CRISIS IN THE HOSPITALS

...And the commissioner has used his legal powers to enforce his views...

...Basically, the crisis of hospital function and financing stems from the fact that we are both the beneficiaries and the victims of the remarkable progress of medicine which has brought us better health and longer life but also has enormously complicated the rendering of medical services and raised their costs...

...If there are ways of operating hospitals more efficiently and economically— as many authorities believe there are —the public certainly has the right to insist on getting full value at the lowest possible price consistent with high quality...

...Out of a total private medical care outlay of $18.3 billion in 1959, payments to hospitals were $5.5 billion, the biggest single share and $500,000,000 more than the amount paid to physicians...

...As productivity has gone up, industry has been able to shorten its work week...

...There is no ready solution for the costliness of new and more effective medical procedures, more elaborate surgery, and more potent drugs...

...Many conditions of modern city living make for significantly higher hospital use than in rural areas...

...For one thing, hospitals can do much more for the sick than they could two or three decades ago...

...that hospitals could do considerably more than they have been doing to keep down their operating costs...

...The rising standard of living also has brought a demand for more attractive hospital facilities...

...It is no exaggeration to say that the future of the organization of medical care and practice in the United States depends on the extent to which the doctors and the hospitals can be prevailed upon to recognize that their business is the public's business...

...Thirty years ago, 37 out of every 1,000 Americans were admitted to general hospitals in the course of a year...

...By 1959, it had jumped to $30.19, an increase of more than 220 per cent...

...and that the public is not adequately represented in the management of the voluntary hospitals and the insurance plans...

...Much wider use of hospital services and their greater costliness have been reflected, inevitably, in steadily climbing hospitalization insurance rates...

...Experts are generally agreed that hospital costs will continue to rise at the rate of five to ten per cent a year...

...On the one hand, hospital beds are sometimes used needlessly for patients who could just as well be taken care of elsewhere at much lower cost...

...Hospitals are expected to match the comforts of motels by way of air conditioning, piped-in radio, perhaps television, and certainly window draperies...

...Blue Cross plans have developed medical review teams to ferret out abuse of insurance contracts...

...They also have been obliged to bring their lagging wage scales closer to those of private industry...

...Of equal importance in contributing to the steady climb of the nation's hospital bill is the striking increase in the rate of hospitalization...

...But some of these miraculous procedures are enormously expensive, requiring dozens of physicians and technicians for a single patient...

...The fact that patients now go home much sooner than they used to—the average length of hospital stay has been cut in the past 30 years from 15.3 to 7.8 days—is in itself far from an unmixed blessing...

...A variety of factors has figured in this upward trend...

...The latest available breakdown shows that thirty cents out of every medical care dollar now goes to hospitals, twenty-seven cents to doctors, twenty-six cents for drugs and appliances, eleven cents to dentists, and the remaining six cents for other professional services...

...The more people learn about medical progress, the more they are likely to go to the hospital, where the latest advances can be most effectively applied...

...But for hospital room rates it was 208.9...

...Soaring hospital costs and hospitalization insurance rates have brought a rising tide of public concern, expressed in demands for greater efficiency in hospital operation, and for reforms in the prevailing patterns of health insurance...

...Hospital services now not only account for the largest single portion of the nation's health care bill, but they are at the heart of our system of medical practice...

...The overall index, which is pegged at 100 for the 1947-49 period, had risen to 124.6 by the end of 1959...

...At that time the index for all medical care services put together stood at 150.8...

...An additional cost factor in more rapid patient turnover is that chances are greater there will be vacant beds which have to be staffed but produce no income...

...that because of the general lack of overall community planning and integration in the hospital field there is duplication and overlapping of personnel, equipment, and services...

...On the contrary, as available life-saving services proliferate and newly-developed equipment is constantly added, more rather than fewer people are required to operate them...

...Another element in the picture has been the sharp increase in new hospital construction throughout the country...

...Such hearings in New York, Pennsylvania, and a number of other states have produced charges that the prevailing insurance approach lays too much emphasis on hospitalization, ignoring possibilities for more economical treatment of many conditions in the doctor's office or in outpatient clinics...

...A continued rise in hospital costs thus appears inescapable...

...For a number of years, hospital room charges have been advancing at a much faster rate than any other item in the United States Department of Labor's consumer price index...

...Increasingly, warnings are heard from responsible sources that the squeeze of spiraling costs may price voluntary insurance out of the market and force full government control of our whole complex of health services...

...The high price of household or nursing help to care for the sick at home and the limited size of city apartments also force up the hospitalization rate...

...But hospitals cannot shorten their week...

...There are many sound reasons for the continued rise in hospital operating costs...

...In 1946, the average cost per patient day in voluntary hospitals was $9.39...

...With the phenomenal spread of health insurance, which now covers more than two out of every three Americans, the hospital bill is being underwritten by the healthy as well as the sick...

...This expansion has been, in general, a laudable development...

...Whereas in the automobile industry wages currently account for only about one-third of production costs, payroll expenditures have shot up to seventy per cent of hospital budgets...

...Hospitals have organized medical utilization committees to check on needless admissions and excessive stays...

...Nor is the end of the spiral anywhere in sight...

...The shorter stay means that more intensive treatment is concentrated within a shorter period of time, so that daily costs are higher...

...But with the introduction through insurance of "a new element in the relationship between cost and use of services," the report says, Blue Cross, as "the intermediary between the purchaser of hospital care and the hospital, must inevitably assume some functions previously the direct responsibility of patient or hospital...

...But we have lagged in developing more economical, facilities such as hospital outpatient clinics and adequate nursing and convalescent homes for chronic patients...

...They have expanded their coverage of diagnostic services and home nursing visits, in order to cut down hospitalization...

...In a series of trail-blazing decisions, he has ordered Blue Cross and the hospitals in Philadelphia and other cities to adopt certain economy measures before any further insurance rate boosts would be granted...

...Such dramatic advances as open-heart surgery, artificial kidneys, heart pacemaker units, cobalt radiation treatment, and radioisotopes to pinpoint internal abnormalities are restoring patients to health sooner and more completely, and, frequently, are saving lives which otherwise would be lost...

...So it is all the more vital to eliminate the waste, duplication, and lack of integrated planning now common in the hospital field...

...A United States Public Health Service official has summed them up with the cogent observation that "when we talk about the cost of medical care today as compared to the past, we're talking about I he price of an electric washer-dryer compared to a washtub...

...Antiquated buildings have in many places been replaced, and additional bed space has been provided to keep pace with the forward march of medical science...

...One of those holding that "genuine economies can be made by hospitals without lessening quality of service," and that Blue Cross should insist on such economies instead of merely acting as a collection agency for the hospitals, is Francis R. Smith, Pennsylvania's dynamic state insurance commissioner...

...The Commission, sponsored by the American Hospital Association and made up of a distinguished group of authorities, concluded after a lengthy study that the emergence of insurance as a major factor in medical economics has "to some degree reduced, if not removed, incentives that would otherwise operate to encourage maintenance of hospital operating costs at the lowest level practicable...

...The revolution in medicine is far from over, and hospitals have yet to fulfill their growing potential...

...In 1946 voluntary hospitals in the United States had, on the average, 156 employes for every 100 patients...

...He won the Associated Press Managing Editors Association Award for his series of articles on the problems of the aged...

...More needs to be done in applying common sense business practices and methods to hospitals—wherever they will apply...

...While raising its wage level, industry has often managed to cut its labor costs through automation...

...Low ocu-pancy means a correspondingly heavier proportion of overhead in daily per patient costs...

...They also are moving to achieve greater management efficiencies and to coordinate expansion through joint planning...

...Across the country labor unions, business firms, citizens' groups, and public officials are calling for controls on skyrocketing costs, curbs on services which are either wholly unnecessary or could be furnished less expensively, and a more rational and coherent system that will get the most out of the medical care dollar...

...Further scientific advances will unavoidably mean still costlier diagnostic and treatment procedures, more elaborate and expensive equipment, and an even greater need for technical personnel...

...Greenberg has twice been honored by the Lasker Foundation for his distinguished writing on medicine...

...Concentration upon the expansion of costly hospital bed capacity designed primarily for the acutely ill is wasteful...

...The large proportion of working wives means that often there is no one at home to take care of a sick husband or child...

...One of the paradoxes of the hospital cost problem is that it is the result of both overuse and insufficient use of facilities...

...For it is here, more than in any other area of medical care, that the problems of the technological revolution in medicine are rapidly coming to a head...

...While the effect of these niceties on the patient's recovery is debatable, their effect on the hospital's unit costs is obvious...

...A spokesman for the American Hospital Association has predicted that the average cost per patient day may reach $50 by 1968...

...This means that the public is more and more looking upon hospital costs not only in terms of charges for services rendered but also in terms of the monthly cost of insurance...

...Widespread insurance coverage has removed much of the economic deterrent to hospital care for those in the middle and low-income groups...

...Since then the ratio of hospital admissions has zoomed to 124...

...CRISIS in the Hospitals by SEUG GREENBERG This is the first of two articles on hospital costs by Selig Green-berg, writer on medical problems for the Providence, Rhode Island, Journal and Evening Bulletin...

...Considerable progress has been achieved in Philadelphia, Pittsburgh, and other Pennsylvania communities under Smith's prodding during the past two years...

...The Commission's report points out that prior to the extensive use of insurance, when people were required to pay the full bill directly to the hospital, there were "natural economic restraints" on costs, and lower-cost institutions providing services of equally good quality enjoyed a competitive advantage in attracting more patients...

...The public learns quickly these days of new medical discoveries through the press, radio, and television...

...that much of the present organization of hospital services, revolving around the doctor as a private entrepreneur, has become inefficient in the context of the growing complexity of medicine and must be drastically revamped to take advantage of opportunities for greater productivity and lower costs...

...The statistics of rising hospital costs and utilization are instructive and sobering...

...The new standards also call for a telephone at the bedside and some choice of menu...

...The net effect of higher costs of hospital care and its much greater frequency has been a tripling of expenditures for hospital services in the United States in the past fifteen years...

...They must remain open 168 hours a week, 52 weeks a year...

...To keep pace with the standard forty-hour week in the community, hospitals have been forced to hire many new employes to fill each around-the-clock job...

...As Blue Cross and other plans throughout the country have repeatedly been forced to seek premium hikes, growing attention has been focused on the urgent need for eliminating hospital inefficiencies and needless use of expensive facilities...

...Nowhere is this more evident than in the hospitals, which have become a large-scale and complex business requiring the coordination of a great array of professional skills and huge capital investment in expensive facilities and equipment...

...While hospitals are a big enterprise but not a business in the ordinary sense of that term, Smith said in a recent speech, "This does not mean that hospitals cannot be businesslike...

...On the other hand, hospital facilities are not utilized as efficiently as they should be, with the result that about one bed out of four is usually empty, and in some institutions the average occupancy rate is even lower...

...Among the economy possibilities he has advocated are wider use of opportunities for outpatient diagnosis and treatment, tighter controls on the scheduling of admissions and discharges and on length of stay, better scheduling of medical procedures to avoid needless delays, more effective use of technicians and nurses, sharing of specialized equipment among hospitals, and greater standardization of supplies along with joint purchasing...

...But if costs are to be kept within acceptable bounds and quality improved, we will need a much higher degree of self-discipline by the medical profession and a far greater readiness on the part of hospitals to yield some of the privileges of their cherished autonomy than have so far been evident...

...In the nation's population there has been a steady increase in the numbers and in the proportion of older people, who have a higher incidence of chronic diseases requiring more frequent hospitalization...

...As medicine grows more intricate and its tools more elaborate, the trend inevitably is toward increasing concentration of medical services within the hospital...

...The Editors The nation's hospitals—the outposts of our phenomenal medical progress—are now confronted with a profound crisis, at the very time they are advancing toward ever greater miracles of healing and life-saving...

...But hospitals cannot substitute machines for people...

...Good hospital care clearly cannot be produced cheaply...

...Rate hearings before state insurance commissioners have increasingly provided a platform for the critics of hospital efficiency and of the effect which the present health insurance system has upon it...

...There is probably no more explosive issue in the entire controversial field of medical economics than that of hospital costs...

...The adverse effect of health insurance, which now provides the greatest share of hospital income, in relaxing many of the pressures for economy in hospital operations is emphasized in the report of the Commission on Financing of Hospital Care...

...New medical sophistication has made hospital care an accepted component of the average American's standard of living...

...An important point to bear in mind is that hospital costs are no longer solely the concern of patients and their families...

...that Blue Cross— and Blue Shield, its companion surgical-medical insurance program— have built-in incentives for getting between hospital sheets merely to take advantage of insurance benefits...

...By now the ratio of employes for each 100 patients has risen to 225...

...Smith, who feels that his authority to pass on Blue Cross premium rates goes much further than the checking of actuarial tables and extends to the things which pyramid costs, has for several years been preaching the doctrine that neither the hospitals nor Blue Cross have done all they can and should to control such abuses as unnecessary admissions and excessively protracted stays and to put into effect other efficiency measures...

...And it is the very triumphs of medicine which are catapulting costs...

...Competent opinion is that the more hospital beds are available, the greater is the tendency toward admissions for relatively trivial ailments and for longer-than-necessary stays, particularly when such abuse is encouraged by the benefit structure of hospitalization insurance...