HCM 2 PDF - Health Care Delivery Settings

CHAPTER 2 THE SETTINGS FOR HEALTH CARE DELIVERY LEARNING OBJECTIVES After completing this chapter, students will be able to: Differentiate among ambulatory care, inpatient acute care, and postacute care. Identify the major ambulatory care settings and their relative size. Contrast the kind...

CHAPTER 2 THE SETTINGS FOR HEALTH CARE DELIVERY LEARNING OBJECTIVES After completing this chapter, students will be able to: Differentiate among ambulatory care, inpatient acute care, and postacute care. Identify the major ambulatory care settings and their relative size. Contrast the kinds of health problems treated in hospitals with those cared for in ambulatory settings. Describe the history of hospitals and identify the characteristics used to classify them today. Describe the five types of long-term care and their roles in the health care system. INTRODUCTION Health care is delivered in a variety of settings, which are generally distin- guished as inpatient or ambulatory. Health care can be self-care or care pro- vided by a professional. It can be delivered in the home or outside of it—such as a physician office or hospital. In the latter case, patients stay overnight (“inpatient” care) or return home afterwards (“outpatient” or ambulatory care). While these concepts have been in use in Western civilizations since the ancient Greek period if not earlier (Risse, 1999), modern Western health care differs from the past in the underlying medical science (itself rooted in highly successful physical and mathematical sciences of the Scientific Revolution), the breadth and number of settings, and the technology inherent in each. As the health care system evolved, new settings developed to meet chang- ing needs and existing ones took on or shed their status as the preferred sites of care. The latter case typically occurred when care models shifted and/ or technology enabled other or new sites of care to treat or cure health con- ditions at a lower cost or with better outcomes. What distinguishes newer settings is specialization, level of staffing and required skill mix, breadth and sophistication of technology, and experimentality of treatments. For example, 45 46 I: U.S. Health Care System: Present State about 40% of physician visits were in patient homes as late as the 1940s. By the 1960s, home visits dropped to about 10% of all visits, and by the 1980s, they accounted for less than 1% of visits. This has been attributed to the need for greater economic efficiency (e.g., of the physician) and access to more equipment and clinical staff. More recently, the idea of physician home visits has been revived to increase patient access (e.g., in the case of patients with limited mobility), while technological developments have enabled portable medical devices that can do what could previously be done only in an office (Kao et al., 2009). Additionally, new treatments for a disease may shift the preferred site of care from one to another. For example, hepatitis C has been a leading cause for liver transplantation, a procedure typically only performed in the most advanced acute care hospitals (Missiha et al., 2008). However, the discovery of the virus that causes the disease allowed the devel- opment of curative antiviral agents that can be taken in the home while avoiding the liver damage that necessitated transplant. Additionally, it is possible that future public health efforts will contain and ultimately eradicate hepatitis C, as smallpox was eradicated in the 20th century (Oancea et al., 2020). Thus, while a particular care setting may have been preferred for certain types of care or treatments in the past, this will likely change with future advances in care and technol- ogy. What is more likely to persist is the nature of the facilities and their ability to adapt their unique strengths and capabilities to evolving medical science. For example, while medical science practiced in monasteries during medieval times would be unrecognizable to us today, present day hospitals can trace their evolution back to them, including the tra- dition that when you have to go there, they have to take you in (Risse, 1999). It should also be noted, in a theme that will be repeated throughout this book, that there are no absolute definitions for many elements of the U.S. health care system, but rather an interconnected web of definitions developed by stakeholders ranging from the federal, state, and local government agencies to the private for-profit and nonprofit sectors, includ- ing nongovernmental organizations (NGOs), independent accrediting organizations, and health care payers. For example, the Centers for Medicare & Medicaid Services (CMS), the federal agency that administers the Medicare program, has a specific payment model for “short-term acute hospitals.” Most of them are privately owned, licensed by a state, and accredited by organizations such as The Joint Commission. However, what constitutes a hospital—and, therefore, gets the blue “H” sign along the road that guides those in need to its facility—varies from state to state, with some commonalities due to participation in federal programs such as Medicare. Also of note is the richness of delivery settings and types of providers in the health care system. CMS defines 13 different major provider types (those with distinct payment models or rate schedules), over 50 distinct “places of service,” over 100 provider/supplier types, and over 500 provider taxonomies (CMS, 2019; Data.CMS.gov, 2019). Finally, an important development in the U.S. health care system is the vertical and horizontal integration across the spectrum of care: community-based care, inpatient acute care, and postacute care. The trend toward horizontal consolidation was noted when hos- pitals began to merge in the 1990s (Cuellar & Gertler, 2003). The integrated systems that have emerged since the 2000s are both horizontal and vertical, and may contain multiple hospitals, clinics, long-term care facilities, physician practices, home health care organiza- tions, and hospices.  2: The Settings for Health Care Delivery 47 Referral Hierarchy (Often Referred to as Levels of Care) Primary Care The World Health Organization (WHO) provides a broad and holistic view of primary care—not one specific to a single health profession or activity: Primary Health Care is a whole-of-society approach to health that aims equita- bly to maximize the level and distribution of health and well-being by focusing on people’s needs and preferences (both as individuals and communities) as early as possible along the continuum from health promotion and disease pre- vention to treatment, rehabilitation and palliative care, and as close as feasible to people’s everyday environment. (WHO, 2018, p. 2) The American Academy of Family Physicians (AAFP) provides a comprehensive vision of primary care that outlines specific roles for primary care, the primary care team, and physicians. It includes lowering costs, the role of first contact, intake of “undifferentiated patients,” general and holistic patient evaluation, and preventative care: Primary care is the provision of integrated, accessible health care services by physicians and their health care teams who are accountable for addressing a large majority of personal health care needs, developing a sustained partner- ship with patients, and practicing in the context of family and community. The care is person-centered, team-based, community-aligned, and designed to achieve better health, better care, and lower costs. Primary care physicians specifically are trained for and skilled in compre- hensive, first contact, and continuing care for persons with any undiagnosed sign, symptom, or health concern (the “undifferentiated” patient) not limited by problem origin (biological, behavioral, or social), organ system, or diagnosis. Additionally, primary care includes health promotion, disease prevention, health maintenance, counseling, patient education, diagnosis and treatment of acute and chronic illnesses in a variety of health care settings (e.g., office, inpatient, critical care, long-term care, home care, schools, telehealth, etc.). … (AAFP, 2023, paras. 2 and 3) Secondary Care The Medical Subject Headings (MeSH) of the National Library of Medicine defines second- ary care as “specialized healthcare delivered as a follow-up or referral from a primary care provider” (National Library of Medicine, 2023a, para. 1), and typically encompasses all care from office visits to physician specialists to routine hospital care (Pol & Thomas, 2000). Tertiary Care Tertiary care is typically provided at a medical facility that has a high degree of subspe- cialty expertise for patients, who are often referred from centers where they received sec- ondary care (National Library of Medicine, 2023b). Tertiary care encompasses complex procedures such as open-heart surgery and reconstructive surgery, and it is often provided at major teaching hospitals or academic medical centers located in urban areas with large populations (Pol & Thomas, 2000). 48 I: U.S. Health Care System: Present State Quaternary Care Quaternary care generally refers to medicine practiced at the leading edge—typically ultraspecialized or experimental therapies under clinical research protocols. Heart, lung, and other major organ transplants are generally considered quaternary care (Pol & Thomas, 2000) and only performed at a small fraction of hospitals. For example, less than 2% of U.S. hospitals are active lung transplant centers (Organ Procurement & Transplantation Net- work, 2023). The NIH Clinical Center and the Rockefeller University Hospital are among the few hospitals dedicated solely to clinical research and experimental therapies. Otherwise, most quaternary care is provided at hospitals and medical centers that also provide routine and tertiary care, as few facilities are financially able to provide only quaternary care. Finally, it should be noted that while some attributes are highlighted in definition, they are not defining. For example, while primary care is encouraged to be the point of first contact, first contact does not define primary care (e.g., an urgent care or ED facility is not considered primary care even if it is a patient’s first contact with the health care system for a problem). Rather a broader, multidimensional concept of primary care is emphasized: If primary is understood in its sense of first in time or order, this leads to a relatively narrow concept of primary care as “first contact,” the entry point, or ground floor of health care delivery. This meaning of primary can connote only a triage function in which patients are then passed on to a higher level of care. If, on the other hand, primary is understood in its sense of chief, principal, or main, then primary care is better understood as central and fundamental to health care. This latter idea of primary care supports the multidimensional view of primary care envisioned by this IOM committee. (Donaldson et al., 1994, p. 9) The remainder of this chapter describes the numerous settings for health care delivery, with a brief description of each, as well as the health problems and number of visits (or persons) treated there. These sites are: the home ambulatory care sites acute care hospitals postacute care sites THE HOME Self and Family Care Self-care includes both the wellness and fitness efforts persons undertake to maintain and strengthen their own health (and the health of family members), as well as stave off illness by using layman’s knowledge to treat a variety of maladies. Although the hospital may be seen as the flagship of the health care system—it is the largest single category of National Health Expenditures and the setting for many television shows—the vast majority of peo- ple will not receive inpatient acute care in any given year (National Center for Health Statistics [NCHS], 2023). Outside of people who are unexpectedly incapacitated, the first health care decision people make is whether to access the delivery system, at all, and an estimated 80% to 95% of health problems are never brought forward to a physician or otherwise involve profes- sional medical care. Frequently, ailments perceived to be minor are either addressed with  2: The Settings for Health Care Delivery 49 a “take-no-action,” “wait-and-see,” or self-medication approach. Fevers, headaches, and indigestion are among the most common ailments treated with nonprescription or “over- the-counter” (OTC) medicines (Dean, 1981). Levin and Idler (1983) provide a consensus definition of self-care as follows: Self-care … refers to those activities that individuals undertake in promoting their own health, preventing their own disease, limiting their own illness, and restoring their own health. These activities are undertaken without profes- sional assistance, although individuals are informed by technical knowledge and skills derived from the pool of both professional and lay experience …. The generic attribute of self-care is its nonprofessional, nonbureaucratic, nonindus- trial character. (Levin & Idler, 1983, p. 181) After self-diagnosis and possibly advice from friends and family, an individual may decide to become a patient and enter the health care system. Home is perhaps the most common setting for self/family-care including the self-administration and use of OTC as well as prescription pharmaceuticals and medical products (discussed further in Chapter 4). Additionally, the past 20 years have seen the rise of “Dr. Google” at least as a start- ing point for most people’s questions about their health (Hesse, 2012). More recently, advanced smartphone “apps” and at-home diagnostics have broadened the range of diag- nostics and therapies that can be undertaken or at least initiated in the home. For example, the pulse oximeter—a technology to estimate blood oxygen saturation tracing back to the 1970s—became a popular home diagnostic during COVID-19 after being available for con- sumers (nonprescription for nonmedical purposes1) for at least 10 years (Comstock, 2012). Meanwhile, IQVIA reported there were over 350,000 health apps available to consumers as of 2020 with 90,000 new apps released just that year, and consumer disease management apps accounted for 47% of usage (IQVIA, 2021a). In other cases, laboratory companies, which traditionally received specimens or referrals with prescriptions from physicians, are allowing consumers to order tests on their own for fertility, blood iron levels, and cancer, and collect their own specimens in some cases (Hufford, 2022). Health Professional Care in the Home Physician Home Visits Although the “house call” was thought to be relegated to a delivery system of another time, there has been some resurgence in physician home visits as a convenience or tool to improve access for those with limited mobility. Although technology has made it more practical for physicians to perform increasingly sophisticated examinations outside dedi- cated clinical space, the economics of this model are challenging, given physician salaries, travel times, and projected physician supply and shortages (Yao et al., 2016). Telehealth/Telemedicine As a hybrid between self-care at home and a trip to a physician office, telemedicine has recently become much more practical and affordable with the continuing decline in costs and increased performance of enabling technologies, such as high-speed computers and networking. Many 1 Readers should note that pulse oximeters available OTC are sold as either general wellness or sport- ing/aviation products that are not intended for medical purposes, so they do not undergo U.S. Food and Drug Administration (FDA) review. OTC oximeters are not cleared by the FDA and should not be used for medical purposes. Several studies have found high variability in accuracy. 50 I: U.S. Health Care System: Present State providers are now offering these services as a more convenient and lower-cost modality for diagnosing patients whose ailments do not appear to require physical examination (Volz, 2021). Additionally, both new and existing technology companies have adapted their software to support providers who offer their services as telehealth. As of January 2023, Zoom and Cisco Systems, two general technology companies, had the highest market shares, followed by Amwell, a dedicated telemedicine provider (Healthcare Insights, 2023). While telemedicine as a concept can be traced back to at least 1964 when the University of Nebraska demonstrated its use for psychiatric treatment (Benschoter, 1967), its adoption accelerated dramatically with the COVID-19 pandemic, rising to more than 32% of all out- patient visits in April 2020. By February 2021, telemedicine volumes stabilized at 13% to 17% of all visits across all specialties, which is still 38× prepandemic levels. The shift has been most significant for behavioral health (e.g. care by a psychologist or psychiatrist; Best- senny et al., 2021). However, analysis of post-COVID-19 usage patterns by demographics suggest that telemedicine remains popular for a relatively small, mostly affluent segment of the market (Jain, 2022). Remote Patient Monitoring The American Medical Association (AMA) defines remote patient monitoring (RPM) as, “a digital health solution that captures and records patient physiologic data outside of a tradi- tional health care environment” (2022, p. 8) and further highlights the advantage of providing “visibility into patients’ lives outside of their scheduled appointments, which has histori- cally been a barrier to timely and effective diagnosis and management” (2022, p. 8). Finally, it notes that, “RPM has been praised for engaging patients in their own care by providing them access to their own data so they can better understand the impact of their treatment and advocate for their medical needs” (AMA, 2022, p. 8). In an essay published by the Agency for Healthcare Research and Quality (AHRQ), Hood and colleagues elaborated on the remote aspect: “The data collected from these devices are then electronically transferred to providers for care management. Automated feedback and workflows can be built into data collection, and out-of-range values or con- cerning readings can be flagged” (Hood et al., 2023, para. 2). Complementarily, the U.S. Department of Health and Human Services (DHHS) notes, “Remote patient monitoring lets providers manage acute and chronic conditions. And it cuts down on patients’ travel costs and infection risk” (DHHS, 2023, para. 1). Conditions that are popular for RPM include: high blood pressure diabetes weight loss or gain heart conditions chronic obstructive pulmonary disease sleep apnea asthma (DHHS, 2023, para. 3) Common devices that qualify and can relay data to clinicians include: weight scales pulse oximeters blood glucose meters blood pressure [BP] monitors (DHHS, 2023, para. 4)  2: The Settings for Health Care Delivery 51 Like telehealth, the origins of RPM can be traced back decades. Starting in the 1960s, NASA’s Project Mercury created both the need and resources to develop RPM in order to monitor astronauts in real time. Mirroring the trajectory of telehealth, RPM also jumped during the COVID-19 pandemic and remote monitoring was used by health systems to monitor COVID-positive persons outside the hospital. In one example, seven nurses were able to remotely manage 1,000 sick patients at a time, 24/7, only admitting those whose symptoms escalated (Morgan et al., 2020). The limited adoption-to-date may be due to mixed results with introductions so far. In one study of heart failure patients and another of hypertension patients, there were no improvements in clinical outcomes while self- reported quality-of-life decreased in one and depression worsened in the other (Logan et al., 2012; Ong et al., 2016). Logan and colleagues note, “a potential disadvantage of home BP monitoring is the pos- sibility that patients may become preoccupied with measuring their BP or for those with an anxiety disorder their symptoms may worsen. … [It] is known that selective self-focused attention to bodily symptoms can have unexpected negative psychological consequences” (2012, p. 56). More generally, they argue, “patients with chronic conditions inevitably engage in self-care activities. … However, for self-care activities to be effective they need to be based on reliable information and a meaningful collaboration with healthcare providers in an over- arching framework of maintaining autonomy” (Logan et al., 2012, p. 56). In the case of hyper- tension, “… self-measurement of BP on its own failed to lower BP” (Logan et al., 2012, p. 56). Insider Intelligence estimates 70.6 million U.S. patients, or 26.2% of the population, will use RPM tools by 2025 (Insider Intelligence, 2023). Estimates are that the RPM costs for traditional Medicare beneficiaries are $2,270 (2021 dollars) per year (Tang et al., 2022; Figure 2.1). FIGURE 2.1 The diagnostic process. MATION INTEGRA OR TIO INF N ormation bee t inf nc ien ol ffic l u ec ss ted Ha Clinical ? Patient Patient history and Physical experiences engages with interview exam Communication Treatment Outcomes a health health care of the diagnosis Referral and Diagnostic problem system consultation testing IN FO THE AG ING SIS The explanation of The planned path of Patient and GA the health problem care based on the System Outcomes DI O R K NO R M RIN that is communicated diagnosis Learning from AT G W N to the patient diagnostic errors, IO near misses, and accurate, timely diagnoses TIME SOURCE: National Academies of Sciences, Engineering, and Medicine. (2015). Improving diagnosis in health care. The National Academies Press. https://doi.org/10.17226/21794 52 I: U.S. Health Care System: Present State AMBULATORY CARE Ambulatory care refers to medical services performed without admission to a hospital or other health care facility for an overnight stay. Examples of outpatient clinics and ambu- latory care facilities include diagnostic imaging at radiology centers, outpatient infusion centers, ambulatory surgery centers (ASCs), and freestanding EDs. It should be noted that these facilities are often preceded by the word outpatient, ambulatory, or freestand- ing to distinguish them from their hospital counterparts because these services typically originated in the hospital (historically inpatient) setting and later were offered outside the hospital to improve access, efficiency, and/or convenience and the patient experience. Ambulatory care is provided in many settings, but we begin with a brief description of those where most ambulatory visits are provided: physician offices, followed by EDs and hospital outpatient clinics. In 2016, these visits numbered 883,725 million, 145,591 million, and 125,721 million, respectively (NCHS, 2011; Rui et al., 2016; Rui & Okeyode, 2016). While primary care physician offices and specialty (secondary care) physician offices generally operate somewhat similarly, the scale of complexity and resources of specialist physician offices and routine hospital care included under secondary care spans several orders of mag- nitude. Physician Office The physician office is among the oldest sites of care. CMS defines an office for professional billing purposes as a “location, other than a hospital, skilled nursing facility (SNF), military treatment facility, community health center (CHC), State or local public health clinic, or inter- mediate care facility (ICF), where the health professional routinely provides health examina- tions, diagnosis, and treatment of illness or injury on an ambulatory basis” (CMS.gov, 2023b, para. 11). Additionally, CMS defines a walk-in retail health clinic as “a walk-in health clinic, other than an office, urgent care facility, pharmacy or independent clinic and not described by any other Place of Service code, that is located within a retail operation and provides, on an ambulatory basis, preventive and primary care services” (CMS.gov, 2023b, para. 17). CMS defines an urgent care facility as a “location, distinct from a hospital emergency room, an office, or a clinic, whose purpose is to diagnose and treat illness or injury for unscheduled, ambulatory patients seeking immediate medical attention” (CMS.gov, 2023b, para. 20). Thus, a physician office is one where one or more physicians provide health examinations, diag- nosis, and treatment of illness or injury on an ambulatory basis to patients not necessarily seeking immediate medical attention, not located within a retail operation, and not part of another clinic or facility elsewhere described. Among noninstitutionalized civilians, visits to a physician in an office totaled 948 mil- lion in 2021, up from 934 million during 2020 but down from 1,035 million in 2019 and 1,073 million in 2018. Additionally, there were another 455 million visits in 2021 to phy- sician offices to see nonphysicians (e.g., nurse practitioners or social workers), which is substantially higher than the 371 million such visits in 2019 in both number and ratio to physician visits (AHRQ, 2023). About 363 million of the 948 million visits (38%) in 2021 were to physicians with a specialty considered primary care2 and about 48% of those visits were for check-ups, with about 37% of those related to a specific condition (Romaire, 2020). 2 This analysis included physicians with specialties of family practice, general practice, geriatrics, internal medicine, and pediatrics, though it is also common to include additional specialties such as gynecology/obstetrics, hospice, and palliative medicine.  2: The Settings for Health Care Delivery 53 Total expenditures for those visits were estimated at US$346 billion in 2021, up from US$313 billion in 2020 and US$297 billion in 2019, and otherwise growing at about 6% annually for the past 25 years. Total expenditures on office-based care increased from about 130% of physician office spending in 1996 to about 192% in 2021, though the gap between the two widened the most starting in 2012. From 2019 to 2021, total expenditures on visits to physician offices to see nonphysicians increased from about US$90 billion to US$149 billion reflecting both greater use of a broader care team and higher payments for those visits (AHRQ, 2023). Physician offices are likely the single largest location of billable physician activity based on the Medicare Payment Advisory Commission’s (MedPAC’s) detailed analysis of Medicare claims data, which found about half of allowed charges for physician evaluation and management services were for office/outpatient settings while the remainder were provided across a broad range of settings such as hospital inpatient departments, EDs, and nursing facilities (MedPAC, 2021). The most common reasons for visits to primary care specialties were for diagnosis, treatment, follow-up, and postoperative care. Among nonprimary care specialties, 37% of visits were for diagnosis and treatment and usually for a specific condition. While the majority of visits to a primary care physician involved a diagnostic test, procedure, or prescription, less than half to other specialists did. The most common across all physician office visits were lab tests followed by prescriptions (Romaire, 2020). In the National Ambulatory Medical Care Survey for 2019, the vast majority of visits— 83%—were for already established patients. For new patient visits, about 62% were to a nonprimary care specialist3 though only in 37% of new patient visits to primary care special- ties did the physician consider themself the patient’s primary care provider (NCHS, 2019). About 41% were related to a chronic condition, concentrated in those 18 and over. Among those under 18, visits were most commonly for preventative care (40%) and new problems (38%; Ashman et al., 2023). Infants under 1 year old had an average of five preventative care visits in their first year. In the plurality of visits, the physician saw the patient for 16 to 30 minutes and time spent with the physician was between 11 and 30 minutes 75% of the time, with a median of about 19 minutes. In about 72% of visits, a drug was provided or prescribed. Beyond any onsite tests and treatments and orders for outside tests and treatments, the most common disposition of a visit was for the patient to return in a specified time, with the plu- rality of visits scheduled for 2 months or greater. However, patients were referred to other physicians in about 9% of visits and to a hospital/ED in about 0.4% of visits (NCHS, 2019). The plurality of visits involved solo physician practices (44%) while group practices typically had a size of three to five physicians (21%). Visits to group physician practices with 11 or more physicians were relatively rare, accounting for about 8% of visits. How- ever, 65% of visits to group practices were to single-specialty groups, whereas 79% of visits were to practices with all electronic medical records. About 11% of visits were to practices with no electronic medical records (Harris-Kojetin et al., 2019). Practice structures can range from “micropractices” to highly staffed patient-centered medical homes (also known as primary care medical homes or PCMH). Micropractices emphasize small, independent physician practices with low overhead—aiming for no support staff through the use of technology such as online scheduling and self-service patient portals—with the goal of allowing for extended time with patients. By minimizing fixed-cost overhead, physicians expect to improve both their quality of life and patient Note this survey designated a broader range of specialties as primary care than the previous analyses. 3 54 I: U.S. Health Care System: Present State satisfaction by focusing on building and maintaining patient relationships rather than maintaining a full schedule simply to cover the salaries of support staff. A study across physicians in micropractices and larger group practice settings found that the former had the highest satisfaction with family time and the ability to provide continuity of care. They also rated the overall quality of medical care they provided higher than employed physi- cians. On the downside, they also had lower satisfaction with income and scope of practice (Ho, 2007; Paddock et al., 2013). Alternatives to Physician Office Alternatives to a physician office visit include: urgent care clinics, hospital clinics/outpatient departments, retail clinics, public health clinics, and neighborhood and CHCs. Physicians practice and/or oversee care in these alternates to physician offices. Aside from telehealth, the most common alternatives to physician offices for ambulatory care are hospital clinics/outpatient departments, retail clinics, and urgent care clinics. We will discuss several of them next. Urgent Care Clinics Primarily intended to treat illness or injury for unscheduled, ambulatory patients seeking immediate medical attention (CMS.gov, 2023b), urgent care facilities typically trade the relationship aspect typical of the physician office setting for immediate accessibility. Urgent care centers are defined by CMS as “a location distinct from a hospital emergency room, an office, or a clinic, whose purpose is to diagnose and treat illness or injury for unscheduled, ambulatory patients seeking immediate medical attention” (CMS.gov, 2023b, para. 20). A relatively new concept, urgent care is seen as a middle ground between a (primary care) physician office and a hospital ED. The former tends to have long waits for appointments while the latter tends to have long wait times for issues that are not life threatening. The key to the concept, which can be traced back to the 1970s, is unscheduled care, after-hours access, expanded services compared to primary care, and a lower cost than emergency care (McNeeley, 2012). In 2022 there were about 204 million patient visits to about 14,000 urgent care facilities. This volume is a substantial jump from pre-COVID-19 volumes in 2019 of about 134 million visits (across just over 13,000 facilities) and is expected to be sustained post-COVID. While the number of facilities available did not spike during the pandemic, they have been growing in number every year since at least 2014, when they totaled about 7,000. The total spending on urgent care has been estimated between US$35 billion and US$50 bil- lion. About 75% of facilities are in suburban areas and about 90% of the U.S. population is within a 20-minute drive of a facility as of 2022. In 2022, an estimated 53% of facilities were owned wholly by or joint ventures with hospitals, while another 27% were solely physician owned. The remainder were owned by private equity, insurance companies, or other corporate structures (Urgent Care Association, 2023).  2: The Settings for Health Care Delivery 55 The incremental advantage of urgent care facilities for hospitals that already have a 24/7 ED is that they are typically built to handle less acute patients with a narrower range of medical issues, and therefore have lower capital costs than adding similar capacity to EDs. Also, while an ED will always have emergency medicine-trained physicians and crit- ical care-trained nurses, the staffing model for a typical urgent care facility is a mix of med- ical assistants, mid-level practitioners, and physicians who are not always on-site. Often running on protocols for a select range of issues, it is easier for urgent care centers to run more efficiently with more predictable wait times (Urgent Care Association, 2022). It should also be noted that by offering their own urgent care services, it keeps the patient in the hospital’s system and makes continuity of care easier. Finally, urgent care facilities are not usually4 subject to Emergency Medical Treatment and Labor Act (EMTALA) require- ments (discussed under EDs) and thus sidestep the issue of being required to provide unpaid services (Zibulewsky, 2001). Conditions commonly treated in urgent care centers include minor burns, scrapes and cuts, allergic reactions, ear infections, strep throat, and sexually transmitted infections (STIs). Additionally, most urgent care facilities offer at least some occupational medicine that supports treatment of common workplace injuries, drug and alcohol screening, and treatment for bloodborne pathogen and other hazardous materials exposure (Urgent Care Association, 2021, 2022). For small businesses in particular, this can be more cost effective than either providing on-site medical services or sending their employees to EDs for non- emergency conditions. There remains debate on the overall impact of urgent care centers on total health expen- ditures. Research has generally found that the availability of urgent care centers leads to a decrease in ED usage for low acuity conditions. One study found that during the hours that urgent care centers were open in a particular zip code, there was a 27% decrease in low acuity visits to nearby EDs across an all-payer population while another found a 36% reduction in per-member ED use for select low acuity visits simultaneous with per-member urgent care use across a commercial population nationally. Offsetting this shift to the lower cost setting of urgent care, however, was an increase in cost per visit (both for remaining charges from low-acuity visits in ED facilities as well as a shift from even lower cost set- tings such as primary care to urgent care) and an increase in total visits (increase in urgent care visits was greater than reduction in ED visits). The latter issue relates to a phenom- enon that people who previously would have let minor issues resolve on their own may seek professional care when particularly convenient (Allen et al., 2021; Wang et al., 2021) There also appears to be a generational divide about the use of urgent care facilities compared to other types of providers. In one study’s analysis of patient utilization pat- terns, about 36% of people in the “Gen Z” and “Millennial” age groups reported having used urgent care facilities in a 6-month period in comparison to only 19% of people in the “Boomers” and “Silent Generation” age groups. Then over 45% of those in the Gen Z and Millennials age groups had more than three visits to an urgent care facility in a 12-month period compared to 26% of Boomers and 22% of the Silent Generation. One interpretation of this is that urgent care providers are serving as a primary care provider for younger generations (Urgent Care Association, 2023). This is consistent with findings that as a group 4 It should be noted that some urgent care facilities may be subject to EMTALA even if not established or billing as an ED if they meet certain criteria (Urgent Care Association, 2017). 56 I: U.S. Health Care System: Present State those of the Millennial generation do not value primary care physicians as much as previ- ous generations and only 68% have a primary care physician compared to 91% of those in Generation X (Marso, 2021). As such, some worry that urgent care negatively impacts continuity of care and when used as a substitute for primary care reduces preventative care and ongoing management of chronic conditions. Unfortunately, this can reinforce use of urgent care as patients come to depend on reactive responses to emerging health issues and managing chronic condi- tions, then reinforcing the cycle (Villasenor & Krouse, 2015). On the other hand, surveys have shown that Millennials tend to consider the traditional model of calling the doctor’s office to be seen in-person days or even weeks later as outdated and inconvenient. They are also yearning for the collaborative, close relationship the primary care model is designed to provide even if seemingly an anachronism (Marso, 2021). Finally, some argue that an urgent care facility is unlikely to provide good primary care to those who need it and urgent care facilities that provide good primary care are unlikely to perform well as an urgent care destination for those who seek it out for that purpose. Freestanding Emergency Departments The American College of Emergency Physicians (ACEP) defines a freestanding emer- gency department (FSED) as “a facility that provides emergency care but is structurally separate and distinct from a hospital. There are two types of FSEDs: a hospital outpatient department (OPD), also referred to as an off-site hospital-based or satellite ED, and inde- pendently owned freestanding emergency centers (IFEC)” (ACEP, 2015, p. 1). One chal- lenge—both for the industry and prospective patients—is how these facilities differ from urgent care centers. ACEP highlights that “an FSED offers the same scope of services that a traditional ED does but is not attached to a hospital. An FSED is often open 24 hours, 7 days a week and holidays. In contrast, an UCC (Urgent Care Center) typically offers fewer and less emergent services, is open fewer hours, and may not be open 7 days a week or on holidays” (ACEP, 2015, p. 2). While other definitions abound, there is consensus that FSEDs have grown rapidly over the past 20 years—from approximately 1% of the total ED nationally in 2001 to 12% in 2017. This increase has been attributed to a change in Medicare policy in 2004 that recognized FSED operated by hospitals though not IFECs. IFECs have historically not been allowed to participate in Medicare or Medicaid by law, although this was waived during the COVID- 19 pandemic. In 2017, approximately 5% of ED visits out of 160 million ED visits nationally were in hospital-satellite FSEDs while 1% were to IFECs (Herscovici et al., 2020). There is some controversy about the rise of FSEDs, especially IFECs, and their impact on the overall health system: Emergency departments (EDs) play a critical role in the U.S. health care system, handling one-fourth of all acute care visits and half of all hospital admissions. The Emergency Medical Treatment and Labor Act (EMTALA) of 1986 recog- nizes EDs as an important part of the social safety net that provides acute med- ical care to all patients, regardless of their demographic characteristics or ability to pay. (Gutierrez et al., 2016, p. 1857) While the impact on the system continues to be debated, one study found that the entrance of two FSED near a tertiary care-level hospital-based ED led to a 7.5% decrease over 3 years in visits to the hospital-based ED but a 45% increase in ED visits across the  2: The Settings for Health Care Delivery 57 three facilities. Another study of several hundred people in metropolitan areas across four states found a rise in utilization of EDs following entrance of a FSED into the geography surrounding several hospital-based EDs (Gutierrez et al., 2016; Ho et al., 2019). Originally, FSEDs were intended to ensure access to emergency care in rural areas that lacked the volume to sustain full acute care hospitals. Retail Clinics Additionally, retail chains such as CVS, Walgreens, and Walmart have begun to partner with or build physician clinics in their stores (Charon, 2021; Repko, 2021; Slovenski, 2019). This may have significant implications for practice patterns when the retailer is also the patient’s pharmacy (as in the case of the three largest pharmacy chains: CVS, Walgreens, and Walmart). Additionally, CVS, through its Aetna division, is the third largest health insurer by national-level market share, which may further challenge unaffiliated physician practices. Public Health Clinics Public health clinics are ambulatory health care settings usually serving a catchment area which has scarce or nonexistent health services or a population with special health needs. These centers attempt to coordinate federal, state, and local resources in a single orga- nization capable of delivering both health and related social services to a defined pop- ulation. While such a center may not directly provide all types of health care, it usually takes responsibility to arrange all medical services needed by its patient population (U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, 2023). In many parts of the United States, local government provides ambulatory health care services in public hospitals, through local health departments (LHDs), and in other venues. LHDs operate an array of special clinics (National Association of County and City Health Officials [NACCHO], 2016). In 2016, they provided many services, important among them clinics for tuberculosis control (often providing treatment as well as case finding and con- tact investigation services), child health (where immunizations, examinations, and edu- cation on child rearing are provided), prenatal care, sexually transmitted disease control, and certain mental health problems. In recent years, some public health agencies have broadened the scope of their services to include family planning, chronic disease detection, and general primary care. Precisely how much care is provided is not known. Although there are more than 2,000 LHD units providing some types of care, public health services (PHSs) are not a major factor in the overall ambulatory care picture (Association of State and Territorial Health Officials [ASTHO], 2006). Neighborhood and Community Health Centers In the late 1960s and early 1970s, the neighborhood health center (NHC) movement emerged in the United States. The NHC was based on the concepts of full-time salaried physician staffing, multidisciplinary team health care practice, and community involve- ment in both policy making and facility operations (Davis & Schoen, 1978; Zwick, 1972). The movement was strongly stimulated by the federal Office of Economic Opportunity (OEO). The OEO was the lead agency for the “war on poverty” initiated by President Lyn- don Johnson from 1964 to 1968. For poor people, the NHCs sought to provide one-stop shopping for comprehensive ambulatory care—a full range of preventive and rehabilitative options as well as treatment services that were affordable and of high quality. The NHCs also aimed to intervene in the 58 I: U.S. Health Care System: Present State cycle of poverty by providing jobs and skills/career development opportunities for the resi- dents of the communities they served. The movement did not meet with overwhelming suc- cess in terms of patient visits provided. Conceptually, though, it was very important, leading to, among other things, the community-oriented primary care model mentioned earlier. The NHC did not represent an entirely new concept in the United States. The 19th- century freestanding urban “dispensary” was an early general ambulatory care center that primarily served the poor. Although it was organized differently, it performed some functions similar to those of the modern NHC or the CHC, the NHC’s successor. Health department ambulatory care programs that developed during the last quarter of the 19th century had some elements that would also appear later in NHCs, such as districting and comprehensiveness (Rosen, 1971). The experience with prepaid group practice (PPGP) in the 1930s, 1940s, and 1950s influ- enced the development of the NHC movement of the 1960s and 1970s (Light & Brown, 1967). With varying degrees of vigor and success, the NHCs attempted to make multidis- ciplinary group practice work. Along with physicians and nurses, they employed social workers, neighborhood health workers (usually people from the area served, specially trained by the NHC with a combination of basic nursing and social service skills), and, sometimes, lawyers, all on salary. These health care teams helped patients deal with both social and medical problems. At the movement’s peak in the early 1970s, there were an estimated 200 NHCs nation- ally (CHroniCles, n.d.). In the mid-1970s, the Nixon and Ford administrations more nar- rowly defined the scope of the NHC program and renamed its facilities CHCs. The CHCs, which included many of the original NHCs, were to concentrate on the delivery of primary care services. They were to deemphasize other NHC roles, such as providing employment opportunities and training programs, stimulating social and economic development in their communities, and concerning themselves with communitywide as well as personal health problems. By the early 1980s, there were more than 800 CHCs serving more than 4.5 million peo- ple (Sardell, 1983), a remarkable resurgence for a program that received little publicity. By the early 1990s (Starfield, 1992), there were fewer CHCs (540), but with a total of 2,000 loca- tions and sublocations serving close to 6 million poor people in all 50 states, the District of Columbia, and the major U.S. territories. Many of the CHCs were on the brink of financial insolvency in the late 1990s, but the Bush Administration initiative to expand CHCs has eased the financial difficulties of these health care providers (Bush, 2007). In 2001, President George W. Bush initiated an expansion of the CHCs. After the pas- sage of the Affordable Care Act (ACA) in 2010, there was greater expansion. By 2016, there were over 1,300 CHCs with 26 million visits (Rosenbaum et al., 2018). By 2022, CHCs had become even more important to the nation’s health care system, as they served over 30 million people with over 125 million in-person visits for medical, vision, and dental care (Health Resources and Services Administration [HRSA], 2023). Today, “health centers” refer to all the diverse public and nonprofit organizations and programs that receive federal funding under Section 330 of the PHS Act, as amended by the Health Centers Consolidated Act of 1996 (P.L. 104–299) and the Safety Net Amend- ments of 2002. They include CHCs, migrant health centers, health care for the homeless health centers, and primary care public housing health centers. Health centers are characterized by five essential elements that differentiate them from other providers (HRSA, 2022):  2: The Settings for Health Care Delivery 59 They must be located in or serve a high-need community, that is, “medically under- served areas” or “medically underserved populations.” They must provide comprehensive primary care services as well as supportive services, such as translation and transportation services, that promote access to health care. Their services must be available to all residents of their service areas, with fees adjusted upon patients’ ability to pay. They must be governed by a community board with health center patients constitut- ing a majority of members. They must meet other performance and accountability requirements regarding their administrative, clinical, and financial operations. The CHCs provide a broad range of support services, including transportation, trans- lation, health education, nutrition, and AIDS management, and have been considered by those who use them to provide high-quality care (McAlearney, 2002). The Pharmacy Bridging the home and the physician office is often a pharmacy, “drug store,” or other retailer selling OTC and/or prescription (sometimes abbreviated Rx for the Latin word recipe) pharmaceuticals (drugs) and/or medical devices. The regulatory framework for pharmaceuticals and medical devices is discussed in Chapter 4. However, the total retail sale of medical products in 2021 was estimated at US$542.5 billion, of which US$378 bil- lion was for prescription drugs, up from US$338 billion in 2019, and about 9% of National Health Expenditures in both cases (CMS.gov, 2023a). In the United States—and many Western countries—prescribing and dispensing drugs are two separate acts carried out by two different health practitioners. This sepa- ration of duties—a physician who diagnoses the patient and a pharmacist who prepares and dispenses the indicated remedy—dates back to the 11th century, and it is believed to reduce the conflict of interest (Trap, 2019). Formally, “a pharmacy is a facility whose primary function is to store, prepare and legally dispense prescription drugs under the professional supervision of a licensed pharmacist” (National Uniform Claim Commit- tee [NUCC], 2020, p. 199). As this separation persists today across most of the sites of care, pharmacies exist in not just community care settings but more acute care settings such as hospitals, long-term care facilities, and infusion centers (discussed later). How- ever, “the vast majority of prescription and nonprescription (OTC) medications are pre- scribed, dispensed, and administered in the outpatient setting” (Chui, 2018, para. 10). In the community, most prescriptions are filled by retail pharmacies and mail-order5 pharmacies with compounding pharmacies6 and, almost by definition, specialty phar- macies7 filling a small minority. Retail pharmacies are defined as pharmacies designed 5 A mail-order pharmacy is one that uses common carriers to deliver the medications to patients or their caregivers. Mail-order pharmacies are licensed in the state where they are located and may also be licensed or registered as nonresident pharmacies in other states. 6 Compounding pharmacies specialize in the preparation of components into a drug preparation as the result of a practitioner’s prescription drug order or initiative based on the practitioner/patient/ pharmacist relationship in the course of professional practice. 7 Specialty pharmacies generally dispense low-volume and high-cost medicinal preparations to patients who are undergoing intensive therapies for illnesses that are generally chronic, complex, and potentially life-threatening. Often, these therapies require specialized delivery and administra- tion (NUCC, 2019). 60 I: U.S. Health Care System: Present State to serve a “local patient population in accordance with federal and state law; counsel patients and caregivers (sometimes independent of the dispensing process); admin- ister vaccinations; and provide other professional services associated with pharma- ceutical care such as health screenings, consultative services with other health care providers, collaborative practice, disease state management, and education classes” (NUCC, 2020, p. 200). Specialty pharmacies—which may be part of an institutional or health system setting or accessible in a retail format—“focus on high cost, high touch medication therapy for patients with complex disease states. Medications in specialty pharmacy range from oral to cutting edge injectable and biologic products. The disease states treated range from cancer, multiple sclerosis and rheumatoid arthritis to rare genetic conditions” (American Pharma- cists Association [APhA], 2021b, para. 1). There were an estimated 66,000 pharmacies in 2021, of which just under 59,000 were classified as retail. About 30% of pharmacies are independently owned and the top three chain pharmacies are Walgreens, CVS, and Walmart (IQVIA, 2021b). About 7,500 phar- macies in the United States specialize in compounding (APhA, 2021a). About 5.5 billion prescriptions (adjusted for prescription length) were dispensed across independent, chain, and food store pharmacies in 2021, which is an average of 16.6 per-person-per-year. This average has been growing at an annual growth rate of about 2% per-year since 2015 (authors’ analysis of IQVIA data from 2018, 2021, and 2022 reports). In 2021, an estimated 73% of the overall U.S. population lived within 2 miles of a retail pharmacy and 89% lived within 5 miles (Berenbrok et al., 2022). Retail pharmacies and pharmacists are increasingly being depended upon to engage patients with their unique knowledge of complex pharmaceuticals with complicated side effects and interactions. Increasingly, they are assuming this expansive designation. Phar- macies are also expanding their operations beyond dispensing to include preventative care, such as health screenings and medication therapy management, especially at retail chains. Thus, pharmacies supply and facilitate access to prescription medications and are a vital, and increasingly important, component of health care delivery in the United States (Qato et al., 2017). As another example, CVS Health has announced plans to expand new stores that will “provide dietitians, help people monitor chronic diseases and add community rooms that can be used for yoga classes. The drugstore chain, which quit selling tobacco several years ago, said it will open 1,500 of these so-called HealthHub stores nationally by the end of 2021” (Murphy, 2019, para. 2; Figure 2.2). An increasingly important role of community-based pharmacists is immunization (Goode et al., 2019). Prior to the COVID-19 pandemic, the most common vaccines (e.g., flu; human papillomavirus [HPV]; shingles; and tetanus, diphtheria, and pertussis [Tdap]) were administered about equally in pharmacy and nonpharmacy settings. However, beginning in the fall of 2020, the pharmacy is becoming the preferred site of vaccination, and about 85% of the most administered vaccines are obtained in pharmacies as of 2022. While COVID-era amendments to the Public Readiness and Emergency Preparedness (PREP) Act temporarily expanded pharmacists’ scope of practice for administering vaccines, all states allowed phar- macists at least some authority to administer some vaccines previously (APhA, 2019). One of the most commonly cited advantages of immunizations at pharmacies is access (hours and typically many convenient locations as previously noted) as well as high levels of ongoing engagement compared to many other health professionals. For example, in one  2: The Settings for Health Care Delivery 61 FIGURE 2.2 Types of retail pharmacies. Chain Independent Mass retail Food Clinic Government SOURCE: Data from Qato, D. M., Zenk, S., Wilder, J., Harrington, R., Gaskin, D., & Alexander, G. C. (2017). The availability of pharmacies in the United States: 2007–2015. PLoS One, 12(8), e0183172. https://journals.plos.org/ plosone/article?id=10.1371/journal.pone.0183172 study of complex patients, patients presented to community pharmacies an average of 35 times per year compared to four times per year with their primary care physician (Moose & Branham, 2014). More generally, studies have found increased uptake of immunizations when pharmacists were involved as educators, facilitators, or administrators of vaccines (Isenor et al., 2016). Furthermore, there is movement to expand pharmacies from their traditional drug preparation and dispensing role to a health care destination—especially for care with a significant pharmacologic component. Goode and colleagues outlined five categories of services that pharmacies can increasingly support (Goode et al., 2019): medication optimization (e.g., special packing, home delivery, and medication recon- ciliation) wellness and prevention (e.g., vaccination as previously noted, screenings, and risk assessments) chronic care management (e.g., optimizing diabetes and hypertension through moni- toring and collaborative drug therapy management) acute care management (e.g., test and treat care for minor ailments such as influenza and Streptococcus [strep]) education (e.g., diabetes education and prevention programs) Other Ambulatory Care Sites In 2021, there were an estimated 868 million visits to the offices of clinicians other than physicians and dentists. The top three by number of patient visits were: physical and occupational therapist (169 million visits) chiropractor (133 million visits) mental health counselor (106 million visits; AHRQ, 2023) Other ambulatory care sites include diagnostic imaging and laboratory centers and ASCs. We will focus on the ASCs next. 62 I: U.S. Health Care System: Present State Ambulatory Surgery Centers Evidence of surgery has been found in cultures going back thousands of years and pre- ceding the written word such that researchers now can only speculate about the inten- tions and capabilities of practitioners of those prehistorical eras (Gross, 2012). The earliest known medical texts discussing surgery date to the ancient Mesopotamian world circa 1000 BCE while earlier references to surgery have been found in legal texts such as The Code of Hammurabi, dating from 1700 BCE. The latter might also be the earliest example of outcomes-based payment models though the prescribed downside risk—amputation of the surgeon’s hands in the case of death of a feudal lord—was quite severe (White et al., 2022). However, surgery prior to the advent of aseptic and antiseptic techniques (which slowly gained acceptance between 1867 and 1880), and especially anesthesia (first demon- strated at Massachusetts General Hospital in 18468), might be hard to recognize as health care today (Starr, 1982). As Atul Gawande summarized, “before anesthesia, the sounds of patients thrashing and screaming filled operating rooms. So, from the first use of surgical anesthesia, observers were struck by the stillness and silence” (2012, p. 1718). Dr. Gawande also shares the experience of having an amputation without anesthesia as described by one patient, Professor George Wilson: The horror of great darkness, and the sense of desertion by God and man, bor- dering close on despair, which swept through my mind and overwhelmed my heart, I can never forget, however gladly I would do so. During the operation, in spite of the pain it occasioned, my senses were preternaturally acute, as I have been told they generally are in patients in such circumstances. I still recall with unwelcome vividness the spreading out of the instruments: the twisting of the tourniquet: the first incision: the fingering of the sawed bone: the sponge pressed on the flap: the tying of the blood-vessels: the stitching of the skin: the bloody dismembered limb lying on the floor. (Gawande, 2012, p. 1721) Prior to anesthesia, “surgery was brutal work: physical strength and speed were at a premium so, important was it to get in and out of the body as fast as possible” (Starr, 1982, p. 156). And Dr. Gawande retells the story of a famous London physician, “Liston operated so fast that he once accidentally amputated an assistant’s fingers along with a patient’s leg, according to Hollingham. The patient and the assistant both died of sepsis, and a spectator reportedly died of shock, resulting in the only known procedure with a 300% mortality” (Gawande, 2012, p. 1720). In this context, however, there wasn’t much difference between surgery in a hospital and patient’s home or the physician’s office. Ephraim McDowell famously performed the first ovariotomy in 1809 on Jane Todd Crawford in his home after Mrs. Crawford rode 60 miles on horseback with a 22-pound tumor to have him perform the experimental sur- gery—in this case, without anesthesia and predating Pasteur’s germ theory and Lister’s antiseptic theory. McDowell likely facilitated the success by avoiding the bacteria and autopsies typical of a large hospital at the time (Mann, 1904). 8 There are historical accounts of attempts to render patients unconscious before surgery including “sur- prising their patients by whacking them over the head” (Hippensteele, 2021, para. 3) and the “method of suffocation” (which had the not unknown side effect of mortality; Hippensteele, 2021, para. 4).  2: The Settings for Health Care Delivery 63 Hospitals at the time had a moral stigma associated with almshouses and a reputa- tion as a “house of death.” Data from English hospitals published around 1870 showed that mortality after surgery was higher in hospitals than homes and actually rose with the size of the hospital. As such, anesthesia and antisepsis practices were first adapted to the home and “kitchen surgery.” However, the home surgery model proved both ineffi- cient for surgeons and insufficient to meet the rising standards for surgery. Pioneers like Florence Nightingale promoted ventilation, cleanliness, and the addition of professional nursing. After 1900, hospitals became the predominant site of surgery for patients of all social classes (Starr, 1982). Reciprocally, surgeons raised the standards for hospitals includ- ing starting the American College of Surgeons’ Hospital Standardization Program, which became the Joint Commission on the Accreditation of Hospitals (JCAH), then the Joint Commission on the Accreditation of Health Organizations (JCAHO), and now The Joint Commission (Gawande, 2012). It was in this context that ambulatory surgery—and eventually freestanding ASCs— had to prove themselves as a safe and economical alternative to inpatient hospital care in the 20th century. While there were examples of freestanding outpatient surgical ser- vices early in the century (Hedley-Whyte & Milamed, 2006), surgery had been confined to the hospital despite advocates for the safety and benefits of ambulation (Cohen & Dillon, 1966). These included avoiding the risks of postoperative complications from prolonged bed rest such as deep vein thrombosis, in addition to offering economic benefits (e.g., her- nia repair patients discharged the same day as opposed to postoperative stays of 2 weeks). Despite opposition, two physicians opened the first ASC in the United States in 1970 in Arizona, and from that point, growth proceeded steadily. There were 42 ASCs by 1975, 1,000 by 1988, and 5,400 by 2015. One of the reasons for the substantial growth in ASCs was their coverage by Medicare as part of a cost reduction law passed in 1980 (Leader & Moon, 1989). Other factors were medical and technological advancements, including improvements in anesthesia and in analgesics for the relief of pain, and the development and expansion of minimally invasive and noninvasive procedures (such as laser surgery, laparoscopy, and endoscopy [Hall et al., 2017]). In 2010, patients had over 23 million outpatient surgical and nonsurgical procedures performed during nearly 13 million visits across about 5,000 ASCs. The most common cat- egories of procedures performed outpatient (across both ASCs and hospitals) were oper- ations on the digestive system (e.g., endoscopy), operations on the eye (e.g., extraction of lens due to cataracts), and operations on the musculoskeletal system (e.g., replacement of the knee). On average, visits to ASCs took about 50 minutes of operating room time and 50 minutes of postoperative care—somewhat shorter than the average for outpatient surger- ies in hospitals (Hall et al., 2017). In 2021, there were 6,075 Medicare-certified ASCs with 18,689 operating rooms. Over 95% were for-profit and over 90% were in nonrural areas. About 65% were single-specialty facilities, with pain management now following gastroenterology and ophthalmology as the top three surgical categories. There is wide variation among the states in the concen- tration of facilities—approximately 10 times more facilities in Maryland than in Alabama, West Virginia, and Vermont per Medicare beneficiary (MedPAC, 2023). The substantially higher concentration in Maryland than in all other states may be due to the state’s unique payment model. 64 I: U.S. Health Care System: Present State Total revenue across all ASCs was estimated at US$37 billion in 2021 (Fortune Business Insights, 2021). As of 2022, 52% of ASCs were solely owned by physicians, 21% were part of a hospital–physician partnership, and 2% were solely hospital-owned, with the rest owned solely or in partnership with a corporate entity (Ambulatory Surgery Center Asso- ciation, 2023). Most facilities were small—54% had one to two operating rooms and 30% had three to four operating rooms (Avanza, 2022). A typical four-room ASC costs about US$5 to $10 million to build (Blasco, 2020). An estimated 30% of Mediciare-certified facili- ties are operated by a “major” or multisite operator (VMG Health, 2022). Anesthesia and aseptic techniques, among other techniques, had shifted the focus of surgery to hospitals in the early part of the 20th century. However, as techniques and tech- nology advanced, it became safer to perform surgery outside of hospitals, leading to the shift back to outpatient surgery and the ASC. Perhaps more significant in the second half of the 20th century has been the increasing minimization of the invasiveness of surgical proce- dures. Patients who previously required debilitating, half-meter-long abdominal incisions have benefited from techniques such as laparoscopy and thoracoscopy that allow surgeries with half-centimeter chest incisions while those techniques are being superseded with ones that only leave puncture wounds (Gawande, 2012). In 1991, the mean inpatient hospital stay for a total hip arthroplasty performed for a Medicare patient was 9.1 days (Cram et al., 2011). Advances in the intervening years allowed this procedure to be conducted outpa- tient, culminating in Medicare’s formal coverage on January 1, 2021 (CMS.gov, 2020). Predictions are now that cardiology will be the next specialty to shift to ASCs, with up to one-third of future procedures performed there before the end of the decade (Newitt, 2022). New ASCs may even be located in converted malls as a way to offset declining retail business (Putzier, 2022). HOSPITALS: INPATIENT ACUTE CARE The most intensive health care is provided in hospitals, and although less than 10% of the population experience an overnight stay in a hospital during a 12-month period (Lucas & Benson, 2018), hospitals accounted for about one-third of National Health Expenditures (the largest portion) in 2017, a trend that goes back until at least 1960 (CMS, 2018). This section provides a brief historical background on this important health care setting and an overview of hospital utilization and then describes the current structure of hospitals. Historical Background Historically, the hospital has been the institutional center of the health care delivery system (Knowles, 1965). The word hospital shares its Latin root with the words hostel and hotel. Most frequently under church sponsorship, the institution originated in the Middle Ages primarily as a place of refuge for the poor, the sick, and the weary, rather than as a place for treating illness. As recently as the turn of the 19th century, a person entering a hospital had less than a 50% chance of leaving it alive. By the beginning of the 21st century, most patients could expect to benefit from a hospital stay—about 97% of patients expect to leave the hospital alive. Even though the quality of care could still be significantly improved (Institute of Medicine [IOM], 2000, 2002), the hospital has evolved from a place where a person went to spare their family the anguish of watching them die to a multiservice insti- tution providing interdisciplinary medical care, both ambulatory care and bed-ridden care (Freymann, 1974; Rosenberg, 1979; Stern, 1946).  2: The Settings for Health Care Delivery 65 In the European settlements in America, the earliest hospitals were infirmaries attached to poorhouses. (A poorhouse was an institution operated by a local governmental authority to house persons who were unemployed, orphans or abandoned children, individuals with mental or cognitive disabilities, ill older adults, and those otherwise incapable of self-care.) The first of these was established at Henricopolis in Virginia (1612), and the second in 1732 in Philadelphia (Stern, 1946). The first public institution established solely for the care of the sick was the “almshouse” built in 1736 on Manhattan Island. It was located north of midtown, at a place called Belle Vue (“beautiful vista”). In a reverse of the earlier pattern, the New York City public work- house (a later version of the poorhouse) was moved to the grounds of the almshouse in 1816. New York City’s famous Bellevue Hospital is still at that location. Nongovernmental charity (private, voluntary) hospitals to care for the sick poor were first established in the American colonies during the 18th century (Freymann, 1974). The first was the Pennsylva- nia Hospital in Philadelphia, founded by Benjamin Franklin in 1751. “By 1873, there were an estimated 178 hospitals in the United States, many of them solely for the mentally ill” (Stevens, 1971, p. 52). At about that time, however, the devel- opment of modern medical science was under way, and a general hospital building boom began. By the early 20th century, a patient admitted to a general hospital did, in fact, have a better-than-even chance of getting out alive. That milestone was achieved largely through the development of general hospital hygiene, surgical asepsis (keeping surgical sites scrupulously clean and free of microbial contamination), and surgical anesthesia. After the turn of the 20th century, overall medical care quickly became far too com- plex for average physicians to be able to carry their entire armamentarium in a black bag. By 1910, general hospitals had been established in many communities. There were nearly 4,400 of them, with a total of 421,000 beds (Stevens, 1971). It was the rapid advance of med- ical science that led to the expansion of the hospital system and of individual hospitals, as well as to the evolution of hospitals as the center of the medical care system (MacEachern, 1962; Rosenberg, 1979). The mold from which today’s health care system was cast took its shape around the 1850s. There were still relatively few general hospitals or health care facilities of any type in either Great Britain (our most important medical organizational forebear) or the fledgling United States, but the institutional organization of health care was already firmly estab- lished. The physical separation, for the most part, as well as separate provision for admin- istration and staffing of the curative services for acute, chronic, and psychiatric illnesses became firmly established in the 19th century. That very strong precedent continues to con- trol the physical and administrative design of the health care delivery system even when all three components have a common source of support, as they do now in Great Britain. Present-Day Hospitals The American Hospital Association (AHA) is the primary association that represents and coordinates among hospitals, health systems, and other related organizations. In its role to represent the hospital sector, it surveys nearly all hospitals in the United States each year. Using this survey, a detailed overview of each hospital is provided in the AHA Guide, whereas summaries are available in the companion AHA Hospital Statistics. This chapter utilizes AHA Hospital Statistics, 2019, which contains information from the annual survey of hospitals (AHA, 2019b). 66 I: U.S. Health Care System: Present State The AHA classifies hospitals as one of four types based on the primary function of its diagnostic and therapeutic services (AHA, 2019b): general: for patients presenting with a variety of medical conditions special: for patients who have specified medical conditions rehabilitation and chronic disease: for handicapped or disabled individuals requiring restorative and adjustive services psychiatric: for patients who have psychiatric-related illnesses Most hospitals are general, accounting for 4,680 of the 6,210 hospitals in the United States in 2017. The next largest group is psychiatric, with 631 hospitals in 2017. Another important characteristic of hospitals besides their diagnostic and therapeutic purpose is control and ownership. The AHA defines control as “The type of organiza- tion responsible for establishing policy concerning the overall operation of hospitals. The three major categories are government (including federal, state, and local); nongovern- ment (nonprofit); and investor-owned (for-profit)” (AHA, 2019b, p. 205). Investor-owned (formerly called proprietary) hospitals may be owned by an individual, a partnership, or a corporation. Nongovernment, nonprofit hospitals were historically called voluntary. In addition to diagnostic and therapeutic purpose and control, the length of patient stay is an important distinguishing feature of hospitals. Short-term hospitals, with patient stays under 30 days on average, predominate over long-term hospitals. Long-term hospi- tals have an average length of stay (LOS) of 30 days or more. The AHA has a descriptor that encompasses the majority of hospitals: the community hospital. The designation community hospital is based on a hospital’s diagnostic and thera- peutic purpose, control and ownership, and length of patient stay. It is defined as follows: All nonfederal, short-term general, and special hospitals whose facilities and services are available to the public. (Special hospitals include obstetrics and gynecology; eye, ear, nose and throat; rehabilitation; orthopedic, and other indi- vidually described specialty services.) Short-term general and special children’s hospitals are also considered to be community hospitals. (AHA, 2019b, p. 205) The key to understanding the current hospital sector is knowing the role of the com- munity hospital (AHA, 2019a). Community hospitals clearly dominate the hospital sector in number of hospitals and percent of the total. Of the 6,210 hospitals of all types, most hospitals were nonfederal (96.7% or 6,002 hospitals). Of the 6,002 nonfederal hospitals, the 5,262 community hospitals accounted for 87.7% of them (see Table 2.1). They are also dominant in other ways, including the staffed beds, admissions, and expenses. In 2017, community hospitals accounted for: 85.8% of total staffed beds in all U.S. hospitals (798,921 of the 931,203 total staffed beds) 94% of total admissions in all U.S. hospitals (34,305,620 of the 36,510,207 total admissions) 91.1% of total expenses for all U.S. hospitals (US$966 billion of US$1.060 trillion total expenses)  2: The Settings for Health Care Delivery 67 TABLE 2.1 Hospitals by Type and Ownership, United States, 2017 Number of Percentage of All Percentage of Hospitals Hospitals Community Hospitals All hospitals 6,210 100.0 — Community hospitals 5,262 84.7 — Nongovernment 2,968 — 56.4 (not-for-profit) Investor-owned (for-profit) 1,322 — 25.1 State and local government 972 — 18.5 Federal government 208 3.3 — hospitals Nonfederal psychiatric 620 10.0 — hospitals Other hospitalsa 120 2.0 — a Other hospitals are defined as nonfederal long-term care hospitals and hospital units not accessible to the general public (e.g., prison hospital, school infirmary, or other hospital unit within an institution). Long-term care hospitals include other hospitals with an average length of stay of 30 days or more. (Long-term hospitals may be defined by different methods.) SOURCE: Data from the American Hospital Association. (2019a). Fast facts on U.S. hospitals. https://www.aha.org/ statistics/fast-facts-us-hospitals Other significant features of community hospitals in 2017 are their control and owner- ship, and their system and network affiliations. Of the 5,262 community hospitals in 2017, 56.4% were not-for-profit (n = 2,968). 18.5% were state- or local-government owned (n = 972). 25.1% were for-profit (n = 1,322; see Table 2.1). In 2017, hospitals continued the trend toward consolidation in networks and systems. The AHA defines hospitals in a network as “Hospitals participating in a group that may include other hospitals, physicians, other providers, insurers, and/or community agencies that work together to coordinate and deliver a broad spectrum of services to the commu- nity” (AHA, 2019b, p. 208). Hospitals in a system are defined as “Hospitals belonging to a corporate body that owns and/or manages health provider facilities or health-related subsidiaries; the system may also own non-health-related facilities” (AHA, 2019b, p. 208). These are not mutually exclusive categories. A hospital can be in both a system and a net- work. In 2017, 66.4% of community hospitals were part of a hospital system, compared to 62% in 2012 (AHA, 2018, Table 3). In 2017, 33.2% of community hospitals were in a network, compared to 30.2% in 2012 (AHA, 2018, Table 3). 68 I: U.S. Health Care System: Present State The trend toward creating hospital systems accelerated in the 1990s. In 2003, Cuellar and Gertler wrote, The past decade has seen profound changes in how the hospital industry organizes itself. Standing out among these changes has been the extensive consolidation of hospitals through merger and the rising importance of hospital systems. Researchers either have tended to focus on the effects of merger trans- actions, ignoring system acquisitions, or they have portrayed system formation as primarily an issue of hospital ownership conversion, thereby focusing on the expansion of national, for-profit systems. Relatively little attention has been paid to the rising local presence of hospital systems and how this could affect consumers and health care markets. Hospital consolidation can occur through either merger or acquisition. Mergers—transactions in which separate hospitals come together under a shared license—typically occur among hospitals located near one another. Acquisitions occur when joining hospitals retain their licenses but are owned by a common governing body; they can occur among hospitals that are near or far away. (Cuellar & Gertler, 2003, p. 77) Community Hospitals Within the category of community hospitals, Table 2.2 displays their basic characteristics by control—not-for-profit, for-profit, and state and local. Of note is that the not-for-profit hospital predominates among community hospitals. In 2017, not-for-profit community hospitals had the greatest number of hospitals, beds, and annual admissions and the larg- est average daily census. They also had the lowest average LOS (see Table 2.2). The community hospital is the workhorse of the hospital system and has been, histori- cally. However, community hospitals continuously adapt to major political, economic, and technological changes in the United States. A review of changes in basic characteristics over the past 40 years provides insight. Table 2.3 displays trends since 1976 in the number of hospitals and beds, control of hospitals, and other basic characteristics. Although annual admissions to community hospitals rose slightly over the 40-year period (33.9 to 34.3 million, a 1% increase), community hospitals declined in number, size, average daily census, and LOS. These downward trends are largely the result of patients spending less time in the hospital than in prior years (shorter LOS). TABLE 2.2 Basic Characteristics of U.S. Community Hospitals, by Control, 2017 Characteristic Not-for-Profit For-Profit State and Local Number of hospitals 2,968 1,322 972 Beds 545,129 142,386 111,406 Annual admissions 24,788,938 5,432,727 4,083,955 Average daily census 357,258 81,349 71,516 Average length of stay 5.3 5.5 6.4 (days) SOURCE: Adapted from American Hospital Association. (2019). Hospital statistics, 2019. Health Forum.  2: The Settings for Health Care Delivery 69 TABLE 2.3 Basic Characteristics of U.S. Community Hospitals, 1976 to 2017 Percent Change Characteristic 1976 1997 2017 1976–2017 Total number of 5,857 5,057 5,262 −10.2 hospitals Not-for-profit 3,345 3,000 2,968 −11.3 hospitals Investor-owned 752 797 1,322 75.8 hospitals State and local 1,760 1,260 972 −44.8 government hospitals Beds 956,000 853,000 798,000 −16.5 Annual admissions 33,979,000 31,577,000 34,306,000 +1.0 Average daily 713,000 528,000 510,000 −28.5 census Average length of 7.7 6.1 5.4 −29.9 stay (in days) Outpatient visits 201,247,000 450,140,000 786,077,000 290.6 FTE personnel 2,475,000 3,790,000 5,215,000 110.7 Total expenses (in 45,240 305,763 966,204 2,035.7 millions of dollars; US$) Total expenses ad- 153 1,033 2,424 1,484.3 justed per inpatient day (in dollars; US$) FTE, full-time-equivalent. SOURCE: Adapted from American Hospital Association. (2019). Hospital statistics, 2019. Health Forum. (Table 1). The number of community hospitals has decreased since 1976 from 5,857 to 5,262, a 10% decline. Total number of beds in community hospitals decreased from 956,000 to 798,000, a 16% drop. The average daily census also dropped, from 713,000 to 510,000, a 28% decline. This followed a similar decline in average length of patient stay (7.7 days in 1976 to 5.4 days in 2017). Even though the community hospital sector has fewer hospitals and fewer staffed beds and spends fewer days caring for inpatients now, the expenses have gone up dramatically. 70 I: U.S. Health Care System: Present State Total expenses (in millions of dollars) were 21.3 times greater in 2017 than in 1976 (US$45,240 vs. US$966,204). Total expenses adjusted per inpatient day (in dollars) were 15.8 times higher than in 1976 (US$153 vs. US$2,424). This discrepancy between demand and expenses may be partially explained by the large increase in personnel and outpatient visits in the community hospital sector. The number of full-time-equivalent (FTE) personnel grew from 2,475,000 to 5,215,000, a 110% increase in staff. Outpatient visits in the clinics of community hospitals rose from 201,247,000 to 786,077,000, a 290% increase. Another trend is related to control of community hospitals. Not-for-profit hospitals still predominate, but investor-owned hospitals have become more numerous and state and local hospitals have declined precipitously since 1976. In the period between 1976 and 2017, Investor-owned hospitals doubled in their percent of the total number of community hospitals—from 12.8% in 1976 to 25.1% in 2017. They were the only category that increased their percent over this period. State and local hospitals declined as a percent of the total number of community hos- pitals from 30% to 18.5%. Not-for-profit hospitals saw a small decline from 57.1% to 56.4% of the total number of community hospitals. Special Categories of Community Hospitals Rural Hospitals In 2017, 35.6% of community hospitals were rural, and 64.4% were urban or suburban. Rural community hospitals are vital in the sparsely populated regions of the country both to meet health care needs and for economic stability. Yet, they are particularly vulnera- ble because the populations they serve are not sufficiently large to support even small hospitals. Hospitals are classified by the “number of beds regularly maintained (set up and staffed for use) for inpatients as of the close of the reporting period. This excludes newborn bassinets” (AHA, 2019b, p. 204). The AHA groups hospitals into eight categories based on bed size: six to 24 beds, 25 to 49 beds, 50 to 99 beds, 100 to 199 beds, 200 to 299 beds, 300 to 399 beds, 400 to 499 beds, and 500 beds or more. In 2017, rural community hospitals had an average of 60 beds, with 62% of hospitals having fewer than 50 beds. For these reasons, over 70% of rural hospitals had implemented telemedicine by 2017 (AHA, 2019b). Teaching Hospitals In the past, the AHA used the term teaching hospital to refer to hospitals providing under- graduate or graduate education for medical students and medical house staff (interns, residents, and specialty fellows). The term was not applied to hospitals with teaching programs for other health care providers. Although the AHA formerly presented data  2: The Settings for Health Care Delivery 71 for the teaching hospitals separately, those data are now subsumed under the general categories of hospital, of which the teaching hospitals are a part. In one of the last years for which teaching hospital data were presented separately, 1989, there were 1,054 teaching community hospitals (about 19% of all community hos- pitals), with 393,000 beds (more than 42% of all beds in community hospitals; AHA, 1990, Tables 6 and 8). More recently, only about 20% of the U.S. hospitals were consid- ered teaching hospitals, but they provided about 50% of hospital-based services (AHA, 2013). Public General Hospitals The public general hospital was defined by the Commission on Public General Hospitals of the AHA (1978, p. v) as “short-term general and certain special hospitals excluding federal (those operated by the Department of Defense and the Department of Veterans Affairs), psychiatric, and tuberculosis hospitals that are owned by state and local gov- ernments.” Public general hospitals provide care for many persons unable to be treated elsewhere: the poor, the uninsured, the homeless, alcoholics and other substance abusers, disruptive psychiatric patients, and prisoners. In certain areas, such as isolated rural areas, the public general hospital is also the only source of care for patients with special medical problems, regardless of income: the badly burned, at-risk newborns, high-risk mothers, and victims of criminal or noncriminal life-threatening trauma. Although only a minority of hospitals are under public ownership today, in a nation without universal health care coverage, they play an important role beyond their numbers (Felt-Lisk et al., 2002; Friedman, 1997; Huang et al., 2005; May, 2004; Verghese, 1996). The public hospital sector is shrinking. In 1975, there were 1,761 state and local gen- eral hospitals with 210,000 beds. As of 1995, there were 1,350 state and local general hospitals, with a total of about 157,000 beds. By 2017, the numbers had shrunk to 972 state and local hospitals, with about 111,000 beds. The average daily census for these hospitals had declined from 148,000 in 1975, to 100,000 in 1995, and to 72,000 in 2017 (AHA, 2019b). Despite the low occupancy rate, public general hospitals are still the primary health services resource for the nation’s poor and for those with no health insurance. Compared to not-for-profit and investor-owned hospitals, they are far more likely to care for unin- sured persons, persons living in low-income areas, and those covered by Medicaid. They provide a large amount of unreimbursed care (Fraze et al., 2010). Yet as of 2002, these hospitals were in serious trouble. Noting the shrinking number of public general hospi- tals, Haugh (2002), writing in the AHA’s Hospitals and Health Networks, highlighted their financial straits: [In] an era of tax cuts and disappearing [budget] surpluses, the well is dry. Officials are recommending deep austerity measures … [that] might fore- shadow a looming crisis throughout the nation. The U.S. health care safety net is frayed; without changes, critics fear, it will unravel—and drag other hospitals down with it. (p. 44) As the ax falls on mental health funding, public hospitals’ EDs fill the gap. In many areas, officials recommend privatizing these hospitals. 72 I: U.S. Health Care System: Present State Health Conditions Treated in Community Hospitals The health conditions treated in a hospital are those requiring specialized diagnostic and treatment resources and the associated health professionals to administer them. Hospitalizations—their number and diagnosis—are not random events. They reflect the health status of the population served and the demographic and other characteristics of that population. Hospitalizations may be mon