As a result, they must depend upon public assistance provided by tax funds for medical care in their later years.

Consequently, the more prudent people who elect to take out health insurance under a voluntary system end up not only paying for their own health insurance, but paying through taxes for the medical care of the less prudent who did not take out insurance.

For a variety of reasons, many groups and individuals will strongly oppose President Kennedy's proposals on health insurance for the aged. After a careful analysis of the proposed plan, this writer believes it to be the most logical and efficient approach to this critical problem.

[From Fortune Magazine, August 1961]

THE PUBLIC BUSINESS-WHAT THE DOCTOR CAN'T ORDER-BUT YOU CAN

(By Walter Guzzardi, Jr.)

When Charles II of England lay ill in 1685, the greatest English doctors of the time rushed to his bedside to apply their skills. They drained a pint and a half of blood from his arm, and quickly followed with an emetic of herbs. Then they gave the King an enema compounded of rock salt, violets, beetroot, saffron, and cinnamon. When the King failed to improve, his head was shaved, and a blister raised on his scalp. Sneezing powders were administered; the King was fed 40 drops of extract from a human skull; pigeon dung was applied to his feet. (Doctors of the day often charged that unscrupulous apothecaries adulterated pigeon dung.) The King swallowed a costly bezoar stone-the gallbladder stone of goats, said by Arab physicians to have great healing powers—and drank pearls dissolved in ammonia. As he weakened, the bleeding and the purging were stepped up. One chronicler describing the treatment added the certain, plaintive epilogue: "But the royal patient died."

Ironically, Charles II lived not in a period of scientific stagnation but in a progressive epoch that long before his death had made such fundamental medical discoveries as the circulation of the blood, and the association between infectious diseases and micro-organisms. In the abstract, contemporary medical science already knew the uselessness of the bezoar stone; yet the doctors by Charles's bedside, earnest men every one, were hardly better than the necromancers and the sorcerers of 500 years before. So the royal patient died-because the medical care brought to him lagged so far behind contemporary scientific discovery. In that sense, Charles II was killed by bad organization.

Today, because medical knowledge is racing ahead a thousand times faster than it was in Charles' era, the problem of how to apply the knowledge to the patient is multiplied. But it is still basically a problem of organization-the dovetailing of discoveries, techniques, training, and the diverse skills of the specialists into one economical and efficacious product-that confronts modern medicine. The crucial point in the present swirl of organizational change is the hospital, where a multitude of specific advances must be narrowed down to focus on the individual patient. In the hospital, medical education and medical practice meet; specialists rub elbows and minds with men from other branches of medicine; surgical teams coordinate and practice there, where the devices of modern medicine, from test tubes to reactors, are housed. Its expanding range of functions is making the hospital into a center for community health-an extension of the community that will be truly efficient and responsive to community needs only if the community takes an intelligent interest in its rational development. Dr. Edward Churchill of Massachusetts General Hospital in Boston says: "The most significant thing about this hospital is that it is a community enterprise. Doctors should be active in giving advice, but it's up to the community to build and keep up a place for care." The quality of the medical care any individual receives is determined in large part by the relationship-financial, civic, philanthropic-between his community and its hospitals. In that way the organization of medical care is preeminently a matter of public business, and that is why Fortune has included it in this series.1

1 The first three articles in the Public Business series: "In the Midst of Plenty." March, which discussed problems of poverty, especially in distressed areas; "The Remaking of American Education," April, which described some basic new directions in schools; and "How to Unchoke Our Cities," May, which stressed the need to revive public urban .transport.

THE POOR FISH

One hundred years ago, Oliver Wendell Holmes reflected the degree of public trust in medicine when he wrote that "if the whole materia medica were sunk into the sea, it would be so much better for mankind, and so much the worse for the fishes." But such a view is rarely heard today: confidence in what medical science can do has never been higher. Our belief in the potential blessing of medicine is readily measured by the enormous sums we pour into medical care. On the average, each American saw a doctor once a year in 1920, twice a year in 1930, and five times in 1960. Last year the Nation spent more than $25 billion on medical care 5.4 percent of the gross national product, and one-third as much as it spent on food. Since 1946, under the Hospital Survey and Construction Act (Hill-Burton) passed by Congress in that year, the United States has spent $1.3 billion of Federal funds in new hospital construction; that amount has been augmented by $3 billion from other sources. Government and philanthropy have an investment in hospitals estimated at $16 billion in book value; replacement values are thought to exceed $20 billion. Of the 6,845 hospitals in the United States, 50 percent are nonprofit voluntary hospitals built and-to a greater or lesser extent depending on the individual hospital-maintained with some form of public money. Last year the Department of Defense and the Veterans' Administration between them spent $2 billion on medical care. The National Institutes of Health and other Federal agencies financed $284 million worth of medical research. "If we recognize the social character of taxation, insurance, philanthropy, and industry," writes Dr. Milton Roemer of Cornell University, "probably nearly 50 percent of the Nation's annual investment in health is derived from social sources."

But American society's paramount concern with medical care goes deeper than the sum of the dollars that we have invested in it. The true estate of our society can be gaged by the health of its members or, if we choose, by the litany of their afflictions. As a doctor once said, "Medical statistics are human beings, with the tears wiped off." Dr. Alan Gregg, who was vice president of the Rockefeller Foundation, once remarked in a lecture at Columbia University that "the table of life that traditionally has rested on the tripod of food, clothing, and shelter can now rest more securely and reasonably on four legs: food, clothing, shelter, and medical care."

Concomitantly with this broadened concept of medical care runs the locomotion of technical discovery. The technological advances of the past decade have been heroic and swift. Yesterday's killers are exorcised today by the simple jab of a needle: 75 percent of the drugs now in use, for example, were unknown a decade ago. Open-heart surgery, rarely done before 1956, is performed successfully on an average of twice a week in large urban hospitals in the United States. A patient arriving in the emergency ward of a large hospital was booked recently as "dead on arrival"-clinically dead, with no heartbeat and no blood pressure; 15 days later he walked out a well man. The whole scope of medical care is available now in a new and dramatic dimension.

One unexpected consequence of these new abilities has been the creation of a whole new landscape of medical needs. Medicine's own benison makes it possible for the afflicted to live far beyond their expectancy of a few years ago but they require more medical attention over longer periods of time. Thanks to declining mortality rates, the fastest growing segment of the U.S. population is the group over 65-6 million in 1925, 16 million today, 30 million in 1980and precisely that group is most subject to chronic illnesses needing long-term care. "As we preserve life at all age levels," write Herman and Anne Somers in a book likely to become a classic in its field, "Doctors, Patients, and Health Insurance," "there is more illness, more enduring disability, for the population as a whole."

The paradoxical existence at the same time of increased ability and increased morbidity has inevitably generated dissatisfaction with medical care as it is applied to the individual patient. Medical "breakthroughs" and "triumphs," despite the cautions of the doctors themselves, are often called to public attention with a loud flourish of trumpets. But the trumpets' notes are still hanging in the air when the public demands that the "triumph" be transmuted for the individual's benefit. Delay in meeting such great expectations leads to a corresponding rise in the level of public discontent over the state of medical care.

"People no longer ask: 'Why did God take my child away?" commented one physician. "Instead they say: 'Why didn't the doctor call a specialist sooner?'

HORSE IN THE SNOW

The new importance of the hospital in medical care is best illustrated by the way in which the institution has replaced the old family doctor. Before the revolution in medical science, when less was expected of medicine and disappointment over its failures was less agonizing, the means for bringing care to the sick were simple: "one doctor for one patient for one lifetime for all illnesses." The popularly accepted symbols of medical care were romantic and artless: the bearded doctor keeping a bedside vigil, the laying on of gentle hands, the waiting horse in the snow. In fact, even then the notion of the doctor carrying his black bag on endless rounds, healing by his understanding more than his skill, somehow intuiting when (if ever) to send his bill, always had a strong element of myth in it. Now the more technical character of the medical profession, coupled with migratory habits of the U.S. population and the new urban environment, has laid both the myth and the fact of the family doctor to rest. "The family doctor," reported one study on the subject, "is a vanished ideal.”

The modern counterpart of the old family doctor is the solo general practitioner, referred to within the medical profession (in a tone of respect or of contempt, depending upon the source) as "the man in the corner office." Like his predecessor of 50 years ago, the solo general practitioner today is being lashed at by forces that he cannot combat or control. There are about 50 accredited specialties in medicine, all of them in a state of rapid development; this fragmentation has made it increasingly difficult for the solo general practitioner to keep informed in any phase of his profession. Busy with patients, he often cannot even read the masses of literature that come to his desk, much less evaluate them. Like a lonely violinist trying to play Beethoven's Fifth all by himself, the solo general practitioner, even if he is a man of exceptional abilities, finds it hard to do justice to his source material.

Many doctors recognize this, and fewer new ones are hanging out their own shingles as general practitioners. Of a total of 227,000 doctors in the United States, only 82,000, or 36 percent, are in private general practice-as against 112,000, or 72 percent, in private general practice in 1931. Doctors that go into practice outside hospital walls tend to be specialists who cluster together, usually in offices close to a hospital.

A CONCERT OF SKILLS

In place of the solo general practitioner stand a team of specialists. Like the new technology, the new imagery is more complex than the old: specialists work against the backdrop of a glittering operating room, surrounded by an arcane jungle of machinery. The work is a complicated surgical procedure; the hero is the group. It takes 10 nurses and 10 physicians-surgeons, anesthesiologists, radiologists, pathologists, urologists-to do a kidney transplant at Peter Bent Brigham Hospital in Boston. While details in the picture may vary, significantly the setting is always constant. It is the institution. Once a kind of prison for the sick and the mad, the hospital now is the place where modern medicine's specialized skills have their confluence. Laboratories and supporting services bunch around it, patients flood toward it: 24 million people were admitted to hospitals in the United States last year.

But as the tide, powerfully attracted by the waxing prospect of better medical care, runs toward the medical institution, it carries with it a great dictate for change in the institution itself. Once the hospital was thought of as the doctor's workshop-the place where the generalist worked as a kind of benevolent despot, wielding scalpel instead of scepter, controlled only by a conscientious application of his own principles to his own work. Now the explosion of specialism and the fragmentation of medical knowledge are demolishing the workshop concept. Not without agony to the healthy as well as the sick, the authority once totally vested in the doctor is passing in part to the institution, where the various specialties are pulled together. For the sick man-who is a single human being and not a collection of anatomical parts held together in a bag of skin-the institution has become the vital point for the concert of medical skills. In the fine teaching hospitals of the United States, those skills come to the patient in abundant measure. Since Massachusetts General Hospital in Boston (see the next page) admitted its first patient 143 years ago, it has consistently set and then conformed to the highest standards of medical care. Half of its

550 doctors are teachers at Harvard Medical School, where academic responsibilities-including the need to answer searching questions from medical students require that they keep their knowledge current and compendious. When these doctors come to practice what they teach, they are likely to be as prepared as a physician can be to give good care to his patient. The same pattern is repeated at other top-flight institutions, like New York Hospital, affiliated with Cornell University; Billings Hospital, a part of the University of Chicago Clinics; Columbia Presbyterian Hospital in New York, affiliated with Columbia University's College of Physicians and Surgeons; and Stanford University Hospital in California.

But many other hospitals in the United States, especially those without teaching affiliations, have not been able to keep up. As one hospital director put it, they are struggling "to adapt forces that are the equivalent of the industrial revolution to the cobbler's bench." Somers comments that "the so-called American hospital 'system' is merely a figure of speech. Our hospitals represent the random growth of uncoordinated institutions *** the results are reflected in skyrocketing costs and *** less than optimum quality of care." In reply to those who contend that the imposition of discipline to improve on the inchoate state of many of our hospitals would entail loss of freedom, Cornell's Roemer observes: "More precisely, acceptance of discipline in the organization of hospital care would mean loss of anarchy."

This was the lowering face of anarchy discernible in America in 1961:

Harlem Hospital, night: Ice glazes the streets, and emergencies pile in. A man with multiple fractures staggers into the emergency room and waits 6 hours before he sees a doctor. Other emergency cases have fractures slung in simple splints to relieve pain; the bones may go unset for 3 days. A woman with acute heart failure is admitted to the hospital; 1 day later, she has still not seen a doctor. But hospital routine has picked her up and delivered three meals to her room. The trays sit untouched by her bedside.

Columbia Presbyterian Hospital, same night: Things are quiet. One of the Nation's finest departments of orthopedic surgery, run in affiliation with Columbia University's College of Physicians and Surgeons, is idle. Ambulances race past Columbia Presbyterian's doors, carrying more fracture patients to overloaded Harlem-a mile away. Like many another hospital, Columbia Presbyterian has no ambulance service to gear it into the hospital chain. "This situation," says Dr. Ray Trussell, a competent administrator recently installed as commissioner of hospitals for New York City, "is not a result of a money shortage, or a doctor shortage, or a hospital-bed shortage. What has happened is a breakdown in the distribution of care-a lack of coordination."

A nursing home in California: The home is a ramshackle two-story house, with dark, small, fetid rooms. Sunlight streaks in through dirty windows. A couple of patients sit silently on their unmade beds, their clothes heaped on the floor nearby. The very sick lie neglected in their beds, unwashed, the men unshaved, their eyes almost closed by discharge. There is neither doctor nor registered nurse in regular attendance, although there is a competent staff on a good hospital only a few miles away.

Samplings like these dramatically point up the need for better organized hospital systems. But if a community's interest in its hospitals begins and ends with participation in fund raising drives, the sound organization is unlikely to be realized. The problem confronting the American hospital system today is not a shortage of money, but the danger that too much money will lead to waste-not only of money, but also of lives. Economical use of hospital resources promises better care than extravagance does.

FAREWELL TO ARMS

Fanning community enthusiasm for the latest types of medical equipment, and the acquisition of that equipment by a local hospital, is liable to have an effect contrary to the one the community sought. Many hospitals, for example, spend heavily for the prestige of possessing the total armament against death-the cobalt bombs ($85,000), the heart-lung machines ($45,000), the heart-surgery equipment ($100,000). Instead, they should seek only the share of that armament that they need and can use regularly. Waste of money on rarely used equipment means a rise in the daily rates for hospital beds, followed by a reluctance on the part of the individual to seek out hospital care. Both the quality of the care and the individual suffer as a result.

Hospitals often compete against one another. In Chester, Pa., a new $4 million chromium-and-glass hospital opened recently, specializing in obstetrical

76123-61-pt. 333

cases.

Its glitter attracted most of the profitable obstetrical work away from two nearby hospitals-with the result that the better of them, giving good medical care to difficult and needy cases, faces a grave financial crisis, and may have to close. In southern Michigan, two general hospitals are 2 miles apart, choked with a redundancy of equipment-and fighting a growing annual deficit.

An aura of the miraculous surrounds open-heart surgery; but every community does not require daily medical miracles, alluring as their description may make them seem. "Now we can thread catheters into the heart, and know things we've never known before," say Dr. Martin Cherkasky, director of New York's Montefiore Hospital. "We can get chemical information-like how much oxygen is in the blood-by taking samples from different heart areas. That tells us where the leak is. Then we need pictures, but to take them you have to inject radio-opaque substances into the heart. Since the heart pumps a fifth of a pint of blood through itself every second, any substance is going to be there only momentarily. So you need a complex device linking the heart, at the precise moment the substance is in it, to the machine that takes the picture. When the diagnosis is known, further complexities arise. To operate you need to stop the heart, but you cannot interrupt the flow of blood to the brain. So you have mechanical pumps-but very specially made and operated, because you can't bruise the red corpuscles. You need 10 people, who have worked for years as a team, operating first on animals, for such a cardiac procedure."

But Cherkasky is quick to add his belief, which jibes with the opinion of many another thoughtful doctor, that not every hospital can have all this. Even if smaller hospitals could afford to spend the money for the equipment, they could not find skilled teams to operate it. The death rate would be high, while the costly equipment would be used irregularly. People who need such operations should travel to the large general hospitals, where both skill and equipment are kept sharp by constant use.

THE UNMUSSED BED

After the war, great momentum went into a drive for the construction of new hospitals. But the drive was too successful: now we are living with, and paying for, more hospital space than we need. What we have is badly distributed. One out of four community-hospital beds in the United States was vacant on an average day last year. The cost of vacancy ran beyond loss of income, since hospitals must be geared both in numbers of employees and in space allocation to full occupancy. (One-third of the space in an average hospital goes for beds, two-thirds for the services the sick require.) Robert Sigmond, executive director of the Hospital Council of Western Pennsylvania, believes that hospital beds in the United States should be reduced until individual institutions run at around 85 to 90 percent of capacity, instead of the present 70 percent. Other experts have suggested that the 1,400 U.S. hospitals which have fewer than 100 beds be closed or converted into badly needed nursing homes. Remarks one consultant in the field: "When I go around to my community hospital with a donation, I stop in to chat with the administrator-and tell him he should close up shop." Studies and samplings of hospital practices-objectively examined only rarely 25 years ago, but subject to more frequent review and scrutiny today-often light up areas where utilization of hospital space can be improved. For example, Kings County Hospital in New York was recently forced because of overcrowding to discharge some mothers 2 days after delivery. A matched sample of cases stayed on for the standard 5 days. A study later revealed that those who were hospitalized for the shorter period of time fared just as well as those who stayed longer. Commenting on those findings in New York, one Pittsburgh expert said: "Once we are sure it is good medical practice, we could introduce the idea of a shorter stay into our hospitals. Then we wouldn't have to provide another maternity bed in Allegheny County for 30 years."

The cost in dollars of medical facilities that overlap and are badly utilized is hard to estimate. But unnecessary hospital construction can saddle a community with onerous obligations: for every $2 million it spends in building, a community must lay out an average of $700,000 to $1 million annually for support of the new facility. To the average U.S. citizen, medical care from 1958 to 1960 went up more than three times faster than any other kind of personal expense. Private expenditures for hospital services have tripled, from $1.9 billion in 1968 to $6 billion in 1960. In the New York area, hospital rates for a semiprivate room went from $11.30 a day in 1946 to $34 in 1960. The "hotel" costs of a hospital day-room, board, maid service-dropped from 55 percent of the total in 1946 to