Historic source document from the Coastal Research Group local archive.
The thing about introducing these folks is, of course, they don't need an introduction.
And if I did introduce them at the full depth, I'd take the entire time.
But I'll still introduce Phil briefly, noting that he was a Chancellor at UCSF, Director of Institute for Health Policy Studies at UCSF, was Assistant Secretary twice, both under Johnson and under Clinton.
And one of Phil's joking notes of how he should be introduced would be in part to note that Pete was the smart son, Huey was the handsome one, and Phil was the dumb one.
And, well, you start to say, "Well, Phil's not that dumb." But the fact that he'd go back to Washington a second time does give a little credence to the fact that there may be a little dimwitted in this somewhere in there.
And so with that, Phil.
Peter, thanks for that insulting introduction.
Pete has really given a very good overview of the context within which policies were developed at the time of the Miller's Commission when I was in Washington.
But prior to that, in the 1950s, we first had the report of the President's Commission on the Health Needs of the Nation in 1952.
That was Truman's alternative to national health insurance.
And our father actually served as a member of that commission.
And many of the things we did in the '60s were described in that report.
There was then the Bain Jones report, a report to the Secretary on physician and other health manpower issues.
And then there was the Bain report to the Surgeon General in 1959 so that by the early 1960s, there was a significant body of information pulled together around the needs, particularly issues around physician supply, physician shortage.
And the common view was not only with respect to specialization, but in fact that there was a significant shortage of physicians in the country.
And it was within that sort of mindset that we began the policy activities in the '60s.
Also in the 1950s, President Eisenhower introduced or proposed legislation in 1956, which included support not only for research facilities but for the building of medical education facilities.
The legislation passed but without the medical education facilities.
Funding was there for research facilities as the money was flowing into the medical schools for the support of research and was in the fact transforming the medical schools, at least those that garnered the research dollars in the 1950s.
Also another factor, and Eisenhower did that again in '58.
Again, they expanded the research funding, research facilities funding, but not funding for medical education facilities.
And the other factor in the '50s started in the '40s that was to impact on residency training particularly was the Hillburton program, which resulted, of course, in the modernization and the construction of many hospitals, many of them in the suburbs, but not funding of public hospitals because they received tax dollars from either local government or state government.
So then we began in the early '60s, Kennedy proposed legislation early on in 1963, when the Miller's Commission was established.
Congress passed the first Health Professions Educational Assistance Act of the 1960s in '63 in the fall, and over the course of the next five years, progressive additions were made to that until 1968, and I'll say a little bit more about that in a minute.
But also other things that were not intended, at least as they were being considered, Medicare in particular, the debate on Medicare did not focus on either civil rights or on graduate medical education, but in fact, Medicare was to have a profound impact in both of those areas.
After Medicare was passed, very early on, we began to focus on the — because Medicare policy simply reimbursed hospitals on a cost basis.
You incurred the cost, you got reimbursed for those costs, and included in those costs were the cost of interns and residents and the cost of supervising physicians.
And the — in addition, of course, the higher costs of patients in a teaching hospital were also part of that reimbursement.
They were to become explicit in 1983 when the DRGs were added to the process, and we really changed the way hospitals were paid.
But the — in the — in meetings we had and Bill Longmark at UCLA, who was then chairman of the Council on Medical Education of the AMA, was one of the really instrumental people in advising us on the development of those policies.
And the — there were both the policies that related — that influenced us, the explicit policies on GME, but the policies that were — it might say unintended, but had a major impact, of course, were the payments for physicians, services, Part B of Medicare.
And there, because of the usual customary and reasonable payment method, it was whatever you set your fees and what the fees were in the community were basically what was paid.
And as the procedure-based specialists were used to charging more and did charge more, and general practitioners in the main were not high chargers, and particularly if they were in rural areas, so you had this very skewed system of payment that over time made things progressively worse.
And it wasn't an intended effect of Medicare, but it certainly was an effect of Medicare.
And many of the details — I mean, the Social Security Administration, which was then administering the program, spelled out the broad policies and left the details of implementation to the various Blue Cross plans, which were the intermediaries for the hospitals, and mainly Blue Shield, which were the carriers for physician payment.
And as a result, you had policies that differed from one part of the country to another in terms of how this was implemented.
Medicaid, of course, was quite another matter, and it just was dramatic in the early days of Medicare.
And Medicaid, the resources that were put in by the Federal Government to the implementation of Medicare in contrast to Medicaid, which was basically a welfare program administered through the welfare administration in the Department of Health Education and Welfare, not through the Public Health Service, not through Social Security.
Social Security didn't want to have anything to do with it.
Because it was a stigmatized population.
And Frank Land, who was a family physician — actually, general practitioner, I think Frank was from Nebraska, was the first administrator of that program.
But that was a largely state-determined policies.
And as a result, did not have the same impact.
Now, with Medicare, another unintended consequence occurred in 1966 when it was very clear that the Civil Rights Act had to be applied to Medicare.
The courts had decided in 1964 about Hill Burton, and any hospital that was to receive Hill Burton funds from that point on had to be desegregated.
And the hospitals didn't believe it.
Most of the doctors didn't believe it.
But in fact, the President was absolutely firm on this issue.
It was a value-driven policy.
It wasn't a focus group.
There weren't polls taken.
And as a matter of fact, it was politically very detrimental to the Democratic Party to desegregate the hospitals in every congressional district in the South.
But that is, in fact, what happened over a very short period of time between February of 1966 and July.
And not only did this have a profound effect on those institutions, when we began that process in some states like Mississippi, only about 13 percent of the hospitals admitted black and white patients.
In other states, it was a much higher percentage.
But that process moved very, very quickly.
But more significant even, perhaps than the impact on the southern hospitals, was the impact on residency programs in northern hospitals and southern hospitals.
There were fewer black residents in northern hospitals, lower percentages than there were in the South.
Many southern hospitals that were desegregated had a larger numbers of black residents in contrast to hospitals.
And well, that very quickly disappeared after the Civil Rights Act was passed.
And I think Lou Sullivan, actually, who later became the Secretary of the Department of Health and Human Services, was the first minority physician to intern at New York Hospital.
And so we saw a profound impact totally unintended by the Civil Rights Act and Medicare.
And then, by the time I reached UCSF in 1969, Clark Kerr had been President of the University until, as he said, when he was removed from his position when Reagan was Governor, he said he left the presidency as he came to the university, fired with enthusiasm. (Laughter) But while he was President, he instituted policies that we would now call affirmative action and that there was a profound change, first of all, in the admission of minority students.
And in '69, we were recruiting black students from actually all over the country.
We had recruiters going out to recruit.
Within about three years, it was not only black students, but women, and the whole place was transformed within a decade, as has happened in most medical schools around the country.
Again, the Civil Rights Act, people didn't really think about this impact, but it was to have a profound effect on medical education and then on graduate medical education.
Well, in '68, the process of the health profession's educational assistance legislation, that year we had the most comprehensive support for medical education and other health professions, dentistry, pharmacy, veterinary medicine, nursing, and provided not only grants for construction, loans for students, scholarships for students, but supports for medical education.
And the goal was to both increase enrollment and to increase the quality of education.
And there were grants specifically designed to support innovations in medical education.
And my deputy at that time for health manpower, Ed Rosinski, who was a medical educator, Ed's training was not in medicine but in education, was the principal person behind that idea that there needs to be, from the federal government, supports for innovations in medical education.
It wasn't until 1971 that the federal government took a position on family practice.
Actually, in the '60s, we didn't take a position because there wasn't a board, and we didn't want to say that the federal government should dictate to the profession what it should be doing, although a number of general practitioners, Amos Johnson, among them, were advocating to us that we do exactly that, because they wanted to break down some of the barriers more quickly, but I think that the way it went was really the right way.
Well, the family practice residence, we supported in '71, and as a result of that, the numbers increased.
In '69, there were 30 family practice residencies.
By 1975, there were 219.
And by '77, all of the public medical schools had departments or divisions of family medicine or family practice.
Only 50 percent of the private schools did that.
Now, the federal policies were, in a sense, permissive.
There were grants to be provided if you developed those programs.
Unlike, say, the Civil Rights Act, which was a regulatory and radical change, in '79, the federal government expanded the funding beyond family medicine to other primary care residencies, particularly general internal medicine and pediatrics.
Now, by the 1980s, we were not talking about a shortage.
We were now talking about an oversupply.
We had doubled the enrollment in medical schools.
We had increased the numbers, as Pete said, from '85 to '125, but doubled the output of the medical schools.
And we then had kind of a steady statement.
It's been a relatively steady state since then, but with a dramatic reduction in federal direct support for medical education.
The research — support for research has continued, and the 800-pound gorilla, of course, has been Medicare in terms of funding graduate medical education.
Now, unintended consequences, also with respect to federal manpower policies from the Justice Department and the Labor Department.
Labor Department said in the '60s there's a health manpower shortage, which then resulted in changes in the immigration laws, which resulted in very significant increases in the numbers of foreign medical graduates, now called International Medical Graduates in — in the residency programs.
Also, after Medicare, it's interesting that the number of residencies in affiliated hospitals that were medical school-affiliated went up from 48 percent in 1964-65 to 77 percent by 1970-71.
So in a five-year period, a dramatic shift in the affiliation of residency programs with the medical schools.
Also, the number of foreign medical graduates, if you can believe in 1951, there were only 1350 in residency programs in the United States.
That was 9 percent of the total.
By 1969, there were 11,000 — it was 32 percent of all the residents in 69.
So that shift occurred, and it's been relatively steady since, and although the numbers go up about 4 percent a year, it is still a — the percentages haven't shifted as dramatically as they did in those early Medicare days.
So when the hospitals could get the money to pay the residents, they added residencies very, very rapidly.
And they continued to do that until this year.
The — I've mentioned the impact — the unintended impact that Medicare had both on the GME policies and on the payment policies.
We could have the first slide.
Is there some way to flip that on?
It's that — oh, there's some — oh, here we go.
Here we've got it.
It's like a miracle.
Pete talked about these figures, and this is just a recapitulation to see their dramatic effect.
And this is, I think, princely a Medicare effect.
If you look at the growth in clinical faculty, we've had almost an eight-fold growth in clinical faculty since 1965.
The number of medical schools has doubled.
Since '85, the number of med students has hardly increased at all, and we see, again, this huge increase in the residents and even greater increase in the clinical faculty.
If we could have the next slide.
Then you look — Pete mentioned the revenues, and you see the huge impact.
Where is the money coming from?
It's like Willie Sutton.
You know, he went where the — he robbed banks because that's where the money was.
Well, the medical schools added clinical faculty to generate the revenues, which have now been the major factor in support of medical education.
We could have the next slide.
We notice here that in 6061, 36 percent of the revenues came from research, basically from NIH.
Now, the money's increased still, but it's now only 18 percent.
Whereas clinical services, that includes faculty practice plans and hospital and medical school programs of providing medical care, now up to 48 percent.
You don't think that doesn't influence the policies of these institutions where you are dependent then on the support of your educational enterprise from your faculty practice revenues.
And, of course, in the — what some people would consider the good old days when it was fee for service, and everything you did was a revenue generator, now those become cost centers for many of these services.
We'll see what happens.
Now, we find that Medicare, like NIH, has now become the dominant federal policy without being intended.
And, of course, medical — the Medicare policy for graduate medical education until 1997, there was no federal policy except we'll support whatever the hospitals do.
And those residency training programs have continued to be dominated by service needs and the interest of either the hospital or a clinical division head.
Again, the policy said we'll fund you for whatever you do.
We'll not only fund you with direct support for the resident and the supervising physicians, we'll pay you a lot more for every patient you take care of, even though it's been clear for years that the indirect medical education payments were far in excess of what the actual costs were for those patients.
And you had incentives in states like New York because it was based on where we were in 1984, they based the — these payments.
Monifior gets $200,000 per resident.
Hospitals in Iowa get about $40,000.
Now, if that isn't an incentive and you wonder, well, why have the residents increased in New York and Pennsylvania and New Jersey?
Well, it's a very clear, very perverse incentive.
Now, with the balanced budget act, for the first time, Congress has said we're not going to fund any more residents.
We're going to put a cap on the number of residents.
And they also have given some incentives to New York to reduce the numbers, and they have now passed that on.
They basically hold harmless for a five-year period if you reduce the number of residents.
And when we look at each of these areas, we see unintended consequences of the policies on graduate medical education, on medical education.
And certainly, there's been no incentive in any of the federal policies with respect except for these small discretionary grants out of the Bureau of Health Professions to support the development of family medicine in the medical schools or in residency training programs.
And you compare those dollars to the Medicare dollars to GME, which trained huge numbers of physicians and specialties in excess of what the needs were.
There's been no focus on geriatrics or the needs of the elderly in funding of the GME programs in Medicare.
And now we have a movement with the balanced budget act to support managed care.
I mean, to move HICFA from being a payer to being a purchaser.
And I think we can anticipate unintended consequences of these policies as well.
And nobody is really looking at that.
The one thing they did in the balanced budget act, they said we're going to reduce your IME funding over the next five years by about five and a half billion.
But we're going to take the money away from managed care plans, about four billion, and give it to the teaching hospitals at 20% per year.
So they take it away with one hand and give it back with another.
There will be a modest reduction also in the payments for direct medical education in an attempt to really slow down this constant growth.
And the only reason that happened this year is because the Republicans control Congress and Senator Moynihan from New York isn't able to prevent that continued flow of funds uninterrupted without any limit into the teaching hospitals in New York and New Jersey.
And Pennsylvania.
So we've had over the years, over the last now 40 years, and going back to the context of Millis and the problems that they were addressing as Pete said, we're still facing many of the same issues.
The federal policies, Hillburden, NIH certainly had no beneficial effects on primary care, on the development of S, or on the development of family medicine, either as an intellectual field or as a practicing specialty.
We have Medicare policies, which have now become the dominant policies.
Again, perverse and unintended effects.
The only policies that were really directed towards sort of a rational system were the health professions, educational assistance funds.
We still have, you know, about $200 million maybe in the Bureau of Health Professions, maybe 250, and Medicare has about $7.5 billion just to support a graduate medical education.
NIH is $11 billion, so it gives you some idea of where the incentives have been in the federal government.
I think it's been a miracle to my mind that this has — family medicine has developed to the extent that it has in the face of these very, very formidable not only obstacles within the institutions, within the universities, but because of these financial incentives that have flown from outside into those institutions to accomplish what's been accomplished to date.
Am I any more optimistic about the future?
I would say I don't think so.
I mean, I think we have to look at the unintended consequences of managed care and see if we can anticipate what those will be and try to move to get some more rational policies, and maybe with Peter's help we can do that.
Thank you.
All right. [ Applause ] I'm astounded Phil.
That was ever so brief.
I appreciate this.
You've intimidated me.
Not likely.
Last, introducing Dr.
Hewitt Lee.
Hewie's the past president of the Palo Alto Medical Clinic is the emeritus executive director of the Palo Alto Medical Clinic, trustee of the Palo Alto Medical Foundation professor at Stanford University.
As my dad noted, he's a surgeon.
At one point, he was, however, doing so many hemorrhoids that he was known as a vascular surgeon, though he is a general surgeon by practice.
Hewie will give a perspective on the Miller's commission's impact on the real world and practice, rather than the lofty ivory tower of the world of the Beltway. [ Laughter ] Lawyers are the real ones we want to do hemorrhoidectomies on. [ Laughter ] It's really an honor here as a specialist to talk to all of you primary care people and particularly to follow these distinguished members of my own family.
As Pete just had a birthday, as he mentioned a couple of days ago, and he's now older than Mickey Mouse. [ Laughter ] And he found on a trip to Italy last year that he was older than most of the monuments. [ Laughter ] So I've had that.
I've had three older brothers that were in med school.
We were all one year apart, and I learned from all these guys the easy way to get by everything.
They would tell me who the professors who graded easily were and who the ones didn't require, you know, work very hard were, the ones who didn't have eight o'clock classes and all those things.
So I had a much easier time getting through than they did.
I could just flow along and learn by their mistakes and accept, toward the, each time I introduced, get introduced to a new professor, he'd say, "Oh, my God, not another lead." Well, that's what all you can say now, "Oh, my God, not another lead." I had the pleasure of interning those days when there was still an internship at Western Reserve, and Warren was the dean and the nurse was the president, and these things were beginning to ferment at that time.
Then I came back, I had a residency at Stanford in San Francisco in the old days of a surgical residency, you know, the final pay of the final year, after six years was $150 a month, and went to the, and joined the Palo Alto Clinic in 1956.
And the, at that time, we were 70 physicians, and all but three were specialists.
We had three general practitioners at that time, and 67 specialists.
The, and concerned by the ever decreasing impact of the general practitioner, my dad and his grandfather, said, and he's quoted in the millis report as saying that we should build a monument to the general practitioner, barium, and originate the concept of a personal physician.
And as you know, the, there's been some discussion this morning already, the, what to call this new personal physician that, that was beginning to evolve as a result of the millis report, and then the later creation or the very soon later creation of the board of family practice was generalist, primary care physician, family, physician, family provider, and so on.
And, and ultimately out of the distillate came the term family practitioner.
And, and with the, with the meaning had three additional years of training past an exam, and this was occurring, began to occur at the time when there was really severe, increasing fragmentation of the care.
And I think there's one of the problems with, with health care.
It's been its fragmentation, and Peter, I'm sure is, Peter Jr., I'm sure is faced with some of these complaints that there's no continuity of care.
The, it's all distributed amongst specialists who don't really know the other half.
And when you have a primary care physician controlling this, or guiding this, or being the, the manager of this, there's going to be, I think, a major increase in the general happiness of the, of the patient.
I, I had the pleasure of being a delegate to the AMA at the time the millis report was commissioned, and it was commissioned as, as you all know, by the AMA itself, the Council on Medical Education, which has probably been the most significant committee of the, of the AMA over the years.
The, and with the, is the general practitioner's status declining, with the specialists getting the cream of hospital appointments, the best and easiest hours, the most pay, and the greatest status.
It was no wonder, really, that, that their general practitioner was going into a steady decline on a national basis in the United States.
With the, with the creation of the board and, and of family practice, this was an incredible shot in the arm for the evolution and, and beginning to pull people back into the field of general practice, or now family practice.
And, and the mission as a comprehensive doctor, a true primary physician, with equal educational rank and status for the specialists, I think was, was really something incredibly important.
And a reversal of the specialization trend began, of course there were other reasons for this, as Phil pointed out, because sometimes that's where the money, money came from.
But, with the evolution of the board and the, and the two subsets of the board, the competent special competence in geriatric medicine and a special competence in family practice.
I mean, in sports medicine, each requiring additional training in those fields allowed further enhancement of the primary care physician.
In the U.S. in 1900, there were 76 million people in the entire United States.
And we had 119,000 MDs, almost all male, and there were 10,000 specialists at that time.
In 1975, there were 482,000 male and 30, and, and 86,000 female physicians saw this major, major change degree for a total of 568,000 doctors.
And, at this time, there were 37,000 male family practitioners.
And 7,000 female family practitioners, and general practitioners numbered 25,000.
So they had, the, the, the change had begun to occur.
The family practitioners beginning to ascend, and the general practitioner was beginning to disappear.
The, by 1996, there were 580,000 male and 157,000 female physicians.
Serving a population of 265 million in the United States.
So in less than a century, we'd gone up, you know, about 100 million people.
We had, at this time, there were now 47,000 male family practitioners, 15,000 female practitioners for a total of 62,000 family practitioners, really labeled as such, and there were family, and, and general practitioners, the ones basically without the board training, had dropped to 16,000.
It was still, it was a major turnaround, but it was still not enough.
In, in Palo Alto, now at the Pali Clinic, we now have 180 doctors, and we have 33 family practitioners up from three in this, in the, in my, just in, during my tenure there.
We have 45 internists, and we'd have only three general surgeons, one vascular and one thoracic surgeon.
So you can see the balance is really very, very different from the national balance.
The, the Miller's Commission felt that their ideal place for a family practitioner was, was in a group practice.
And then he or she could utilize the, the specialized colleagues for their help in, in diagnosis and treatment, and, and special procedures, and group practice would give the patient the advantages of continuing contact with the physician who knows him well, and, and knows his medical history, combined with access to the wider array of skills and facilities.
The, the, with these, there also has been an increased status of the family practitioner.
He, he or she now has boards.
The pay has become somewhat comparable.
They, at least in our institution, and, and they pass the exams.
They have, they need to re-certify every seven years, and they get two weeks off for education every year, and all the time necessary to study for the, for the, the new or the review boards that they have to take.
Source file: coastalresearch site/audio/audio-transcription/crg-phca-02apr1998-unintended.srt. Historic from local Coastal Research Group archive files during the DEV archive reorganization.