The Reconfiguration of US Medicine

Abstract

When one of us opened a private medical practice in 1980, the world of medicine was a simpler place. We could send our patients to any specialist and could admit to any hospital we chose. We referred our patients for diagnostic tests and specialty consultations without asking permission. We were paid a fee for each service we provided. No hospital employee pressured us to discharge our patients, and no insurance company sent us computer printouts of the costs we incurred per patient per month. But underneath this freedom of action, a time bomb was ticking: the costs of medical care were relentlessly rising. In the same private practice of 1995, choice of specialists is determined by lists provided by various health maintenance organizations (HMOs). The HMOs tell us to which hospital their (not our) patients must be admitted. We obtain prior authorization before referring patients to specialists or for expensive