History and Evolution of Medical Care Institutions

1. History and Evolution of Medical Care Institutions Professor Edward P. RichardsLSU Law Centerhttp://biotech.law.lsu.edu/

2. Key Issues • Scientific medicine is about 120 years old • Technology based medicine is less than 60 years old • Doctors are not scientists and many do not practice scientific medicine. • Modern medicine is shaped by its history • Health care finance shapes medical care • Special interests undermine cost-effective care • Financial tinkering destabilized primary health care

3. Critical Dates in Medicine

4. 1400s • Birth of Hospitals • Places where nuns took care of the dying • No medical care – against the Church’s teachings • No sanitation – assured you would die

5. Early 16th Century • Paracelsus • Transition From Alchemy

6. Mid 16th Century • Andreas Vesalius • Accurate Anatomy

7. Early 17th Century • William Harvey • Blood Circulation – the body is dynamic, not static

8. 1800 • Edward Jenner • Smallpox and the notion of vaccination

9. 1846 • William Morton - Ether Anesthesia

10. 1849 • Semmelweis • Childbed Fever and sanitation • Scientific Method • Controlled Studies

11. 1854 • John Snow • Proved Cholera Is Waterborne • Basis of the public sanitation movement

12. 1860-1880s - Development of the Germ Theory • Louis Pasteur • Simple Germ Theory • Vaccination For Rabies • Pasteurization to kill bacteria in milk • Joseph Lister • Antisepsis – surgeons should wash their hands and everything else, then use disinfectants • Koch • Modern Germ Theory

13. Sanitation Movement - Modern Public Health: 1850s - 1900s • Lead by the Shattuck Report on Sanitation in Boston - 1850 • Waste water disposal • Drinking water treatment • Pasteurization of milk • Food sanitation • The Jungle - 1905

14. The Business of Medicine in the 1800s • Physicians are Solo Practitioners • Most Make Little Money • Have Limited Respect • No bar to entry to profession • Most medical schools are diploma mills • Limited or no licensing requirements • Cannot make capital investments • Training • Medical equipment and staff

15. Transition to Modern Medicine and Surgery

16. Surgery Starts to Work in the 1880s • Surgery Can Be Precise - Anesthesia • Patients Do Not Get Infected - Antisepsis

17. Effect on Licensing and Education • Once there are objective differences (people live) between qualified and unqualified docs, people care • You can make more money with better training • You can make more money with better equipment and facilities • Effective Medicine Drives Licensing • Licensing Limits Competition • Physicians Start to Make Money • Allows capital expenditures

18. The Tipping Point - 1910 • About 1910, going to the doctor, and particularly the hospital, shifted from being more dangerous than avoiding them to increasing your chance of survival. • Flexner Report - standardized medical education and shaped the modern training system

19. Legal Limits on Physician Practice Organization - 1920s • Corporate practice of medicine • Physicians working for non-physicians • Concerns about professional judgment • Real Concern Was Laymen Making Money off Physicians • Banned in most states • Docs pushed the bans

20. Traditional Impact of Corporate Bans • Physicians Do Not Work for Non-Governmental Hospitals • Contracts Governed by Medical Staff Bylaws • Sham of “Buying” Practices • Physicians Contract With Most Institutions • Charade of Captive Physician Groups • Managed Care Companies Contact With Group • Group Enforces Managed Care Company’s Rules • Physicians Can Be As Ruthless As Anyone

21. Impact on Physician Practices • Corporate practice bans limited competitors to physician practices • Physicians had no incentive to form their own large integrated practices • Sole Proprietorships and Partnerships • A few exceptions - Kaiser • The legal impact is that these small groups were subject to the antitrust laws, making it difficult to negotiate with health insurers in the 1980s

22. From L'Hotel-Dieu to High Tech The Evolution of Hospitals From Nuns to MBAs

23. Reformation of Hospitals • Paralleled Changes in the Medical Profession • Began in the 1880s • Shift From Religious to Secular • Began in the Midwest and West • Not As Many Established Religious Hospitals • Today, Religious Orders Still Control A Majority of Hospitals

24. Technology in Hospitals - The Advantage of Hospital Care over Home Care • Driven by antisepsis - homes were safer before antisepsis • Started With Surgery • Medical Laboratories • Bacteriology • Microanatomy • Radiology • Services and Sanitation Attract Patients • Internal Medicine • Obstetrics Patients

25. Post WW II Technology • Ventilators (Polio) • Electronic Monitors • Intensive Care • Hospitals Shift From Hotel Services to Technology Oriented Nursing

26. Post World War II Medicine • Conquering Microbial Diseases • Vaccines • Antibiotics • Chronic Diseases • Better Drugs • Better Studies • Childhood Leukemia

27. Effect of Medical Science on Hospital Care • 1930s • Few effective treatments means no cures other than surgery • Long stays, hospitals act as nursing homes • Care is nursing and palliative • Post-1960s • Many effective treatments • Much shorter stays - expansion of nursing homes • Most care is technological

28. Joint Commission on Accreditation of Hospitals • 1950s • American College of Surgeons and American Hospital Association • Now Joint Commission (on Accreditation of Anything that Makes Money in Health Care) • Split The Power In Hospitals • Medical Staff Controls Medical Staff • Administrators Control Everything Else • Enforced By Accreditation • Depends on Medicare/Medicare waiver • Seldom pulls accreditation

29. Changes in Hospital Financial Models • Pre-1970s • Mostly Charitable • Built on donations, not debt or bonds • Reduced operating costs and pressure on occupancy • Post 1970s • Debt • Stock market - pressure for performance • Huge pressure on occupancy and profitability

30. EMTALA and the Duty to Treat - 1986 • Traditionally hospitals could, in theory, refuse to treat patients without money • Actually limited to patients with no legal relationship to the hospitals • Emergency Medical Treatment and Active Labor Act of 1986 • Must evaluate all patients seeking treatment • Must treat or properly transfer all needing treatment to save life or limb or in active labor • Can charge, but no government funding for unpaid care

31. Contemporary Hospital Organization • Classic Corporate Organizations • CEO • Board of Trustees Has Final Authority • Part of Conglomerate • Medical Staff Committees • Tied To Corporation by Bylaws • Headed by Medical Director • Raises Conflict of Interest/Antitrust Issues

32. Medical Staff Bylaws • Contract Between Physicians and Hospital • Not Like the Bylaws of a Business • Selection Criteria • Contractual Due Process For Termination • Negotiated Between Medical Staff and Hospital Board • Limits corporate control as compared to employee models

33. Specialty Hospitals • Traditional hospitals were general care • Children's and maternity hospitals • Broadened to areas such as hearts, orthopedics, etc. • Complex care is safer when regionalized into high volume centers • Better care at lower prices

34. The Real Specialty Hospital Business Model • Do not do money losing services • Do not take uninsured patients • Shift the most valuable patients from community hospitals, dump the rest back to the community hospital • No EMTALA requirements if no ER • Doc owners control admissions • Huge conflict of interest • No regulation in LA, limited elsewhere • One on every corner, no regionalization • Increase unnecessary surgery