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Nurse Practitioners, Physician Assistants, andCertified Nurse-Midwives: A Policy Analysis. HealthTechnology Case Study 37.Congress of the U.S., Washington, D.C. Office ofTechnology Assessment.OTA-HCS-37Dec 8690p.

Superintendent of Documents, U.S. Government PrintingOffice, Washington, DC 20402.Reports - Research/Technical (143)

MF01/PC04 Plus Postage.

Attitudes; *Cost Effectiveness; Financial Policy;Financial Problems; *Health Insurance; *Medical CareEvaluation; *Nurse Practitioners; *Obstetrics;Patients; Physicians; *Physicians AssistantsHealth Care Costs

This case study was conducted to analyze thecost-effectiveness of nurse practitioners (NPs), physicians'assistants (PAs), and certified nurse midwives (CNMs) by examining(1) the contributions of each group in meeting health-care needs; (2)

the effect of changing] the method of payment for their services onthe health-care delivery system; and (3) the effects of changing thepayment method on the health care costs of patients, third-partypayers, and society. Chapter 1 summarizes the case study and definesand describes NPs, PAs, and CNMs. Chapter 2 reviews studies comparingthe care provided by these practitioners with that proN'ided byphysicians as well as studies that gauge patients' satisfaction withphysicians' acceptance of the care provided by these three groups.Chapter 3 considers access to health care; aid chapter 4 focuses onproductivity, costs, and employment. Chapter 5 analyzes theimplications of various payment modifications for the employment andpractice of NPs, PAs, and CNMs and for health care costs; examinesthe effects new developments could have on the three groups; andassesses how payment modifications might influence the roles of thesepractitioners and the costs of health care. Appendixes describe themethodology of the study, provide a detailed description of paymentfor services by third-party payers in the public and private sectors,and list 268 references. (KC)

************************************************************************ Reproductions supplied by EDRS are the best that can be made *

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Office of Technology Assessment

Congressional Board of the 99th Congress

TED STEVENS Ala,ka (7,airman

MORRIS K UDALI Arizona lice Chairrudn

Senate

ORRP.s. G HATCHUtah

CHARLES McC NIATHIAS IRMar} land

EMARD NI KENNED1Massachusett,

EIZNEST F -JOLLINGSSouth C.rolina

CI AIBORNE PEI LRhode Island

IVILLIAN1 I PERRY ChairmanH&C) Technologi Partner,

DAVID S POT) ER Vice 07 ;manGeneral Motors Corp (Ref

EARL BEISTLINEConsultant

CHART ES A BOV\ SHERGeneral Accounting Office

House

GEORGE E BROWN, IRCalifornia

JOHN I) DINGELIAltchigan

CLARENCE E MILLEROhio

COOPER EVANSlolsa

DON SUNDQUISTTennessee

JOHN H GIBBPNS(Nonl oting

Advisory Council

CLAIRE T DEDRICKCalifornia land Commission

S DAVID FREEMANlower Colorado River Authorn1

MICHEL T HALBOUTYT Halbwity Energi Co

CARL N HODGESUniversio of Arizona

Director

JOHN II GIBBONS

RACHEL NIcCULLOCHUniversio of Wisconsin

CHASE N PETERSONITniversitv of Utah

JOSEPH E ROSSCongressional Research Service

LEWIS THOMASAlernoraal Sloan-Kettering

Cancer Center

The views in this OTA Case Study do not necessarily reflect the viewsof the Technology Assessment Board or of its individual members.

411Mill 111=1111

HEALTH TECHNOLOGY CASE STUDY 37

Nurse Practitioners, Physician Assistants,and Certified Nurse-Midwives:

A Policy Analysis

DECEMBER 1986

,ACONGRESS OF THE UNITED STATES

Office of Technology Asu.ssmentwashIngton D G 20510

Recommended Citation:U S. Congress, Office of Technology Assessment, Nurse Practitioners, Physician Assis-tants, and Certified Nurse-Midwives: A Policy Analysis (Health Technology Case Study37), OTA-HCS-37 (Washington, DC: U S Government Printing Office, December 1986).

Library of Congress Catalog Card Number 85-600596

For sale by the Superintendent of DocumentsU.S. Government Printing Office, Washington, DC 20402

Preface

Nurse Practitioners, Physician Assist-ants, andCertified Nurse-Midwives A Policy Analysis isCase Study 37 in OTA's Health Technology CaseStudy Series This case study has been preparedin response to a request by the Senate Commit-tee on Appropriations.

OTA case studies are designed to fulfill twofunctions. The primary purpose is to provideOTA with specific information that can be usedin forming general conclusions regarding broaderpolicy issues. The first 19 cases in the Health Tech-nology Case Study Series, for example, were con-duced in conjunction with OTA's overall projecton The Implications of Cost-Effectiveness Anal-ysis of Medical Technology. By examining the 19cases as a group and looking for common prob-lems or strengths in the techniques of cost-effec-tiveness or cost-benefit analysis, OTA was ableto better analyze the potential contribution thatthose techniques might make to the managementof medical technology and healtn care costs andquality.

The second function of the case studies is toprovid' useful information on the specific tech-nologies covered. The design and the funding lev-els of most of the case studies are such that theyshould be read primarily in the context of the as-sociated overall OTA projects. Nevertheless, inmany instances, the case studies do represent ex-tensive reviews of the literature on the efficacy,safety, and costs of the specific technologies andas such can stand on their own as a useful contri-bution to the field.

Case studies are prepared in some instances be-cause they have been specifically requested bycongressional committees and in others becausethey have been selected through an extensive re-view process involving OTA staff and consulta-tions with the congressional staffs, advisory panelto the associated overall project, the Health Pro-gram Advisory Committee, and other experts invarious fields. Selection criteria were developedto ensure that case studies provide the following:

examples of types of technologies by func-tion (preventive, diagnostic, therapeutic, andrehabilitative);

examples of types of technologies by physi-cal nature (drugs, devices, and procedures);examples of technologies in different stagesof development and diffusion (new, emerg-ing, and established);examples from different areas of medicine(e.g., general medical practice, pediatrics,radiology, and surgery);examples addressing medical problems thatare important because of their high frequen-cy or significant impacts (e.g., cost);examples of technologies with associated highcosts either because of high volume (for low-cost technologies) or high individual costs;examples that could provide information ma-terial relating to the broader policy and meth-odological issues being examined in theparticular overall project; andexamples with sufficient scientific literature.

Case studies are either prepared by OTA _.aff,commissioned by OTA and performed under con-tract by experts (generally in academia), or writ-ten by OTA staff on the basis of contractors'papers.

OTA subjects each case study to an extensivereview process. initial drafts of cases are reviewedby OTA staff and by members of the advisorypanel to the associated project. For commissionedcases, comments are provided to authors, alongwith OTA's suggestions for revisions. Subsequentdrafts are sent by OTA to numerous experts forreview and comment. Each case is seen by at least30 reviPwers, and sometimes by 80 or more out-side reviewers. These individuals may be fromrelevant Government agencies, professional so-cieties, consumer and public interest groups, med-ical practice, and academic medicine. Academi-cians such as economists, sociologists, decisionanalysts, biologists, and so forth, as appropriate,also review the cases.

Although cases are not statements of officialOTA position, the review process is designed tosatisfy OTA's concern with each case study'sscientific quality and objectivity. During the vari-ous stages of the review and revision process,therefore, OTA encourages, and to the extent pos-sible requires, authors to present balanced infor-mation and recognize divergent points of view.

III

Health Technology Case Study Seriesa

Case StudySeries No

Case study title; author(s);OTA publication number"

1 I ormal Analysis Policy Formulation, and End - Stage RenalDisease

Richard A Rettig (OTA-BP-11-0( 12 The Feasibility of Economic Evaluation of Diagnostic Pro

cedures The Case of CT ScanningJudith L Aagner IOTA-BP-H-0(2))

3 Screening for Colon Cancer A Technology AssessmeiitDavid NI Tild , IOTA-BP-II-Q(31)

4 Cost Effectiveness of Automat' I Multichanni ChemistrAnalyzers

Milton C Weinstein and Laurie A Pearlman(OTA-BP-H-Q(4))

5 Periodontal Disease Assessing the Etfec tiyeness and Costs ofthe Keyes Technique,

Richard NI Scheffler and Sheldon Rot to

( OTA-BP-1 I-915 ))6 The Cost Effectiveness of Bone Marrow Transplant Therapy

and Its Policy Implications,Stuart 0 Schweitzer and C C Scaizi (OTA-BP-H-0160

7 Allocating Costs and Benefits in Disease Prevention ProgramsAn Application to Cervical Cancer Screening

Bryan is Luce (Office of Technology Assessment )OTA-BP-H-Q(7))

8 The Cost Effectiveness of Upper Gastrointestinal Endoscom,lonathan A Showstack and Steven A Schroeder(OTA-BP-H-Q(8))

9 The Artificial Heart Cost Risks, and Benefits,Deborah P Lubeck and lohn I' Bunker(OTA-BP-H-9(9))

10 The Costs and Effectiveness of Neonatal Intensive CarePeter Budetti, Peggy McManus, Nancy Barrand andLu Ann Heinen (OTA-BP-H-9110))

11 Benefit and Cost Analysis of Medical Interventions The Caseof Cimetidine and Pept.c Ulcer Disease,

Harvey V Fineberg and Laurie A Pearlman(OTA-BP-H-Q(11))

12 Assessing Selected Respiratory Therapy Modalities Trends andRelative Costs in the Washington, D C Area,

Richard M Scheffler and Morgan Delaney(OTA-BP-H-0(12))

13 Cardiac Radionuclide Imaging and Cost Effectiveness,William B Stason and Eric Fortess IOTA-BP-H-9(13))

14 Cost Benefit Cost Effectiveness of Medical Technologies ACase Study of Orthopedic Joint Implants,

Judith D Bentkover and Philip G Drew (OTA-BP-H-0(1415 Elective Hysterectomy Costs, Risks, and Benefits,

Carol Korenbrot Ann B Flood, Michael HigginsNoralou Roos, and John P Bunker (OTA-BP-H-Q(15))

16 The Costs and Eftectiveness of Nurse Practitioners,Lauren I. :Roy and Sharon Solkowitz (OTA-BP-H-9(16))

17 Surgery for Breast Cancer,Karen Schachter Weingrod and Duncan Neuhauser(OTA-LP-H-9(17))

18 The Efficacy and Cost Effectiveness of PsychotherapyLeonard Saxe (Office of Technology Assessment)(OTA -BP -H- 9(1811`1

Case Study Case study title; author(s);Series No. OTA publication number"

19 Assessment of Foar Common X-Ray ProceduresJudith I. Wagner IOTA-BP-H-0(10W

20 Mandatory Passivc Restraint Sy,tems in Automobiles ksuesand Evidence

Kenneth E Warner (OTA-BP-H-1520)1'21 Selected Telecommunications Devices for Hearing-Impaired

PersonsVirginia W stern and Martha Ross Redden(OTA-BP-H-16(21 )1g

22 The Effect' ness and Costs of Alcoholism Treatment,Leonard Saxe, Denise Doughert} Katharine Estv,and Michelle Fine IOTA-HCS-22)

23 The Safety, Efficacy and Cost Effectiveness of TherapeuticApheresis

John C Langenbrunner )Office of Technology Assessment)(OTA-HCS-23)

24 Variation in Length of Hospital Stay Their Relationship toHealth Outcomes,

Mark R Chassin (OTA-HCS-24)25 Technology and Learning Disabilities,

Candis Cousins and Leonard Duhl (OTA-HCS-75)2b Assistive Devices for Severe Speech Impairments,

Judith Randal (Office of Technology Assessment)(OTA-HCS-26)

27 Nuclear Magnetic Resonance imaging Technology A Clinical,Industrial, and Policy Analysis,

Earl P Steinberg and Aian Cohen (OTA-HCS-27)28 Intensive Care Units (ICUs) Chrocal Outcomes, Costs, and

Deasionmaking,Robert A Berenson IOTA-HCS-28)

29 The Boston Elbow,Sandra i Tanenbaum (OTA-HCS-2Q)

30 The Market for Wheelchairs Innovations and Federal Policy,Donald S Shepard and Santa L Karon (OTA-HCS-30)

31 The Contact Lens Industry Structure, Competition, and PublicPolicy,

Leonard G Schifrin and William J Rich (OTA-HCS-31)32 The Hemodialysis Equipment and Disposables Industry,

Anthony A Romeo (OTA-HCS-32)33 Technologies for Managing Urinary Incontinence,

Joseph Ouslander, Robert Kane, Shira Vollmer, and MelvynMenezes (OTA-HCS-33)

34 The Cost Effectiveness of Digital Subtraction Angiography inthe Diagnosis of Cerebrovascular Disease,

Matthew Menken Gordon H DeFriese, Thomas R Oliver,and Irwin Litt (OTA-HCS-34)

35 The Effectiveness and Costs of Continuous AmbulatoryPeritoneal Dialysis (CAPD)

William B Stason and Benjamin A Barnes (OTA-HCS-35)36 Effects of Federal Policies on Extracorporeal Shock Wave

LithotnpsvElaine J Power (Office of Technology Assessment)(OTA-HCS-36)

37 Nurse Practitioners, Physician Assistants and Certified Nurse-Midwives A Policy Analysis,

IOTA-IISC-37)

aAvailable for sale by the Superintendent of Document, L1 S GovernmentPrinting ()Hue Washington DC, 20402 and by the National TechnicalInformation Service 5285 Port Royal Rd , Springfield VA 22161 CallOTA s Publishing Office (224-80961 for availability and ordering infor-mation

"Original publication numbers appear in parenthesescThe first 17 cases in the series were 17 separately issued caws in BackgroundPaper *2 Case Studies of Medical Technologies prepared in eon)unctionwith OTA s August 1080 report The Implitations of Cost-Filet tit eness Analvsis of Medical Technology

IV

dliackground Paper #3 to The Implications 01 C at-Effectiveness Analysis ofMedical Technologt

eBaekgrourd Paper /5 to The Impluations of Cost F tie( tiyeness Analysis ofMedical Technologt

f Backgrounu Paper *1 to OTA s N1av 1082 report Technologt and Handl-apped l'eople

glide kgrwind Paper 2 to Tethnoliigy and Hindi( apped People

OTA Project Staff for Case Study #37Nurse Practitioners, Physician Assistants, and Certified Nurse-Midwives:

A Policy Analysis

Roger C. Herdrnan, Assistant Director, OTAHealth and Lite Sciences Division

Clyde I Behnev, Health Program Manager

Gloria Ruby, Project Director

Steven Sisskind, Research Assistant*

Virginia Cwalina, Administrative Assistant

Diann G. Hohenthaner, P.C. Specialist

Carol A. Guntow, Secretary Word Processor Specialist

Principal Contractor

Edward G.Brooks, University of North Carolina, Chapel Hill, NC

Contractors

Louis P. Garrison, The Project Hope Health Sciences Education Center, Millwood, VA

Anne Meadows, Washington, DC (Editing)

*From 1111\ to O( tobr r 108o

(')V

Advisory PanelNurse Practitioners, Physician Assistants, andCertified NurseMidwives: A Policy Analysis

Rosemary Stevens, ChairDepartment of History and the Sociology of Science

University of Pennsylvania, Philadelphia, PA

raw( is A. PrescottSchool of NursingUniversity of MarylandBaltimore, MD

Judith RooksConsultantPortland, OR

George M. RyanDepartment of Obstetrics and GynecologyCollege of MedicineUniversity of TennesseeMemphis, TN

Richard M. SchefflerHealth Policy and Administration ProgramSchool of Public HealthUniversity of CaliforniaBerkeley, CA

Henry M. SeidelSchool of MedicineThe Johns Hopkins UniversityBaltimore, MD

Gerry SheaHealth Care DivisionService Employees International UnionWashington, DC

Barbara WardenNational Consumers' LeagueWashington, DC

Ivan WilliamsKellogg CenterMontreal General HospitalMontreal, Quebec

Walter H. CaulfieldKaiser PermanenteCakland, CA

Philip D. ClevelandFamily Medicine SpokaneSpokane, IA,A

Lynn EtheredgeHealth Policy ConsultantWashington, DC

Willis GoldbeckWashington Business Group on HealthWashington, DC

Sandra GreeneHealth Economics ResearchBlue Cross/Blue Shield of North CarolinaDurham, NC

Hurdis GriffithRobert Wood Johnson FellowInstitute of MedicineNational Academy of SciencesWashington, DC

Charles G. HuntingtonHermon Medical GroupHermon, NY

Lauren LeRoyPhysician Payment Review CommissionWashington, DC

Kathy LohrThe Rand Corp.Washington, DC

Ruth LubicMaternity CenterNew York, NY

Michael R. PollardOffice of Policy AnalysisPharmaceutical Manufacturers' AssociationWashington, DC

Association

NOTE 0 rA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panelmembers The panel does not, however, necessarily approve, disapprove, or endorse this repent OTA assumes fullresponsibil,' v for the report and the accuracy of its contents

VI

Contents/',life

CHAPTER 1. SUMMARY AND POLICY CONCLUSIONS 3Introduction 3

Background and Scope of the Case Study 3Organization of the Case Study 4

Summary 5Contributions of Nurse Practitioners, Physician Assistants, and

Certified Nurse-Midwives 5Effects cf Changing Payment Methods b

Policy Conclusions 10Addendum. Definitions and Descriptions 12

CPAPTER 2: QUALITY OF CAREIndicdtors of Quality

Comparisons With PhysiciansPatients' SatisfactionPhysicians' Acceptance

Methodological Problems of StudiesQuality of Nurse Practitioners' Care

Comparisons With PhysiciansPatients' SatisfactionPhysicians' Acceptance

Quality of Physician Assistants' CareComparisons With PhysiciansPatients' SatisfactionPhysicians' Acceptance

Quality of Certified Nurse-Midwives' CareComparisons With Physicianspatients' SatisfactionPhysicians_' _Acceptance

Summary

1717171818

1819191921222222232323242425

CHAPTER 3: ACCESS TO CARE 29Nurse Practitioners' Contribution to Access to Care 30Physician Assistants' Contribution to Access to Care 32Certified Nurse-Midwives' Contribution to Access to Care 33Summary 34

CHAPTER 4: PRODUCTIVITY, COSTS, AND EMPLOYMENT 39Scope of Professional Practice 39

Services Provided by Nurse Practitioners and Physician Assistants 39Services Provided by Certified Nurse-Midwives 40

Productivity 40Nurse Practitioners' and Physician Assistants' Productivity 41Certified Nurse-Midwives' Productivity 43

Costs and Employment 44Costs and Benefits of Training Nurse Practitioners Physician Assistants, and

Certified Nurse-Midwives 44Costs and Benefits of Private Employment of Nurse Practitioners,

Physician Assistants, and Certified Nurse-Midwives 46

.. j

Contentscontinued

Current Employment. Settings and Trends 47Nurse Practitior.s?rs' and Physician Assistants' Emplovnient 47Certified Nurse-Midwives' Employment 48

Summary 49

CHAPTER 5: PAYMENT ISSUES 53r.'ffects of Modifying Payment for Services of Nurse Practitioners,

Physician Assistants, and Certified Nurse-Midwives 54Effects on Independent Practices of Nurse Practitioners and

Certified Nurse-Midwives 54Effects on Physicians' Practices 57Effects on Health Maintenance Organizations 58Effects on Hospitals 58Effects on Nursing Homes

The Changing Context of Health Care 60Financing 60Supply of Physicians 60Delivery Sites and Organizations 6lEffects of Changes in the Health-Care Environment on Nurse Practitioners,

Physician Assistants, and Certified Nurse-Midwives 62Summary 64

APPENDIX A.METHODS AND ACKNOWLEDGMENTS 69

APPENDIX B PAYMENT FOR THE SERVICES OF NURSE PRACTITIONERS,PHYSICIAN ASSISTANTS, AND CERTIFIED NURSE-MIDWIVES 71

REFERENCES 79

TablesTable No Page1-1 Coverage and Direct Payment for Services of Nurse Practitioners, Physician

Assistants, and Certified Nurse-Midwives 71-2. Comparison of Nurse Practitioners, Physician Assistants, anu

Certified Nurse-Midwives 132-1. Equivalence in Quality of Care Provided by Nurse Practitioners (NPs) and

Physicians (MDs) 202-2. Difference in Quality of Care Provided by Nurse Practitioners (NPs) and

Physicians (MDs) 212-3. Percentage of U.S. Resident Certified Nurse-Midwives by

Type of Organization, 1976-77 and 1982 255-1. Selected Alternatives to Traditional Health-Care Delivery 62B-1. Coverage and Direct Payment for Services of Nurse Practitioneis,

Physician Assistants, and Certified Nurse-Midwives 72

FigureFigure No Page3-1 [Distribution of Physician Assistants by Size of Community 32

t

Chapter 1

Summary and Policy Conclusions

Chapter 1

Summary and Policy Conclusions

INTRODUCTION

,! use of nurse practitioners (NPs) and phy-sician assistants (PAs) to provide primary healthcare Traditionally provided only by physicians de-vel( ped during the 1960s in response to a per-ceived shortage and maldistribution of physicians.Societal support for this innovation in the deliv-er of health-care was based en the potential forNPs and PAs to improve access and to lower costswhile maintaining the quality of care. At aboutthe same time the number of certified nurse-mid-wives (CNMs),' who had been providing healthcare for some 30 years, began to increase substan-tially.

In the past two decades, the ranks of NPs, PAs,and CNMs and their responsibilities for provid-ing care to patients have increased, despite theresistance these practitioners have encountered inthei, attempts to assume more prominent or moreindependent roles in delivering health care. Today,approximately 15,400 NPs, 16,000 PAs, and 2,000CNMs are practicing in the United States.

Changes in the health-care environment havealtered the forces that spurred the developmentand growth of these groups of providers. Thehealth-care sector has become increasingly com-petitive as the supply of physicians has grown andas the pm portion of physicians practicing in theprimary-care specialties has decreased. New formsof organization for the delivery of medical carehave emerbed. Concern over the rapidly risingcosts of health care has grown, and new meth-ods of paying for hospitals' inpatient services havebeen implemented. All of these changes have Im-plications for the roles NPs, PAs, and CNMs willplay in the future, and for the quality, accessibil-ity, and costs of health care.

As the stealth -care delivery system evolves,NPs, PAs, and CNMs are exploring ways to over-come several obstacles, such as unsupportive

'This case study uses the word certitied to distinguish formallytrained and certified nurse-midwives f rom lay midwives, who mayor may not be nurses and who have Informal training in midwifery

physicians, restrictive State laws and regulations,and the inaccessibility and cost of malpractice in-surance. Although these problems are significant(see box 1-A), they are beyond the s pe of thisstudy, which focuses on another major barrierlimited third-party payment for the services ofNPs, PAs, and CNMs.

Background and Scope ofthe Case Study

This case study was prepared in response to arequest by the Senate Committee on Appropria-tions to update a previous OTA case study, TheCost and Effectiveness of Nurse Practitioners."The committee also requested that OTA addressthe extent to which various Federal health-careprograms ana private third-party payers pay forthe services of NPs and CNMs. Of particular in-terest to the committee were the issues of cover-age (i.e., authorization for payment) and directpayment (i.e., payment to NPs and CNMs) fortheir services.' The committee also requested thatOTA review the evidence on the quality and costsof the care NPs and CNMs provide. The analy-sis also addresses PAs because their historicalbackground and current roles are similar to thatof NPs, and because information on NPs oftenoverlaps with information on PAs.

In considering NPs and PA s, the study focuseson the large majority who provide primary care,although some attention is given to the roles ofNPs and PAs in nonprirnary-care settings. No dis-tinction is made between primary-care PAs andPAs trained in Medex programs specifically toprovide primary care to underserved populations.

'The Medicare program and other third-party payers distinguishbetween coverage and payment Coverage refers to benefits avail-able to eligible beneficiaries or subscribers payment refers to theamounts and metbods of payment for covered ser

3

4

Box 1-A.Selected Obstacles Fared by Nurse Practitioners, Physician Assistants,and Certified Nurse-Midwives

Physicians' Resistance

The limited acceptance and, in some cases, outright opposition with which some physicians have metNPs, PAs, and CNMs have restricted employment opportunities for these practitioners. Their use is deter-mined by the settings and the supervisors. In some settings (e.g., health maintenance organizations), NPs,PAs, and CNMs are likely to perform the whole range of services for which they were trained. In othersettings (e.g., private practices), ho-sever, some physicians are apparently reluctant to delegate primary-care tasks.

Legal Restrictions

The restrictions placed on NPs', PAs' and (to some extent) CNMs' practices by State laws and regula-tions discourage the integration of these providers into the health-care delivery system. Requirements varywidely from State to State with respect to such matters as physicians' supervision, drug prescription, andindependent practice. The requirements are often ambiguous and prevent these providers from practicingat levels commensurate with their training. Furthermore, the lack of uniformity and clarity of the lawsand regulations may discourage physicians from hiring these providers. The considerable variance reflectsdisagreement among the States about the competence levels and appropriate roles of NPs, PAs, and CNMs.During the past decade, however, States have generally lowered the legal barriers to NPs', PAs', and CNMs'practice. For example, between 1965 and 1975 no State permitted NPs to prescribe medications; four Statesdid so between 1975 and 1980; 14 more States have done so since 1980. The trend is not universal. Anattempt made after 1980 to permit NPs to prescribe drugs was defeated in the California legislature (154).

Inacces3ibility and Cost of Malpractice Insurance

The malpractice crisis has affected most health-care practitioners and providers. Insurers have signifi-cantly increased premiums, and have refused altogether to underwrite malpractice policies for some practi-tioners, including CNMs. As a result, an unknown number of CNMs were forced to close their practices,and about 30 (out of 140) birthing centers closed (136). Although progress is being made in obtaining liabil-ity insurance for some CNMse.g., a consortium has 1-?en formed to underwrite insurance for membersof the American College of Nurse Midwivesincreas , liability insurance premiums, may lead CNMs,obstetricians, and other health professionals to change their practice patterns or to stop practicing entirely.

Limitations on Coverage and Payment for Interpersonal and Preventive Care

Most third-party payers provide little or no coverage for preventive services and interpersonal serv-ices, such as health education and counseling, which are integral to the activities of NPs, PAs, and CNMs.The problem affects all health-care providers and has received broader analysis elsewhere. A recently re-leased OTA report, Payment for Physician Se-vices: Strategies for Medicare, provides a detailed discus-sion of the differences in payments for nonprocedural and procedural services.

The central questions the study attempts to an-swer are

What contributions do NPs, PAs, and CNMsmake in meeting the Nation's health-careneeds?How would changing the method of r ;mentfor the cervices of NPs, PAs, and CNMs at-fect the roles these practitioners would playin the evol ing health-care delivery system?

How would changing the payment methodaffect health-care costs for patients, third-party payers, and society?

Organization of the Case Study

The case study is organized into rive chaptersand two appendixes. Chapter 1 presents a sum-mary of the case study and in an addendum de-

fines and describes NPs, PAs, and CNMs. Chap-ters 2 through 4 discuss the contributions of NPs,PAs, and CNMs to health care. Chapter 2 ad-dresses the quality of care, reviewing studies thatcompare the care provided by NPs, PAs, andCNMs with that provided by physicians and studiesthat gauge patients' satisfaction with and physi-cians' acceptan e of the care provided by NPs,PAs, and CNMs. Chapter 3 considers access tohealth care; and chapter 4 focuses on productivity,costs, and employment. Chapter 5 analyzes whatimplications various payment modifications wouldhave for the employment and practice of NPs,PAs, and CNMs and for health-care costs; exam-ines the effects new devel.,pments in the health-

SUMMARY

Understanding how the use of NPs, PAs, andCNMs affects the quality of care, the access tocare, the productivity of providers, and the costsof care is crucial for analyzing the effects of alter-native policies regarding payment for the servicesof these providers. Drawing general conclusionsis possible, despite the methodological limitationsof many studies.

Contributions of NPs, PAs, and CNMs

Direct measurement of the quality of the careprovided by NPs, PAs, and CNMs is not possi-ble at this time. Instead, the quality must begauged by comparing their care with the care pro-vided by physicians, by examining the extent towhich patients are satisfied with the care providedby NPs, PAs, and CNMs; and by assessing phy-sicians' acceptance of such care. Many studies thatanalyze these relationships are methodologicallyflawed and almost none examine the quality ofservices provided without physician involvement.

The weight of the evidence indicates that,within their areas of competence, NPs, PAs, andCNMs provide care whose quality is equivalentto that of care provided by physicians.' More-over, NPs and CNMs are more adept than phy-

1-111S study examined tilt quality of the Late provided Eland l'As to rrimary-tare ambulatory setting,. and the qualal, of (.areprovided by CNNh m ambulatory and inpatient ,,ettings

5

care sector could have on NPs, PAs, and CN:ls;and assesses how payment modifications in thecontext of a rapidly changing health-care systemmight influence the roles of these practitioners andthe costs of health care.

Appendix A describes the method of the studyand acknowledges the assistance of the individ-uals and organizations that reviewed this casestudy and provided valuable advice on its con-tent. Appendix B presents a detailed descriptionof payment for the services of NPs, PAs, andCNMs by third-party payers in the public and pri-vate sectors.

Photo credit American College of Nurse Midwives

CNM's improve quality of care and access to care byproviding person-oriented services such as health

education and counseling

6

sicians at providing services that depend on com-munication with patients and preventive actions.The evidence indicates that PAs also perform bet-ter than many physicians in supportive-care andhealth-promotion activities. Patients are generJlysatisfied with the quality of care provided by NPs,PAs, and CNMs, particularly with the interper-sonal aspects of care. Although most physicianswho employ these practitioners are satisfied withtheir performance, physicians' willingness to del-egate medical tasks is limited. Many physiciansare more comfortable delegating the routine tasksrelated to primary care, such as taking histories,than the more technical procedures, such as phys-ical examinations. Employment statistics also re-flect physicians' acceptance of these practitioners.

Historically, NPs, PAs, and CNMs have beencredited with improving the geographic distribu-tion of care, because many of them have beenwilling to locate in underserved rural and inner-city areas. As a result of increases in the supplyof physicians, some physicians are beginning topractice in smaller communities. Althcugh someexperts believe that the maldistributior of physi-cian manpower will improve over time, access toprimary care is still limited and may persist as aproblem in certain geographic areas. How chang-ing patterns in the distribution of primary-carephysicians will affect the employment and thepractice patterns of NPs, PAs,and CNMs is un-certain, but these practitioners will continue toplay valuable roles in underserved areas.

In addition to im .oving access to care in ru-ral areas, NPs, PAs, and CNMs increase accessto primary care in a wide variety of nongeographicsettings and for populations not adequately servedby physicians. Studies have shown, for example,that NPs increase access to primary care for un-derserved children in school settings, and elderlypatients in nursing homes. CNMs provide effec-tive and low-cost maternity c ire to underserved,socioeconomically high-risk pregnant women andadolescents. NPs, PAs, and CNMs have also im-proved access by adding to the scope of primary-care services available to patients. NPs and PAsare competent in guiding individuals through to-day's complex health-care system and i caringfor chronically ill adults and children. Preliminaryreports indicate that NPs and PAs also increase

access to primary care in other settings, such as,in the home and in correctional institutions, whereneeded medical care is not always available.

In principle, the scope of NPs' and PAs' prac-tice encompasses most of the primary-care serv-ices provided by their physiciar counterparts.Productivity studies indicate that NPs and PAsworking under physicians' supervision can in-crease total practice output by some 20 to 50 per-cent. Increases in productivity resulting from theuse of NPs and PAs vary widely depending onthe practice settings, on the responsibilities dele-gated to these practitioners, on the severity andstability of the patients' illnesses, and on how thephysicians choose tc use the free time that resultsfrom delegating tasks, Although much less infor-mation on productivity is available for CNMsthan for NPs and PAs, the degree to which CNMscan substitute for physicians appears to be con-siderable.

Indirect evidence indicates these providers coulddecrease costs to employers and society. Employ-ment levels for NPs, PAs, and CNMs suggest thathealth-care providers consider these practitionersto be cost-effective substitutes for physicians indelivering many services. From a societal stand-point, training NPs, PAs, and CNMs costs muchless than training physicians. Given that the qual-ity of care provided by NPs, PAs, and CNMswithin their areas of competence is equivalent tothe quality of comparable services provided byphysicians; using NPs, PAs, and CNMs ratherthan physicians to provide certain services wouldappear to be cost-effective from a societal per-spective.

Effects of Changing Payment Methods

Although the evidence indicates that NPs, PAs,and CNMs have made positive contributions tothe delivery of health care, these practitionershave not been used to their fullest potential. Ma-jor obstacles to the greater employment and ap-propriate use of NPs, PAs, and CNMs are thatmost third-party payers do not cover (authorizefor payment) the provision by NPs, PAs, andCNMs of many services that are typically andcharacteristically provided by physicians, and, inthose instances where third-party payers do cover

1 0

the services of NPs, PAs, and CNMs, the pay-ments are most often indirect (i.e., to the employ-ing physicians or institutions) rather than direct(i.e., to the NPs or CNMs). PAs have not soughtdirect payment.

Most NPs, PAs, and CNMs are employed in or-ganized settings where employment is usually notcontingent upon coverage. However, the reluc-tance of some physicians in private practice to hirethese practitioners stems partly from uncertaintiesabout payment for their services. NPs and CNMsin independent practices must depend on patients'out-of-pocket payments. Some third-party payersin the public and private sectors cover the servicesof NPs, PAs, and CNMs (see table 1-1). Coverageand direct payment has been mandated most oftenfor CNMs, and to some extent they have been ableto operate with suitable physician collaboration.

The effects of extending coverage for the serv-ices of NPs, As, and CNMs and paying directlyfor the services of NPs and CNMs would un-doubtedly be influenced by the markets for theirservices. The health-care system is currently un-dergoing substantial changes in the supply of phy-

7

moans and in physicians' practice arrangements.Innovations in methods of paying other providersare multiplying. For example, some third-partypayers are paying prospectively for hospitals' in-patient services (e.g., Medicare is paying on thebasis of diagnosis related groups4), and capitationsis a growing mode of payment. These changes,along with the fact that an increasing proportionof the population is aged 65 or older, and thusin need of significant amounts of health-care serv-ices, have major implications for the employmentand use of NPs, PAs, ana CNMs and for health-care costs. The uncertainty surrounding the mar-kets for the services of NPs, PAs, and CNMs ina health-care system in a state of flux makes itdifficult to predict the effect of payment changes.

'Diagnosis related groups are groupings of diagnostic categoriesdrawn from the International Classification of Diseases and modi-fied on the basis of surgical procedures, patients' age, significantcomorbidities or complications, and other relevant criteria DRGsare the case -mix measure mandated for Medicare's prospective hos-pital payment system by the Social Security Amendments of 1983(Public Law 98-211

Capitation payment is prospective payment o. a per-capita amountfor all services received by an enrollee or beneficiary during a give-.period

Table 1.1.Coverage and Direct Payment tor Services' of Nurse Practitioners,Physician Assistants, and Certified NurseMidwives

Nurse practitioners

Direct

Physician assistants Certified nurse-midwives

Direct DirectThird-parts payer Coverage payment Coverage payment Coverage payment

MedicarePart A No No No No No NoPart B No No Nob No No NoHMOsb Yes NA Yes NA Yes NA

State Medicaid programsd Some A few Some None Almost all Almost allprograms programs programs programs programs

Medicare and MedicaidRural Healtn Clinics Yes No Yes No Yes No

CHAMPUSe Yes Yes No No Yes Yes

FEHBPf 7 plans 7 plans 6 plans 6 plans 20 plans 20 plans

Private insurances In some In some No No In some In someStates States States States

NA = not availableaServoces that are typically and characteristically provided by physiciansbDuring the publication of this case study, the Omnibus Reconciliation Act of 1986 (Public Law 99 509) was enacted The act modifies Part B of Medicare and authorizespayment for (covers) services of physician assistants working under the supervision of physicians in hospitals skilled nursing facilities, intermediate care facilities,and as an assistant at surgery The pcyment is indirect and at levels lower than physicians would receive for providing comparable services

CHealth maintenance organizationsdState Medicaid programs have the option of including NP and PA services in their State Medicaid Plans Congress mandated coverage of CNMs services in 1980

As of January 1985, all States in which CNMs practiced either were complying with the law (Public Law 96 499) or were considering changes intheir Medical plansto comply with the law

eCivIloan health and Medical Prop, -im of the Uniformed Services(Federal Employees Health Benefit -'rogram FEHBP has 21 'ee for service plans, some of which authorize payment to NPs PAs and CNMs9Whether State laws and re Julations ,,duire or permit insurance coverage and direct payment for the services of NPs PAs, and CNMsSOURCE Office of Technology Assessment 1986

8

The effect of modifying the payment system tocover and allow direct payment for the serviceof NPs, PAs, and CNMs depends on their em-ployment setting. Such changes could spur thegrowth of NPs' and CNMs' independent fee-for-service practices'. and joint practices with physi-cians, to the extent permitted under State laws andregulations. Because CNMs are currently less lim-ited than NPs by payment limitations of third-party payers, NPs would benefit most from cov-erage and direct payment.

Even with coverage and direct payment, thenumber of NPs and CNMs engaging in independ-ent practice should be expected to remain verysmall. In addition to the restriction imposed byState laws and regulations, there are many diffi-culties in undertaking such a practice, includinghigh startup costs, obtaining malpractice insur-ance, and high premium malpractice insurancerates. NPs in independent practices also dependon physician referrals to establish a clientele. Con-cerns expressed by physicians and the currentcompetitive market suggest that such referralsmight not be forthcoming. Independent practicesof CNMs are limited by physician concern withcompetition and difficulty in obtaining physiciancollaboration and hospital privileges. Althoughmany patients might continue to prefer a physi-cian, direct payment would give patients the choiceof a wider range of providers.

One possible drawback of coverage and directpayment is that additional covered providersmight increase the volume of services providedand increase costs to patients and third-partypayers. Although the sparsity of conclusive datamakes it difficult to allay this concern, the increas-ing emphasis most third-party payers place onmonitoring the use of services might help controlany increase in the volume of services provided.

Because of their potentially small number, NPsand CNMs in independent practice might not seri-

'Such practices would be administratively independent Adminis-tratively independent practices are not clinically independent fromphysicians when NPs and CNMs are performing delegated medicaltasks In addition to the nursing profession's agreement to clinicalwIlaboration with physicians. State laws and regulations that pro-scribe the scope of practice of NPs and CNMs and peaty require-ments to' physician supervision serve as a more tormal control onclinical independen«. NPs and CNMs may legally be clinaallv in-dependent from physicians when performing nursing tasks

ously affect costs. However, NPs and CNMs itadministratively independent practices could po-tentially lower costs to third-party payers, pa-tients, and society. If the provision of services byNPs, CNMs, and physicians did not increase,' andif NPs' and CNMs' payment level were lower thanthose of physicians for comparable services, lowercosts for third-party payers would be likely. If thefees to patients reflected the lower payment levels,costs to patients' and society could be lower. Forprimary care services, such as office visits, sav-ings to patients would be small, because the feefor the service is small, and because insurance usu-ally covers most of the providers' fees. Savingsfor maternity care could be important, becausethe care itself is costly and insurance coverage isincomplete. Patients, third-party payers, and so-ciety could have lower costs if the total costs ofcare provided by these practitioners was lowerthan the total costs of care provided by physiciansfor similar medical conditions.

NPs and CNMs in independent practices wouldbenefit by being able to offer lower prices as acompetitive strategy. Individual practice associa-tion (IPA)-model health maintenance organiza-tions (HMOs), which contract with individualphysicians for services, might turn to NPs as con-tractors for primary-care services and CNMs ascontractors for maternity services. Preferred pro-vider organizations (PPOs), which contract withproviders to supply services at discounted fees,might also consider NPs and CNMs as contrac-tors. These developments, however, would belimited by the increasing availability of primary-care physicians (including obstetricians) and otherbarriers (see box 1-A). Moreover, physicians ap-pear to be engaging in price competition as a re-sult of the changing health-care market.

How coverage for NPs, PAs, and CNMs wouldaffect their employment and appropriate use byfee-for-service physicians' practices is uncertain,because many variables affect physicians' deci-sions to employ these practitioners and to dele-

No direct evidence is available, as to how coverage and directpayment would affect the volume of services provided by NI's andCNMs Although research on physicians inn, ,ce on the volumeof services has been conducted for many ye as none of the studiesunequivoe dill, proses the magnitude or even the existence of phy-sicians ability to control the volume of service's (2,ioi

gate tasks commensurate with the training of theseproviders. If NPs', PAs', and CNMs' services wereauthorized for payment, some physicians mightbe encouraged to employ and integrate theseproviders into their practices, knowing that prac-tices that employ NPs and PAs are better able tooffer competitive prices and broader ranges ofservices than are other practices (17). Some phy-sicians might find it advantageous to hire newphysicians, rather than NPs, PAs, or CNMs, be-cause the rate at which physicians' income is grow-ing is decreasing, and new physicians are express-ing interest in salaried positions and are willingto work for less money than established physi-cians earn. Employing physicians, rather thanNPs, PAs, or CNMs, might make some practicesmore competitive, because of the status patientsoften confer on physicians. Physicians with declin-ing patient bases might not be able to justify tak-ing on additional providers and expenses andmight compete by increasing the time spent withindividual patients.

The advantages of extending coverage for NPs',PAs', and CNMs' services in fee-for-service set-tings is apparent in certain settings, for certainpopulations and where there are demonstratedshortages of trained personnel. For example, rapidgrowth in the elderly population and in the useof nursing-home care has raised concerns aboutthe quality and costs of such care. Not only has

.....----->Photo credit

'WI

American Nurses Association

Extending coverage for NPs to provide primary careservices to elderly nursing home residents woula

alleviate a demonstrated shortage of trainedpersonnel for that population.

52-64 3 0 86 1

9

physicians' disinterest in visiting elderly residentsof nursing homes (166) been established, but thereare very few physicians trained in geriatrics (126).Furthermore the elderly institutionalized popula-tion is growing. Although more and better phy-sician care for these patients may be available inthe future, their ability to furnish all the healthneeds of this group is questionable. The geriatriccomponent of many of the training programs ofNPs and PAs has been increased and the 1- to 2-year length of NP and PA training programs makesNPs and PAs readily available for providing care.NPs and PAs have the demonstrated ability toprovide care for a population with chronic prob-lems and functional disabilities. Coverage wouldpermit NPs and PAs8 to legally provide the pri-mary care services for which they are trained andlicensedservices that many nursing homes finddifficult to supply.

If coverage were extended, NPs and PAs wouldmost likely provide nursing home visits as em-ployees of physicians' practices or as team mem-bers in group practices to provide nursing-homevisits. If NPs were paid directly, they could func-tion as independent practitioners, supplying pri-mary-care services to nursing homes. Except whenmore intensive care can be substantiated, theMedicare program currently limits the frequencyof physicians' visits to nursing homes, so third-party payer costs in this setting might not be af-fected as long as payment levels were the samefor NPs and PAs as for physicians. Total coststo third-party payers would probably decrease be-cause visits to nursing homes by teams of physi-cians and NPs or PAs would decrease the use ofhospit-1 facilities (128,155,257).9

'During the publication of this case study, the Omnibus Recon-ciliation Act of 1086 (Public Law 99-5001 was enacted The actchanges the Medicare law and authorizes the coverage of the serv-ices furnished by PAs under the supervision of physicians in skilledno-,mg facilities and intermediate care facilities in States where PAsare legally authorized to perform the services This provision takeseffect Jan 1, 1087 Payments, which go to the employer die t5 per-cent of the prevailing charges of physician services for comparableservices provided by nonspecialist physicians

As app B describes, a number of other Medicare and Medicaidregulations specific to nursing homes limit the roles of NPs and PAsand specify services that must be performed by physicians in orderfor the nursing homes' services to be covered In addition to per-mitting coverage under Medicare and Medicaid, amendments to theseregulations would be required in order to encourage the employ-ment and appropriate use of NPs' and ['As' services in this setting

10

Coverage for the services of NPs and PAs couldalso be advantageous for home-bound elderly pa-tients and for allowing pediatric NPs to care forchronically ill children at home. Medical teamsof pediatricians and PNPswith the PNPs pro-viding routine care, teaching children at home,and monitoring the programhave been shownto be effective in minimizing the social and psy-chological consequences of chronic illness (234).CNMs could be covered for the maternity careof pregnant disabled women, in cases where thedisabling condition did not complicate the preg-nancy and birth process. Such women might ben-efit from the individualized care that CNMs typi-cally provide.

Coverage would be advantageous in rural areaswhere the lack of medical personnel is a persist-ing problem. Although the Rural Health ClinicsServices Act of 1977 extended coverage to NPs,PAs, and CNMs working in rural clinics, not allresidents of such areas have access to clinics. Cov-erage for NPs, PAs, and CNMs might encouragetheir use by physicians in fee-for-service practicesin rural areas who, because of fewer nombers,must see considerably morP patients and worklonger hours than their urban counterparts. Fur-thermore, direct payment might encourage qual-ified NPs and CNMs to move into unserved andunderserved areas to expand access to heath care.

CompLition among health-care organizationsand the growth of HMOs which have employedand used NPs, PAs, and CNMs extensively in thepastaugurs larger roles for these providers inthe health-care system as employees of HMOs.Capitation, the method used to pay most HMOs,does not require providers to bill for specific serv-ices, and the services provided by NPs, PAs, andCNMs in such settings are, for the most part, al-

POLICY CONCLUSIONS

NPs, PAs, and CNMs have made importantcontributions to meeting ' he Nation's health-careneeds by:

improving the quality and accessibility ofhealth-care services; and

ready covered by public and private third-partypayers. Thus, coverage and direct payment forthe services of these practitioners would notdirectly affect their employment by HMOs.

Such employment might diminish, however, ifcompetition leads physicians to accept salariesthat are sufficiently low to entice HMOs to em-ploy physicians instead of NPs, PAs, or CNMs.Another factor that might negatively affectHMOs' employment of these practitioners is theincrease in the number of IPA-model HMOs. Be-cause they are primarily organized around phy-sicians who usually practice in private offices,IPA-model HMOs are less likely than are largegroup- or staff-model HMOs to employ these pro-viders. Although the number of IPA-model HMOshas increased, the group- and staff-model HMOshave the greatest number of enrollees.

The data suggest that NPs, PAs, and CNMs of-fer financial savings to capitated HMOs. An in-creasingly competitive environment might en-courage providers to pass on to consumers thesavings generated by the employment and appro-priate use of NPs, PAs, and CNMs, which wouldbenefit society.

Providing coverage or direct payment for theservices of NPs, PAs, and CNMs would not nec-essarily affect their employment by hospitals forinpatient care. NPs, PAs, and CNMs who workin hospitals are usually hospital employees, andthe hospitals pay their salaries. Furthermore, thereis no statutory permission or lack of permissionunder Medicare or Medicaid for payment of NPs',PAs', or CNM's services as inpatient hospital serv-ices when these providers are employed by hos-pitals. Most other third-party payers are also si-lent on this issue. With coverage, these servicescould be billed for as professional services.

increasing the productivity of medical prac-tices and institutions.

These practitioners have been accepted in a widerange of settings under many different paymentschemes, have the potential to reduce health-care

4;0

costs, and clearly play legitimate roles in thehealth-care system.

Although NPs, PAs, and CNMs are not em-ployed and used to their fullest potential, manythird-party payers in the public and private sec-tors are gradually lowering the barriers presentedby current payment methods and coverage re-strictions.

Although Federal third-party payers vary con-siderably in the extent of their coverage of andpayment for the services of these providers, ingeneral, coverage and direct payment is limited(see app. B). Federal third-party payers could bemore in step with new and evolving paymentpractices by liberalizing coverage and paymentrestrictions for the services of NPs, PAs, andCNMs. A major policy question is the manner ofliberalizing coverage and policy restrictions. Cov-erage could be extended for NPs', PAs', andCNMs' services in all settings or only in certainsettings. Direct payment for the services of NPsand CNMs would further remove barriers to prac-tice. (PAs have not sought direct payment.)

How extending coverage for the services ofNPs, PAs, and CNMs in all settings would affecttheir employment and use varies on the setting:

little change would occur in HMOs and in-patient hospital settings; andthe effect in physician fee-for-service prac-tice settings is unclear.

Coverage for the services of NPs, PAs, andCNMs by additional payers would have little ef-fect on the employment and use of these providersby HMOs or by hospitals for inpatient care. Whileimportant changes in employment opportunitiescould occur in physician fee-for-service practices,the direction of change is not clear because of thelarge number of variables that affect physicians'decisions. Since the effect on costs is directly re-lated to the extent of employment, this questionalso remains unanswered.

Extending coverage for NFs', PAs', and CNMs'services in all settings or limiting coverage for theirservices to certain settings where health-care serv-ices are currently inaccessible or inadequate wouldbenefit certain individuals, such as:

11

those in certain locales (geographically under-served rural and inner-city areas);those in certain settings (e.g., homes andnursing homes); andspecific populations (e.g., some disabled preg-nant women and some chronically ill patients,both adults and children).

Covering the services of NPs, PAs, and CNMsmight encourage physician fee-for-service prac-tices to employ these providers and use them insettings and for populations that are not receiv-ing sufficient and adequate care. Because paymentwould be to employing physicians, physicianswould have the final authority for the employ-ment and the exact nature of NPs', PAs', andCNMs' responsibilities. Physicians would have torecognize the advantages of using NPs, PAs, andCNIV.s in their practices for providing care to un-served and underserved individuals.

Direct payment as well as coverage for serv-ices of NPs and CNMs might enable them to de-velop independent practices in competition withphysician practices. Legal and financial restric-tions could be expected to keep the numbers ofNPs and CNMs in independent practicevery small.Competition from an increasing supply of physi-cians might offset the gains direct payment wouldbring to the independent practice of NPs andCNMs.

How adding these practitioners, particularly asindependent practitioners, to the health-care sys-tem, would affect costs cannot be resolved at thistime. The suspicion exists that total costs wouldincrease, but data are not available to answer thequestion. If costs increased due to an increase inthe provision of services, volume controls couldbe instituted.

If the overall volume of services did not in-crease, and :f the NPs' and CNMs' payment levelswere lower than physicians' levels for compara-ble services, third-party payers' costs might de-crease. Patients might realize savings from de-creases in the fees for some services. The extentof any savings would depend on what paymentlevels were established. In any event, patientscould choose from a wider range of providers andmight have greater access to primary-care services.

12

Direct payment for the services of NPs and PAscould be limited to certain settings where thereare demonstrated shortages of primary or mater-nity care services. For example, direct paymentmight be provided to NPs and CNMs who in-crease geographic access to care. NPs and CNMsin independent practice may prove a viable solu-tion for meeting the health-care needs of sparselypopulated areas that cannot support a physicians'practice. However, limiting direct payment to cer-tain areas and populations may not be an efficientcost containment measure because of the poten-tially small number of independent practices.

It seems clear that coverage for the services ofNPs, PAs, and CNMs in at least some settingscould improve health care for segments of thepopulation that are not being served adequately.How coverage would affect costs is unclear, butthe long-term result could be notable savings Theeffect of direct payment on costs is even less cer-tain, but it might enable NPs and CNMs to prac-tice in unserved and underserved areas to expandaccess to health care.

ADDENDUM: DEFINITIONS AND DESCRIPTIONS

Descriptions of the general roles of NPs, PAs,and CNMs indicate the similarities and differencesof these three types of health practitioners. (Seetable 1-2 for a comparison of their general char-acteristics 1

Today's nurse, operating in an expanded roleas a professional nurse practitioner, providesdirect patient care to individuals, families andother groups in a variety of settings . Thenurse practitioner engages in independent deci-sionmaking about the nursing needs of clients,and collaborates with other health professionals,such as the physician, social worker, and nutri-tionist in making decisions about other healthneeds. The nurse working in an expanded rolepractices in primary, acute, and chronic healthcare settings As a member of the health careteam, the nurse practitioner plans and instituteshealth care programs

Cl .\1X4( 1Q7°

The purpose of the physician assistant in pri-mary care is to help the physician provide per-sonal health service to patients under his caieAn assistant works with a supervising physicianin performing clinical functions and tasks whichprior to the mid-lobOs were reserved principallyif not solely for performance by the physician

Anwil i kaki, 1 thhation Piredon 108 2;

)Nurse- midwifery practice is] the independentmanagement of care of essentially normal new-borns and women, antepai-tally, mtrapartally,postpartally and or gynecologically )and) occurs

within a health care system which provides formedical consultation, collaborative manage-ment, and referral

American College of Nurse-ltlidtilves 1443.1

PAs differ from NPs and CNMs in their work-ing relations with physicians. PAs always workunder physicians' supervision, whereas NPs andCNMs work under physicians' supervision, or incollaborative relationships with physicians andother healt;i professionals. Another major differ-ence lies in the training these practitioners un-dergo. NPs and CNMs are licensed registerednurses'" who have received advanced training be-yond that of other registered nurses. NPs aretrained as generalists in the provision of primarycare services. They may choose to specialize atthe graduate level and deal with specific popula-tions, as do geriatric or pediatric NPs. CNMs re-ceive advanced training in midwifery. PAs, how-ever, are not required to be registered nurses, andthe great majority are not. They come from a va-riety of backgrounds and experiences before train-ing to become PAs. Most PAs have had 3 or moreyears of college-level education or several years

'1 hree types of nursing education lead to registered -nurse licenses2 star «m/let-MN «dlege progratm, 3 -year hospital-attiliated diplomaprogram,' and 4 -}car ha« alaureate-dcgtee pro,;ram,, The trend to111.1k(' nursing edit ation more a( aclerni( and unitorm e, reflected inthe de,«mtinuation of mane hospitals diploma programs althoughthis has not resulted in an In( reawd demand f or ha( cdIdur Cd te CdU-( anon for nur,,e,-.

13

Table 1-2.Comparison of Nurse Practitioners, Physician Assistants, and Certified NurseMidwives

Nurse practitionersDate of first educational

program 1966

Approximate number trained 25 000 to 30000''Approximate number employed

in field of tramingd 15433'Services Provide medical services within

limits of competence providecounseling and health promotionservices

Role Provide advanced nursingservices including working withclients having complex or multipleneeds provide medical services incollaboration with physicians andother health providers

Settings Mainly primary care, trend towardhospitals long term care facilitiesand other settings

Education Registered nurse with additionaltraining increasingly at masterslevel

Physician assistants

1965

181161-

16 000'

Provide medical services asassistants to physicians

Provide medical care undersupervision of physicians

Mainly primary care trendtoward hospitals long-termcare facilities and otherSpecial academic and on tr,,-job training

Cr2r1 if led nUr5r, rnidwi s,r;S

1931

3 500'

2 000''

Provide fui, range of prenatallabor deln.ery and postpartumcare family planning counselingand gynecological services

Provide midwifery services inconsultation with physiciansmainly serve low isk womenincreasingly work administrativelyindependent of physicians

Hospitals trend toward birthingcenters health departments, andfamily planning clinics

Registered nurse with additionaltraining about half at masterslevel

Approximate average income $25 975h $27 560' $25.000laEstimated by Denise Gelot Division of Nursing Bureau of Health Professions Health Resources and Services Administration Public Health Service U S Departmentof Health and Human Services Rockville MD personal communication Aug 20 1986American Academy of Physician Assistants AAPA Membership Statistics by Graduation Date Arlington VA May 13 1986

'Estimated by American College of Nurse Midwives Washington DC personal communication Aug 20 1986dThe figures for NPs and CNMs are from 1980 Later data from 'he U S Department Of Health and Human Services Public Health Seriice Health Resources and Seryices Administration Bureau of Health Professions Division of Nursing 1984 National Sample Survey of Registered Nurses Rockville MD indicates that the aggregate number of employed NPs and CNMs is 18 642

eNational Sample Survey of Registered Nurses November 1980 in Registered Nurse Population and Overview U S Department of Health and Human Services Pubtic Health Service Health Research Services Administration Publication No HRS POD 83 1 November 1982

(Estimated by Gretchen Shaf ft American Academy of Physician Assistants Arlington VA personal communication Sent 15 1986gEstimate from Kathy Michels Assistant Director Congressional and Agency Relations American Nurses Association Washingtr n DC onrsonal communicationJune 17 1986hU S Department of Health and Human Services Public Health Service Health Resources and ServicesAdministrat e,n Burnell, o' Hcalt, P ofess n ^s Division or Nursmg 1984 National Sample Survey of Registered Nurses Rockville MD

'American Academy of Physician Assistants 1984 Phys,c13n Assstant MaSterhle Sur.Pt lArlIngilln VA 190411American College of Nurse Midwives Washington DC personal rommunicaticn 4.J", 20 1986

SOURCE Office of Technolow Assessment 1986

of experience in health-related fields, althoughthese are not entrance requirements for the train-ing programs.

Certification is available to all three types ofhealth practitioners and is required for CNMsCertification is offered to registered nurses by theAmerican Nurses Association, by nurse-specialtyassociations and by some academic nursing-edu-cation programs An NP can be certified aftercompleting either an NP-master's program or anNP-certificate program. Master's degree programsrequire applicants to have baccalaureate degreesand registered-nurse licenses, and such programsentail an average of more than a year of additionaltraining Certificate programs are generally a yearlong and require registered-nurse licenses. CNMsare certified according to the requirements of theAmerican College of Nurse-Midwives. PAs are

certified by the National Commission of Certifi-cation of PAs.

CNMs are trained to provide care for essentiallynormal expectant mothers and to handle abnor-mal cases by referring the patients to physiciansof by consulting physicians or working Jointlywith them. Specific functions include providingprepartum care, managing normal deliveries, pro-viding postpartum care, providing gynecologicalcare, providing care to normal newborns and in-fants, and providing family-planning services.

NPs are taught to perform functions beyondthose of traditional nursing and to assume respon-sibility for some of the care usually provided byphysicians (see box 1-B). PAs are also trained toprovide some of the services typically providedby physicians (see box 1-B) PAs arc trained in

14

Box 1-B.Functions of Nurse Practitioners and Physiciar Assistants

Nurse PractitionersThe nurse practitioner is the professional nurse trained to provide the full range of primary-care serv-

ices in the community setting The American Nurses Association desLribed the NPs' functions referred toin the original Nurse Training Act of 1071 as:

obtaining a health history; assessing health-related status, entering a person into the health care system, sus-taining and supporting persons who are impaired infirm, or ill and during programs of diagnosis and therapy,managing a medical care regimen for acute and chronically ill patients within establ shed standing orders, aidingin restoring persons to wellness and maximum function; teaching and counseling persons about health and illness,supervising and managing care regimens for normal pregnant women, helping parents in guidanc" of childrenwith a view to their optimal physical and emotional development, counseling and supporting persons with regardto the aging process; and supervising assistants to nurses (46)

Physician AssistantsPhysician assistants (PAs) are skilled members of the health-care team who, working dependently with

physicians and under their supervision, provide diagnostic and therapeutic patient care (255). They aretrained to obtain a patient's medical history, perform comprehensive physical examinations and minor sur-gical procedures, order and complete routine diagnostic tests, develop diagnostic and management plans,provide basic treatment for persons with common illnesses, and respond appropriately to life-threateningemergencies. PAs are also trained to counsel patients on preventive health-care topics and to facilitate thereferral to the community's health and social service agencies when appropriate (20). The curricula of thesurgeon's assistant programs are structurally similar to programs for primary care PAs, except they placegreater emphasis on clinical and technical skills related to surgical patient care . . . Surgeon assistants (grad-uates of specialized training programs) and PAs with training in surgery often act as first or second assis-tants in major surgery (255).

interpersonal skills, but not to the extent that NPsand CNNIs are Indeed, counseling and healtheducation are traditional dimensions of nursingpractice Although many PAs pursue medical andsurgical subspecialties, this study focuses on thosePAs who are primary-care practitioners in am-bulatory settings

The roles PAs and NPs play depend on their1Nork settings In some settings, no functional dis-

tinctions between NPs and PAs exist, in other set-tings the two types of providers function verydifferently NPs, as registered nurses, perform thefull scope of nursing practice in addition to per-forming medical tasks, whereas PAs only performmedical tasks In reality, NPs and PAs often per-form the same roles, and evaluations often focuson NPs and PAs collectively_ , rather than on ei-ther NPs or PAs alone

'

Chapter 2

Quality of Care

Chapter 2

Quality of Care

&cause he-ith care encompasses both techni-cal care and the art of care (146), the quality ofboth must be assessed in determining the qualityof the care provided by nurse practitioners (NPs),physician assistants (PAs), and certified nurse-midwives (CNMs). Technical care comprises the

INDICATORS OF QUALITY

Current methods of evaluating the quality ofcare provided by NPs, PAs, and CNMs are inex-act. Structure, process, and outcome of care aretraditionally used to measure the quality of careprovided by physicians (70).' The quality of careprovided by NPs, PAs, and CNMs is often evalu-ated by comparing the process and outcome2 ofthe care they provide with the process and out-come of the care physicians deliver. Other acceptedindicators of the quality of care provided by NPs,PAs, and CNMs are patients' satisfaction' and,to a lesser extent, physicians' acceptance.

Comparisons With Physicians

The quality of care provided by NPs, PAs, andCNMs can be compared to the quality of care pro-vided by physicians with regard to only thosefunctions that both physicians and NPs, PAs, andCNMs usually perform. Comparisons based onfunctions outside the scope of NPs', PAs', andCNMs' training and practice, or on functions that

`Structural measures evaluate descriptive characteristics of facil-ities and providers, e g , the soundnt,s of a building and the boardcertification of a physician Process measures evaluate what a pro-vider do - fq and i or a patient e g , order a cardiogram for na-

tient with :hest pain Outcome measures evaluate the result of pa-tient care, i e , health statue. Although outcome measures are themost accurate available measure of quality, they are difficult to ob-tain (For a discussion of the problems associated with measuringthe outcome of care, see OTA's 1986 report Payment furclan Services Strategies for Medicare (246)

'The structural measures applicable to NPs, PAs, and CNN1s in-clude their certification, and the accreditation of their training pro-grams and of their continuing education programs

'Although accept :ince and satisfaction are not synonymous, theliterature uses the words intercharipP:ibl-y in describing positive ITsponses to NPs, PAs and CNN1s and the care they provide

diagnostic and therapeutic components of care;the art of care refers to the environment in whichcare is provided and the provider's manner andbehavior in caring for and communicating withthe patient (146).

physicians do not usually perform are unrea-sonable

Comparison studies a, e biased against NPs,PAs, and CNMs because the studies assume themedical model as the standardphysician careis considered the standard for care. This stand-ard may be appropriate for measuring the tech-nical quality of the tasks that NPs, PAs, CNMs,and physicians perform. But the medical modelmay be less suitable fo measuring the interper-sonal quality or art of care, which is more char-acteristic of care provided by NPs, PAs, andCNMs than of that provided by physicians. In-deed, health promotion, teaching, and counsel-ing are the essence of nursing education and arealso stressed in the curricula for training NPs andCNMs. PAs also receive training in interpersonalskills, but to a lesser extent. Physicians can legallyprovide health education and counseling, but thetraining in these skills varies among medical spe-cialties and medical schools. Among physicians,only family practitioners and psychiatrists receiveextensive training in interpersonal skills, althoughsome physicians in all specialties provide personalcare.

Some other comparison studies are biased infavor of NPs, PAs, and CNMs. In studies wherepatients are not randomly assigned, patients as-signed to NPs, PAs, and CNMs are, on the whole,healthier than patients who see physicians exclu-sively; and either the practitioners or patients candecide to consult physicians at any time. Of thosepatients who consult physicians, those who chooseto remain exclusively under the physicians' care

17

18

most likely are less healthy than those who re-turn to the NPs, PAs, or CNMs.

Patients' Satisfaction

Looking to patients' satisfaction as an indica-tion of quality of care reflects an increasing sen-sitivity to patients' interests and concerns and arecognition that outcomes partly depend on pa-tients' attitudes. Little evidence, however, suggeststhat patients' satisfaction positively correlates withfavorable technical outcomes (70). Patients' judg-ments may be based less on the therapies' successthan on the interpersonal aspects of carefor ex-ample, on how courteously patients felt they weretreated, how the" assessed the value of the ad-vice they received, on how much time they sperqwith the providers, and on how their emotionalstates changed (267). Nonetheless, if patients aredissatisfied with the services they receive, part ofthe reason for their dissatisfaction may be thattheir expectations have not been fulfilled.

Malpractice insurance premium rates and mal-practice , ,aims can also be used to judge patients'satisfaction. The comparison between physiciansand NPs, PAs, and CNMs is crude because thenumber and scope of services provided by phy-sicians differ from those provided by NPs, PAs,and CNMs. The interpersonal aspects of care ap-

pear to influence malpractice cases: physicianswho maintain good relations with their patientstend to be sued less frequently than physicianswho lack rapport with their patients (185).

Physicians' Acceptance

Some authorities reject the notion that physi-cians' acceptance of NPs, PAs, and CNMs indi-cates that the care they provide is good. Otherauthorities believe that physicians' acceptance ofsuch providers indicates good care to the extentthat physicians evaluate the care given by theproviders against the standard of physicians' care.Physicians' evaluations of the care provided byNPs, PAs, and CNMs in their employ, however,might be affected by the physicians' fiscal inter-ests. Physicians pleased with the financial resultsof employing NPs, PAs, or CNMs might viewthese providers favorably, whereas plsysician5 iis-pleased with the financial results might show theirdispleasure in negative assessments of the workof these providers. Other subjective factors, suchas gender or personal acquaintance, might influ-ence the degree to which physicians accept NPs,PAs, and CNMs. Competition from NPs and CNMsin independent practice, for example, certainly in-fluences physicians' acceptance of such practi-tioners.

METHODOLOGICAL PROBLEMS OF STUDIES

One or more common methodological prob-lems affect most studies of the quality of care pro-vided by NPs, PAs, and CNMs. The problemsinclude using small samples, focusing on short-term outcomes, using nonrandomized study pop-ulations, applying singl evaluation criteria, usingincomplete and unstandardized medical recordsdata, and choo5ing nonrepresentative samples orsites. Some studies, because they were conductedby educators and other proponents of NPs, PAs,and CNMs, might be biased in favor of the caregiven by these providers.4

'No bias against NI's, PAs and CNIXIs was apparent in the studiesexamined for this review

Study designs contain other weaknesses. Somestudies compare the processes and outcomes ofcare provided by NPs, PAs, and CNMs with theprocesses and outcomes of care provided by housestaff rather than by experienced physicians. Studydesigns that compare only medical tasks as per-formed by physicians with tasks performed byNPs and CNMs are incomplete because they ig-nore the adv,.nced nursing responsibilities thatNPs and CNMs also fulfill.

There are a few well-conducted, randomized,controlled trials that are valid within their owndesigns. The conclusions of these trials, as wellas other less rigorous studies, can be generalizedapplied to other populations and settingsbut

only in a limited way, Many studies report ononly a few NPs, PAs, or CNMs in only one set-ting, which limits the applicability of the findingsfor other providers and other settings.

Some of the studies of patients' satisfaction andphysicians' acceptance are opinion surveys that,depending on the rigor of design and execution,

19

are more or less flawed. Problems include misin-terpretation of questions bti respondents, inves-tigators' bias in framing questions, and relianceon the respondents' memories. Little attention hasbeen given to the systematic development of thequestionnaires or measuring scales used by inves-tigators.

QUALITY OF NURSE PRACTITIONERS' CARE


Reviews of comparison studies (230,242) andindividual studies comparing NPs and physiciansfind that the quality of care provided by NPs func-tioning within their areas of training and exper-tise tends to be as good as or better than care pro-vided by physicians (50,51,72,104,186,199,231).

In some cases, the quality of NP care is equiva-lent to physician care (see table 2-1). For exam-ple, NPs generally resolve patients' acute problemsas well as physicians (130,139), and the functionalstatus of patients treated by NPs and physiciansis equivalent (212). Spitzer (231) found no differ-ence between NPs and physicians in the adequacyof their prescribing practices. Other researchersfound that NPs prescribe and use inedications lessfrequently than do physicians, and that NPs tendto prescribe only well-known and relatively sim-ple drugs (29,204,225). The studies did not ascer-tain whether the differences in the prescribinghabits of physicians and NPs stem from differ-ences in patient mixes, prescribing philosophies,or other causes.

The quality of NPs' care differs from that ofphysicians' care in other instances (see table 2-2).NPs appear to have better communication, coun-seling, and interviewing skills than physicianshave (84,104,178), a conclusion reinforced by oneliterature review citing a number of "variables forwhich nurse practitioners received higher scoresthan physicians." These variables include.

. . . amount/depth of discussion regarding childhealth care, preventive health, and wellness; amountof advice, therapeutic listening, and support of-fered to patients; completeness of history, includ-ing the recording of previous problems and fol-

lowup of problems and therapies; completenessof physical examinations and interviewing skills,and patient knowledge about the managementplan given to them by the provider (187).

Table 2-2 also suggests that NPs are especiallygood at assisting ambulatory patients with chronicproblems such as hypertension and obesity (189,211). After clinic visits for chronic problems, NPs'patients are less likely than physicians' patientsto report that their activities are limited or thatthey experience anxiety about their problems (139).Whether NPs' interpersonal skills contribute totheir ability to care successfully for patients withchronic problems has not been determined. Phy-sicians, however, appear to provide better carein managing problems that require technical so-lutions (104).


Overall, patients are satisfied with the care theyreceive from NPs (25,41,80,82,139,141,145,207,231,265). Moreover, patients appear to be moresatisfied with the care they receive from NPs thanwith care from physicians, in regard to severalfactors: personal interest exhibited, reduction inthe professional mystique of health-care delivery,amount of information conveyed, and cost of care(41,145,190).

A few studies, however, indicate patients' dis-satisfaction with one or more aspects of NPs' careor show patient preference for physicians' care.Patients are concerned about long waits to see NPs(145),5 about how well NPs communicate with pa-

`This finding was consistent across 10 settings, including solo prac-tices, university student-health centers, public health-departmentclinics, private-hospital outpatient clinics, and a health maintenanceorganization

20

Table 2-1.Equivalence in Quality of Care Provided by Nurse Practitioners (NPs) and Physicians (MDs)

Activity or measure

Process measuresAdequacy of pediatrirt physical

Sr."ing Study type Source

assessment Health center, low incomeneighborhood

Retrospective chart review Duncan et al 1971

Adequacy of prescribingmedication Two MD family practice Randomized controlled trial Spitzer et al 1974

Adequacy of the management ofepisodes of care HMO Prospective chart review timing of

segments of patient visitsSpitzer, et al , 1974,Salkevor, et al , 1982

Management of hypertensivepatients Rural primary carp center Retrospective chart review Watkins and Wagner, 1982

Similarity of treatment plans forpediatric patients Military outpatient clinic Retrospective evaluation of NPs and Dipirol and Parry, 1983

MDs' treatment plansShort- and long term compliance

by patients Emergency room Prospective study with data collection atemergency room visit, short termfollowup, and long-term followup

Powers, et al , 1984

Outcome measuresPatient's physical, emotional, and

social functional statute Two MD family practice Randomized controlled trial Sackett, et al , 1974Resolution of acute problems Hospital ambulatory care

clinicsRecord review Komaroff, et al , 1976

Resolution of acute problems Prepaid croup prance Survey of providers and patients withtelephone fcllowup of patients atweek

Levine et al , 1976

Reductions in pain 0i urit5CoMf ortamong pediatric patients Prepaid group practice Survey of providers and patients with

telephone followup of patients at 1week

Levine, et al , 1976

SOURCE Process measures M T DiGirol and W H Parry Consultation to the Peolatric Automated Military Outpatient Systems Specialist (AMOSIST) A Comparisonof Consultation by a Pediatric Clinical Nurse Specialist ano by a Pediatrician, Military Med 1480) 364 367 April 1983 B DUI can A N Smith, and H K Silver,'Comparison of the Physical Assessment of Children by Pediatric Nurse Practitioner:, and Pediatricians, Am J Public Hecith 60(6) 1170 1176, June 1971,td J Powers A Jalowiec and P A Reichert Nurse Practitioner and Physician Care Compared for Nonsurgery Emergency Room Patients Nurse Practitioner 9(2) 39 52 February 1984, W 0 Spitzer, D L Sackett J C Sibley et al The Burlington Randomized Trial of the Nurse Pracf !boner,' N Engl J Med29015) 251 256, Jan 31 1974, L 0 Watkins and E H Wagner Nurse Practitioner and PhyJician Adherence to Standing Orders Criteria for Consultation orReferral Am J Public Health 72(1)2229 January 1982Outcome measures 0 M Levine, L L Morlock, A I Mushlin et al The Role of New Health Practitioners in a Prebaid Group Practice Provider Differencesin Process and Outcomes of Medical Care, Med Care 1464) 326 347, April 1976, A L Komaroff K Sawyer M Flateiy, et al Nurse Practitioner Managementof Common Respiratory and Genitourinary Infections Using Protocols' Nurs Research 25(21 84 89 March April 1976, D L Sackett The Burlington RandomizedTrial of the Nurse Practitioner Health Outcomes of Patients Annals Int Med 80(2) 137 142 February 1974 D S Salkever E A Skinner D M Sternwachs,et al Episode Basnd Efficiency Comparisons for Physicians and Nurse Practitioners Med Care 20(2) 143 153 February 1982

tients (139), and about whether NPs can care forwhat patients perceive to be serious medical prob-lems (131). Patients are dissatisfied with NPs whodo not consult with physicians about diagnosticand treatment decisions (80,198). Some of thesefindings, particularly those having to do withwaiting time and communication, contradict thoseof other studies (41,71,104,178,195), suggestingthat some aspects of NPs' care may require fur-ther research.

Additional research on patients' satisfactionwould be especially timely now, when the Na-tion's supply of physicians is growing, and morephysicians seem to be locating in small towns(36,39,68,174,264), where a i 1.atively large pro-portion of NPs have been pro riding health serv-ices. Any factors that might cons; bute to patients'

dissatisfaction with NPs' care are likely to limitthe employment and use of NPs as the growingsupply of physicians allows more consumers tochoose between NPs and physicians.

Malpractice insurance premiums and the inci-dence of malpractice claims indicate that patientsare satisfied with NP care. Although insurancepremiums for NPs are increasing, successful mal-practice suits against them remain extremely rare.Not surprisingly, most of the estimated $1.4 bil-lion in malpractice claims paid in the United Statesin 1984 (62) resulted from suits against physicians,particularly physicians in the surgical subspecial-ties. Physicians, however, far outnumber othertypes of providers, generally deal with the mostcomplex cases, and have more financial resourcesthan other providers.

21

Table 2-2.Difference in Quality of Care Provided by Nurse Practitioners (NPs) and Physicians (MDs)

Relatie quality ofActivity or measuic, ;are by NP; and Mn ,

Process measureNumber of diagnostic legs

Number of diagnostic test,

Thoroughness of document; onof diagnosis and treatmentinformation

Adequacy of a telephonemanagement of common pediatrirproblems

Effectiveness of interpersonalmanagement skills (interviewingcommunicating)

Management of problemsrequiring technical solutions

Outcome measuresRate of patient return toemployment

Reduction in number ofSymptoms in patients

Level of patient awareness ofpowder orders

Level of control of blood pressurein patients with hypertension

Level of control of blood pressurein patients with hypertension

Level of activity limitation andanxiety in patients with (,hronicproblems

Amount of reduction 1 pain or

discomfort in adult patients

NP Mr

NP Mfl

NP MD

NP , MP

NP

NP MD

r.P ,in

NP MD

r.P MD

.MD

NP , rod D

NP

Settml

outpatient ling

HMU

Preventive nedic ne deportmentof a mull spec laity t

llrih.iers.1 pediatric cliniL

Universih, pediatric Omit

Jail health 3ervii

University hospital medical clinic

University hospital medical Llinic

University hospital medical clinic

City llospital and healthdepartment clinics

University hospital hypertensionc; me

Prepaid group practice

P MD Previd group practice

Study type

R11100111 assignment of patients

re( Ord review time and motionstudies patient interviews

Prospective c. art review timinn ofeymer s of patent visits

Cross secticnal Patient survey and

chart review

Programed calls from a trainedperson about selected pediatricproblems calls recorded andanalyzedProgrammed calls from a trainedperson about selected pediatricproblems calls recorded and contentanalyzed

Record review and audit

Random patient assignmentinterviews chart reviews



Record re.iiew

Prospectue record review

Survey of providers and patients withtelephone followup of patients at 1

week

Survey of providers and patients withtelephone followup of patients at 1

week

Amount of might reduction in NP MD University hospital hypertension Prospective record reviewobese Patients clinic

SOURCE Process measures J D Brown M I Brown and F Jones Evaluation of a Nurse Practitioner Staffed Preventive Medicine Program in a Fee for ServiceMultispecialty Clinic Prey Med 84 0 53 64 January 1979 BC Flynn The Effectiveness of Nurse Clinicians Service Delivery Am J Public Health 64(6) 604 611June 1974 G E Hastings L Vick G Lee et al Nurse Practitioners in a Jailhouse Clinic Med Care 18(7) 731 744 July 1980 E C Perrin and H C Gaodman

Telephone Management of Acute Pediatric Illnesses N Engl J Med 298131130 135 Jan 19 1978Outcome measures B C Flynt The El fectiveness of Nurse Clinicians Service Delivery Am J Public Health 64(61604 611 June 1974 D M Levine L LMorlock A I Mushlin et al The Rote of New Health Practitioners in a Prepaid Group Practice Provider Differences in Process and Outcomes of MedicalCare Med Care 14,4) 326 347 t rril 1976 C E Lewis B A Resnick G Schmidt et al Activities Events and Outcomes in Ambulatory Patient Care NEngl J Med 280112)645 645 Mar 20 1969 J A Ramsay J K McKenzie and D G Fish Physicians and Nurse Practitioners Do They Provide EquivalentHealth Care, Am J Public Health 720155 57 January 1982 J W Runyon The Memphis Chronic Disease Program Comparisons in Outcome and the Nurse SExtended Rotes JAMA 23110' 264 270 Jan 20 1975 D S Salke,,er E A Skinner D M Stemwachs et al Episode Based Efficiency Comparisons for Physiciansand Nurse Practitioners Med ixe 2012) 143 153 February 1982

soure

Flynn 1471

Sialke.er et al 1982

Brown et dl 1970

Perrin and Goodman 1978

Perrin rid Goodman 1978

Hastings et al 1980

Hastings et al 1980

Lewis et al 1969

Lever et di 1969

Flynn 1974

Runyon 1975

Ramsay et al 1982

Ramsay et al 1982

Levine et al 1976

Levine et ai 1976

Ramsay et al 1982


A variety of factors affect physicians' opinionsof NPs. For example, physicians are more inclinedto approve NPs' performance of relatively sim-ple tasks, such as history-taking, than to approveNPs' performance of more challenging clinicaltasks (84,108). Another major factor influencingphysicians' opinions of NPs is personal contact.

Physicians who work with NPs express more sat-isfaction with NPs' performance and more will-ingness to delegate higher level tasks than do phy-sicians whose contact is indirect or nonexistent(21,134,223). This finding might indicate quality,but it might also reflect physicians' opinions aboutsuch non-quality-of-care factors as the relativelylow cost of NP care or the freeing of time for phy-sicians to see more patients or to spend in leisure.

r.

22

i'hysicians in group practices and in institutionalsettings are more supportive of NPs than are solopractitioners. The level of physicians' satisfactionincreases with the degree of their control over theactivities of NPs (21).

Many physicians who approve of the conceptof NPs have expressed only limited interest in ac-tually employing them (134,223), although NPsand PAs were .ntroduced and established in theUnited States largely because a minority of phy-sicians chose to support, train, and hire them.About 65 percent of the NPs in the United Stateswere employed as NPs in 1982, compared with69 percent in 1974 (237).6 No documented reason

More recent longitudinal nationwide data on NP employmentare not aallable

is available for the decrease in the employmentrate, although some observers 'nave attributed theslight downward trend to lac of acceptance byphysicians, rest, active State licensing, and un-favorable reimbursement practices (135).7 Further-more, the validity of these statistics is questiona-ble, because they are based on a very small numberof NPs.

"Many other factors may also contribute to the lower employ-ment rate The number of Master's programs preparing nurse prac-titioners ras grown substantially from 74 in 1077 to 124 198] ),and the number of certificate programs has decreased (from i24 to84 during the same period) (262) The decrease in employment mayalso partly reflect the increased number of NPs removing themselvesfrom the work force and seeking doctoral degrees

QUALITY OF PHYSICIAN ASSISTANTS' CARE


Within the limits of their expertise, PAs pro-vide care that is equivalent in quality to the careprovided by physicians (73,92,129,230,242). Whatlittle evidence is available about how the qualityof PAs' care differs from the quality of physicians'care indicates that PAs provide more counselingof obese patients than physicians provide (129),that PAs spend more time educating patients thanphysicians spend (159), and that PAs' patientsgenerally are better able to resume their usual levelof functioning than are patients of physicians(226).


The few available studies that directly addresspatients' satisfaction indicate that patients gener-ally are as highly satisfied with the care they re-ceive from PAs as with the care received from NPs(127,173,179,207). One study found that patients'satisfaction is tempered by the desire to see PAsperform routine functions rather than make in-dependent diagnostic and treatment decisions(227).

Photo credit American AcaJemy of Physician Assistants

The care provided by PAs functioning within their areasof training and expertise tends to be equivalent in

quality to the care provided by physicians forcomparable services


Physicians initiated and developed the conceptof PAs and serve as instructors in PA training pro-grams. PAs function as their name impliesas as-sistants to physicians. Thus, it is not surprisingthat many physicians accept PAs and are satis-fied with their work (125,129,179,208).

Physicians' confidence in PAs extends beyondroutine care. One recent study found that al-though physicians generally delegate routine, un-complicated cases to PAs, physicians also permitPAs to treat walk-in patients with urgent prob-lems if the physician., cannot treat those patients

23

and honor previously scheduled appointments(57). Perry and Breitner (182) found that super-vising physicians rate PAs higher than NPs ontasks involving educating, counseling, or instruct-ing patients.

The high level of physicians' satisfaction withPAs may help account for their continued highemployment rate. Employment rates provide themost consequential expression of physicians' ac-ceptance, and nearly 86 percent of the Nation'sPAs were employed as PAs in 1981 (45). By 1984,the employment rate had increased slightly to ap-proximately 88 percent; only 8.4 percent had notbeen employed as PAs for more than a year (219).

QUALITY OF CERTIFIED NURSE-MIDWIVES' CARE


CNMs can manage normal pregnancies safelyand can manage them as well as, if nO better than,physicians (65,148,190,193,226). Studies showthat, in accordance with their training, CNMs rec-ognize deviations from the norm and seek medi-cal consultation promptly (65,210). The fact thatCNMs provide standard care has been documentedin a variety of settings, including hospital inpatientservices, hospital clinics, migrant health centers,neighborhood health centers, and private prac-tices (67).

As measured by such short-term indicators asApgar scores (a numerical expression of the con-dition of a newborn infant) and birthweight, com-parable outcomes of normal, low-risk pregnanciesresult from care by CNMs and care by physicians(65,196,226). CNMs' care and physicians' carealso compare with regard to birth outcomes meas-ured by fetal, perinatal, neonatal, and maternalmortality (65,181). A randomized clinical trial ofuncomplicated deliveries showed no significantdifference in the outcome of care whether pro-vided by CNMs or by the obstetric house staff,except that CNMs kept more appointments andperformed fewer forceps deliveries (226).

Data on birth outcomes reveal that proportion-ately fewer low-birth-weight infants result fromdeliveries managed by CNMs than from those

managed by physicians (253). Although this mightseem to indicate that CNMs provide better carethan physicians, it might reflect CNMs' referralof high-risk pregnancies to physicians. In one re-cent study, the low-birth-weight rate for CNM-managed deliveries was 28 percent less than thecontrol group's rate; the CNMs had also providedprenatal care, whereas the control group receivedprenatal care from State-supported maternal andchild-care clinics (184).

CNMs appear to differ from obstetricians insome processes of care. CNMs order medicationsless frequently than do obstetricians (65), low-riskpatients of CNMs have shorter inpatient stays forlabor and delivery than do low-risk patients ofobstetricians (65), more obstetrical patients ofCNMs are tested for urinary tract infections anddiabetes than are patients of house staff physicians(226), and CNMs communicate and interact morewith their clients than do physicians (66,181,190,265). The care given by CNMs differs from theusual care given by the physicians in the personalattention patients receive throughout labor anddelivery. Most physicians care is episodic, whichmay contribute to the fact that they rely moreheavily than CNMs do on technology, such as fe-tal monitoring (265).

Although CNMs are trained to provide normal,low-risk maternity services, some of them col-laborate with physicians to participate in the care

rk 7,, '",

24

of high-risk women during labor and delivery.These CNMs perform such tasks as:

. . applying Internal uterine pressure monitor-ing devices or fetal scalp electrodes, obtaining fe-tal scalp blood samples, managing breech or mul-tiple gestation deliveries, utilizing low or outletforceps, or utilizing vacuum extractors (10)

Little evidence exists about CNMs' effectivenessin performing these tasks, although one researcherconcluded that CNMs "can render safe, effectiveservices to about one-third of the high-risk ob-stetric population" (210). Rooks and Fischman(203) found that most CNMs working in collabo-ration with physicians manage the care "of prena-tal patients with some complications."


Women served by CNMs are satisfied with thecare they receive (65.181,190,209).8 Although ob-stetric patients from all socioeconomic strata aresatisfied with CNMs' care, favorable feelingstoward CNMs increase with patients' age, educa-tional background, and number of births (59). Pa-tients' satisfaction has been recorded for a widerange of family planning services and normalmaternity care provided by CNMs in a varietyof ambulatory care and hospital settings (209).CNMs also appear to be readily accepted by newpatients-90 percent of the patient,.; seeking ob-stetric services from a group practice of obstetri-cians accepted services from a CNM the practicehad recently employed (190).

When comparing their satisfaction with serv-ices provided by CNMs and obstetricians, patientsof CNMs express preferences for the greater easeof communicating with CNMs and the chanceCNMs allow them to exercise more control dur-ing delivery (209). Perry found that none of thepatients whose babies had been delivered by

"Perhaps the main problem with most studies of 2.NMs is the pos-sible bias resulting from nonrandom assignment of patients to differ-ent types of providers Self-selection suggests that those women whoaccept care from CNMs are inclined to be satisfied with CNMs' care(lust as it suggests that those women who choose care from an ob-stetrician are inclined to be more satisfied with physiciar _,' services)Nevertheless, ,tudies consistently find patient acceptance of CNMsand some studies find that patients express relatively greater satis-faction with CNMs' care than with obstetrician's care

CNMs would have preferred to have had themdelivered by obstetricians, although some of thephysicians' patients said that in retrospect theywould rather have been cared for by CNMs (181).Patients in a large health maintenance organiza-tion expressed satisfaction with the care they re-ceived from both obstetricians and CNMs, but theCNMs' patients were significantly more likely toexpress great satisfaction with, and great confi-dence in, their providers (65). This study alsofound that patients of CNMs were more satisfiedthan those of physicians with the promptness withwhich they could obtain their first prenatal carevisit and with the relatively short time they spentwaiting in reception rooms (65).

CNMs differ markedly from obstetricians withrespect to frequency of malpractice suits, a crudegauge of patients' acceptance. The number ofCNMs who obtained malpractice insurance un-der the auspices of the American College of Nurse-Midwives (ACNM) grew from 625 in 1976 to1,400 in 1983. Between 1977 and 1982, 20 claims(not all successful) were made against ACNMgroup policyholders (55). A 1982 national surveyof CNMs found that 5.2 percent (55 of 1,065 re-spondents) had been named in malpractice suitsduring their careers (55). By contrast, of the 1,915members of the American College of Obstetriciansand Gynecologists responding to a recent survey,31 percent said they had been sued once, 16 per-cent had been sued twice, and 20 percent had beensued at least three times (55). Interpreting thesefigures, however, is difficult, partly because theydo not reflect case-mix differences. CNMs sendpatients with complicated or high-risk problemsto physicians, especially in emergencies. That rela-tively more obstetricians than CNMs are suedmay not reflect performance as much as the factthat obstetricians deliver many more babies thando CNMs and have higher incomes than CNMs.


CNMs may practice administratively and phys-ically apart from obstetricians and gynecologists,but by functioning "interdepenu,ntly with" thesephysicians, the CNMs retain the formal supportof the American College of Obstetricians andGynecologists. The American College of Obstetri-

cians and Gynecologists has agreed with theAmerican College of Nurse-Midwives that:

. . . the appropriate practice of the certifiednurse-midwife includes the participation and in-volvement of the obstetrician/gynecologist asmutually agreed upon in written medical guide-line/protocols 113)

The two colleges further agree that.

Quality of care is enhanced by the interdepen-dent practice of the obstetrician/gynecologistand the certified nurse midwife working in a rela-tionship of mutual respect, trust and professionalresponsibility This does not necessarily implythe physical presence of the physician when careis being delivered by the certified nurse-midwife(13).

Nonetheless, CNMs have had difficulty in ob-taining acceptance by practicing physicians, med-ical societies, hospital departments of obstetricsand pediatrics, companies that provide malprac-tice insurance, State boards of health, andnotinfrequentlynurses, themselves (196). Obstetr:-cians and gynecologists are thought to find com-petition from CNMs threatening to physicians' po-sition as the sole providers of a special type ofmedical care (43,190). Opposition may also re-flect the tightening market conditions facing ob-stetricians and gynecologists in urban areas (196).In addition, other physicians, particularly generaland family practitioners, have resisted CNMs(258).

SUMMARY

Within their defined areas of competence, NPs,PAs, and CNMs generally provide care that isequivalent in quality to the care provided by phy-sicians lot similar problems. Considerable edence exists, particularly for NPs and CNMs, thatthey are more adept than many physicians ai com-municating effectively with patients and manag-ing patients who require long-term and continu-ous care. Such patients include chronically illpatients and patients undergoing labor and deliv-ery. Although the evidence is less voluminous con-cerning PAs' supportive-care and health-promot-ing activities, data indicate they overlap with NPs'activities of that nature

Despite the reservations of many physicians asto whether CNMs are needed, their employmentrate has been increasing in recent years. In 1976and 1977, only about half of the Nation's CNMswere employed in clinical midwifery practice (9),but by 1982, approximately two-thirds (67.2 per-cent) of the CNMs in the United States were em-ployed in nurse-midwifery practice (10). TheCNMs' employment settings may better reflect theextent of physicians' acceptance. Although thepercentage of CNMs employed in private prac-tice with physicians increased from 13 percent in1976 and 1977 to 20 percent in 1982, most CNMsin 1982 were employed in organizational settingsor in private nurse-midwifery practice (see table2-3).

Table 2-3.Percentage of U.S. Resident CertifiedNurse-Midwives by Type of Organization,

1976.77 and 1982

Type of organization 1976.77 1982

Hospita; . . 45 6% 35 8%Private practice with physicians 12 9 19 8Private nursemidwifery practice 2 4 14 4Public health agency . 13 8 8 6Maternity service operated

predominantly by nurse-midwives 7 6 7 7Branch of the U S military 8 2 62Prepaid health plan 34 60University health service 5 0 1 8

SOURCES American College of Nurse Midwives, Nurse Midwivery in the UnitedStates 1976 77 (Washington DC 1978) and American College ofNurse Midwives, Nurse Midwivery in the United States 1982(Washington, DC 1984)

fh,.. iindings for NPs and PAs apply primarilyto care provided in ambulatory settings, and theactivities of CNMs have been documented in avariety of settings with favorable results. Al-though the findings are qualified by the method-ological limitations of the techniques used to in-dicate quality, the weight of the evidence seemsto show that the health-care services provided bythese practitioners are equivalent in quality tocomparable services provided by physicians.

Although patients are generally very acceptingof care provided by NPs, PAs, and CNMs, pa-tients are most satisfied with the services that re-

25

, -if

I

26

quire interpersonal skills. Patients seem to requirewhat might be called technical reassurance forserious conditions and to prefer that NPs, PAs,and CNMs consult with physicians when techni-cal care is required.

Patients' satisfaction with NP, PA, and CNMcare is affected by factors external to the actualcare provided. Satisfying a particular patient de-pends partly on the physician's conveying to thepatient a sense of approval of the NP, PA, orCNM (113). Patients' judgments may also reflecttheir past experiences with medical care and theirsocioeconomic status. One study, for example,found that an upper-middle-class populationaccustomed to receiving care from fee-for-servicephysicians evaluated providers mainly on the ba-sis of technical competence (35). Patients' age, sex,and race also affect their opinions. Middle-agedpeople, males, and blacks are more accepting ofNPs (80); whites are more accepting of CNMsthan are blacks, who are more likely to associatethe word midwife with untrained lay midwives(201). The American Nurses' Association (21) con-cluded that trust in NPs and PAs varies with theoptions available to patients, and that satisfac-

tion with NPs and PAs tends to be highest whenaccess to other sources of care, particularly phy-sicians, is limited. Patients' satisfaction withCNMs, however, appears to be independent ofaccess to other sources of obstetrical care (201).

Based on historical data, physicians accept theconcept of NPs and PAs but remain concernedabout their practicing independently. Physicianshave been reluctant to accept CNMs, especiallythose practicing independently. Physicians' will-ingness to delegate tasks depends on the particu-lar tasks. Most physicians who hire NPs, PAs,or CNMs are satisfied with their performance.Employment status, the most relevant indicatorof whether physicians accept NPs, PAs, andCNMs, is satisfactory; PAs, in particular, appar-ently enjoy a high level of appreciation by phy-sicians. Increasingly, CNMs' employment is in-dependent of physicians. A growing supply ofphysicians and potentially heightened competitionmay decrease physicians' acceptance of thesehealth practitioners. Indeed, the American Med-ical Association resolved in 1985 to "oppose newlegislation extending medical practice to non-physician providers" (136).

Chapter 3

Access to Care

C' -,, " ()

Chapter 3

Access to Care

In the late 1960s and the 1970s, health policyfocused on making health care accessible to allAmericans, much effort went toward helping peo-ple enter the health care system (1). A particularconcern was geographic access to primary care,because the geographic maldistribution of physi-cians and their patterns of specialization had leftmany of the Nation's inhabitants without ade-quate access to primary care.

Indeed, the creation and development of nursepractitioners (NPs) and physician assistants (PAs)occurred in large part in response to the limitedaccessibility of basic medical services, especiallyin rural and inner-c:ty areas, where physicianswere disinclined to practice (74,169,183)) Thestated purpose of the early training programs forNPs was to improve access to primary care forpeople in areas without enough physicians (236).Similarly, PAs were intended to "help remedy theshortage of primary care physicians, particularlyin medically underserved areas" (180). Much ofthe impetus for the growth in the number of cer-tified nurse-midwives (CNMs) during the 1970scan be attributed to concern about the limited sup-ply of obstetricians in the United States (180).

The various barriers to providing care must beconsidered in assessing the success of NPs and PAsin improving health care in medically underservedareas. Legislation and regulations vary widely fromState to State but generally tie medical practiceby NPs, PAs, and, to some extent, CNMs to asso-ciations with physicians and limit such practicewhere physicians are not present. Although NPsmay provide nursing services independently, forthe most part neither NPs nor PAs can providemedical services unless local physicians are will-ing to hire them. Medicare and Medicaid rules re-

'Other factors, including improved integration of nursing antimedicine, bolstered the NI' movement, which signified a deliberatemove to expand the nursing role and to meet the health -cure needsof many underserved populations Other factors that contributedto the success of NPs, PAs, and CNMs arc the consumers andwomen's movements, the new focus on self -help and self -care, andother pushes for social and personal change that emerged duringthe late 19o0s and continue today 1229)

garding payment also significantly impede NPs,PAs, and CNMs by restricting payment for med-ical services to the supervising physician or insti-tution. The Rural Health Clinic Services Act (Pub-lic Law 95-210) waived the re,triction for directsupervision of NPs, PAs, and CNMs practicingin certified rural health clinics located in desig-nated underserved areas (see app. B).

Whether NPs, PAs, and CNMs are needed toimprove access to primary medical care in under-served areas remains an issue, even though thesupply of physicians has increased, and some phy-sicians have moved away from urban areas (174,264). Some e <perts believe that competitive pres-sures will eventually remedy the maldistributionof medical manpower (222) but, the proportionsof physicians in urban and rural areas have re-mained fairly constant since 1970 (255).

Furthermore, large overall increases in physi-cian supply in a State may still leave some areasin the State without adequate access to medicalcare (112). The situation may worsen in thoseareas as older physicians are not replaced byyounger ones. Indeed, the Bureau of Health Pro-fessions has predicted that unmet needs for pri-mary care will persist in many currently desig-nated shortage areas. Although the dispersal ofyoung primary-care physicians is expected to re-duce overall shortages, reducing shortages in allunderserved areas may take an extensive periodof time (250).

Although the need remains for NPs, PAs, andCNMs to provide care to underserved populationsand in underserved areas, interest has increasinglyfocused on these providers' abilities to delivergood medical care in certain institutional settings,such as jails, and to specific populations, such aselderly people and poor women and their infants.In addition, by functioning as case managers, theseproviders can help patients find appropriate carein our increasingly complex health-care system.(The effect of NPs, PAs, and CNMs on access tospecific services, such as health education, coun-seling, and health promotion, is addressed morecompletely in chapter 2.)

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30

NURSE PRACTITIONERS' CONTRIBUTIONS TO ACCESS TO CARE

Although legal constraints (such as require-ments for supervision by physicians=) have hin-dered NPs' dispersal to isolated settings, NPs havehelped improve geographic access to primary care(31,86,160,168,261). In 19-7 23 percent of NPsworked in inner-city settings and 22 percent in ru-ral areas (238)the geographic areas of greatestneed (120). In 1980, the proportion of NPs work-ing in these settings hid increased to 47.3 percentin inner cities but decreased to 9.4 percent in ru-ral areas (255). In both inner cities and rural areas,more than half of NPs' patients had annual in-comes of less than $10,000 (255).

NPs alone cannot entirely resolve the problemof provider maldistfibution, because the profes-sional, social, and cultural attractions of thesuburbs and cities that appeal to many physiciansalso appeal to many NPs. An early survey of NPsin six States found that generally they "do notwork in the inner city or in rural areas" (81), buta Pennsylvania NP-training program surveyed itsgraduates through 1982 and found that 70 of the102 graduates worked in urban programs withlow-income people (151).

NPs tend to view themselves as being able tofunction effectively and appropriately not onlyin settings with physicians, but also in practiceswithout physicians on the premises. Starting inthe mid-1960s a significant minority of NPsworked in satellite settings as the sole providersof services; they received medical supervisionfrom physicians working in other communities.Often, the backup physicians would be availablefor telephone consultations, would visit the sat-ellite settings, and would be responsible for in-suring that the NPs adhered to the protocols guid-ing the provision of medical services. These NPsincreased access to care by working in placeswhere physicians had not located.

NPs' extension role is no longer as significantas it was in the 1960s and 1970s. A national sam-ple of 44 rural communities' identified in 1975 as

1Requirement,, for phymciare, ,,upt n.vaon of NI\ vary from Stateto Slate In many State,,, phraciare must be on the premew,-, butnot nete,,sardy in the same room,,a,, the NP,, providing the ,,ervif 4. ,-,

'The communities had populatiore of le,,,, than 10 000 v, it h anaverage population of le,,,, than 2 000, and Nero at least , hourin travel time from communities that had populatiore, of more than10,000

having satellite practices (most of which werestaffed by NPs; some by PAs) illustrates this de-cline By 1979, only 24 of the centers were staffedby NPs or PAs alone (37). By 1984, 18 were staffedonly by NPs or PAs, 8 were staffed only by phy-sicians, and 6 were staffed by a combination ofphysicians and NPs or PAs. In all but 4 of theremaining 12 communities, where satellite clinicshad ceased functioning, physicians' practices hadbeen established (38).

More recently, NPs' contribution to access hasbeen in nongeographic settings where not enoughphysicians have been available. Case studies re-port the satisfactory performance of NPs in a widevariety of settings. NPs act as team members inhome health and nursing home care for elderlypatients (220) and in correctional institutions(104), and in home health care for children withchronic illness (234). NPs also provide terminalcare in patients' homes (268), ambulatory care inlarge municipal teaching hospital units (30); andprimary care in inpatient units (224), in normalnewborn nurseries (188), and in occupational healthsettings (26). NPs also deliver preventive care inthe workplace (216), in retirement communities(109), and in industrial settings (47,162). Thesedescriptive reports are only a beginning; largerscale studies are needed to evaluate the qualityof care NPs provide in these settings.

Whether NPs can improve access to health carein schools has been carefully examined A large-scale study, involving 18 school districts in 5States, reports that NPs working as part of health-care teams in schools can have highly favorableeffects on school children's health (197). NPs areespecially valuable in improving access to primarycare and supplementary care in rural areas andin health programs for the poor, minorities, andpeople without health insurance.

People over 65, a growing segment of the pop-ulation, suffer serious gaps in their ability to ob-tain health care. Many physicians lack the exper-tise or time required for managing all aspects ofelderly patients' health problems Although pri-vate attending physicians provide most of themedical care in nursing homes, many physiciansare unwilling to care for patients in nursing homes166).

0 -,,.0

NPs are trained to care for the older popula-tion. Indeed 40 of the approximately 200 NP-training programs focus on geriatrics, and 31 otherNP programs have gerontological components(254). Furthermore, much of the cafe that institu-tionalized elderly people need is the kind that NPscan best givehealth maintenance, personal assis-tance, chronic-disease management, recognitionof acute or exacerbating chronic conditions, on-going accurate and comprehensive health assess-ment, appropriate and expeditious referral to otherteam members, medication management and re-view, coordination of daily services, family andpatient education and counseling, and so on. NPshave the assessment skills to recognize compli-cated acute illnesses or serious exacerbations ofchronic diseases and to make medical referrals(157).

The few available studies show that NPs havethe professional ability to assist with the care ofinstitutionalized elderly patients (124,220,262).But of the more than 23,600 nursing homes in theUnited States, only approximately 250 have ger-iatric NPs on their staffs providing patient care(76). Interest in the effectiveness of NPs in nurs-ing homes is growing rapidly, however, as evincedby the number and size of current studies of theissue.4

NPs improve access for the general populationby acting as case managers, matching the needsof patients with appropriate services (88). NPs areeffective in coordinating the care of many other

'Ongoing studies include a large-scale research project measur-ing how geriatric NPs employed in nursing homes affect the qual-ity and costs of care This protect is being conducted by the Moun-tain States Health Corp , the Rand Corp , and the University ofMinnesota School of Health Sciences and funded by the Health CareFinancing Administration and the R W Johnson and the W K Kel-logg Foundations The faculties of the Geriatric Nursing Programsat the University of Arizona, the University of California at SanFrancisco, the Univerisity of Colorado, and the Univeristy of Wash-ington are examining the role of the geriatric NP in concert withthe study, and the Group Health Cooperative of Puget Sound hasreceived funding from the Fred Meyer Charitable Trust to evaluateNPs employed by the health maintenance organization to serveelderly enrollees living in nursing homesif a Medicare waiver ofmandatory physician visits can be obtained (157) In addition, theHealth Care Financing Administration has granted a waiver underMedicare and Medicaid to permit fee-for-service reimbursement forthe provision of medical services to residents of nursing homes byphysician-supervised NPs and PAs A cost and utilization .t.,valua-bon is being carried out by the Health Care Financing Administra-tion's Policy Center at Rand

31

health professionals, interservice transfers, andcontinuity of care, and in mobilizing family, in-stitutional, and community resources (77).

NPs also are particularly effective in improvingaccess to care for groups that, for a variety of rea-sons, have difficulty in obtaining the care theyneed. For example, NPs and PAs work well asmembers of multidisciplinary teams in improvingaccess for chronically ill elderly people, whoseneeds for health services are great and whose abil-ities to manage the health-care system are limited(155). The NPs and PAs facilitate linkages betweenthe community and the nursing home. NPs, work-ing as members of teams with physicians, are alsoeffective in educating couples about the nature oftreatment for infertility and in providing emotionalsupport to people seeking such treatment (175).

In general, NPs appear to improve continuityof care. In institutional settings, their patients missfewer appointments than do physicians' patients(30). Studies have generally shown that patientsof NPs in fee-for-service settings (34,84), as wellas in clinics and health maintenance organizations(225), have higher rates of completed followupvisits than do patients of physicians (213). Thesefindings may explain the special success NPs havein caring for chronically ill patients and may re-flect the adequacy (or inadequacy) of relationshipsbetween the practitioners providing care and thepatients.

NPs affect access by expanding the scope of carefor their patients into dimensions that physiciansmight ignore. For example, some studies showthat NPs provide greater amounts of health edu-cation than do physicians. NPs are more likelythan physicians to explain why medications areadministered and what side effects are possible,and to discuss health-promoting behaviors withpatients (34,84). Unfortunately, these studies donot say whether the need for health education ifgreater among the patients seen by NPs or amongthose seen by physicians.

NPs spend about 50 percent more time thanphysicians spend on each encounter with a pa-tient (143). The time an NP spends over the courseof an illness, especially a chronic illness, may beless than that spent by a physician, however, be-cause the NP has fewer encounters with the pa-

32

tient (143). The fact that NPs provide a more per-sonal kind of care may account for the greatertime they spend with patients. One study foundthat pediatric NPs are as efficient as physiciansin gathering historical data and suggesting ther-apy, and attributed the NPs' greater time per en-counter to greater communication with patientsgathering more information from patients and

offering more advice to them (178). However, evi-dence from other studies is insufficient to supportor refute this study's finding, and other factorsmay play a role. For example, the greater an.ountof time NPs spend with patients might be due inpart to management. When NPs are used efficientlyin practices physicians might be able to spend lesstime with patients.

PHYSICIAN ASSISTANTS' CONTRIBUTIONS TO ACCESS TO CAREPAs have also contributed notably to improv-

ing geographic access to care. A number of studieshave shown that they are more interested thanphysicians in locating in nonaffluent, medicallyunderserved areas with high percentages of non-white populations (90,137,147,169). This willing-ness is reflected in statistics on where PAs prac-tice in the United States. Whereas about 27 percentof the general population and 14 percent of theNation's physicians are located outside standardmetropolitan statistical areas (SMSAs), 32 percentof PAs practice outside SMSAs (49). And the per-centage of PAs working in communities with pop-ulations of 10,000 or less has remained constantfrom 1974 to 1981 (45). The 1984 Masterfile Sur-vey of Physician Assistants reports that 6.5 per-cent of PA respondents were located in rural areasof fewer than 10,000 people and that 40 percentwere in communities of fewer than 50,000 peo-ple (6) (see figure 3 -11

More NPs than PAs have staffed rural satellitehealth centers (38), perhaps because some NP-training programs recruited students from ruralareas hoping they would return there as NPs.Nonetheless, in States that permit satellite clinicsand permit PAs to practice apart from physicians,a significant minority of PAs work in such set-tings (45).

As members of health-care teams, PAs have im-proved access to care in settings where sufficientphysician care is not always available. PAs areemployed in industrial organizations; communityclinics; drug and alcohol abuse clinics; nursinghomes and extended-care facilities; and Federal,State, county, and city prisons (25).

Figure 3.1.Distribution of Physician Assistantsby Size of Community

Proper on of physician assistserving such community

Less than 10 000

10 000 to 24 999

25 000 to 49,999

50,000 to 124,999

--J186 ° -0

111 2%

1101 °°

156°%125 non to 499,999 1155'0500,000 to 999 999 1 9 7%

1 000 000 to 2,499,999 7001 8

2 500,000 to 4 999,999 2'.1 4

5 000 000 or over5''016

i 1 I I0% 5°0 10% 15'. 20%

Average community population = 980,235

SOURCE American Academy of Physician Assistants 1984 Physician AssistantMasterfile Survey (Arlington VA 1984)

Few physicians are trained in geriatric medicine(126), and the inadequacy of physician servicesfor the growing population of institutionalizedelderly patients is especially serious (122). Al-though more and better physician care for thesepatients may be available in the future (122),whether physicians can satisfy all the health-careneeds of this group is questionable.

The potential of PAs in providing care for the'lderly has been discussed in the literature (160,215,218). Nearly 5 percent of PAs now providecare in nursing homesthe same proportion asin 1981 (6). The Federal Government has recog-nized this potential and requires an increased ger-

iatric content in the curricula of federally fundedPA-training programs. A survey of 34 federallyfunded programs' curricula, in fiscal year 1983,reported that three-fourths had varying degreesof geriatric content (254). Furthermore, the Fed-eral Government (through the Administration onAging of the Office of Human Development Serv-ices of the U.S. Department of Health and Hu-mar Services) partly supported the AmericanAssociation of Physician Assistants in its reporton the assessment and improvement of PAs' knowl-edge and skills in geriatrics (215). The reportfound a fivefold increase in the number of re-quired and elective experiences in geriatrics amongPA programs since 1980, which appear related tothe Federal funding rules. However, the report

33

noted the need for more uniform teaching of ger-iatric medicine in training programs. (The reportincludes guidelines for standardizing geriatric cur-ricula during the training period and in continu-ing education programs for PAs.)

PAs have also expanded the scope of care thatmost patients receive. PA training programs re-quire competence in interviewing, educating, andcounseling patients (93). Although research is lim-ited as 1-o the interpersonal components of carethat PAs provide, they appear to expand accessto patient education and counseling by mixingcompetence in technical care with interpersonalskills (182).

CERTIFIED NURSE-MIDWIVES' CONTRIBUTIONS TO ACCESS TO CARE

Modern nurse-midwifery started in this coun-try in 1925, when Mary Breckenridge establishedthe Frontier Nursing Service to serve rural Ken-tucky. As of 1977, 10 percent of CNMs workedin communities with populations below 10,000(9). CNMs still practice extensively in underservedarels, such as the rural South, Indian reservations,and iner cities, and significantly improve accessto health care in those areas. For example, inHolmes County, Mississippi, the infant mortal-ity rates dropped from approximately 38 per 1,000live births to 20 per 1,000 live births 2 years afterCNMs began providing primary care to pregnantwe nen as part of a communitywide focus on thehealth problems of mothers and babies (158).

CNMs have also reduced financial barriers toaccess by providing care at relatively low cost,pa ticnlarly in short-stay, out-of-hospital births.Many such births occur in birth ce: ers not af-filiated with hospitals. The number of these cen-ters increased from 3 in 1975 to mor _tan 100in 1982 (33). They have made prenatal, labor anddelivery, and postnatal services increasingly acces-sible to poor patients (C. 5,149,193). For example,15 birth centers are accessible to families in NewYork's Lower East Side, a low-income area (150).The relatively low cost of CNMs' services mayresult from shorter inpatient stays as well as lower

fees (53,65). One study, however, found thatCNMs' fees exceeded physicians' fees in urbanlocations (200), but nearly a year had elasped be-tween the measurement of physicians' fees and themeasurement of CNMs' fees, which may accountfor the finding. Also, a disproportionately largenumber of CNMs practice in academic medicalcenters, which have higher costs than communityhospitals (200).

CNMs affect access (as well as quality) by pro-vidine, person-oriented services, such as commu-nicating thoroughly with patients, counseling,promoting self-help, and attending to patients'emotional needs (196). CNMs interact with pa-tients more than physicians do (66,190,265). Pa-tients feel more coinfortable about asking ques-tions of CNMs than of physicians (181,190). Inaddition, CNMs' patients obtain care relativelyearly in their pregnancies and continue to receiveprenatal care relatively frequently (140,193,226).CNMs tend to increase the amount of prenatalcare their patients receive.

In general, then, CNMs continue not only tolower financial barriers to care, but to offer a con-siderable amoun. of care that includes both healthadvisory and health-promotion services. This ex-pertise is reflected in the valuable care CNMs on

34

_=0Photo credit American College of Nurse Midwives

CNMs are particularly effective in managing the careof pregnant women who are not at risk of having

low weight babies

SUMMARY

NPs and PAs have long been recognized for in-creasing geographic access to primary health care,particularly for residents of inner cities and ruralcommunities. Although indications are that phy-sicians are migrating to smaller communities (174),the growing supply of physicians appears to beaffecting different communities differently (250).Overall increases in the supply of physicians ina State may still leave some areas in need of pri-mary care services (112). In those areas where ac-cess to physicians' services remains inadequate toserve the pop., lation or has decreased (112), NPsand PAs can continue to serve as a source of pri-mary care. In areas where access to physicianservices has increased, employment opportunitiesfor and PAs might decrease. But the employ-ment of NPs and PAs in rural areas has previouslybeen limited by the scarcity of physicians willingboth to practice in rural areas and to superviseNPs and PAs. Thus, the growing numbers of phy-sicians in previously 11 'lerserved areas may wellincrease employment ,pportunities for NPs andPAs. The physicians moving into smaller com-munities are mainly v(,ting physicians, who are

multidisciplinary teams provide for high-risk preg-nant adolescents (184), especially in clinic settings(42). Indeed, the Institute of Medicine's report onpreventing low birthweight calls for:

more reliance on nurse-midwives . toincrease access to prenatal care for hard-to-reach,often high risk, groups. This recommendation isbased on the studies that indicate that CNMs canbe particularly effective in managing the care ofpregnant women who, because of social and eco-nomic factors are more likely to deliver low weightbabies (121).

more likely than older physicians to accept theteam approach to health care and to use the serv-ices of NPs and PAs. Furthermore, a small townmight he able to support a physician-NP or aphysician-PA team but not two physicians. Whetherthese factors or others reduce the role NPs andPAs play in improving geographic access to care,these practitioners will continue to be valuable,especially in rural areas.

The evidence (prima* from case studies) isthat NPs and PAs are improving access to pri-mary health-care services in settings not adequatelyserved by physicians. For example, NPs and PAsare trained to provide primary care for elderly pa-tients in nursing homes, a growing populationwith poor access to standard health care. The ef-fectiveness of NPs and PAs in this role is underscrutiny. They are also helping people to obtainprimary care in an increasingly complex health-care system.

Studies have shown that NPs are especially val-uable in providing primary care in school settingsto previously unserved or underserved children,

and in expanding the content of availat e care toinclude interpersonal and preventive care for all

patients.

CNMs have not only made care more accessi-ble in underserved areas, they have also contrib-uted to making rare financially available and havecontributed to social and psychological access to

35

ea, e by the personal orientation of the:r services.Studies have shown that CNMs' communicationskills and attention to the social and psychologi-cal needs of pregnant adolescents, as well as thetechnical carc CNMs provide, have reduced therate of low-birth-weight babies among this high-risk population.

Chapter 4

Productivity, Costs,and Employment

4 ti

Chapter 4

Productivity, Costs, and Employment

Several studies have examined the scope ofpractice and productivity of nurse practitioners(NPs), physician assistants (PAs), and certifiednurse-midwives (CNivls); how that scope relatesto the tasks usually undertaken by physicians; andthe implications of this evidence for the employ-ment of these providers and ,`.--1- the costs of med-ical care.

Questions related to productivity include thenature and size of the contributions NPs, PAs,and CNMs make to medical practices' outputs(e.g., encounters between providers and patients).Questions related to costs include how much a

practice must spend to employ an NP, PA, orCNM and how much society must spend to trainthese types of practitioners. Questions related toemployment compare productivity with the costsof employment to ascertain whether medical prac-tices could gain from employing more NPs, PAs,or CNMs, and whether society could g in fromtraining more NPs, PAs, and CNMs. Because ofthe complexity of the issues involved and the lackof data, these questions are seldom addressed to-gether. The literature does, however, permit thepiecing together of some parts of this puzzle.

SCOPE OF PROFESSIONAL PRACTICE

Services Provided by Nurse Practitionersand Physician Assistants

The tasks NPs and PAs are trained to performencompass a broad spectrum of primary care ac-tivities involving diagnosis and therapy (see ch.1). Distinguishing between NPs and PAs on thebasis of task descriptions is difficult. NP trainingmay emphasize counseling and health promotionactivities to a greater degree than PA trainingdoes, but the major difference lies in the practi-tioners' relationships ith physicians. By defini-tion, PAs work under physicians' supervision,whereas Nis have collaborative relationships withphysicians and other health professionals.

Most observers conclude that most primarycare traditionally provided by physicians can bedelivered by NPs and PAs. Hausner and others(105) conclude that 60 to 80 percent of the tasksnormally performed by primary care physicianscan be provided by NPs and PAs without consul-tation. Record and others (192) estimated that 90percent of pediatric care can be provided by NPsand PAs, and that NPs and PAs can substitutefor physicians in providing 50 to 75 percent ofall primary care services. Haus 'r and others (105)argue that NPs and PAs can sa perform enough

Photo credit American Nurses Association

NPs are trained to perform a broad spectrum ofprimary-care activities

of the primary care responsibilities to be consid-ered viable alternatives in providing primary care,even where direct supervision is unavailable.

What NPs and PAs are trained to do and whatthey do in practice may be different. Their actualroles depend on the settings in which they work.Limited information exists as to how practicing

45

39

40

14Ps and PAs actually spend their time. A 1979review cites four reports indicating that "nursepractitioners, in particular, emphasize preventiveservices," including one report concluding thatNPs can provide as m'ich as 75 percent of the well-person care for both adults and children (21b).Other studies have found that NPs engage moreoften than phy sicians in providing interpersonalcare (221) and chronic care (32). However, beyondthese sorts of indications and references to the NPorientation to health education, counseling, andpreventive and chronic care, accurate descriptionsof the actual specific tasks performed by NPs donot exist. Indeed, such information would be clic-ficult to obtain, because the range of primary careservices provided by NPs in outpatient settingsis so broad.

Little information exists concern:ng trends inthe freedom of NPs to function independently ofphysicians. Nearly two-thirds of the pediatric NPsresponding to a national survey in 1978 said thata physician was always physically present whenthey worked. Only 39 percent of the respondentsto a similar survey in 1983 noted that a physicianwas always present (44). These findings suggestsome movement toward administrative independ-ence, but more data on other types of NPs work-ing in a variety of settings are required in orderto establish whether the trend is significant.

Although PA training programs also includehealth education and counseling, relatively littleempirical evidence exists on how much health-promotion and disease-prevention services PAsactually provide. In general, PAs tend to focusmore than NPs on providing acute care services(138). Pr ks place less emphasis on preventive serv-ices (218) and "provide selective patient services,"whereas NPs are oriented more "toward treatment

PRODUCTIVITY

If the tasks performed by NPs, PAs, and CNMsoverlap substantially with those performed byphysicians, an obvious potential exists for theseproviders to substitute for physicians in the senseof performing tasks typically and characteristi-cally carried out only by physicians. NPs, PAs,and CNMs can also complement physician care

of the 'whole patient' (160). These generalizedcharacterizations do not apply universally, butthey illustrate an important distinction betweenPAs and NPs: PAs tend to function primarily assubstitutes for physicians, generally providingonly services that physicians provide, whereasNPs are likely to provide both services usuallyprovided by physicians as well as services gener-ally provided by nurses.

Services Provided byCertified Nurse-Midwives

In 1982, the American College of Nurse-Mid-wives (ACNM) (10) conducted a survey of its mem-bers which obtained detailed information aboutthe specific tasks performed by CNMs in clinicalpractice. Of the approximately 1,000 CNMs re-sponding, over 75 percent delivered prenatal, la-bor, delivery, and po,tpartum care as well as fam-ily planning and normal gynecological services.The CNMs' responses to detailed ruestic abouttasks showed that they provide the full range ofservices within their a; :as of expertise and theyassume specific responsibility for many of thetasks which they perform without physician direc-tion and supervision. CNMs clearly can substi-tute for physicians in performing a significantshare of the tasks normally carried out by physi-cians. A major difference between CNM care andphysician care is that CNMs are less likely thanphysicians to prescribe drug treatments, whichmay reflect both philosophical differences and le-gal restrictions. CNMs also tend to use less high-priced technology than physicians, and CNMs donot perform major surgery. In collaboration withphysicians, however, CNMs manage high-risk pa-tients during the prenatal, labor, and deliverystages.

by providing some services, such as counselingor health education, not currently provided bymany physicians or not carried out to the sameextent.

Whether a service is a substitute or a comple-mentary service is often difficult to determine.

o

Technically, empirical measurement of substituta-bility is complicated by the need for large amountsof accurate data on the prices and utilization levelsof resources used in the production process as wellas on the output of the production process. There-fore, studies of the role of NPs, PAs, and CNMshave taken the more straightforward approach ofproductivity analyses based on small samples,case stuales, or simulations.

Productivity, simply stated, is output per unitof input. The productivity of medical practitionersis frequently expressed in terms of the number ofpatients seen per week or per hour of the practi-Foners' time. In comparing physicians with NPs,PAs, and CNMs, the appropriate method of meas-uring productivity depends on whether the NPs,PAs, or CNMs are working under direct super-vision by physicians or working interdependentlywith physicians. For example, studies of PAsdirectly supervised by physicians examine howemploying PAs marginally affects total practiceoutput (e.g., the additional number of patientsseen per week). Or time-and-motion studies of theproduction process might examine the tasks per-formed by PAs and how long they take, as com-pared with the time physicians would take. Toevaluate the productivity of practitioners work-ing in collaboration with physicians, as CNMswork, studies could compare the number of pa-tients seen per week in collaborative practice withthe number of patients seen for the same serviceby an obstetrician. Physicians could also be com-pared with NPs, PAs, or CNMs with regard tothe number of minutes required per encounter fora particular type of patient or medical service.This approach attempts to control for case mix.

Comparing the productivity of physicians andPAs is facilitated by the fact that the t,..iks theyperform overlap significantly. Indeed, PAs tendto provide essentially the same services physiciansperform. The need to understi. id differences incontent of care, therefore, is not , great in com-paring physicians with PAs as in comparing phy-sicians with NPs, who generally provide a muchwider range of services.

41

Nurse Practitioners' andPhysician Assistants' Productivity

Studies of NPs' and PAs' productivity have gen-erally taken one of three approaches:

1. time per visit (comparing how much timephysicians and NPs or PAs take to completeoffice visits);

2. average number of visits per unit of time(comparing how many visits different typesof providers handle in a given period oftime); and

3. marginal product (assessing the effect of add-ing an NP or PA on a practice's total num-ber of patient visits).

Most studies of NPs and PAs indicate that theseproviders spend more time per office visit thando physicians (242). For example, Mendenhall andothers (160) found in a national survey of physi-cian practices that NPs averaged 19.4 minutes perdirect encounter with a patient, PAs averaged 13.3minutes per encounter, and physicians spent slightlymore than 11 minutes per encounter. A study byCharney and Kitzman (52) yielded similar results,but studies are not unanimous on this issue. Ina large health maintenance organization (HMO)a special settingRecord and others (191) re-ported that PAs spent less time per routine visit(an average of 7.1 minutes) than physicians did(8.9 minutes). The study noted, however, that:

. . . a sampling of medical charts revealed thateven where the presenting morbidity was the same,physicians tended to get somewhat older patientsw n a greater number of associated morbidities,including chronic diseases, which might easily ex-plain the time difference

Also, Kane and others (129) found little differ-ence in the amount of time physicians and physi-cian assistants spent per visit. These data supportthe conclusion reached by Record and her col-leagues (192) in a review of more than a decadeof experience and studies, that "there is more ofa tendency for NPs than for PAs to vary fromphysicians in the average amount of time spenton an office visit."

12

The shorter average time physicians, as com-pared with NPs and PAs, spend with patientstranslate into greater productivity over time. Inother words, the number of encounters with pa-tients per hour or per work week is higher for phy-sicians than for NPs or PAs. Mendenhall Andothers (160) reported the following:

NPs average 7.9 direct encounters and 2.4telephone encounters with patients per day;PAs average 14.2 direct encounters and 2.6telephone encounters with patients per day;physicians who supervise NPs or PAs aver-age 18.9 direct encounters and 3.4 telephoneencounters with patients per day; andphysicians who do not supervise NPs or PAsaverage 21.4 direct encounters and 5.7 tele-phone encounters with patients per day.

Data from a recently completed national sur-vey of rural health care delivery organizations in-dicate 'iat primary care physicians saw an aver-age or 105.6 patients per week and worked 48.6hours per week, whereas NPs and PAs saw anaverage of 75.0 patients Der week and worked 40.7hours per week (107). On the average, then, thesephysicians, saw 2.2 patients per hour, comparedwith 1.8 patient:, per hour for NPs and PAs. Rommand others (199) found that, compared with PAs,NPs spent more time per patient and, therefore,saw fewer patients per week. Because physicianswork more hours per week than do PAs and NPs,these productivity comparisons are best made ona per-hour basis, i.e., adjusting for the numberof hours worked per week. Overall, the findingsindicate that, in terms of patients seen per unitof time, NPs are less productive than PAs, who,are less productive than physicians. However, thisresult does not adjust well for severity of illness(i.e., case mix), nor does it necessarily mean thatphysicians are relatively cost-effective. For exam-ple, physicians might be three times more produc-tive than NPs and PAs are, but cost six times asmuch as they do.

The extent to which hiring an NP or PA in-creases the output of a practice has been the sub-ject of some debate (110,111,153). LeRoy (138)reported increases of between 20 and 90 percentin the productivity of physicians' practices thatadded NPs. Hershey and Kropp (110) used a model

to estimate that the productivity gain may be only20 percent after calculating the "offsetting changesin measures such as provider time available fornondirect patient care activities, patients' wait-ing time, waiting room congestion, practice hours,and supervisory requirements." The findings ofMendenhall and others (160) indicate that eventhough direct encounters between patients and thesupervising physician decline when an NP or PAis hired, the practice's total output increases. Rec-ord and others (192) reported "greatly varying re-sults" in studies of how addi^g an NP or a PAto a practice affected its productivity. Some studiesfound NPs and PAs to have greatly increasedproductivity, and other studies found that add-ing PAs or NPs actually decreased the number ofpatients seen. The one fact about which research-ers appear to agree is that the potential for increas-ing productivity is greater in large practices thanin small ones (111,192).

Three major problems arise in assessing produc-tivity in terms of length of encounter or numberof patients seen per unit of time First, these unitsof measure do not reflect the intent of the careprovided or the severity of the patients' illnesses.Because some visits require more skill than othervisits Holmes and others (114) applied a relative-value measure of productivity, considering boththe number of visits and the complexity of thosevisits. The researchers found that although phy-sician-NP teams handled only 5.7 patient visitsmore than physician-nurse teams handled eachday, the teams with NPs were 26 percent moreproductive in terms of total value-weighted serv-ices (114). The difference in content of care is animportant consideration because NPs provide moretime-consuming services, such as health educa-tion and counseling, than do physicians and phy-',icians are capable of providing some medicalservices that NPs cannot provide. Measures un-adjusted for content and complexity of work mayyield biased estimates of relative productivity.

The second major problem in basing produc-tivity estimates on numbers of patients or lengthsof visits is that these measures inadequately re-flect the ultimate objective of medical care. Thepurpose of medical care is to treat and preventhealth problems rather than to provide individ-

ual services. Recognizing this fact, Salkever andothers (213) examined the productivity of physi-cians and NPs in terms of episodes of care, be-cause episode-based assessments account for dif-ferences in referral, and because "the episode isalso a more appropriate unit for measuring differ-ences in effectiveness of care, since the outcomeof the care process may be causally related notonly to a service received at a single visit, but toany services received over the course of the epi-sode." The researchers found that the per-episodecosts were about 20 percent lower when NPs werethe initial providers than when physicians werethe initial providers.

A third major problem in ascertaining produc-tivity is that existing studies reflect current sub-stitution practices, which may not fully exploitthe potential for using NPs and PAs cost-effec-tively. The fact that NPs and PAs can safely per-form numerous medical-care services suggests thatthese practitioners have the capacity to be highlyproductive as individuals and to contribute sub-stantially to the productivity of the organizationsin which they work. But a key factor affectingthe productivity of NPs and PAs is the extent towhich their employersoften physiciansarewilling to delegate tasks to them.

The evidence about what physicians actuallydelegate as opposed to what they can safely del-egate is limited. A recent study of physicians ina large HMO (125) found that physicians did notdelegate as many tasks as they thought NPs andPAs could handle safely. General internists, pedi-atricians, and obstetrician/gynecologists indicatedthat 49, 46, and 29 percent, respectively, of theirtotal office visits could be shifted safely to PAsand NPs. The internists and pediatricians, how-ever, were willing to shift only about 28.5 per-cent of their visits to NPs and PAs, and obstetri-cian/gynecol gists were willing to shift my about14 percent of their visits. Most pediatricians andobstetrician/gynecologists cited their patients'preferences for being treated by physicians andthe physicians' own needs to maintain overall pro-ficiency by seeing a hill range of patients as theprimary reasons for not delegating more. The pri-mary reasons most internists cited for not delegat-ing more were that seeing only complex cases

43

would be too demanding and that patients pre-ferred to receive care from physicians (125).

In addition to reflecting physicians' willingnessor unwillingness to delegate responsibilities, theproductivity of NPs and PAs depends on manyfactors, including practice type (solo or group),practice setting and size, case mix, how long theNPs or PAs have been practicing, practice regu-lations, and how much autonomy the NPs or PAshave. Many of these factors are beyond the con-trol of NPs and PAs, however, which means thatthe potential or capacity of NPs and PAs has alimited effect on their productivity and, conse-quently, on their ability to affect the cost of care.Indeed, most productivity analyses consider NPsand PAs as part of physicians' practices. Little evi-dence exists as to the productivity and cost-effec-tiveness of NPs and PAs as autonomous practi-tioners.

In sum, the studies of the productivity of NPsand PAs suggest that:

physicians can substantially increase theirpractices' output by employing NPs or PAswho operate under the supervision of phy-sicians;although PAs, and, especially, NPs see fewerpatients per hour than physicians see, thesepractitioners are capable of carrying substan-tial proportions of the workloads of primary-care physicians; andpractice setting may be an important factorin NPs' and PAs' productivity, as evidencedby the differences in the use and productivityof NPs and PAs in HMOs and traditionalsettings.

The potential suggested by these studies is lim-ited by the reluctance of physicians to delegatetasks. Evidence shows that physicians are reluc-tant to use NPs or PAs even to the extent thatphysicians think feasible and safe, basing theirreluctance on patient preferences.

Certified NurseMidwives' Productivity

Compared to the many studies of NPs and PAs,much less information is available on the produc-tivity on CNMs. Furthermore, "it is characteris-

44

tic of the nurse-midwifery studies that they con-centrate on outcome" (671. This almost exclusivefocus on outcome rather than process limits in-formation about CNMs' involvement ;n produc-ing services.

One study (253) indicated that CNMs were only"about 23 percent as productive as obstetricianswhen the number of deliveries was used as theoutput measure." But the same study reportedwhen the volume of patient visits was used as theoutput measure, CNMs were 98 percent as pro-ductive as obstetricians.

As with NPs, the content of care provided byCNMs must be understood because they stress the

COSTS AND EMPLOYMENT

Although considerable scope exists for substi-tuting of NPs, PAs, and CNMs in providing someof the care traditionally provided by physicians,the resulting increases in productivity are notenough, by themselves, to justify greater employ-ment of these practitioners in private practices.From the standpoint of a private firm, the mar-ginal value (as measured by the amount patientswould pay for the additional output) must com-pare favorably with the marginal cost (i.e., thesalary and related expenses) of hiring an NP, PA,or CNM. From the perspective of a long-run in-vestment in training, either by society or by thetrainees, the value (i.e., compensation) placed onthe output of the NPs, PAs, or CNMs must com-pare favorably with the costs of training to justifyexpending the resources.

In 1983, annual salaries for NPs, PAs, andCNMs averaged about $25,000, compared withthe $60,000 to $80,000 median salaries of primary-care physicians (18). This wage gap raises severalquestions. What are the costs and benefits to so-ciety of using NPs, PAs, and CNMs rather thanphysicians? And if NPs, PAs, and CNMs are cost-effective substitutes, why isn't their employmentincreasing relative to the employment of physicians?

NPs, PAs, and CNMs, clearly could not com-pletely replace physicians, because the scope ofthe NPs', PAs', and CNMs' professional activi-ties is constrained by their more limited training,

interpesonal aspects of care, ,uch as counseling,health education, and patient interaction (103,184). Such an understanding is necessary in or-der to specify what facet of the care provided byCNMs contributes to the positive outcomes theirpatients experience (226).

Data from the ACNM survey (1984) suggestsubstantial possibilities for CNMs to substitute forphysician care. Many CNMs are already assum-ing responsibility for a wide variety of complextasks in prenatal, labor, delivery, and postpar-tum care.

reimbursement policies, legal barriers, and prac-tice setting characteristics. Furthermore, NPs,PAs, and CNMs sometimes compete with profes-sionals other than physicians or operate independ-ent practices. Nonetheless, given the large over-lap of their practices, primary care physiciansprovide an appropriate comparison group for con-sidering the employment of NPs, PAs, and CNMs.Although some information is available about sal-aries, the figures are imprecise enough that thediscussion must be carried out in approximate andqualitative terms.

Costs and Benefits of Training NursePractitioners, Physician Assistants,and Certified Nurse-Midwives

Estimates of the social and private rates of re-turn to investments in training and education in-dicate the value placed on these investments bysociety and private individuals, respectively. Thebest of such computations require large amountsof data on earnings over the career of the indi-vidual However, some conceptual issues can beaddressed qualitatively. In theory, the rate of re-turn on investment in the training of NPs, PAs,or CNMs can be calculated without reference tothe training or earnings of physicians. Societymust expend a certain amount to train a personto ')e an NP, for example, and this investmentyields a return of about $25,000 per year (plus

fringe benefits) minus what the person would haveearned otherwise.

An alternative approach would be to considerthe costs and benefits of training someone to bean NP, PA, or CNM instead of training the per-son to be a physician. The costs to society of train-ing an NP, PA. or CNM are much less than thecosts of training a physician. The direct costs re-lated to education such as payments for instruc-tors, supplies, and facilities, are greater for phy-sicians than for NPs, PAs, and CNMs, probablyon a yearly as well as overall basis. The indirectcosts, primarily what the individual would haveearned during the time spent in training, are alsogreater for physicians, because more years of school-ing are required.

Differences between the social and private ratesof return primarily reflect differences in the costsof education. The more that government subsi-dizes training, the higher will be the private rateof return, compared with the social rate. Little evi-dence exists as to what either rate of return is orwhat the differential between the two is, but edu-cational subsidies over the years have been r^n-siderable. Scheffler (217) provides an estimate ofthe private rate of return as of the early 1970s,arguing that ". . . the private rate of return issufficient to produce a relatively strong demandfor PA training; therefore, an increase in govern-ment support is unwarranted." He finds high ratesof returnover 20 percentcomparable to thosereceived by physicians. The lvailable data areprobably insufficient to allow distinctions betweenthese two types of investment, but thinking aboutthem qualitatively is useful.

Nurse Practitioners and Physician Assistants

The most recent estimates of the costs of edu-cating physicians and NPs, PAs, and CNMs weremade in 1979 by the Congressional Budget Of-fice (CBO). CBO estimated the mean total costsof educating NPs and physicians at that time tobe $10,300 and $60,700, respectively. Assuming,conservatively, that these costs increased at anaverage annual rate of 6 percent, the total educa-tional costs would have been $14,600 for NPs and$86,100 for physicians as of 1985.

45

A substantial portion of these direct costs areborne by taxpayers, rather than by the trainees.Society, through government support, has in-vested heavily in the training of NPs as well asphysicians. For example, between 1975 and 1982,the Federal Government spent $65.9 million oneducating NPs These funds supported approxi-mately half the NP training programs in theUnited States (251)

The indirect costsprimarily foregone earn-ings--are substantial, but they are difficult to esti-mate with any precision. Because a physicianspends about 6 more years in training than doesan NP, the indirect costs an individual must payto become a physician are much greater. Deter-mining the value of the foregone earnings forthose individuals who become doctors versusthose who become NPs is a more complex em-pirical task. Clearly, however, several NPs couldbe trained for the cost of educating one phjsician.

Extrapolating from CBO's estimates of PA-train-ing costs (242), the total direct costs of traininga physician assistant would have been $16,900,compared with $86,100 for training a physicianas of 1985. The indirect costs for PAs are aboutthe same as for NPs. Thus, the total costs of train-ing are higher for PAs than for NPs, but the aver-age earnings of PAs are higher than those of NPs($24,500 versus $23,500) (44,237). Although, amore precise comparison would require some ad-justment for the sex compositions of the twogroups, the chief implication of the studies is thatPAs, like NPs, are much less costly to train thanphysicians.

Certified Nurse-Midwives

The tuition charges for nurse-midwifery edu-cation vary considerably among programs, butan estimated average of the annual cost of edu-cating a nurse-midwifery student is approximately$12,000 (78). The total cost of training is inc, eas-ing with the growing trend toward master's de-gree programs, which last 2 years and are usuallytwice as long as certificate programs. Approxi-mately 40 percent of the Nation's CNMs havegraduated from master's degree programs. Theaverage total training cost for certificate and

; i I

46

master's programs combined is about $16,800,compared to the $86,100 cost of physician train-ing as of 1985.

Costs and Benefits of PrivateEmployment of NPs, PAs, and CNMs

Because physicians or grcup practices some-times must choose between hiring additional phy-sicians and hiring NPs, PAs, or CNMs, the per-spective of the physician as employer should beconsidered in any attempt to understand the em-ployment levels of these nonphysicians. UsingNPs, PAs, and CNMs to provide services tha:would otherwise be provided by physicians canbenefit society with lower fees if the cost of pro-viding services by the nonphysicians is less thanthat of providing services by physicians and if thesavings are passed on to patients. The costs of em-ploying an NP, PA, or CNM include salary, fringebenefits, supervisory expenses, costs of any ex-pansion necessitated' y adding another providerto the staff and costs of resources used by the ad-ditional provider. These costs must be comparedwith the costs that would be incurred if a physi-cian were added to the practice. The benefits apractice receives by hiring an additional providerare the additional fees the provider's services gen-erate for the practice.

Nurse Practitioners

How employing a nurse practitioner would af-fect the cost of a practice cannot be determinedwith any precision, but the following simple cal-culation provides a rough picture of the effect.The median salary of NPs in clinical practice in1983 was approximately $23,500. If fringe bene-fits averaged 25 percent of salaries, total costswould be about $29,500 per year. This is far be-low the $82,000 net income of young physicians(19). Hiring a nurse practitioner or another phy-sician might also result in indirect costs for suchthings as new office space, new equipment, ad-ditional support staff, and additional resources.

Total practice costs would change in composi-tion because physicians would spend some timesupervising the NP instead of providing visits, orthe NP might order more or fewer lab tests thanthe physician would have. However, the basic

question is whether the total value of the prac-tice output increases enough (i.e., would there beenough additional revenue) to cover the additionalcost of the NP?

Denton and others (61) examined the effect ofthe additional costs in a hypothetical calculationof the savings that would have resulted in Can-ada in 1980 "had nurse practitioner time been sub-stituted for physician time in the provision of allservices for which such substitution has been dem-onstrated to be safe and feasible." The research-ers concluded that the savings from this widespreaduse of NPs would have been from 10 to 15 per-cent for all medical costs (or from $300 millionto $450 million) and that the savings would haveamounted to between 16 and 24 percent of thetotal costs for ambulatory care. Furthermore, theresearchers determined that their "estimates arequite insensitive to demographic changes and willbe as valid in the future as they are today."

These findings are supported somewhat by thefindings of Salkever and others (213), who com-pared patterns of treatment for otitis media andsore throat by three types of prepaid group prac-ticesNP only, NP-physician team, and physi-cian only. With respect to otitis media, the find-ings support the contention that NPs' services areless expensive than those of physicians. Servicesprovided by NPs alone are less costly than thoseprovided by physicians alone or by NP- physicianteams. The researchers found no difference, how-ever, between the cost of treatments for otitis me-dia by physicians alone and NP-physician teams.The findings were similar for care of sore throats.These results confirm earlier studies (81,141) com-paring the costs of specific medical tasks conductedby nurse practitioners with the costs of the sametasks conducted by physicians.

Physician Assistants

The average salary of a PA is $24,500 and fringebenefits probably amount to about 25 percent oftheir salaries, making the average direct cost ofemploying a PA approximately $30,600 per yeara sum much lower than the average income ofyoung primary-care physicians

Accurately estimating the relative cost of em-ploying a PA versus that of employing a physi-

clan requires an examination of the indirect coststhat result from the resources expended by the ad-ditional employees. Little information exists aboutthe extent of the costs PAs generate by using apractice's resources. For example, Wright and others(266) found that PAs generate more laboratorycosts than medical residents but fewer than med-ical faculty. The calculations that Denton andothers (61) employed for determining that usingNPs would save 10 to 15 percent of the total costfor medical care in Canada could apply to usingPAs, as well, because the researchers used theterm nurse practitioner in a broad sense to encom-pass "several different types of intermediate healthprofessionals."


The average salary of CNMs was $24,800 in1983. If their fringe benefits were 25 percent oftheir salaries, the average direct cost of employ-ing a CNM was approximately $31,000 that year.The mean net income of obstetricians in 1983 was$119,900 (before fringe benefits) but because mostCNMs have been practicing fewer than 15 years,the most appropriate figure for comparison wouldbe the average salary of youngrather than allobstetricians. The average income of young ob-stetrician 'gynecologists is $100,000 per year plus$25,000 or more for fringe benefits.

As with the other types of health-care provid-ers, the indirect costs a CNM generates by usinga practice's resources need to be calculated to de-termine the full costs of employment. Evidenceexists that clients of CNMs have shorter hospitalstays than do clients of obstetricians (53,65). But

47

Dickstein (53) found that clinic prenatal and post-p:2rtum costs in a large HMO were higher forCNMs than for obstetricians, "primarily becausemidwifery visits are longer and more frequent, usemore RN educational time, and include the costof OB consultations and referrals." Generally, al-though existing data do not allow precise quan-tification of the costs of CNM care and physiciancare, the salary differential probably ensures thatthe total costs are considerably less for CNMsthan for physicians.

Costs Versus Benefits of Private Employment

The private physician's firm that employs anNP, PA, or CNM incurs extra costs for salary,fringe benefits, capital improvements, and otheritems. Productivity studies have shown that thetime a physician spends supervising the NP, PA,or CNM reduces the number of patients the phy-sician sees, although the reduction is more thanoffset by the overall increases in practice volumegenerated by the additional provider. Studies havenot, however, directly addressed whether thevalue of the additional output exceeds the addi-tional cost. In terms of rough magnitudes, thecomparison is between a $25,000 salary (plusother costs) and a 20- to 50-percent increase inthe practice's revenues, from a base of $150,000to $200,000 annually. In view of the uncertaintyabout the extent to which an NP, PA, or CNMwould increase marginal revenues, the marginalrevenues do not clearly exceed the marginal costs.But the careful accounting by Denton and others(61) in Canada suggests that significant savingsare possible for private practices that hire an NP,PA, or CNM rather than an additional physician.

CURRENT EMPLOYMENT: SETTINGS AND TRENDS

The productivity studies suggest that hiringNPs, PAs, and CNMs may provide private prac-tices a cost-effective alternative to hiring addi-tional physicians. And although private marketsmay be functioning as expected under existing le-gal and market institutions, unexploited socialbenefits may be available from the greater em-ployment of NPs, PAs, and CNMs.

Nurse Practitioners' andPhysician Assistants' Employment

Most of the pertinent studies have addressedthe employment of NI's and PAs in primary-caresettings, although NPs and PAs work at all levelsof health care in a wide variety of settings (154).A 1982 national survey of ped'atric NPs, for ex-

48..

ample, revealed that 22 percent of the respondentsworked in hospitals, 20 percent in community-health agencies, 17 percent in private pediatricians'offices, 10 percent in specialty clinics, 8 percentin schools, 6 percent in HMOs, and the rest mainlyin nursing schools and military clinics (167)

NPs are increasingly being employed in homehealth agencies (155,196,220,268), and findingwork in nursing homes (87,262). NPs are alsoworking in industrial settings (216), correctionalinstitutions (104), and schools (156,228).

Different types of practice settings have differ-ent implications for any economic analysis of thebenefits of hiring NPs or PAs. For example, com-paring NPs with other nurses might be more ap-propriate than comparing NPs with physicians insuch settings as home health agencies, HMOs,schools, and businesses, where NPs might be em-ployed instead of, or in addition to, registered orlicensed nurses. In these settings, the NPsthemore costly alternativemight be selected be-cause they could provide a wider range of serv-ices. NPs employed in schools, for example, canserve as liaisons among the various health-careproviders serving schools; NPs can also providebackup support and in-house education to schoolnurses and provide educational services to teach-ers, parents, and students (228).

Because of increases in the variety of settingsin which NPs work, their employment rates mightreasonably be expected to be higher than ever.But, proportionately fewer NPs are working asnurse practitioners in the 1980s than were doingso in the 1970s (237). The extent to which this de-crease reflects incr-ased competition from the grow-ing supply of physicians is unknown.

PAs also work in a wide variety of settings andin every level of health Giro from primary to ter-tiary. Of all the Nation's PAs, about one-thirdwork in office-based practices (about halt of thesePAs work with physicians in solo practices); anotherone-third or so are based in hospitals; and the re-maining one-third work in prepaid groups, pub-lic health departments, drug and alcohol rehabili-tation centers, industrial settings, nursing homes,prisons and jails, and military facilities (45). Con-siderable change has occurred in the proportionof PAs employed in various settings. For exam-

ple, the proportion of PAs employed in hospitalsgrew from about 10 percent in 1974 to more than30 percent today.

Increasing numbers of NPs, as well as PAD, arefinding work in hospitals. This development maynot be due to the implementation of prospectivepayment for hospitals based on diagnosis-relatedgroups (DRGs) and, in fact, may be occurring de-spite DRGs. Instead, the trend is probably relatedin part to the growth in the supply of physicians.

As the number of physicians increases in cer-tain specialties, e.g., surgery, residency positionsare being decreased to contain the numbers andPAs [are being] employed as 'junior house staff'to supplement patient care (262).

New employment opportunities for NPs and PAsmay also stem from the trend for hospitals toestablish community-based, ambulatory-care cen-ters in order to broaden their patient bases andto assure themselves of solid sources of inpatientreferrals. Hospital managers recognize that theirbest interests are served by providing these serv-ices as efficiently as possible and, consequently,by employing NPs and PAs.

Certified Nurse-Midwives' Employment

According to the 1982 ACNM survey, 36 per-cent of the Nation's CNMs worked in hospitals,20 percent were in private practice with one ormore physicians, 14 percent were in private nurse-midwifery practice, and the remainder worked inpublic-health agencies, prepaid groups, and othersettings (10). Nearly 35 percent of the respond-ents to this survey revealed that they were notworking as nurse-midwives, and about half ofthese said the reason was that "no nurse-midwif-ery positions are available in my community.''

The data in table 2-3 indicate the changes thathave taken place in how CNMs are distributedamong the types of organizations in which theywork. In general, the shift has been away fromemployment in hospitals, public health depart-ments, and university health services and towardprivate practice (9,10). In contras. to NPs andPAs, proportionately fewer CNMs practice in hos-pitals now than did so in the 1970s: in 1984, only6.7 percent of the Nation's hospitals had CNMs

on staff (171). More than 14 percent of the Na-tion's CNMs worked in private nurse-midwiferypractice in 1982, compared with 2.4 percent in1976 to 1977 (9,10)

CNMs are finding increased employment wherethe- are not administratively responsible to phy-sicians. Administrative independence must not becontused with clinical independence, becauseCNMs do not aspire to clinical independence.They highly value their professional interdepen-denci.- and collaboration with physicians (13).

Although most NPs and PAs in primary careare supervised directly by physicians, only 48 per-cent of the CNMs practicing in the Unites.; Stateswho responded to the 1982 ACNM survey indi-cated that their immediate supervisors were phy-sicians. All the responding CNMs, however, col-laborated on clinical matters with physicians (10).The proportion varied considerably depending onthe type of practice. For example, about 9 of every

SUMMARY

Studies show that NPs, PAs, and CNMs canprovide services that both substitute for and com-plement physicians' services, depending on tbc,particular service or type of practice Moreov(T,hiring an NP, PA, or CNM increases a practice'stotal output and costs less than employing an ad-ditional physician. Because training is less costlyfor these practitior,ers than for physicians, usingNPs, PAs, and CNMs rather than physicians forcertain services would presumably be cost-effec-tive from a societal point of view, given that thequality of care is equivalent to that provided byphysicians for comparable services (see ch. 2). Al-though additional cost savings might result fromgreater employment of these providers, the evi-dence suggests that current employment levels andpractices more or less reflect existing market con-ditions.

The abilities and cost-effectiveness of NPs, PAs,and CNMs raise a question as to why their ranks

4t

10 CNMs in private practice with physicians weresupervised directly by physicians, whereas ap-proximately one-third of hospital-based CNMswere 'alder the supervision of physicians. Almosthalf the CNMs in private nurse-midwifery prac-tice were not administratively responsible to any-one other than themselves, and an additional 22percent reported to other nurse-midwives. In all,nearly 36 percent of the respondents noted thatthey were supervised directly by other CNMs (10).

The evidence suggests that CNMsespeciallythose in private nurse-midwifery practicetendto function organizationally more independentlyof physicians than do NPs or PAs. Because of thesixfold increase in the percentage of CNMs work-ing in private nurse-midwifery practices between1976-77 and 1982, the organizational independ-ence r.. CNMs has increased markedly. This trendshe., no signs of slowing down, although allobstetrics-related care may be decreased by theliability-insurance crisis.

have not grown and diffused to a greater extent.Although the private markets for NPs. PAs, andCNMs as employees in physicians' practices donot suggest a current shortage, the removal ofpayment barriers and limitations could greatly in-crease the demand for these alternative practi-tioners. Unless the barriers are altered, the poten-tial savings from a greater use of NPs, PAs, andCNMs will probably remain unexploited.

Continuing research and analysis is needed toascertain the cost savings that would result fromincreased employment of NPs, PAs, and CNMs.Many productivity studies have been conducted,but few attempts have been made to compare howNPs, PAs, or CNMs affect the revenues of indi-vidual practices with how they affect the prac-tices' costs. Changing market circumstances cre-ate a need for both types of studies, but those thatcompare revenues and costs are especially im-portant.

)

Chapter 5

Payment Issues

Chapter 5

Payment Issue

In their areas of expertise, nurse practitioners(NPs), physician assistants (PAs), and certifiednurse-midwives (CNMs) can provide safe Llrethat meet., generally recognized standards of qual-ity, care that emphasizes personal and preventivedimensions often underemphasized by physicians,and care that would otherwise be unavailable ininner cities, remote areas, and certain settingswhere demand or ability to pay are insufficientto support physicians' practices NPs, PAs, andCNMs could also reduce costs in certain settings

Nonetheless, professional attitudes and restric-tive statutes, regulations, and policies have hin-dered the ability of NPs, PAs, and CNMs to ob-tain employment in some settings and to practiceat levels commensurate with their training (see box1-A). One major constraint is that many third-party payers, including many Federal programs,do not cover (authonze payment for) services pro-vided by NPs, PAs, and CNMs in certain settings,if the services are typically and characteristicallyprovided by physicians nor do they pay themdirectly for such services (see app. B) Althoughmost third-party payers usually do not look be-yond a physician's claim for payment as to whetherthe physician or NP, PA, or CNM have prov;deda particular service, uncertainties about coverageare partly responsible for some physicians' reluc-tance to hire NPs, PAs, or CNMs. Lack of directpayment limits the independent practice of NPsand CNMs Third-party payers have been moregenerous in covering and directly paying for theservices of CNMs than NPs Although PAs, aswell as NPs and CNMs, have actively sought cov-erage for their services, Lhey differ from NPs andCNMs in not wanting direct payment

Observers have suggested modifying the cur-rent rules for payment of such services by requir-ing coverage for NP, PA, and CNM services andby paying NPs and CNMs directly and not throughthe employing physician Requiring coverage woulbe both an independent modification and a pre-liminary step toward direct payment A thirdmodificationestablishing a payment level could

apply even if payment were indirect, i.e.NPs', PAs', or CNMs' employer.' Thesecations would have several implicationployment and the scope of practice oftitioners2 and for the costs borne by thpatients, and society.

Some Federal health programssurers provide coverage and direthe services of NPs, PAs, and Ctings (see app. B). For purposecase study assumes that coverrnent for such services wouldprograms and insurers andlegislation would not oveu:ations governing the liNPs, PAs, and CNMs.

to themodifi-

s for em-hese prac-

ird parties,

nil private in-ct payment for

NMs in some set-s of analysis, this

age and direct pay-be offered by all the

that any new Federalride State laws or reg-

ensing and practice of

The effect of the modifications would vary, de-pending on the setting in which the provider prac-ticed and on the method of paymen't. Becausethese two factors are interdependent--in that pay-ment method is usually typical of a type of prac-tice settingthey are considered together.

The effect oor the healthing The sution and finways thatpetitivetrends

thechatties

sic

these modifications also dependscare environment, which is chang-

ply of physicians and the organiza-ancing of heaith care are changing in

are likely to bring about a more com-market for health-care services.' Theseave implications for the future of NPs,

mg the publication of this case stud% the Omnibus Recon-on At of 1080 (Public 1 av, clo-50o) was enacted The act mod-\Audi( are and authorues payment for (covers) services of phy-

c-istants v,orking under the supervision of physicians in)srtals skilled nursing facilities, intermediate-care facilities and

is an assistant at surgery The payment is indirect and at le ,els lowerthan ph% sic ions v,ould receive for providing comparable services

Many other tai ors at t,..ct the employment and practice patternsof NI's l'As and C NMs Several issues especially malpractice in-urani e are ( rit u al but discussion of them would be beyond the

scope of this case study'the tae t that the ,pulation is aging and consequently need-

ing Trione health c are service-, would also affect the employment ofand l'As and to the extent that ti ev provide g% necological serv-

o N Ms l he aging of the population has been disc uss.2d in de-tail in a number of pre %low. 01 A report, notably in Technologyand ,i1,ein,e Ill A Merl( .? 1245

(.0

53

54

PAs, and CNMs, regardless of whether paymentfor their services changes. Modifying payment forthe services of NPs, PAs, and CNMs in a chang-

ing health-care environment, however, would cer-tainly affect their employment and use and mightalter the costs of health care

EFFECTS OF MODIFYING PAYMENT FOR SERVICES OFNURSE PRACTITIONERS, PHYSICIAN ASSISTANTS, ANDCERTIFIED NURSE-MIDWIVES

Modifying the method of payment could be ex-pected to have varying effects on the employmentand scope of practice of NPs, PAs, and CNMs,depending on whether they were in independentpractices or worked in physicians' practices, healthmaintenance organizations, hospitals, nursinghomes, or other settings. Modifying the methodof payment might also affect costs.

Effects on Independent Practices ofNurse Practitioners andCertified Nurse-Midwives

Mandated coverage and direct payment to NI'sand CNMs for providing services typically andcharacteristically performed by physicians woulddramatically increase NPs' and CNMs' ability toestablish fee-for-service practice, that were ad-ministratively independent from physicians. In-deed, direct payment would be the most advan-tageous payment method for NPs or CNI'vls inindependent practices. As autonomous providers,NPs and CNMs could provide the full range ofservices for which they were trained and licensed

Such practices would be administratively inde-pendent but according to current modes of prac-tice, they would not be clinically independentfrom physicians when NPs and CNMs were per-forming delegated medical tasks.' The nursingprofession has agreed to clinical collaboration Forexample, a joint statement of "practice relation-ships" calls for obstetrician, gynecologists andCNNIF to adhere to clinical-practice arrangementsthat include the participation and i . olvement ofobstetrician, gynecologists with CNI\vls as mutu-ally agreed on in written medical guidelines orprotocols Cl\IMs in administratively independ-ent practice believe that they are adhering to the

-NI', and ( NM,. ma( Itig,111( h« linic,111% Ind( li, rid( ht In, ii ph \..,i( lam N, htin riiirt orming nursing t,g3i.

joint statement, because it permits interdependentpractice without calling for physicians to be pres-ent whenever CNMs are caring for patients (13).In addition, the American College of Nurse Mid-wives requires that CNMs agree to work in clini-cal collaboration with physicians in order to ob-tain certification.

In addition to professional restraints, State lawsand regulations that limit NPs' and CNMs' scopeof practice and specify requirements for supervi-sion by physicians serve as a formal control onclinical independence. NPs and CNMs in inde-pendent practice are also accountable for theirmode of practice by the malpractice insurancethey carry.

Although a few NPs have attempted to estab-lish administratively Independent practices, mostNPs in such practices provide traditional nursingcare rather than primary medical care (138). Amongthe barriers NPs face in undertaking independentpractices are the necessity of making substantialfinancial investments and the lack of coverage anddirect reimbursement for their services. The Amer-ican Nurses Association (ANA) believes thatmany NPs would establish such practices if cov-erage at,d direct payment were more widely avail-able (256).

CNMs are highly interested in administrativelyindependent practice. Indeed, the proportion ofCNMs in private midwifery practices increasedfrom 2 4 percent in 1976 to 1977, to 14 percentin 1982 (9,10) During that period, the numberof third-party payer s that provided coverage anddirect payment for CNMs' services Inc reased. Ifadditional third-party payers were to cover andpay for these services, more CNNIs probably wouldbe interested in independent practice

Pri,bleins gi.ith iihtdining imilprac tat ini.tir,irg t ,ii. i i,4,I ,ind highithilphic tics ii(1111lIM (,,,t, Mr SIgillillint liniitatiiin, nn Ind, 14 nd-t ni pr,i( ti« h ( N \ 1,

r:It 4 (...)

How coverage and direct payment for NPs'services would affect the establishment of adminis-tratively independent fee-for-service practices byNPs partly depends on the extent to which NPsseek and obtain direct payment. The impetus fordirect third-party payment of nurses, an ANA pri-ority since 1948, increased for organized nursingwith the establishment of NPs as health practi-tioners (22). Indeed, the ANA has been activelyinvolved in seeking and sometimes obtaining suchpayment at the State and national levels (23,232).

Little information is available as to how manypracticing NPs receive direct payment. A 1983survey of NPs, conducted 4 years after the pas-sage of a Maryland law providing direct third-party payment for services not directly supervisedby physicians, found that fewer than 1 percentwere paid directly (99). In 1986, however, 7 yearsafter the passage of similar legislation in Oregon,a survey of NPs in that State found that 25 per-cent were receiving direct third-party payment;42 percent had been issued provider numbers; and38 percent were signing the claims forms for theservices they provided (102). The researcher whoconducted both surveys suggests that the disparatefindings might reflect the fact that more time hadelapsed between the passage of the legislation andthe survey in Oregon than had elapsed in Mary-land (101).

The establishment of independent fee-for-serv-ice practices by NPs and CNMs could affect thecosts of third-party payers. If the total volumeof services by all providers did not increase, set-ting payment levels for services provided by NPsand CNIvls lower than levels for comparablE serv-ices provided by physicians might decrease thecosts of third-party payers. Or course, the size ofany savings to third-party payers would dependon the size of the gap between payment levels forphysicians and payment levels for NFs and CNMsPaying NPs and CNMs 10 percent less than phy-sicians are paid would have a minimal effect onthird-party costs in the immediate future, in partbecause the number of NPs and CNMs is so muchsmaller than the number of physicians. Savingsto third-party payers would also depend on theextent to which patients chose to patronize NPsand CNMs in independent practices.

55

Patients' costs might be lower if the NPs andCNMs charged their patients lower fees than phy-sicians charged for comparable services. For mostprimary care services, e.g., office visits, savingsto most patients would be small, because fees forsuch services are not high and third-party pay-ments cover a large part of them. Savings formaternity care could be appreciable however, be-cause charges and patient liability for such serv-ices are high. Coverage and direct payment wouldallow patients to choose NPs and CNMs as pro-viders without being penalized financially by lackof reimbursement.

Any savings to third parties and patients mightbe decreased or negated by duplicative visits. Pa-tients who sought care from NPs or CNMs in in-dependent practices might also see physicians forthe same or related care, on their own initiativeor on referral by NPs or CNMs. Seeing both phy-sicians and nonphysicians could result in dupli-cation of examination and laboratory procedures.

Although NPs and CNMs in independent prac-tices could lower soci?tal costs for health care, theextent of the savings is difficult to estimate. So-cietal costs would reflect, among other things, anydecreases in program costs and beneficiary costsand any savings resulting from NPs' and CNMs'care that reduced the need for care in the future.For example, although CNMs might not find itfeasible to charge patients lower fees than physi-cians charge (because CNMs spend so much moretime with patients than physicians spend), CNMsmight lower societal costs by decreasing the needfor expensive neonatal intensive care for infantsof women whose socioeconomic status puts themand their infants at high risk (193).

Scant evidence iF available as to how much NPs;n independent practicei, charge their patients. Inan exploratory phase of a survey of MarylandNPs, Griffith (99) found that the median feescharged by NPs in independent practice were lowerthan the median fees charged by physicians formost services. However, 59 percent of NPs' feeswere the same as physicians' fees for all types ofvisits (99). Charging lower fees than physicianscharge for similar services appears to be the normfor NPs in many types of settings other than in-dependent practice. Brooks (36) reported that the

56

fees charged by NPs in rural satellite settings arelower than those charged by a sample of ruralphysicians. Several national studies of NPs inorganized settings confirm this finding (256). Pa-tients were generally charged less for visits to Ore-gon NPs who received direct payment either inindependent practices or in physicians' fee-for-service practices than for visits to salaried NPs(102). The difference between the charges for shortinitial visits and brief followup visits was statis-tically significant. Furthermore, charges for visitsto NPs were lower than for visits to physiciansin both Oregon and Maryland. The difference be-tween charges for NPs and those for physicianswas greater in Oregon than in Maryland, perhapsbecause the proportion of NPs receiving directpayment was greater in Oregon than in Maryland(102).

Whether NPs would increase their fees if theywere in independent practice and received directpayment is unclear, although some evidence in-dicates that other groups that provide servicestypically provided by physicians have graduallyincreased their fees to the level of physicians' feesafter receiving direct payment. The American Psy-chiatric Association (APA) has reported twostudies that found this phenomenon to be true ofpsychologists and clinical social workers (256).

Some private insurers report that their totalcosts from CNMs for maternity care are lowerthan those from physicians. Of course, physicians'care i-,cludes care for complex cases that requiremore resources than normal maternity care. How-ever, Mutual of Omaha has noted that CNMsprovide a "valuable service at a reduction in costsfrom that charged by medical doctors or osteo-paths," anc-I the Blue Cross and Blue Shield Asso-ciation found that CNMs were less costly thanphysicians in normal maternity care (256). Indeed,based on the current status of direct payment forservices, insurers of CNMs appear to be less resis-tant to coverage and direct payment than do in-surers of NPs (see table B-1). Insurers, such asMutual of Omaha and Blue Cross, perceive thatNPs would provide services in addition to thosenormally provided by a physician, whereas CNMsprovide services that substitute for physicians'services (256)

Charges for CNM services in independent prac-tice appear to vary by regionin some areas theirfees are lower than those of physicians, and inother areas they are about the same (79). CNMscharge slightly less than obstetricians for normalmaternity care (98) when services are providedin independent birthing centers (103,149). The to-tal costs of maternity care by CNMs may also beless than total costs for care by physicians for sim-ilar cases, not necessarily because CNMs havelower fees, but because the care they provide isusually technologically less complex than physi-cian care (98,201).

Costs to patients, third-party payers, and so-ciety would also be influenced by changes in thevolume of Lervices provided as a result of cover-age and direct reimbursement for new providers.Historically, insurance companies have contendedthat covering and directly paying additional pro-vider groups in fee-for-service settings increasesthe volume of services provided by the new pro-viders, the physicians, or both .:..d, consequently,increases costs for third-party payers, benefici-aries, and society. The evidence to prove or re-fute this argument is equivocal (246). The recentemphasis that public and private third-party payershave placed on monitoring the volume of health-care services may help to control potential in-creases in volume.

Direct evidence is unavailable as to how cov-erage and direct payment would affect the volumeof services provided by NPs and CNMs. Indi:ctinformation, which consists only of anecdotalreports of private insurers' experiences with othergroups, is conflicting. Mutual of Omaha and oiherinsurers report that chiropractors increased till :rprovision of services to consumers after being au-thorized for direct reimbursement but that psychi-atric social workers did not increase theirs (256).

Whether coverage and direct payment for serv-ices by NPs and CNMs would increase the pro-vision of services by physicians is unclear. Phy-sicians might change their behavior in responseto competitive providers. If NPs and CNMs chargedtheir patients lower fees, some physicians mightdecrease their fees in order to compete but, tomaintain their incomes, might increase the num-ber of services they provided to their patients (in-

6t)

ducing demand for services). Although researchon physicians' influence on the volume of serv-ices has been conducted for many years, none ofthe studies positively proves the magnitude oreven the existence of induced demand for serv-ices (246). In the past, however, physicians in theUnited States and Canada have maintained theirincome level even with substantial increases in thesupply of physicians (28).

Effects on Physicians' Practices

In the 1970s, a major reason cited by physiciansas a disincentive to employing NPs, PAs, andCNMs was that Federal payment policies did notauthorize payment for services provided by NPs,PAs, and CNMs (138). Whether mandating cov-erage for such services would increase incentivesfor physicians in fee-for-service practices to em-ploy these practitioners and delegate more serv-ices to them depends on several factors, includ-ing physicians' billing practices and the paymentlevels for NPs', PAs', and CNMs' services. Thehigher the payment level, the greater the mone-tary incentive a physician would have to employan NP, PA, or CNM, but simultaneously the cost-saving potential to the third-party payer woulddecline.

Providing coverage and payment for the serv-ices of NPs, PAs, and CNMs (at any level) wouldincrease practice incomes for physicians who haveemployed these practitioners without billing fortheir services. Such physicians might increase therange of services they delegate to NPs, PAs, andCNMs. Third-party payers' costs would probablyincrease, regardless of whether the practices' vol-umes of services increased. Whether increases inpractice income would be passed on to patientsin the form o: lower fees is unclear.

If services by NP-, PAs, and CNMs were au-thorized for payment, physicians' prck ices thatcurrently do not employ such practitioners mightbe more inclined to employ them rather than hireadditional primary-care physicians. If the pay-ment level was 100 percent of what a physicianwould receive for providing a comparable serv-ice, third-party payers probably would incur highercosts for such practices regardless of whether thenew employees were NPs, PAs, CNMs, or phy-

57

sicians. If the payment levels set for NPs', PAs',or CNMs' services were lower than those set forphysicians' services, the costs to third-party payerswould be lower if NPs, PAs, or CNMs, ratherthan physicians, were employed.'

However, authorizing payment for NPs', PAs',and CNMs' services would not necessarily increasethe opportunities for these providers to becomesalaried employees in physicians' practices. Alle-gations have been made that many physicians'practices, knowingly or unknowingly, submit billsunder the physicians' provider numbers for un-covered NPs', PAs', and CNMs' services. The billsare seldom challenged by third-party payers. Ifthe payment levels were the same for the serv-ices of NPs, PAs, and CNMs as for the employ-ing physicians, coverage of NPs', PAs', and CNMs'services would not affect the revenues of physi-cians' practices that were already billing for suchservices. In these practices, coverage probablywould affect neither the employment opportuni-ties for NPs, PAs, and CNMs nor the servicesphysicians delegated to such practitioners.

The revenues of these practices would decrease,however, if the payment levels were significantlylower for NPs', PAs', and CNMs' services thanfor phys,:ians' services, if the volumes of serv-ices remained the same for the practices, and ifthe physicians billed for the services of NPs, PAs,or CNMs under the NPs', PAs', or CNMs' pro-vider numbers. How physicians would respondto decreases in their Practices' revenues is unclear,but employment opportunities for NPs, PAs, andCNMs might be jeopardized. The physiciansmight increase the volumes of ,,ervices providedby their practices.

Coverage of NPs', PAs', and CNMs' serviceswould not affect third-party costs if the numberof services provided by practices remained stz:-ble; i.e., if the practices had billed for servicesi,..-der the physicians' provider numbers before cov-erage was expanded, and if the payment levelswere the same for NPs, PAs, and CNMs as forthe employing physicians. If the payment levelswere lower for NPs, PAs, and CNMs than for

It is not clear w Nether or not NI's would accept payment levelslower than those of physicians As noted earlier PAs are willingto accept le%,els of compensation lower than those of physicians

58

physicians, third-party payers' costs for such prac-tices might decrease. For physicians' practices, asfor NPs' and CNMs' independent practices, thesize of the difference between the payment levelsfor services provided by NPs, PAs, and CNMsand for comparable services provided by physi-cians would partly determine how lowering thepayment level would affect the costs of third-partypayers.

Because data do not exist as to how physiciansbill for the services of NPs, PAs, and CNMs, theoverall effect that required coverage would haveon NPs', PAs', and CNMs' employment oppor-tunities in physicians' fee-for-service practices isuncertain. Coverage might influence employmentindirectly. NPs have argued that coverage estab-lishes a collegial professional relationship. Further-more, they claim that coverage can cause physi-cians to see that NPs', PAs', and CNMs' servicesgenerate revenue as wel: as costs (98). This per-spective might increase the employment potentialof these practitioners (98).

Direct payment would only indirectly affect theemployment of NPs and CNMs as salaried em-ployees of physicians. Direct payment would al-low NPs and CNMs to choose to work as salariedemployees, to undertake independent practices,or to enter into joint practices with physicians(i.e., partnership arrangements by NPs or CNMswith physicians). Paying NPs in physicians' prac-tices directly, rather than indirectly, could bP ex-pected to decrease the fees for patients' visits toNPs (102).

Effects on Health MaintenanceOrganizations

Because most third-party payers in the publicand private sectors currently provide coverage forthe services of these p-actitioners in health main-tenance organizations (1-IMOs) (see table 1-1), ex-tending coverage is largely irrelevant to their em-ployment in this setting. Also, most HMOs payNPs, PAs, and CNMs a direct salary, which makesthe issue of direct payment of little importancein the HMO setting.

The data suggest that NPs, PAs and CNMssave costs for HMOs:

It is to their [HMOs] financial advantage toproduce services with the most efficient combi-nation of inputs, substituting lower priced phy-sician extenders for higher priced physicians when-ever possible (138).

Furthermore, past experience with HMOs has shownthat:

. . . capitation' plans do care for (non- Medicare)enrollees at lower costs while maintaining qual-ity at levels equal to or better than comparisonpractices (246).

Effects on HospitalsPayment for services delivered in inpatient hos-

pital settings by NPs, PAs, and CNMs who arehospital employees is most commonly made ei-ther retrospectively on the basis of cost or pro-spectively on the basis of diagnosis-related groups(DRGs). There is no statutory permission or lackof permission under Medicare or Medicaid forpayment of NPs', PAs', and CNMs' services asinpatient hospital services when the providers areemployed by the hospitals. Most other third-partypayers are also silent on this issue. Moreover, hos-pitals usually pay a salary to NPs, PAs, andCNMs that they employ.

Medicare, Medicaid, and most other third-partypayers pay hospitals for total operating costs, andmost hospitals' accounting systems simply lumpthe costs of NPs', PAs', and CNMs' services to-gether with other types of operating costs. Nursescontend that coverage and direct payment as wellas the identification of the services that coverageand direct payment would require, would influ-ence hospitz Is interest in them as employees. De-lineating the costs of these services might facili-tate internal management decisions. Nurses haveadvocated the identification of the costs of nurs-ing services in institutional settings, believing thatidentification would increase nurses' autonomy,encourage economic decisionmaking, enhancenursing efficiency, and spur hospital administra-tors to recognize that nurses generate revenue as

'Capitation is a method of paying for medical care, in which aper capita amount is paid prospectively for all services received byan enrollee or beneficary during a given period of time The pay-ment is not related to the quantity of service provided Capitationpayment provides financial incentives to use resources more eff.-ciently and even to underuse services

el ,

59

well as osts (22,98,162). Nurses believe that rec-ognition of their revenue-producing abilities couldincrease their employment opportunities in hos-pitals (161).

Extending coverage and direct payment for theservices of NPs, PAs, and CNMs as hospital em-ployees in the inpatient hospital setting most likelywould require that the costs of the services be paidfor as professional services, the category underwhich Medicare and other third-party payers cur-rently pay for physicians' services. Such a movewould run counter to most current thinking, es-poused in both the public and private sectors,which is focused on containing costs by aggregat-ing services. For example, some observer, haveexpressed interest in aggregating physician serv-ices by adapting the DRG approach,8 particularlyfor hospital-based physicians (63,165). The Om-nibus Reconciliation Act of 1986 (Public Law 99-509), however, has extended direct payment foranesthetic services rendered by :ertified registerednurse anesthetists in hospitals. These services wereoriginally to be paid for under Medicare as a com-ponent of a DRG but were passed through as ahospital cost.

Coverage of their services would affect the em-ployment of PAs who are employees of physiciansor physicians' practices but who work as surgi-cal assistants in hospitals.9 PAs assist in perform-ing surgical procedures and also provide preoper-ative and postoperative care (7). Medicare doesnot cover PAs' provision of such procedures andcare, although Medicare currently covers andpays at amounts equivalent to 20 percent of thesurgeons' fees for the services of physicians whoact as assistants at surgery. Some observers have

'Under the DRG approach, Medicare pays a fixed amount for theoperating costs associated with treating patients in each diagnosticcategory In applying the DRG approach to physicians, the pay-ment unit would be a bundle of services rather than an individualservice This approach could co itrol both costs and utilization byreducing the number of service wits billed and encouraging the ju-dicious use of services within packages

°During the publication of this case study, the Omnibus Recon-ciliation Act (Public Law 9o-509) was enacted The act modifiesMedicare and authorizes coverage of a physician assistant servicesfurnished under the supervision of a physician as an assistant at sur-gery The payment to the employer will be 65 percent of the rea-sonable charge for a physician when acting as an assistant at sur-gery and will be effective after Jan I, 1087

f

)

---NA.I!

Photo credit Getsmger Medical Center and theAmerican Academy of Physician Assistants

PAs provide post-operative care as well as pe-r_loerativecare and assisting in performing aurgical procedures.

expressed concern that the lack of coverage hasrestricted PAs' employment and the delegation ofappropriate services to PAs at surgery. Using PAsrather than physicians as surgical assistants re-duces practices' costs, but whether the savings arepassed on to patients is unclear.

Effects on Nursing Homes

Because virtually all NPs and PAs working innursing homes are salaried employees, their em-ployment would not be necessarily affected bycoverage of their provision of services typicallyprovided by physicians.'° With coverage, NPs andPAs could supply primary-care services in nurs-ing homes as employees of physicians' practicesor as team members in group practices provid-

'"Several other Medicare and Medicaid regulations specific to nurs-ing homes limit the role of NPs and PAs and specify services thatmust be performed by physicians in order for the nursing homes'services to be covered (see app B) Many States have passed lawsto "permit the delegation of these services by a physician to a phy-sician assistant or nurse practitioner" (116) However, strict inter-pretation of these and similar rules prohibits the appropriate useof NPs and PAs in nursing homes In addition to permitting cover-age under Medicare and Medicaid, amendments to these regulationswould be required in order for NPs an PAs to be used appropnately

60

ing visits to nursing homes." If NPs were paiddirectly, they could supply primary-care servicesto nursing homes as independent practitioners,similar to physical therapists.

Many nursing homes have difficulty supplyingprimary-care services because few physicians areinterested in visiting patients in nursing homes toprovide services (166) Furthermore, most phy-sicians are poorly prepared to care for seriouslyill elderly patients. The growing number of elderlypeople in our society, particularly those over 85who most frequently need nursing-home care, hasincreased concerns about the quality and costs ofsuch care. Many residents are medically stable butfunctionally impaired by chronic physical or men-tal conditions. Other residents are admitted fromhospitals for recuperation and rehabilitation fol-lowing surgery, or are terminally ill and do notrequire hospital care (245). NPs and PAs areuniquely suited to provide the types of care neededby nursing home residents with chronic conditionsand their associated disabilities (see chs. 2 and 3).

"During the publication of this case study, the Medicare law waschanged as a result of the enactment of the Omnibus Reconcilia-tion Act of 1986 (Public Law 99-W9) during October 1986 The actauthorizes the coverage of the sr :vices of PAs furnished under thesupervision of a physician in skilled nursing facilities and interme-diate-care facilities in States where the physician assistant is legallyauthorized to perform the services The payment to the employeris to be at 85 percent of the prevailing charge of physician servicesfor comparable services provided by a nonspecialist physician

Except when more intensive care can be sub-stantiated, the number of physician visits to nurs-ing homes is limited under the Medicare program.Extending coverage, therefore, might not increasethe costs attributable to nursing-home visits forthird-party payers, assuming payment levels werethe same, or lower, for the NPs and PAs as forthe physicians. When physician-NP teams, ratherthan physicians alone, visited nursing homes,however, total costs to third-party payers wereshown to decrease, mainly because of lower ratesof hospitalization and fewer visits to physiciansor clinics (128). A 1980 and 1982 study found that,as compared with physicians alone, a group prac-tice of salaried physicians, NPs, and PAs showedsubstantially lower overall medical costs for nurs-ing home residents even though the number ofvisits to the homes were not limited. Savings wererealized from decreases in expensive hospital-based emergency and outpatient services and inthe numbers of hospital days used (155,257). Fur-thermore, the qualit) of care increased, and theNPs acted as patients' advocates.

Although payment changes are a necessarystep, innovative approaches to improving the careand redu -ing the costs associated with nursinghomes need to include modifications of regula-tions concerning visit limitations and changes inother Medicare and Medicaid regulations thatlimit the role of NPs and PAs in nursing homes.

THE CHANGING CONTEXT OF HEALTH CARE

Financing

A growing trend is to set payment rates forhealth services before, rather than atter, they aredelivered. Prospective payment has Eeen adoptedin response to rapidly rising health-care costs andthe recognition that cost increases have been partlycaused by retrospective reimbursement. One ofthe most innovative approaches is Medicare'smethod of paying for beneficiaries' inpatient careon the basis of DRGs.

The other major trend is increased interest inthe use of capitation, in which a per capita amountis set prospectively for all medical :,-..2rvices receivedby an enrollee or beneficiary during a given pe-

riod. The health-care organization receives itspayment, the amount of which is not related tothe quantity of services provided, and must thenpay physicians and other providers. Capitationpayment provides financial incentives to preventhigh -cost problems and to deliver services at lowcost. Acceptable standards of care, or at least pa-tient satisfaction, are essential if capitated plansare to maintain enrollment at sufficiently highlevels to maintain financial viability (246).

Supply of Physicians

In the mid-1960s, public policy in the UnitedStates began to focus on counteracting the short-

i"

age and maldistribution of physicians. As a re-sult, the number of medical schools increasedfrom 89 in 1065 to 127 in 1984 (255), and the num-ber of first-yea medical students nearly doubled(240,255). Expected increases in the numbers ofgraduates from U.S. medical schools, combinedwith graduates of foreign medical schools, are re-sulting in physician surpluses, which the Gradu-ate Medical Education National Advisory Com-mittee predicts will be significant by 1990. Since1982, enrollment in medical schools has declinedslightly, as the Federal Government has 'educedboth its funding of subsidized loans for medicalstudents and its support of medical schools (58).The growth rate in the supply of foreign medicalgraduates also is expected to decrease (255), butthe effect of past efforts to increase the supply ofphysicians will be felt well into the next century.

Observers expect increases in the number ofphysicians to significantly outpace populationgrowth. For every 100,000 people in the UnitedStates, there were 148 physicians in 1970 and 218in 1983 (255). Estimates for 1990 range from 215(240) to 224.4 (255) per 100,000 Estimates for theyear 2000 range from 240 (240) to 245.2 (255) per100,000.12 From 1981 levels, the numbers of phy-sicians in primary-care specialties, including ob-stetrics and gynecology, are expected to have in-creased 28 percent by 1990 and 53 percent by2000, outpacing the growth in the total supply ofphysicians (255). Although the need for physiciansis expected to increase, the supply of physiciansis expected to exceed the need by 1990, accord-ing to all estimates (94,240,251,255).

Delivery Sites and Organizations

In 1983, for the first time, the main practice ar-rangement of less than half (48.9 percent) of allphysicians in the United States was solo practice.Only 8 years previously, more than 54 percentof the Nation's physicians practiced individually.In 1084, the number of group practices (three ormore physicians) was over 15,000up 44 percentsince 1980 (16) The number o' physicians in grouppractices dui ing the same period increased from

'1 he total number of physic an in 1070 334 028 and in 1083was 510 54t, (2551 Lstirnatc for 1000 range from 517 750 12401 to555,300 phy,1(,an,-, 12551 F ,,timate,-, for 2000 range fmnr t-,42 050 (240,to 055,020 phy,,,f( lam, 12551

61

88,290 in 1980 to 140,213 in 1984 (4). Some phy-sicians join group practices because the practicesare established, they entail less financial risk thansolo practices, and they provide access to the cap-ital required for purchasing and using sophisti-cated medical technology (16). Group practicesmay be even more attractive to physicians in thefuture for a number of reasons including the cap-ital required to purchase expensive technology andincreased competition.

The types of organizations in which physicianspracticewith or without other health-care pro-vidershave also increased. HMOs have beengrowing rapidly in recent years. Enrollment inHMOs grew by 25.7 percent in 1985 to a total en-rollment of 21 million (123). Although Individ-ual Practice Association (IPA) models outnumberedall other kinds of HMOs combined, group-modelplans retained the lead in enrollment (123). Thatenrollment is expected to increase rapidly in thenext 5 years. Estimates of total enrollment inHMOs range between 25 and 50 n,illion for 1990(241). Part of the growth in HMOs has been at-tributed to the increased willingness of physiciansto be employed in them (240). Recent changes thatmight affect the employment and use of NPs, PAs,and CNMs in HMOs are the increasing involve-ment of for-profit corporations in HMOs, and thejoint purchasing and other cost-saving venturesundertaken by groups of HMOs (246).

Preferred-provider organizations (PPOs) in-clude several types of arrangements between third-party payers and health-care providers, includ-ing physicians, hosnitals, or both. In these ar-rangements, providers contract with insurers oremployers to deliver care at reduced prices. Thefirst PPO was organized in 1978; by June 1985,334 had been organized and 229 were operating(118). Although PPOs were designed to reduceexpenditures, no evidence currently exists that thecare they deliver costs less than that deli ered byother types of organizations.

The delivery of health services is also affectedby the growth of the multihospital systemtwoor more hospitals owned, leased, controlled, ormanaged by a single for-profit or not-for-profitcorporation. Indeed, the multihospital system hasbecome an important component in the chang-ing health-care-delivery system. Some 35 ercent

,

(.0

62

of the Nation's hospitals and 38 percent of all com-munity hospital beds are now in multihospital sys-tems (14). Since 1976, the number of multihospi-tal systems has increased by more than 60 percent(2). A few observers believe that the growth ofthe for-profit component will eventually result inmost services being provided by a few nationwidesuppliers that might appropriately be labeledmegacorporate health care delivery systems"

(85).

Another trend is toward increasingly diversesites for providing care (see table 5-1)." For ex-ample, the first free-standing center was estab-lished in Delaware in 1973. By July 1984, therewere an estimated 1,800 such centers in the UnitedStates and the total is projected to grow to ap-proximately 4,500 by 1990 (152). In late 1983,about 9 percent of the Nation's physicians workedan average of about 13 hours per week in free-standing centers providing primary or emergencycare. Some of these centers were operated by hos-pitals or chains and others operated independently(16).

"See !tied/cal Technology and Costs of the Aledicare Program1244) for a more detailed description of alternative sites of care

Table 5-1.Selected Alternatives to TraditionalHealthCare Delivery

I Alternative sites:Alcohol and drug abuse centersAmbulatory care centersAmbulatory surgical centersBirthing centersDiagnostic imaging centersFreestanding emergency centersHospicesMammography centersNurse-managed centersNutritional dietary centersOncology centersPain management centersPsychiatric centersRehabilitation centersSports rehabilitation centersStudent health centersWellness programs

II Alternative organizations:Competitive medical plansExtensive provider organizationsHealth maintenance organizationsIndependent practice associationsPreferred provider organizationsSocial health maintenance organizations

SOURCE Office of Technology Assessment, 1986

Effects of Changes in the HealthCareEnvironment on Nurse Practitioners,Physician Assistants, andCertified NurseMidwives

Flow changes in the health-care environmentwill affect the integration of NPs, PAs, and CNMsin the health-care system is unclear. The changes,which generally reflect trends toward cost-con-tainment and increased competition, are inter-dependent. For example, the increasing supply ofphysicians has heightened competition amongmedical-care providers (19,176,205,206), leadingmany young physicians to accept salaried posi-tions and to enter into contractual arrangementswith third-party payers (19,240). The number ofphysicians in salaried positions is twice as greatfor those in practice 5 years or less as for thosein practice 6 years or more (18). In effect, the in-creasing supply of physicians is an important fac-tor in changing medical practice arrangements inthe United States and in fostering a willingnessto practice in fee-for-service groups and in capi-tated and institutional settings, which many phy-sicians avoided only a few years ago.

Competition in the health-care system could ei-ther limit or expand employment opportunitiesfor NPs, PAs, and CNMs. Competition resultingfrom the growing supply of medical-care providersmight reduce such opportunities, especially inphysicians' office-based, fee-for-service practices.Physicians with declining patient bases might nothave enough patients to justify employing addi-tional providers (97). Ho.vever, the AmericanMedical Association (15) notes that, faced withincreasing competition, rising practice costs, andcost-conscious patients, physicians ere concernedabout the cost-effectiveness of their practices andmight attempt to improve the practices' produc-tivity and increase the practices' income by em-ploying NPs, PAs, and CNMs. Compared withpractices that do not employ NPs and PAs, phy-sicians' practices that do employ NPs and PAshave higher numbers of patient visits per hour andper week and higher incomes for the employingphysicians (17). Because such practices chargelower fees per office visit (17), they might be morecompetitive with other practices. Physicians mightalso attempt to attract more patients by expand-ing the range of the services provided by their

Pt,

offices, which could enable NPs and PAs to prac-tice the full range of services for which they weretrained.

Some physicians, however, might find it eco-nomically more advantageous to hire new phy-sicians rather than NPs, PAs, or CNMs. The rateof growth in physicians' incomes has started todecline, a trend that is expected to continue (20).If new physicians' incomes decline sufficiently,and if their interest in salaried positions continueto increase, they might be more attractive thanNPs, PAs, or CNMs to established physicianswho want to expand their practices.

Competition among different types of health-care organizations might increase the employmentand responsibilities of NPs, PAs, and CNMs (15,143,144). For example, the growth of risk-sharingHMOswhich have used the services of NPs,PAs, and CNMs extensively in the pastwouldseem to ensure a larger role for these providersin the health-care system. But like physicians'practices, HMOs could turn instead to physicians,if their incomes are reduced enough. Anecdotalreports from California note "that clinics that hadintended to employ NPs and PAs were havingphysicians arrive on their doorsteps saying theywould work for $30,000 or $40,000" (263). Clinicadministrators, then, must consider whether tohire NPs or PAs at $25,000 or to hire physiciansfor only $10,000 more. In addition to salary, how-ever, other factors might enter into such decisions.NPs, PAs, and CNMs save costs for capitated en-tities and provide the types of serviceshealtheducation, counseling, and preventive carethatHMOs emphasize. Indeed, observers generallyagree that the opportunities for employment andfull use of NPs, PAs, and CNMs are highest incapitated systems.

The increase in the numbers of IPA-modelHMOs is another trend that might adversely af-fect the employment and use of NPs, PAs, andCNMs. Large group- and staff-model HMOs usu-ally provide care at primary HMO sites and em-ploy NPs, PAs, and CNMs because they are cost-saving, and because they provide health educa-tion and preventive services that meet standardlevels of quality . The IPA model is less likely thanother models to employ these practitioners, be-

63

cause the "plan is primarily organized aroundsolo/single specialty group practices," (123) whichdo not benefit as much from employing and usingNPs, PAs, and CNMs as do larger practices.

The trend toward alternative providers, mostof whom are profit-making entities, suggests pos-sible new sources of employment. Anecdotal evi-dence indicates that ambulatory care centers areemploying PAs and NPs. A survey of 250 indi-vidual ambulatory care centers, owned by 142 pri-vate organizations, found that PAs' salaries rangedfrom $20,784 to $35,u00, with an average of$25 946 (172). Humana, Inc., owns 150 ambu-latory care centers (Medfirst) and employs NPsonly in its high-volume centers, about 5 percentof the total (163). NPs, who receive salaries orhourly wages, have been found to provide stand-ard care and to cost Humana one-third as muchas physicians. Nonetheless, the organization per-ceives a demand from its clients for physician careand does not intend to change its staffing patterns.

The effects of payment changes, such as theDRG approach, on the employment and use ofNPs, PAs, and CNMs in hospitals have not yetbeen well documented. From individual reports,the effects appear to vary among hospitals. Somehospitals have reportedly cut their nursing staffsand reduced the nurses' work schedules becauseof DRGs (163). Other hospitals reportedly havehired PAs to increase efficiency (48). The differ-ent responses were to be expected and might beattributed to differences in patient mix (and thusdifferences in DRGs), in the costs of the hospi-tals with respect to specific DRGs, and in DRGrates (based on geographic locationurban or ru-ral). The aggregate effect on the employment anduse of NPs, PAs, and CNMs is thus difficult toascertain.

Reports also indicate that, as a result of DRGpayment, some hospitals are dismissing NPs andPAs and shifting portions of their operations totheir outpatient departments. where fee-for-service plp;sicians deliver care (117). PAs' advo-cates suggest that eventually hospitals might seekmore efficient outpatient operations and use PAsin an attempt to contain their costs (48). New rolescould also emerge for PAs as utilization reviewspecialists or DRG coordinators (48).

64

Nurses expect that prospective payment and itsrelated cost management will bring about increas-ing attention to the contribution of nursing serv-ices in critical care and transplant units and willresult in a much more realistic allocation of dol-lars for nursing services (233). Also, because pro-spective payment may result in the early dischargeof patients into the community, followup serv-is for patients after they are discharged are as-suming increasing importance. Nurse-managedand nurse-owned organizations are emerging toprovide nursing services in the community, andnurses are attempting to establish a mechanismof payment f m- community, nursing services (233)NPs are also assuming new roles in managingcases and reviewing the use of hospital services(96).

Studies are not available to show how the growthof investor-owned hospitals and multi-hospitalsystems has affected the employment and use ofNPs, PAs, and CNMs. Studies on the differencesin economic performance based on ownership (in-vestor-owned or not-for profit) and system affili-ation (affiliated or free-standing) found no signif-icant difference in costs for delivering comparablecare to patients (260). Compared with other typesof hospitals, investor-owned chain-hospitals hadfewer employees per bed, but paid employeesexcept nursesmore (260). The years studiedwere 1978 and 1980, when payment methods cre-

SUMMARY

The employment and use of NP,, PAs. andCNMs would be affected by changes in the meth-ods of payment for their services and by otherchanges in the health-care system. Examining howparticular changes in paymer would interact withthe other changes provides some indication ofwhat roles NPs, PAs, and CNMs might play inparticular health-care settings and how costs mightchange for health-care providers, patients, andsociety

Despite anticipated changes in the methods ofpaying for physicians' services, fee-for-service willprobably remain a major form of payment in theforeseeable future. Allowing coverage and direct

ated incentives for maximizing the costs of pro-viding services. The adoption of prospective pay-ment by Medicare, some Blue Cross plans, andsome State Medicaid programs has created incen-tives for minimizing such costs. In addition, pri-vate sector groupsHMOs, PPOs, employers,and insurersare contracting with selected hos-pitals on the basis of price.

Hospitals, especially investor-owned hospitals,will need to lower their costs of production in re-sponse to the increasingly competitive new envi-ronment (194), but investor-owned hospitals arenot hiring lower priced personnel, such as NPs,PAs, ai,d CNMs, to substitute for physicians ininpatient settings (95). Indeed, investor-ownedhospitals are not employing many physicians, ei-ther (170). Investor-owned chains are ti'ing de-partment managers, who for fixed-price contractsprovide services, including personnel, for hospi-tal departments (95). Because the managers areat risk financially, however, they have incentivesto save costs and, therefore, might employ appro-priately trained NPs and PAs.

The growth of investor-owned hospitals mightsignal fewer opportunities for CNMs to be em-ployed in hospital settings. Both system-affiliatedand free-standing hospitals treated proportion-ately fewer maternity patients than not-for-profithospitals treated (260)

payment for the services of NPs and CNMs wouldsignificantly help them in administratively inde-pendent practices, could stimulate the growth ofsuch practices to the extent permitted by Statelaws and regulations, and would increase oppor-tunities for NPs and CNMs to provide the fullrange of services for which they are trained andlicensed.

As independent providers, IPA-model HMOsmight engage NPs as contractors for primary-careservices (100) and CNMs as contractors for mater-nity services PPOs also might treat these practi-tioners as contractors who agreed to provide serv-ices, at a discounted fee The opportunities for NPs

and CNMs to become contractors might be lim-ited, however, by the increasing supply of pri-mary-care physicians, including obstetricians, :Indby competition from physicians, who arc lower-ing the amounts for which they are willing towork

NPs' and CNMs' employment and the full useof their skills in administratively independentpractices could decrease costs for programs, ben-eficiaries, and society. If the numbers of servicesNPs and CNMs and physicians provided did notgreatly expand, and if the payment levels for NPand CNN! services remained lower than those ofphysicians for comparable services, lower pro-gram costs would be likely. Furthermore, if thefees to patients reflected the lower payment level,costs to beneficiaries and society might be lower.

In any fee-for-service practice, including oneoperated by NPs or CNMs, the degree to whichcosts would decrease would dLpend on how muchlower the level of payment was for these practi-tioners than for physicians and on the particularservice. For example, the Congressional Buc'gc..tOffice found that covering the services of PAs atrates 10 percent below those of physicians wouldhave negligible effects on ':osts or savings for theMedicare program or for society (177). Even ifthe say'ags occasioned by the lower payment levelwere passed on to 1..-neficiaries, they would haveonly small incentives to seek treatment from lowerpriced PAs At the margin, patients would paycoinsurance of only 20 percent. A reduction inthe charge for an office visit from $30.00 to $27.00would save a Medicare patient only $0.60, anamount that might well be paid by Medicaid ora private Medi-Gap policy and would not pro-vide an incentive to use such services. Similarly,most of the services provided by NPs are primarycare services, such as visits, and would likely notprovide much saving for a patient. Maternitycare, however, is costly and -)atient,; out-of-pocket costs could be high. If t...NMs would ac-cept lower payment levels than those of physi-cians, any savings passed on to the expectantmother would be considerable

How covering their ser"ices would affect theemployment and use of NPs, PAs, and CNIVIs inphysicians' tee -for- service practices is unclear. Nu-

65

mcrous variaL les could affect physicians' decisionto employ anc appropriately use these pi oviders.Such variable:, include the physicians' billing prac-tices; the payment levels for services of NPs, PAs,and CNMs, the cost differentials between hiringphysicians or hiring NPs, PAs, or CNMs, thecompetitive position of the physicians' practices;the practices' interests in expanding the range ofservices they provide in order to improve theircompetitive positions; the abilitiesas well as thephysicians' perceptions of the abilitiesof NPs,PAs, and CNMs to improve the practices' produc-tivity and income, and the physicians' perceptionsof the noneconomic benefits these providers couldbring to the practices.

Coverage might encourage fee-for-service prac-tices, particularly group practices to use NPs andPAs in settings and kr certain populations andsettings where appropriate care currently is un-available or inadequate. For example, physicianshave been reluctant to make nursing home visits,and there is no evidence that an increased supplyof physicians will decrease their reluctance. Theincreases in the elderly population and the growthof nursing homes have exacerbated an unmet needfor services in this setting. Not o fly does the train-ing of NPs and PAs enable them to pro ide theolder population with care whose quality is com-parable to that of the care provided by physicians,but evidence shows that teams of physician, NPs,and PAs visiting patents in nu-sing homes pro-vide standard care and reduce total expenditures. 14Elderly people and children wi,h disabling con-ditions and other individual with chronic con-ditions would also benefit from NP and PA carein the home setting

ie employment practices of -HMOs, the health-cap settirq, with significant growth potential,would not be directly influenced by changes inthe current methods of paving for he serv,ces ofNPs, PAs, and LNMs because most public andr,rivate third-party payers cover su-1-1 services inHMO settings Furthermore, whether paymentswere direct or indirect to ;he NP, PA, and CNM,

I H, Ile. p1,I,, I oo ;00lurInvto( rubl:( anon ot t Ast ,tud 1,r,% !tic, ,% t & tOt

It t ,1 011tied In horn(ti tindt lt.(fi(

66

would not be an issue for organizations paid pro-spectively by a capitated amount.

However, the increase in the number of IPA-model HMOs does affect the employment of NPs,PAs, and CNMs. In 1985, although group modelHMO plans retained the lead in total enrollment,IPA model plans outnumbered all other kinds of"MO plans for the first time (123). Because theya .. primarily solo or single-specialty practices,IPAs are less likely than group model HMOs toemploy these practitioners.

The data suggest that NPs, PAs, and CNMssave costs for HMOs. In an increasingly competi-tive environment, the financial incentives promotepassing on to consumers the savings generated bythe employment and full use of NPs, PAs, andCNMs. Thus, as the environment becomes morecompetitive, the employment of these providersin capitated HMOs could benefit society finan-cially. To the extent these providers are used toprovide interpersonal care and preventive serv-ices, the types of services traditionally incorpo-rated into the practice of these providers and ofHMOs, the quality of care will also benefit.

Third-party payers pay hospitals an aggregatesum for operating costs, and the hospitals are re-sponsible for paying salaried employees. There-fore, coverage and direct payment for inpatienthospital services provided by NPs, PAs, and CNMswould not directly affect their employment pos-sibilities. This is especially applicable to Medicare,which pays for inpatient services on a DRG-ratebasis. This payment method creates incentives forlowering the cost of resources, and the costs ofNPs, PAs, and CNMs are included in calculatingthe costs of resources. Although coverage and sep-,Irate billing ror their services could clarify ,heirrevenue-producing abilities as in -11 as their coststo the employing hospital, the use of these prac-titioners to provide patient care as hospital em-ployees is likely to decline under DRG-based pay-ment. PAs and NPs could be used in new roles,such as DRG coordinators.

In order for coverage and direct payment to af-fect the employment of NPs, PAs, and CNMs byhospitals for providing inpatient services, the costsof tl-,e'r services would be billed as professionalservices. If he payment levels for the services theyprovided were lower than those for physician'sservices, and if the volume of services were notincreased, savings might be likely for Medicareand--if fees were lowered accordinglyfor so-ciety. However, if Medicare paid NPs or CNMsfor providing services for which hospitals werealso paid under the DRG rate, paying for themseparately might increase program costs, if DRGpayment rates were not changed. Reducing DRGrates to account for eliminating the costs associ-ated with the NPs' or CNMs' services would beextremely difficult because of the lack of data. Inany case, because the proportion of the DRG rateascribed to nursing costs is unknown, the effectsof direct payment on organizational, program, orsocietal costs cannot be determined.

A major change in health-care delivery is thegrowth of investor-owned hospitals, particularlyinvestor-owned chains of hospitals. These orga-nizations are currently focusing their efforts onattracting medical specialists to their staffs andhave evinced no interest in employing NPs, PAs,and CNMs. The advantages of coverage for theservices of these providers do not appear to besufficiently significant to spark such interest.

In the final analysis, it seems that extendingcoverage for the services of NPs, PAs, and CNMsin at least some settings could benefit the healthstatus of certain segments of the pr,pulation cur-rently not receiving appropriate care. The imme-diate effects on third-party costs are unclear, al-though long-term effects could be a decrease intotal costs. The advantages of direct payment forthe services of NPs and CNMs are less obvious.Direct payment might encourage qualified NI'sand CNMs to move into unserved and under-st., ved areas to expand access to health care.

Appendixes

k i -

4 .1

Apperdix A

Methods and Acknowledgments

The study is based on an analyis of information obtained from an extensive review of the literature andfrom individuals and organizations with relevant experience An advisory panel of experts with backgroundsin health policy, medical economics, health insurance, medicine, nursing and consumer advocacy defined thegoals for the study and suggested source material, subject areas, and perspectives to consider in presenting thematerial The drafts of the report were revised to reflect the thoughtful comments of the panel OTA thanksthe panel for its assistance and the following people and organizations for supplying information and reviewingdraftsJoel I AlpertBoston City HospitalBoston, MAAmerican Nurses AssociationWashington, DCAmerican College of Nurse-

MidwivesWashington, DCAmerican Academy of Physician

AssistantsArlington, VADavid BantaThe NetherlandsJames D CampbellUniversity of NlissouriColumbia, MOJames F CawleyGeorge Washington University

Medical CenterWashington, DCKatherine H Chavigne,American Nledual AssociationChicago, IL

lames CrouchUtah Department of HealthSalt Lake, City, UT

L DetmerAmerican Medical Assoc cationChicago, IL

Karen EhrnmanAmerican College cal

MuiwivesWashington, DCE Have); Estes, itDuke University 'Medical C (ntelDurham, NCClaire NI Fawn,University of l'enns k amaPhiladelphia PA

Carl FalserBaylor UniversityHouston, TXWilliam FinefrockAmerican Academy of Physician

AssistantsArlington, VALoretta C FordUniversity of Rochester Medical

CenterRochester, NY

Louis P GarrisonProject HOPENlillwood, VA

Arclue Goldenhesapeake Health Han --SouthSide

Baltimore, MDinda Golodner

National Consumers LeagueWashington DCBradford GrayInstitute of MedicineWashington, DCNlarie Haw kHarvard Community I leahh PlanBoston, NIA

Anita HegsterHealth Care Financing

AdministrationBaltimore, MDMartha HillJohn, Hopkins School of NursingBaltimore, Mt)Ada iacoxUniversity of %lin ylandBaltimore, NIDlean lohn,,onGeorge Washington UniversityWashington, DC_

01

Kerry KempOffice of Technology AssessmentWashington, DCCynthia P. KingAmerican Medical AssociationChicago, ILKarl KronebuschOffice of Technology AssessmentWashington, DCWilliam LarsonHealth Care Financing

AdministrationBaltimore, MDKenneth LeaseU S Office of Personnel

ManagementWashington, DCCharles E LewisUniversity of CaliforniaLos Angeles, CAloan LynaughUniversity of PennsylvaniaPhiladelphia, PANancy MarchAmerican College of Nurse-

MidwiveslVashington DCLynn MayAmerican Academy of Physician

AssistantsArlington VAKathy 'MichelsAmerican Nurses AssociationWashington, DCEvelyn MosesHealth Resources and Services

AdministrationRoc kvillc, NIP

69

Norbert NelsonNew York L niversity Medical

SchoolNew York, NYRonald NelsonAmerican Academy of Physician

AssistantsArlington, VARobert OseasohnUniversity of TexasSan Antonio, TXHenry B PerryMountain Medical CenterClyde, NCElaine PowerOffice of Technology Asses,mentWashington, DCRobert RanneyNational Rural Health Care

AssociationKansas City, MOGinette RodgerCanadian Nurses AssociationOttawa, ON

Gretchen SchatttAmerican Academy of Physician

AssistantsArlington, VASherry ShamanskyYale UniversityNew Haven, CTlane SiskOffice of TechnologyWashington, DCJulie Soclia IskiAnn Arbor, MISally SolomonNational League for NursingNew York, NYBrenda SplitzGeorge Washington UniversityWashington, DCMargetta StylesAmerican Nurses AssociationKansas City, MODan ThomasHealth Insurance Association of

AmericaWashington, DC

Assessment

Nlarlent VenturaVeterans Administration HospitalButtalo, NYJudith WagnerOffice of Technology AssessmentWashington, DCJerry WestonNational Center for Health

Services ResearchRockville, MDJiidith WillisHealth Care Financing

AdministrationBaltimore, MDSidney WolfeHealth Research GroupWashington, DCSusan YatesAmerican College of Nurse-

MidwivesWashington, DC

Appendix B

Payment for the Services ofNurse Practitioners, Physician Assistants,

and Certified Nurse-Midwives

Health-care services are paid for by individuals andby third-party payers Third-party payers in the pri-vate sector include commercial insurance companies,hospital and medical plans, such as Blue Cross andBlue Shield, prepaid group medical plans, such ashealth maintenance organizations (HMOs), and others,such as labor unions or employers of insured inc'ivid-uals (106). Specific benefits, exclusions, and !imitationson financial coverage vary from one third-party payerto another and differ even among the policies and plansoffered by a particular payer. However, State and, toa lesser extent, Federal laws and regulations requirepr:vate third-party payers to offer some benefits anddo not permit them to offer others.

The Federal Government plays a significant role inpaying for health-care services under four primary-health-care programs The government acts as a third-party payer for health care under the Medicare andthe Medicaid programs Although the Health CareFinancing Administr-tion (HCFA) is the Fedc. al agencyresponsible for both Medicare and Medicaid, the twoprograms differ considerably in (lieu payment prac-tices and covered populations Medicare is a nation-wide health insurance program for the 27.5 millionAmericans who are at least 65 years of age and for2 9 million disabled Americans Pal t A, the HospitalInsurance Program helps pay for hospital services, re-lated institutional services, and other services Part B,the Supplementary Medical Insurance Program cov-ers physicians' services and many other medical serv-ices. Medicaid is a joint Federal-State prog-am for 22million low-income persons The program is admin-istered by individual States under general Federalguidelines, which include mandatory minirr urn bene-fits that all States must provide to eligible -ecipientsand optional benefits that individual States may electto provide to recipients

The Civilian Health and Medical Program of theUniformed Services (CHAMPUS), the third medical-benefits program provided by the Federal Govern-ment, is administered by the Department of Defense(DOD) (24 CHAMPUS covers nearly 8 million de-pendents of military personnel, retirees, and depen-dents of retirees inside and outside the United States(60)

The fourth medical-benefits program provided bythe Federal Government is the Federal EmployeesHealth Benefits Program (FEHBP), a voluntary health-care program that provides health insurance for ap-proximately 10 million Federal employees and their de-pendents. Enrollees receive health-insurance servicesfrom more than 300 health-benefit plans under con-tracts negotiated with the Office of Personnel Man-agement of the U S Government (256)

As table B-1 shows, payment for the services ofnurse practitioners (NPs), physician assistants (PAs),and certified nurse-midwives (CNMs) varies consider-ably, in part because of variations in the State lawsand regulations that govern these providers' practicesand payment Table B provides a generalized over-view of the payment practices of the major third-parrypayers in the public and private sectors These prac-tices are described in greater detail below

Nurse Practitioners andPhysician Assistants

Government-Sponsored Programs

Medicare.Under Part B of the Medicare program,coverage and payment for NPs' and PAs' services arerestricted to services not traditionally performed byphysicians, to services normally delegated by physi-cians, and to services performed under the direct su-pervision of physicians This provision is commonlytermed the "incident to" provision '

Under this provision, services of nonphysicians mayhe covered where th_v an of types which are commonlyperformed by pliv,iciar,s ,,ff pec-Air.nel, and are per-formed by employees of the pi sician under his or herdirect supervision, e g , giving injections, taking tem-peratures and blood pressures, performing Hood tech,etc Payment c-innot be made, however, for servicesperformed by nonphysicians where the services are of

I he relevant Medicare Part 13 regulation prohibits porment formccin al synt i«., ryncicrcci by someone other than a phy,ot idn«rt for sc s that dry furnished as an inn ident to a physician spriityss.onal 4 rt it c,c, of kinds vi.hich dre«itnrnon1( turnishyd in phv-sulans and an «,mmonlv either rendered ts.ithout (barge.r In( lulled in ph \ sit an hills Set 18nlisii2)(A) of the Social Sccu-

ritt Att 42 1' ( 11,45(0'211A 20 (1U 105211110

71

72

Table B1.--Coverage and Direct Payment for Servicesa of Nurse Practitioners,Physician Assistants, and Certified NurseMidwives

Nurse practitioners

Direct

Physician assistants

Direct

Certified nurse midwives

DirectThird party payer Coverage payment Coverage payment Coverage paymentMedicare

Part A No No No No No NoPart B No No Not' No No NoHMOs' Yes NA Yes NA Yes NA

State Medicaid programs° Some A few Some None Almost all Almost allprograms programs programs programs programs

Medicare and MedicaidRural Health Cum Gs Yes No Yes No Yes No

CHAMPUSe Yes Yes No No Yes YesFEHBPf 7 plans 7 plans 6 plans 6 plans 20 plans 20 plansPrivate insuranceg In some In some No No In some In some

States States States StatesNA not availableaServices that are typically and characteristically provided by physiciansbDuring the publication of this case study the Omnibus Reconciliation Act of 1986iPublic La. 1 5091 was enacted The act modifies Part B of Med care and authorizes

payment for lcoversl services of physician assistants working under the superv,sion of physicians in hospitals skillednusing facilities intermediate care facilitiesand as an assistant at surgery The payment is indirect and at levels lower than physicians would receive for providing corripArable services

cHealth maintenance organizationsdState Medicaid programs have the option of including NP and PA services in their State Medicaid Plans Congress mandted coverage of CNMs services in 1980

As of January 1985 all States in which CNMs practiced either were complying with the law iPublic Law 964991 or were considering changes in their Medical plansto comply with the law

eCiviltan Health and Medical Program of the Uniformed Servicesf Federal Employees Health Benefit Program FEHBP has 21 fee for service plans some of whIr,h authorize payment NPs PAs and CNMsgWhether State laws and regulations require or permit insurance coverage and di,ect payment to. the services NPs PAs rAnd C NMsSOURCE Office of Technology Assessment 1986

the kinds which are typically arid characteristically ten-dered by physicians, e g , prescribing medications, set-ting casts on fractures, assisting at surgery, ai.d otheractivities that involve an independent evaluatiur ortreatment of the patient's condition even if the attend-ing physician is directly supervising these services (64)The "incident to" provision was partly intended to

reduce the possibility of physicians' making excessiveprofits by employing large numbers of assistants (162)The provision has been refined over time, and its com-plexity has led to varied interpretation by p',ysiciansStrictly interpreted, the provision means that Medicareonly pays for physicians' typical services when theyare actually provided by physicians Knowingly orunknowingly, however, some physicians bill for serv-ices irrespective of who performs the service Unlessaudits are performed, Medicare contractors have dif-ficulty determining who has rendered services from t'Medicare billing form One of the "incident to pr.vision s effects has beer to sharply limit the adminis-tratively independent practice of NI's who cannot hillMedicare for medical services

This provision was modified in 1980 (2481 to permitgenerally supervised nurses and other paramedicalpersonnel such as NPs and PAs -to provide cei lainservices to the homebound in some medicall r underserved areas The ''incident to'' provision is waived

only in areas that do not have certified home-healthagencies In 1984, there were 5,247 Medicare certifiedhome-health agencies (164), and the number is growing(115) Presumably, therefore, NI's and PAs provideservices to homebound patients only to a limited extentand only in areas where home-health agencies do notfind it economical to function

The Tax Equity and Fiscal Responsibility Act of 1982(Public Law 97-248) allows for Medicare coverage ofNPs' and PAs' service,. in HMOs and competitive med-ical plans (CMPs( that have entered into certain con-tractual risk-sharing arrangements v h HCFA 2 TheJi-iplementing regulations permit NPs and PAs in HMOsand CMPs to furnish servic:, without the direct per-sonal supervision of physicians ' The NI's and i'Asessentially can provide whatever services State law au-thoriles including <iipervising or ordering services andsopri.c,, math mai to the services

During the publication of this case study, the Om-nibus Reconciliation Act of 108o (Public I a 0o-500)

( ale ulatiom, id cartation rah, do not Inc ludo NI l'As sal-aras but ar«lett rrmned hi the ik.erage atlatsted per 1,iptta «,st,

hu h arc has( d on the . osts it vast rt it( s rc«m.rd 1,5 hi:nett(re .ho till into partu tflar sits oit erni it ht '1( h lac tor, as gut,-

otion 'try srs and i'llgthilittIenicr it Ki gist( r lid 'Ail No 7 I harstta% Lin 10 1067, p 1951

f

-

was enacted The act modifies Medicare and author-izes payment for (covers) services of PAs working un-der the supervision of physicians in hospitals, skillednursing facilities, intermediate-care facilities, and asan assistant at surgery The payment is indirect andat levels lower than physicians would receive for pro-viding comparaJle services

Medicare's payment for inpatient hospital servicesunder Part A does not specify coverage or paymentfor NPs' and PAs' services, either under Medicare'sformer cost-based reimbursement method or thecurrent prospective-payment system. Hospitals usu-ally pay for NPs' and PAs' services by salaries, the sal-aries and other costs of employing or contracting withNPs and PAs are included in the hospitals' formulasfor caloilating operating costs. Under cost-based reim-bursement, Medicare pays the hospital the total oper-ating costs associated with Medicare beneficiariesUnder the prospective-payment system, Medicare paysa fixed amount for each patient admitted; the aggre-gate J amount is intended to cover the hospitals' totaloperating costs for Medicare beneficiaries.

Medicaid.Under Medicaid, each State has consid-erable discretion to design its program within broadFederal guidelines Covering and paying for theservices provided by NI's and PAs is one of the bene-fits a State may choose 'o include in its Medicaid Plan.Data on the number of State Medicaid programs thatcover NI's' services are not collected by HCFA's centraloffice Although the available data conflict, theyindicate that State Medicaid programs ace cautiousabout extending payment to NPs A 1985 study notedthat NPs were authorized to receive direct paymentor indirect payment 1 e , to bill directly or throughphysicians in 21 State Medicaid programs (60) Anearlier study found that of the 26 State Medicaidprograms that covered NPs' services, most paid in-directly Nineteen of the twenty-six States adopted theMedicare appioach of allow ing payment only for NI'sservices that were incidental to physicians' services(22)

A preliminary survey of State Medicaid programsfound that 26 of the 36 State Medicaid programs cov-ered PAs' services (5) Of these 26 programs, 18 re-imbursed for PAs' servit_c5 at the same rates as physi-cians , 4 ielmburs,:d at lower rates, 2 reimbursed ona cost basis, and the remainder did not respond to the'question Most of the State Medicaid programs re-quirements for supervision by physic lam, were simi-lar to the requirements contained in State laws goerning PAs practice (In most States, the scope ot PAspractice is controlled under medical-practice at andregulations 1 Other State Medicaid programs requirethat physicians review patients' charts every 7 days,that physinans be onsite, or that physicians be present

73

The scope of services covered for PAs also varied fromthe general (e g , all the serve es cited in the PA lawgoverning scope of services o the specific (e.g., ex-aminations under the program Early and PeriodicScreening, Diagnosis, and Treatment, services in com-munity health centers, and services in family planningagencies) Three States specified that only "incident to"services (i.e., services not traditionally performed byphysicians) were covered for payment (25).

Medicaid payment for inpatient hospital servicesdiffers by State. Although 41 State Medicaid programspaid for hospital inpatient services on a retrospectivecost basis at the beginning of 1980, 34 State Medicaidprograms had some form of prospective-paymentsystem as of December 1985 (133). Each State Medic-aid program pays for operating costsincluding sal-,aries and other costs associated with NPs and PAsaccording to its unique payment method for inpatientservices (40)

Rural Health Clinics.Access to primary-careservices by NPs and PAs in satellite settings in isolatedareas was hindered by the fact that payment for suchservices was available under Medicp1e and Medicaidonly if a physician was on the ?remises when theservices were delivered. The Rural Health ClinicServices Act of 1977 'Public Law 95-210) waived suchrestrictions for NPs and PAs practicing in certified ru-ral health clinics located in designated underservedareas The act permits payment for the services of NPsand PAs even when they are not directly surpervisedby physicians at all times This allows rural clinicsstaffed only by NPs and PAs backed up by physiciansto provide reimbursable primary care typically pro-vided by physicians, so long as written plans oftreatment are periodically reviewed and approved byphysicians Payment, which is based on reaso-,ablecosts, Is made to the employing clinic, not to the Ni'or PA, and is restricted to services that State legisla-tion authorizes NPs and PAs to perform

Nursing Homes.V,Irlow, Medic, c and Medica dregulations. in addition to coverage and paymentprovisions, limit the provision of certain services byPAs and NPs in nursing homes In some States, thelaws permit physicians to delegate such services to NPsand PAs

Only physicians can provide certain services if a fa-cility is to

I he certified as a skilled nursing facility (SNF) inthe Medicare and Medicaid programs (42 CFR405 1123,1124, 1125,1126, and 1128),

2 he certified as an interm«hate-care facility (ICF)in the :Medicaid program (42 CFR 311, 334, 343,and 346),

3 obtain certification and remlification of a patient'sneed for care in an SNI; in tho' Medicare program(42 CFR 450 260, Th..), and 280), or

74

4 obtain certification of a patient's need for care inan SNF and ICF in the Medicaid program (42 CFR456.360, and 380).

The specific services that must be performed by physi-cians vary according to the type of certification andthe program. Under the Medicare and Medicaid pro-grams, for example, patients can be admitted to SNFsbased only on physicans' medical findings, diagnosis,and orders. Patients' care must be supervised by phy-sicians, and patients must be seen by physicians at leastevery 30 days for the first 90 days after admissionOnly physicians can prescribe drugs and order diag-nostic and specialized rehabilitative services and ther-apeutic diets.

Unlike Medicare, Medicaid allows NPs and PAs torecertify patients' needs for institutional care. NPs andPAs are authorized to recertify the necessity ofcontinuing medical care in SNFs (42 CFR 456.260) andICFs (42 CFR 456.360) where general supervision isprovided by physicians.

Civilian Health and Medical Program of the Uni-formed Services.The Federal Government, thr( ughthe Department of Defense s CHAMPUS, has takenthe lead in treating NPs as autonomous and independ-ent providers of care for payment purposes CHAMPUSbegan billing and paying for NPs' services on an ex-perimental basis in fiscal year 1980 When the experi-ment ended 2 years later, CHAMPUS continued cover-age and direct fee-for-service payment of NPs, therebyrecognizing them as a distinct group of providers de-serving direct compensation for services (60) AlthoughCHAMPUS does not cover PAs' services, PAs are notseeking coverage under CHAMPUS, because DOD hasindicated that CHAMPUS will begin contracting outits services and cease paying on a fee-for-service basis(83)

Federal Employees Health Benefit Program.LikeCHAMPUS, FEHBP experimented with direct paymentand required that all FEHBP plans directly pay healthpractitioners, including NPs and PAs, who were li-censed under applicable State law in those States whereat least 25 percent of the population was located informally designated primary-medical-care manpower-shortage areas (60). After the experimental period ofJanuary 1980 to December 1984, FEHBP did not requireplans to compensate NPs and PAs directly.

Payment to providers of covered service s currentlydepends on the terms of the FEHBP's contract witheach health-benefit plan and thus varies among theplans. There is no statutory requirement that all plansoffer payment to NPs and PAs, but some plans cur-rently authorize NPs and PAs to receive direct pay-ment or reimbui rent for covered services withoutreferral or supervision (see table B-1) Of the 21 fee-for-service plans participating in FEHBP for he con-

tract year 1986, 7 cover and offer direct payment forservices of NPs and 6 cover and offer direct paymentfor the services of PAs4 (256) Only 14 percent ofenrollees in FEHBP are enrolled in plans that LoverNPs' services and 11 percent of enrollees in FEHBP areenrolled in plans that that cover PAs' services. Directpayment for NPs and other providers is :low underconsideration by Congress

Private Insurance

Private third-party payment for NPs' and PAs' serv-ices is subject to State laws and health insurance reg-ulations. Increasing numbers of States have passedlaws and regulations concerning payment for the serv-ices of NPs and PAs. Such laws and regulations mustaccord with the States' requirements governing thescope of practice of these providers and, in some cases,of physicians

The State payment laws vary in a number of dimen-sions, including the types of insurers affected (for-profit, nonprofit, or both) and the types of insurancepolicy (22). Some laws affect the services of all nurses;others affect only special groups of nurses, such asNPs Some States require insurers to include nurses'services as a reimbursable benefit (mandatory bene-fit), whereas other States require insurers to offer reim-bursement for nurses' services as an option in their pol-icies (mandatory option) (232).

The numbers do not include the more than 300 prepaid compre-hensive medical plans in the FEHBP, because the organization ofmedical delivery systems under these plans makes the issues of di-rect access, pa} ment, supervision, and referral largely irrelevant

`In early 1986, President Reagan vetoed H R 3384 which con-tained a provision requiring direct reimbursements to nurses andnurse-midwives who provide services to employees covered by theFEHBP Congress then passed new legislate -in, Public Law 99-251,directing the Office of Personnel Management (OPM) to study andreport to Congress on the advisability of amending the law governingFFHBP to provide mandatory recognition of additional health-carepractitioners, such as nurse-midwives, nurse praCitioners, chiroprac-tors and clinical social workers The legislation extended direct reim-bursement for nonphysician providers in medically underservedareas which are determined by the Department of Health and Hu-man Services to have at least 25 percent of the population livingin areas with inadequate numbers of medical providers OPM's studyadvised against mandatory coverage on grounds specific to FEHBP

g mandating coverage would not increase the choice of practi-tioners available to plan members, nor would it necessarily increasecompetition among the plans! Nonetheless, the Subcommittee onCompensation aid Employee Benefits of the House Committee onPost Office and Civil Service remains interested in the topic Thesubcommittee held hearings on direct reimbursement for noliphy-sicians on Apr 15 1086 and indicated intention to continuestudying the issue H R 4825, introduced on May 14, 1986, wouldauthorize direct payment for st rvices performed by NPs and CNMsand other healt1,-care providers As of lune 1086 the hill had beenreported favorable by the I louse Committee on Post Office and CivilService and was awaiting tloor action The hill did not pass the 90th

ongress

Although direct third-party payment is the excep-tion rather than the rule, 13 States currently permitdirect payment for NPs' services (24) The wide vari-ation in conditions for payment of NPs' services isapparent in the laws of Mississippi, Maryland, andOregon regarding supervision by physicians In allthree States, insurers must pay for any service that iswithin NPs' lawful scope of practice, but Mississippirequires the NPs to work under the supervision of phy-sicians, whereas Maryland prohibits direct paymentto NPs who work under the direct supervision of phy-sicians (101) In Oregon, supervision by physicians isnot a condition for reimbursement (21).

No State laws mandate coverage of PAs' servicesExcept in Wisconsin, State laws are silent even aboutoptional coverage of PAs services (83). None of theStates mandate direct reimbursement for PAs' services;indeed, 16 States explicitly prohibit it. Although thereis anecdotal information concerning third-party payerswho cover PAs' services, sometimes under physicians'billing, information concerning the extent of coverageis not available.

Businesses in the United States are beginning to pro-vide insurance that pays directly for NPs and PAs (aswell as CNMs) The Washington Business Group on1-1, alth recently conducted a national survey of itsmember organizations, all of which are large firms.Of the approximately 200 respondents, 43 percent arepaying directly for the services of NPs, and 39 per-cent are donig so for PAs (91) The proportion of mem-ber companies reimbursing NPs and PAs (and CNMs)has increased steadily over the past decade (91)

In many States, NPs' and PAs' services still mustbe -incident to physicians' services, for payment pur-poses, and compensation for NPs' and Ms' servicesmust be made to their employing physicians or orga-nizations Nevertheless, the recent changes in someStates' laws and in the policies of major corporationssuggest a movement away from requirements fix di-rect supervision, by physicians Increasingly, NPs andPAs can function administratively independently ofphysicians and qualify for direct payment Also, moreStates are likely to pass legislation providing for thedirect compensation of NPs and PAs


Government-Sponsored Programs

Medicare and Medicaid. --Medicare's poll( les concerning payment are the same for the services o1 CNi,lsas for the services of NPs and PAs Medicaid's pay-ment policies are much more permisssive for CNMs"services than for NPs' and PAs' services In 1080,Congress enacted legislation (Pc,blic Law 96-499) torequire that CNMs' services be a mandator, benefit

75

under Medicaid The Federal statute recognizes CNMs'autonomous practice expressly stating that the man-dated benefit shall be provided "whether or not he isunder the supervision of, or assoc:ated with, a physi-cian or other health care provider" (60) HCFA issuedthe regulations that implemented this law in May 1982As of January 1985, ail Sates in which CNMs prac-ticed either were complying with the statute and theregulations or were considering changing their Med-icaid plans to bring them into compliance. Currentlyonly tour States and the District of Columbia do notprovide for direct Medicaid payment to CNMs, andHCFA's regional offices are working v, ith these juris-dictions to bring them ink compliance (235) Further-more, the Medicaid statute was amended by PublicLaw 98-369 to ensure that birthing centers operatedby CNMs need not be administered by physicians tobe eligible for coverage as Medicaid clinic services

tural Health Clinics.CNMs are treated differentlyfrom NPs and PAs under the Rural Health Clinics Act.Only rural clinics employing NPs or PAs are eligiblefor certification under the act (Title 42, Section 481.4)Once a clinic is certified, however, it can receive pay-ment for the ,.ervices of the CNMs it employs

Civilian Health and Medical Program of the Uni-formed Services.CHAMPUS singled out CNMs forspecial consideration before it experimented with di-rect payment for NPs' services starting in 1980 TheDefense Appropriations Act of 1979 (Public Law 95-457) was the first Federal law to pay directly for serv-ices provided by CNMs without either referrals or di-rect supervision by physicians.

Federal Employees Health Benefit Program.Of the21 FEHBP fee-for-service plans, 20 cover CNMs with-out a contractual requirement for physicians' referralsor supervision In addition, many prepaid plans in theFEHBP employ CNMs Roughly 90 percent of all Fed-eral enrollees are in plans that cover CNMs (256)Many of the insurance companies in the FEHBP offerthe same coverage of CN' Is for their privay sectorbusiness

Private Insurance

Private third-parry payment for CNMs' services hasalso been mandated in a growing number of jurisdic-tions As of 1983, '4 States had mandated direct reim-bursement by private insurers for CNMs' care (55). ByApril 198o, the number of States had increased to 17(11) In most States, direct supervision by physiciansis not a condition of reimbursement (22) In additiu 1,in many other States insurers voluntarily have cho-

sen to pay for nurse-midwifery care" (55). Fifty-sevenpercent of the large corporations surveyed by the Wash-ington Business Group on Health provide direct reim-bursement to CN1Ms 1Q1)

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220. Schultz, P R., and McGlone, F.B , "PrimaryHealth Care Provided to the Elderly ay a NursePractitioner/Physician Team Analysis of Cost-Effectiveness," I. Am Geriat. Soc. ?5(10):443-446, October 1977

221 Schwartz, J L., "Economic l'easibility and PatientDiagnostic Mix of Family Nurse Practitioners,"Public Health Rep. 94(2) 148-155, March /April1979

222 Schwartz, W B , Newhouse, J.P., Bennett, B.W.,et al , The Changing Geograthic Distributionof Board-Certified Physicians,- N. Erg]. I. Med.303(18) 1032-1038, Oct 30, 1980.

223 Sharpe, T R , and L anahan, B F "Evaluation ofthe Use of Rural Health Clinics Attitudes and Be-haviors of Primary Care Physicians in ServiceAreas of Nurse Practitioner Clinics," PublicHealth Rep 97(6. 566-571, November/December1082

224 Silver, ILK , Murphy, M A . and Gitterman,13 A , 'The Hospital Nurse Prachtioner in Pedi-atric Practice, AIDC 133 237-239, March 1984.

225 Simborg D W , Starheld,B H., and Hui r, S D.,"Physicians and Non-Physician Hearth Practi-tioners The Characterp-tics of Their Practices andTheir Relationships,- Am I Public Healthtr)8(1) 44-48, January 1978

12c) Slorne, C , Wetherbee, H , Daly, M , et al "Ef-fectiveness of Certified Nurse-Midwives A Pro-spective Evaluat-m Study,' Am I Obstet Gy-necol 124(2) 77-182, Jan 15, 1970

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228 Sobolewski, S D , "Cost-Effective School NursePractitioner Services," I Sch Health 51(9) 585-588, November 1981

229 Solomon, S , Director, National League for Nurs-ing, New York, NY, personal communication,Aug 25, 1986.

230 Sox, H C., Jr , "Quality of Patient Care by NursePractitioners and Physician's Assistants A Ten-Year Perspectiv -,"Arn. Intern. Med. 91(3):459-68, September 1'79

231 Spitzer, W 0., Sackett, D L , Sibley, J.0 , et al ,

The Burlington Randomized Trial of the NursePractitioner," N Engl I Med 290(5)251-256,Jan 31, 1974

232 Stallmeyer, , American Nurses' Association,Direct Reimbursement for Non-Physician Health

Professionals Under FEHB," Hearings Before theSubcommittee on Compensation and EmployeeBenefits, House Committee on Post Office andCivil Service, U S Congress, Washington, DC,Apr 15, 1986

233 Stein, I , "Nursing Can Gain From ?rospectivePayment," Business awl Health 1(5) 36, May1984.

234 Stein, R E , and Jessop, D.J , "Does Pediatr:cHome Care Make a Difference for Children WithChronic Illness? Findings From the Pediatric Am-bulatory Care Treatment Study," Pediatric.;73(6) 845, June 1984

235. Streimer, R A , Deputy Director, Bureau of Eligi-bility, Reimbursement, and Coverage, HealthCare Financing Administration, U.S Departmentof Health and Human Set vices, Baltimore, MD,personal communication, 1985

236 Sultz, H A , "Nurse Practitioners An Overviewof Nurses in the Expanded Role," The New HealthProfessionals Nurse Practitioners and PhysiciansAssistants, A A Bliss and E D Cohen (eds(Germantown, MD Aspen Systems Corp , 1077)

237 Sultz, H A , Henry, 0 M Bullough, B , et al ,

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238 Sultz, H A , Zielezny, M , Gentry, J M , et alLongitudinal Study of Nurse Practitioners, PhaseIII, DHEW Pub No HRA-80-2 (Washington,DC 11 S Government Printing Office, 1080)

730 Swoap D B , "Beyor )RGs Shifting the Riskto " v de r s ,' Health Affairs 3(4) 117-121, win-ter 1984

240. Tarlov, A.R , "Shattuck Lecture The Increas-ing Supphi of Physicians, the Changing Structureof the Health Service,. System, and the Future

87

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241 Tresnowski, B R , "HMOs Are Rollingand WeCan All Benefit," Inquiry 21(3)203 -204, fall 1984.

242 U S Congress, Congressional Budget Office,Physician Extenders: Their Current and Futur'Role in Medical Care L very (Washington, DCU S Government Printing Office, April 1979).

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244 U S. Congress, Office of Technology Assessment,Medical Technology and Costs of the MedicareProgram, OTA-H-227 (Washington, DC U.S.Government Printing Office, July 1984).

245 U S Congress, Ofnce of Technology Assessment,Technology and Aging America, OTA-BA-264(Washington, DC U S. Government Printing Of-fice, June 19851

246 U S Congress Office of Technology Assessment,Payment for Physician Services: Strategies forMedicare, OTA-H-294 (Washington, DC U.SGovernment Printing Office, February 1086).

247 U S. Department of Health, Education, and Wel-fare, "The Effect of Task Delegation on the Re-quirements for Selected Health Manpower Cate-gories in 1980, 1985, and 1990," final reportcontract No NIH 72-44006, Washington, DC,1974

248 U.S Department of Health and Human Services,Health Care Financing Administration, Medi-care's Carrier Manual Baltimore, MD n d

240 U S Department of Health and Human Se. vices,Public Health Service, Health IZesearr!, ServicesAdministration, Registered Nurse P pulat'on andOver view, DHHS Pub No HI.S-P-OD-83-1(Washington, DC U S Governme it Printing Of-fice, November 1982)

250 U S Department of Health and Human Services,Public Health Service, Health Resource,. andServices Administration, Diffusion and theC hanging Geographic Distr,hution of Prim-ryCare Physicians, DHHS Pub No HRS-P-OD-84-1, HRI' 0904702 (Washington, DC 1.1 S Gov-ernment Printing Office, June 1083, revised No-vember 1083)

251 U S Department of Health and Human Services,Public Health Service Bureau of Health Profes-sions Report to the 1)iesident and Congr:ss onthe Status of Health Personnel ir. '-tStates, Vols I and II, DHHS Pub No HRS-P-

88

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257 U S Department of Health and Human Services,Public Health Service, Health Resources andService:, Administration Bureau of HealthProfessions Division of Nursing, "1984 NationalSample Survey of Registered Nurses," RockvilleMD, 1084

253 U S Department of Health and Human Services,Public Health Service, National Center for HealthStatistics, Midwife and Out-ot-Hospital Deliver-ies- United States, Vital and Health Statistics Ser-ies 21, No 40, DHHS Pub No 84-1918 (Wash-ington, DC U.S Government Printing Office,February 1984)

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0

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263 Weston, J.L , Senior Research Manager, NationalCenter for Health Services Research, PublicHealth Service, U.S. Department of Health andHuman Ser Washington, DC, personalcommunication, Apr 2, 1985

264 Williams, A P , Schwartz, W.B , Newhouse,P , et al , How Many Miles to the Doctor?"

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767 Zikmund, W G , and Mille!, S J , "A FactorAnalysis of Attrudes of Rural Health ConsumersToward Nurse Practitioners,- Res ,Mors Health2(2) 85-00, June 1070

268 Zimmei I G , Groth-funcker, A and IvlcCus-ker, I Effects of a Physiciar -Led Home CareTeam on T. rminal Care, I Am Cerfat Soc32(4) 288-202, April 1084

Office of Technology Assessment

The Office of Technology Assessment (OTA) was created in 1Q72 as ananalytical arm of Congress OTA's basic function is to 1..,11p legislative policymakers anticipate and plan for the consequences of technc,logical change,and to examine the many ways, expected and unexpected, in which tech-nolo y affects people's lives The assessment of t _.chnology calls for explo-ration of the physical, biological, economic, social, and political impactsthat can result from application, of scientific knowledge OTA prosCongress with independent and timely a.formation about the potential et-tects both beneficial and harmfulof techm,logical applications

Requests for studies are made by chairmen of standing committees otthe Ho'ise of RepresentatPres or Senate, by the Technology AssessmentBoard, the governing body of OTA, or by the Director of OTA in consul-tation with the Board

The Technology A'Aes,ment Board 1, composed of six rneml,cr, ot theHouse, six members of the Senate, and the OTA Director, who is a non-voting member

OTA has studies under way in nine program areas energy and materals, industry, technology, aid employment international security and com-merce, biclogical applications, food and renewable resources, healthcommunication and information technologi s oceans and environment, andscience, education, and transportation.

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