Who Stole U.S. Health Care?

(The A.M.A.-- A.A.M.C. Sell-Out of Marcus Welby, MD)

by Fred A. Baughman Jr, MD

Karl Sandberg, MD, of Wrightwood, California laments (letter, American Medical News, April 3, 1995) "My business is worthless...I can't even give it away...patients stiff me...insurance companies stiff me...I am inspected and harassed....it is assumed that I am an absolute danger to the well-being of my community (and I thought I was part of the solution)." "It's all pretty disgusting. I'm gradually coming to the conclusion that I no longer wish to practice medicine in the United States. Many of my colleagues have already retired or changed vocations....the only thing that has kept me on the sinking ship this long ....is that I care about my patients. Ultimately they are the ones getting screwed."

Dr. Sandberg, is Marcus Welby, MD and he does care about you. He doesn’t care just about himself, he cares that you--the patient are getting screwed by the changes that have taken place in US health care. But you, there--folks of Wrightwood--you don't know what a gem you have in Dr. Sandberg--10 years in your midst, caring about you and your welfare--a regular Marcus Welby, MD. All you know is that you are getting screwed and not knowing that he is getting screwed too--that you're both getting screwed--you blame him. The trust between you is gone. Someone has absconded with your health care system--once the finest in the world--and you're both in the dark.

Dr. Sandberg has no idea where his independence and his practice has gone, and you, every patient, has no idea where "your" doctor and affordable health care has gone. Someone ran off with the health care system because, you don’t have it anymore and Dr. Sandberg doesn’t have it either. Where did it go? Who has it?

Maybe I can help. Like Marcus Welby, MD I was around when it was just you and I, physician and patient, and it was affordable and no one intruded. I saw who absconded with it.

I

Paying for their medical schools and teaching hospitals with their tax moneys, Americans have sought to assure an appropriate supply of physicians and thus, optimal health. However, those in charge of the medical schools and teaching hospitals--collectively known as medical academia--have abrogated their social contract--their obligation to the American people--and have failed to produce appropriate numbers and types physicians. What follows is one private practitioner's career-long view of the development of the US health care crisis.

I began practice in Grand Rapids in 1964, western Michigan's first neurologist. The "grandest" profession was a loose collective of private practitioners, content with the independence, esteem and fine standard of living the solitary pursuit of patient health and well-being accorded them. Here, the key word is "independence", for we were truly independent--beholden only to our patients and peers. The "Blues"--Blue Cross and Blue Shield were hardly in evidence. What insurance industry? Having enough new patients (at times,too many) and seeing (and operating upon) enough real disease , we did not have to contrive anything to do to generate revenue, and continuing medical education was a time-honored apprenticeship at the bed-side and the everyday lessons of patient care. I never thought of it then, but west Michigan, with Grand Rapids, with its three major hospitals and a physician/population ratio of 140/100,000, was a model of efficiency.

In 1975, I moved to El Cajon, California, a suburb of San Diego. While most physicians were busy, there was a general perception that San Diego had a growing physician oversupply. There were other differences as well; the hospital at which I located and where I became chief-of-staff in 1982--El Cajon Valley Hospital--was owned by American Medical International --among the biggest corporations in the burgeoning, for-profit, hospital industry.

II

With health care our biggest, most lucrative industry--and the most expensive in the world as well--and with the US physicians having outgrown the population nearly five to one (including doctors of osteopathy--DO's: 1/18 MD's) between 1965 and the present, why are 43.3 million Americans without health insurance? How does Canada provide care for every citizen for 35% less per capita? Why have the number of health care administrators outgrown the number of physicians 4:1 since 1970?. Why, although health care employment has grown so dramatically, did economists find that the industry only produced "about the same amount of care" in 1990 as it did in 1980? Why do only one in four physicians--fewer all the time-- find practice satisfying ? Why has public dissatisfaction with health care doubled in the past 5 years? Why, despite the AMA pledge to protect freedom of choice for physicians and patients alike, do both have less choice every day.

As physician-patient encounters for preventive care and early diagnosis become less frequent, patients arrive in ever-greater numbers, sicker, in emergency rooms across the country. Former HEW Secretary , Joseph Califano remarked: "By the year 2000, only Donald Trump will be able to afford health care." What did he mean?

III

The US health care crisis was prophesied by former AMA President, Malcolm Todd. In 1960 we were well cared for by 142 physicians per 100,000 citizens for a mere $45 billion (versus $1 trillion today). In 1965, President Johnson declared there were too few physicians, kept that way to keep costs high. Dr. Todd countered: "Mr. President....the more doctors you have, the more services, the more x-rays, the more surgeries are done."(provider-induced need which ensues when there are too many providers) However, the administration insisted that more physicians were needed immediately, and expedited legislation which, by the mid-1970's, doubled medical school (MD) graduation rates. At the same time the number of International Medical Graduates (IMG's) was burgeoning.

^.Between 1960 and 1993 the number of physicians grew 4 times times faster than the population, from 142/100,000 to 259/100,000 (almost 5 times faster when doctors of osteopathy, DO's--38,240 today-- are counted). As a direct result of the manpower policy pursued by the leadership of organized medicine, each physician has 40 to 50% fewer patients in 1993 than they had had 33 years earlier.

Nor are physicians proportionately distributed, geographically. While exemplary HMO's function with 125/100,000, most US cities and desirable areas have 3-5 times that number! In 1986, San Francisco County had 627/100,000; adjacent Marin County 418/100,000 and Washington, DC 607/100,000! In 1993, Washington, DC was up to 707/100,000; New York State 366/100,000; Massachusetts 393/100,000; Maryland 370/100,000; while Connecticut had 354/100,000. At the same time, countless urban and rural enclaves are under-served. East LA-Watts, had only 42/100,000 (1986).

Not only is their a absolute glut with geographic maldistribution, there is a glut of specialists as well: specialist/primary care maldistribution!

While the specialist/primary care ratio was 35/65 in the 1960's, by 1993, this ratio had inverted, and was 65/35. Are this many specialists necessary? Does the frequency of the diseases pertinent to each specialty, justify this many specialists? This many physicians generally?

In neurology--my specialty-- there is one neurologist per 6,600 (15/100,000) citizens statewide, in Massachusetts, New York and Maryland, while in exemplary HMOs there is 1/50,000 (2/100,000). 70% of neurologists have pursued fellowships in EEG and EMG, which are reimbursed at a higher rate than other neurological studies. Their mean gross income is $ 464,000.

In psychiatry with 50% of mental health "insured lives" already in managed care, managed care is credited with reducing the “expensive, dehumanizing, institutional care" that characterized the 1980's. As payers turn to non-psychiatrist (psychologists, marriage and family counselors and social workers), mental health providers who outnumber psychiatrists three to one, it is estimated that half of the country's 36,000 psychiatrists might be out of work by the time mental health is totally within managed care.

Professor of Neurosurgery, Charles B Wilson, MD, recently observed that "By most estimates, if one applies the current HMO utilization of neurosurgical services, the number of practicing neurosurgeons is between 2.5 and 3.5 the number needed." "In the year 200, I anticipate there will be 50% fewer practicing neurosurgeons. Some will retire, others will go on to administrative positions, some will pursue other professional avenues, such as law and not a few will decide to take early retirement. In the year 2000, I expect there will be 50% fewer positions for first-year-residents in neurosurgery." In planning the neurosurgical workforce was there ever a thought as to how many were actually needed or how what neurosurgeons/populace ratio provided a sufficient amount of disease and number of operations to assure surgeon competence. How many neurosurgeons retain competence when there are 2.5 times the number needed? 3.5 times? Nor does manpower planning appear to have been any different in any of the surgical specialties. In 1985 it was concluded that their were excessive numbers of surgeons in general surgery and in every surgical subspecialty, but there were no cutbacks, in fact, just as in neurosurgery, all of graduate medical education has continued to grow to this very day. In a 5 year period the number of resident physicians grew 25% to a total of 104,000 in 1994 We have heard from Dr. Wilson that neurosurgery had "a record number of neurosurgical residents in 1995..."Actual need appears to have had little to do with their manpower planning

It must be understood that specialists, most with an armamentarium in the tens of thousands to millions of dollars--prescribing a million to several million dollars worth of care each year, need to limited and centralized.

70% of tenured medical school faculty are specialists. A medical school administrator observed: "if students say they are planning to go into family practice, the specialists say: 'Oh, you don't want to be one of those'"! As if a student's preference should take precedence over the needs of the public and, as if the faculty has no responsibility in the matter, a recent University of Michigan study claimed that the faculty could not influence their choice of career. The General Accounting Office disagreed, finding that medical schools requiring clerkships in family medicine were more likely to graduate doctors wanting to be generalists. Medical school tuitions have risen inexorably. Debt upon graduation is commonly $75,000 to $100,000--a potent factor favoring the choice of a specialty--generally more lucrative than primary care.

As early as 1970, McNerney opined that the physician shortage perceived in the mid-1960's had been "a figment of someone's imagination". In 1980, the Graduate Medical Education National Advisory Committee (GMENAC) predicted a physician surplus of 62,700 by 1990 and of 137,000 by the year 2000. This lead the Department of Health and Human Services to call for a 17% cutback. In a 198l, California Medical Association poll, 63% of members said that there were "to many physicians". In 1983, Petersdorf, then, Dean, University of California-San Diego, School of Medicine, observed: "For most of the 1970's a debate took place over whether or not there was a physician surplus, but there is no longer any doubt about. To put it bluntly, many specialists are hurting. There are not enough patients to keep them all busy." Observing that "the number of graduates is still rising", he asked "Is the Establishment Defensible?" He urged that they "reduce the size of medical school classes, close some schools altogether" and begin "phasing out training opportunities for foreign medical graduates".

In the same vein, Glenn, in his December 8, 1983, presidential inaugural address at The Mount Sinai Medical Center in New York, noted: "Virtually every study of medical manpower has indicated....an overabundance or glut of physicians"; "We are in trouble." He urged "rational decision-making....controlling numbers of students, numbers of schools and numbers of specialists". But, calls for cutbacks were met with obfuscation and denial. In 1984, AMA, Executive vice-president, James H. Sammons announced that the AMA had never acknowledged that there was a physician glut. In August, 1984, I charged: "Neither the AMA nor the deans of the medical schools of the US have the sensitivity of a salamander pituitary to the oversupply of their product. It is this, and only this, that is demeaning our grand profession." In 1986, Tarlov predicted the physician oversupply would reach 180,600 to 220,000 by the turn of the century. Elwood²⁰ concurred. Citing California, circa 1986, with 1/372, I (21)called into question, the ethics of those responsible for the unmitigated physician oversupply.

Upon elevation to the presidency of the Association of American Medical Colleges in 1986, Petersdorf declined to be interviewed on the subject of physician oversupply, and was noted by an aide to be "less outspoken on the subject since he began representing all of the medical schools" .

In a 1986 editorial entitled: "Physician Supply: Primary Catalyst of Change", McMahon, former president of the American Hospital Association, wrote that increasing numbers of US physicians "has had the most far-reaching impact on the health care world. Physicians began competing for patients and working as salaried employees in the all-new delivery system....Physicians and hospital people are uncertain about their future."

In 1988 and, again in 1990, taking exception to a decade of observations, Schwartz, et al assured us "there will be little or no physician surplus between now and the year 2000". In 1994, Weiner predicted a surplus of 165,000 physicians by the year 2000; 85% of them specialists.

Speaking of the record numbers matched in family practice programs, in March, 1994, Kindig, Chairman of the Council on Graduate Medical Education, remarked: "It's nice to see such interest in family medicine, but the big problem is that we're turning out to many physicians overall and to many specialists. With no change in the current level of graduates, the physician supply continues to grow and is projected to reach 1/342, nationwide, by the year 2010.

Having been forced from private practice into managed care, over

the past 10-15 years, physicians--particularly specialists, are now being "deselected" or "de-listed" by managed care organizations. Their practices failing, unable to find positions in managed care, those that can afford to do so, are retiring, while some retrain in primary care. Meanwhile, the medical schools, advertise, network, collude, compete with the private practitioners of their communities for patients, and buy failing practices for pennies on the dollar. Doing so, they have forsaken their role as "consultant" to the private practitioners of their community, to whom, ethics would dictate, they should return each patient. Town-gown enmity is no more. The medical schools sit atop the health care "industry" while private practitioners, many insolvent, grow extinct.

III

With too many physicians--each seeing too few patients and too little disease--physician incomes would be expected to drop, but, until recently, they did not. To compensate, physicians mounted what Roper, former head of the Health Care Financing Administration, called an increased "volume" and "intensity" of prescribing. Physician's net incomes rose from $98,000 in 1982 to $164,000 in 1990, an average increase of 6.6% per year, comparing to a 4.3% for all full-time workers. Physicians remained the best paid professionals in the private sector. Did the number of diseases per patient increase? As never before, physicians were under pressure to network, collaborate, collude and sign on the dotted line, forgoing their independence.

In 1984, 76,000 of the 103,000 stroke-preventive, carotid endarterectomies were unnecessary, causing in 3800 to 11,600 unnecessary strokes or deaths. 50%, of coronary bypass operations and 56% of permanent pacemaker implantation's may be unnecessary.

The number of surgeons is outgrowing the number of patients with surgical disease in general surgery and in every surgical subspecialty. It is feared that individual surgeons will have less experience, more adverse outcomes and that indications for surgery might "loosen" with an increase in unnecessary operations.

With medical technology accounting for half of health care inflation, half of all general surgeons learned laparoscopic cholecystectomy within 18 months of its introduction in 1989. Though risks were less and costs 25% lower, the number of gall bladder procedures skyrocketed and total costs rose. Did the amount of gall bladder disease suddenly escalate? Diehl warned that surgeons might be broadening use of the procedure to indications it was not intended for.

Physicians with self-owned x-ray equipment ordered 4-4.5 times as many x-rays as non-owner physicians and charged 4.5 to 7.5 times more per study. Extrapolate this to physician ownership of for-profit hospitals,, of MRI scans at $1000/scan, of laboratories and surgicenters, and you get the picture. .

Congressional hearings entitled: "How Inpatient Psychiatric Treatment Bilks the System and Betrays Our Trust" were told of children kept in for-profit hospitals for periods determined, not by medical needs, but duration of insurance benefits, of bounties paid to school personnel for referrals and of millions of dollars in fraudulent billings . Speaking out, Duard Bok, MD, of the Psychiatric Institute of Fort Worth, was fired and, at the same time, deemed "impaired". In a remarkable insight into the ways of market-place medicine, Bok testified: "Most of the doctors most of the time, for the past three or four years have been much more dependent on the hospital's marketing department to refer patients to them, rather than they referring patients to the hospital. Ethical physicians who refused to keep patients in the hospital longer than necessary have seen the number of patient referrals dwindle to almost nothing, while physicians, some just having completed their psychiatric residencies, who order treatments and therapies that the administrative staffs direct, are rewarded with numerous referrals."

In 1994, National Medical Enterprises, owner of Psychiatric Institutes of America and of two of the five hospitals at which I practiced, agreed to settle federal claims of insurance fraud for $375 million. NME had previously set aside $315 million for the settlement of other lawsuits, including those filed by private insurance companies alleging insurance fraud. The NME settlement with the federal government was the biggest since that of San Diego-based, National Health Laboratories, operators of the laboratory in my medical building, for $111.2 million, in 1992.

In a 1994 review of hospital charts from forty cities, it was concluded that 59% of inpatient procedures, meaning those performed inside of hospitals, probably should not have been performed. In San Diego, where 49% of in-patient care was deemed unnecessary and where 50% of beds were empty to begin with--just 24% of hospital beds were appropriately filled. Bear in mind that virtually all health care, out-patient as well as in-patient, is physician-prescribed. At $329 billion annually, in-patient hospital costs are the largest component of health care spending.

AMA insistence that medical malpractice and "defensive medicine", costing an estimated $27 billion annually, is the main cause of the health care crisis--obfuscates. Tort reform, currently under way, can hardly be viewed as health care reform.

Nor has the health care crisis abated. The 1994 slowing of health care inflation as health reform was debated in Washington and as California approached the vote on its solo payor initiative--Proposition 186, was both mysterious and evanescent.

With too few patients and too little real disease, physicians become less skilled at diagnosis and therapy, surgery included. At the same time, economic conditions are such that they must "loosen" indications so as to heighten the "volume" and "intensity" of prescribing . As the shrinking pool of well-insured patients is targeted, it becomes apparent that the wealthy, despite the illusion of health and immortality, get more health care than is healthy for them and suffer increasingly from the morbidity and mortality of commission. Bear in mind that unnecessary prescriptions only heighten one's risk of injury or death, and that unnecessary prescriptions, knowingly rendered, are de facto malpractice. Recall carotid endarterectomy causing more strokes and death than had the patients never seen a doctor.

On the other side of the tracks, the poor, the sick-therefore-uninsurable, mothers-to-be without prenatal care, malnourished and unimmunized children, suffer increasingly from the morbidity and mortality of omission.

It is my considered opinion that more than 50% of all patient-care billings represents unnecessary prescribing. Add to this, administrative costs of 25 to 30%, and we are left to conclude that greatest part of each health care dollar is not spent on health care.

IV

By their disavowal and refusal to enact or countenance physician-workforce controls, the AMA and AAMC ceased being advocates for private-practice physicians and for the populace--all of them patients at one time or another. Physicians have signed on the dotted line, relinquishing their independence, not because they wanted to, but because they were forced to. Patients do not want their prescriptions second guessed or vetoed by insurance clerks, federal regulators, CEOs or "gatekeepers", nor should they.

I recently met a medical student here, from a state without a medical school of its own. Though that state was paying for his education, he confided that he had decided not to return to practice there. Think what we will of him, officials of his home state were remiss in not executing a contract binding him to return, for at least a time, to serve the citizens, who's taxes paid for his education.

In its 16 years, 97% of the 1800 graduates of the Uniform Services University of the Health Sciences are still serving their country on active duty They understood their obligation, were likely content with it and would not have been able to break their contract if they wanted to. Quite the opposite has been the case with the failed National Health Service Corps with its wholesale defections. It is not the solution for maldistribution that was hoped for.

To curtail the costs which accompanied the rise in physician/populace ratio from 1/850 in 1961 to 1/450 in 1992, Canada eliminated 98 first-year slots for the fall of 1993 and, by 1997, will have accomplished a 13% reduction in enrollment from its high in 1985.

With their stated mission to provide physicians who are trained to meet the medical needs of rural Appalachia, the West Virginia School of Osteopathic Medicine educated and retained more physicians for its service area than any other US medical school in the years 1978-1990 . Is this not the primary mission of every medical school?

67% of 1970-1979, University of Michigan medical alumni settled out of state. Do taxpayers not have a right to question this? In 1985, noticing increased costs with 1/529, the Michigan State Senate called for a 20% cutback in medical school enrollment. It never came to pass.

Medical schools are not the province of the "best and brightest", or of the wealthiest, regardless of willingness to serve. Neither are they the exclusive preserve of researchers or of intensivists or specialists of the sort medical academia inundates us with today, cloning themselves, without regard to societal needs or costs.

As health care costs have risen, the proportion of research funded by industry--for-profit, has increased. Drugs, vaccines, cell-lines and, even genes, are patented . Medical school discoveries, once public property, are now controlled by for-profit partners and become affordable only when the patent has expired and the profits have been reaped.

Though we are the world's leader in the development of vaccines, Katz remarked: "other than Haiti and Bolivia, we have the worst record in the Western Hemisphere of immunizing our children in the first two years of life."

Although tacrine, marketed as Cognex, is of unproven value in Alzheimers disease, JAMA published an article by manufacturer employees with stock options, extending therapeutic claims. Temianka opined: this is a "glaring and hopeless conflict of interest."

Industry-friendly research showing that second-hand smoke is not a workplace hazard, was found to be faked.

With longstanding ties to Eli Lilly, Lewis Judd, formerly, director of NIMH, claimed to have discovered a new mental disorder affecting 20 million Americans, requiring Prozac. "Subsyndomal symptomatic depression" is said to follow marital discord, loss of a job or a death in the family, With 292 disorders in DSM III and 94 new diagnostic categories under consideration for DSM IV, SSD failed to make the cut. How many such "diseases" will disappear as mental health manned by un-indoctrinated non-psychiatist providers in an all-managed care arena becomes more a reality? In a 1990 editorial , "In bed together at the market", Dumont, himself a psychiatrist, urged that psychiatry declare itself an arm of the pharmaceutical industry .

Harvard researchers, Peter Schur and Matthew Liang-- Schur--editor of Arthritis and Rheumatism, journal of the American College of Rheumatology--resigned from the nation's largest study of breast implant safety when their ties to defense attorneys in breast implant litigation became known.

With medical school departments receiving millions in grant moneys, "unlimited educational grants" and with continuing medical education expenditures in the billions of dollars annually, who among us thinks that adverse and negative results get a free and proportionate airing. They do not. Examples abound of the suppression of data proving the worthlessness or danger of experimental drugs.

A Congressionally mandated "national quality consortium" made up of "regional professional foundations" in which " academics run the show" is on the drawing board. While those debating health care reform show a will to address specialist/generalist imbalance, there seems little awareness of the absolute glut with geographic maldistribution and there seems no awareness, whatsoever, of the fact that this--as nothing else--rendering the solo-practice physician, dependent, insolvent and extinct, has led to today's health care crisis.

Meanwhile, the AMA and AAMC continue to urge that there be no government interference in physician-workforce planning, suggesting instead, that this be left to "an appropriately constituted physician workforce body". They admit nothing of the relationship between the physician glut-with-maldistribution and the US health care crisis, and suggest nothing that will ameliorate it.

With the health care crisis rapidly worsening --a national disgrace, we must ask, as Petersdorf did in l983: "Is the Establishment Defensible?" While Petersdorf, gave them a "D minus" then, today they are indefensible and deserve an "F". Moreover, they no longer deserve the reins of physician-workforce planning.

To establish and maintain an appropriate physician supply--a necessity for every country--must be the primary aim of US health care reform. Although this will take years to achieve and will require continual adjustment--do it, and physicians will once again have enough patients, see enough real disease, make a good living from the solitary pursuit of their patient's health and well being, be independent again, and sign on no one's dotted line. Do this and the layers of CEO's, profit-takers, general and limited partners, administrators and regulators--hardly any of them present when I began practice--hardly any of them essential to the delivery of health care--will fall away.

Physician and patient, thus reunited, US health care will be universal and more humane, scientific and healing than at any time in the past two decades and it will cost 1/2 to 2/3rds what we pay today.