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245

P A R T

F O U R

Nonfinancial Resources for Health Care

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CHAPTER TOPICS

Regulatory and Legal Issues

From Idea to Treatment: The Long, Uncertain Research and Development Process

Access, Pricing, and Patent Issues

The Value of Medicines

LEARNING OBJECTIVES

Upon completing this chapter, the reader should be able to

1. Understand the nature of the pharmaceuti- cal industry.

2. Understand the drug discovery process.

3. Appreciate the role of pharmaceuticals in promoting health.

4. Appreciate the complex legal and regulatory issues facing the industry.

5. Understand the role of government and pub- lic policy with regard to pharmaceuticals.

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CHAPTER 11

The Pharmaceutical Industry*

*This chapter is adapted from Pharmaceutical Industry Profile 2007, Pharmaceutical Research and Manufacturers of America (PhRMA), 2007, Washington, DC: PhRMA. Copyright © 2007 by the Pharmaceutical Research and Manufacturers of America.

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Breakthrough medicines and vaccines have played a central role in this century’s unprecedented progress in the treatment of fatal diseases. New medicines generated 40 percent of the 2-year gain in life expectancy achieved in 52 countries between 1986 and 2000. Leading causes of death have been eliminated, and people of all ages enjoy vastly in- creased life expectancy and improved health. Antibi- otics and vaccines figured importantly in the near eradication of syphilis, diphtheria, whooping cough, polio, and measles. Likewise, cardiovascular drugs, ulcer therapies, and anti-inflammatories have had a major impact on heart disease, ulcers, emphy- sema, and asthma. Advances in biomedical science and revolutionary new research techniques are help- ing to develop novel approaches to attack infec- tious, chronic, and genetic diseases. By unraveling the underlying causes of disease, today’s research holds the promise that tomorrow’s medicines will move beyond the treatment of the symptoms of disease to the prevention or cure of the disease it- self. While much progress has been made, many challenges remain. The role of the pharmaceutical industry in addressing the challenges of disease and illness is the subject of this chapter.

Improvements in life expectancy are due in large part to historic discoveries of anti-infective thera- pies. Introduction of the first sulfa drug in 1935 stimulated interest in pharmaceutical research and set the stage for the successful development of peni- cillin. The 15 years between 1938 and 1953 be- came known as “The Age of Antibiotics” as the re- sult of the introduction of an unprecedented number of new anti-infective agents. Antibiotics and vaccines played a major role in the near-eradication of many major diseases of the 1920s, including syphilis, diphtheria, whooping cough, measles, and polio. Since 1920, the combined death rate from influenza and pneumonia has been reduced by 85 percent. Despite a recent resurgence of tuber- culosis (TB) among the homeless and immunosup- pressed populations, antibiotics have reduced the number of TB deaths to one-tenth the levels experi- enced in the 1960s. Before antibiotics, the typical TB patient was forced to spend 3 to 4 years in a

sanitarium and faced a 30 to 50 percent chance of death. Today, most patients can recover in 6 to 12 months with a full and proper course of antibi- otics. Lack of compliance among the homeless and the subsequent emergence of drug-resistant strains of TB remain a challenge to public health officials.

Pharmaceutical discoveries since the 1950s have helped to cut death rates for chronic as well as acute conditions. Cardiovascular drugs such as beta-blockers and ACE inhibitors have contributed to a 74 percent reduction in the death rate for atherosclerosis. Similarly, H2 blockers, proton pump inhibitors, and combination therapies have cut the death rate for ulcers by 72 percent. Anti- inflammatory therapies and bronchodilators have helped reduce the death rate from emphysema by 57 percent and provided relief for those with asthma. Similarly, since 1960, vaccines have greatly reduced the incidence of childhood diseases— many of which once killed or disabled thousands of American children. A vaccine has helped to cut the incidence of hepatitis B, a leading cause of liver cancer in the United States.

The twenty-first century beckons as the Biotech- nology Century. Rapid scientific advances—in biochemistry, molecular biology, cell biology, im- munology, genetics, and information technology— are transforming drug discovery and development, paving the way for unprecedented progress in de- veloping new medicines to conquer disease.

In the 1980s, scientists identified the gene caus- ing cystic fibrosis; this discovery took 9 years. Scientists located the gene that causes Parkinson’s disease—in only 9 days! Gene chips will offer a road map for the prevention of illnesses throughout a lifetime.

Biotechnology offers new approaches to the dis- covery, design, and production of drugs, vaccines, and diagnostics. The new technology will make it possible to prevent, treat, and cure more diseases than is possible with conventional therapies; to de- velop more precise and effective new medicines with fewer side effects; to anticipate and prevent dis- ease rather than just react to disease symptoms; to replace human proteins on a large scale that would

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not otherwise be available in sufficient quantities, such as insulin for diabetics and erythropoietin for cancer patients; and to eliminate the contamination risks of infectious pathogens by avoiding the use of human and animal sources for raw materials, as with the use of recombinant Factor III for the treat- ment of hemophilia and human growth hormone for growth-deficient children. Through modern bio- logical science, particularly genomics—the study of genes and their function—we better understand the underlying cause of disease, the ways in which drugs operate, and how to create new therapies.

REGULATORY AND LEGAL ISSUES

The drug discovery and development process is time consuming, complex, and highly risky. At the same time, to ensure safety, the research-based pharmaceutical industry is one of the most heavily regulated in the country. The historic Food and Drug Administration (FDA) Modernization Act of 1997 has enabled the agency to further reduce reg- ulatory approval times. Manufacturers are able to make new cures and treatments available to pa- tients about a year earlier than would otherwise have been possible.

Drug Discovery and Testing

The process of discovering and developing a new drug is long and complex. In the discovery phase, pharmaceutical companies employ thousands of scientists to search for compounds capable of af- fecting disease. While this was once a process of trial and error and serendipitous discovery, it has become more rational and systematic through the use of more sophisticated technology.

From discovery through postmarketing surveil- lance, drug sponsors and the FDA share an overrid- ing focus to ensure that medicines are safe and effec- tive. The drug development and approval process takes so long in large part because the companies

and the FDA proceed extremely carefully and me- thodically to ensure that drug benefits outweigh any risks. More clinical trials are being conducted than ever before. More patients are participating in the trials than ever before. As a result, more infor- mation on benefits and risks is being developed than ever before. The companies and FDA cannot, however, guarantee that a drug will be risk-free. Drugs are chemical substances that have benefits and potential risks. The FDA does not approve a drug unless it determines that its overall health ben- efits for the vast majority of patients outweigh its potential risks. But there will always be some risks to some patients.

The FDA and the pharmaceutical industry fol- low elaborate scientific procedures to ensure safety in four distinct stages:

1. Preclinical safety assessment

2. Preapproval safety assessment in humans

3. Safety assessment during FDA regulatory review

4. Postmarketing safety surveillance

The relative safety of newly synthesized com- pounds is initially evaluated in both in vitro and in vivo tests. If a compound appears to have impor- tant biological activity and may be useful as a drug, special tests are conduced to evaluate safety in the major organ systems (e.g., central nervous, cardio- vascular, and respiratory systems). Other organ systems are evaluated when potential problems ap- pear. These pharmacology studies are conduced in animals to ensure that a drug is safe enough to be tested in humans. An important goal of these pre- clinical animal studies is to characterize any rela- tionship between increased doses of the drug and toxic effects in the animals. Development of a drug is usually halted when tests suggest that it posseses a significant risk for humans, especially organ dam- age, genetic defects, birth defects, or cancer.

A drug sponsor may begin clinical studies in hu- mans once the FDA is satisfied that the preclinical animal data do not show an unacceptable safety risk to humans. The time ranges from a few to

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many years for a clinical development program to gather sufficient data to prepare a new drug appli- cation (NDA) seeking FDA regulatory review to market a new drug. Every clinical study evaluates safety, regardless of whether safety is a stated objec- tive. During all studies, including quality-of-life and pharmacoeconomic studies, patients are observed for adverse events. These are reported to the FDA and, when appropriate, the information is incorpo- rated in a drug’s package labeling. The average NDA for a novel prescription drug is based on al- most 70 clinical trials involving more than 4,000 patients—more than twice the number of trials and patients for the NDAs submitted in the early 1980s.

Clinical studies are conduced in three stages:

■ Phase I: Most drugs are evaluated for safety in health volunteers in small initial trials. A trial is conducted with a single dose of the drug, begin- ning with small doses. If the drug is shown to be safe, multiple doses of the product are evaluated for safety in other clinical trials.

■ Phase II: The efficacy of the drug is the primary focus of these second-stage trials, but safety is also studied. These trials are conducted with pa- tients instead of healthy volunteers; data are col- lected to determine whether the drug is safe for the patient population intended to be treated.

■ Phase III: These large trials evaluate safety and efficacy in groups of patients with the disease to be treated, including the elderly, patients with multiple diseases, those who take other drugs, and/or patients whose organs are impaired.

Investigators must promptly report all unantici- pated risks to human subjects. Investigators are also required to report all adverse events that occur during a trial. A sponsor must report an adverse event that is unexpected, serious, and possibly drug-related to the FDA within 15 days. Every indi- vidual adverse event that is fatal or life threatening must be reported within 7 days.

A sponsor submits an NDA to the FDA for ap- proval to manufacture, distribute, and market a drug in the United States based on the safety and

efficacy data obtained during the clinical trials. In addition to written reports of each individual study included in the NDA, an application must contain an integrated summary of all available information received from any source concerning the safety and efficacy of the drug.

The FDA usually completes its review of a “stan- dard” drug in 10 to 12 months. One hundred and twenty days prior to a drug’s anticipated approval, a sponsor must provide the agency with a summary of all safety information in the NDA, along with any additional safety information obtained during the review period. While the FDA is approving drugs more expeditiously, the addition of 600 new reviewers has been made possible by user fees. Over the years, the percentage of applications ap- proved and rejected by the FDA has remained sta- ble. Two decades ago, 10 to 15 percent of NDAs were rejected—the same as today.

Postapproval Safety and Marketing

Monitoring and evaluating a drug’s safety becomes more complex after it is approved and marketed. Once on the market, a drug will be taken by many more patients than in the clinical trials, and physi- cians are free to use it in different doses, different dosing regimens, different patient populations, and in other ways that they believe will benefit patients. This wider use expands the safety information about a drug. Adverse reactions that occur in fewer than 3,000–5,000 patients are unlikely to be de- tected in Phase I–III investigational clinical trials and may be unknown at the time a drug is ap- proved. These adverse reactions are more likely to be detected when large numbers of patients are exposed to a drug after it have been approved.

Safety monitoring continues for the life of a drug. Postmarketing surveillance is a highly regu- lated and labor-intensive global activity. Even be- fore a drug is approved, multinational pharmaceu- tical companies establish large global systems to track, investigate, evaluate, and report adverse drug reactions (ADRs) for that product on a continuing

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basis to regulatory authorities around the world. As a condition of approval, the FDA may require a company to conduct a postmarketing study, or a company may decide on its own to undertake such a study to gather more safety information. A company may also undertake a study if it believes that the report of ADRs it has received requires such action. These studies may consist of new clin- ical trials or they may be evaluations of existing databases. The FDA collects reports of ADRs from companies (which submit more than 90 per- cent of the reports), physicians, and other health care professionals. The agency evaluates the re- ports for trends and implications and may require a company to provide more data, undertake a new clinical trial, revise a drug’s labeling, notify health care professionals, or even remove a product from the market.

In addition to meeting regulatory requirements necessary to prove drug safety and efficacy, manu- facturers must also comply with FDA regulations to ensure the quality of pharmaceutical manufactur- ing. These “good manufacturing practice” (GMP) re- quirements govern quality management and con- trol for all aspects of drug manufacturing. To enforce GMP requirements, the FDA conducts field inspections where training investigators periodi- cally visit manufacturing sites to ensure that a facil- ity is in compliance with the regulations.

The FDA also regulates all aspects of pharma- ceutical marketing. These regulations are to ensure that health care professionals and the public are provided with adequate, balanced, and truthful in- formation and that all promotional claims are based on scientifically proven clinical evidence. Key aspects of marketing regulations include labeling, advertisements, promotional claims, investigational new drugs, and advertising in the form of Internet, television, and direct-to-consumer marketing.

Labeling

Labels and other written, printed, or graphic matter on a drug or its packaging (including all other promotional material such as brochures, slides, video tapes, and other sales aids) must not be false

or misleading in any way. The labeling must include adequate directions for use of a product, warnings when needed against use in children and people with certain conditions, dosage information, and methods and duration of use. Labeling must in- clude a brief summary of a drug’s side effects, con- traindications, and effectiveness. Any deviation from labeling regulations is considered “misbrand- ing,” a serious violation of federal law.

Advertising and Promotional Claims

All advertising is subject to the same requirements that apply to drug labeling. An ad must include a brief summary that gives a balanced presentation of side effects, contraindications, and effectiveness. It also must include information on all indications for which a drug is approved but may not include any information on unapproved or “off-label” uses. All promotional claims must be in agreement with the most current information and scientific knowledge available. The FDA may cite an ad as false, mislead- ing, or lacking in fair balance based on its empha- sis or manner of presentation.

Claims of safety relate to the nature and degree of side effects and adverse reactions associated with a drug or the overall risk benefit ratio of the drug. Claims of effectiveness relate to the ability of a drug to achieve its indicated therapeutic effect. Any prod- uct claims relating to safety and effectiveness must be supported by adequate and well-controlled stud- ies. The FDA Modernization Act allows promotion of economic claims to HMOs based on “competent and reliable scientific evidence.”

Investigational New Drugs

Unapproved drugs under clinical development or approved drugs under investigation for a new indi- cation can be discussed in scientific literature and at medical conferences but cannot be promoted as safe or effective. The FDA may authorize distribu- tion of the unapproved treatment investigational new drug to seriously ill patients who are not par- ticipating in clinical studies.

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FROM IDEA TO TREATMENT: THE LONG, UNCERTAIN RESEARCH AND DEVELOPMENT PROCESS

According to the National Science Foundation, pharmaceutical product development comprises one of the most research-intensive sectors in the United States. The industry is one of the largest em- ployers of scientists in the United States—and its success or failure relies heavily on their ability to make breakthroughs.

On average it takes 10 to 15 years and costs more than $800 million (and up to $1.2 billion for a biologic) to advance a potential new medicine from a research idea to a treatment approved by the FDA. That means that for more than a decade, sci- entists, engineers, and physicians strive every day in laboratories and hospitals searching for a new dis- covery and a way to deliver those new medicines to patients. It may entail trying to understand how to turn a key gene on or off. Researchers may test thousands of chemicals for biochemical activity in the body. It might involve attempting to create a completely new chemical compound, one so unique that the U.S. government grants its inventor a patent.

The research doesn’t end with the understanding of how a gene works or the creation of a new molecule—scientists must then transform those dis- coveries into medicines. The chemicals and biolog- ics must be safe and work as they should when in- gested. They must be engineered so that the body absorbs them in the proper quantities and trans- ports them to their sites of action.

Even after a medicine is discovered, teams of en- gineers, biologists, chemists, and physicists must spend long hours figuring out how to mass-produce the results achieved by an individual scientist at his or her lab bench. Often promising experiments are not replicable on a large scale. The research may fail because it is not possible to manufacture the drug safely or to the proper specifications.

Teams of physicians must study the effects of a new medicine on patients to discover whether it re- ally works in a population and works without caus- ing unacceptable side effects. Clinical trials may take years and involve thousands of patients and proce- dures. On average each new trial requires many pro- cedures and increasingly larger numbers of patients.

After a decade or more of the scientists’, engi- neers’, and physicians’ efforts, still only one out of five medicines that enter clinical trials is approved for patient use by the FDA. The process is long, risky, fraught with failure, and ultimately expensive. Failure at the clinical trial stage could completely nullify 15 years of work.

The United States is the world leader in pharma- ceutical research. During the 1990s, the United States surpassed Europe as the leading site for pharmaceutical research and development (R&D). The increased concentration of research efforts in the United States is reflected by the fact that 8 of the top 10 medicines by sales originate from the United States, compared to 2 from Europe.

Americans are also conducting more pharma- ceutical-related research in universities and public institutions as compared to their European counter- parts (Figure 11.1). However, academic scientists

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U.S. Companies’ Research

Expenditures 53%

Australia 1%

Germany 8%

Japan 29%

France 9%

Figure 11.1. WWoorrllddwwiiddee PPhhaarrmmaacceeuuttiiccaall RReesseeaarrcc hh SOURCE: Pharmaceutical Industry Profile 2004, 2004, Washington, DC: Pharmaceutical Research and Manu- facturers of America (PhRMA).

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might use National Institutes of Health (NIH) dol- lars to discover how two genes interact to cause a disease, but a scientist in a pharmaceutical research company lab will discover how to create a medicine to regulate those genes, thus inventing the treat- ment or cure for a disease.

Last year pharmaceutical research companies spent $33 billion on research to develop new and better medicines, a 7 percent increase from the pre- vious year. Over time, this investment will yield new medicines that will make progress in better treating a range of diseases that impose large direct and indirect costs on patients and society.

The innovation taking place in pharmaceutical research leads to new and better treatments for dis- ease (Exhibit 11.1). The products of this innovation will allow millions of patients to live longer, better, and more productive lives. New medicines also help curb overall health care costs by often reduc- ing the need for hospitalization and more invasive procedures, such as surgery, or by delaying nursing

home admission. The combination of innovation in new medicines and a shift to prescription medica- tions as preferred medical intervention means that spending on prescription drugs has increased.

Since 1990, pharmaceutical research company scientists have invented and developed more than 300 completely new medicines, vaccines, and bio- logics approved by the FDA to treat more than 150 conditions, ranging from infectious diseases to chronic diseases—and from diseases affecting mil- lions of patients to those afflicting less than 200,000 people. Recent pharmaceutical research company advances are helping to meet the emerg- ing diabetes epidemic, save the lives of cancer pa- tients, and forestall the burden of Alzheimer’s dis- ease. The progress made in reducing death rates from heart disease and stroke, for example, is sav- ing the lives of more than 1 million Americans each year. In addition, pharmaceutical research has cre- ated new medicines for a number of serious, but rare, conditions such as Fabry’s disease, cystic

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EXHIBIT 11.1 A Decade of Innovation

Today, patients who would have faced death or dis- ability a few years ago have treatments options available to help them live healthier, more produc- tive lives. A sampling of these innovations are as follows. ■ Patients suffering from Alzheimer’s disease (AD),

a neurological condition that leads to cognitive decline among older people, had few treatment options until the past decade, when the FDA ap- proved new medicines to treat AD and slow im- pairment. A new class of drugs is the first ap- proved treatment for moderate to severe AD. New medicines are still greatly needed to stem the enormous costs of AD because the number of cases continues to rise.

■ High blood pressure can lead to stroke, blind- ness, heart problems, and kidney damage. Since

1995, scientists have developed two new classes of blood pressure medications, angiotensin-II antagonists and selective aldosterone receptor antagonists. These new medicines improve blood pressure control with individualized treatment plans and have fewer side effects.

■ Schizophrenia is an incapacitating mental ill- ness that impairs the patient’s sense of reality, reduces the ability to relate to people, and, in many cases, causes hallucinations.

■ New atypical antipsychotic medicines treat schizophrenia with fewer problematic side effects than older drugs, which makes them easier for patients to tolerate and continue taking. As a result, many people with schizophrenia can now lead more normal, independent lives.

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fibrosis, sickle cell anemia, and a number of rare cancers.

Medical literature today includes countless stud- ies demonstrating medicines’ ability to help pa- tients avoid hospitalization and invasive surgery, or delay the need for long-term nursing home care. In addition to improving patient quality of life and giving physicians more options to tailor treatment to the needs of individual patients, the use of new medicines also reduces overall health care costs. For example, by preventing complications, side ef- fects, and symptoms, new medicines drastically re- duce the need for hospitalization.

Examples of Pharmaceutical Invention

Scientists have developed new medicines to treat a number of gastrointestinal disorders over the past two decades. Since these medicines have become available to patients, the need for surgical proce- dures to correct ulcers has slowed, and today ulcer surgery is a relic of the past.

A new Alzheimer’s drug slows the progression of cognitive decline, allowing patients to maintain their independence longer and delay entering a nursing home by an average of 30 months. Nursing home care is more costly than in-home care, so this delay can significantly reduce health care expenditures— and the economic and emotional burden on both patient and caregiver.

The health of AIDS patients is not only im- proved by new medicines, but those medicines also reduce the need for costly hospital care. After the introduction of highly active antiretroviral ther- apy (HAART) for the treatment of AIDS, pharma- ceutical expenditures increased by about 33 per- cent, while hospital expenditures decreased by about 43 percent. Overall, total health care expen- ditures decreased by 16 percent (between 1996 and 1998).

New medicines to reduce the incidence of breast cancer can help women avoid later chemotherapy and surgery. Because of the high-technology science needed to develop these new prescription drugs,

the medication costs as much as $1,050 a year. However, surgery, chemotherapy, or other invasive treatments for women suffering from breast cancer may cost as much as $14,000 a year.

Medicines have played a significant role in the life expectancy gains made in the United States and around the world. New medicines are estimated to have generated 40 percent of the 2-year gain in life expectancy achieved in 52 countries between 1986 and 2000.

In many cases new medicines and vaccines help prevent disease, in addition to those that may cure or alleviate previously fatal or debilitating condi- tions. For example, new medicines contributed to the decline in U.S. HIV/AIDS death rates.

Some cancers have become a “chronic disease much like asthma, diabetes, and, more recently, AIDS” as a result of new diagnostic techniques and innovative medicines. Today there are 3 million more cancer survivors than there were a decade ago. The chance of surviving for five years after di- agnosis has risen by 10 percentage points over the past two decades to 62 percent today.

New and better medicines are not only extend- ing more people’s lives but also giving them higher quality, more productive years. Risks for chronic disabilities such as stroke and dementia have de- clined sharply.

As patients and health care professionals have turned increasingly to medications as cost-effective alternatives to invasive surgery and hospitaliza- tion, spending on prescription medicines has natu- rally increased. Although prescription medicines are often portrayed as the main driver of rising health care costs, prescription drugs accounted for 16 percent of total health care spending increases in a recent year.

In addition to more than 70,000 scientists, the pharmaceutical research industry directly employs more than 315,000 Americans. New medicines also benefit the economy by increasing worker productivity and reducing absenteeism. Many types of medicines—including those for depression, migraines, diabetes, and allergies—help boost worker productivity.

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ACCESS, PRICING, AND PATENT ISSUES

Ultimately, innovative medicines make a difference only when patients have access to them and use them. Underutilization of effective new medicines is a serious concern that limits the potential pub- lic health impact of pharmaceutical discoveries (Exhibit 11.2). Strategies to contain pharmaceutical costs have led to less access to needed medicines for patients. However, some important programs that broaden access to innovative medicines illustrate the positive impact of this approach.

In recent years, many Medicaid programs have instituted preferred drug lists (PDLs), which specify the reimbursable medicines physicians can freely prescribe. Drugs not on the PDL are reimbursed only if a patient’s doctor first obtains special per- mission from the insurer to prescribe the drug (known as “prior authorization”). Although the in- tent of this mechanism is to control costs, the result has been less access to needed medicines for pa- tients. Prior authorization and restrictive PDLs limit a physician’s ability to choose the most appro- priate medicine(s) for the patient. Yet one size does not fit all when it comes to medicines because indi- vidual differences in drug response are common.

Access restrictions are particularly onerous for low-income patients, who lack the resources to pay

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EXHIBIT 11.2 Underutilization of Drugs

Use of medicines is increasing as more patients take medicines for a broader range of conditions. This is indicative of new medicines offering new treatment options (e.g., Alzheimer’s disease and chemotherapy-induced anemia) and changing standards of medical care that call for earlier use of medicines to prevent the progression of disease, use of combination therapy rather than a single medicine, and improved therapies. Nonetheless, in- creasing use of medicines is often cited in policy debates as indicating widespread overuse of medicines.

In fact, while only limited research indicates overuse of prescription drugs, there is much evi- dence that large numbers of patients underuse needed medical care, including prescription medicines, for many serious health conditions. Such underuse is not limited to patients without health insurance or prescription drug coverage—it clearly afflicts patients who have health insurance with prescription drug coverage.

A RAND study found that nearly half of all adults in the United States fail to receive recommended

health care. Only 45 percent of patients with diabetes received the care they needed; only 68 percent of patients with coronary artery disease received recommended care; only 45 percent of heart attack patients received medications that could reduce their risk of death; only 54 percent of patients with colorectal cancer received recom- mended care; and less than 65 percent of patients with high blood pressure received recommended care. According to the RAND researchers, “the deficiencies in care . . . pose serious threats to the health of the American public that could contribute to thousands of preventable deaths in the United States each year” (McGlynn et al., 2003).

In assessing underuse and overuse of health care services, the study included an examination of nine health conditions that require treatment with prescription medicines. There was underuse of prescription medications in seven of the nine conditions. Those seven conditions were asthma, cerebrovascular disease, congestive heart failure, diabetes, hip fracture, hyperlipidemia, and hypertension.

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for innovative medicines out of pocket. If the most appropriate medicines for them are not on the PDL, they face fighting their way through the bu- reaucracy of prior authorizations and/or lengthy appeals processes—or doing without.

Yet experience shows that denial of the most ap- propriate drug therapy ultimately lowers quality of care and increases use of more expensive services, such as hospitalization. For example, clinicians treating patients in Michigan’s Medicaid program reported that the prior authorization process was overly burdensome and time consuming for them and their patients. The process also harmed vulner- able Medicaid beneficiaries, such as an HIV/AIDS patient who had to be hospitalized due to a delay in obtaining prior authorization for a necessary medication.

While Medicaid PDLs seek to restrict access to medicines, alternative approaches seek to improve quality of care and achieve overall health cost sav- ings by promoting the correct use of medicines, thereby avoiding the later need for more costly in- terventions. Increases in expenditures for prescrip- tion medicines often help patients lead healthier lives while avoiding expensive hospitalizations, emergency room visits, and long-term care. Disease management programs work to increase patient ac- cess to innovative medicines to improve health and reduce overall health care costs.

Patient-focused disease management programs promote appropriate use of pharmaceuticals and medical resource utilization. In these programs, pa- tients receive more intensive education, assistance, and monitoring in following a treatment plan tai- lored to their needs. Managed-care organizations and large employers make up the majority of dis- ease management clients, although some state Medicaid programs also offer them. Disease man- agement programs rely heavily on giving patients access to innovative medicines to reduce health care costs and improve outcomes.

For example, disease management programs, which target patient populations with specific high-cost, high-risk chronic conditions, have shown that increased spending on medicines that manage

disease helps reduce surgeries, hospitalizations, and emergency room visits. Patient-focused disease management programs promote appropriate use of pharmaceuticals and medical resource utilization.

Direct-to-consumer advertising (DTCA) brings Food and Drug Administration approved informa- tion about prescription medicines to patients and families. Through print and broadcast channels, many people learn about new medications for symptoms they are experiencing.

The ability of patients without insurance cover- age to access medicines is essential to maintaining health. Pharmaceutical research companies employ a number of programs—discount cards, supporting clinics, donated medicines—to help patients gain access to the medicines they need. Through these programs, companies provide prescription drugs free of charge to patients who might otherwise not have access to necessary medicines, such as those who do not have prescription drug insurance cover- age or who are underinsured with either private and/or government health plans. Companies also allow physicians, hospitals, community pharma- cies, home health companies, and others to obtain drugs for patients in need. In 2003, an estimated 6.2 million patients received prescription medicines through these programs.

In the United States today, a vigorously compet- itive pharmaceutical market provides incentives for scientists to be the first to bring a new product to market and potentially earn rewards after more than a decade of costly research. Pricing through a competitive market also allows innovators to earn returns on successful inventions, thus providing the substantial funds necessary to continue other re- search projects.

However, in parts of the world where the govern- ment controls prescription drug prices, both inno- vation and patient access to innovation suffer. In many European countries where governments im- pose prescription drug price controls, patients must wait as long as 2 years for new medicines to get to market while bureaucrats decide on price levels.

Some national health care systems restrict access to a new medicine even after setting its price. In the

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United Kingdom (UK), a governmental board, the National Institute for Clinical Excellence (NICE), issues recommendations based on a number of fac- tors (including cost effectiveness) as to whether the National Health Service (NHS) should make medicines available to patients covered by the government-run health care system. European price controls often restrict patient access to medicines that American doctors cite as essential for proper patient care. There are huge differences in the ac- cess to medicines among the various European countries. The shift of research and development (R&D) investment and the physical relocation of pharmaceutical research laboratories from Europe to the United States especially with consolidation underline the significance of free-market policies for producing innovation.

Patents and Drugs

Another policy important to innovation is govern- ments’ granting of patents as an incentive for re- search and for inventors to share their discoveries with the public. In the United States, patents are granted according to strict standards by trained ex- aminers at the U.S. Patent and Trademark Office (USPTO). They are granted only to inventions proved as new, useful, and nonobvious and provide only a limited period of exclusivity to the inventor (20 years in the United States), after which anyone can replicate or use the invention.

Patent incentives encourage the development of new medicines by attempting to provide a level of certainty to inventors. If granted a patent, scientists and the companies they work for know that they have a protected period of time in which they may prevent others from selling their invention. The ex- clusive right to exclude others from selling the new invention during this time gives them the opportu- nity to potentially recoup the hundreds of millions of dollars invested in researching and developing a new medicine.

Under current law, generic drug manufacturers can infringe unexpired patents in order to prepare their copies for Food and Drug Administration

approval and the market, and can—in an increasing number of instances—enter the market with their copies years before patents expire. In fact, a grow- ing number of generics seek to enter the market as quickly as 5 years after an innovator medicine is approved. Yet pharmaceuticals already have fewer effective years of patent protection than other U.S. products.

Continuing Innovation

Over the past several decades, scientists have in- vented and discovered a steady stream of new and better medicines, advanced our scientific and tech- nological capabilities, and improved our knowl- edge of disease. The work of these scientists is far from over.

In some labs geneticists are striving to unlock the secrets of the human genome and to develop new scientific techniques for regulating the genes that cause disease. In other labs chemists are devel- oping new and more efficient ways to combine chemical compounds to produce new treatments for patients. Engineers and computer scientists are designing robots to screen new compounds for bio- chemical activity and design new and faster com- puters and applications to analyze data on poten- tial drug targets. Biologists are trying to understand and replicate the complex structure of proteins and are looking for new tools to combat antibiotic- resistant bacteria and bioterrorism agents.

Prescription drugs save lives, alleviate suffer- ing, and improve the quality of life. They also often reduce the need for other more invasive and expensive treatments. A narrow focus on the cost of drugs, without regard to their value and their role in the health system as a whole, would dis- courage innovation and harm the prospects for health advances.

Better quality patient care is often more efficient care. For example, large percentages of patients with conditions such as diabetes, depression, hyperten- sion, and high cholesterol are not receiving needed care, yielding worse health outcomes and higher overall costs. Focusing on promoting solutions that

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improve quality will lead to better results for pa- tients and more affordable medical care.

Instead of focusing on reducing the prescription drug line item, some health plans are emphasizing disease management programs, which recognize the value of medicines in both improving patient care and offsetting other health care expenditures. Furthermore, a competitive market provides greater opportunity for access to medicines.

THE VALUE OF MEDICINES

Medicines save lives, relieve pain and cure and pre- vent disease. Medicines help keep families together longer and improve the quality of life for patients and caregivers. Medicines keep employees on the job and productive in the community. They also help people—and the health care system—avoid disability, surgery, hospitalization and nursing home care, often decreasing the total cost of caring for an illness.

Ulcer treatment provides a good example of the ability of pharmaceutical innovation to reduce costs, both for individuals and for the health care system. Before 1977, the year in which stomach- acid-blocking H2 antagonist drugs were intro- duced, 97,000 ulcer surgeries were performed each year. By 1987, the number of surgeries per year had dropped to fewer than 19,000. In the early 1990s, the annual cost of drug therapy per person was about $900, compared to about $28,000 for surgery. The discovery that the H. pylori bacterium is the principal cause of ulcers led to the use of an- tibiotics in combination with H2 antagonists to treat duodenal ulcers.

Every 5 years since 1965, roughly one addi- tional year has been added to life expectancy at birth. These longer life spans are due, in large part, to the conquest of diseases by pharmaceuticals: Vaccines have virtually wiped out such diseases as diphtheria, whooping cough, measles and polio in the United States. The influenza epidemic of 1918

killed more Americans than all the battles fought during the World War I. Since that time, medicines have helped reduce the combined U.S. death rate from influenza and pneumonia by 85 percent; in large part to new medicines, deaths from heart dis- ease have been cut by more than half since 1950. And this steady decline is continuing; deaths from all cancers combined as well as for the top 10 can- cer sites declined in the United States between 1990 and 1997, due to better treatments and early detection; and since 1965, drugs have helped cut emphysema deaths by 57 percent and ulcer deaths by 72 percent.

Medicines are helping more children grow into healthy adults. In 1949, more than one in every hundred babies died of respiratory distress syn- drome due to immature lungs. Today, thanks in large part to new medicines that accelerate lung maturity in premature babies, infant mortality rates have sunk to record lows. Polio, which killed nearly 2,000 American children in 1950, is now virtually unknown, thanks to vaccines. Before routine measles vaccination began in the 1960s, more than 3 million cases of this childhood disease and 500 deaths from measles were reported each year. Cases of bacterial meningitis among young children dropped nearly 80 percent over 11 years after the introduction of a vaccine.

Treating cystic fibrosis patients with a break- through medicine reduces hospitalization and re- lated medical costs. This medicine, when used in conjunction with standard treatments, was proven in clinical trials to reduce the risk of respiratory tract infections requiring intravenous antibiotic therapy by 27 percent. For asthma patients, increased drug spending kept patients out of the hospital. Total health care costs declined nearly 25 percent and hospitalization rates dropped by 50 percent for asthma patients using new inhaled corticosteroid therapy.

New medicines have helped reduce the toll of cancer, and ongoing pharmaceutical research promises to continue and accelerate the impressive progress made against cancer in the past decade (Exhibit 11.3). Researchers are using new knowledge

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and innovative techniques to hone in on cancer cells without damaging healthy cells.

Pharmaceutical companies have developed a number of drugs that improve the quality of life for cancer patients and, in some cases, lower the cost of cancer treatment. Drugs that prevent nausea dur- ing chemotherapy are making treatment easier to bear for many patients, as are medicines that help restore the energy that chemotherapy can take away. Another medicine, called a colony stimulat- ing factor, helps patients whose immune systems are weakened by high-dose chemotherapy. A shift from intravenous to newer forms of oral chemotherapy is also yielding savings both in qual- ity of life and in cost reductions.

Prescription medicines can reduce disability and absenteeism and increase productivity—while im- proving the quality of life for employees. Migraine

headaches not only cause pain to those who suffer from them—they also take a huge toll in absen- teeism and lost productivity. Thanks to a break- through drug, however, the human and economic costs of migraine headaches are dropping. Total costs of treating patients for migraine headaches declined 41 percent as the result of the new drug treatment. The drug saved employers $435 per month per treated employee due to a reduction in lost productivity costs, while the monthly cost of the drug per employee was only $43.78.

Depression affects nearly 18 million Americans. Its annual toll on U.S. businesses amounts to about $70 billion in medical expenditures, lost produc- tivity, and other costs. Innovative prescription medicines are reducing employers’ costs and absen- teeism drops when depressed workers are treated with prescription medicines. Savings from improved

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EXHIBIT 11.3 New Chemotherapy: Nineteen Years from Idea to Approval

In 2000 the FDA approved a new chemotherapy treatment, Mylotarg®, for patients with relapsed acute myelogenous leukemia. The approval came 19 years after scientists at Lederle Labs, now Wyeth, first discovered a microorganism in a soil sample that produced a powerful anticancer sub- stance called calcicheamicin.

Scientists learned that calcicheamicin destroys cell DNA, which results in the cell’s death. Thus, in theory, targeting it to cancerous cells could elimi- nate them. In developing any cancer treatment, a key challenge is finding a way to kill cancer cells while minimizing or avoiding damage to the body’s other healthy cells. However, calcicheamicin’s ex- ceptionally high toxicity (between 1,000 and 10,000 times more toxic than traditional anticancer medicines) meant that scientists had to find a novel way to deliver the drug only to cancer cells.

Before concentrating on making the medicine safe for patient use, the pharmaceutical

researchers first had to figure out how to make large quantities of calcicheamicin for experimenta- tion. During the next 5 years, they worked to understand its structure and how to stabilize it.

The team spent the next 3 years trying to develop a “linker” molecule that would bind tightly to the calcicheamicin to deliver it directly to cancer cells without releasing it in the bloodstream. Although they found linkers that worked in animals, they had problems converting them to a form usable in humans. Working virtually around the clock, only stopping for a break on Christmas day, the pharmaceutical research company scientists tested 35 linkers before finding one that worked. Finally, in 1995, 14 years after discovering calci- cheamicin, the new medicine Mylotarg® entered human clinical trials. After nearly 5 years of successful clinical trials, the FDA approved the medicine for widespread patient use.

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productivity and the reduction in work loss and medical costs far outweighed the cost of the drug.

Hay fever, or seasonal allergic rhinitis, affects an estimated 13 million working adults and has been shown to cause absenteeism and diminished work productivity. But new nonsedating antihistamines actually increase worker productivity.

Women live an average of 7 years longer than men. The bad news is they are more susceptible to a number of diseases and more likely to experience illness or disability. Pharmaceutical companies are targeting diseases that disproportionately afflict women. Over 300 medicines are in development for such diseases as rheumatoid arthritis, multiple sclerosis, lupus, osteoporosis, breast cancer, ovar- ian cancer, diabetes, and depression.

Breast cancer is the second leading cause of can- cer death among U.S. women, exceeded only by lung cancer. Breast cancer afflicts 8 million Ameri- can women and takes 40,000 lives each year. Breast cancer deaths have declined due to early de- tection and better treatments, including new medicines. Some of the latest medicines developed for breast cancer are a genetically engineered ver- sion of one of the body’s own weapons for killing invaders; an oral anticancer drug to shrink hard-to- treat tumors; and a drug that can reduce the inci- dence of breast cancer in high-risk women.

Multiple sclerosis, or MS, is a chronic, often pro- gressive disease of the central nervous system in which scattered patches of the covering of nerve fibers in the brain and spinal cord are destroyed. MS is most often diagnosed in people in their twenties and thirties, and women develop the disease at a rate almost double that of men. An estimated 350,000 Americans have this disease.The average annual cost of MS exceeds $34,000 per person, while the life- time cost is more than $2.2 million per person.

Treatment with a breakthrough medicine slows the cognitive impairment often suffered by people with relapsing MS. The medicine has also been shown to reduce relapses and slow the progression of the disease. A combination of two powerful drugs may help patients who continue to suffer flare-ups on one-drug treatment.

One of every two women will have an osteo- porosis-related fracture at some point in her life. In osteoporosis, a reduction in bone mass leads to fractures, particularly of the vertebrae, hips, and wrist. Bone-density screening for early detection, strengthening exercises, and innovative medicines can help people avoid osteoporosis. Several types of medicines are available to help prevent osteo- porosis and to reduce the human and economic toll of this disease. Because fractures due to osteoporo- sis often lead to disability and nursing home admis- sion, new medicines for osteoporosis are the best hope of cutting the cost of this disease.

Heart disease is America’s number-one killer, and stroke is third, following cancer. Heart disease and stroke claim almost a million lives and cost $300 billion each year. New treatments, including innovative medicines, have helped cut deaths from heart disease and stroke in half in the past 30 years and are also reducing the economic toll of these diseases. The widespread use of blood pressure drugs over the past half century appears to have sharply reduced dangerous hypertension and potentially lethal enlargement of the heart’s main pumping chamber. A blood thinning drug reduces the risk of new heart attacks, strokes, and death by 20 percent a year in people being treated for mild heart attacks and bad chest pain. ACE inhibitor drugs for patients with congestive heart failure helped avoid $9,000 per person in hospitalization costs and reduce deaths. The use of a beta-blocker medicine to treat high blood pressure and conges- tive heart failure sharply reduces hospital admis- sions. Combining two common medicines can sig- nificantly reduce the risk of death for patients with mild heart failure: Using beta-blockers and ACE inhibitors in combination can reduce the risk of death from heart failure by 30 percent. A study sponsored by the National Institutes of Health (NIH) found that treating stroke patients promptly with a clot-busting medicine reduces the need for hospitalization, rehabilitation, and nurs- ing home care.

Some historians have called the era from the 1940s through the 1990s “the Golden Age of

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Medicine.” But many scientists predict that even those accomplishments will be dwarfed by the achievements of the twenty-first century. Stunning advances in the knowledge about disease, in- creases in targets available for drug discovery, and our growing ability to design effective medicines open the door to exciting possibilities. No one can predict the future with great accuracy, but here are some of the developments scientists believe are possible in this next “Platinum Age” of medicine: Medicines can already stop the AIDS virus from reproducing. The next breakthrough may be medicines that can stop the virus from entering the cell in the first place; drugs that will slow the progression of Alzheimer’s disease; “cocktails” of treatments, including vaccines, monoclonal anti- bodies, immune system boosters, and drugs that cut off a tumor’s blood supply in an all-out attack against cancer; medicines that will prompt the heart to grow new blood vessels, reducing the need for bypass surgery; and treatments that may regenerate nerves damaged by brain disease or spinal cord injury.

Arthritis

Rheumatoid arthritis (RA) is a chronic inflamma- tory autoimmune disease that primarily affects the joints. In this disease, the body’s immune system attacks the cells of a fluid that surrounds the joints. This fluid normally lubricates and nourishes the bones and cartilage within a joint, but with RA, the inflammatory process causes this fluid to be- come thicker and begin to destroy the cartilage and bone. This leads to RA’s characteristic effects on the joints: pain, swelling, loss of function. RA can also lead to bone loss that causes osteoporosis, as well as the development of anemia, neck pain, dry eyes and mouth, bumps under the skin, and very rarely, inflammation of the blood vessels, the lining of the lungs, or the sac enclosing the heart.

Medicines seek to relieve the symptoms of RA in three main ways: reducing pain, decreasing inflam- mation, and slowing damage to the joints. Before 1998, treatment of rheumatoid arthritis depended

largely on nonsteroidal anti-inflammatory drugs (NSAIDs) like aspirin. However, since 1998, pa- tients suffering from rheumatoid arthritis have ben- efited from a surge in the approval of new treat- ments for their often painful condition. In 1998, the FDA approved the first new disease modifying anti-rheumatic drug (DMARD) specifically devel- oped for the treatment of rheumatoid arthritis in more than a decade. This class has the potential to reduce or prevent joint damage, preserve joint in- tegrity and function, and ultimately, reduce the total costs of health care and maintain economic productivity of the patient with RA. That same year, the FDA also approved the first in a new cate- gory of biologic products known as biological re- sponse modifiers. Medical products in this category reduce inflammation by blocking the protein in the immune system that causes excessive inflammation in those with RA.

Advances in drug treatment continued in 1998 with the FDA’s approval of a medicine in a third new class of drugs known as COX-2 (cyclo- oxygenase-2) inhibitors. Like NSAIDs, these drugs block COX-2, an enzyme that causes in- flammation. However, unlike NSAIDs, they do not block COX-1, an enzyme that protects the lining of the stomach, thus reducing risk of the gastrointestinal ulcers and bleeding that can occur with NSAIDs. In 2004, these drugs faced a challenge due to concerns about elevated cardio- vascular risks in clinical use.

Although RA still has no cure, drug treatments are helping patients live more comfortable, produc- tive lives. New drugs in development focus on the early stages of the immune response to block only those specific immune system cells involved in au- toimmune disease; so-called “next generation bio- logics,” including co-stimulatory blockers that pre- vent the initial signaling and chain of chemical reactions that turn on the immune system; and therapies that inhibit the migration of inflamma- tory cells into the joint tissues, thus preventing car- tilage and bone destruction. Trials of gene therapy products that affect factors regulating the immune system have also shown promising results.

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HIV/AIDS

Like other viruses, the human immunodeficiency virus (HIV) that causes acquired immune deficiency syndrome (AIDS) replicates by entering a healthy cell and taking over its machinery. Most medicines available to treat HIV infection have gained FDA approval in the past decade, including four new classes of medicines that target three different stages of the HIV virus’s life cycle. Two new classes of medicines, along with one class approved in the late 1980s, use different mechanisms to interfere with the reverse transcriptase enzyme, thereby in- terrupting an early stage of the HIV life cycle. Medicines in the earliest class of drugs, nucleoside analogues, provide faulty DNA building blocks, halting the DNA chain that the virus uses to make copies of itself.

A second drug class, introduced in 1996 and called nonnucleoside reverse transcriptase in- hibitors, binds to the enzyme so it cannot copy it- self. The third class, nucleotide analogue reverse transcriptase inhibitors, was first introduced in 2001. These drugs block the reverse transcriptase to prevent replication of the HIV virus. A second enzyme, protease, is a critical player in a later stage of the HIV life cycle. The first drug in a class of pro- tease inhibitors to combat this enzyme was ap- proved in 1995. Health care providers combine protease inhibitors with the other classes of antivi- ral medicines in a strategy known as combination therapy (using more than one type of medicine to treat a condition). This strategy has been used to treat both early-stage and advanced-stage HIV dis- ease and is an important factor behind the signifi- cant decline in AIDS deaths in the United States in recent years.

In 2003, the FDA approved the first in another new class of drugs that prevents the HIV virus from attaching to healthy cells. This class, known as fu- sion inhibitors, blocks the virus’s ability to infect certain components of the immune system. Recent clinical trials showed that when added to combina- tion therapy regimens, fusion inhibitors can de- crease the amount of virus in the bloodstream to

undetectable levels. Because these drugs attack the HIV virus in a totally different way, they can be of particular benefit to individuals who have devel- oped resistance to previously available medicines.

Beyond the entirely new classes of drugs, impor- tant innovations within existing drug classes have made the treatment of people living with HIV/AIDS more effective as well as more tolerable. For example, the first treatments had to be taken multiple times a day, but many new drugs are avail- able in twice-daily or even once-daily dosage forms.

Medicines under development for AIDS and AIDS-related conditions include, among others, an antisense gene therapy medicine that uses two novel technologies to boost immune responsive- ness against HIV; a new medicine that blocks a third enzyme, known as integrase, that the HIV virus uses to copy itself; and a number of HIV/AIDS vaccines that may prevent the spread of the virus.

Although a cure has not yet been found for HIV/AIDS, new medicines that are the product of research have dramatically affected the length and quality of life for those infected with the HIV virus. Because people receiving pharmaceutical therapy for HIV/AIDS are better able to maintain their health, they use fewer health care services and use them less often.

Neurology and Mental Health

Parkinson’s disease is a condition that results from the breakdown of neurons in the part of the brain that controls movement. This breakdown causes a shortage of a chemical called dopamine. Dopamine is responsible for relaying the brain’s instructions for movement, and a lack of it causes the tremors, rigidity, and slower-than-normal movement that many Parkinson’s patients experience. Until re- cently, patients suffering from Parkinson’s disease were usually first treated with levodopa, a chemical that is converted to dopamine once it enters the brain. Unfortunately, levodopa is often broken down in the bloodstream before it reaches its target in the brain, causing decreased effectiveness.

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In 1997, researchers made a major advance in treating Parkinson’s disease by introducing a sec- ond generation of medicines called dopamine ago- nists. These medicines mimic the effect of dopamine and stimulate neurons to act as though sufficient dopamine were present in the brain. A new class of drugs introduced in 1998, known as COMT (catechol O-methyltransferase) inhibitors, blocks the enzymes that break down levodopa as it moves through the bloodstream, allowing it to get to the brain and be converted to dopamine. Consis- tent exposure to dopamine allows patients to func- tion more independently and for longer periods of time between doses with fewer of the burdensome symptoms of Parkinson’s disease.

Alzheimer’s disease (AD) is a progressive neuro- logical disease that affects memory, personality, and behavior. The pathological processes involved in AD disrupt the three key functions of nerve cells in the brain—communication, metabolism, and re- pair. When these processes are disturbed, brain cells stop working, lose connections with each other, and eventually die. Over a period of years, those with AD gradually lose their ability to re- member things and think clearly.

All four of the prescription medicines, belonging to two therapeutic classes, approved by the FDA to treat Alzheimer’s disease have been developed in the past decade. The first class, acetylcholinesterase inhibitors, prevents the breakdown of a neurotrans- mitter in the brain called acetylcholine. This chemi- cal is thought to carry messages between nerve cells. The breakdown of acetylcholine can lead to disruptions in thinking and memory. These medicines were first introduced in 1993. The sec- ond class, cholinesterase inhibitors, also prevents the breakdown of acetylcholine as well as another similar chemical, butyrylcholine. This class was first approved for use in 2000.

By preventing the breakdown of these chemi- cals, these new medicines ensure that more acetyl- choline is available for memory-related and cogni- tive functioning. They also help with some behavioral problems commonly experienced by those with AD, including delusions and agitation.

Although these drugs do not stop or reverse AD, they allow people with the disease to maintain their independence for longer periods of time. These AD treatment innovations are the current standard of care among neurologists for those with mild to moderate AD.

Another medicine in recent clinical trials is the first in a new class of drugs known as NMDA (N-methyl D-aspartate) receptor antagonists. The medicine works by modulating the levels of gluta- mate, a nerve signaling agent in the brain. Too much glutamate can lead to the death of nerve cells. As the Baby Boom generation reaches its older years, the number of Americans suffering from Alzheimer’s disease is likely to increase dramati- cally, and this will have major financial and social consequences. As a result, the search for new AD treatment strategies is a high priority.

Schizophrenia is a condition that causes those who suffer from it to lose their sense of reality, be- come delusional, suffer from hallucinations, become emotionally unstable, and find it difficult to make decisions and relate to people. Little is known about the causes of schizophrenia and it has no cure, but medications are now available to treat many of the symptoms. The first medicines to treat schizophrenia were introduced in the 1950s, but these drugs often caused side effects such as muscle stiffness, tremor, and abnormal movements.

The past decade witnessed the introduction of new atypical antipsychotic medicines. These atypi- cal antipsychotic medicines work by blocking re- ceptors of the neurotransmitters dopamine and serotonin. Serotonin controls mood, emotion, sleep, and appetite and is thus implicated in the control of numerous behavioral and physiological functions, while dopamine acts on the cardiovascu- lar, renal, hormonal, and central nervous systems. These drugs appear to change the chemical balance of serotonin and dopamine in the brain. The new medications are able to control the so-called “posi- tive” symptoms of schizophrenia—symptoms and behavior that should not be there—as well as the “negative” symptoms—lack of characteristics that

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should be present—thereby allowing patients to lead more normal, independent lives.

Diabetes and Heart Disease

Diabetes is a metabolic disorder in which the body is unable to make enough of and/or properly use the hormone insulin to control blood glucose lev- els. Glucose provides the basic fuel for all cells in the body, and insulin transports glucose from the blood into the cells for storage. When glucose builds up in the blood instead of going into cells, it can cause two problems. Immediately, cells may be starved for energy, and over time, serious problems develop for many body systems. During the past decade, research breakthroughs have led to the ap- proval of new insulin products to treat Type 1 and advanced Type 2 diabetes. One closely mimics the action of human insulin by providing a slow release over a 24-hour period, with no pronounced peak. Another medicine works quickly and for a short pe- riod of time, allowing patients to take the medica- tion right before they eat a meal, instead of the 30 minutes before eating that insulin doses have traditionally required. Beginning in 1995, a string of additional treatment advances have allowed peo- ple with Type 2 diabetes to more effectively manage their condition.

Until 1995, only one category of oral medicines was available in the United States to treat patients with Type 2 diabetes. This category of drugs, the sulfonylureas (SU), was a major advance in treat- ment for Type 2 diabetes because it was the first oral medicine that could be used to treat the dis- ease. Available in the United States since 1954, SU drugs stimulate the pancreas of a patient with Type 2 diabetes to produce more insulin and remain an important part of diabetes treatment today. New SU drugs with fewer side effects have been devel- oped and are used as “monotherapy” or as part of combination therapy with other types of diabetes pills or insulin.

In 1995, one class of medicines known as biguanides was introduced in the United States after having been available in Europe for a number

of years. This class lowers blood sugar levels by pre- venting the liver from making too much glucose and by improving the sensitivity of the muscle to the body’s own insulin.

Since 1995, four totally new classes of medicines have been introduced in the United States, allowing doctors to better customize treat- ment regimens to fit their patients’ needs. Alpha- glucosidase inhibitors, controls blood sugar by slowing down the digestion of carbohydrates in the small intestine after meals. By blocking the enzyme that digests carbohydrates, the medicine keeps blood sugar levels from rising too dramatically after a diabetic eats a meal. Thiazolidinediones are designed to reduce insulin resistance. These medicines were first introduced in 1997. By mak- ing cells more sensitive to insulin, thiazolidine- diones allow insulin to move sugar from the blood into cells more effectively. The third class of Type 2 diabetes medications, meglitinides, was also intro- duced in 1997. The drugs stimulate insulin secre- tion from the pancreas, which lowers blood sugar levels. The first drug in the most recent class of new medicines for Type 2 diabetes was approved by the FDA in 2000. The class, D-phenylalanine deriva- tives, stimulates rapid, short-acting insulin secre- tion from the pancreas, effectively lowering overall blood sugar levels and blunting the increases in these levels that most people with Type 2 diabetes experience after meals.

Because these medications have different mecha- nisms of action and different side effects, combina- tion therapy can prevent patients from becoming hy- poglycemic or experiencing serious complications such as kidney problems. Experimental pharmaceu- tical treatments in development include a protein to promote increased insulin secretion when blood glu- cose levels are high, but not when they are normal; inhaled forms of insulin that do not require injec- tions; dual-acting sensitizers that increase muscle cell uptake of blood sugar and inhibit the liver’s produc- tion of blood sugar, as well as reduce blood lipid lev- els; and drugs that are designed to lessen diabetic nerve disease and complications involving small blood vessels, such as those in the eye or kidney.

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Approximately one in every four adults has high blood pressure, a condition in which the force of blood against the walls of the arteries remains too high for an extended period of time. High blood pressure is a symptomless condition, and nearly one-third of people with it do not know they have it. Fewer than 3 out of 10 people with high blood pres- sure have it adequately controlled by medication. High blood pressure can lead to stroke, blurred vi- sion or blindness, congestive heart failure, heart at- tack, kidney damage, and hardening of the arteries.

Major advances continue to be made in treating this condition. As researchers have learned more about existing drug classes—such as calcium chan- nel blockers, ACE inhibitors, alpha-blockers, beta- blockers, and diuretics—they have been able to de- velop new medicines with easier dosing schedules (such as once-daily dosing) and better side effect profiles. Researchers also have learned that com- bining multiple types of high blood pressure medi- cations can help patients.

Over the past decade, two new therapeutic classes for treating high blood pressure have been developed. The first class, introduced in 1995 and known as angiotensin-II antagonists, blocks the hormone angiotensin-II. This hormone normally causes blood vessels to narrow, but angiotensin-II antagonists cause blood vessels to dilate, resulting in decreased blood pressure. The formulation of these medicines allows patients to take them once daily and provides smooth, gradual, 24-hour blood pressure reduction.

In 2002, the FDA approved a second new class of medicines to treat high blood pressure—selective aldosterone receptor antagonists. These medicines work to block aldosterone, a hormone that helps the kidneys absorb sodium and water. If too much absorption takes place in the kidneys, blood pres- sure can increase. By blocking the hormone, selec- tive aldosterone receptor antagonists can prevent that increase in blood pressure. High blood choles- terol is a primary risk factor for coronary artery disease, the nation’s number-one killer. Nearly 100 million Americans now meet the definition of having high blood cholesterol.

Researchers have continued to develop the class of breakthrough cholesterol-lowering drugs known as statins (HMG-CoA reductase inhibitors). First introduced in the late 1980s, statins act by prevent- ing the body from manufacturing cholesterol, reducing absorption of dietary cholesterol, or re- moving cholesterol from the bloodstream. Some statins work by slowing down the liver’s produc- tion of cholesterol and increasing that organ’s abil- ity to remove low-density lipoprotein (LDL) choles- terol already in the blood. Some statins also modestly increase high-density lipoprotein (HDL), which carries cholesterol to the liver, where it can be broken down and removed from the body, and reduce other fats in the blood.

In 2002, a new class of medicines was approved by the FDA. These medicines, called cholesterol ab- sorption inhibitors, act in the small intestine, keep- ing cholesterol from ever entering the liver. This means that less cholesterol is stored in the liver, and more is removed through the blood. Because this class works differently than statins, it can be used in combination with statins, resulting in improved cholesterol levels.

New drugs are discovered, tested, and approved for marketing for numerous conditions. Often new applications of existing products are identified. Re- cently, for example, in the area of cardiovascular health clopidogrel bisulfate was found to be benefi- cial for certain heart attack victims in emergency rooms without the capability to perform angio- plasty procedures. Sometimes drugs reach the mar- ket, but use in large numbers of individuals uncov- ers serious adverse side effects such as happened for certain nonsteriodal anti-inflammatory agents. Unfortunately, the United States does not have in place an ongoing comprehensive surveillance pro- gram for population drug use.

SUMMARY

The pharmaceutical industry has contributed to improvements in the nation’s health. Yet many complex issues remain unresolved including pric- ing, testing, approval procedures and standards,

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distribution and access issues, international equity, and legal and regulatory concerns. The industry will continue to be a key part of the national health care system, but its nature and operations will likely adapt to changes in technology, demands for ac- countability, public policy issues, and many other complex factors.

REVIEW QUESTIONS

1. What is the role of the pharmaceutical indus- try in the health care system?

2. What are the regulatory and legal issues re- lated to drug and pharmaceutical develop- ment and sale?

3. What is the role of the pharmaceutical and biotechnology industry in making products available to the poor in the United States?

4. How are drugs priced in the United States, and how does it differ from drug pricing in other countries?

5. What economic benefits are derived from the use of prescription drugs and other interventions?

6. What does the pharmaceutical industry need to do to thrive in the future?

REFERENCES & ADDITIONAL READINGS

Altman, S. H., & Parks-Thomas, C. (2002). Controlling spending for prescription drugs. New England Journal of Medicine, 346(11), 855–856.

McGlynn, E. A., et al. (2003). The quality of health care delivered to adults in the United States. New England Journal of Medicine, 348(26), 2635–2645.

Rosenthal, M. B., Berndt, E. R., Donohue, J. M., Frank, R. G., & Epstein, A. M. (2002). Promotion of prescription drugs to consumers. New England Journal of Medicine, 346, 498–505.

Scherer, F. M. (2004). The pharmaceutical industry— prices and progress. New England Journal of Medicine, 351(9), 927–932.

Schweitzer, S. O. (1997). Pharmaceutical economics and policy. New York: Oxford University Press.

Topol, E. J. (2004). Failing the public health—Rofecoxib, Merck, and the FDA. New England Journal of Medicine, 351(17), 1707–1709.

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CHAPTER TOPICS

Employment Trends in the Health Care Sector

The Supply of Physicians

Osteopathy

Dentistry: A Profession in Transition

Public Health: New Roles, New Possibilities

Nursing

Pharmacists

Physician Assistants and Advanced Practice Nurses

The Changing Nature of Health Professionals

The Puzzle of Managed Care

LEARNING OBJECTIVES

Upon completing this chapter, the reader should be able to

1. Appreciate the growth and changes in the composition of the health profession workforce during the twentieth century and into the twenty-first century.

2. Understand the key role of physicians and osteopaths in the workforce, and account for the growth in physician supply.

3. Account for the various trends and changes in dentistry, public health, nursing, and pharmacy and the forces affecting these health professionals.

4. Comprehend the importance and potential of physician assistants and nurse practi- tioners in the health care system.

5. Understand the various major transitions occurring in the health care workforce, with particular emphasis on current and impending shortages.

266

CHAPTER 12

Health Care Professionals

Stephen S. Mick and Kenneth R. White

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CHAPTER 12 Health Care Professionals 267

Health care professionals play a key role in the provision of health services to meet the needs and demands of the population. This chapter highlights health care professional trends and discusses issues of provider supply, education and training, distri- bution, specialization, and the impact of recent market and regulatory changes on the health pro- fessions workforce.

EMPLOYMENT TRENDS IN THE HEALTH CARE SECTOR

At the dawn of the twenty-first century, observers now look back at the latter part of the twentieth century and are struck by the dramatic growth in the number and types of personnel employed in the health care sector. Table 12.1 shows the large gains in health sector employment in the United States over the period 1970 to 2003, starting with a pool of about 4.246 million employed persons and growing to 13.615 million. These figures include people who work in hospitals and all other health services organizations and include professional clinicians as well as those without professional training such as clerical staff, artisans, laborers, and others who have supporting roles in the delivery of health services. Although these nonclinical workers

are not discussed in this chapter, they are important because they evidence the role the health care sec- tor has played for new employment opportunities in the service-oriented economy that now charac- terizes the United States.

The health care sector has maintained a steadily increasing proportion of all persons employed, and it currently includes almost 1 in 10 persons (9.9 percent) working in the U.S. labor force. Thus, growth in employment in the health care sector between 1970 and 2003 (221 percent increase) has outpaced growth in overall employment in the economy (79 percent increase) as well as total pop- ulation growth (43 percent increase). The health sector is clearly a major engine of economic growth in the U.S. economy. This assertion is underscored by the 124 percent increase in the rate of health care personnel per 100,000 population, from 2,090 in 1970 to 4,682 in 2003 (Table 12.1). In a 33-year span, the number of people involved in health care has increased by about 2,592 workers per 100,000 population, an extraordinary reflec- tion of the central place health and health care have in the lives of Americans.

At least as extraordinary as the increased supply of health care personnel has been the emergence of a wide variety of new categories of personnel, including physicians’ assistants (PAs), nurse practi- tioners (NPs), dental hygienists, laboratory techni- cians, nursing aids, orderlies, attendants, home

Table 12.1. TThhee HHeeaalltthh SSeeccttoorr aass aa PPrrooppoorrttiioonn ooff AAllll EEmmppllooyyeedd PPeerrssoonnss,, 11997700,, 11998800,, 11999900,, 22000000,, 22000033

11997700 11998800 11999900 22000000 22000033

Employment in health sector (thousands) 4,246 7,339 9,447 11,597 13,615 Total number of persons employed (thousands) 76,805 99,303 117,914 136,891 137,736 Health sector as a proportion of all occupations 5.5% 7.4% 8.0% 8.5% 9.9% Total resident U.S. population (millions) 203.2 226.5 248.7 281.4 290.8 Number of health personnel per 100,000 population 2,090 3,240 3,799 4,121 4,682

SOURCE: From Health, United States, 2004, with Chartbook on Trends in the Health of Americans, National Center for Health Statistics, 2004, Hyattsville, MD: U.S. Government Printing Office.

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health aids, occupational and physical therapists, medical records technicians, X-ray technicians, di- etitians and nutritionists, social workers, and the like. The Department of Labor recognizes about 400 different job titles in the health sector. Some of the most rapid growth in the supply of health care personnel has occurred in these recently developed categories.

The traditional health care occupations of physi- cian, dentist, and pharmacist have generally expe- rienced declines, some dramatic, in their relative proportion of all health care personnel. For exam- ple, physicians (including osteopaths) constituted 30 percent of all persons in health occupations as the decade of the 1920s began, but had declined to 8.0 percent by 2000. Over the same period, den- tists declined from 8 to 1.9 percent, and pharma- cists 11 to 2.3 percent. Registered nurses have fluc- tuated up, then down, during this 80-year period: about 20 percent in 1920 to a high of 36 percent in 1940, then a steady decline to 23.4 percent in 2000. The group of health care workers that has gained the largest share of the overall number in- cludes allied health technicians, technologists, aides, and assistants: They composed a mere 1 to 2 percent in 1920, but in 2000, they made up over 54 percent. These figures should not mask the fact that all groups of health care personnel have in- creased in absolute number from year to year as inspection of any of the tables of this chapter will show. What the data emphasize is the higher rate of growth of nontraditional allied health and support personnel, who now constitute the majority of all personnel employed in the health care sector.

The primary reasons for the increased supply and wide variety of health care personnel into the twenty-first century are the interrelated forces of technological growth, specialization, health insur- ance coverage, the aging of the population, the emergence of the hospital and hospital systems and their associated ambulatory clinics as the central in- stitution of the health care system, and the large array of posthospitalization treatment venues that include nursing homes, rehabilitation facilities, hos- pices, and home health organizations. The hospital

has become the setting where new technology can be used and where medical, nursing, and other health professional students can be educated. The technological revolution has led to diagnostic and treatment procedures that, in turn, have led to an increased use of hospitals, with a corresponding concentration of health personnel. The rise of pri- vate health insurance in the 1940s, plus enactment of the publicly funded insurance systems in the mid-1960s (Medicare and Medicaid), fueled hospi- tal growth because reliable payment mechanisms provided hospitals with assured revenues. These funding sources, intersecting with the ineluctable aging of the population, have given rise to an ex- tensive network of care options for the elderly, all leading to increasing demand for such personnel as home health aides and inhalation or respiratory therapists as well as nursing personnel.

Technological innovation has also led to in- creased specialization of health care personnel, pri- marily during the last 40 years. This specialization has resulted in new categories of health care providers within the traditional professions [e.g., pediatric nephrologists and gastroenterologists in medicine, periodontists in dentistry, intensive care unit (ICU) specialists in nursing]. Notable among new medical specialists are hospitalists—physicians who work solely or mostly in hospitals—and intensivists—physicians who work solely or mostly in hospital intensive care units. In 2005, hospital- ists numbered about 15,000, and their roles were focused on improving patient quality and safety, increasing patient flow, and affording convenience and support for community physicians (Society of Hospital Medicine, 2005). There has also been the advent of new types of allied health professions (e.g., occupational and radiological technicians and speech pathologists).

Health care personnel will be discussed in greater detail by focusing on five of the more traditional groups of professions—physicians and osteopaths, dentists, public health professionals, nurses, pharmacists—and two of the more re- cently developed categories of personnel—PAs and NPs.

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CHAPTER 12 Health Care Professionals 269

THE SUPPLY OF PHYSICIANS

From a Surplus to a Shortage?

The number of physicians in the United States has increased rapidly in the last four decades, with an estimated 845,684 active nonfederal physicians, in- cluding osteopaths (described more fully in a later section), practicing in 2005 (Figure 12.1). Between 1965 and 2005, there was a 218 percent increase in the supply of active physicians, resulting in an average of approximately 285 physicians per 100,000 population. Over the same period, the physician to 100,000 population ratio increased by 105 percent. In 1980, the Graduate Medical Edu- cation National Advisory Committee (GMENAC) reported to the Secretary of the U.S. Department of Health and Human Services that there would be a surplus of physicians of 70,000 in 1990, and roughly 140,000 in 2000, underscoring the belief that the nation could substantially reduce its subsi- dization of medical education (Graduate Medical Education National Advisory Committee, 1980). In

1999, the Council on Graduate Medical Education (COGME), an advisory group to the federal gov- ernment, noted that despite the warning of a sur- plus made 20 years previously, only limited progress had been made in reducing the growth of the U.S. physician supply (Council on Graduate Medical Education, 1999).

But, by the early 2000s, some observers were raising the spectre of a physician shortage, espe- cially among some specialty groups (Cooper et al., 2002). Figure 12.1 shows that for the first time since at least 1965, between 2000 and 2005, there was a slight decrease in the ratio of physicians per 100,000 civilian population (288 to 285), which draws attention to this new concern. How could the fears of a surplus change so quickly into fears of a shortage? The answer to this question is complex. Although part of the response lies in the way that differing methodologies and assumptions yield varying physician requirement and supply projec- tions, the more pertinent answer lies in the cross- cutting forces that have affected the U.S. health care system in the last several decades.

First, although managed care remains a formidable force in the organization and delivery of

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Figure 12.1. TToottaall NNuummbbeerr ooff NNoonnffeeddeerraall PPhhyyssiicciiaannss aanndd NNuummbbeerr ooff PPhhyyssiicciiaannss ppeerr 110000,,000000 CCiivviilliiaann PPooppuullaattiioonn,, 11996655––22000055

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health care, its more restrictive elements have been blunted due to widespread physician and patient dissatisfaction, particularly with limits on choice. Medicine’s distaste of tightly controlled reimburse- ment and of nonphysicians’ attempts to control their work fueled much of this backlash (Lesser, Ginsburg, & Devers, 2003). The outcome of this has been a movement away from capitated insur- ance arrangements back to coverage that more closely resembles fee-for-service plans, especially preferred provider organizations (Mick, 2004). The move away from more efficient forms of organized medical practice commonly means that more physi- cians will be necessary to deliver the same level of care (Weiner, 2004). Physicians and patients seem to prefer choice to efficiency, which will add pres- sure for more physicians and is the first of several possible factors fueling fears of a new shortage.

Second, in the early 2000s, a historic first was reached in U.S. medical schools. The proportion of first-year students who were women basically reached parity with men: The entering class of medical students in 2004–2005 was 49.5 percent female; the proportion of all medical students who were women was 48.6 percent. Aside from the social and economic features of this remark- able change (two decades before in 1983–1984, the total proportion of women enrolled was just 30.7 percent), the impact on physician supply is generally thought to be one that will require some- what more physicians to do the same work previ- ously done predominately by men (Dedobbeleer, Contandriopoulous, & Desjardins, 1995; Carr et al., 1998; Pearse, Haffner, & Primack, 2001). The reasons for this are clear: Women still do a majority of the tasks surrounding the raising of children and maintaining a home, leaving less time available for practice. Taken together this important demographic shift within the workforce may produce more pressure for more rather than fewer physicians.

Third, physician preferences now favor a more “controllable lifestyle.” This factor stems in part from the increasing number of women in the workforce, but it affects men as well. Generally, younger physi-

cians seek a different lifestyle that allows for week- ends off, limits on the number of hours worked per week, and other amenities that allow for activities outside the workplace. Taken together, these prefer- ences have had and will probably continue to have the effect of reducing the amount of time available for patient care (Dorsey, Jarjoura, & Rutecki, 2003).

Fourth, on the demand side, there has been un- usual growth of the U.S. population fueled in large measure by immigration. Since the mid-twentieth century, immigration has dramatically increased so that almost one-third of U.S. population growth in the decade 1990–1999 was due to net legal mi- gration (Philip & Midgley, 2006). The present pop- ulation of the United States of roughly 297 million is expected to increase to slightly over 400 million by 2050. In the presence of this population pres- sure, the need for more physicians will inevitably increase.

Fifth, within the general increase in the U.S. pop- ulation, there exists the ever-increasing lifespan of Americans, with their attendant levels of chronic conditions. In 2000, 12.4 percent of the U.S. pop- ulation was 65 years of age or older; in 2050, the figure is projected to be 20.6 percent (U.S. Census Bureau, 2007). This change will produce a steadily increasing demand for physician services and a consequent increase in the need for physicians.

On the other hand, there are those who argue that before any effort is made to increase the supply of physicians, consideration should be given to sev- eral key problems with the way medical care has been and currently is delivered. The first argument in favor of caution derives from the apparent abandon- ment of efforts to extract more efficiency from the physicians we already have through innovative deliv- ery arrangements and combinations of different lev- els of providers. This is the obverse of the point al- ready made about the decline of managed care.

A second factor revolves around the use of physi- cian substitutes or “extenders” in health care delivery. If, for example, nurse practitioners and physician as- sistants, among others, were increasingly used to provide primary care, there would be less pressure to increase physician supply. The rate of increase of

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these so-called “midlevel” practitioners has been very high since the 1990s, and their ability to de- liver a large proportion of primary care services is no longer argued (Cooper, Laud, & Dietrich, 1998; Cooper, 2001). The extent to which these clinicians continue to grow in number, and are more widely used, will have a restraining influence on how many more physicians need to be trained.

The third argument stems from decades of analysis—called Small Area Variation Analysis— that has documented wide variation in the use of physician services without any obvious connection to levels of health of patients and populations (Wennberg, 2004). These findings raise the ques- tion of why there should be more physicians if areas with high levels of physicians—particularly specialists—have health outcomes that are no bet- ter than those in areas with low levels of physicians (Goodman, 2005). This lack of evidence about whether present levels of physician supply are opti- mal leads to the worry about how projections of future supply based on current patterns can be justified. Thus, without a clear demonstration that increasing physician supply will have a positive im- pact on health outcomes, this position is skeptical of calls to add 3,000 more physicians in residency training programs and to increase medical school enrollment by 15 percent over the next decade (Council on Graduate Medical Education, 2005).

A fourth, and related, point is the relatively new movement by payers and insurers toward a “pay for performance” reimbursement approach, particularly for office-based practice. The essence of these pay- ment schemes is to reduce unnecessary diagnostic and procedural work, to tie clinical processes to out- comes, and to emphasize evidence-based medicine. Much of the variation in physician work is skewed toward more rather than less work, and thus, any re- duction in variation will probably reduce work. If this is true, the aggregate amount of work necessary for a given population of patients will experience a dampening effect, which, in turn, could add pres- sure for fewer rather than for more physicians.

It is difficult to determine what the net effect of forces favoring and disfavoring growth in the physi-

cian supply will be. However, the focus of debate has now shifted from a putative surplus to a possi- ble shortage. Advocates and analysts on either side of the question are pressing hard for policy re- sponses, and over the next several years, a clearer picture will emerge about the issue.

International Medical Graduates

The issue of an appropriate supply of physicians is complicated because of the fact that there exist two distinct avenues to becoming a practicing physician in the United States. The first is the domestic track consisting of persons who are U.S. citizens and who are trained in U.S. medical schools. The sec- ond track consists of persons who are foreign- trained physicians known as international medical graduates (IMGs).

As for U.S. medical graduates, Table 12.2 shows the substantial increase in both the number of med- ical schools and the number of medical students (first year and total enrolled) between the period 1965 and the early 1980s. By 1980–1981, the yearly number of graduates had more than doubled the 1965–1966 number. This increase can be di- rectly attributed to massive federal outlays for train- ing, research, and construction in the 1960s and 1970s. By the early 1970s, 40 to 50 percent of medical school support came from federal sources.

However, the retreat of the federal government from an active role in the financial support of medi- cal education was initiated in the early 1980s as a result of pressures to reduce federal spending, of the perception that there was an adequate supply of physicians in the United States, and of a conserva- tive administrative ideology regarding federal inter- vention in medical education. The effect of this is seen in Table 12.2: From the early 1980s to the present time, the number of first-year medical stu- dents, total medical students, medical school gradu- ates, and medical schools has been constant. By the early 1990s, the federal government provided about 20 to 25 percent of medical school financial sup- port through direct subsidies and research, down from about 44 percent in 1970. The extraordinary

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leveling off of U.S. medical school production is an important ingredient in the current debate about a possible impending shortage.

The second important factor in the supply of physicians has been the influx of IMGs into the United States. In 2005, 204,369, or 24 percent, of the total active nonfederal physician population of 845,684 physicians were IMGs. The inflow of IMGs began after World War II when the U.S. Congress passed legislation that made it relatively easy for professionals from foreign countries to come to this country to obtain advanced graduate training. This effort was in response to the need for skilled personnel in many developing countries and of other countries’ rebuilding after the war’s de- struction to educate a new cadre of professional personnel. It was also an attempt to inculcate the values of democracy into a new generation of young professionals who were also offered ad- vanced education in the then communist Bloc

counties where they were exposed to communist ideological positions.

By the mid-1960s, favorable immigration poli- cies for physicians had encouraged this movement; there was, in addition, an unceasing demand for in- terns and residents in U.S. hospitals as measured by the existence each year of unfilled house officer positions. By the early 1970s, IMGs accounted for more than 40 percent of new physician licentiates, 30 percent of filled residency positions, and 20 per- cent of the active physicians in the United States. One-third of the growth in physician supply in the 1970s was due to increases in the number of physi- cians trained outside the United States.

After a period of decline in the number of IMGs filling residency positions during the 1980s, their numbers steadily increased in the 1990s, hitting the mid-20,000s by 1995 and remaining at that level until the present time; in 2005, there were 26,720 IMGs in residency positions of all types.

272 PART FOUR Nonfinancial Resources for Health Care

Table 12.2. NNuummbbeerr ooff AAllllooppaatthhiicc MMeeddiiccaall SScchhoooollss,, AApppplliiccaannttss,, SSttuuddeennttss,, GGrraadduuaatteess,, aanndd RRaattiioo ooff FFiirrsstt--YYeeaarr SSttuuddeennttss ttoo AApppplliiccaannttss:: SSeelleecctteedd AAccaaddeemmiicc YYeeaarrss 11996655––11996666 tthhrroouugghh 22000044––22000055

RRaattiioo ooff NNuummbbeerr ooff SSttuuddeennttss FFiirrsstt--YYee aa rr

AA cc aa dd ee mm ii cc NNuummbbeerr ooff NNuummbbeerr ooff FFiirrsstt NNuummbbeerr ooff SSttuuddeennttss ttoo YYee aa rr SS cc hh oo oo ll ss AApppplliiccaannttss TToottaall YYee aa rr GGrraadduuaatteess AApppplliiccaannttss

1965–1966 88 18,703 32,835 8,759 7,574 1:2.4 1970–1971 103 24,987 40,487 11,348 8,974 1:2.2 1975–1976 114 42,303 56,244 15,351 13,561 1:2.8 1980–1981 126 36,100 65,497 17,204 15,667 1:2.0 1985–1986 127 32,893 66,604 16,929 16,125 1:1.9 1990–1991 126 29,243 64,986 16,803 15,481 1:1.7 1995–1996 125 46,591 66,906 17,024 16,029 1:2.7 1999–2000 125 38,529 66,550 16,856 15,830 1:2.3 2004–2005 125 35,735 67,296 17,109 16,066 1:2.1

SOURCES: Adapted from the following: “Undergraduate Medical Education,” 1980, Journal of the American Medical Association 243, pp. 849–866; “Educational Programs in U.S. Medical Schools,” by H. Jonas, S. Etzel, & B. Barzansky, 1991, Journal of the American Medical Association, 226, pp. 913–923; “Educational Programs in U.S. Medical Schools, 1995–1996,” by B. Barzansky, H. Jonas, & S. Etzel, 1996, Journal of the American Medical Association, 276, pp. 714–719; “Educational Programs in U.S. Medical Schools, 1999–2000,” by B. Barzansky, H. Jonas, & S. Etzel, 2000, Journal of the American Medical Association, 284, pp. 1114–1120; “Educational Programs in U.S. Medical Schools, 2004–2005,” by B. Barzansky, & S. Etzel, 2005, Journal of the American Medical Association, 294, pp. 1068–1074.

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The question is, How can it be that so many IMGs entered U.S. medicine when there was a sup- posed “surplus” of physicians as announced by the Graduate Medical Education National Advisory Committee (GMENAC) in 1980 and reaffirmed by the important federal advisory group, the Council on Graduate Medical Education (COGME), in its various reports from the late 1980s to the late 1990s (Council on Graduate Medical Education, 1999)? Although there is no clear and proven answer to this question, there are a number of probable reasons. First, although the United States may have had a sur- plus of physicians, that is, more physicians than there were requirements for their services, they have continued to be distributed too often in nonprimary care specialties; in urban and suburban locations and insufficiently in rural and inner city locations; in practice settings that are desirable, for example, group practices, well-established HMOs, and the like, and not in less desirable settings, for example, public hospitals, state mental hospitals, prison health services. Thus, IMGs who have entered the U.S. health care system “fill gaps” to some extent, fre- quently practicing in specialties, geographic loca- tions, and employment settings avoided by U.S. medical graduates (Mick, Lee, & Wodchis, 2000). This rationale remains true today.

A second reason for the large IMG presence in the United States has been that teaching hospitals, that is, those in which physicians, nurses, and most other health professionals are trained, have enjoyed relatively generous funding via the Medicare pro- gram to underwrite the costs of graduate medical education (Council on Graduate Medical Educa- tion, 1995a). The result has been that many more residency positions exist than there are U.S. medical graduates to fill them. This acts as a sort of “suction” or “pull” factor to bring IMGs to the United States. Often, these hospitals serve large numbers of per- sons who are poor or without health insurance, or both, as well as those on Medicaid. Estimates of the number of hospitals that are “dependent” on IMG residents and that serve the poor vary between 77 and 276, many concentrated in New York, Texas, New Jersey, Michigan, and Illinois (Whitcomb &

Miller, 1995). However, the number of hospitals falling into this category is probably greater than these figures because the authors used conservative criteria to determine “IMG dependence.”

A third reason for the IMG presence has been brought on by the increased market penetration of managed-care plans in urban areas. Notwithstanding the decline in the power of managed-care plans in the late 1990s and early 2000s, it remains true that these plans are generally not linked to teaching hospitals and therefore do not train residents or any other health professionals. Nor do they incur the costs of research, as do the teaching hospitals. Managed-care plans can therefore charge lower premiums and offer lower cost services to employers and other groups anxious to cut their rising health care costs. Teaching hospitals, in order to compete, have searched for lower cost substitutes, and residents—often IMGs— may actually provide a lower cost substitute than skilled nurse, NP, or PA services because the latter work fixed hours per week and are generally paid higher overtime rates. A resident works longer hours, is paid a fixed salary, and is a physician. Thus, as managed care has spread in urban markets where IMG residents are traditionally located, there has been more pressure on teaching hospitals to increase the residency complement.

Other factors have undoubtedly played a role in the increase of IMGs. Because of the concern of many in the medical community and groups such as the Institute of Medicine (1996) and others such as the Pew Health Professions Commission (2005), there have been calls for limits on IMG immigration. But, no such action was ever taken, and in view of the arguments of some that there may be a new shortage of physicians, enacting policies to restrict the inflow of IMGs is not likely to happen. Still, the IMG “issue” continues to generate controversy.

The United States has never had a coordinated physician personnel policy as has, for example, France or Canada; in particular, undergraduate and graduate medical education systems have operated largely independently of each other. Thus, past and future policies of increasing the number of U.S. medical schools and U.S. medical graduates have

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not been and do not appear to be closely connected to the graduate medical training system. One result of this has been that students graduating from U.S. medical schools have filled a smaller proportion of available residencies positions, often leaving—as noted earlier—the less desirable positions (Mick & Worobey, 1984; Mick, 1992; Mick, Lee, & Wodchis, 2000). IMGs have had a key role in the provision of medical services in the United States for over a half- century, and there is no evidence that this situation will change.

Trends in Specialty Distribution

Simply increasing physician supply has not guaran- teed that necessary medical services would readily be available to the general population. Of particu- lar interest is the availability of primary care—the portal of entry into the health care system where basic medical services are provided. Primary care includes the diagnosis and treatment of common illness and disease, preventive services, home care services, and uncomplicated minor surgery and emergency care.

The increased supply of physicians has also wit- nessed some change in the proportion of physicians in primary care specialties—general practice, family practice, general internal medicine, and general pe- diatrics (Table 12.3). There has been substantial growth in primary care specialties both in absolute

numbers and in percent: From 1980 to 2002, the number of primary care physicians has grown to nearly 300,000, an increase of 87 percent. Only growth in the broad category of medical specialties has been greater over this period, reaching to more than 120 percent. On the other hand, the percent- age of physicians in any given year who are in pri- mary care has remained fairly constant, with about 38.5 percent of all physicians in these specialties in 1980 and 41.6 percent in 2002. The sources of growth, however measured, in primary care special- ties have, interestingly, come disproportionately from IMGs and women. Whereas IMGs constituted 18 percent of all primary care physicians in 1980, they were 29.2 percent of this specialty group by 2003. As for women, they were a mere 13.1 percent of primary care physicians in 1980, but by 2002, they constituted 33.5 percent of the total.

The importance of the concern about whether the nation is producing enough primary care spe- cialists relates to a number of contemporary issues. The rational management of patients with “undif- ferentiated symptoms,” the navigator for the patient through the myriad services available for even the most mundane condition, the least expensive of all specialty services enabling it to be more accessible to the poor and low income portions of the popula- tion, and the capacity of primary care to help reduce health disparities, all combine to make the ade- quate supply of primary care physicians of critical

274 PART FOUR Nonfinancial Resources for Health Care

Table 12.3. NNuummbbeerr ooff AAccttiivvee PPhhyyssiicciiaannss ((MMDDss)) aanndd PPeerrcceennttaaggee DDiissttrriibbuuttiioonn bbyy SSppeecciiaallttyy GGrroouuppss:: SSeelleecctteedd YYeeaarrss,, 11998800,, 11999900,, 22000000,, 22000022

11998800 11999900 22000000 22000022 PP ee rrcceenntt CChhaannggee SSppeecciiaallttyy NNuummbbeerr PP ee rrcceenntt NNuummbbeerr PP ee rrcceenntt NNuummbbeerr PP ee rrcceenntt NNuummbbeerr PP ee rrcceenntt 11998800––22000022

All specialties 435,264 100.0 559,988 100.0 737,504 100.0 768,498 100.0 76.6 Primary care specialtiesa 170,705 39.2 213,514 38.1 274,653 37.2 286,294 37.3 67.7 Medical specialties 25,328 5.8 41,958 7.5 54,877 7.4 57,579 7.5 127.3 Surgical specialties 72,050 16.6 90,052 16.1 101,629 13.8 104,871 13.6 45.6 All other specialties 167,181 38.4 214,464 38.3 306,345 41.5 319,754 41.6 91.3 aIncludes general practice, family practice, general internal medicine, general pediatrics, and obstetrics/gynecology.

SOURCE: From Physician Characteristics and Distribution in the U.S., 2004, 2004, Table 4.1, p. 289, Table 5.2, p. 323, Chicago: Department of Physician Practice and Communications Information, Division of Survey and Data Resources.

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CHAPTER 12 Health Care Professionals 275

importance (Ferrer, Hambridge, & Maly, 2005). Fur- thermore, there is some evidence that a higher con- centration of primary care providers is correlated with a higher level of health (Starfield & Shi, 2005). If the relationship holds up after more careful scrutiny, there will be a powerful argument for either more growth than there has already been in primary care physicians or a more even distribution between specialists and primary care physicians, or both.

In the 1990s, observers of the managed-care phenomenon noted that high market penetration of such plans was producing change in the specialty composition of physicians in these markets. As managed-care plans used more primary care “gatekeeper” physicians to care for patients and to make referrals to specialists, the demand for the for- mer grew and the latter decreased (Seifer, Troupin, & Rubenfeld, 1996). However, since that time, as managed-care plans have reduced their more strin- gent controls on physician and enrollee behavior and have opened up direct access to specialty care, the growth in primary care practice appears to have been dampened. Whereas the period 1990–2000 showed a 35.3 percent increase in primary care physicians, the early part of the 2000s experienced a more modest rate of growth of 5.6 percent. It is possible, however, that having two out of five U.S.

physicians in primary care is a sufficient level, and the country may be nearing a balance between pri- mary care physicians and other more specialized medical areas, although there is, and will continue to be, debate about the most desirable mix of these two broad groupings (Whitcomb, 1995).

Geographic Distribution of Physicians

One of the assumptions underlying federal health personnel policy in the 1960s and early 1970s was that a significant increase in the overall supply of physicians would both resolve the problem of a serious shortage and improve the geographic distri- bution of physicians. It is true that in some rural areas, there has been an increase in the physician- population ratio, but for most rural areas in the United States, there has been only minor improve- ment: Rural places with no nearby city still have fewer than 100 physicians per 100,000 population whereas large and small cities have over or near three times this ratio, respectively. Figure 12.2 displays the discrepancies in physician to 100,000 population over the period 1940 through 2000: Nonmetro places of 2,500 to 19,000 inhabitants have experi- enced only a slight increase in the availability of

1940 1950 1960 1970 1980 1990 2000

Year

100

150

200

250

300

350

P h

ys ic

ia n

s p

er 1

00 ,0

00 P

op u

la ti

Metro ≥1,000,000

Nonmetro ≥20,000 Nonmetro 2,500 –19,999

Nonmetro <2,500

Metro <1,000,000

Figure 12.2. PPhhyyssiicciiaannss ppeerr 110000,,000000 PPooppuullaattiioonn ffoorr MMeettrroo aanndd NNoonnmmeettrroo PPllaacceess,, 11994400––22000000 SOURCE: Bureau of Health Professions, Health Resources and Services Administration, Area Resource File, 2004 Release.

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physicians; nonmetro places of less than 2,500 have actually experienced no improvement in physician availability in 60 years! Furthermore, the disparity between the relative distribution of physicians in urban versus rural localities has increased dramati- cally from 1970 to 2000: The difference between the ratios of physicians to population in the most urban and rural locations has nearly doubled (Ricketts, 2005). Thus, although there is now debate between adherents of the surplus and shortage hypotheses, there is very little debate about the persistent chronic shortages in rural America, although some argue that actual access by rural dwellers to physician ser- vices is not as poor as it may seem because there may be overuse of physician services—particularly spe- cialist care—in urban areas by both urban and rural dwellers (Reschovsky & Staiti, 2005). Thus, compar- ing rural use levels with urban use levels may exag- gerate urban-rural differences.

Nevertheless, there has been extensive study of the reasons physicians have been reluctant to lo- cate in rural areas. They include a lack of adequate medical facilities, professional isolation, limited support services, inadequate organizational set- tings including lack of group practices, excessive workloads and time demands, limits on earnings, lack of social, cultural, and educational opportuni- ties, and spouse’s influence (Gordon, Meister, & Hughes, 1992). Efforts to improve the distribution of physicians have tried to address some of these factors.

Federal efforts to improve the distribution of physicians have included loan forgiveness, the National Health Service Corps, Area Health Educa- tion Centers (AHECs), and extensive support for the development of family practice training pro- grams, among others (Ricketts, 1994). These programs have experienced a number of difficulties over the past 20 years: Many were severely cut back during the Reagan era and were only partially re- funded during the Clinton administration. At the present time, given other budget priorities, there is always danger that these programs will be reduced or eliminated, although a hallmark of the Bush ad- ministration has been support for rural health clin-

ics and critical access hospitals, institutions that can attract physicians to rural communities.

At the state level, there have been efforts to im- prove physician distribution through the authority of Offices of Rural Health in most states. State-level policy has been aimed at increasing the recruitment and retention of health care providers in rural areas as well as cooperative ventures of consortia of states to decentralize medical education programs and coordinate placement of graduates.

Despite the variety of approaches to alter the urban/rural location of physicians, unequal distribu- tion persists. Market forces have altered distribution to some degree, but many rural communities still find it difficult to recruit and retain physicians. The same is true for inner-city locations. Often those locales with the greatest need continue to have the biggest problems attracting physicians. As mentioned earlier, national bodies like the Institute of Medicine (1996) have called for a cutback in IMGs. However, without specific programs aimed at increasing the number of physicians in underserved areas, it is difficult to see how a reduction in the overall number of physicians can do anything but worsen the historic problem of physician maldistribution.

Developing policies to alter physician distribu- tion has therefore turned out to be a difficult under- taking. The limited impact of previous attempts suggests that broader policy options should be con- sidered. The possibilities include changing reim- bursement systems to provide a financial reward for physicians practicing in underserved areas. An- other remedy might be to modify the admissions policies of medical schools even more than has been done in order to place more emphasis on applicants interested in primary care practice. Or, undergraduate and graduate medical education systems could be changed to ensure that the cur- riculum, counseling, clinical setting, and role mod- els presented are better related to health needs of the underserved. A revitalized and expanded National Health Service Corps might be one of the best short-term solutions to the distribution prob- lem. Whatever steps are taken, a balance must be found between changing the size and composition

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of the physician workforce so that goals of improv- ing physician distribution are not forgotten.

Women and Minorities in Medicine

Another important issue in the system of medical ed- ucation concerns women and minority students. Concerted efforts to increase their enrollment have borne fruit, as noted earlier: Women in medical school are almost half of the total. A more modest, but significant, increase in minority students has been registered: From 1970–1971 to 1999–2000, the percentage of minority students in allopathic medical schools increased from about 9 percent to nearly 35 percent of all first-year students. The great- est increase in minority students has been among Asian Americans, Native Americans, Hispanic Amer- icans, and African Americans, in that order. For ex- ample, although African Americans increased their number by 91 percent over the period 1970–2000, Asian Americans increased more than 16-fold. The presence of minority physicians is extremely impor- tant because it has been shown that minority patients are four times more likely to receive care from minor- ity physicians than nonminority ones. Low-income patients, Medicaid recipients, and uninsured patients were also more likely to receive care from nonminor- ity physicians (Moy & Bartman, 1995).

Conclusion

In summary, throughout the latter half of the twen- tieth century and into the early twenty-first century, there has been enormous growth in the number of physicians as well as in the number of physicians per population. The latter ratio has, however, leveled off since the new millennium, raising questions among some observers whether a “new” shortage of physicians may be in the offing. There has also been increasing growth among primary care physicians, and women, and IMGs have con- tributed disproportionately to this phenomenon. Despite the growth collectively, there continue to be disparities in the availability of physicians

between rural and urban areas. These issues, joined to the debate engendered by the presence of IMGs in U.S. residencies, promise to keep the fundamen- tal problems of the training and deployment of the physician workforce a number-one policy issue in the early twenty-first century.

OSTEOPATHY

Often neglected in discussions of medical person- nel is the small but significant number of os- teopaths in the United States. Osteopathy differs from allopathic medicine in that osteopaths tradi- tionally emphasize treatments that involve correc- tions of the position of joints or tissues and they stress diet or environment as factors that might de- stroy natural resistance. Allopathic medicine views the physician as an active interventionist attempt- ing to neutralize effects of disease by using treat- ments that produce a counteracting effect. Despite these differences, osteopaths are licensed to prac- tice medicine and perform surgery in all states and are eligible for graduate medical education in either osteopathic or allopathic residencies. In fact, there were 5,675 osteopaths in accredited allopathic residency programs in 2004–2005. Finally, both Medicare and Medicaid, the two major federal financing programs, reimburse osteopaths.

The growth in osteopaths has been great, but this is partially due to the small base number to begin with: In 1970, there were only 12,000 osteopaths; in 2005, there were 50,532, an increase of about 321 percent. The ratio of os- teopaths to population was 17 to 100,000. How- ever, this figure is deceptive because osteopaths are unevenly distributed around the country. More than one-half (51.6 percent) of all osteopaths were located in just seven states: Pennsylvania, Michigan, Ohio, New York, Florida, Texas, and New Jersey, in descending order. Hence, in states like these, osteopaths make a contribution to health care disproportionate to their overall number. Finally,

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historically, osteopaths have been more likely to locate in rural areas than allopathic physicians.

There are now 20 schools of osteopathy, up from 15 schools in the early 1990s. The states with the largest number of osteopaths are also those with schools of osteopathy. From 1975–1976 to 1999–2000, there was an increase in first-year class size of 174 percent. There has been an increasing proportion of first-year female students (14 per- cent to 47 percent, from 1975–1976 through 2003–2004) as well as an increase in minority first-year students (5 percent to 27 percent over the same period). Since 1987, there have been more os- teopaths in allopathic residency programs than in osteopathic programs, underlining the narrow dif- ference between the two groups. Of those os- teopaths training in allopathic residencies, about 48 percent select one of the primary care specialties (family medicine, general internal medicine, general pediatrics), whereas only 31 percent of allopathic residents in training were in a primary care area. In 2003, whereas about 40 percent of all allopathic physicians were in primary care specialties, 49 per- cent of all practicing osteopaths were so engaged. Combining these facts with osteopaths’ location in specific states with a tendency to locate in rural areas underscores their importance to health care delivery of primary care medicine.

In short, osteopathic medicine is a small, but important form of medical practice that shares the burden of care with allopathic physicians. It has ex- perienced the same changes, for example, increas- ing proportion of women and minorities, increas- ing number of applicants, as its larger cousin has undergone.

DENTISTRY: A PROFESSION IN TRANSITION

In 2000, there were approximately 168,000 active dentists practicing in the United States. The supply of dentists has slowly increased since the 1970s,

as has the ratio of active dentists to population: In 1975 the ratio was 51.6 per 100,000 popula- tion and in 1990, 58.7 per 100,000. In 2000, the ratio was 60.6 per 100,000, which indicates a rate just barely exceeding general population growth (Table 12.4). As in medicine, the earlier increases that occurred can be attributed to federal legisla- tion passed in the early 1960s and early 1970s that directly attempted to remedy the perceived short- age. This legislation resulted in increases in the number of dental schools from 47 to 60 in the pe- riod 1960 to 1980, and an increase in the number of first-year dental students from 3,600 to more than 6,000 in the same period (Table 12.5). How- ever, since 1980, the total number of dental schools and the first-year class dropped to 55 and 4,327, respectively, by 2000–2001.

Some of the recent trends that are descriptive of medical schools are also descriptive of dental schools. The percentage of female first-year students has soared from a mere 2 percent in 1970–1971 to 39.8 percent in 2000–2001 (Table 12.5). The proportion of underrepresented minority students has also increased dramatically, from 3 percent in 1970–1971 to 10.8 percent in 2000–2001. Dental schools have started to deemphasize their support from federal sources and have increased their state support, dental clinic revenues, and fees from tuition. Also, as with medicine, there was a sizable decrease in the number of applicants to dental school in the 1980s, although the decline started earlier and was steeper for dentistry. Since 1975, when dental school applications peaked at 15,734, there was a steady decline until 1990 when 5,123 persons applied, or one new entrant per 1.3 appli- cants. Since then applications have increased so that for the 2000–2001 academic year, 7,772 persons applied for dental school, or 1 new entrant per 1.8 applicants.

Unlike their physician counterparts, dentists typ- ically work in solo or small group private practices. However, current economic pressures on the dental profession have initiated changes in the delivery of dental services. Since the 1980s, a variety of nontra- ditional practice settings have emerged for dentists,

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including HMOs and retail locations in malls, stores, and plazas. Although only a small propor- tion of dental services is provided in these settings and the number of active private practitioners is ex- pected to grow (Brown & Lazar, 1999), this orga- nizational innovation is an indication of the more competitive environment dentistry is facing in the early 2000s.

The vast majority of dentists are in general prac- tice. Only about one-seventh of all dentists are specialists, and the proportion of specialists has re- mained stable in recent years. Orthodontists com- prise roughly one-third of all dental specialists, with oral surgeons totaling almost another one- fourth of the specialist population.

There is significant variation in the distribution of dentists across the regions of the United States and metropolitan versus nonmetropolitan areas. This variation is caused by the same factors that have led to physician maldistribution, as well as by the lack of reciprocity in the licensing of dentists across states. Those portions of the country that are the most rural have the lowest dentist/population

ratios; for example, in 1999, an urban state like Massachusetts had 81.2 dentists per 100,000 pop- ulation, whereas a rural state such as Alabama had 43.5 per 100,000. In 2002, there were 2,041 federally designated dental shortage areas in the United States, more than half of which were located in nonmetropolitan areas (Ricketts, 2005).

In addition to the traditional maldistribution of dentists, there is concern that there may be a grow- ing gap between the availability of dentists and the need for their services, especially since the financ- ing of dental services is on a much smaller scale than that for physician services. Currently, less than one-half of the U.S. population has dental insur- ance, and federal funds pay for less than 2 percent of all dental care (Health Personnel in the United States, 1993). Other factors contributing to the gap include the following:

1. Whereas fluoridation of water has reduced the number of dental caries and fillings need- ing replacement, about 75 percent of dental caries in children are concentrated in about

Table 12.4. TToottaall aanndd AAccttiivvee DDeennttiissttss aanndd DDeennttiisstt//PPooppuullaattiioonn RRaattiiooss:: SSeelleecctteedd YYeeaarrss,, 11996600 tthhrroouugghh 22000000

NNuummbbeerr ooff DDeennttiissttssaa TToottaall PPooppuullaattiioonn AAccttiivvee DDeennttiissttss ppeerr YYee aa rr TToottaall AAccttiivvee ((TThhoouussaannddss)) 110000,,000000 PPooppuullaattiioonn

1960 105,200 90,120 182,287 49.4 1970 116,250 102,220 206,466 49.5 1975 126,590 112,020 217,095 51.6 1980 147,280 126,240 228,831 55.2 1990 — 147,500 251,340 58.7 2000 — 168,000 276,740 60.7

aIncludes dentists in federal service.

SOURCES: From Fourth Report to the President and Congress on the Status of Health Personnel in the United States (DHHS Pub. No. [HRS]-P-0084.4), 1984, Washington, DC: U.S. Government Printing Office; Seventh Report to the President and Congress on the Status of Health Personnel in the United States (DHHS Pub. No. [HRS]-P-OD-90-1), 1990, Washington, DC: U.S. Government Printing Office; Health Personnel in the United States: Ninth Report to Congress, 1993, Washington, DC: U.S. Government Printing Office; adapted from “Trends in the Dental Health Work Force,” by L. J. Brown, & V. Lazar, 1999, Journal of the American Dental Association, 130, pp. 1743–1749; Health Workforce Factbook, Bureau of Health Professions, Health Resources and Services Administration, retrieved November 10, 2005, from http://www.hrsa.gov/healthworkforce/reports/factbook02

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25 percent of the population, with disease levels higher among minority populations.

2. Minority populations where dental problems appear to be concentrated and which have lit- tle, if any, dental insurance, are expected to grow between the mid-1990s and 2020, thus potentially widening the gap between ability to pay and receipt of services.

3. The ever-growing adult population—at greater risk for gingivitis and adult-onset periodontis (a major contributor to tooth loss)—will need more dental services.

Auxiliary Personnel

The practice of dentistry has undergone major technological and organizational changes in the

past several decades. Of particular importance has been the increased use of dental auxiliary person- nel. Two major types of dental auxiliaries are den- tal hygienists and dental assistants. Dental hygien- ists provide oral prophylaxis services and dental health education and comprise the only group of auxiliaries that is licensed. Dental assistants have generally supported the dentist at chair side and have had the opportunity in some states to per- form expanded functions under the dentist’s su- pervision. In 2000, there were about 112,000 ac- tive dental hygienists, and roughly 240,000 dental assistants.

Most dentists employ some dental auxiliary on a full- or part-time basis. The government has sup- ported the training of expanded-function dental auxiliaries (dental hygienists or dental assistants who receive additional education and training that

280 PART FOUR Nonfinancial Resources for Health Care

Table 12.5. NNuummbbeerr ooff DDeennttaall SScchhoooollss,, SSttuuddeennttss,, IInncclluuddiinngg FFeemmaallee aanndd MMiinnoorriittyy SSttuuddeennttss,, aanndd GGrraadduuaatteess:: SSeelleecctteedd AAccaaddeemmiicc YYeeaarrss,, 11996600––11996611 tthhrroouugghh 22000000––22000011

PP ee rrcceenntt PP ee rrcceenntt NNuummbbeerr FFiirrsstt--YYee aa rr FFeemmaallee ooff TToottaall MMiinnoorriittyy TToottaall

AA cc aa dd ee mm ii cc ooff FFeemmaallee FFiirrsstt--YYee aa rr MMiinnoorriittyy ooff TToottaall NNuummbbeerr ooff YYee aa rr SS cc hh oo oo ll ss TToottaall FFiirrsstt YYee aa rr SSttuuddeennttss SSttuuddeennttss ((%%)) SSttuuddeennttssaa SSttuuddeennttss ((%%)) GGrraadduuaatteessbb

1960–1961 47 13,580 3,616 — — — — 3,290 1970–1971 53 16,553 4,565 94 2.1 552c 3.3 3,775 1980–1981 60 22,842 6,030 1,194 19.8 2,453 10.7 5,550 1990–1991 55 15,951 4,001 1,522 38.0 4,766 29.9 3,995 1997–1998 54 16,926 4,347 1,609 37.0 5,888 34.8 3,930 2000–2001 55 17,349 4,327 1,721 39.8 6,164 35.5 4,171

aIncludes African American, Hispanic, Native American, Asian American, and, for 1970, “Other Minorities.” bExcludes graduates of the University of Puerto Rico for 1960–61 and 1970–71. cEstimated minority enrollment.

SOURCES: From Minorities and Women in the Health Fields, 1990 Edition (DHHS Pub. No. [HRSA]-P-DV-90-3), 1990, Washington, DC: U.S. Government Printing Office; Health Personnel in the United States: Eighth Report to Congress, 1991 (DHHS Pub. No. HRS-P-OD-92.1), 1992, Washington, DC: U.S. Government Printing Office; Health Personnel in the United States: Ninth Report to Congress, 1993, Washington, DC: U.S. Government Printing Office; Minorities and Women in the Health Fields, 1994 Edition (DHHS Pub. No. HRSA-P-DV-94-2), 1994, Washington, DC: U.S. Government Printing Office; adapted from “Trends in the Dental Health Work Force,” by L. J. Brown, & V. Lazar, 1999, Journal of the American Dental Association, 130, pp. 1743–1749; Health Workforce Factbook, Bureau of Health Professions, Health Resources and Services Administration, retrieved November 10, 2005, from http://www.hrsa.gov/ healthworkforce/reports/factbook02

NNuummbbeerr ooff SSttuuddeennttssbb

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enable them to perform a broader array of clinical functions), as well as the training of dental students to help improve their administrative and organiza- tional skills in managing multiple auxiliary team practices. Support for the auxiliary concept has been due largely to an increase in the productivity of dental practices that employ such persons.

Increasing educational and professional re- quirements for dental hygienists (they must carry their own malpractice insurance) have made them able to practice without the physical presence of a dentist, something allowed in a majority of the states. There is evidence that these hygienists can provide greater access to dental services in under- served areas, at lower cost and without overall reduction in the quality of care. However, state regulations and the opposition of professional dentists’ organizations do not favor the use of dental hygienists, and there is currently a struggle between dentists and dental hygienists over self- regulation and autonomy. This controversy will continue as long as the maldistribution of dentists persists and evidence continues to appear that den- tal hygienists can perform a variety of functions in- dependently and inexpensively with no loss of quality.

Thus, the dental professions are in transition. The growth of dentists will continue, but proba- bly at a lower rate than other health professions. The financial condition of a number of the re- maining 55 dental schools, especially private ones, is poor, and there may be more closures in the next several years, further reducing the growth of dentistry. The role of the expanded function dental auxiliary is still unclear. The demand for dental care is very sensitive to economic condi- tions (because dental insurance covers only two- fifths of the population and one-third of dental expenditures) and can decrease during periods of recession. Hence, a shortage one year can quickly turn into a surplus the next. Yet, these economic conditions mask the epidemiological and demo- graphic changes that are slowly altering the need for services. How these many factors combine to affect the future of dentistry should be watched closely.

PUBLIC HEALTH: NEW ROLES, NEW POSSIBILITIES

Traditionally, health professionals trained in public health have been sharply demarcated from those involved in the direct delivery of personal health services. Even so, the Institute of Medicine, in its landmark publication The Future of Public Health stated that the goal of public health activities was nothing less than assuring the conditions for peo- ple to be healthy (Institute of Medicine, 1988). In theory, then, there is a natural affinity between health professionals in public health and those in direct health care delivery.

In practice, public health roles have centered on, among others, administration of local, state, and national public health agencies; on planning, im- plementing, and evaluating prevention, screening, and health education programs; on surveillance and control of environmental hazards and pollu- tants; and on the epidemiological description and explanation for the incidence and prevalence of dis- ease and trauma in populations. In certain settings, for example, municipal or county health depart- ments, public health professionals have worked closely with other health professionals such as public health nurses in the delivery of primary care services to special populations such as indigent families, migrant workers, and groups of uninsured persons. But, in general, public health professionals have been a relatively “unseen” group of persons working to maintain a fundamental infrastructure allowing an understanding and an implementation of health-promoting activities at the population level: safe drinking water, adequate sanitary sys- tems, control of infectious diseases, and prevention of disease and injury by reducing behavior such as smoking, high-speed driving, and the like.

The principal training programs for careers in public health are located in the 37 accredited schools of public health (up from about 29 in 2000), as well as a small number of accredited health educa- tion programs and community medicine programs.

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Nearly 400 other nonaccredited programs exist that offer training in the various subfields of public health such as health administration and environ- mental health. The primary academic degree is ei- ther the master of public health (MPH) or the master of science in public health (MSPH). Other common avenues for careers in public health include the study of medicine with emphasis on and board cer- tification in preventive medicine, the study of pub- lic health nursing, dentistry, nutrition, industrial hygiene, and social work among others. Advanced graduate training in some of the fields of public health, for example, epidemiology, environmental health sciences, health services research, health behavior and health education, and biostatistics, is normally obtained through the accredited schools of public health.

Total enrollment in schools of public health has expanded rapidly over the period 1975–1976 to 2004–2005, growing from 6,461 to 19,434, re- spectively, a 200 percent increase. Of the total students enrolled during the 1981–1982 academic year, 9.9 percent were members of underrepresented minority groups (African American, Hispanic, and Native American); by the 2004–2005 academic year, this proportion had grown to 18.2 percent. The proportion of women in the 1981–1982 total enrollment was 55.4 percent whereas this figure was 69.6 percent by 2001–2002 (Association of Schools of Public Health, 2005). Thus, during a period of major expansion in the number of students studying public health (public health ranked fourth in total enrollment after nursing, allopathic medicine, and pharmacy), there has been significant growth of op- portunity for historically underrepresented minori- ties and women during the past two decades.

New Roles for Public Health Professionals

Two new general roles for public health profession- als have arisen in recent years. First, the melding of public health functions with those of professionals in the direct delivery of personal health services is now under way with the expansion of managed- care plans. As explained in other chapters in this

text, managed-care plans assume the responsibility for the health care of defined populations of en- rollees within a budgetary system constrained by capitation arrangements, that is, a prospectively fixed payment for each enrollee for a defined period of time, usually 1 year. Because the financing sys- tem no longer permits an open-ended cost-based billing for services to insurers, the managed-care plan has clear incentives to find ways to deliver health care services efficiently, but more to the point here, to find ways to keep the covered popu- lation healthier in the first place.

This function is part of the fundamental mission of public health: Collect information on and moni- tor disease incidence and prevalence of the plan’s enrollees; monitor the outcome of the health care de- livery process; and develop, implement, and monitor programs of prevention and other forms of positive intervention into the health habits and behavior of the plan’s enrollees (e.g., smoking and diet, receipt of prenatal care, immunization against infectious diseases, and the like). To the extent that managed- care plans emphasize these traditional public health roles, the plans may well be the catalysts for the integration of public health and personal health services that has long been called for in the United States. But, because of traditional insur- ance schemes based on retrospective cost-based reimbursement, of deep professional fissures between some health professionals and public health professionals, and other reasons, this inte- gration has proceeded very slowly.

The second newer role for public health profes- sionals, one that takes their traditional functions and places them in a new context, resides in bioterrorism surveillance and prevention. Ever since the tragic events of September 11, 2001, the public health community has been called on to develop systems of detection of potential bioterrorism events, including the release of biological and chemical agents into a variety of settings. These efforts have required a re- consideration of the preparedness of local, state, and federal public health organizations and functions to be able to operate in a streamlined, rapid, and effec- tive fashion to identify, isolate, contain, and destroy potentially harmful agents released inadvertently or

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maliciously. Much more progress must be made in this domain, and public health authorities through- out the nation are working to find appropriate ways to foster this mission.

In short, more than ever, future careers in public health promise to join community-based practice— the historical purview of public health—and the institutional practice of the healing arts. The task of disease prevention and health maintenance promises to bring about integration of these two domains. However, without universal entitlement to health care via a comprehensive health insurance program, there will still continue to be a need for traditional community-based public health specialists involved in meeting needs of disadvantaged groups. At the same time, public health professionals are now called on literally to protect the public’s health by prevention of the spread of harmful biological and chemical agents via such things as the food chain, the water supply, and the wider environment.

NURSING

Registered nurses are the largest group of licensed health care professionals in the United States. The supply of registered nurses (RNs) grew from 1,662,382 in 1980 to 2,694,540 in 2000, an in- crease of 62.2 percent. At the beginning of the twenty-first century, the active, that is, employed, supply of RNs increased 72.9 percent (from 1,272,851 in 1980 to 2,201,813 in 2000). An es- timated 81.7 percent of RNs were employed in nursing in 2000. This reflects a major feature of the nursing workforce: A substantial number of nurses are not working in nursing or are inactive in the economic workforce.

Profiles show that most nurses are women with 5.4 percent of the RN workforce being men. How- ever, in 2003, nearly 11 percent of enrolled nurs- ing students were men. Twelve percent of the RN population is from minority groups. About 40 per- cent of RNs are graduates of associate degree pro- grams, with 30 percent holding a nursing diploma,

usually sponsored by hospital programs. The bac- calaureate preparation (bachelor of science in nursing) is represented by 30 percent of the RN population. Nursing programs, however, are dis- tributed differently, with baccalaureate 36 percent; associate degree, 59 percent; and hospital diploma programs, 5 percent. The shifting education pat- tern of RNs, with increasing emphasis on a four- year baccalaureate degree, is discussed in greater detail below.

Despite the overall absolute increase in the number of nurses employed in nursing, a shortage of nurses exists relative to demand. Data from the National Sample Survey of Registered Nurses (Health Resources and Services Administration, 2000) indicated that the shortage was estimated at 6 percent in 2000. Based on what is known about trends in the supply of RNs and their anticipated demand, the shortage is expected to grow slowly until 2010, at which time it will have reached 12 percent and by 2015, the shortage is projected to be 20 percent. The cause of the nursing shortage is a confluence of factors. These factors include the declining number of nursing school enrollments, the aging of the RN workforce, nurses not em- ployed in nursing, declines in relative earnings, and the emergence of alternative job opportunities (Health Resources and Services Administration, 2004a).

First, there is the issue of nursing school enroll- ments. The growth in nursing students during the period 1995 to 2000 experienced an annual de- crease in the number of entry-level students in bac- calaureate nursing programs. The period 2001 to 2006 saw a reversal of this trend, with increases in entry-level students each of these years, topping at 17 percent (American Association of Colleges of Nursing, 2007). However, the increases have been decreasing steadily since 2003, and this fact com- bined with the estimate made by the federal gov- ernment that increases in the number of graduates must be around 90 percent to meet the nursing shortage adequately, means that nursing school production continues to fall short of what will be needed (Health Resources and Services Administra- tion, 2004b).

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Second, there is the aging of the RN workforce. The average age for hospital RNs is slightly over 43, the oldest it has ever been (Health Resources and Services Administration, 2004a). Three factors contribute to the aging of the RN workforce: (1) the decline in number of nursing school gradu- ates, (2) the higher average age of recent graduating classes, and (3) the aging of the existing pool of li- censed nurses. This slowing of new, young entrants coupled with an accelerating retirement rate for older RNs will produce a national supply of nurses in 2020 that will not only be older, but also no larger than the supply projected for 2005.

Third, there is the phenomenon of nurses not employed in nursing. The number of RNs who gave up their licenses from 1996 to 2000 num- bered 175,000, and this is projected to double by 2020. In addition to the number of RNs that gave up their license, there are 500,000 licensed nurses not employed in nursing, with about 69 percent being 50 years or older. Analysis of data from the 2000 National Sample Survey of Registered Nurses shows that only 7 percent of the licensed RNs not employed in nursing were actively seeking employ- ment in nursing (Health Resources and Services Administration, 2000).

Fourth, there have been declines in relative earn- ings. Whereas actual earnings for RNs increased steadily from 1983 through 2000, “real” earnings— the amount available after adjusting for inflation— have been relative flat since 1991 (Health Resources and Services Administration, 2000). In contrast, salaries of elementary school teachers have always been greater than RN salaries, and they are growing at a faster pace. The potential for nurses to increase their salaries decreases over time.

Fifth, there has been an emergence of alternative educational and job opportunities. Women no longer have limited options for education and em- ployment. Medical school and other allied health profession enrollments are seeing increasing num- bers of women. In addition, advanced practice nursing opportunities exist that involve indepen- dent practice and third-party reimbursement for some services.

As with most other health care professionals, the nursing shortage is not distributed evenly through- out the United States. For example, in 2000, 30 states were estimated to have shortages. By 2020, 44 states and the District of Columbia are pro- jected to have shortages. The maldistribution ap- pears to be due to the geographic immobility of women who are married and are second wage earn- ers in a family. Additionally, rural and inner-city hospitals and other facilities are unable to offer an adequate range of incentives (e.g., flexible working hours, increased salaries, fringe benefits, safe work- ing conditions) to attract nurses.

Rural institutions have found that urban-based education and training programs have not often been relevant to rural needs. Rural hospitals must frequently hire recent nursing graduates with lim- ited skills and often resort to dependence on pool nurses from temporary employment agencies. This problem is of particular concern because of the in- creased responsibilities and range of skills needed by rural nurses. Rural providers are not likely to im- prove their chances of attracting well-trained nurses with a broad range of skills.

Nursing Education and Role Changes

The federal government has been largely responsi- ble for increases in nursing school class size during cyclical shortages. Over the period 1960–1980, the federal government spent about $2.0 billion for nursing education, resulting in a more than dou- bling of admissions to nursing schools. The passage of the Nursing Reinvestment Act (NRA) of 2002 was to infuse money in the education of nurses in response to falling enrollments in nursing schools and to increase the number of admissions. Of particular interest, however, is the switch that has occurred in the control of nursing education from the hospital to nursing educators in colleges and universities.

Three forms of training lead to licensure as an RN: three-year diploma programs that are hospital- based, two-year associate degree programs that are

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generally in community colleges, and four-year bac- calaureate nursing programs in universities or four- year colleges. In 2002–2003 only 6,196 (4.7 per- cent) of new nursing students were enrolled in diploma programs; in 1960–1961, the percentage had been 78.

In contrast to the other health professions dis- cussed in this chapter, for reasons that are not clear, the supply of RNs had not included as great a proportion of minority group members, al- though the trend is changing. In 2002–2003, about 24 percent of RN students were members of minority groups. The largest minority group— African Americans—grew from about 7 percent in 1980 to a peak of nearly 13 percent in 2003. Why the field of nursing should lack the appeal to mi- norities that other health professions appear to have remains an unanswered question, deserving inquiry and remedy.

The major employment patterns now and in the future are shown in Table 12.6. The hospital is and will remain the major locus of employment for RNs, sectioning off about two-thirds of the nursing

workforce. Long-term care and home health nursing employment are expected to increase in importance whereas other areas of employment will show stability over the period 2000–2010. These figures may appear to contradict the notion that non- hospital-based employment is gaining in popular- ity; however, since many hospitals are themselves involved in owning and operating non-hospital- based services (such as home health and hospice services and ambulatory care sites), these figures may not reveal the true picture. Within these set- tings, new roles have emerged for the RN. These in- clude clinical nurse specialist, nurse practitioner, nurse anesthetist, and nurse clinician. These posi- tions involve employment in new ambulatory care settings (e.g., insurance companies, ambulatory surgery centers, free-standing urgent care centers, and the like), long-term care facilities, and home health and hospice programs providing care for the elderly and others with chronic and life-limiting illnesses or conditions. Nurses are also finding op- portunities in statewide, regional, and hospital- level utilization and quality review roles in which

Table 12.6. EEssttiimmaatteedd aanndd PPrroojjeecctteedd RReeqquuiirreemmeennttss ffoorr FFuullll--TTiimmee EEqquuiivvaalleenntt RReeggiisstteerreedd NNuurrsseess bbyy EEmmppllooyymmeenntt SSeettttiinngg,, 11999900,, 11999955,, 22000000,, 22001100

FFiieelldd ooff EEssttiimmaatteedd PP ee rrcceenntt EEssttiimmaatteedd PP ee rrcceenntt EEssttiimmaatteedd PP ee rrcceenntt PP rroojjeecctteedd PP ee rrcceenntt EEmmppllooyymmeenntt 11999900 ((%%)) 11999955 ((%%)) 22000000 ((%%)) 22001100 ((%%))

Registered Nurse Total 1,466,000 100.0 1,610,200 100.0 2,201,813 100.0 2,344,584 100.0 Hospital 1,009,700 68.9 1,086,600 67.5 1,300,323 59.1 1,451,083 61.9 Nursing Home 105,300 7.2 130,300 8.1 152,894 6.9 223,193 9.5 Home Health 53,000 3.6 57,000 3.5 107,553 4.9 177,583 7.6 Other Community/

Public Health 111,900 7.6 136,700 8.5 175,065 8.0 93,226 4.0 Ambulatory Care 101,200 6.9 107,200 6.7 209,324 9.5 178,272 7.6 Other 84,900 5.8 92,400 5.7 256,654 11.7 221,227 9.4

SOURCES: From Health Personnel in the United States: Eighth Report to Congress (DHHS Pub. No. HRS-P-OD-92-1), 1992, Washington, DC: U.S. Government Printing Office; “The Registered Nurse Population,” Findings from the National Sample Survey of Registered Nurses, U.S. Department of Health and Human Services, Bureau of Health Professions, 2000, Washington, DC: U.S. Government Printing Office; Projected Supply, Demand, and Shortags of Registered Nurses: 2000–2020, U.S. Department of Health and Human Services, Bureau of Health Professions, 2002, Washington, DC: U.S. Government Printing Office.

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they analyze clinical records describing patient care.

The nursing profession has expanded its bound- aries for a broader role in the health care system, in- cluding independent roles of nurses within institu- tional settings and the creation of new professional roles outside them. With decreasing numbers of diploma programs sponsored by hospitals and in- creasing numbers of nurses being educated in aca- demic settings, the result is a decoupling of nursing education from nursing practice. The National League for Nursing (2003) has called for a dra- matic reform and innovation in nursing education to create and shape the future of nursing practice. The league recommends new teaching strategies, curriculum changes, and increased collaboration with practitioners to prepare a nursing workforce that practices effectively in new health care envi- ronments. Other professional organizations in nursing have also proposed expanded duties through the doctor or nursing practice degree with enhanced duties.

PHARMACISTS

As is the case for all the health professional groups discussed so far, pharmacists are also undergoing extensive change as well as experiencing supply shortages. Until recently, pharmacists performed the traditional role of preparing drug products and filling prescriptions. In the 1980s and 1990s, phar- macists expanded that role to include drug produc- tion education and to act as an expert for clients and patients about the effects of specific drugs, drug interaction, and generic drug substitutions for brand-name drugs. In the early twenty-first century, the role has further expanded to include selecting, monitoring, and evaluating appropriate drug regi- mens, to provide information not only to patients, but also to other health care professionals, and to prevent medication errors. Finally, in their role as businessmen and -women, pharmacists have had to

learn more about the managerial and financial as- pects of working in a retail trade.

There has been steady growth in the number of pharmacists during the last quarter century (Table 12.7). From 1973–1974 to 2002–2003, there was a 74 percent increase in the overall num- ber. First-year enrollment in pharmacy schools lev- eled off during the 1980s, although there was a major increase in the proportion of female first-year students, from about 30 percent in 1973–1974 to about 67 percent of the total pharmacy student en- rollment in 2002–2003. The growth of minorities in pharmacy, although not as great, has been steady, increasing from about 12 percent in 1980–1981 to 32 percent in 2002–2003. Another phenomenon of note is the doctorate in pharmacy (PharmD) degree, which was recognized as the entry-level degree in the 1990s, requiring addi- tional clinical training and expanded practice skills, thus preparing pharmacists to take on more com- plex clinical roles such as counseling patients, advising other health professionals on drug use is- sues, and participating in disease management programs. Careers for those with the PharmD de- gree lead not only to research and teaching posi- tions, but also to levels of higher administrative responsibility, often in health care organizations, and insurance and pharmaceutical companies.

Pharmacists are employed in a number of set- tings, such as pharmacies and drug stores, hospitals and medical centers, retail stores with pharmacies (grocery stores and mass merchandising stores), and other institutional settings such as long-term care facilities. As the 1990s began, about 40 per- cent of all pharmacists were employed in drug store chains. Estimates are now that at the beginning of the twenty-first century nearly two-thirds of phar- macists practice in retail pharmacies. The remain- der of graduates works in hospitals, home health care, insurance companies, consulting groups, and universities.

Forces that may contribute to an increase in the need for pharmacists include the increased use of drugs, especially among the growing aged popula- tion, and the pharmacy’s expanded role under

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changes in Medicare and Medicaid programs that re- quire review of patient drug use and patient coun- seling. Nevertheless, making projections about the future supply of pharmacists in relation to future need or demand is difficult because of the rapidly changing employment circumstances in the field. Further, the aging of the American population would suggest that more medication prescriptions will be written and more work for pharmacists will result. At the same time, because pharmacists are expand- ing their role to include nontraditional activities, as mentioned, the amount of time an individual phar- macist might spend in traditional “druggist” activities will probably decline. With computerized informa- tion procession systems, assistance from pharmacy technicians, and mail-order approaches that phar- macists will be using in increasing numbers, one would expect a positive gain in productivity, and per- haps a diminished need for an increased supply. In short, a number of factors make predicting the future balance of supply and demand difficult, and given the importance of drug therapies for modern medi- cal care, policy makers should watch this important health profession closely.

PHYSICIAN ASSISTANTS AND ADVANCED PRACTICE NURSES

The perceived shortage of physicians in the mid- 1960s led to the development of two types of health care providers: physician assistants (PAs) and ad- vanced practice nurses (APNs). PAs are qualified by academic and practical training to provide patient services under the direction and supervision of a li- censed physician who is responsible for the perfor- mance of the PA. PAs are able to diagnose, manage, and treat common illnesses; provide preventive services; and respond appropriately to common emergency situations. Although PAs are trained as primary care providers, approximately half subse- quently serve in specialty roles (Cooper, 2001). All states license or otherwise recognize PAs under a physician’s supervision, although as with NPs, that supervision may be intermittent and at a distance, and the actual autonomy of PAs may be substantial.

Table 12.7. NNuummbbeerr ooff AAccttiivvee PPhhaarrmmaacciissttss aanndd NNuummbbeerr ooff PPhhaarrmmaaccyy SSttuuddeennttss,, bbyy GGeennddeerr aanndd MMiinnoorriittyy SSttaattuuss,, SSeelleecctteedd AAccaaddeemmiicc YYeeaarrss,, 11997733––11997744,, 11998800––11998811,, 11999900––11999911,, aanndd 22000022––22000033

PP ee rrcceenntt ((%%)) PP ee rrcceenntt ((%%)) TToottaall FFiirrsstt--YYee aa rr FFeemmaallee ooff TToottaall MMiinnoorriittyy ooff

AA cc aa dd ee mm ii cc AAccttiivvee FFiirrsstt--YYee aa rr FFeemmaallee FFiirrsstt--YYee aa rr TToottaall MMiinnoorriittyy TToottaall YYee aa rr PP hh aa rrmmaacciissttss SSttuuddeennttssaa SSttuuddeennttssaa SSttuuddeennttssaa GGrraadduuaatteess GGrraadduuaatteess GGrraadduuaatteess

1973–1974 112,600 8,342 2,508 30.1 5,957 — — 1980–1981 142,400 7,551 3,655 48.4 7,323 891 12.2 1990–1991 161,900 8,356 4,926 59.0 7,122 1,461 20.5 2002–2003 196,011 — 43,047b 66.9b 7,488 2,391 31.90

aIncludes students in the first year of the three years of pharmacy education, excluding any students in prepharmacy years. bIncludes all students enrolled in pharmacy schools.

SOURCES: From Minorities and Women in the Health Fields [DHHS Pub. No. [HRSA]-P-DV-90-3], 1990, Washington, DC: U.S. Government Printing Office; Health Personnel in the United States: Eighth Report to Congress [DHHS Pub. No. HRS-P-OD-92-1], 1992, Washington, DC: U.S. Government Printing Office; Minorities and Women in the Health Fields, 1994, The Pharmacist Workforce: A Study of the Supply and Demand for Pharmacists, 2000, Department of Health and Human Services, Bureau of Health Professions; American Association of Colleges of Pharmacy 2005, http://www.aacp.org

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Forty-two states, as well as the District of Columbia, allow delegation by a physician to the PA the au- thority to prescribe certain medications (American Academy of Physician Assistants, 2005). The typical PA training program consists of 2 to 3 years of didactic study followed by clinical training. How- ever, programs vary widely in terms of admission re- quirements, curriculum, and site of educational training. There were 59 accredited PA programs in the early 1990s, and by 2005, the number had more than doubled to 135 (Accreditation Review Com- mission on Education for the Physician Assistant, 2005), and at the beginning of 2005, there were an estimated 55,061 people in clinical practice as PAs, more than double the number in 1993 (American Academy of Physician Assistants, 2005).

There is a tendency for PAs more often than physicians to serve in rural and medically under- served areas with about 34 percent of PAs working in communities of less than 50,000. Although women represent 60 percent of practicing PAs, this is a trend that has reversed since the mid-1990s. Most PAs are white (88 percent) with the remainder con- sisting mostly of underrepresented minorities.

In 2004, 57 percent of PAs were employed by solo or multispecialty physician practices, 22 percent were employed by hospitals, 11 percent were not em- ployed in clinical practice, and the remaining 10 per- cent were employed by other types of organizations. Of practicing PAs, 37 percent report that their “pri- mary” work setting was the hospital (American Academy of Physician Assistants, 2005). In 1990, there were 5,315 PAs practicing in hospitals and by 2004, the number had increased to 7,591. Most PAs work in the private sector (90 percent), and about 10 percent work for government agencies including the Veterans Administration, the Armed Forces, and the U.S. Public Health Service. Finally, the propor- tion of PAs working in primary care settings has de- clined over the period 1978 to 2004, from 67 per- cent to 42 percent. General surgery, surgical subspecialties, intensive care units, orthopedics, and emergency medicine all registered increases.

APNs are nurses with particular skills and creden- tials, which typically include basic nursing education,

basic licensure, graduate degree in nursing, experi- ence in a specialized area, professional certification from a national certifying body, and—if required in some states—APN licensure (National Council of State Boards of Nursing, 2004). The APN specializes as a nurse practitioner (NP), certified nurse midwife (CNM), certified registered nurse anesthetist (CRNA), or clinical nurse specialist (CNS).

The APN role is defined by seven core compe- tencies or skill performance areas. The first core competency of direct clinical practice is central to and informs all the others, as follows: direct clinical practice; expert guidance and coaching of patients, families, and other care providers; consultation; re- search skills, including use and implementation of evidence-based practice, evaluation, and conduct; clinical and professional leadership, which includes competence as a change agent; collaboration; ethi- cal decision-making skills (Hamric, 2005).

As with PAs, some states permit certain cate- gories of APNs to write prescriptions for certain classes of drugs. This prescriptive authority varies from one state to another and may be regulated by boards of nursing, pharmacy, or allied health. Of NPs, 97 percent prescribe medications and write an average of 19 prescriptions per day (American Academy of Nurse Practitioners, 2005). Sixty-five percent of NPs are authorized to write prescriptions for controlled substances. Some states require physician supervision of APN practices, although some managed-care plans now include APNs on their lists of primary care providers.

APN Specialization

Certified nurse midwives (CNM) specialize in low- risk obstetrical care, including all aspects of the pre- natal, labor and delivery, and postnatal processes. Certified registered nurse anesthetists (CRNAs) complete additional education to specialize in the administration of various types of anesthesia and analgesia to patients and clients. Often, nurse anes- thetists work collaboratively with surgeons and anesthesiologists as part of the perioperative care team. Clinical nurse specialists (CNSs) hold masters

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degrees, have successfully completed a specialty certification examination, and are generally em- ployed by hospitals as nursing “experts” in particu- lar specialties. The scope of the CNS is not as broad as that of the NP; CNSs work with a specialty pop- ulation under a somewhat circumscribed set of con- ditions, and the management authority of patients still rests with physicians. In contrast, NPs have de- veloped an autonomous role in which their collab- oration is encouraged, and they generally have the legal authority to implement clinical management actions.

As of 2004, there were some 106,000 NPs in the United States, more than double the number in 1992. There is a range of specialties for NPs, in- cluding pediatric, family, adult, psychiatric, geronto- logical, and acute care. Eighty-eight percent of NPs have graduate degrees; 92 percent of NPs maintain national certification; 39 percent of NPs hold hos- pital privileges; 20 percent of NPs practice in rural or frontier settings; and the average NP is female (95 percent), 48 years old, and has been in practice for nearly 9 years as a family NP (41 percent) (American Academy of Nurse Practitioners, 2005).

There are important differences in the percep- tions of the roles of PAs and APNs. The medical profession views PAs as physician “extenders” who can perform many of the usual functions completed by physicians. APNs are nurses in an expanded role. The NP would be the APN specialist with greater supervision of, and responsibility for, pri- mary patient care, with extra emphasis on the tra- ditional nursing competencies of prevention and counseling. Despite these perceptual differences, as well as differences in education, care delivery model, and outlook, many of the performance char- acteristics of PAs and NPs appear to be similar.

Issues in PA and NP Use

Among the issues that need to be resolved before PAs and NPs can be used to their full capacity and original promise are legal restrictions concerning practice, reimbursement policies, and relationships with physicians. The legal status of PAs and NPs

varies considerably across states. As noted in the case of PAs, many states permit considerable delegation of tasks and responsibilities, including prescribing certain drugs. State legislation expand- ing medical delegation has been unduly restrictive with regard to the scope of practice of qualified nonphysicians, although progress is being made.

Laws and regulations governing the expanded role of the nurse practitioner are also changing rapidly, but inconsistently. Although the majority of states have altered their nurse practice acts to facili- tate expanded roles, the constraints on the scope of NP practice continue to vary from state to state. A particular barrier is whether an individual state will authorize prescription practices of NPs. Although most states have explicit regulatory provision for limited prescriptive authority, these authorizations vary in the degree of independence and in the types of drug and devices that may be prescribed. There may also be geographic limitations, for example, more NP discretion in rural than urban settings.

Third-party reimbursement imposes another constraint on the use of PAs and NPs. Current poli- cies generally link their reimbursement directly to the employing physician or institution. Since 1989, federal law requires direct Medicaid reimbursement for pediatric NPs and family NPs whether or not a physician directly supervises the NP. Yet, many states are not yet in compliance with federal legis- lation. As for the private health insurance sector, some states have laws allowing reimbursement to NPs, but this coverage is usually optional and is not widespread. Some progress has been made in reim- bursement of NPs and PAs through the Medicare program. For example, in 1989, the U.S. Congress, in its mandate that a resource-based relative value scale (RBRVS) fee schedule supplant the usual and customary schedule for physician payment under Medicare Part B, called for study of including “non- physician providers” in the fee schedule. Experi- mental programs are under review and may lead to a special reimbursement schedule.

A final area of concern is current and future rela- tionships with physicians. In the past, physicians were reasonably accepting of these personnel. Yet,

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about the time that these midlevel practitioners were becoming popular among those seeking a lower-cost substitute for physician services, the physician surplus was enunciated, and physicians were wary of employing personnel who might take away their work. Further, there was, as noted earlier in this chapter, a tendency for some physicians to move into previously medically underserved areas.

Yet, there has been an increase in NPs and PAs, and much of the current demand has been gener- ated by managed-care plans whose efforts to cut costs, to find flexibility in deployment of caregivers, and to emphasize primary care and prevention co- incide with the lower salaries, the broad skill set, and the training that are typical of NPs and PAs. Further, there are many roles that these midlevel professionals have been filling and continue to fill: providing primary care to underserved populations often in underserved areas as well as care to the el- derly and the mentally ill, providing preventive care and health education, delivering specialty services in hospitals in lieu of house staff. New practice set- tings for NPs and PAs include schools, industrial settings, prisons, and nursing homes.

The outcome of the current debate about the physician shortage and the role of IMGs in the physician workforce will be consequential for PAs and NPs. If efforts are successful in increasing the growth of physician supply, the employment of these midlevel health professionals may slow down somewhat throughout the health care system. On the other hand, given the current and projected shortage of nurses, the historic barriers to PAs and NPs may continue to crumble and thus improve the chances for attainment of the full promise of PA and NP service delivery.

THE CHANGING NATURE OF HEALTH PROFESSIONALS

This chapter has summarized trends in the supply of health professionals. From the 1960s into the early 1980s, federal and state support resulted in

large increases in the number of graduates of most health professional occupations. From the mid- 1980s to the end of the 1990s, the growth of some occupational groups, for example, PAs, and NPs, was probably affected as much by the workforce requirements of managed-care plans as by any public policy effort. In the early 2000s, the faster than anticipated growth of the U.S. population, the ever-increasing number of elderly persons, the improved effectiveness of and accompanying in- crease in demand for diagnostic and treatment pro- cedures have led to a searching review of the ade- quacy of personnel across the spectrum of health occupations, most notably in nursing. Still there has been much growth in the sector, and women and minorities have greatly benefited from this phenomenon. And, in addition to the “standard” health professions discussed in this chapter, there has been steady growth—and popularity with the American public—in numerous less conven- tional health care occupations like chiropractors, acupuncturists, and naturopaths (Cooper, Laud, & Dietrich, 1998).

The historic federal and state investment in health care personnel has improved access to health care and helped schools training health pro- fessionals to remain financially viable. But, current budget deficits have led to reductions in govern- ment spending for the health professions, although there have been efforts to increase spending for nursing. Many of the major trends affecting the U.S. health care system, such as restrictive public and private sector reimbursement, growth of alter- native delivery systems and managed-care plans, portend continuing pressures against the growth of health professions. Thus, stories are becoming more common of hospitals having potential short- ages of not only RNs, but also of pharmacists, in most of the allied health professions, and in certain medical specialists (Steinhauer, 2000).

The increasing number of women in all the health professions also suggests that, on balance, with the rise of single-parent households and the continued disproportionate household and child- rearing responsibilities that married or single working mothers bear, female health professionals,

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particularly physicians, will probably work fewer hours per week and fewer weeks per year than men. This could add up to a need for more per- sonnel to make up desirable levels of full-time equivalent labor. For example, if the proportion of women entering medicine continues at the current pace, the effective full-time equivalent supply of physician services will decline by about 4 percent between 1986 and 2010, other things being equal (Kletke, Marder, & Silberger, 1990). On the other hand, the effect of managed care plans with their efficient use of health care personnel produces a countervailing force in relation to overall numbers of health care professionals. Such conflicting forces make predicting the balance between need and de- mand versus supply of health professionals a very difficult enterprise.

THE PUZZLE OF MANAGED CARE

Managed care deserves the final comment in this chapter’s conclusion. The rapid growth of managed- care plans and of the number of Americans en- rolled in these plans has become a major force re- shaping the size and composition of the health care professions’ workforce. In the immediate future, there are several important consequences of man- aged care on the workforce (Council on Graduate Medical Education, 1995b). First, more and more health professionals will have some sort of rela- tionship with managed care. For example, most physicians are now involved in managed care either as full-time employees or as contractors with one or more plans. More than three-fours of all physicians are estimated to have at least one managed-care contract. This trend may have weakened in the early 2000s, but substantial numbers of physicians re- main connected to managed care at least through preferred provider organizations and their associ- ated networks.

Second, some observers have felt that contin- ued managed-care growth would only magnify

and exacerbate the problem of a physician sur- plus. But, the current thinking is that with the weakening of tightly controlled managed- care plans, particularly the classic HMOs, the “managed-care effect” has softened and will not be as powerful an influence on workforce supply as once thought. It remains an open question what impact the organization of health services will have on questions on “shortage” or “surplus” be- cause it is unclear what the future of managed care versus a more fee-for-service-like system of care de- livery will be.

SUMMARY

In the longer run, it appears that—one after an- other—the individual health professions are pre- dicted to be in short supply, and with the potential addition of medicine to the list, there will be great pressure on public and private sources to fund more of the costs of the education health care pro- fessionals, including the building of new schools. The phenomenon has already taken place in public health and osteopathy. Official medical associa- tions are calling for increases in allopathic medical education. Nursing educators are striving to in- crease nursing faculties and class sizes. Some hos- pital systems, in desperation of finding enough nurses, are actively soliciting nurses from foreign countries and refurbishing long-closed hospital- based, non-university-based, nurse diploma pro- grams. This activity is taking place within the con- text of an increasingly stringent public and private reimbursement environment, and it is very difficult to see where the funds will come from to support the kind of expansion in health professions for which many are calling. Although what the out- come of these forces will bring is speculative, what is not is the interactive nature of all the health pro- fessions and the delivery organizations and the often-surprising outcomes of that interaction. The future presents a vastly different possibility than that predicted at the beginning of the twenty-first century, and the trends that emerge will be of the greatest interest.

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REVIEW QUESTIONS

1. Describe the general employment trends in the health care sector.

2. Discuss some of the reasons there may be a physician shortage rather than a surplus.

3. Describe the geographic distribution of physicians across the United States. In addi- tion, list the governmental initiatives taken to improve physician distribution.

4. Discuss the role of osteopathic medicine in the United States.

5. Describe the role of public health professionals.

6. What factors contribute to the nursing shortage?

7. Discuss trends in the pharmacy profession. 8. Discuss the issues associated with the use of

physician assistants and nurse practitioners.

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Cooper, R. A., Laud, P., & Dietrich, C. L. (1998). Current and projected workforce of nonphysician clinicians. Journal of the American Medical Association, 280, 788–794.

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CHAPTER 11: The Pharmaceutical Industry

REGULATORY AND LEGAL ISSUES
FROM IDEA TO TREATMENT: THE LONG, UNCERTAIN RESEARCH AND DEVELOPMENT PROCESS
ACCESS, PRICING, AND PATENT ISSUES
THE VALUE OF MEDICINES
SUMMARY
REVIEW QUESTIONS
REFERENCES & ADDITIONAL READINGS

williams12890_1418012890_00.13_chapter12.pdf

CHAPTER 12: Health Care Professionals

EMPLOYMENT TRENDS IN THE HEALTH CARE SECTOR
THE SUPPLY OF PHYSICIANS
OSTEOPATHY
DENTISTRY: A PROFESSION IN TRANSITION
PUBLIC HEALTH: NEW ROLES, NEW POSSIBILITIES
NURSING
PHARMACISTS
PHYSICIAN ASSISTANTS AND ADVANCED PRACTICE NURSES
THE CHANGING NATURE OF HEALTH PROFESSIONALS
THE PUZZLE OF MANAGED CARE
SUMMARY
REVIEW QUESTIONS
REFERENCES & ADDITIONAL READINGS