preventive medicine physicians will be expected to have a greater role in the AMA and county
and state medical associations.17
• P
hysicians will be challenged to advocate for support of the public health infrastructure and the prevalence of
preventable diseases through public policies—e.g., increasing taxes on tobacco, alcohol and sweetened soft drinks;
smoke-free workplaces; and tobacco settlement funds for public health and fitness programs in schools.17
Predicted impact on hospitals
• Hospitals will have to accommodate victims of mass casualty events.
What is public health?
Public health is defined as the “organized community efforts aimed at the prevention of disease and promotion of
health” and focused “on society as a whole, the community, and the aim of optimal health status.”2 The mission of
public health is to fulfill “society’s interest in assuring conditions in which persons can be healthy.”7
75
Stages of public health and medicine
Period
Public health
Medicine
Pre–20th century era of infectious
disease: cooperation
Focus on prevention, sanitary
engineering, environmental hygiene,
quarantine
Focus on treatment; direct patient
care within comprehensive
framework
Early 20th century era of
bacteriology: professionalization
Establishment of targeted
disease control
Establishment of biomedical model
of disease; development of medical
education standards
Post–WW II era of biomedical
paradigm: functional separation
Focus on behavioral risk factors,
establishment of publicly funded
medical safety net
Pursuit of biological mechanisms of
disease; success with pharmacology,
diagnostics, therapeutic procedures
Population-level health
Public health has a distinctive approach to problem-solving for population-level health issues with three core
functions: assessment, policy development and assurance, which are defined further and expanded into 10 essential
services.8,19
The 10 essential public health services
Assessment
1. Monitor health status to identify community health problems.
2. Diagnose and investigate health problems and health hazards in the community.
Policy development
3. Inform, educate and empower people about health issues.
4. Mobilize communities to identify and solve health problems.
5. Develop policies and plans that support individual and community health efforts such as laws and regulations
(e.g., environmental protection), funding for specific services (e.g., child immunizations), and setting guidelines
for standards for services (e.g., laboratory testing for infectious diseases).
Assurance
6. Enforce laws and regulations that protect health and ensure safety (e.g., inspections of restaurants, nursing
homes and hospitals).
7. Link people to needed health services and assure the provision of health care when otherwise unavailable.
Ensure good implementation of necessary services (e.g., home visits to new mothers).
8. Assure the public of a competent public health and personal care work force and adequate response to crises
(e.g., preparedness for biological terrorist attack).
9. Evaluate effectiveness, accessibility, and quality of personal and population-based health services.
Serving all functions
10. Research for new insights and innovative solutions to health problems.19,20
Public health and medicine: Who is responsible for the public’s health?
Approximately 3,000 federal, state and local governmental agencies all have a role to play in the public health system.
However, public health’s focus on populations and prevention overlaps and complements the work of health care
delivery systems. No single organization or governmental agency has complete responsibility for public health goals in
this country, therefore medicine, government, insurance companies, employers, schools, professional associations, and
many other private and nonprofit organizations adopt a public health role when they focus on prevention and on the
health of populations in the public interest. This network of entities with differing roles, relationships and interactions
contributes to the health and well-being of the community.7,19
76
Similarities and differences between populationand practice-based preventive medicine
Population-based
Prevention aspects of practicebased medicine
Data collection
Community history
Surveillance data
Diagnostic test surveillance
Patient history
Physical examination
Diagnostic tests
Data analysis
Sensitivities and specificities
Probabilities/statistics
Rates, proportions, trends
Relative risks
Sensitivity and specificity
Probabilities/statistics
Pre- and post-test
Likelihood ratios
Observation
Vaccinations
Prevention/treatment
Medications
decisions
Hospitalization/isolation
Quarantine
Follow-up
Continued data collection
Data analysis
Treatment adjustments
Observation
Vaccinations
Medications
Hospitalization/isolation
Continued data collection
Data analysis
Treatment adjustments
Adapted from Kahn, Health Affairs, 200316
Federal role—the federal role is policymaking, financing activities, overseeing national disease prevention efforts,
collecting and disseminating health information, building capacity, and directly managing some services. The federal
government’s functions are widely diffused across eight federal agencies and two offices. The major agencies are the
U.S. Department of Health and Human Services, Surgeon General, CDC, FDA, Environmental Protection Agency,
Department of Agriculture, and Occupational Safety and Health Administration.7
•One CDC project, Healthy People 2010, targets 26 priority areas designed to promote healthy behavior,
promote healthy and safe communities, improve systems for personal and public health initiatives, and prevent
and reduce diseases and disorders. The areas range from physical activity and fitness to food and consumer
product safety, family planning, chronic disease management, and public health infrastructure.3
State and local role—under U.S. law, state governments have primary responsibility for the health of their citizens.
Constitutional “police powers” give states the ability to enact laws and issue regulations to protect, preserve and
promote the health, safety and welfare of their residents. In most states, the laws charge local governments with
responsibility for caring for the health of their citizens.7
•State responsibilities for public health include disease and injury prevention, sanitation, water and air pollution
control, vaccination, isolation and quarantine, inspection of commercial and residential premises, food and
drinking water standards, extermination of vermin, fluoridation of municipal water supplies, and licensure of
physicians and other health care professionals.
• T
he state health officer directs the department of health. However, some states centralize public health within
a few agencies, while others decentralize, but most share the public health functions between the state and
local governments. States differ as to whether the public health agency has responsibility for mental health and
substance abuse, environmental health and Medicaid. These differences complicate a coherent national agenda
to improve public health.21
77
Public health models in clinical practice
• T
he patient-centered medical home includes principles of a “whole person orientation” and care that is
coordinated and/or integrated across all elements of the complex health care system and the patient’s community.22
• T
he Chronic Care Model is a framework for preventing health risk behaviors. Among the essential elements of a
health care system that facilitates a high-quality care community, the Chronic Care Model identifies resources and
policies that support care through community programs and local or state policies advocating improvements in
health care. These resources and policies may include partnerships with community organizations to identify, create
and support needed services.23
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
78
References
1. Centers for Disease Control and Prevention. Achievements in Public Health, 1900–1999: Changes in the Public Health System. MMWR CDC
Surveill Summ. 1999; 48(50):1131–1137.
2. Institute of Medicine. The Future of Public Health. Washington, DC: National Academy Press; 1988:39.
3. McGinnis JM, Williams-Russo P, Knickman JR. The case for more active policy attention to health promotion. Health Aff. 2002;21(2):78–93.
4. McGinnis JM. Can public health and medicine partner in the public interest? Health Aff. 2006;25(4): 1044–1052.
5. McGinnis JM, Foege WH. Actual causes of death in the United States. JAMA. 1993;270:2207–2212.
6. Benjamin G (Feb 29, 2008). Leading US Health Challenges: The coming decade. Coaltion for Health Funding Hill Briefing, Washington,
DC. www.aamc.org/advocacy/healthfunding/obesityamerica.htm. Accessed September 15, 2008.
7. Frequently asked questions about public health. Trust for America’s Health Web site. http://healthyamericans.org/docs/?DocID=201. Accessed
September 15, 2008.
8. US Department of Health and Human Services. Public health infrastructure. In: Healthy People 2010 Midcourse Review. Washington, DC: US
Dept of Health and Human Services; 2006.
9. Centers for Disease Control and Prevention. Measles—United States, January 1–April 25, 2008. MMWR CDC Surveill Summ. 2008
[early release];57:1–4. www.cdc.gov/mmwr/PDF/wk/mm57e501.pdf. Accessed September 15, 2008.
10. Dayan GH, Quinlisk MP, Parker AA, et al. Recent resurgence of mumps in the United States. N Engl J Med. 2008;358:1580–1589.
11. Ready or not?: protecting the public’s health from diseases, disasters, and bioterrorism. Trust for America’s Health Web site. http://healthyamericans.
org/reports/bioterror07/BioTerrorReport2007.pdf. Accessed September 15, 2008.
12. US Department of Health and Human Services. Understanding and improving health. In: Healthy People 2010. 2nd ed. Washington, DC: US
Dept of Health and Human Services; 2000.
13. Gollust SE, Jacobson PD. Privatization of public services: organizational reform efforts in public education and public health. Am J Public
Health. 2006;96(10):1733–1739.
14. The Turning Point Model State Public Health Act. Center for Law and the Public’s Health at Georgetown and Johns Hopkins Universities
Web site. www.publichealthlaw.net/Resources/Modellaws.htm#TP. Accessed September 15, 2008.
15. 2007 State Public Health Workforce Survey Results. Association of State and Territorial Health Officials Web site. www.astho.org/pubs/
WorkforceReport.pdf. Accessed September 15, 2008.
16. Kahn LH. A prescription for change: the need for qualified physician leadership in public health. Health Aff. 2003;22(4):241–248.
17. Davis R. Marriage counseling for medicine and public health: strengthening the bond between these two health sectors. Am J Prev Med.
2005;29(2):154–157.
18. Trust for America’s Health. New poll finds dramatic rise in public concern about biological and chemical terrorism; Americans continue to
rate cancer as #1 health threat. http://healthyamericans.org/newsroom/releases/release020207.pdf. Accessed September 15, 2008.
19. Leviton LC, Rhodes SD. Public health: policy, practice, and perceptions. In: Kovner AR, Knickman JR, eds. Jonas and Kovner’s Health Care
Delivery in the United States 8th ed. New York, NY: Springer Publishing Co; 2005.
20. Institute of Medicine. Who Will Keep the Public Healthy: Educating Public Health Professionals for the 21st Century. Washington, DC: National
Academy Press; 2003.
21. Understanding state public health. Association of State and Territorial Health Officials Web site. www.astho.org/pubs/UnderstandingPHASTHO.pdf.
Accessed September 15, 2008.
22. American Academy of Family Physicians, American Academy of Pediatrics, American College of Physicians, American Osteopathic
Association. Joint Principles of the Patient-Centered Medical Home. February 2007. American Academy of Family Physicians Web site.
www.aafp.org/online/etc/medialib/aafp_org/documents/policy/fed/jointprinciplespcmh0207.Par.0001.File.tmp/022107medicalhome.pdf. Accessed
September 15, 2008.
23. Hung DY, Rundall TG, Tallia AF, Cohen DJ, Halpin HA, Crabtress BF. Rethinking prevention in primary care: applying the chronic care
model to address health risk behaviors. Milbank Q. 2007;85(1):69–91.
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AMA Health Care Trends 2008
Globalization
Figure 11. Pathways by which climate change affects human health
Modulating influences
Health effects
Temperaturerelated illness and
death
CLIMATE
CHANGE
Human exposures
Regional weather
changes
•
•
•
•
Heatwaves
Extreme weather
Temperature
Precipitation
Contamination
pathways
Transmission
dynamics
Changes in
agro-ecosystems,
hydrology
Socioeconomic
and demographic
disruption
Extreme weatherrelated health
effects
Air pollutionrelated health
effects
Water and foodborne diseases
Vector-borne and
rodent-borne
diseases
Effect of feed and
water shortages
Mental,
nutritional,
infectious and
other health
effects
Adapted with permission from the Intergovernmental Panel on Climate Change.41
A change in climatic conditions can have three kinds of health impacts: those that are relatively
direct, usually caused by weather extremes; the health consequences of various processes of
environmental change and ecological disruption that occur in response to climate change; and the
diverse health consequences—traumatic, infectious, nutritional, psychological and other—that occur
in demoralized and displaced populations in the wake of climate-induced economic dislocation,
environmental decline and conflict situations.
Globalization is breaking down economic, political, cultural, social, demographic and symbolic barriers across the
world at a pace unseen in history. Governments, international organizations and businesses facilitate such expanded
globalization. The process is having many positive but also some negative economic, social and health consequences.
When borders open, there is greater flow of goods, services, finance, tourists, ideas and mass marketing, but also
migrants, refugees, pollutants and disease. Population and economic growth contribute to changing disease and
climate patterns. The speed and extent of globalization are enhanced by telecommunications, Internet connectivity
and rapid travel. The global economy and changing rules of trade provide opportunities and challenges for the medical
profession and public health.
80
Trade and trade agreements
Trade is critical to America’s prosperity—fueling economic growth, supporting good jobs at home, raising living
standards, and helping Americans provide for their families with affordable goods and services. In the past 10 years,
free trade has helped raise our GDP by nearly 40 percent. Over the same period, the United States has added more
than 16 million jobs.1
Trends
Growing concern over global trade
• T
rade agreements (bilateral, regional and global) are key factors driving broader globalization. However, there is a
growing recognition that these agreements may have a significant impact on local economies, jobs, public health,
domestic regulation, health services, medical education and physician practices in ways not widely understood.
Trade agreements may even affect the ways in which the United States can reform its health system.
• W
hile globalization involves the integration of various national economies into a single market for goods
and services and for capital and investment flows, the past two decades have witnessed the emergence and
consolidation of a global economic system that emphasizes domestic deregulation and the removal of barriers to
international trade and finance.2
Impacts of trade agreements on professional services
• W
orld trade, foreign investment and reduced government regulations have become formalized in international
trade agreements or treaties, which establish rules for trade among signatory countries. The World Trade
Organization (WTO) has been a major player, with agreements existing between 152 countries. Moreover, there
are currently hundreds of regional and bilateral agreements, and many more are under negotiation.3
In the WTO, member countries, including the United States, declare their explicit schedules of commitments, i.e.,
areas where specific foreign products or service providers will have access to their markets and which create legally
enforceable trade conditions. More than half (88) of the members of the WTO have made some commitment on
behalf of their health and dental sectors.
• T
he United States has committed some health services: hospital services, health facility services and health
insurance coverage. The United States has not yet made commitments under the General Agreement on Trade
in Services covering professional medical sector or professional licensing, alcohol and tobacco distribution, or
drinking water. However, these limits may prove temporary if the WTO objective of eventually liberalizing all
trade in all services is achieved.4
• T
here are signs that the medical profession may soon be affected. For example, India has requested that the United
States recognize the qualifications of Indian physicians and remove requirements of residence. China, India and
Mexico are also pressing the United States to make commitments covering professional services delivered by
doctors, nurses, dentists and other health care professionals, including telemedicine and the increased importation
of medical workers on a temporary basis.4
• U
nder “hospital services,” Global Agreement on Trade in Services (GATS) may affect the preferential tax
treatment of nonprofit hospitals, since many are managed by for-profit firms. If a foreign firm buys a chain of U.S.
hospitals to run as for-profit, the corporation could argue that it also merits preferential tax treatment because it
provides similar hospital services. If for-profit hospitals receive tax advantages, U.S. nonprofit hospitals might be
disadvantaged.5,6
81
• T
he United States has made commitments in the insurance sector. If the United States should end private
competition that had been established within Medicare (e.g., Medicare Advantage), it may be obligated to provide
compensation to all countries whose health insurance firms claim harm by the reversal.7,8 South Africa found that
its flagship health legislation, intended to meet the health needs of the majority of the population, conflicts with
legally binding previous commitments under GATS.9
• T
he U.S. government is proposing a commitment in the “higher education service sector,” which would include
both public and private medical, dental and nursing schools and could affect credentialing of health care
professionals and state licensing. This could lead to a global mechanism for accreditation and quality assurance
outside the control of federal or state regulators. This could severely undermine the authority of medical training
institutions and states on quality standards.10
• T
rade agreements are negotiated under very tight security with limited or no participation by most sectors of
society. Public health input is limited on the Office of the U.S. Trade Representative’s trade advisory committees.
• I n 2007, the National Conference of State Legislatures indicated that states lack input in trade policy even though
agreements affect a wide range of state laws—e.g., product protection, professional licensing and government
purchasing including Medicaid “preferred drug lists,” which aim to secure lower prices for pharmaceuticals.11
• A
s the United States moves toward greater health care reform, implementation of key domestic non-trade policies
may require modifications to rules of the WTO, e.g., health insurance risk pooling, employer insurance mandates,
tax credits for small employers, electronic medical record-keeping and policies to reduce pharmaceutical prices.12
Trade has an impact on public health
• T
here is growing awareness that trade agreements have provisions enabling corporations to challenge domestic
regulations on tobacco and alcohol by claiming that restrictions on advertising, marketing and sales practices are
trade barriers. Water distribution and sanitation services (commitment of which the United States proposes to
expand to include wastewater under “environmental services”) may also be opened to trade, and privatization and
deregulation of these services may affect public health.3
• T
he frequency of dangerous toys sold in the United States has risen as more toys are produced abroad. In 1970,
86 percent of toys were domestically produced vs. 87 percent currently made abroad. Toy recalls by the U.S.
Consumer Product Safety Commission rose from 37 in 2003 to 120 in 2007 (with toys made in China accounting
for 94 percent), due largely to design flaws and use of lead paint and other raw materials.13
Economic and social impacts of globalization
• A
s long as markets are non-exclusionary, regulatory institutions are strong, safety nets are in place, and there
are narrow domestic markets and a good human and physical infrastructure, open borders and markets lead to
prosperity and improved health status. However, the impact of trade has been mixed for developing and some
developed countries, including the United States, with some experiencing slow, unstable and unequal patterns of
growth and stagnation in their economies and in their health indicators.14
• T
he American Midwest was built on heavy industry and farming, both of which have been dramatically changed
by globalization. Industry has moved abroad where labor is less expensive. To compete, family farms are being
transformed into mega-farms as rural populations decline.15
• T
he American middle and lower classes are affected by globalization. While some sectors expand, lost jobs are not
just manufacturing but also low- and high-skill service jobs. As higher-paid jobs are lost to foreign competition,
service jobs, with lower wages and less insurance coverage, are likely to be inadequate replacements.16
82
Global health issues
To the extent that global integration helps reduce poverty and improves incomes, it will lead to health improvements.
But clearly, globalization can have adverse effects on health as well.
Globalization of disease and increased prevalence and spread
of infectious diseases
• O
ver the past three decades, more than 30 previously unrecognized diseases—such as Ebola, HIV, Hantavirus,
H5N1 influenza virus and severe acute respiratory syndrome (SARS)—have emerged as new global threats to
human health.
• B
oth the movement of millions of people each day across national borders and the growth of international
commerce facilitate the spread of disease. In the 1970s, there were about 200 million international tourist arrivals
annually. Tourists will increase to about 900 million a year by 2010.
• O
ver the past two centuries, the average distance and speed of human travel have increased a thousandfold, even
though the incubation times for infectious diseases have remained the same. Some emergent “stealth” infections
have long, silent incubation periods, so pathogens can have wide geographical spread before the onset of clinically
recognizable illness.17
• F oods once produced and consumed locally are increasingly being produced in one locale, processed elsewhere and
consumed in yet another place.
• C
hanges in consumer demand and provisions of the General Agreement on Tariff and Trade foster consolidation
and the streamlining of food production for export. National policies of “zero risk” for trade in animals and their
products have been challenged, as imported products must now be treated no less favorably than domestic products.
One example is the challenge to U.K. and European health restrictions on bovine spongiform encephalopathy (i.e.,
mad cow disease).18,19
• T
he spread of HIV/AIDS revealed the lack of coordination between public and private science and between the
world of trade and that of health since the new disease was linked to migrants’ sexual contact and commercially
spread via infected blood products.
Increase in prevalence and spread of noncommunicable and chronic disease
The developing world is also becoming increasingly burdened with chronic disease, partly due to the rapid adaptation
of behaviors and lifestyles that adversely affect health such as the following20:
• O
besity—largely due to lifestyle changes, obesity and obesity-related diseases (e.g., cardiovascular diseases, stroke
and type 2 diabetes) are becoming more widespread in poor and middle-income countries, with 1 billion adults
worldwide being overweight and at least 300 million clinically obese. Unhealthful high-fat, high-sugar, low-fiber,
high-calorie diets, along with lower levels of exercise, are all exacerbated by global marketing.21
• T
obacco—expanded trade and global marketing are continuing to contribute to tobacco use (the single most
preventable cause of death), with more than 5 million deaths globally each year, more than tuberculosis,
HIV/AIDS and malaria combined.21
• A
lcohol—contributes to the global burden on disease at about the same levels as do the deaths and disability from
tobacco or hypertension.23
83
• Perfect storm—similar to tobacco, there is a “perfect storm” (i.e., a confluence of factors) leading to an increase
in alcohol availability, alcohol consumption and a weakening of alcohol control policies in developing countries.
Global factors that contribute to the storm include economic growth, the low price of alcohol, the rising number
of young people, corporate marketing, weak public health infrastructure and favorable, business-friendly trade
agreements.22
ambling—trade agreements have surprising power over public policy. The WTO forced the United States (in a
• G
challenge from Antigua) to change its restrictions on Internet gambling. Rather than change its legislation, the
United States withdrew its GATS commitment for gambling. However, when WTO member countries withdraw
GATS commitments in one sector, they are required to compensate by making substitute commitments in other
service sectors. The European Union is now taking this opportunity to gain greater market access into the United
States and challenge domestic alcohol regulation.23
Human migration and health
Each year millions of people temporarily or permanently leave their homes in search of work or an improved quality of
life, and millions more are forcibly displaced by war or natural disasters. These migrant populations, especially refugees,
are among the most vulnerable to emerging infectious diseases. In many developed countries, including the United
States, the emergence and re-emergence of diseases (e.g., multi-drug resistant TB) are often linked to the influx of
immigrants from poor countries.
Climate change—effects on health, economy and society
• T
he WHO estimated that the burden of disease from climate change exceeded 150,000 excess deaths in 2000. The
Save the Children organization estimates that by 2010, 175 million people, mostly women and children, may be
displaced due to climate change.24
• T
he Intergovernmental Panel on Climate Change reported in 2007 that by 2030 the earth will warm by 2.0 degrees
Celsius—the tipping point at which climate change may lead to a self-perpetuating increase in warming due to the
current levels of carbon in the atmosphere.
• W
ithout any changes or developments in adaptive capacity, the impacts on human health could be significant.
These include the following: heat stress; injuries; drowning; vector-, food- and waterborne diseases; water and
soil salinization; ecosystem and economic disruption; mass population movement; international conflict; food
and water shortages; malnutrition; respiratory disease exacerbations (e.g., chronic obstructive pulmonary disease,
asthma, allergic rhinitis, bronchitis); and mental health issues related to extreme events.25
• S
ome projections to the mid- to late 21st century are for extreme weather and climate events to affect agriculture,
forestry and ecosystems, water resources, industry, settlement, and society. Extreme weather and rising sea levels
would have adverse effects on infrastructure, including destruction of hospitals, primary health centers and homes.
Every mode of transportation in the United States would be affected.26
• A
ccording to the 2008 OECD Environmental Outlook to 2030, if policy reforms are not introduced worldwide
within the next few decades, there is the risk of irreversible changes in the environmental basis for sustained
economic prosperity. To avoid that, four areas require urgent action: climate change, biodiversity loss, water
scarcity, and health impacts of pollution and hazardous chemicals.
In-sourcing and outsourcing of medical services
• T
he size of the global health services marketplace is likely to grow robustly in the next decades and generate
interest and concern in the outsourcing of medical services and travel abroad for medical care (i.e., medical
tourism).27,28
• U
.S.-based groups are expanding abroad. Johns Hopkins International has developed telemedicine consulting
services in pathology and radiology, as well as remote second opinion.
84
• I n-sourcing also remains viable as major medical centers—e.g., Johns Hopkins, Cleveland Clinic, Mayo—continue
to attract foreigners for care at U.S. centers of excellence. Moreover, there may be continued flow of patients from
Canada and other countries that are experiencing waiting periods for procedures.
• A
s health care becomes digitized with inexpensive and reliable broadband access, more services can be provided
across borders, such as the offshore interpretation of radiologic images. With radiologists unavailable for 24-hour
coverage, hundreds of hospitals use lower-cost overseas services for interpretation of radiologic images. Some
foreign services also have interpreters who speak a range of languages that individual hospitals cannot match, as
well as highly specialized resources that may not otherwise be available.29
• O
ther services have the potential for being outsourced, such as analysis of pathology specimens, reading of
echocardiograms, colonoscopies, teledermatology, electronic intensive-care monitoring units and even remote
robotic surgery.
• I ndia has captured 2 percent of the U.S. health care market (including $350 million for outsourced medical
transcription and billing). Mexico and Paraguay have taken notice of the potential “tip of the e-health iceberg.”
Medical tourism
• “ Medical tourism” is the organized travel outside of one’s health care jurisdiction, usually one’s country, to enhance
or restore health through medical intervention.30
• W
hile there are no exact numbers of how many Americans have traveled overseas for essential medical procedures,
companies specializing in medical tourism estimate an annual total of about 10,000, even excluding cosmetic
surgery and dental procedures.31
• S
ome experts estimate that about 150,000 medical tourists from all nations sought treatment outside their home
country in 2005; the number is rising at 15 percent annually.
• T
he primary reason to travel for medical care is to receive the same or better care at lower cost. Most American
medical tourists are uninsured or are seeking an unapproved procedure, or one that is not covered by their
insurance (e.g., hip resurfacing and in vitro fertilization), for which patients are seeking treatment in the Czech
Republic, Israel, Canada and Thailand.32
• S
ingapore, Thailand, Malaysia and India are the leading nations involved that offer care to foreign patients,
whereas Costa Rica, Turkey and Mexico are entering the market. Medical tourism is a $40 billion global industry.33
New business models are also starting to evolve in the sector, with the development of medical cities and emerging
alliances of hospitals and medical groups with medical spas (wellness tourism), insurance organizations, property
developers and financial investors.
• R
esearchers identified 15 common procedures performed in U.S. community hospitals and found there could
be savings of around $1.4 billion annually if one in 10 U.S. patients chose to undergo treatment abroad. These
procedures were knee surgery, shoulder arthroplasty, transurethral resection of the prostate, tubal ligation, hernia
repair, skin lesion excision, adult tonsillectomy, hysterectomy, hemorrhoidectomy, rhinoplasty, bunionectomy,
cataract extraction, varicose vein surgery, glaucoma procedures and tympanoplasty.34
• T
he medical tourism industry is increasingly stressing quality and accreditation.35 Joint Commission International
currently accredits 140 international hospitals in 30 countries.35,36 Some foreign hospitals are establishing
affiliations with highly reputable hospitals (e.g., Johns Hopkins) in developed countries and mirroring their host’s
procedural standards, guidelines and clinical pathways.
• T
he Cleveland Clinic has established partnerships abroad “as an opportunity to monetize our intellectual capital.”
These include a 15-year contract to build and select the staff and manage a hospital in Abu Dhabi; a similar arrangement
with an Austrian hospital for heart surgery; and relationships with facilities in Toronto, Saudi Arabia and Egypt.37
85
• H
ospital, insurance and corporate administrators will consider and increasingly utilize offshore alternatives as long
as outsourcing saves money, improves access to care and provides high-quality services.
Globalization and the medical work force
• T
here is a global shortage of 2.4 million physicians, nurses and midwives to provide essential interventions. The
existing work force tries to address changes in their patient demographics (e.g., aging) and factors that drive
changes in population-based health threats (infectious diseases, chronic disease, lifestyle-related and disasterrelated issues). Moreover, financing policies, technological advances and consumer expectations can dramatically
shift demands on the work force in health systems.
• M
edical systems in the United States and other wealthy countries are heavily dependent upon imported workers to
staff hospitals, provide care to underserved areas and meet gaps at many skill levels. Graduates of foreign medical
schools from the poorest and most deprived countries are disproportionately represented in the United States
among our primary care physician population.
Predicted impacts for patients
• P
atients and governments may have to pay higher drug prices in government programs such as Medicaid due to
restrictions brought by international trade agreements.
• V
ulnerable and remote populations may not have to travel to obtain technological advances available through
“virtual” services of telemedicine.
• T
he uninsured and underinsured may obtain medical procedures abroad at lower costs but may experience
complications and lack of continuity of care.
• T
he trade in medical tourism might crowd out poorer local patients in the local health care system of the
destination country due to an enhanced two-tier health care system and increase in domestic prices.
• O
n the positive side, increased demand from medical tourism creates opportunities for developing countries to
improve access to health care for all citizens. Inflows of rich-country consumers could lead to higher incomes at
home and a reduced incentive for doctors and nurses to emigrate to industrialized countries.
• P
eople living in countries that have enormous disease burdens can ill afford to lose their trained medical personnel
who leave to work in the United States and Europe.
• Patients and their families will feel the impact of climate change and extreme weather events.
• G
lobalization may benefit or negatively affect local communities, with changes in availability of jobs, income,
benefits and quality of life.
Predicted impacts for physicians and other health care providers
• O
utsourcing is likely to be a continuing trend with potential opportunities and challenges for U.S. physicians.
Teleradiology is the most economically viable of the telemedical fields, making radiologists in the United States
increasingly fearful of foreign competition.
• T
elemedicine may challenge arrangements patients have had with their physicians and institutions, and require
rapid development of new quality, legal and ethical standards.
• H
ealth care outsourcing is definitely a “transforming innovation” that can permanently change processes and
relationships, ultimately leading to benefits and harms that are hard to anticipate.38
86
• P
hysicians will have to deal with more issues stemming from their patients going abroad, including quality of care,
follow-up, continuity of care, confidentiality of patient records and liability, as well as potential loss of revenue.39
• I f patients seek care elsewhere, hospitals will see fewer patients and reduced revenue. Hospitals are already under
increased pressure to provide more free care, and under-reimbursed services and are less able to cross-subsidize to
cover expenses. Medical tourism may harm their sustainability as Americans seek lower prices abroad.40
• G
lobalization may improve (but also may harm) the communities, the economy, and the quality of life of
physicians and other health care professionals. Small and poorer rural populations often present challenges for
physicians and hospitals.
• Physicians will have to address changes in disease patterns from climate change and major weather events.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
87
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ffice of the United States Trade Representative. Trade delivers growth, jobs, prosperity and security at home [fact sheet]. www.ustr.gov/assets/
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Health%20Care%20Memo.pdf. Accessed September 15, 2008.
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Accessed September 15, 2008.
13. Santa’s sweatshop: “Made in D.C.” with bad trade policy. Public Citizen Web site. www.citizen.org/documents/Santas%20Sweatshop.pdf.
Accessed September 15, 2008.
14. Stiglitz JE. Making Globalization Work. New York, NY. W.W. Norton & Company; 2006:3–24.
15. Longworth RD. Caught in the Middle: America’s Heartland in the Age of Globalization. New York, NY: Bloomsbury; 2008.
16. Polaski S. US Living Standards in an Era of Globalization. Carnegie Policy Brief No. 53. www.carnegieendowment.org/publications/
index.cfm?fa=view&id=19442&prog=zgp&proj=zted. Accessed September 15, 2008.
17. Kimball AM, Arima Y, Hodges JR. Trade related infections: farther, faster, quieter. Global Health. 2005;1:3. www.globalizationandhealth.com/
content/1/1/3. Accessed September 15, 2008.
18. Lee K, Koivusalo M. Trade and health: is the health community ready for action? [published online January 25, 2005]. PLoS Med.
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31. Wolff J. Medical tourism: passport to cheaper health care? WebMD Web site. www.webmd.com/osteoarthritis/features/
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SB120338119629575619.html. Accessed September 15, 2008.
33. Kamath A. The mystical world of medical tourism. Medical Tourism. 2008;2:10–11.
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89
AMA Health Care Trends 2008
Science and technology in medicine
Figure 12. Federal obligations for health research and development,
by performer, in millions: 1985–2005
50,000
40,000
State & local
Nonprofit FFRDC
University FFRDC
Other nonprofits
Universities and colleges
Industry FFRDC
Industry
30,000
20,000
10,000
0
a
b
1985
1990
1995
2000
2005
(preliminary)
FFRDC stands for federally funded research and development center.
Data from the National Science Foundation, Division of Science Resources Statisics.29
The United States leads the world in both demand for health care advances in medical technologies
and in the research and development that generates those advances.1 Medical breakthroughs in
imaging have led to earlier and more accurate diagnosis, and the use of minimally invasive surgery
has made procedures less painful and improved recovery times. The impact of the Genome Project
has yet to be fully realized, and many exciting applications are on the horizon, including gene therapy.
The United States leads the world in both demand for health care advances in medical technologies and in the
research and development that generates those advances.1 Increasingly, contemporary biomedical science is an
interdisciplinary endeavor requiring collaboration among traditional bench researchers, computer scientists, scholars
talented in writing complex mathematical algorithms and bioengineers, among others. Genomics and all the other
“-omics,” nanotechnology, modern epidemiology to fight novel infectious disease, and health information technology, are
interdisciplinary by nature. According to National Institutes of Health (NIH) Director Elias Zerhouni, in 20 years medicine
will be characterized by three p’s—predictive, personalized and pre-emptive—as basic science is applied to practice.2
90
Trends
Research funding
• T
he NIH will receive exactly the same budget of $29.5 billion in 2009 as in 2008. The budgets of NIH’s institutes
and centers remained flat for the fifth year in a row. The NIH’s budget for research and development (R&D)
also remained flat at $28.7 billion. In 2009, there could be fewer new research grants, the real size of the average
research grant could shrink for the fifth year in a row, and the success rate for grant competitions could fall to a new
low of 18 percent. After peaking in 2004, the NIH budget has declined every year in real terms. The 2009 request
leaves NIH funding 8 percent below 2004, after adjusting for economywide inflation, and 13 percent below 2004,
after adjusting for NIH’s own calculations of biomedical research inflation.3
• A
ccording to the PhRMA, the pharmaceutical industry spent a total of $59.8 billion on R&D in 2007—
an increase from $47.6 billion in 2004. The industry group reported 23 drugs approved in 2007. There were
2,700 compounds in development in 2008, up from 2,000 compounds in 2003.4
• I n 2007, there were only five innovative commercial therapies approved by the Food and Drug Administration
(FDA), down from eight in 2004. Other drugs counted as new by the FDA dropped to 14 in 2007 from 28 in 2004.5
• A
survey by the Institute for Alternative Futures of more than 150 from the senior ranks of major pharmaceutical
companies found that companies are losing key staff while facing several central challenges:
•Companies need to discover new drugs and compounds that will enter into the pipeline and will serve to meet
global health care needs.
• Companies need more biomarkers for a multiplicity of study designs that fit targeted molecules, personalized
medicines and preventive products.
• The FDA Amendments Act of 2007 signals that continuous learning about risk will be required the whole time
a product is on the market.6
• T
he years 1996 and 1997 were terrific for the biopharmaceutical industry, with record numbers of new product
approvals largely due to greater efficiency in the FDA review process rather than greater productivity in R&D.
However, the products of those years are the blockbusters that industry still lives on—the ones that created the
massive infrastructure that Big Pharma now needs to shed. The cost-cutting has begun.
• A
n analysis of trends suggests that the industry wants and needs even more than the most optimistic prediction of
new products than the industry can reasonably expect to deliver in the years ahead.5
• W
hile targeted clinical research continues to suffer from a lack of trained investigators, a larger portion of both
public and private funding is being earmarked for clinical application of basic research. Nonetheless, barriers to
technology diffusion remain, including lack of an overall technology assessment process, disjointed information
flows, and complex economic and financial incentives.7
• W
hile an increasing number of treatment options are available, outcomes research has failed to keep pace, leaving
physicians without adequate data to judge the comparative advantages and disadvantages of the options.
• I n some cases, new medical technology increases the population that can be served, increasing health care
expenditures, while in other cases, new technological advances achieve dramatic cost savings by reducing the
incidence of disease.
91
Market surveillance and regulation
• I n May 2008, the FDA and the Centers for Medicare & Medicaid Services (CMS) announced a joint plan to
improve patient safety and quality of medical care with proactive surveillance of medical products on the market.
Called the Sentinel Initiative, it will include the development of a new electronic system that will enable the
FDA to query information sources to identify possible post-market adverse events. CMS will make it possible for
federal agencies, states and academic researchers to use claims data from the Medicare prescription drug program
(Part D)—subject to protections for beneficiary privacy and commercially sensitive data—for public health and
safety research, quality initiatives, care coordination, and other research and analysis.8
• T
he FDA established the Drug Safety Oversight Board to provide independent oversight and advice on the
management of important drug safety issues and to manage the dissemination of certain safety information through
FDA’s Web site to health care professionals and patients.9
• I n July 2007, the U.S. Office of Nutrition, Labeling and Dietary Supplements drafted nonbinding recommendations
for industry, an Evidence-Based Review System for the Scientific Evaluation of Health Claims.10
New technologies
• W
ith the completion of the Human Genome Project in 2003, medicine is armed with better information to
treat genetic disorders. Genetic breakthroughs will yield new prevention and treatment options and will have
unpredictable effects on physicians in some specialties.
• O
ne of the byproducts of the Human Genome Project is the advent of pharmacogenomics, the science of
determining how genetic variability influences physiological responses to drugs, from absorption and metabolism to
pharmacological action and therapeutic effect. With increasing knowledge of the molecular basis for a drug’s action
has come the recognition of the importance of an individual’s genetic makeup in influencing how he or she may
respond to a drug.11
• U
nderstanding of the genetic variations in drug response opens the door to “personalized medicine” by
(1) identifying patients who are more prone to experience adverse events from a drug and (2) identifying patients
who are more likely to benefit from a particular therapy.11
• P
harmacogenomical studies have recently identified a genetic marker in some patients which can affect their
reactions to some medications: the human leukocyte antigen (HLA) allele HLA-B*1502, which is associated with
dangerous, sometimes fatal, skin reactions (Stevens-Johnson syndrome and toxic epidermal necrolysis) following
treatment with the anti-epileptic drug carbamazepine.11
• O
ne of the most important discoveries of the past decade has been the phenomenon of RNA interference (also
known as gene silencing), and regulation of RNA at the molecular level. The discovery provides an important tool
to turn off a given gene on a very specific basis, e.g., a cancer gene.2
• T
he FDA is in a unique position to promote pharmacogenomics and personalized medicine in the drug
development process. In 2004, the FDA launched the Critical Path Initiative, a national effort to stimulate
and facilitate the modernization of the sciences through which regulated products are developed, evaluated and
manufactured. The initiative is aimed at facilitating development of innovative tools, such as predictive genetic
tests, valid biomarkers, assays and information technology, to enable the efficient development and evaluation of
safer and more effective drugs, and to promote the safe use of FDA-regulated products.11
• I n 2005, the National Academies released “Guidelines for Human Embryonic Stem Cell Research,” which offered
a common set of ethical standards for a field that, due to the absence of comprehensive federal funding, was
lacking national standards for research. In order to keep the guidelines up to date, the Human Embryonic Stem
Cell Research Advisory Committee was established and, in 2007, clarified earlier recommendations, including the
criteria for determining which stem cell lines are acceptable to use.12
92
The health care system has quickly adopted new medical technologies, both devices and pharmaceuticals. Despite
increased interest in cost-benefit assessment techniques, the pace of introducing new technologies is unlikely to slow,
and there will be a significant increase in the number of new technologies available in the coming decade. Some of the
most interesting new technologies include:
• Rational drug design—the use of computers to design drugs that target a particular receptor
•Advances in imaging—the use of new imaging technologies, such as electron-beam computed tomography
(CT), harmonic ultrasound, high-resolution positron emission tomography (PET) and functional magnetic
resonance imaging (MRI), to look at the form and function of organs that were once examined only in surgery
• G
enetic mapping and testing—the identification and testing of genes and genetic interactions that cause
disease
• Gene therapy—the use of site-specific genes to treat a variety of inherited or acquired diseases
• V
accines—the use of vaccines to bolster immune systems, target tumors or immunize against viruses, and of
delivery methods including oral and nasal sprays to simplify the vaccination process
• Artificial blood—the use of recombinant hemoglobin, using E. coli, to create a blood substitute
• X
enotransplantation—the transplantation of tissues and organs from animals into humans, primarily bone
marrow and solid organs
•Minimally invasive surgery—the use of miniaturized devices, digitized imaging, and vascular catheters in
neurosurgery, cardiology and interventional radiology13
• A
nticipating changes in orthopedics, Stryker Chairman John Brown predicts that joints and joint surfaces replaced
and regrown using biotech products (e.g., bone morphogenic proteins) will replace mechanical implants.14
• T
elemedicine has been slow to catch on. However, an aging population, decreasing equipment costs, and rapidly
evolving computer and telecommunications technology make its future widespread use more promising. Studies
have found that remote monitoring of ICU patients by intensivists can be medically and economically effective.
Telemedicine also is being used in disease management programs for congestive heart failure and diabetes.15
• T
he success of organ and tissue transplantation continues, as evidenced by the improvement in long-term survival
rates and the increased number of organs being transplanted.
• E
xperimentation in robotics medicine and remote operations is becoming more widespread and could have
implications for delivery of care, licensure, professional liability and payment. Telerounding using robots to
complement formal postoperative care has been shown to augment patient satisfaction.16
• N
anotechnology has the potential of having a dramatic impact on the practice of medicine. It will enable clinical
research using microelectronic mechanical systems (MEMS) or “labs on chips” concepts. Nanotechnology may be
used to track the course of disease in people at home, under natural conditions, in order to monitor the effect of
interventions and see what perturbations are critical to success or failure.2
Recent NIH developments include:
• N
ovel research methods can identify the causes of outbreaks, such as severe acute respiratory syndrome (SARS), in
weeks rather than months or years.
• T
he sequencing of the human genome set a new course for developing ways to diagnose and treat cancer,
Parkinson’s disease and Alzheimer’s disease, as well as rare diseases.
93
• I n response to the anthrax attacks of 2001, the NIH launched and expanded research to prevent, detect, diagnose
and treat diseases caused by potential bioterrorism agents.
• P
rogress in understanding the immune system may lead to new ways to treat and cure diabetes, arthritis, asthma
and allergies.
• N
ew, more precise ways to treat cancer are emerging, such as drugs that zero in on abnormal proteins in cancer
cells.17
A 2008 NIH biomedical report described new research with implications for clinical practice.18
• R
esearchers recently developed a technique, DNA microarray technology, that can distinguish between different
types of closely related cancers.
• M
utations in two genes, BRCA1 and BRCA2, give rise to most cases of hereditary breast cancer. The NIH’s
DNA microarray technology has identified clear differences between hereditary and nonhereditary breast tumors.
Understanding how the activation of these subsets of genes results in different paths of cancer development may
help researchers develop new targets for treating and preventing breast cancer.
• I n 2007, researchers discovered a new gene on chromosome 1 that is linked to an inherited form of prostate cancer.
The gene, which codes for a protein called ribonuclease L, is mutated in some families with a history of prostate cancer.
• I n May 2001, the FDA approved the use of a member of a new class of anticancer drug, Gleevec, to treat chronic
myelogenous leukemia (CML). In a recently completed Phase II study of Gleevec, 454 patients with CML who had
not responded to standard therapy took Gleevec on a daily basis. After 18 months, 95 percent of the patients were
alive and 89 percent were free of disease progression.
• T
he scientific mainstream has long believed that certain types of cells, once destroyed, are gone forever (e.g.,
heart muscle damaged during a heart attack cannot be repaired or regenerated). However, recent animal research
indicates that bone marrow progenitor cells can replace dead or damaged myocardial cells with functioning living
tissue suggesting that the heart is much more resilient than previously thought.
• R
ecent diabetes prevention studies showed that people in a diet and exercise group who lost 5–7 percent of
their weight lowered the incidence of diabetes by 58 percent. Metformin, an oral medication used to treat type 2
diabetes, reduced the incidence of diabetes by 30 percent. Among volunteers over the age of 60, diet and exercise
reduced the incidence of diabetes by 71 percent. In addition to delaying or preventing the onset of diabetes, diet
and exercise also restored normal blood glucose levels in many people with pre-diabetes.
• T
echnologies have improved for masking pain. Spinal cord stimulation often required surgery every few years to
replace devices. More advanced devices deliver better outcomes and could last essentially a lifetime.19
Emerging platforms for biomonitoring
The Robert Wood Johnson Foundation funded the Biomonitoring Futures Project to forecast by 2016 advances in
various forms of testing that could lead to dramatically better early detection of disease and pre-disease states, and
support better treatment for diabetes, cancer and many other diseases.20
94
• B
lood and serum tests—a number of biomarker tests using blood and serum are under development that could
dramatically change the screening, diagnosis and treatment of disease, especially cancer. Most patients will have
a pharmacogenomical profile that indicates the likelihood of benefit and side effects from medicines. Biomarker
tests that determine an increased risk of disease and tests that can identify pre-disease states as well as sub-types
of disease will also become much more common.
•Saliva and oral testing—an oral test for oral cancer is likely to be available in 2008. Saliva tests for other
cancers, including breast and ovarian cancer, will likely take longer. In 2008, researchers expect to complete
the saliva road map. This will help researchers to identify molecular signatures for non-cancer diseases such as
diabetes and rheumatoid arthritis. Their goal was to identify genetic signatures for at least 10 common diseases
by 2007. From there, it will take three to seven years to perfect the tests, get them through clinical trials, secure
regulatory approval and get the tests to market.
•Breath testing—a prototype diabetes testing device is in development and will need to prove acceptable levels
of specificity and sensitivity as well as pass FDA certification before it could be used as a screening test. Breath
tests for cancer could reach the market soon, with lung cancer as the first candidate.
•Stool testing—two very good stool tests for colorectal cancer already exist. One is very affordable and widely
available. The other is newer, more expensive and better at detecting early colorectal cancer. Unfortunately,
only 22 percent of those over 50 years old received fecal tests in the past 12 months due to low consumer
acceptability with collecting the samples.
• S
kin testing—a new test for cholesterol that can be performed on bare skin can be used at community
outreach programs and has potential as a home testing device. A novel skin test for prostate cancer is under
development, as are skin tests for glucose monitoring.
•Urine testing—current research is looking for specific protein and genetic biomarkers in urine that could be
useful in diagnosing cancers and other conditions. Urine testing is relatively inexpensive compared to other
forms of testing, but sophisticated gene and protein tests could be quite expensive for the foreseeable future.
Qualitative accuracy is good, but variable urine dilution depending upon hydration and other factors make
quantitative measurement difficult. This could limit urine testing to screening tests.
•Behavioral and lifestyle monitoring—a number of new devices have been developed for monitoring the home
setting and for individual use that provides data on motion, body position, body heat dissipation, galvanic skin
response, heart rate, breath rate and brain-wave activity. Algorithms convert the data into measures such as
duration of physical activity, calories burned at rest or during activity, times of sleeping and awakening, heart
rate, or the effects of anesthesia and sedatives on the brain.
•Imaging tests—in the future, imaging devices will increasingly be relied upon for early diagnosis, extent of
disease and rapidly verifying the benefit of specific expensive therapies. Routine use in community health
clinics of the newer and more expensive imaging technologies will likely be a long way off unless the costeffectiveness of treating common severe diseases such as lung or breast cancer is so great as to justify the
expense of doing imaging studies.
Complementary and alternative medicine
• T
hirty-eight million American adults self-reported using complementary and alternative medicine (CAM) to treat
health conditions. Nearly 6 million indicated they used CAM because conventional medicine was too expensive.21
• T
he NIH National Center for Complementary and Alternative Medicine and other NIH institutes fund studies of
CAM treatments.22 These studies have indicated the following:
• A
rthritis—extracts of the spice turmeric, used in Ayurvedic medicine to treat inflammatory disorders, has antiarthritic effects.
• B
rain—ginkgo biloba reduces the formation of specific brain abnormalities and paralysis in animal models and
may slow the progression of Alzheimer’s disease in humans.
• P
ain—a randomized clinical trial demonstrated that yoga was more effective and produced longer-lasting pain
relief than exercise or use of a self-help book.
95
• M
enopause—black cohosh failed to show relief of menopause-associated symptoms by treatments containing
black cohosh.23
•Chronic pain—using imaging technology, investigators found differences in the responses to acupuncture
between healthy individuals and others with chronic pain from carpal tunnel syndrome, pointing to the role
of specific neurobiological pathways in the response to acupuncture, and to more effective approaches for the
management of chronic pain.24
• While a growing number of patients are using alternative medicine, not all users are informing their physicians.
• I n 2003, 98 medical schools had CAM as a topic in a required course.25 According to an e-mail correspondence
from Barbara Barzansky, AMA Division of Undergraduate and Graduate Medical Education (May 2008), in
2006–2007, 114 schools (out of 125) indicated that some aspect of the subject is included in one or more required
courses, and 78 schools indicated that it was included in an elective course.
• T
he percentage of graduate medical education programs with complementary/alternative medicine curricula has
held steady since 2000 at 24 percent.26
• A
growing number of traditional health care institutions are offering alternative medicine services to patients.
Physicians are increasingly referring patients to nontraditional providers.
• A
2005 report in the Journal of the American Medical Association (JAMA) found that 25.8 percent of residents
reported being very or somewhat unprepared to treat or provide specified services to patients who use alternative/
complementary medicine. The same report in JAMA also found that 25 percent of residents reported similar
feelings about treating or providing specified services to patients whose health beliefs are at odds with Western
medicine.27
Predicted impacts for patients
• B
ehavioral and lifestyle monitoring, combined with advances in health coaching software, have the potential for
encouraging healthy living and disease management, preventing diseases such as diabetes, and allowing elderly or
chronically ill patients to avoid hospitalization.
• M
inimally invasive surgery will allow patients to recover faster, enabling them to lead more productive lives, and in
some cases to seek care sooner due to less fear of the procedure itself.
• P
atients will face diminished access to emerging and investigational therapies due to fewer clinical trials and
insurers’ unwillingness to pay for therapies regarded as unproven.
• T
he Human Genome Project is projected to have a positive impact on health status, allowing genetic manipulation
to alter the course of or possibly even the elimination of certain chronic diseases.28 It also will drive society to deal
with a number of policy issues related to the ethical implications, ownership of information, confidentiality and
proprietary control of testing. Patients will benefit from increased use of noninvasive procedures.
• Due to lower cost and perceived value, patients will continue to use CAM.
• Public acceptance of alternative medicine will continue to increase and more payers will cover these services.
Predicted impacts for physicians
• Due to improved technology, physicians will experience increased productivity.
• A
dvances in medical science and technology will enable physicians to do more for their patients than ever before.
Physician satisfaction with patient-care aspects of medical practice should increase.
96
• I ncreasingly, physicians will utilize higher technology in primary care practice to get the same outcomes as if done
in the hospital or specialty centers.
• P
hysicians will be under pressure to justify the use of new, expensive technology based on cost-benefit analysis that
includes the economic benefits gained from the return of patients to work. Regardless of the pressure to justify the
cost-benefits of new techniques, advances in medical technology will continue at a rapid pace and will be one of
the major drivers of the health care system.
• N
ew technology will cause career instability as established knowledge and skills become obsolete. Physicians who
position themselves to be flexible in terms of type of practice and who keep abreast of advances are likely to adjust
well to this trend.
• P
hysicians will need expanded education regarding the impact of the Human Genome Project on human health,
the appropriate use of genetic testing, and the provision of adequate counseling and support for patients regarding
test results. The importance of being informed on ethical, legal and social implications of genetic testing will
increase.
• W
ith the rapid advancement in genetic therapies and other technologies, physicians must be the leaders in
ensuring that these technologies are developed and applied according to the principles of medical ethics as well as
being covered by insurance.
• I n the future, physicians will be able to remotely monitor chronically ill patients. As a result, physicians will be
able to do more for their patients.
• W
ith the prevalence of patient use of CAM therapies, physicians will need to take more thorough medical histories
and become aware of interactions with traditional therapies.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
97
References
1. Weisbrod B, LaMay C. Mixed signals: public policy and the future of health care R&D. Health Aff (Millwood). 1999;2:112–125.
2. Culliton BJ. Extracting knowledge from science: a conversation with Elias Zerhouni [published online March 9, 2006]. Health Aff (Millwood).
2006;25:w94–w103. doi:10.1377/hlthaff.25.w94.
3. Intersociety Working Group. AAAS Report XXXIII: Research and Development FY 2009. Washington, DC: Committee on Science,
Engineering, and Public Policy, American Association for the Advancement of Science; 2008. AAAS Publication 08-1A. www.aaas.org/spp/
rd/rd09main.htm. Accessed September 15, 2008.
4. Pharmaceutical Research and Manufacturers of America. Pharmaceutical Industry Profile 2008. Washington, DC: PhRMA; March 2008.
5. McCaughan M. The blockbuster bubble: what is the real trend in R&D output [PowerPoint presentation]? The RPM Report.
http://therpmreport.com/LibRepository/1ae12495-ea4e-4a97-b22f-ea206f9c9e53.ppt#376,2,A Decade to Forget. Accessed September 15, 2008.
6. Peck J. Pharma 2029 Strategies. The RPM Report. 2008;3(3). http://therpmreport.com?EMS_Base/Agent.aspx?Page=Content/
2008500028.aspx?utm_so. Accessed September 15, 2008.
7. American Medical Association. Update on clinical research. Report 13 of the Council on Scientific Affairs (I-99). American Medical Association
Web site. www.ama-assn.org/ama/pub/category/13562.html. Accessed September 15, 2008.
8. New efforts to help improve medical products for patient safety and quality of medical care [news release]. Washington, DC: US Department
of Health and Human Services; May 22, 2008. www.hhs.gov/news/press/2008pres/05/20080522a.html. Accessed September 15, 2008.
9. US Food and Drug Administration. Manual of Policies and Procedures. Center for Drug Evaluation and Research MAPP 4151.3. www.fda.gov/
cder/mapp/4151.3R.pdf. Accessed September 15, 2008.
10. Center for Food Safety and Applied Nutrition, US Food and Drug Administration. Guidance for industry: evidence-based review system for
the scientific evaluation of health claims. www.cfsan.fda.gov/~dms/hclmgui5.html. Published July, 2007. Accessed September 15, 2008.
11. US Food and Drug Administration. Pharmacogenomics and its role in drug safety. FDA Drug Safety Newsletter. Winter 2008;1(2).
12. National Research Council (NRC) and Institute of Medicine (IOM). 2007 Amendments to the National Academies’ Guidelines for Human
Embryonic Stem Cell Research. Washington, DC: The National Academies Press; 2007.
13. Institute for the Future. Health and Health Care 2010: The Forecast, The Challenge. 2nd ed. San Francisco, CA: Jossey-Bass; 2003. www.iftf.org/
system/files/deliverables/SR-794_Health_%2526_Health_Care_2010.pdf. Accessed September 15, 2008.
14. Burns LR. Growth and innovation in medical devices: a conversation with Stryker chairman John Brown [published online May 1, 2007].
Health Aff (Millwood). 2007;26(3):w43–w444. doi:10.1377/hlthaff.26.3.w436.
15. Field M, Gregsby J. Telemedicine and remote patient monitoring. JAMA. 2002;288:423–425.
16. Ellison LM, Pinto PA, Kim Ong AM, et al. Telerounding and patient satisfaction after surgery. J Am Coll Surg. 2004;199(4):523–530.
17. NIH overview. National Institutes of Health Web site. www.nih.gov/about/NIHoverview.html. Accessed September 15, 2008.
18. Biomedical research at the National Institutes of Health. National Institutes of Health Web site. www.ugsp.nih.gov/nih/nih.asp?m=03&s=02.
Accessed September 15, 2008.
19. Coye MJ. Confessions of a serial entrepreneur: a conversation with Alfred E. Mann [published online 14 March 2006]. Health Aff (Millwood).
2006;25:w104–w113. doi:10.1377/hlthaff.25.w104.
20. Institute for Alternative Futures. The Biomonitoring Futures Project: Final Report and Recommendations. November, 2006. www.altfutures.com/
BFP/BFP_Final_Report.pdf. Accessed September 15, 2008.
21. Tu H. High Cost of Medical Care Prompts Consumers to Seek Alternatives. Washington, DC: Center for Health System Change; December 2004.
22. National Center for Complementary and Alternative Medicine Web site. http://nccam.nih.gov. Accessed September 15, 2008.
23. Kirschstein RL. Fiscal year 2008 budget for the National Institutes of Health: a new vision for medical research. Testimony before the Senate
Subcommittee on Labor-HHS-Education Appropriations. http://nccam.nih.gov/about/offices/od/directortestimony/0607.htm. Accessed September
15, 2008.
24. Briggs JP. Fiscal year 2009 budget request. Testimony before the House Subcommittee on Labor-HHS-Education Appropriations.
http://nccam.nih.gov/about/offices/od/directortestimony/0308.htm. Accessed September 15, 2008.
25. Barzansky B, Etzel SI. Educational programs in US medical schools, 2002–2003. JAMA. 2003;290(9):1190–1196.
26. Brotherton SE, Rockey PH, Etzel SI. US graduate medical education, 2003–2004. JAMA. 2004;292(9):1032–1037. doi:10.1001/
jama.292.9.1032.
27. Weissman JS, Betancourt J, Campbell EG, et al. Resident physicians’ preparedness to provide cross-cultural care. JAMA. 2005;294(9):1058–
1067
28. Collins FS. Shattuck lecture—medical and societal consequences of the Human Genome Project. N Engl J Med. 1999;341(1):28–37.
29. Federal obligations for research and development, by performer: FY 1985–2006 [table]. National Science Foundation Web site. www.nsf.gov/
statistics/nsf07323/pdf/tab116.pdf. Accessed September 18, 2008
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AMA Health Care Trends 2008
Information and communication technologies
Figure 13. Use of electronic health records
Basic system
Fully functional system
Patient problem lists
x
x
x
x
Electronic lists of medications
taken by patients
x
x
Clinical notes
x
x
Patient demographics
Health information and data
Notes including medical history
and follow-up
x
Electronic images returned
x
x
x
x
x
x
x
x
Warnings of drug interactions or
contra-indications provided
x
Out-of-range test levels
highlighted
x
Reminders regarding guidelinebased interventions or screening
x
Orders for prescriptions
x
Orders for laboratory tests
Order-entry management
Orders for radiology tests
Prescriptions sent electronically
Orders sent electronically
Viewing laboratory results
Results management
Clinical-decision support
Viewing imaging results
All physicians
x
x
Full
Primary care
Basic
Not primary care
a
Data reflect the rates of adoption of electronic health records by physicians, with adjustment for the characteristics of the
physicians and their practices.
b
Adapted with permission from the New England Journal of Medicine.2
Medicine has been slower than other industries to fully utilize new information technology.
Information and communication technology, however, is beginning to transform medicine.
The terms electronic medical record (EMR) and electronic health record (EHR) are often used interchangeably.
However, these terms describe very different concepts. The EMR is the legal record created in hospitals and
ambulatory environments that is the source of data for the EHR. The EHR represents the ability to easily share
medical information among stakeholders and to have a patient’s information follow him or her through the various
modalities of care engaged by that individual. Stakeholders may include patients/consumers, health care providers,
employers and/or payers/insurers, including the government. EHRs are reliant on EMRs being in place, and EMRs will
never reach their full potential without interoperable EHRs in place. Both are crucial to the success of local, regional
and national goals to improve patient safety, enhance the quality and efficiency of patient care, and reduce health care
delivery costs.1
A “fully functional” EHR generally has four domains: recording patients’ clinical and demographic data, viewing
and managing results of laboratory tests and imaging, managing order entry (including electronic prescriptions), and
supporting clinical decisions (including warnings about drug interactions or contraindications). A “basic system” lacks
99
certain order-entry capabilities and clinical-decision support.2 Medicine has been slower than some other industries
to fully utilize new information technology. Information and communication technology, however, is beginning
to transform medicine in five critical ways: (1) automation of back-office procedures (e.g., billing, coordination of
benefits, processing pre-authorizations, etc.); (2) development of electronic patient records; (3) creation of platforms
for online outcomes research; (4) improvements in the systems for telemedicine; and (5) increased access to
information through the Internet.3
The Office of the National Coordinator for Health Information Technology, in the U.S. Department of Health and
Human Services (HHS), is the principal federal organization charged with coordination of national efforts related to
the implementation and use of electronic health information exchange and implementation of interoperable health
information technology (HIT).4
• P
resently, the capacity for an interoperable health information exchange through a nationwide health information
network does not exist, but up to 10 sites across the country will be implementing this architecture in 2008.
• T
he new availability of EHRs that are certified by the Certification Commission for Healthcare Information
Technology for specific functionalities and security addresses one of the key concerns that physicians have had
when making their investments.
• W
hile these programs have likely contributed to the increase in EHR adoption rate, continuing concerns about the
business case for adoption, privacy and security issues, as well as office workflow and how to get through the EHR
adoption process, continue to inhibit more widespread activity toward the 2014 goal.
• HHS has undertaken a number of initiatives to address the barriers to EHR adoption, including:
• T
he certification process that guarantees systems functionality, security and interoperability status is just now
evolving to address the financial risk of the various EHR vendors.
• The Office of the National Coordinator for Health Information Technology is working with the malpractice
insurers to establish credits for physicians who have adopted certified EHRs.
•To further adoption of HIT, the Centers for Medicare & Medicaid Services’ demonstration projects provide
financial incentives for physician practices to adopt certified EHR systems to improve the quality and efficiency
of services.
• E
fforts to develop electronic patient records continue with varying degrees of success. Ultimate success of
electronic patient records is dependent upon the establishment and adoption of a standard format and development
of confidentiality protections.
• S
ome physicians see practical pitfalls to EMRs. It is easy to cut and paste large blocks of text, or even complete
notes, from other physicians, make blanket copies, and possibly perpetuate erroneous information. Some EMR
software merely requires filling in boxes with little room for free text. EMR may help track outcomes and adherence
to guidelines but may also force doctors to give standard rather than customized care by fostering a generic
approach to diagnosis and treatment. Physicians may give patients less personal attention. “Dr. Computer never
looks at me at all—only at the screen.”5
• A
n EHR for small-group and solo-practice physicians costs $44,000 per physician and generates an average
ongoing $8,500 per year in annual costs, American College of Physicians President Lynne Kirk, MD, told the
Subcommittee on Regulations, Healthcare and Trade of the House Committee on Small Business in October 2007.
“The business case does not exist to make this kind of capital investment.” While the benefits of full-scale adoption
of interoperable HIT will be significant, leading to a higher standard of quality in the U.S. health care system,
unfortunately, without adequate financial incentives, solo and small physician practices will be left behind the
technological curve, and their patients with them.6
100
Trends
Issues related to adoption of HIT by medical practices
• I n late 2007 and early 2008, a national representative survey of 2,758 physicians found that only 4 percent of
physicians reported having an extensive, fully functional electronic records system, and 13 percent reported having
a basic system.2
• P
rimary care physicians and those practicing in large groups, in hospitals or medical centers, and in the western
region of the United States were more likely to use EHRs. Physicians reported positive effects of these systems
on several dimensions of quality of care, as well as high levels of satisfaction. Financial barriers were viewed as
having the greatest effect on decisions about the adoption of EHRs.
• M
ost physicians who had fully functional electronic records systems reported positive effects of the system on
the quality of clinical decisions (82 percent), communication with other providers (92 percent) and patients
(72 percent), prescription refills (95 percent), timely access to medical records (97 percent), and avoidance of
medication errors (86 percent). Furthermore, 82–85 percent reported a positive effect on the delivery of longterm and preventive care that meets guidelines. For physicians with basic systems, the magnitudes of positive
effects were generally smaller.
• M
ost of those with fully functional EHR systems reported averting a known drug allergic reaction (80 percent)
or a potentially dangerous drug interaction (71 percent), being alerted to a critical laboratory value
(90 percent), ordering a critical laboratory test (68 percent), and providing preventive care (69 percent).
Physicians with basic electronic records systems reported having the same effects but less commonly than did
those with fully functional systems.
• A
mong physicians who did not have access to an electronic records system, the most commonly cited
barriers to adoption were capital costs (66 percent), not finding a system that met their needs (54 percent),
uncertainty about their return on the investment (50 percent), and concern that a system would become obsolete
(44 percent). Physicians with EHRs tended to highlight the same barriers but less frequently than did non-adopters.
• F actors most frequently cited as facilitators of adoption were financial incentives for the purchase (55 percent
among physicians with no EHRs and 46 percent among those with EHRs) and payment for use of an electronic
records system (57 percent and 52 percent, respectively). About 40 percent of respondents with and without an
electronic records system also reported that protecting physicians from personal liability for record tampering by
external parties could be a major facilitator of adoption.
• T
he Greenfield Health project in Portland, Ore., an independent clinic with four internists and one adolescent
medicine specialist, found that much care can be delivered without resource-intensive office visits when
phone, e-mail, group medical appointments and other methods are supported by the appropriate information
technology infrastructure and system design.7
• A
study published in Archives of Internal Medicine in 2007 found that EHRs were used in 18 percent of the
estimated 1.8 billion ambulatory visits in the United States in 2003 and 2004. For 14 of the 17 quality
indicators, there was no significant difference in performance between visits with vs. without EHR use.
Researchers concluded that, as implemented, EHRs were not associated with better-quality ambulatory care.8
• R
ecent exceptions to the Physician’s Self-Referral Law (i.e., Stark) and the Anti-Kickback Statute safe harbors
create new opportunities for financing the transition to EHRs and electronic prescribing systems.9
•Since 2006, it is permissible for organizations such as hospitals, health systems or health plans to donate
HIT to a physician practice, provided physicians pay at least 15 percent of the market value of the
donation and meet other requirements.
101
Professional Internet use
• A
ccording to a 2004 survey conducted by the American Medical Association (AMA) and Forrester Research,
there has been a steady increase in online usage for all functions since 199710:
•A full 78 percent of practicing physicians used the Internet for researching drug information in 2004 compared
with 57 percent in 1997.
•A total of 69 percent of respondents said they participated in online CME in 2004 compared with 52 percent in
1997.
•About 45 percent of physicians said they obtained and transferred lab test results online in 2004 compared with
13 percent in 1997.
•Roughly 33 percent indicated they obtained and transferred medical records online in 2004 compared with
10 percent in 1997.
•A full 31 percent of respondents said they obtained insurance and/or managed care data online in 2004
compared with 9 percent in 1997.
•A total of 43 percent indicated that they investigated employment/career opportunities online in 2004
compared with 21 percent in 1997.
•Younger physicians rely on technology more than their older colleagues. Approximately half of practicing
physicians use a personal digital assistant (PDA) on a regular basis compared with almost three-quarters of
residents. Although more residents use a PDA on a regular basis, physicians and residents use the following
features most often: appointment calendar, address book and to check medications. The activities performed
least often by both groups were the following: ordering medications, accessing patient records and checking
lab results.
Patient access to medical records and health information
• I n 2006, the Institute for Alternative Futures forecast that by 2015 all Community Health Centers will have
EMRs tied into advanced clinical management systems. Patients will have access to a personal health record that
is linked to the EMRs of their health care providers and to biomonitoring devices. The personal health record will
automatically update information from the EMR and biomonitoring devices. Patients will control security settings
and which providers have access to the information in their personal health record. Biomonitoring data will be in
an easy-to-read format. This software will reduce the disparities in health literacy among different patient groups by
making it easier for them to access health information in their own language and in culturally appropriate ways.11
• E
lectronic health data are poised for an online transformation that is being catalyzed by Dossia (a nonprofit
consortium of major employers), Google Health, Microsoft HealthVault and other Web services. These allow
patients to store, retrieve, manage and share their health data—such as lists of medical problems, medical history,
medications, allergies, immunizations, test results, insurance information and doctor’s visits over the Internet.
While promising advantages, data may be incomplete, inaccurate or difficult to verify, resulting in liability concerns
for physicians. Online services are not subject to Health Insurance Portability and Accountability Act (HIPAA)
regulations.12
• In the latest Vital Signs, The Impact of E-Health on Patients and Physicians series (2003), the Boston Consulting
Group (BCG) reported that about 80 percent of all patients search online for information about health care. The
way patients use that information continues to be dependent on the severity of their condition and their attitude
toward their physician(s). As in its 2001 report, BCG reported on four patient segments. The percentages of
“involved” and “in control” have declined slightly since 2001, and the percentage of “accepting” has grown.
102
• A
ccepting—rely entirely on doctors for health information and decisions (17 percent of patients in 2002 and
8 percent in 2001)
• I nformed—rely on doctors to make health decisions, but typically go online after an office visit to learn more
about a diagnosis or prescribed treatment (55 percent in 2002 and 2001)
• I nvolved—view themselves as partners with their physicians in making care decisions and seek information
online both before and after visits to discuss with their doctor; but they still rely on their doctor when making
the ultimate decision regarding care (24 percent in 2002 and 28 percent in 2001)
•In control—take control of their health care; use online information to diagnose themselves, to determine
which treatments they want and to convince their doctor to treat them accordingly (4 percent in 2002 and 9
percent in 2001)13
E-prescribing
• I n 2004–2005, only 21.9 percent of physicians reported that HIT was available in their practices to write
prescriptions electronically. Those that do not write prescriptions electronically tend to be physicians in smaller
practices. However, a 2007 report in Health Affairs found that physicians were generally very positive about the
impact of their systems’ most basic features on prescribing safety, quality, and practice efficiency through improved
legibility, better documentation, reduced pharmacy callbacks and improved management of renewals.14
• E
-prescribing may reduce errors and improve the monitoring of patients’ response to treatment. However, it has the
potential to significantly save insurers money by boosting adherence to formularies and steering patients and their
physicians to generic alternatives.15
• I n October 2007, the New Hampshire Citizens Health Initiative launched a statewide electronic prescribing
program for doctors to use regardless of their patients’ health plan. The program alerts doctors to potential drug
interactions. Anthem Blue Cross Blue Shield also provides access to medical records and claims data on Anthem
members using a Web-enabled cell phone.16
Local health information exchanges
• A
2006 Institute for Alternative Futures report forecasts that by 2015 there will be a national health information
network in the United States for the electronic transfer of health information. The system will largely be comprised
of regional networks linked by open standards. Interoperability problems will remain, as will gaps in coverage. If
current trends continue, many regions will not have a regional health information infrastructure or will have a
system that is not interoperable with the national system. However, most patients at community health centers will
be able to have their health information travel with them. Community health centers that are more electronically
isolated may have effective internal systems that provide advanced services but are not effectively linked to the
national system.17
• C
omputer Sciences Corp. announced in 2007 the successful exchange of health information through a Nationwide
Health Information Network prototype.
•Health care data transferred between MA-SHARE, the Indiana Health Information Exchange and the
Mendocino Health Records Exchange, and local public health departments within the regions participating in
the Computer Sciences Corp. consortium—Boston, Indianapolis and Mendocino County, Calif.
•The project demonstrated that health data can be exchanged accurately, quickly and securely, using readily
available technology and existing systems. John Halamka, MD, chief information officer for Harvard Medical
School and the CareGroup Health Care System, reported that this “validates that a federated, coordinated, but
decentralized, model can work for the country.”18
103
• T
o fully leverage the benefits of HIT, providers must not only adopt EMR within their organization but also share
data electronically to allow physician access to a patient’s data across sites of care. Health information exchanges
(HIEs) are organizations that support the electronic sharing of clinical data among independent hospitals,
physicians and other health care stakeholders in a community.19
•Barriers to achieving data exchange remain high. Concerns about loss of competitive advantage and data
misuse impede provider and health plan willingness to contribute patient data. Additionally, uncertainty about
who benefits from HIEs is affecting stakeholder willingness to fund the exchanges.
•The more mature exchanges—Cincinnati-based HealthBridge and the Indiana Health Information Exchange—
have achieved some viability by meeting a specific business need—more efficient delivery of hospital test results
to physicians. The newer exchanges—CareSpark, serving northeast Tennessee and southwest Virginia, and the
Tampa Bay Regional Health Information Organization—have struggled to identify and finance initial services
without a similar critical mass of hospital participation.
•Like hospitals, physicians feared losing competitive advantage by relinquishing control of what they consider
“their” data. As a medical group CEO said, “We are all competitors around the table … We are putting a lot of
our strategic information out for the world to see.”
•Policymakers are particularly interested in the role HIEs may be able to play in addressing limitations in
existing quality reporting and pay-for-performance programs, which primarily rely on claims data.
•Absent major policy changes, it is likely that communitywide HIEs of different designs and proprietary niche
data exchanges will continue to proliferate, with the landscape varying by community.19
• T
hree-quarters of states have begun developing some kind of health information exchange. HIEs are public/private
partnerships and seldom part of state governments.20
• P
harmaceutical companies are increasingly participating in eDetailing, an online feature used to provide
information about products and expert opinions. In 2004, approximately one-third of practicing physicians and
one-fifth of residents who have access to the Internet indicated that they have participated in eDetailing.10
• A
number of specialty societies have started online outcomes research projects. The growing availability of
information on medical care issues and alternative care options is changing the way that physicians interact with
patients.
• H
oles in state and federal regulations, combined with increased public demand for specific drugs (e.g., Viagra,
Claritin), have led to the proliferation of Web sites that dispense prescriptions without a face-to-face exam.
Moreover, patients are asking their physicians for specific medications as a result of direct-to-consumer advertising
campaigns.
• S
everal governors are considering developing Web sites to enable state employees, and in some cases state
residents, to purchase U.S.-manufactured pharmaceuticals from Canada. The Food and Drug Administration is
currently taking a hard stand against the governors’ plans.
Predicted impacts for patients
• P
atient outcomes should improve for patients who can access health care information. For some patients, the
availability of health information will lead them to seek medical care at an earlier stage of the disease process. One
of the challenges will be to ensure that health information is valid and appropriate as well as available and usable
by diverse populations.
104
• P
atient access to health care information, some of which may be inaccurate, will continue to increase. Patients will
use the Internet to research specific diseases and treatment options and use this information to become more active
participants in the patient-physician relationship.
• S
ince not all patients will have access to or will choose to access health care information through the Internet, an
even greater disparity will evolve between informed and uninformed patients.
• Due to the availability of clinical information, patients will increasingly demand specific services and treatments.
Predicted impacts for physicians
• E
xternal forces (e.g., payers) will continue to challenge physicians to incorporate high-technology and often very
expensive information systems into their practices, pressuring physicians to join groups.
• P
hysicians will become overwhelmed with the proliferation of information related to medical technologies and
treatment options and may need help deciphering what is important for their practices.
• A
s clinical information interfaces improve, physicians will have access to more sophisticated decision-support
systems, which will be fueled by the proliferation of outcomes research projects.
• I n the future, physicians will be able to remotely monitor chronically ill patients. As a result, physicians will be
able to do more for their patients.
• P
hysicians increasingly will be challenged by patients and delivery systems/insurers to be informed about new
technologies and treatment options that patients learn about through the media and the Internet. This offers the
opportunity for increased educational interaction between physicians and patients.
• I mproved telecommunication and networking capabilities present an opportunity for the AMA to form a direct
connection with every physician and become a part of their lives (e.g., through providing back-office services,
continuing medical education through the Internet, clinical outcome data collection).
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
105
References
1. Garets D, Davis M. Electronic Medical Records vs. Electronic Health Records: Yes, There Is a Difference. HIMSS AnalyticsTM white paper.
Updated January 26, 2006. www.himssanalytics.org/docs/WP_EMR_EHR.pdf. Accessed September 15, 2008.
2. DesRoches CM, Campbell EG, Rao SR, et al. Electronic health records in ambulatory care: a national survey of physicians. N Engl J Med.
2008;359:50–60.
3. Institute for the Future. A Forecast of Health and Health Care in America. Princeton, NJ: Robert Wood Johnson Foundation; 1998.
4. Office of the National Coordinator for Health Information Technology, US Department of Health and Human Services. Online performance
appendix FY 2009. www.hhs.gov/budget/09budget/oncfy09opa.pdf. Accessed September 15, 2008.
5. Hartzband P, Groopman J. Off the record: avoiding the pitfalls of going electronic. N Engl J Med. 2008;358(16):1656–1658.
6. American College of Physicians. The value of health IT to solo and small medical practices. Statement for the record of the ACP to the
House Committee on Small Business, Subcommittee on Regulations, Healthcare and Trade; March 28, 2007. www.acponline.org/advocacy/
events/testimony/hit_testimony.pdf. Accessed September 15, 2008.
7. Kilo CM. Transforming care: medical practice design and information technology. Health Aff (Millwood). 2005;24(5):1296–1301.
8. Linder JA, Ma J, Bates DW, Middleton B, Stafford RS. Electronic health record use and the quality of ambulatory care in the United States.
Arch Intern Med. 2007;167:1400–1405.
9. American Medical Association. Health Information Technology Donations: a Guide for Physicians. American Medical Association Web site.
www.ama-assn.org/ama1/pub/upload/mm/472/hitdonate_physicians.pdf. Accessed September 15, 2008.
10. Schneiderman M. 2005 Physicians and Technology Study. Chicago, IL: American Medical Association and Forrester Research; 2005.
11. Institute for Alternative Futures. Health Information Systems. Background Report (BFP 5). www.altfutures.com/bfp/
Health_Information_Systems_2015.pdf. Published March 23, 2006. Accessed September 15, 2008.
12. Steinbrook R. Personally controlled online health data—the next big thing in medical care? N Engl J Med. 2008;358(16):1653–1656.
13. Harris Interactive. eHealth’s influence continues to grow as usage of the Internet by physicians and patients increases. Health Care News. 2003
17 Apr;3(6). www.harrisinteractive.com/news/newsletters/healthnews/HI_HealthCareNews2003Vol3_Iss06.pdf. Accessed September 15, 2008.
14. Grossman JM, Gerland A, Reed MC, Fahlman C. Physicians’ experiences using commercial e-prescribing systems [published online April 3,
2007]. Health Aff (Millwood). 2007;26(3)w393–w404. doi:10.1377/hlthaff.26.3.w393.
15. Vesely R. The riches of e-prescribing. Insurers will say, do pretty much anything to get physicians to prescribe medications electronically. Ever
wonder why? Mod Healthc. 2008 Feb 18;38(7):6–7,16,1.
16. Associated Press. NH doctors access patients’ records electronically. The Boston Globe. May 12, 2008. www.boston.com/news/local/
new_hampshire/articles/2008/05/12/nh_doctors_have_electronic_access_to_patients_records. Accessed September 15, 2008.
17. Institute for Alternative Futures. The Biomonitoring Futures Project: Final Report and Recommendations. www.altfutures.com/BFP/BFP_Final_
Report.pdf. Published November, 2006. Accessed September 15, 2008.
18. CSC and ‘Connecting for Health’ team successfully demonstrates Nationwide Health Information Network prototype [news release]. El
Segundo, CA: Markle Foundation; February 14, 2007. www.markle.org/resources/press_center/press_releases/2007/press_release_02142007.php.
Accessed September 15, 2008.
19. Grossman JM, Kushner KL, November EA. Creating sustainable local Health Information Exchanges: can barriers to stakeholder participation
be overcome? HSC and NIHCM Research Brief No. 2. www.hschange.org/CONTENT/970/970.pdf. Published February 2008. Accessed
September 15, 2008.
20. Ferris N. Report: three-quarters of states are developing HIEs. Government Health IT. April 22, 2008. www.govhealthit.com/online/
news/350325-1.html. Accessed September 15, 2008.
106
AMA Health Care Trends 2008
Patient expectations and perceptions
Figure 14. Confidence in knowing enough to make various health care decisions
Extremely
confident
Very
confident
Somewhat
confident
Not too
confident
Not at all
confident
Ask your doctor
questions about
your health and
health care
38%
34%
23%
3%
2%
Choose your own
doctors
32%
33%
25%
6%
3%
Question your
doctor about the
appropriateness
of different
treatments
30%
36%
28%
4%
3%
Purchase health
insurance on your
own
16%
22%
35%
15%
10%
Adapted with permission from the Employee Benefit Research Institute.23
a
Many Americans are confident that they have enough knowledge to question their doctor about their
health care, but the percentage of Americans who are quite confident that they know enough to
purchase health insurance on their own is very low.
Trends
Patients’ health awareness and confidence
• A
ccording to a 2005 Kaiser Health Poll Report survey, 40 percent of all adults reported that they mainly obtained
their information about health and health care from traditional media sources such as television and newspapers.
Twenty percent of adults said that doctors and other health professionals were their primary source for health
information and 8 percent reported getting their information mainly from the Internet.1
• M
any Americans are confident that they have enough knowledge to question their doctor about their health
care, but they are less likely to express confidence in their ability to make decisions about coverage.
• M
ore than seven in 10 (72 percent) are extremely or very confident they know enough to ask their doctor
questions about their health care, and approximately two-thirds each are confident about knowing enough to
question their doctor about the appropriateness of different treatment options (66 percent) and choose their
own doctors (65 percent).
107
• H
owever, the percentage of Americans who are extremely or very confident that they know enough to purchase
health insurance is much lower (38 percent).2
• T
he 2008 Senior Health Index™ by American System for Advancing Senior Health (ASASH) found that one in
every three respondents aged 55–64 said they need more help with their health care decisions, and:
• A total of 71 percent said they want to be able to find more information about their own health care.
•Most people—88 percent—want to be in control of their health care decisions, and half said they believe they
themselves are in the best position to help improve the quality of their health.3
• A
2007 Harris Interactive® Poll found that many U.S. adults indicate that they are generally satisfied with how
their personal health information is used. However, a substantial number has serious reservations about the
confidentiality and security of their health data. One in six adults (17 percent)—representing about 38 million
persons—say they withhold information from their health providers due to worries about how the medical data
might be disclosed.
• S
even in 10 (70 percent) U.S. adults agree that they are generally satisfied with the way doctors and
hospitals handle personal health information in terms of protecting its confidentiality and security. One in
five (20 percent) strongly agree with this, 50 percent somewhat agree and another 19 percent disagree.
The remaining 11 percent are not sure.
•A majority (63 percent) agree that increased use of computers to record and share patient medical records can
be accomplished without jeopardizing proper patient privacy rights.4
Patient perceptions and attitudes toward quality of care
• A
ccording to a 2007 Gallup Poll, 86 percent of Americans report that the quality of health care they receive is
good to excellent.5
•Six in 10 rate the health care system as fair (29 percent) or poor (30 percent). Moreover, many feel the health
care system needs a complete overhaul (24 percent) or requires major changes (47 percent).
• T
he Employee Benefit Research Institute survey, reported in November 2007, found that while half of Americans
(51 percent) remain extremely or very satisfied with health care quality, less than two in 10 are satisfied with the
cost of health insurance (18 percent) or with costs not covered by insurance (16 percent).2
• T
he WSJ.com/Harris Interactive poll, conducted in February 2008, indicates more Americans accept the concept
of grading the quality of care provided by hospitals and medical groups6:
•About 60 percent said medical care can be measured fairly and reliably, up from 49 percent in 2006, while the
percentage of those who were unsure fell to 26 percent from 35 percent in 2006.
•About two-thirds of respondents think it would be fair for health plans to measure and compare quality of care
by considering frequency of preventive screening tests and assessments by health care watchdogs and medical
boards. But the poll indicates Americans see patient satisfaction surveys as one of the most reliable indicators
of quality of care. Three-quarters said it would be fair for health plans to use them to assess and compare care
provided by medical groups.
•At the same time, 87 percent said they would be willing to provide feedback about their doctors on issues
like trust, communications and medical knowledge if their health plan offered the feature on a Web site.
And 91 percent said they would be likely to refer to those ratings when choosing a new doctor.
108
Patient trust and respect
• I n the 2007 Gallup Poll on the honesty and ethics of people in different professions, nurses achieved the highest
score with 83 percent positive, followed by grade school teachers (74 percent), druggists (71 percent), military
officers (65 percent), medical doctors (64 percent), and clergy and police officers (53percent). In recent years
ratings for medical doctors were 68 percent (2003), 67 percent (2004), 65 percent (2005) and 69 percent (2005).7
• I n general, lower socioeconomic status (defined as lower income, lower education and no health insurance)
was associated with higher levels of distrust, with men generally reporting more distrust than women.
•Blacks and Hispanics reported higher levels of physician distrust than did whites. Higher levels of distrust
among blacks are not surprising and have been reported in prior studies on distrust of medical research, distrust
of the health care system and distrust of health care providers. These differences are generally attributed to
current and historical evidence of inequitable treatment of blacks by the health care system, as well as racial
differences in patient-provider communication, insurance coverage and physician characteristics.8
• A
2008 Kaiser survey found that just over half (53 percent) of the public says prescription drug advertising is mostly
a good thing, while 40 percent say it is mostly a bad thing.
•Two-thirds (67 percent) of the public agree that prescription drug advertisements educate people about
available treatments and encourage them to get help for medical conditions they might not have been aware of.
• W
hile majorities say drug ads do an excellent or good job explaining the potential benefits of a medication and
what condition it is designed to treat, more than half (53 percent) say ads do only a fair or poor job explaining
the potential side effects of the medication.
•The public is also concerned about the cost of prescription drug ads, and the impact of this cost on drug prices
overall. Six in 10 say pharmaceutical companies spend too much money advertising to patients, and more than
three-quarters (77 percent) agree that the cost of such advertising makes prescription drugs too expensive.9
• A
mericans love the products that pharmaceutical companies produce, but they are less favorable toward the
companies themselves, mainly because they feel prices are driven by high drug company profits.10
•While a plurality (47 percent) of the public says it has a favorable view of pharmaceutical companies, more
than four in 10 (44 percent) have an unfavorable view of these companies, outranked only by health insurance
companies (54 percent) and oil companies (63 percent).
•Those who have an unfavorable opinion of pharmaceutical companies are more likely than those with a
favorable opinion to express a variety of negative views, particularly when it comes to pharmaceutical company
profits and prices, and the amount of influence drug companies have over various government processes.
• P
rescription drug advertising has led a third of Americans to talk to their doctors about specific prescription
drugs, and many of these people got a prescription from their doctor as a result.
•Almost all Americans (91 percent) have seen or heard prescription drug ads, and nearly a third (32 percent)
have talked to a doctor about a prescription drug they saw advertised.
•Among those who have talked to a doctor about a drug they saw advertised, 44 percent say their doctor gave
them a prescription for the drug they asked about, and 54 percent say their doctor recommended another
prescription drug (resulting in 82 percent who got a prescription either for the drug they asked about and/or
another drug).
109
Perception of the health care system
Historically, between about 50 percent and 60 percent of the public has said that there are some good things about the
health care system, but that major changes are needed.
• T
he share saying the health care system needs to be completely rebuilt peaked at 42 percent in 1991, leading
into the campaigns for the 1992 presidential election. In late 2007, this share was again close to its peak, reaching
38 percent in July 2007.
• S
ince 1996, the share of the public naming health care as one of the two most important problems for the
government to address has remained fairly steady at around 10–20 percent, and in February 2008, it was 22 percent
(close to the high since 1996).9
• A
mericans agree that it is the responsibility of the federal government to make sure that all Americans have
health care coverage. When asked, “Do you think it is the responsibility of the federal government to make sure
all Americans have health care coverage, or is that not the responsibility of the federal government?” 64 percent
responded yes in November 2007 (vs. 59 percent in January 2000), and 33 percent responded no in 2007
(vs. 38 percent in 2000).11
Patients’ perception of financial barriers to care
• A
November 2007 Gallup Poll found that three-quarters of Americans describe their present physical health as
excellent or good and one-fifth describe their health as only fair or poor. Respondents indicated that poor physical
health affected them an average of four days in the past month, but that it only kept them from their typical
activities an average of 2.9 days. The poll found that older Americans, people in lower-income households and
blacks are less likely to report being in good health.12
• A
majority of Americans say they are satisfied with the amount they pay for health care, but a substantial
minority of respondents report postponing medical treatment for themselves or a member of their family in the
past year because of cost.
•A majority of Americans who have put off treatment say it was for a very or somewhat serious medical
condition or illness. A total of 30 percent of Americans say they or a family member have put off medical
treatment because of cost, up from 22 percent in 1991, when Gallup first asked the question. Since 2003,
the percentage has increased gradually, and has been 30 percent in each of the past two years.13
•Younger respondents are also more likely than older ones to say that in the past year, they put off medical
treatment. Thirty-seven percent of Americans aged 18–49 vs. 22 percent of those aged 50 and older report
deferring treatment. And one-third of women compared with 26 percent of men also report holding off on
medical treatment in the past year.
•Wealthier Americans are less likely to have to go without treatment because of cost. Americans whose
household incomes are under $50,000 (39 percent) are more likely than those whose incomes are at least
$50,000 (23 percent) to say that they or a family member put off treatment.
• H
ealth care costs rank among Americans’ top personal economic problems, and their struggles to deal with those
costs have affected both their financial well-being and their family’s health care. According to an April 2008 Kaiser
Family Foundation poll9:
110
•Nearly three in 10 Americans (28 percent) report that they or their families have had a serious problem paying
for health care and health insurance as a result of recent changes in the economy, which is behind paying for
gas (44 percent), and about tied with getting a good-paying job or raise in pay (29 percent).
•Smaller shares report serious problems paying their rent or mortgage (19 percent), dealing with credit card
or other personal debt (18 percent), paying for food (18 percent), or losing money in the stock market
(16 percent).
• I ncreased health care costs have resulted in a decrease in contributions to retirement (30 percent) and other
savings (52 percent) and in difficulty paying for basic necessities (29 percent) and other bills (36 percent).2
• T
he typical patient with private insurance is responsible for 23 percent of his or her medical bills—more than twice
the out-of-pocket costs in 1980.14
• H
ealth care costs are also having ripple effects on family budgets. In a separate series of questions asking about the
personal economic consequences of medical bills, nearly four in 10 (37 percent) report at least one of six financial
troubles over the past five years as a result of medical bills: having difficulties paying other bills (20 percent); being
contacted by a collections agency (20 percent); using up all or most of their savings (17 percent); being unable to
pay for basic necessities such as food, heat or housing (12 percent); borrowing money (10 percent); or declaring
bankruptcy (3 percent).9
• T
he 2007 Health Confidence Survey found that more than six in 10 Americans with health insurance coverage
(63 percent) report they experienced an increase in the costs they are responsible for paying under their plan in the
past year. Of these respondents, higher costs have caused them to increasingly:
• Try to take better care of themselves (81 percent in 2007; 71 percent in 2005)
• Talk to the doctor more carefully about treatment options and costs (66 percent in 2007; 57 percent in 2005)
• Go to the doctor only for more serious conditions or symptoms (64 percent in 2007; 54 percent in 2005)
• Delay going to the doctor (50 percent in 2007; 40 percent in 2005)
• Not fill or skip doses of their prescribed medications (28 percent in 2007; 21 percent in 2005)
•Those experiencing cost increases are also likely to report that these increases have negatively affected their
household finances. In particular, they indicate that increased health care costs have resulted in a decrease
in contributions to retirement (30 percent) and other savings (52 percent) and in difficulty paying for basic
necessities (29 percent) and other bills (36 percent).2
• H
ealth costs are a factor in a growing number of adults delaying retirement. These costs are the biggest obstacle
to a secure retirement. Americans’ confidence in their ability to afford a comfortable retirement has dropped to its
lowest level in seven years, reflecting worries about health costs, the economy and home values.15,16
• A
study completed in March 2008 by Leo J. Shapiro & Associates finds that the percentage of households that
report cutting back on medical expenses has reached a high of 31 percent in February 2008—up from 21 percent
in 2007.17
• Forty percent of adults say they are more inclined to wait it out before seeing a doctor than they were in the past.
•A like percent (40 percent) say they are more inclined now to treat themselves with over-the-counter
medications (24 percent) or herbal remedies (26 percent) before seeing a doctor.
•Many adults (49 percent) also say that they are now more likely to consult a pharmacist than in the past,
indicating the rising importance and authority of the pharmacist.
111
•Physician avoidance is substantial among households that do not have health insurance (79 percent), but is also
occurring among the large majority with health coverage (36 percent). This suggests that access to physicians
is being resisted, not just on an economic basis, but also as a matter of convenience and perhaps a loss of
confidence that physicians will help.
•The growth of walk-in clinics at retail stores is a counterpoint to physician avoidance. The growth in over-thecounter remedies and herbal treatment is a second counterpoint supporting reluctance to see physicians.
•Reluctance to visit physicians for treatment does not carry over to physical checkups. There may be growing
acceptance by the public of physicians’ role in preventive health care. The Shapiro study found that:
• T
hirty-five percent of American adults say they are now more likely to visit a physician for a physical
checkup than in the past, two points more than those who say they are less likely to do so (33 percent).
• A
mericans may be seeing physicians as more a source to preserve health and less for early-stage treatment.
They are slowing down visits to physicians when something goes wrong, but more often relying on
physicians for physical checkups to maintain their health. Economic hard times appear to support this
trend. In the face of hard times, people want to stay healthy.
• W
ith millions of baby boomers across America preparing for retirement, the first annual Senior Health Index by
ASASH, conducted by Zogby International Polling, shows that seven in eight baby boomers believe it is important
that their physician has specialized training in dealing with older patients, but a majority of them say they cannot
find such a doctor.3
• A
Harris Interactive Heath Care Poll found that approximately 15 percent of U.S. adults with health insurance
have on occasion gone to a doctor who does not accept their health insurance. Others indicated that they would
be very or somewhat willing to pay the full price for a doctor’s service if they were able to get specialized care, spend
more time with their doctor or have expanded hours to get medical care.18
• A
ccording to a WSJ.com/Harris Interactive Personal Finance Poll conducted in January 2006, only a quarter
(26 percent) of U.S. adults think they have or will have saved enough money to finance their own potential
long-term-care needs as they age. Forty-one percent do not think they will have enough money to cover their
expenses as they age, and 33 percent are not sure. Adding to the financial strain, many adults may have to finance
some of the costs associated with their parents’ potential long-term-care needs, with more than a quarter
(28 percent) of adults whose parents are still living saying that they and/or their siblings will be sharing these
costs with their parents, and 14 percent saying that these costs will fall primarily on them and/or their siblings.19
Use of alternate sites of care
• A
ccording to a 2008 WSJ.com/Harris Interactive health care study, U.S. adults who have used health clinics in
a pharmacy or retail chain are generally pleased, as almost all are very or somewhat satisfied with the quality of
the care (90 percent), cost (86 percent) and staff qualifications (88 percent). As in prior surveys on this topic,
the biggest driver of satisfaction appears to be convenience, with 73 percent very satisfied and another 20 percent
somewhat satisfied with the convenience of these clinics.
• T
he use of retail-based health clinics has remained consistent over the past few years, with 7 percent of
U.S. households in 2005, 5 percent in 2007 and again 7 percent in 2008 saying they have done so.
• Thirty-five percent of patients who use retail-based health care clinics do not have a primary care provider.
• U
.S. adults believe retail-based health care clinics can provide low-cost basic services to people who cannot afford
care (78 percent) and to anyone at times when doctors’ offices are closed (81 percent).
112
• S
imilar to results from 2007, the clinics are most frequently used for vaccinations (40 percent) and treatments for
common medical conditions such as ear infections or colds (39 percent).
• Use for preventive screening tests and physical exams for sports and school increased slightly this year.20
Personal capacity and responsibility
• O
f the 228 million adults in the United States, just 12 percent have the skills to manage their own health care
proficiently, according to the Agency for Healthcare Research. These skills, known collectively as health literacy,
describe people’s ability to obtain and use health information to make appropriate health care decisions. They
include weighing the risks and benefits of different treatments, knowing how to calculate health insurance costs,
and being able to fill out complex medical forms. Eighty-one million could not figure out a child’s dose on a bottle
of Tylenol.
•There is a mismatch between what people’s skills are and what the health care system is demanding of them in
general.21
Public perception of ways to change health care
• M
any Americans may feel helpless to affect rising health care costs, believing that individual consumers have little
or no influence on the overall cost of health care. When asked how much influence various participants in the
health care system have on the cost of health care, Americans responded as follows:
• More than nine in 10 (92 percent) say that prescription drug companies have a great deal or some influence.
•Almost as many indicate that health plans (86 percent) and hospitals (85 percent) have at least some influence
on the cost of care. Three-quarters each believe that Congress and doctors influence the cost of care.
•However, fewer than four in 10 think individual consumers have a great deal or some influence on the cost of
health care.
•Although employed Americans are positive about wellness programs in general (82 percent), they are less
comfortable with specific programs that employers might offer. Moreover, many have reservations about
employer motivations for offering these types of programs.
•More than nine in 10 (91 percent) of those surveyed support an employer mandate. More than 40 percent
believe that all employers, regardless of size, should be included in a mandate requiring them to provide and
contribute to health insurance coverage for their workers (42 percent).
•Almost two in 10 (18 percent) think employers with 30 or more workers should be included in the mandate,
while one in 10 (12 percent) say those with at least 50 workers should be included.2
• T
he 2007 Health Confidence Survey found that few Americans who currently have employment-based health
benefits are confident they could afford coverage on their own, even if their employer gave them the money it
currently spends on their insurance to help them pay for it.2
• J ust 16 percent report they are extremely (7 percent) or very (9 percent) confident they could afford to purchase
health insurance on their own if their employer stopped offering coverage. Nearly three in 10 (28 percent) are
somewhat confident, but more than half are not too (22 percent) or not at all (32 percent) confident they could
afford coverage.
• N
evertheless, a majority of those who currently have employment-based health benefits says it is extremely
(37 percent) or very (22 percent) likely they would purchase health insurance on their own if their employer
stopped offering coverage and gave them the money it currently spends to help them pay. Just two in 10 state
they would be not too (7 percent) or not at all (14 percent) likely to purchase it.
113
• F indings from previous years suggest that the seeming contradiction between the large percentage saying they
are not confident they could afford to purchase insurance on their own and the percentage reporting they are
likely to purchase coverage anyway is explained by the fact that many would replace their richer employmentbased plan with more basic coverage.
• T
he 2007 EBRI/Commonwealth Fund Consumerism in Health Care survey found that the level of participant
satisfaction with the consumer-driven plans is significantly lower than for traditional plans.22
• A
bout 64 percent of participants in traditional plans are very or extremely satisfied with their plans, compared
with 48 percent for consumer-driven health plan (CDHP) participants and 35 percent for high-deductible
health plan (HDHP) participants.
•CDHPs and HDHPs are perhaps at a tipping point. The level of enrollment in these plans has grown
significantly, relative to previous years, but is still modest in absolute terms. That suggests that both workers
and employers remain skeptical of them. These attitudes will change only if both the substance and perception
are positive.
• I f employers and workers change their mind-sets, CDHPs and HDHPs can become a significant part of the
U.S. health care financing system. But if there are no changes in employers’ and workers’ attitudes and
behaviors, they will remain as a niche type of plan or decline in the future.
Predicted impacts for physicians
• P
atient-physician relationships are changing; patients are becoming less loyal to their physicians and willing to
switch doctors more readily.
• Patients will utilize alternate health resources as financial pressures and lack of insurance escalates.
• If health care costs continue to rise, more Americans will support a larger government role in health reform.
• P
atients will have more access to health information through the Internet that may facilitate or complicate the
doctor-patient interaction.
• Patients who have deferred treatment due to cost may be sicker when they seek a physician’s help.
Visit www.ama-assn.org/go/healthcaretrends to take a quick survey about this resource,
view or download additional chapters in this series, or learn more about activities of
the AMA and its Council on Long Range Planning and Development.
114
References
1. P
ublic opinion snapshot on health information sources—July 2005. Kaiser Family Foundation Web site. www.kff.org/kaiserpolls/
pomr071805oth.cfm. Accessed September 15, 2008.
2. Employee Benefit Research Institute. 2007 Health Confidence Survey: Rising Health Care Costs Are Changing the Ways Americans Use the Health
Care System. November 2007;28(11). www.ebri.org/pdf/notespdf/EBRI_Notes_11a-20071.pdf. Published November 2007. Accessed September
15, 2008.
3. New survey from American System for Advancing Senior Health (ASASH™) shows knowledge is (healing) power in the hands of older
patients [news release]. Utica, NY: Zogby International; April 29, 2008. www.zogby.com/news/ReadNews.dbm?ID=1491. Accessed September
15, 2008.
4. Many US adults are satisfied with use of their personal health information. The Harris Poll® #27, March 26, 2007. Harris Interactive Web site.
www.harrisinteractive.com/harris_poll/index.asp?PID=743. Accessed September 15, 2008.
5. Personal health issues. Gallup Web site. www.gallup.com/poll/1648/Personal-Health-Issues.aspx. Accessed September 15, 2008.
6. Bright B. Patient surveys seen as reliable for rating health-care providers. Wall Street J. February 23, 2008. http://online.wsj.com/public/
article_print/SB120292044107465659.html. Accessed September 15, 2008.
7. Honesty/ethics in professions. Gallup Web site. www.gallup.com/poll/1654/Honesty-Ethics-Professions.aspx. Accessed September 15, 2008.
8. Armstrong K, Ravenell KL, McMurphy S, Putt M. Racial/ethnic differences in physician distrust in the United States. Am J Public Health.
2007;97:1283–1289. doi:10.2105/AJPH.2005.080762.
9. Kaiser public opinion spotlight: health care and elections. Kaiser Family Foundation Web site. www.kff.org/spotlight/election/loader.cfm?url=/
commonspot/security/getfile.cfm&PageID=301889. Accessed September 15, 2008.
10. USA Today/Kaiser Family Foundation/Harvard School of Public Health. The Public on Prescription Drugs and Pharmaceutical Companies.
www.kff.org/kaiserpolls/upload/7748.pdf. Accessed September 15, 2008.
11. Health care system. Gallup Web site.www.gallup.com/poll/4708/Healthcare-System.aspx. Accessed September 15, 2008.
12. Personal health issues. Gallup Web site. www.gallup.com/poll/1648/Personal-Health-Issues.aspx. Accessed September 15, 2008.
13. Three in 10 have postponed medical treatment due to cost. Gallup Web site. www.gallup.com/poll/103261/
Three-Postponed-Medical-Treatment-Due-Cost.aspx. Accessed September 15, 2008.
14. Kirchheimer S. Cash before care: don’t get blindsided. AARP Bulletin. July 9, 2008. http://bulletin.aarp.org/yourhealth/caregiving/articles/
cash_before_care_.html. Accessed September 15, 2008.
15. Helman R, VanDerhei J, Copeland C. The 2008 Retirement Confidence Survey®: Americans Much More Worried About Retirement, Health Costs a
Big Concern. EBRI Issue Brief 316. www.ebri.org/pdf/briefspdf/EBRI_IB_04-2008.pdf. Accessed September 15, 2008.
16. Fleck C. Retirement on hold: how long will you have to keep working? AARP Bulletin. July 7, 2008. http://bulletin.aarp.org/yourmoney/
retirement/articles/retirement_on_hold.html. Accessed September 15, 2008.
17. Physician avoidance. Leo J. Shapiro & Associates Web site. www.ljs.com/fileadmin/ljs-files/studies/Physician_Avoidance.pdf. Accessed September
15, 2008.
18. Substantial numbers of insured pay, and would be willing to pay, for doctors who don’t accept their health insurance, according to new Wall
Street Journal Online/Harris Interactive health care poll [news release]. Rochester, NY: Harris Interactive; August 31, 2005.
www.harrisinteractive.com/news/allnewsbydate.asp?NewsID=960. Accessed September 15, 2008.
19. Preparing and paying for the cost of care as we age [news release]. Rochester, NY: Harris Interactive; February 1, 2006.
www.harrisinteractive.com/news/allnewsbydate.asp?NewsID=1014. Accessed September 15, 2008.
20. New WSJ.com/Harris Interactive study finds satisfaction with retail-based health clinics remains high [news release]. Rochester, NY: Harris
Interactive; May 21, 2008. www.harrisinteractive.com/news/allnewsbydate.asp?NewsID=1308. Accessed September 15, 2008.
21. Goldstein A. Few Americans have skills to manage own health care, US says. Bloomberg. May 14, 2008. www.bloomberg.com/apps/
news?pid=newsarchive&sid=ay7c4gQSRm4w. Accessed September 15, 2008.
22. Employee Benefit Research Institute. Findings from the 2007 EBRI/Commonwealth Fund Consumerism in Health Care Survey: implications
for plan sponsors. EBRI Notes. April 2008;29(4):2–6. www.ebri.org/pdf/EBRI_Notes_04-20081.pdf. Accessed September 15, 2008.
23. Employee Benefit Research Institute. 2006 health confidence survey: dissatisfaction with health care system double since 1998. EBRI Notes.
November 2006;27(11):2–10. www.ebri.org/pdf/notespdf/EBRI_Notes_11-20061.pdf. Accessed September 18, 2008.
115
AMA Health Care Trends 2008
Index
A
Academic medical centers
accountability for spending of................29
financial conflict of interest by...............26
Age projections for U.S. population
for groups of older persons........................2
median......................................................8
table of, 2000–2050..................................7
Alcohol use
contribution to disease of.................83–84
in factors for risk of death of middle-aged
and older people.....................................11
by youth..................................................11
Alternate sites of health care
patient use of................................112–113
physician services at...............................21
Alternative medicine...............................95–96
Ambulatory care visits...........................56, 101
American Public Health Association,
emerging issues list of.....................................72
Antibiotics
over-prescription of................................12
resistance to......................................12, 73
Anti-cancer drug, Gleevec............................94
Anti-dumping laws........................................54
Anti-Kickback Statute.................................101
Association of American Medical Colleges
(AAMC) survey on medical school
expansion................................................25
B
Baby boomers
as continuing to increase older U.S.
population................................................2
hospital care requirements of.................20
long-term care needs of..........................53
physician training for older patients
sought by...............................................112
quality and cost concerns of...................13
retirement of, decreased labor force
projected due to........................................3
retirement of, Medicare expenditure
increases from.........................................36
Best practices, defining..................................68
Biomonitoring, platforms for...................94–95
116
Bioterrorism.......................................73, 74, 94
public concern about..............................75
Bone marrow progenitor cells........................94
Bridges to Excellence.....................................67
C
Cancer
closely related types of............................94
death rates from......................................10
Career satisfaction of physicians..............58–59
Care settings, patient.....................................59
Causes of death, leading..................................8
for people aged 1–24...............................11
Centers for Medicare & Medicaid Services
(CMS)
HIT demonstration projects of.............100
Physician Focused Quality Initiative by
HHS and.................................................66
Physician Quality Reporting Initiative
(PQRI) of...............................................66
Sentinel Initiative of FDA and..............92
quality-of-care measures of...............66, 68
Children
overweight..............................................10
in poverty...........................................4, 40
uninsured................................................40
Chronic Care Model......................................78
Chronic diseases
health care costs attributable to
treating.....................................................9
package of services for managing...........62
spending for patients with......................65
Chronic diseases, incidence of.........................7
accounting annually for deaths................9
by age........................................................8
increasing......................... 9–10, 12, 83–84
preventing..............................................73
Cigarette smokers
in factors for risk of death of middle-aged
and older people.....................................11
prevalence of..........................................10
Cleveland Clinic, foreign partnerships of.....85
Climate change, effects of
economic................................................84
on human health..............................80, 84
societal....................................................84
Collaborative practice arrangements.............22
ommunity benefit standard for hospitals....21
C
Competency expectations for physicians......26
Complementary alternative medicine
(CAM)...................................60, 61, 95–96, 97
Concierge medicine.......................................59
Continuing professional development for
physicians...........................................28, 29, 30
Convenient care clinic (CCC) settings........59
Critical care specialists, shortage of...............12
D
Demographics of U.S. population...............1–6
Diabetes, reducing incidence of.....................94
Disabled people
health care coverage types for....41–42, 51
Medicaid enrollment of..........................53
Disparities in health care
challenges to government of....................5
for racial and ethnic minority
populations.......................................3, 8, 9
Disparity in mortality
factors creating.........................................8
for racial and ethnic groups......................8
Diversity of U.S. population, increasing
statistics by racial and ethnic group.....2–3
table of projected......................................1
E
Economic conditions. U.S...............................4
Education levels of U.S. adults....................4–5
earnings correlated with...........................5
unemployment correlated with................3
Electronic health data, patient use of..........102
Electronic health records (EHRs)
barriers to adoption of, initiatives
addressing.............................................100
basic........................................99–100, 101
costs of..................................................100
fully functional...............................99, 101
table of....................................................99
Electronic medical record (EMR).........99, 100
tied to advance clinical management
systems..................................................101
Emergency department (ED)
bottlenecks in.........................................21
overcrowding of......................................22
visit rates for.....................................11, 21
wait time for.....................................20, 21
Emergency care, federal laws prohibiting
denial of.........................................................54
Emergency Medical Treatment and Active
Labor Act (EMTALA) requirements............22
Employer health insurance coverage
affordability for patients of...........113–114
decline in........................39, 40, 42, 47, 50
employee costs for..................................45
gap between public coverage and...........42
for low- and middle-income families......41
by smaller companies..............................42
types of plans for...............................43–44
Employers, trends affecting U.S.
demographic.............................................5
health promotion...................................36
Employment increases, projected
physician..................................................17–18
e-prescribing.................................................103
Evidence-based care improvements...............67
Evidence-based practice, physician
accountability for...........................................61
F
Family medicine, graduates in.......................27
FDA Amendments Act of 2007....................91
First responders to catastrophe......................75
Flexible spending accounts (FSAs)...............44
Food and Drug Administration (FDA)
Critical Path Initiative of.......................92
Drug Safety Oversight Board
established by.........................................92
review process of.....................................91
Sentinel Initiative of CMS and.............92
stance of, against Canadian
drug imports..........................................104
Fruit and vegetable consumption..................10
in factors for risk of death of middle-aged
and older people.....................................11
G
Gambling restrictions, Internet.....................84
General Agreement on Tariff and
Trade (GATT).........................................83, 84
Generalists
closure of practices by.............................62
income of................................................58
projected shortages of.......................56–57
Gender statistics of population........................2
life expectancy......................................7, 8
for medical school..................................24
mortality...................................................8
physician.................................................17
Genomics.......................................................90
Geriatric medicine.........................................18
Global Agreement on Trade in Services
(GATS), commitments under.................81, 82
Globalization............................................80–89
changes to industry and farming by.......82
concerns for U.S. health system of.........81
of disease.................................................83
economic and social impacts of..............82
Governments, predicted challenges of health
disparities on local and national......................5
Gross domestic product (GDP)
free trade increasing...............................81
health care costs compared with
and within........................................32–33
Medicare and Medicaid spending as
share of...................................................34
slower growth of.....................................36
H
Health care access......................46–47, 64, 112
decline in................................................58
patient confusion with...........................21
tiered.......................................................47
of underserved population......................29
by uninsured patients.............................46
universal.................................................47
Health care costs
accelerating future..................................35
for chronic disease treatments..................9
gaps in coverage affecting.......................46
increases for, compared with GDP.....32–33
personal economic problems of
Americans with............................110–111
P4P inappropriate focus on....................69
pressure on physicians to reduce............37
in private sector................................49–51
public influence on...............................113
retirement delays from............................11
ripple effect on family budgets of.........111
Health care coverage...............................39–45
ability of employers and governments
to provide.................................................5
by age................................................40–41
COBRA..................................................43
consequences of gaps in..........................46
coverage patterns for, overall...........39–40
for disabled people............................41–42
government responsibility for..............110
by income level......................................41
individual................................................41
largest gap in...........................................41
physician avoidance and access among
households related to............................112
premiums for...............................43, 49–50
private...............................................33, 50
by private sector, for workers............42–43
by public sector (government)...............42
by racial and ethnic minority.................41
results of increased costs of, on
behaviors of insureds............................111
Health care decisions, table of, confidence
in knowledge to make..................................107
Healthcare Effectiveness Data and
Information Set (HEDIS) measures..............67
Health care expenditures.........................32–38
administrative costs as share of..............51
cost-sharing trend in............36, 44, 45, 50
credit card use for...................................45
by elderly people.....................................35
by federal government............................34
health insurance administrative costs
as share of...............................................33
longer-term, accelerating.................35–36
per capita................................................50
public sector...........................................33
self-referral incentives in........................36
short-term slowing of........................32–35
Health care expenditures, out-of-pocket
financial choices resulting from.............47
increases in.......................................58, 61
by Medicare beneficiaries.......................36
as percentage of health spending...........35
table of, 2001–2007................................32
Health care facilities, health care resource
trends for........................................................22
Health care information, patient
access to..................................................102–103
increasing................................................60
outcome improvements from...............104
portable.................................................103
sources of, patient.................................107
Health care insurance. See Employer health
care; Health care coverage; Medicaid
programs; State Children’s Health
Insurance Program (SCHIP)
Health care resources...............................16–23
delivery systems for, changing................26
increased use of...............................34, 114
Health care system, public perception of
need for change..............................47, 110
ways to change..............................113–114
Health information exchanges, local....103–104
Health information technology (HIT)
adoption issues for medical practices
117
adopting................................................101
benefits of, sharing................................103
implementation of................................100
investments in........................................57
Health insurance. See Employer health care;
Health care coverage; Medicaid
programs; State Children’s Health
Insurance Program (SCHIP)
Health Insurance Portability and
Accountability Act (HIPAA) Privacy Rule,
compliance with.....................................58
Health insurers, consolidation of...................50
Health issues, global.......................................83
Health maintenance organizations
(HMOs).................................................. 43–44
physician employment by.......................56
profits of..................................................45
Health outcomes
accountability for...................................12
for racial and ethnic minorities................3
Health savings arrangement (HAS)-qualified
HDHPs.....................................................44, 45
Health status of U.S. population...............7–15
demographics for......................................5
by racial and ethnic minority...................3
2007 survey report of............................110
Healthy People 2010 project...................72, 77
Heart disease, death rates from......................10
Hepatitis B cases............................................72
High-deductible health plans with health
reimbursement arrangement
(HDHP/HRA).........................................44, 45
High-deductible health plans with savings
options (HDHP/SOs)..............................44, 45
HIV/AIDS, spread of.....................................83
Home health care, spending in......................34
Hospitalists, increasing demand for...............18
Hospitals
affiliations with physicians of.................57
challenges of small and rural
populations for........................................87
data collection by...................................65
grading quality of care by.....................108
insolvency rates of..................................21
justification of tax-exempt status of.......21
mix of services of....................................54
number of, declines in............................20
patient selection of.................................69
physician employment by.................18–19
physician referrals to..............................22
reimbursement rates for..........................50
specialized facilities expanding in..........35
staffing and wages for..............................22
teaching......................................24, 29, 54
termination from provider network of.....50
Hospital spending growth..............................34
Hospital standardized mortality ratios...........65
118
Hospitals, trends affecting
health care resource....................20–21, 22
public health...........................................76
third-party payer.....................................54
Household income, decreases in......................4
Human Genome Project
byproducts of..........................................92
impact on health status of................96, 97
I
Immigrants, U.S.
diseases linked to....................................84
projected increase of.................................2
statistics by race and ethnicity of.............2
unauthorized.............................................3
Immunization
anti-vaccine movement toward.............72
awareness of importance of....................76
Incarceration rate, increases in........................4
Income, physician..........................................61
Infectious diseases
prevalence and spread of, increased.......83
prevention of....................................72–73
response to..............................................74
treatment modes and
objectives for....................................11–12
Influenza vaccine...........................................72
Information and communication
technologies...........................................99–106
Information technology, advances for medical
education in...................................................28
Injuries, unintentional and violencerelated............................................................11
Inner cities
medical resources in...............................29
physicians in...........................................19
In-sourcing of patients to U.S. medical
centers............................................................85
Institute of Medicine (IOM) quality
initiative.........................................................65
Insurance plans
consumer-driven...................................114
patient choice of.....................53, 107–108
survey results of 2007 Kaiser/HRET
for......................................................43–45
underwriting...........................................50
U.S. Census Bureau report on................46
Internet use, patient.....................102–103, 114
Internet use, physician.................................102
for continuing education programs........29
J
Job losses related to globalization..................82
Joint Commission CME requirements...........28
Joints, biotech products for replacing............93
K
Kaiser Health Poll Report survey (2005)....107
Kaiser/HRET 2007 Employer Health Benefits
Survey......................................................43–45
L
Labor force, U.S. See Work force, U.S.
Leapfrog Group..............................................68
Liability insurance for physicians. See
Malpractice costs; Professional liability rates
License re-registration, CME
requirements for.............................................28
Life expectancy trends.................................7–8
by gender..............................................7, 8
by geographic area....................................8
20th century...........................................71
Long-term care insurance coverage...............44
Long-term care needs, savings for................112
Lyme disease...................................................73
M
Malpractice costs...........................................34
Managed care contracts, revenue from..........61
Managed care plans
continued evolution of...........................37
conversion of Medicare recipients to.....20
physician contracts with........................58
shifting of patients among......................60
Mass casualty events......................................76
Measles cases..................................................73
Medicaid programs
for children in poverty...........................40
enrollment in, for aged and
disabled people.................................52–53
expenses of, as less than private
insurance...................................................50
preferred drug lists of..............................82
regulations for.........................................53
spending for, growth of...............34, 52, 53
structure of..............................................52
Medicaid reform, demographic trends driving
need for............................................................1
Medical advice, literacy skills for
understanding..................................................5
Medical education...................................24–31
continuing........................................28, 29
cost of.....................................................29
expectation of competencies in.............26
graduate......................................26–27, 96
postgraduate......................................26, 61
for public health.....................................75
rethinking of...........................................62
virtual.....................................................28
Medical errors, discussion of..........................60
Medical home
patient-centered.....................................78
primary care model as.............................58
Medical practices.....................................56–63
arrangements for...............................56–58
basic science applications in..................90
closure of.................................................62
corporate policies and directives
influencing..............................................56
group.......................................................57
growing quality of care by....................108
high-minority.........................................60
HIT adoption by...................................101
mergers of...............................................34
public health models in..........................78
size of......................................................57
solo..........................................................57
Medical profession, medical education
trends affecting...............................................30
Medical records, patient access to.......102–103
Medical school applicants and matriculants
academic credentials and
experience of......................................... 25
by gender................................................24
by race and ethnicity..............................25
table of, 1996–2007................................24
Medical school enrollment............................25
Medical school faculty.............................26, 29
Medical school financing
competition for.......................................29
debt for.............................................24, 25
sources of..........................................27, 29
Medical school graduates
debt for.............................................24, 25
international.....................................17, 27
minority member....................................26
in United States.....................................18
Medical services
competition for.......................................62
in-sourcing and outsourcing of.........84–85
Medical technology.................................90–98
market surveillance and regulation of....92
new, emergence of............................92–94
new, incorporation by physicians of.....105
research funding for................................91
spending for new....................................35
Medical tourism.......................................85–86
issues for physicians of............................87
Medicare Advantage (MA) program
payment system..............................................51
Medicare beneficiaries
disabled.............................................42, 51
older........................................................51
by race and ethnicity..............................51
Medicare benefit payments......................51, 62
Medicare, Medicaid and SCHIP Extension
Act of 2007....................................................53
Medicare Modernization Act of 2003,
Medicare Part D prescription program
created by.......................................................51
Medicare Part D prescription drug
program....................................................51–52
insurance premium growth slowed by....49
shifts in sources of funds caused by........35
switch in coverage from Medicaid for
users of....................................................53
Medicare reform, demographic trends driving
need for........................................................1, 5
Medicare regulations......................................53
Medicare spending growth.......................33, 36
Medication errors, reducing.........................103
Migration, human..........................................84
Model State Public Health Act.....................74
Morbidity, personal behaviors
associated with.......................................7, 9, 10
Mortality amenable to medical care..............65
Mortality rates
disparity increasing in..............................8
by gender..................................................8
infant........................................................8
by race and minority group......................9
U.S., rank in OECD nations for..............8
Motor vehicle crashes....................................73
injury rates for........................................11
Mumps outbreak............................................73
N
Nanotechnology............................................93
National Committee for Quality Assurance
(NCQA) performance measures..............66, 67
National Institutes of Health (NIH)
biomedical report by, on implications of
research...................................................94
CAM studies funded by....................95–96
funding of...............................................91
recent developments of....................93–94
National Quality Forum (NQF)....................65
voluntary consensus standards of...........66
Noncommunicable disease, increase in
prevalence and spread of..........................83–84
Non-physician providers
globalization affecting......................86–87
physician management of.......................22
scope of practice of.................................20
shortages of.............................................16
supply of..................................................19
Nurses
average age of.........................................19
education of............................................75
Nursing
projected employment for......................19
shortages within.....................................34
Nursing homes, spending in..........................34
O
Obesity rates...................................................10
health care spending impact of..............36
worldwide...............................................83
Office of the National Coordinator for Health
Information Technology (HHS).................100
Organization for Economic Cooperation and
Development (OECD) ranking of health care
indicators for industrialized nations.................8
Outsourcing of medical services..............85, 86
Overweight status
of adults..................................................10
of children..............................................10
of women..........................................10–11
P
Patient expectations and
perceptions...........................................107–115
for health care services, rising................17
Patient management of health care, capacity
and responsibility for....................................113
Patient–physician relationship........54, 60, 114
Patient role in medical decision-making.......61
Patients, health awareness and
confidence of................................104, 107–108
Patients, low-literacy, physicians’
communication requirements for....................5
Patients, non-English speaking,
increases in.......................................................... 60
Patients, trends affecting
demographic.............................................5
globalization...........................................86
health care coverage and access.......46–47
health care expenditure..........................36
health care information access.............104
health care resource................................21
health status...........................................12
medical education..................................29
medical practice.....................................61
medical technology................................96
public health...........................................75
quality measure.......................................69
third-party payer...............................53–54
Patient trust and respect related to providers
and pharmaceuticals....................................109
119
Pay for performance (P4P) models................69
benchmarking for...................................61
focus on cost of.......................................69
incentives in...........................................62
performance standards of........................65
Performance measurement and incentive
programs.........................................................61
Personal behaviors associated with poor
health...............................................................7
of high school students...........................10
types of........................................11, 83–84
Personal health information, security of.....108
Personal health record.................................102
Personalized medicine....................................92
Pertussis cases.................................................72
Pharmaceuticals
new, FDA approval of............................91
patient advertising for....................12, 109
patient demand for specific..................104
patient trust and respect regarding.......109
reducing length of stay...........................22
specialty..................................................36
Pharmacists
consultations with................................111
as “disease-state managers,”....................20
projected shortage of........................19–20
Physical activity
in factors for risk of death of middle-aged
and older people.....................................11
participation rates in..............................10
Physician and clinical services,
spending for....................................................34
Physician and specialist visits
by seniors..................................................8
time pressure constraining......................62
Physician Consortium for Performance
Improvement (PCPI)...............................66, 68
Physician performance measures (PPM).......68
Physicians
accountability for clinical
competence by..................................29, 30
accountability for quality of care by.......61
advocacy by............................................75
by age......................................................18
ancillary services performed in
offices by.................................................35
career instability of.................................97
career satisfaction of...................58–59, 96
continuing professional
development for.........................28, 29, 30
cost reduction pressures on.....................37
departing practice, rate of......................17
employment growth for....................17–18
by gender, race, and ethnicity................17
health plan interference with decisionmaking of..........................................47, 54
120
income of................................................61
Internet use by................................29, 102
number of...............................................17
payment reductions to............................50
recruitment of...................................18–19
in rural communities and inner cities....19
self-employed..........................................54
in specialties. See Specialists, physician
table of supply of active, 2000–2020......16
treatment decisions by............................62
use of technology by.............................102
workload of.......................................56, 62
Physician’s Self-Referral Law.......................101
Physicians, trends affecting
globalization.....................................86–87
health care coverage and access.............47
health care expenditure..........................37
health care information access,
patient..................................................105
health care resource................................22
medical education..................................29
medical practice.....................................62
medical technology..........................96–97
patient expectations and perceptions....114
patient population demographic..............5
patient health status.........................12–13
public health...........................................75
quality measure.......................................69
third-party payer.....................................54
Physician-to-population ratio of PGPs..........57
Pneumococcal infections...............................73
Population growth rate 1950–2005
age groups declining in.............................1
older groups increasing.............................2
Poverty rates, U.S............................................4
Premiums, health care coverage....................43
Preparedness, disease, disaster,
and bioterrorism.............................................73
Prescription drug coverage.............................52
Prescription drug plans (PDPs)......................51
Prescription drugs
coverage by supplemental insurance
for...........................................................36
generic..............................................35, 36
growth in use of......................................35
importation of.................................35, 104
patent expirations of..............................36
patient trust and respect for.................109
payers for.................................................34
spending for......................................35, 36
tiered drug plans for................................44
Preventive medicine, table of, populationand practice-based.........................................77
Preventive services
integration of clinical.............................13
physician visits for................................112
Primary care
possible collapse of.................................37
resurgence of...........................................18
by specialists...........................................58
Primary medical care health professionals
compensation of.....................................61
declines in.............................17, 21, 29, 34
EHR use by...........................................101
non-physician providers replacing.........22
per capita supply of.................................19
shortage areas of.......................................4
Procedures performed abroad, cost
savings for.......................................................85
Professional liability rates........................36, 37
Public health............................................71–79
achievements in, in 20th century,
list of.......................................................71
clinical health models for.......................78
definition of............................................76
essential services in, list of.....................76
focus of....................................................72
funding of...............................................75
infrastructure of......................................74
legislative authority for....................74, 75
professional education for......................75
responsibility for...............................77–78
stages of...................................................76
trade agreement impact on.....................82
training in care competencies for...........74
work force addressing.............................74
Public health programs, expansion of............13
Q
Quality improvement (QI) methods.............26
Quality measures......................................64–70
national movement advancing for
focus on.............................................65–67
payer use of.............................................69
pressure to show effective care
results of..................................................69
for selecting providers, business
coalitions using.................................67–68
Quality of care
patient perceptions and attitudes
toward...................................................108
variability of...........................................65
R
Reimbursement, declines in...........................37
for physicians..........................................50
Remote monitoring of chronically ill
patients.........................................................105
Research and development for health, table
of, 1985–2005................................................90
Research funding...........................................91
Research projects
conflicts of interest in.............................26
expansion of medical schools into others
areas for...................................................29
online outcomes...................................104
spending for............................................91
Residency duty hours standards.....................27
Residency positions..................................27, 29
Residents
Hispanic native citizen...........................27
inpatient clinical experience of.............27
number of active.....................................26
Retail store clinics..........................59, 112–113
Retirement and departure from practice of
physicians.......................................................17
RNA interference (gene silencing)...............92
Robotics medicine.........................................93
Rural communities
medical resources in...............................29
physicians in.....................................19, 87
S
Science and technology in medicine.......90–98
Scope of practice for physicians.....................61
Sexually transmitted diseases (STDs)
infection rates.........................................10
prevention, testing, and treatment of....12
Silent PPOs....................................................50
Specialists, physician
compensation of.....................................61
in declining demand, types of................18
hospital employment of..........................19
primary care services by..........................58
shortages of.............................................16
Spinal cord stimulation..................................94
State Children’s Health Insurance Program
(SCHIP)...................................................40, 53
State programs
for disease outbreaks and disasters..........73
for health information exchange.........103
for high-risk health insurance
applicants................................................46
for public health...............................77–78
Stem cell research standards..........................92
Substance abuse disorders..............................11
Surgery, minimally invasive...........................96
T
Telemedicine consulting services
international...........................................84
low growth of..........................................93
standards for...........................................86
for vulnerable and remote populations....86
Third-party payers....................................49–55
Tobacco use as cause of death........................83
Toy recalls......................................................82
Trade and trade agreements...........................81
professional service impacts of.........81–82
public health impacts of.........................82
Transplantation, organ and tissue..................93
Trends, population. See U.S. population trends
access to health care by, table of,
2007 versus 2003....................................39
denial of coverage for.............................46
mergency department use by..................20
in families having full-time worker........42
follow-up of.............................................86
forgoing medical care.............................45
by geographic region..............................40
increases in.......................................39, 45
low-income.......................................42, 43
medical debt problems of.................46, 47
medical tourism by.................................85
table of percentage of, 2007
versus 2003.............................................49
Uninsured and underinsured young adults....40
Union membership statistics...........................3
V
Vaccination
influenza..................................................72
Lyme disease...........................................73
Vaccination rates and supplies, 11–12
U
W
U.S. population trends.................................1–5
age, table of projected..............................7
chronic disease...................................9–10
demographic, predicted............................5
disparities in care..................................3, 9
diversity....................................................2
infectious disease..............................11–12
life expectancy......................................7–8
in medical care spending..................32–35
mortality...............................................8–9
personal behaviors and lifestyle.......10–11
race and ethnicity, table of projected.......1
Unemployment rate by education
level, 2005........................................................5
“Unequal Treatment” report (IOM)................9
Uninsured and underinsured adults
Weather and climate events, effects of..........84
Work force, U.S.
aging of.....................................................3
changes in.............................................3–4
education levels of............................3, 4–5
high growth rates in past decades of........3
medical, imported...................................86
in nonstandard jobs................................42
physician, aging of............................17–18
for public health.....................................74
World Trade Organization (WTO)
General Agreement on Trade in Services
(GATS) limits for objectives of.......81, 84
trade agreement involvement of............81
121