--How extensive is the problem of fraud and abuse? --Are efforts to detect and prosecute fraud and abuse effective? --What additional methods can be employed to identify fraud and abuse, such as focused reviews of certain providers and use of computers? CHAPTER 2 HEALTH RESOURCES One of the components of the health care system is resources, which includes personnel, facilities, and medical technology. We essentially limited our discussion of personnel to physicians because of their influential role, and concentrated our discussion of facilities on hospitals and nursing homes. We essentially limited our discussion of medical technology to medical and surgical equipment and procedures. The supply of certain health resources may not be matched to the nation's need for them. While federal programs have successfully eliminated a shortage of physicians and created many new community hospital beds, many believe that the nation now has an excess supply of hospital beds and may soon have an oversupply of physicians. The impact of changes in the supply of certain health resources on health care spending, however, is debatable. Furthermore, changes in the supply of health resources may also affect access to care. As a result of increasing long-term care demands of an expanding elderly population together with state and federal actions affecting construction, the nation has an apparent shortage of nursing home beds. However, the extent of the undersupply of beds is difficult to measure because many patients may unnecessarily be placed in nursing homes when other forms of less expensive care would be appropriate. In addition, the lack of nursing home beds causes some patients to remain in hospitals unnecessarily. The impact of this situation on expenditures is inconclusive. For example, if alternative forms of care add to rather than substitute for nursing home care, total expenditures may increase. Questions have also been raised concerning the fact that medical technology has not been systematically evaluated before it is purchased and used. This has occurred because, until recently, no single organization has had overall responsibility for assessing both the efficacy and cost-effectiveness of technologies. PERSONNEL General Employment in the health care system has grown rapidly. The total supply of active health personnel as of 1982 was estimated to include approximately 6 million persons, according to a May 1984 report by the Department of Health and Human Services (HHS). Nursing personnel, who number almost 3 million persons, and allied health personnel, such as dental assistants, laboratory workers, and physical therapists, who number over 2 million persons' account for about 86 percent of the total supply. Practitioners in other professions of medicine, such as dentistry, podiatry, optometry, and pharmacy comprise the remaining 14 percent.iptometry, The number of health practitioners has increased faster than our population, and the health personnel-to-population ratio in each medical field is also at record levels. However, wide variations among states still exist in medicine, dentistry, nursing, podiatry, and optometry, relative to the population. Furthermore, there are still pockets of medically underserved areas.2 According to HHS, between 1970 and 1982, registered nurses increased by 83 percent; and physicians, by 43 percent, surpassing the growth of other major groups of health practitioners. This translates to a 4-percent average annual growth rate since 1980, compared to 2 percent for other professionals. Increases in other professional categories--dentists (102,200 to 132,000), optometrists (18,400 to 23,300), podiatrists (7,100 to 9,600), and pharmacists (113,700 to 151,400)--ranged from 27 to 35 percent over this 12-year period. Allied health personnel also increased by an estimated 76 percent from 1970 to 1982. The supply of health personnel is expected to continue to increase, but more moderately in the next 20 years, according to HHS' 1984 report. Although the number of physicians may exceed projected needs, aggregate supply and requirements of most health professionals are expected to be in rough balance by 4 1990, according to HHS. Physicians play an influential role in determining the levels of health care spending. In most cases, it is the physician who determines who will go to the hospital, which hospital they will enter, how long they will stay, and what diagnostic and treatment services will be used. Physicians also influence expenditures for many services and goods provided and bought outside the hospital. Many believe that physicians influence or control between 70 to 80 percent of total health spending.6 Because of their influential role in the health care system, the remaining discussion of health care personnel is limited to physicians. Physicians Since 1950, the number of active physicians has more than doubled, increasing from 220,000 in 1950 to 502,000 in 1982.7 The number of physicians has also increased faster than the general population, resulting in more physicians per capita, as shown in table 1. Year 1950 1960 1970 1975 1980 1981 1982 Source: American Medical Association. The American Health Care The increasing supply of physicians has had an impact on the delivery of health care in previously medically underserved areas. In recent years, many physicians have, to an increasing extent, located in small cities and towns. This has alleviated the maldistribution of physicians between urban and rural areas to some extent. Nevertheless, some believe that physicians are still maldistributed within urban areas. By the end of the 1970's, it was reported that nearly every town with a population of 2,500 or more had a physician, or ready access to one. The number of physicians practicing in nonmetropolitan areas increased by about 32 percent between 1970 and 1980.8 Some health care experts have noted a new potential problem associated with specialists "underpracticing" in rural areas. These physicians may not provide care of adequate quality because in sparsely populated areas they do not see enough patients to maintain an adequate skill level. Why has the supply of Two major federal actions--support of medical schools and physician medical education and immigration policies favorable to medical graduates--have increased the overall supply of physicians. Impact of federal programs. Federal financing of medical schools and medical education has contributed significantly to the increase in the number of physicians. After World War II, the federal government began indirectly financing medical schools through research grants which helped pay salaries and overhead costs.9 By later enacting the Health Professions Educational Assistance Act (Public Law 88-129) in 1963, the Congress established the first federal program directed at meeting critical needs for physicians and certain other health professions by providing financial assistance to schools for construction of facilities and assistance to students in the form of loans. The scope of this legislation was broadened in 1965 and 1968 and major amendments were enacted as part of the Comprehensive Health Manpower Training Act of 1971 (Public Law 92-157). This legislation was aimed at increasing the supply of physicians and other health professions personnel, among other things, while stabilizing the finances of health professional educational institutions. The 1971 act also provided for special project grants to help address two problems: geographic and specialty distribution of physicians and other health professions.10 The health professions legislation expired in June 1974, and new authorizing legislation was approved in 1976. As enacted, the Health Professions Educational Assistance Act of 1976 (Public Law 94-484) extended the health manpower training authorities through fiscal year 1980 with significant changes to meet national needs. This act was designed primarily to produce more primary care practitioners and improve health services in manpower shortage areas. This legislation was due to expire at the end of fiscal year 1980;11 however, the Congress reauthorized it through fiscal year 1985.12 The effect of these federal financing programs can be seen in the growth of medical schools. In academic year 1960 to 1961, there were 86 medical schools in the United States with 13 30,288 students, 6,994 of whom graduated that year. In 1982 to 1983, there were 127 medical schools with 66,886 students, 15,728 of whom graduated that year. 14 However, the trend towards increasing numbers of medical school students may be changing. The Association of American Medical Colleges has reported that the number of new medical school admissions has declined slightly from 16,644 students in academic year 1981 to 1982 to 16,480 students in academic year 1983 to 1984. It is expected that the number of admissions for academic year 1984 to 15 1985 will further decline slightly to 16,440 students. In Impact of foreign medical school graduates. The influx of foreign medical school graduates into the U.S. medical system has also contributed to the increased physician supply. 1982, HHS reported to the Congress that from 1970 to 1980 the growth in the supply of foreign-trained physicians was greater than the growth of U.S.-trained physicians. Over the decade, the number of actively working U.S.-trained physicians increased by about one-third (from 263,200 to 350,100), while the number of actively working foreign-trained physicians increased by over |