The High Cost of Cure

How a hospital bill grows 17 feet long

Until his admission to the hospital, John O'Connor, a fifty year-old railroad dispatcher from Charlestown, was in perfect health. He had never been sick a day in his life.

On the morning of his admission, he awoke early, complaining of vague abdominal pain. He vomited once, bringing up clear material, and had some diarrhea. He went to see his family doctor, who said that he had no fever and his white-cell count was normal. He told Mr. O'Connor that it was probably gastroenteritis, and advised him to rest and take paregoric to settle his stomach.

In the afternoon, Mr. O'Connor began to feel warm. He then had two shaking chills. His wife suggested he call his doctor once again, but when Mr. O'Connor went to the phone, he collapsed. His wife brought him to the emergency ward of the Massachusetts General Hospital at 5 P.M., where he was noted to have a temperature of 108° F. and a white count of 37,000 (normal count: 5000 to 10,000).

The patient was wildly delirious; it required ten people to hold him down as he thrashed about. He spoke only nonsense words and groans, and did not respond to his name. While in the emergency ward he had massive diarrhea consisting of several quarts of watery fluid.

The patient was seen by the medical resident, John Minna, who instituted immediate therapy consisting of aspirin, alcohol rubs, fans, and a refrigerating blanket to bring down his fever, which rapidly fell to 100°. He was in shock, with an initial blood pressure of 70/30 and a central venous pressure of zero. Over the next three hours he received three quarts of plasma and two quarts of salt water intravenously, to replace fluids lost from sweating and diarrhea. He was also severely acidotic, so he was given twelve ampule of intravenous sodium bicarbonate as well as potassium chloride to correct his electrolyte balance.

The patient could not give a history. His wife, upon questioning, denied any history of malaria, distant travel, food exposure, infectious disease, headache, neck stiffness, cough, sputum, sore throat, swollen glands, arthritis, muscle aches, seizures, skin infection, drug ingestion, or past suicide attempts. His past history, according to the wife, was unremarkable. He had never been ill or hospitalized. His mother died at age fifty-five of leukemia; his father, at age fifty-nine, of pneumonia. The patient had no known allergies, and did not smoke or drink.

Physical examination was normal except for a slightly distended abdomen and a questionably enlarged liver, which could be felt below the rib cage. Neurological examination was normal except for the patient's stuporous, unresponsive mental state. The patient was cultured "stem to stern," meaning that samples of blood, urine, stool, sputum, and spinal fluid were sent for bacteriologic analysis. He was also given heavy doses of antibiotics, including a gram of chloramphenicol, a gram of oxacillin, two million units of penicillin; later in the evening, kanamycin and colistin were added to the list.

X rays of the chest and abdomen were normal. Electrocardiogram was normal. Hematocrit was normal. The white count was elevated, with a preponderance of polymorphonuclear leukocytes, the cells which increase in bacterial infections. Examination of the urine showed a few white cells. Platelet count and prothrombin time were normal. Measurements of blood sugar, serum amylase, serum acerone, bilirnhin, blood urea nitrogen were normal. Lumbar puncture was normal.

An intravenous pyelogram (an X ray of the kidneys to check their function while they excrete an opaque dye) showed that the left kidney was normal, but the right kidney responded sluggishly. The excretory tubing on the right side seemed dilated. A diagnosis of partial obstruction of the right kidney system was suggested.

Because the abdomen was distended, six abdominal taps were performed in different areas by the surgical residents, Drs. Robert Corry and Jay Kaufman, in an attempt to obtain fluid from the abdominal cavity. None was obtained.

Dr. Minna's diagnosis was septicemia, or generalized infection of the bloodstream, from an unknown source. As possibilities he listed the urinary tract, the gastrointestinal tract, the gallbladder, or the lining of the heart. He felt there was no good evidence for a central nervous system cause for the fever, and no good history of drug ingestion or thyroid problems to account for the fever.

This was essentially the conclusion of the neurological consultants who saw the patient later in the evening. They felt that Mr. O'Connor had suffered a primary infectious process with sudden outpouring of bacteria into the blood, and consequent fever and prostration. They felt the infection was somewhere in the urinary or gastrointestinal system, or perhaps even in a small area of the lungs. They felt that meningitis, encephalitis, subarachnoid hemorrhage, or other central nervous problems were unlikely.

A formal surgical consult, also later in the evening, reported that in the absence of muscle spasm or guarding of the abdomen, and in the presence of six negative taps, an acute abdominal crisis was unlikely.

Genito-urinary consultants examined the patient that evening and reviewed his kidney X rays. They felt that there was a probable partial obstruction of the right kidney, but they could not determine whether this was a recent or a slowly developing change. They found no evidence of infection of the prostate gland to explain the fever.

Mr. O'Connor was placed on the danger list and transferred to the intensive-care unit of the Bulfinch Building. At the end of his first twelve hours in the hospital, his fever had been reduced, but there was still no explanation for the fever itself.

BEFORE continuing with Mr. O'Connor's hospital course, it is worth pausing a moment to consider the patient's initial symptoms and initial therapy. Mr. O'Connor presented with high fever and shock. Classically, the fever of unknown origin is a pediatric problem, and classically it is a problem for the same reasons it was a problem with Mr. O'Connor -- the patient cannot tell you how he feels or what hurts. However, a high fever in a child is less worrisome than it is in an adult, for children have a much greater tolerance for fever. In adults, prolonged high fever is more likely to result in permanent brain damage and death.

The most common cause of fever for anyone, child or adult, is infection; the most common cause of fever of unknown origin is also infection. There are some unusual causes occasionally seen, such as malignancies, bleeding in the brain, drug ingestion, and outpouring of thyroid hormone, but for the most part, unexplained fevers are produced by unidentified infections.

It is now known that one can harbor an infection in a secluded part of the body, and the body will make very little response to it; however, if the infection spreads into the bloodstream, there may be a "shower " of bacteria, and a subsequent sudden rise in temperature. The shower is usually brief, lasting minutes or hours, and often ends before the temperature rises. This makes diagnosis difficult; if one wants to catch bacteria in the blood, one must draw a sample before the temperature spike, and not during it or after it. It was thought that Mr. O'Connor was suffering from precisely this sort of situation: a sequestered infection producing episodic bursts of bacteria into the blood, with episodic fever. However, his fever was threateningly high. And thus a classic conflict in therapy arose. It is a conflict as old as Hippocrates. "For extreme diseases, extreme remedies," Hippocrates wrote. He also said: "For grave diseases, the most exact therapy is best." But obviously, an exact therapy depends upon a precise diagnosis, and here lies the conflict.

What is a diagnosis? The question is not as simpleminded as it first appears, for the notion of what constitutes an acceptable diagnosis has radically changed through the years. A diagnosis is drawn up on the basis of two kinds of knowledge: the physician's concept of disease processes, and his available therapies. Ideally, a diagnosis contains some sense of etiology -- the cause of the disease -- but for most of medical history etiology was either ignored or wrongly ascribed (as in "fever from excess of black bile").

In a modern sense, precise diagnosis is required because precise therapies are available. Yet the need for precise diagnosis is older; in Hippocratic time, this need was based on a prognostic, not a therapeutic, concern. Physicians were unskilled at curing disease, and therefore served mostly to predict the course of an illness which they could not influence. Robert Platt notes that "until quite did not matter whether your diagnosis was right or wrong....Prognosis mattered rather more, especially to the doctor's reputation. "

Hippocrates was deeply concerned with the prestige of the physician as related to prognostic acumen; much Hippocratic writing shows this preoccupation with "Sleep following upon delirium is a good sign." "Those who swoon frequently without apparent cause are likely to die suddenly." "Labored sleep in any disease is a bad sign." "Spasm supervening upon a wound is dangerous." "Hardening of the liver in jaundice is bad." "If a convalescent eats heartily, yet does not take on flesh, it is a bad sign. "

These observations are still valid today. But we demand something further from diagnosis, as the range of therapies has increased. If a person swoons, for example, it is important to know whether he has aortic stenosis -- and is likely to die suddenly -- or whether he is hysterical, or diabetic, or has some other reason for fainting. In short, we want more precise diagnoses because we have more precise therapies.

Throughout medical history, physicians of every age have felt that they had precise, specific remedies but few of these are still acceptable. As Berton Rouech&eacute notes, only three eighteenth-century drugs are still acceptable today: quinine for malaria, colchicine for gout, and foxglove (digitalis) for heart failure. All the other "specifics, " as well as what Holmes termed the "peremptory drastics," have disappeared.

Even as recently as 1910, L. J. Henderson commented that "if the average patient visited the average physician, he would have a fifty-fifty chance of benefiting from the encounter." Much has happened since then; in fact, nearly every diagnostic test and therapeutic procedure performed on Mr. O'Connor during those first twelve hours has been developed since 1910. For clinically, diagnosis and therapy go hand in hand; increasing sophistication in either one demands sophistication in the other.

The proliferation of tests and techniques in this century is staggering. Consider the following list of tests performed on Mr. O'Connor, and the dates those tests were first described in clinically practical terms:

X ray: chest and abdomen (1905-1915)
White-cell count (about 1895)
Serum acetone (1928)
Amylase (1948)
Calcium (1931)
Phosphorus (1925)
SGOT (1955)
LDH (1956)
CPK (1961)
Aldolase (1949)
Lipase (1934)
CSF protein (1931)
CSF sugar (1932)
Blood sugar (1932)
Bilirubin (1937)
Serum albumin/globulin (1923-1938)
Electrolytes (1941-1946)
Electrocardiogram (about 1915)
Prothrombin time (1940)
Blood pH (1924-1957)
Blood gases (1957)
Protein-bound iodine (1948)
Alkaline phosphatase (1933)
Watson-Schwartz (1941)
Creatinine (1933)
Uric acid (1933)

If one were to graph these tests, and others commonly used, against the total time course of medical history, one would see a flat line for more than two thousand years, followed by a slight rise beginning about 1850, and then an ever sharper rise to the present time.

That is the meaning of technological innovation. It has struck medicine like a thunderbolt: far more advances have occurred in medicine in the last hundred years than occurred in the previous two thousand. There is no mystery why this should be so. Most research scientists in history are alive today; therefore most of the discoveries in history are being made today. But the consequences of this vast outpouring of information and technology have yet to be grasped. Major questions are raised in such widely diverse subjects as medical education and euthanasia.

What makes the case of Mr. O'Connor so interesting is the way it illustrates the vast web of technological advances which make diagnostic techniques and treatment today so radically different from what they were only thirty years ago.

PRESUMABLY, Mr. O'Connor had an infection. The treatment of infectious disease is considered one of the triumphs of modern medicine, crowned by the introduction of antibiotics. But as the bacteriologist Ren&eacute Dubos had pointed out, "The decrease in mortality caused by infection began nearly a century ago and has continued ever since at a fairly constant rate irrespective of the use of any specific therapy." He says, further, "These triumphs of modern chemotherapy have transformed the practice of medicine and are changing the very pattern of disease in the western world, but there is no reason to believe that they spell the conquest of microbial diseases."

In this light, consider Mr. O'Connor's antibiotic "cocktail," given shortly after admission. It was later the subject of some heated discussion when, during the first two or three days, he failed to improve. The use of antibiotics is more sophisticated now than it was twenty years ago, corresponding to a better appraisal of the benefits and limitations of the drugs. Generally speaking, the antibiotic cocktail, a mixture of drugs given before one has diagnosed the nature of the infection, is frowned upon.

The arguments against it are simple enough. For Mr. O'Connor, the mixture of antibiotics might not eliminate the primary site of infection, but it would certainly kill all free bacteria in the blood, thus making identification of the organisms impossible. Without identification, one cannot treat specifically, by matching the organism with the single most effective antibiotic. Further, the inability to identify the organism deprives doctors of an important clue to the location of the infection, since different organisms are more likely to infect different parts of the body.

The arguments in favor of the cocktail are equally simple: that Mr. O'Connor's fever was, in itself, dangerous and constituted a medical emergency. As they saw it, the first duty of the EW residents was to lower that fever by every possible means, even if this hampered further diagnostic efforts. As one resident said, "He could have died while we waited for the cultures to grow out."

It all comes back to Hippocrates: does one treat with a grave remedy, or a specific one? The MGH chose a grave remedy, a strong antibiotic cocktail. The residents did so with the full knowledge that it might impair further work.

Let us now see what happened to Mr. O'Connor.


Mr. O'Connor survived the night. The following morning his blood pressure was normal and his temperature was 99°, but he remained severely agitated and unresponsive. He was sedated with morphine, continued on intravenous fluids and electrolyte supplements. The oxygenation of his blood had been poor from the start, and he was continued on oxygen by face mask.

At eight in the morning the GU consult saw him and felt that he had peritonitis of the right abdomen, or infection of the saclike membrane which surrounds the abdominal contents. Evidence included tenderness and muscle spasm on the right side, and tenderness when his liver was tapped. Bowel sounds were decreased, suggestive of intra-abdominal infection. There was tenderness to rectal examination, also suggestive of such infection.

At nine, Dr. Minna examined the patient again and agreed that the tenderness was impressive, particularly after a heavy dose of morphine. An X-ray study of the gallbladder was planned. At eleven, he was seen by the surgeons, who agreed that gall bladder infection was possible, even though bilirubin and amylase tests were normal. They advised waiting on surgery, however.

At noon, the gastrointestinal consult reviewed the barium enema, which was normal. They concluded that "we remain in the dark regarding diagnosis but would agree that bacterial sepsis secondary to a right abdominal lesion is the best bet." They suggested, however, that perforated small bowel, duodenal lesion, pancreatitis, and a number of other possibilities remained, and advised an upper GI series of X rays.

At approximately the same time, the attending physician on the wards, Dr. Kurt Block, noted that Mr. O'Connor presented "a very puzzling problem," with some findings suggestive of right-upper abdomen pathology, but no clear indication of what it might be.

Later in the day the surgeons again saw Mr. O'Connor, but disagreed with earlier interpretations. They felt his abdomen had no peritoneal signs, and no localizing signs.

At eight in the evening, the neuromedical consult again evaluated Mr. O'Connor, and concluded that his condition still gave no hint of central nervous system disease. They felt that findings pointed to an abdominal problem.

That same evening, more abnormal results of tests came back from the labs. They had been taken the day of admission, and included an elevated uric acid of 17.1 and an elevated alkaline phosphatase of 37.6. The alkaline phosphatase was repeated, and was found to be still higher, at 61.0. Two other enzymes were also slightly high: the serum glutamic oxalocetic transaminase, or SGOT, was 123, and the lactic dehydrogenase, or LDH, was 540. Blood samples were immediately drawn for repeat determinations.

These two enzymes, SGOT and LDH, are measured as indexes of cell destruction. Cells normally contain them; if the cells die, they rupture and release their enzymes to the bloodstream. A rise in enzyme levels is thought to correspond moderately well with the degree of cellular damage, particularly when followed over several days. However, these enzymes are found in many kinds of cells, and thus an enzyme rise does not pinpoint precisely the area of destruction. For example, heart, skeletal muscle, brain, liver, and kidneys all contain SGOT; damage to any of them will produce an SGOT rise. In recent years, there has been a search for enzymes specific to certain tissues. Creatinine phosphokinase, or CPK, is usually considered more specific for heart damage.

Day 2

At 3:30 A.M., Michael Soper, a medical resident, got back the new set of enzyme values. Everything was further increased: SGOT was now 640, LDH 1250, and CPK very high, at 320. He wrote: "I've never seen a CPK this high and don't know where it is coming from. Doubt it is solely of cardiac origin. Electrocardiogram tonight is unchanged."

At 7 A.M., on morning rounds, Mr. O'Connor's abdomen was again without localizing signs pointing to disease on the right side. All cultures were back from the labs; all were negative. It was decided to continue only penicillin and chloramphenicol, and discontinue all other antibiotics.

Later in the morning the patient was seen by the infectious disease consult, who concluded that the agitation and unresponsiveness were almost certainly secondary to gastrointestinal disorders and metabolic problems. The elevated enzymes could be the consequence of insufficient oxygen and shock, present at admission. However, they noted that the elevated alkaline phosphatase and elevated uric acid were unexplained. They suggested the possibility, previously unconsidered, of staphylococcal food poisoning.

Since no information could be obtained directly from the patient, his wife was closely requestioned about symptoms of thyroid disease, or long-standing diarrhea or other GI problems. The paregoric which the patient had taken on the day of admission was brought into the hospital and checked; it was, indeed, paregoric.

During this period the patient was examined by Dr. Leaf, the chief of medicine, and Dr. Federman, the assistant chief, as well as by a large number of other physicians, in an informal brainstorming session. Every conceivable diagnosis, including mushroom poisoning and cholera, was considered at this time.

The patient's condition remained unchanged.

Day 3

Continued problems with oxygenating the patient's bloodstream produced a consultation by the respiratory unit, which advised drying the lungs as much as possible, nasotracheal suctioning, encouraging coughing, and close monitoring by arterial blood gases. The patient improved somewhat during the day, becoming less wild. That evening, for the first time, he responded to his name.

Day 4

The patient was more alert. He was seen again by the surgeons, who felt his abdomen was still soft, without any indications for surgery. His dose of Valium, to contain his agitation, was reduced.

Day 5

He was seen in the morning by the neurological consult, who felt that he was "still quite obtunded," confused, and disoriented. Nonetheless, his progress since admission was striking. He could answer questions. When asked where he was, he said, "The hospital," though he could not specify which one. When asked his name, he said, "John." He could state his age. He was taken off Valium entirely. His temperature continued to fluctuate in the range of 99° to 101°. Dr. Minna wrote: "He is better in all ways."

Day 6

Lab values, back from the day before, continued to climb. CPK had now gone to 2900, the highest in the history of the hospital. There was still no explanation for these enzyme changes. The patient continued to improve in responsiveness, though his mental function was far from satisfactory. In answer to questions, he said that one plus one was "one," and two plus two was "five."

Day 7

He was able to carry out verbal commands such as "squeeze my hand" and "open your eyes." However, for the most part he lay in bed with his eyes closed; he initiated little spontaneous activity, and never spoke except in reply to questions.

Day 8

His Foley catheter was removed. He was able to urinate in the normal manner. He was more active mentally, and remembered his last name.

Day 9

Blood cultures now revealed growth of a gramnegative bacillus, identified as bacteroides, probably of bowel origin. The patient was sufficiently improved that he could be questioned about toxins, drugs, mushrooms, work exposure, and possible ingestions of heavy metals; there was no evidence for any of these. He was seen again by the surgeons, who concluded that his abdomen was soft, with normal bowel sounds.

Day 10

He was seen by the neurological consults, who observed mild proximal muscle weakness and suggested study of the electrical activity of the muscles, by electromyography. He was also noted to have mushy swelling of his extremities.

Day 11

The patient's mental condition continued to improve. A repeat kidney X ray was read as normal.

Day 12

There was continued improvement. Enzymes had dropped to near-normal levels. He had no temperature.

Day 13

Bariuim enema was repeated, in the search for diverticulitis or other source of infection. None was seen.

Day 14

Electromyography was normal. It was decided to discontinue his chloramphenicol antibiotic and see if he remained without fever.

Day 15

Chloramphenicol was stopped. The patient did well, taking liquids by mouth.

Day 16

On his second day off antibiotics, his temperature fluctuated in the range of 101° to 100° F.

Day 17

The patient had an upper gastrointestinal series of X rays, which were normal. On his third day off antibiotics, the temperature began to spike again, to 102°. Tenderness and guarding of the right upper abdomen reappeared.

Day 18

The surgeons concluded that the patient had cholecystitis, or infection of the gallbladder, which had probably begun initially as cholangitis, infection of the bile system. They also wondered, however, whether he might have a liver abscess. The patient was restarted on antibiotics.

Day 19

Mr. O'Connor was transferred from the medical service to the surgical service as a preoperative candidate for exploratory abdominal surgery. His mental state continued to clear slowly.

Day 20

The neurological consult saw him and agreed that his mental status was improving. The surgeons, however, found that his abdominal tenderness had disappeared with the antibiotics. X rays of the gallbladder showed no filling of the bladder sac, but the films were of poor quality. Radioactive scans of the liver and spleen were negative.

Day 21

Scheduled operation was canceled in order to allow time for further preoperative studies. A repeated gallbladder X ray definitely showed no filling, although this time the films were of good quality. A celiac angiogram was scheduled.

Day 22 and Day 23

The weekend. Specialized procedures such as celiac angiography could not be done, and further work on the patient was postponed until Monday.

Day 24

Celiac angiography was performed. Under 1ocal anesthetic, a thin, flexible catheter was passed up the femoral artery in the leg, to the aorta, and finally to the celiac axis, a network of arteries coming off the aorta to supply blood to all the upper abdominal organs. A dye opaque to X rays was injected, and the vessels studied. No space-occupying lesion (tumor) was found, and the vessels were normal in appearance. The patient made a good recovery from the procedure.

Day 25

The abdomen was soft and nontender. The patient felt well. He was still on chloramphenicol antibiotic. Enzymes were, by now, fully normal.

Day 26

The patient had no fever and felt well. The surgical staff decided to stop antibiotics, and see if fever and symptoms recurred.

Day 27

He was taken off antibiotics. Temperature and white-cell count remained normal. The patient himself was in good spirits.

Day 28

There was no demonstrable worsening of the patient's condition on his second day off antibiotics. His wife expressed the opinion that his mental state was entirely normal once more.

Day 29

His condition remained stable on the third day. He said he felt well. He had no fever and no elevation in white count.

Day 30

His condition was still good; his abdomen was soft without tenderness. He said he felt well. It was now clear that he was not an operative candidate. Plans were made for his discharge the next day.

Day 31

Discharged. His discharge diagnosis was fever of unknown origin with bacteroides septicemia. The opinion of the house staff remained that this patient had probably had bile-collecting-system infection.

Five days after discharge, he was seen in the surgical clinic by Dr. Monchik, who scheduled another set of gallbladder X rays for the future, and noted that if the patient had further trouble with infection, it would probably be necessary to remove the gallbladder. For the moment, however the patient was fully well.

"To do nothing," said Hippocrates, "is some times a good remedy."

On the surface, Mr. O'Connor's hospital course seems proof of this ancient dictum of "watchful waiting. But this is not really so: had Mr. O'Connor received no treatment, he would almost certainly have died within twenty-four hours. He received vital symptomatic therapy (lowering his fever) as well as acute support of vital functions (assisted respiration). He was closely monitored by teams of physicians who were prepared to intercede on his behalf, supplying more assistance should his body require it.

He also received a vigorous diagnostic work-up, which did not produce as much information as one might like. His therapy was successful, but no physician at the hospital could claim, at discharge, that they really knew what was going on in his case. A diagnosis of cholangitis and cholecystitis was likely, but never demonstrated.

His hospital bill for a month of care was $6172.55 This is just a few dollars less than Mr. O'Connor's annual salary. But he did not have to worry about it; unlike that of most patients with some form of health insurance, Mr. O'Connor's coverage was essentially complete. His personal bill amounted to $357.00.

In this, as in many other things, Mr. O'Connor was a very lucky man.

THE single most important problem facing modern hospitals is cost. This cost can be analyzed in a variety of ways, most of them confusing and unhelpful. But the following points are clear:

First, the cost of hospitalization has skyrocketed. The average MGH patient today pays per hour what the average patient paid per day in 1905. Even as recently as 1940, a private patient could have his room for $10.25 per day; by 1964, it cost $50.10 per day; by 1969, $72.00 to $110.00 per day. This staggering increase is continuing at the rate of 6 percent to 8 percent per year. Each year for the past three, the MGH has had to raise its charges. Nor is the teaching hospital unique in its financial squeeze. All American hospitals are raising their charges at this same rate.

Second, hospitalization cost has increased much more rapidly than other goods and services in the economy. Medical care is the fastest-rising item in the consumer price index in recent years, and per day hospital cost accounts for the largest proportion of this increase. Physicians' fees have also been rising faster than other items in the consumer price Index. However, hospital costs have nearly doubled in the past decade, while physicians' fees have increased 30 percent.

Third, the individual contemplating hospitalization no longer worries much, in a direct way, about cost. Third-party payment has led to public apathy about hospital costs, and this is unwise, if for no other reason than the fact that most people have only one fourth to one third of their costs paid by insurance, a fact they discover late in the game.

Fourth, the often overlapping coverage of health insurance permits some patients to make money from their hospitalization, while welfare reimbursements are always less than the true costs of care. In this situation, the hospital makes ends meet by overcharging private patients and their insurance companies to cover the welfare deficit-in the case of the MGH, roughly $10 a day overcharge.

Fifth, no single hospital stands alone in its financing problems, but rather is influenced by the activity or decline of other hospitals in the area. The decay of the Boston City Hospital, and its reduction in size to nearly half its earlier patient capacity, have created great pressure on other Boston hospitals to take up the slack, by accepting precisely those patients on whom the hospital loses money, namely, patients covered by welfare. The decline of Boston's municipal, tax-supported hospital is similar to the decline of other such institutions in other American cities. In each case, the reasons behind the decline are political and financial, but the consequences are always the same -- to pass on costs to insured patients and make them augment insufficient tax funding for welfare. In the long run, of course, it all works out to the same thing: one can pay the money either in taxes or in higher health insurance premiums. But in such a situation, it is probably more efficient to choose one or the other -- and the trend is toward universal health insurance in this country, unmistakably. Dr. John Knowles, director of the MGH, notes that Americans are required by law to arrange insurance for their cars; why should they not also be required to arrange health insurance for themselves?

Sixth, lest private health insurance seem a financial panacea, one should note that private companies are often irrational in their payment procedures. For example, for many years one could not collect for certain treatments, such as the setting of fractures, unless one were admitted to the hospital, at least overnight. Thus a person who might easily receive therapy in the emergency ward and be sent home had to be admitted in order to receive insurance coverage. This unnecessary admission raised the total cost of health care, and ultimately such increases are passed on to the consumer in the form of higher premiums. Some of these peculiar payment procedures have been changed, but not all.

Seventh, the American medical system in its full spectrum, from the private specialist's office to the municipal hospital wards, has never been able to structure the kind of competitive situation which encourages and rewards economies. Nor has American medicine tried. The American physician has been grossly irresponsible in nearly all matters relating to the cost of medical care. One can trace this irresponsibility quite directly to the American Medical Association.

FOR the past forty years, the American Medical Association has worked to the detriment of the patient in nearly every way imaginable; it is a peculiarity of this organization that it has also worked to the detriment of physicians as well.

Dr. James Howard Means has said: "Its ideology is very like that of the big labor unions . . . it has now set up a continuing political action committee quite like those of the fighting labor unions. Every attempt that has been made by liberally minded groups to improve medical care and make it more accessible . . . the AMA has attacked with ever increasing truculence.... They forget perhaps that medicine is for the people, not for the doctors. They need some enlightenment on this point."

Their truculence has been expensive. In terms of the modern-day cost of medical care, we may cite the following points. Beginning in 1930, the AMA opposed voluntary health insurance, such as Blue Cross. In 1932, it opposed prepaid group-practice clinics. In 1933, it began a successful campaign to block the construction of new medical schools, and limit enrollment in those already in existence. We now have a shortage of doctors. More recently, the AMA spent millions -- probably no one knows exactly how many millions -- to fight Medicare, a program which resulted in health benefits to 10 percent of the population and vastly increased income to physicians. (Indeed, a good gauge of the AMA's shortsightedness can be gained by imagining the outcry from private doctors should anyone now try to repeal Medicare.) Further, the AMA has failed to take any strong stand on prescription pharmaceutical prices in this country, which nearly every objective observer regards as grossly inflated. And more insidiously, the AMA has permitted what may politely be called blind spots in health care. The Journal of the American Medical Association refused to print a government study of combination-antibiotic drugs which concluded that many of these expensive medications are either worthless or dangerous; the AMA has still failed to condemn cigarette smoking despite overwhelming evidence that this habit, though profitable to certain industrial groups, is directly responsible for much disease, suffering, and medical expense in this country.

One can only conclude that the American Medical Association has not considered the interests of patients. On the basis of its record, it is opposed to both better and cheaper medical care. Its only commitment is to the doctor's bank account, and even then, it makes astonishing errors in judgment.

In 1967, in his inaugural address, Milford O. Rouse, the incoming president of the AMA, deplored the growing sentiment in this country that medical care was a right, not a privilege. His opinion was not well received by an angry public, and later presidents have been more circumspect in voicing their views. Nonetheless, it is customary for AMA presidents to travel about, speaking to groups of doctors, applauding what they call "the phenomenal growth of the health industry."

That growth cannot be questioned. Personal consumption expenditures for medical care rose from $7.5 billion in 1948 to more than $27 billion in 1965, and more than $50 billion in 1968. By 1975, it is expected to reach at least $100 billion. This is the sort of news to make a Wall Street broker squeal with delight. But medicine is a service, not an industry, and one really ought to look at it as a service.

In fact, the United States spends more of its gross national product (6.2 percent) on medical care than any other country in the world; it spends a larger absolute sum than any other country in the world. Yet on most objective standards of health -- infant mortality, life expectancy, and so on -- it is far from the leader.

Other countries are doing better, and most of them have some form of socialized medicine. The United States is extraordinarily backward in this respect. However, many American observers have looked at European socialized systems and have come away shaking their heads; and there is a widespread doubt whether any European system can be adapted to this country. Very likely, America will have to work out its own system. The combination of group insurance with a group-practice system seems a feasible, economical, and practical, method, acceptable both to doctors and patients.

Without question, the notion of the doctor as legitimate fee-for-service entrepreneur, making his fortune from the misfortunes of his patients, is old fashioned, distasteful, and doomed. It is only question of time.

ULTIMATELY, however, it is not useful to lay blame, whether on physicians, health insurance administrators, politicians, or an apathetic public. For they all seem to share a common blindness, a total failure to understand why hospital costs are rising.

In 1967, the average cost of a hospital room in America increased 15 percent. The per-day room charge is the largest single item in the hospital bill. In 1969, the cost of a semiprivate room at the MGH was $70. Breaking this down, we find:

Utilities, housekeeping, maintenance, plus business offices ("hotel expense") $6.96
Food and special diets $5.82
Nursing $18.42
Labs, records, house staff, X ray, and pharmacy $28.80
overcharge (to cover welfare debts) $10.00
Total $70.00

Now this breakdown contradicts one of the oldest complaints about hospitals, as quoted in a national magazine: "My work puts me in contact with hotels and hotel management and I know that a good hotel can give you a beautiful room for $30 a day, with three meals, and make a profit and pay taxes. And yet any hospital, which doesn't pay any taxes, operates in the red for $65 a day. I say it must be poor administration." If the analogy were true, the conclusion would be correct. But the hospital is not a hotel -- and in any case, its "hotel" costs are quite reasonable at $6.96 a day; this is approximately half the cost of a decent motel room in Boston. The charge of $5.82 for food, or approximately $1.70 a meal, is equally reasonable, especially when one considers that as a restaurant the hospital must provide an extraordinary range of services, including some eighty special diets.

The true hospital costs -- the expenses incurred in a hospital but not in a hotel -- are, on the other hand, very high. They account for 90 percent of the total per-day room charge. And the question, really, is whether these charges are reducible. No sensible businessman would bother to try to get his hotel costs below seven dollars a day; if there is to be a decrease in costs, it must come from the nonhotel charges.

These in turn largely reflect the increased technological capacity of the hospital. Mr. O'Connor's example is a case in point: most of the tests performed on him were not available in 1925, when he could have had his room for one twenty-fifth of what it cost him today. The maintenance of this new technological capability costs money; and to a large extent, in medicine as in education, law enforcement, sanitation, and a variety of other services you get what you pay for. If you are going to enter a high-quality acute-care facility which has six employees (most of them nonphysicians) for every patient, and if you are going to pay these employees a decent wage, then your care will be expensive. (This is sometimes easier to see if it is taken out of the hospital setting. If a man had to hire six secretaries for an eight-hour day, at $2.50 an hour, it would cost him $144 a day. If a man had to hire two gardeners at $4 an hour, for a single eight-hour day, it would still cost him $64 a day.) If you are going to purchase technological hardware, maintain it, and keep it up to date, this costs money. If you are going to keep the hospital in continuous operation 24 hours a day, 365 days a year, this costs money.

All this becomes clear in the instance of a simple procedure such as a chest X ray. A private radiologist in his office will perform this for you at one half or one third of what the hospital charges. His charge largely reflects the fact that his unit can operate on an eight-hour day and a forty-hour week; other costs, such as equipment and supplies, are the same. In medicine today, as in every other industry, people are more expensive than anything else. Sixty-three percent of the hospital budget now goes to the salaries and benefits of employees. And much of the rise in hospital costs is directly attributable to the demand of these employees that they not be forced personally to subsidize the health business by accepting wages incommensurate with similar jobs in other industries. Their demands are justified; most of them are still underpaid. Their salaries will increase in the future.

One cannot, however, fairly claim that hospitals are superbly efficient. Especially in a teaching hospital, attention to the medical, nonhotel costs is less central than one would like to see. One can argue endlessly about whether too many tests are ordered. But certainly, when physicians who order these tests don't know what patients are charged for them, eyebrows must go up. Doctors tend to operate on a "spare-no-expense" philosophy, which will, eventually, need to be tempered.

But more fundamentally, the present cost structure of the hospital seems to lead to a rather old-fashioned conclusion: no one should go there unless he absolutely has to. If a diagnostic procedure can be done on an ambulatory, outpatient basis, it should be; if a series of tests and X rays can be done outside the hospital, they should be. No one should be admitted unless his care absolutely depends upon being inside the hospital; no one should be admitted unless he requires the hour-to-hour facilities of the house staff, the nursing staff, and the laboratories.

For decades, admission to the hospital was necessary because there was no other facility available. For a large segment of the population, care was either given in the hospital or not at all; and the hospital's clinic system was a poor compromise, with hordes of patients being brought in to wait hours -- sometimes literally days -- to have relatively brief tests performed.

There is hope that satellite clinics will help solve the problem; one study of a satellite clinic in Boston reported that there were fewer hospital admissions as a result of the clinic's work. In any case, alternative facilities must be found, because it is unlikely that hospital costs will ever go down. The best anyone can hope to do is stabilize them somewhere in the neighborhood of $100 a day. This makes the hospital an expensive place; but it has its uses, and indeed will be an economically tolerable place, if it is used appropriately.