--Middle-aged, middle-income groups who have habits that are often detrimental to health, such as smoking, being overweight, leading sedentary lives, and not obtaining proper nourishment.

CHAPTER 3

CARE IN THE APPROPRIATE FACILITY

Within the past 2 decades the Nation's outlays for medical care increased more than fivefold, to about $75 billion in fiscal year 1971. Hospital care accounted for about 39.5 percent of the total medical expenditures, or $29.6 billion; doctors for 19 percent, or $14.2 billion; nursing homes for 4.5 percent, or $3.4 billion. The average expenditure per patient day in general hospitals was $48 in 1966 and $81 in 1970. Moreover, the cost to construct new hospitals is currently estimated at between $14,000 and $72,000 per bed.

The cost of building, equipping, and maintaining a modern hospital has become so great that it is no longer economical to use such an institution for convalescent care or the treatment of chronic illness, to say nothing of custodial care. With the ever-increasing cost of health care in the United States, attention is being focused more and more on means of reducing these costs through more efficient means of delivery and effective use.

Ultimately it depends on physicians to determine which level of care their patients require and the period that care will be necessary. However, there is a consensus among health care authorities that about 25 percent of the patient population are treated in facilities which are excessive to their needs. The health care system is oriented primarily toward treatment of the acute phase of illness and does not offer a complete spectrum of health care by providing available alternatives to acute care, financing for the alternatives, and educating physicians and patients in accepting alternatives.

Changes in the current health system potentially could increase the system's effectiveness through stimulating alternatives to traditional health care. A PHS costeffectiveness analysis completed in 1968 projected that a better matching of hospital patient needs with facilities' services could result in 81.7 million short-term general hospital days' being transferred to alternative health facilities, with a resultant savings of about $3 billion

in 1970 health system operating costs. concluded that a reduction in length of

The analysis also stay by 1 day could

save 28 million short-term hospital days, or about 96,000 beds. Other health care authorities have estimated that a 1-day reduction in the average length of stay in hospitals could save between $1 billion and $2 billion a year in health care costs.

The hospital, extended care facility (ECF), skilled nursing home, and the individual patient's home constitute important facilities in the continuum of patient care in a community. Appropriateness of medical care depends on using the right facility for the right patient at the right time. Each resource is a distinct type of offering, and the combined resources work best when there is a free flow of patients from one to another as dictated by the patient's need. Therefore the National Commission on Community Health Services recommended that community health care programs be concerned with the quality, availability, accessibility, adequacy, effectiveness, and economic use of the health care services. Each community and health facility with coordinated Federal participation has a responsibility for developing a comprehensive and balanced range of services and facilities accessible to all. Various health care authorities, including PHS and the National Commission on Community Health Services, have concluded that efforts should be made to exploit all alternatives to acute inpatient care, specifically:

--Increased ambulatory outpatient facilities.

--Establishment of effective PAT programs.

--Close matching of patient's health care needs with facilities' health care capabilities through substitution of ECFs, nursing homes, or home health care beds for short-term general hospital beds.

--Reduction in unnecessary stays in health facilities through continuous utilization review and expanding facilities' workweeks.

--Conversion of underused beds, particularly maternity beds, to general medical-surgical uses.

--Third-party financing of needed health care regardless of where it is provided.

OUTPATIENT CARE

Outpatient care constitutes a large part of total health care, including outpatient physician visits, dental services, services of other health personnel, and outpatient diagnostic tests. Medications are also available at outpatient facilities. Outpatient care involves the delivery of personal health services to patients who come to the health facility and who do not remain overnight, as distinguished from home care and inhospital care.

Traditionally there have been five institutions which deliver outpatient care: the independent practitioner network, the group practice, the hospital outpatient department, the emergency room, and the nonhospital clinic. A more recent innovation in outpatient care has been the neighborhood health center. The first two institutions concern the physician in private practice while the nonhospital clinics are incidental sources of care within the framework of other health care institutions. Discussions on outpatient care usually emphasize the hospital outpatient department and emergency department. The emergency department is sometimes a separate organized unit of a hospital but is usually included as a part of the care provided in the outpatient department.

An "organized outpatient department" is sometimes defined as the organized services or clinics of the hospital which provide nonemergent medical and/or dental services for ambulatory patients. AHA's annual survey for 1971 showed that about 1,583, 29 percent of the short-term general and specialty hospitals reporting, had an organized outpatient department.

Health care authorities recognize that short-term hospital outpatient visits are the fastest growing area of health care delivery. In 1962, the earliest year for which data is readily available, such visits numbered about 70.7 million. By 1970 the number of these visits had risen to about 133.5 million, or almost double. A number of reasons are offered for this significant increase, but it

generally can be attributed to the mobility of the population and the acceptance of the hospital outpatient units as a source of primary care, replacing to some degree the diagnostic and therapeutic services previously offered in physicians' offices.

In this regard, in 1972 AHA reported in "Hospital Statistics 1971" that about 150 million outpatient visits were reported by hospitals. The visits consisted of about 53 million clinic visits, 47 million visits resulting from physician referrals for highly complex tests and for consultations not available at the clinic or office of the private physician and 50 million emergency visits. Thus, outpatient units are being used for episodic and primary diagnostic care rather than as an alternative to acute inpatient care.

Our review of the literature and discussions with various authorities revealed little information on the extent to which the services of hospital outpatient departments can reduce the need for acute inpatient beds. This was particularly true from the standpoint of the availability of such services permitting earlier discharge of patients. For example, we sent a questionnaire to 101 selected hospitals to determine the extent that selected services might save acute inpatient hospital days. We received about a 50-percent response to the questionnaire. Although the hospitals which replied tended to rank outpatient and other ambulatory services high as means of saving acute inpatient days, they generally could not attribute specific savings in acute inpatient days to a specific service.

However, Kaiser-Permanente--which emphasizes outpatient care, including preventive medicine--exemplified the benefits that can be obtained through outpatient services. Kaiser-Permanente has approximately 2.3 million members, with about 2 million residing in California and Oregon. The report of the National Advisory Commission on Health Manpower concluded that there was nothing extremely unusual about the practice of medicine under Kaiser-Permanente. The Commission attributed substantial savings in health care under the plan to the individual physicians who work in a financial and organizational setting that exerts