5
The Health Care Delivery System

For Americans to enjoy optimal health—as individuals and as a population—they must have the benefit of high-quality health care services that are effectively coordinated within a strong public health system. In considering the role of the health care sector in assuring the nation’s health, the committee took as its starting point one of the recommendations of the Institute of Medicine (IOM) report Crossing the Quality Chasm (2001b: 6): “All health care organizations, professional groups, and private and public purchasers should adopt as their explicit purpose to continually reduce the burden of illness, injury, and disability, and to improve the health and functioning of the people of the United States.”

This chapter addresses the issues of access, managing chronic disease, neglected health care services (i.e., clinical preventive services, oral, and mental health care and substance abuse services), and the capacity of the health care delivery system to better serve the population in terms of cultural competence, quality, the workforce, financing, information technology, and emergency preparedness. In addition, the chapter discusses the responsibility of the health care system to recognize and play its appropriate role within the intersectoral public health system, particularly as it collaborates with the governmental public health agencies.

The health care sector in the United States consists of an array of clinicians, hospitals and other health care facilities, insurance plans, and purchasers of health care services, all operating in various configurations of groups, networks, and independent practices. Some are based in the public sector; others operate in the private sector as either for-profit or not-for-



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The Future of the Public’s Health in the 21st Century 5 The Health Care Delivery System For Americans to enjoy optimal health—as individuals and as a population—they must have the benefit of high-quality health care services that are effectively coordinated within a strong public health system. In considering the role of the health care sector in assuring the nation’s health, the committee took as its starting point one of the recommendations of the Institute of Medicine (IOM) report Crossing the Quality Chasm (2001b: 6): “All health care organizations, professional groups, and private and public purchasers should adopt as their explicit purpose to continually reduce the burden of illness, injury, and disability, and to improve the health and functioning of the people of the United States.” This chapter addresses the issues of access, managing chronic disease, neglected health care services (i.e., clinical preventive services, oral, and mental health care and substance abuse services), and the capacity of the health care delivery system to better serve the population in terms of cultural competence, quality, the workforce, financing, information technology, and emergency preparedness. In addition, the chapter discusses the responsibility of the health care system to recognize and play its appropriate role within the intersectoral public health system, particularly as it collaborates with the governmental public health agencies. The health care sector in the United States consists of an array of clinicians, hospitals and other health care facilities, insurance plans, and purchasers of health care services, all operating in various configurations of groups, networks, and independent practices. Some are based in the public sector; others operate in the private sector as either for-profit or not-for-

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The Future of the Public’s Health in the 21st Century profit entities. The health care sector also includes regulators, some voluntary and others governmental. Although these various individuals and organizations are generally referred to collectively as “the health care delivery system,” the phrase suggests an order, integration, and accountability that do not exist. Communication, collaboration, or systems planning among these various entities is limited and is almost incidental to their operations. For convenience, however, the committee uses the common terminology of health care delivery system. As described in Crossing the Quality Chasm (IOM, 2001b) and other literature, this health care system is faced with serious quality and cost challenges. To support the system, the United States spends more per capita on health care than any other country ($4,637 in 2000) (Reinhardt et al., 2002). In the aggregate, these per capita expenditures account for 13.2 percent of the U.S. gross domestic product, about $1.3 trillion (Levit et al., 2002). As the committee observed in Chapter 1, American medicine and the basic and clinical research that inform its practice are generally acknowledged as the best in the world. Yet the nation’s substantial health-related spending has not produced superlative health outcomes for its people. Fundamental flaws in the systems that finance, organize, and deliver health care work to undermine the organizational structure necessary to ensure the effective translation of scientific discoveries into routine patient care, and many parts of the health care delivery system are economically vulnerable. Insurance plans and providers scramble to adapt and survive in a rapidly evolving and highly competitive market; and the variations among health insurance plans—whether public or private—in eligibility, benefits, cost sharing, plan restrictions, reimbursement policies, and other attributes create confusion, inequity, and excessive administrative burdens for both providers of care and consumers. Because of its history, structure, and particularly the highly competitive market in health services that has evolved since the collapse of health care reform efforts in the early 1990s, the health care delivery system often does not interact effectively with other components of the public health system described in this report, in particular, the governmental public health agencies. Health care’s structure and incentives are technology and procedure driven and do not support time for the inquiry and reflection, communication, and external relationship building typically needed for effective disease prevention and health promotion. State health departments often have legal authority to regulate the entry of providers and purchasers of health care into the market and to set insurance reimbursement rates for public and, less often, private providers and purchasers. They may control the ability of providers to acquire desired technology and perform complex, costly procedures that are important to the hospital but increase demands on state revenues. Finally, virtually all states have the legal responsibility to

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The Future of the Public’s Health in the 21st Century monitor the quality of health services provided in the public and private sectors. Many health care providers argue that such regulation adds to their costs, and high-profile problems can create additional tensions that impede collaboration between the state public health agency and the health care delivery system. Furthermore, when the delivery of health care through the private sector falters, the responsibility for providing some level of basic health care services to the poor and other special populations falls to governmental public health agencies as one of their essential public health services, as discussed in Chapter 1. In many jurisdictions, this default is already occurring, consuming resources and impairing the ability of governmental public health agencies to perform other essential tasks. Although this committee was not constituted to investigate or make recommendations regarding the serious economic and structural problems confronting the health care system in the United States, it concluded that it must examine certain issues having serious implications for the public health system’s effectiveness in promoting the nation’s health. Drawing heavily on the work of other IOM committees, this chapter examines the influence that health insurance exerts on access to health care and on the range of care available, as well as the shortcomings in the quality of services provided, some of the constraints on the capacity of the health care system to provide high-quality care, and the need for better collaboration within the public health system, especially among governmental public health agencies and the organizations in the personal health care delivery system. ACCESS TO HEALTH CARE Health care is not the only, or even the strongest, determinant of health, but it is very important. For most Americans, having health insurance— under a private plan or through a publicly financed program—is a threshold requirement for routine access to health care. “Health insurance coverage is associated with better health outcomes for adults. It is also associated with having a regular source of care and with greater and more appropriate use of health services. These factors, in turn, improve the likelihood of disease screening and early detection, the management of chronic illness, and the effective treatment of acute conditions,” IOM notes in a recent report (IOM, 2002a: 6). Private insurance is predominantly purchased through employment-based groups and to a lesser extent through individual policies (Mills, 2002). Publicly funded insurance is provided primarily through seven government programs (see Table 5–1). Medicare provides coverage to 13.5 percent of the population, whereas Medicaid covers 11.2 percent of the population (Mills, 2002). Additionally, public funding supports directly

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The Future of the Public’s Health in the 21st Century TABLE 5–1 Government Health Programs Program Year Enrollment Expenditures Medicare 2001 40 million aged and disabled individualsa $242.4 billionh Medicaid 2002 47 million low-income individualsb $247 billion (federal, $147 billion; state, $100 billion)b SCHIP 2001 4.6 million low-income childrenc $4.6 billionc VHA 2001 4.3 million veteransd $21 billiond IHS 2001 1.5 million American Indians and Alaska Nativese $3.2 billione DOD TRICARE 2001 8.4 million active-duty members of the militaryf $14.2 billionf FEHBP 2000 9 million federal employees, dependents, and retireesg $20 billiong NOTE: VHA = Veterans Health Administration; IHS = Indian Health Service; DOD = Department of Defense; FEHBP = Federal Employees Health Benefits Program. SOURCES: aBoards of Trustees (2002). bSmith et al. (2002); CMS (2002a); CMS (2002c). cCMS (2002a); CMS (2002a); CMS (2002c). dGAO (2001b). eIHS (2002a, 2002b). fDepartment of Defense (2002). gOPM (2001); Office of the President (2001). hDHHS (2002). delivered health care (through community health centers and other health centers qualified for Medicaid reimbursement) accessed by 11 percent of the nation’s uninsured, who constitute 41 percent of patients at such health centers (Markus et al., 2002). Because the largest public programs are directed to the aged, disabled, and low-income populations, they cover a disproportionate share of the chronically ill and disabled. However, they are also enormously important for children. In early 2001, Medicaid and the State Children’s Health Insurance Program (SCHIP) provided health care coverage to 23.1 percent of the children in the United States, and this figure had risen to 27.7 percent according to data from the first-quarter estimates in the National Health Interview Survey (NCHS, 2002). Being uninsured, although not the only barrier to obtaining health care, is by all indications the most significant one. The fact that more than 41 million people—more than 80 percent of whom are members of working families—are uninsured is the strongest possible indictment of the nation’s health care delivery system. Those without health insurance or without insurance for particular types of services face serious, sometimes insurmountable barriers to necessary and appropriate care.

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The Future of the Public’s Health in the 21st Century Adults without health insurance are far more likely to go without health care that they believe they need than are adults with health insurance of any kind (Lurie et al., 1984, 1986; Berk and Schur, 1998; Burstin et al., 1998; Baker et al., 2000; Kasper et al., 2000; Schoen and DesRoches, 2000). Children without health insurance may be compromised in ways that will diminish their health and productivity throughout their lives. When individuals cannot access mainstream health care services, they often seek care from the so-called safety-net providers. These providers include institutions and professionals that by mandate or mission deliver a large amount of care to uninsured and other vulnerable populations. People turn to safety-net providers for a variety of reasons: some because they lack health insurance and others because there are no other providers in the area where they live or because language and cultural differences make them uncomfortable with mainstream care. Safety-net providers are also more likely to offer outreach and enabling services (e.g., transportation and child care) to help overcome barriers that may not be directly related to the health care system itself. In this section, the committee reviews concerns about the barriers to health care that are raised by the lack of health insurance and by threats to the nation’s safety-net providers. The Uninsured and the Underinsured The persistently large proportion of the American population that is uninsured—about one in five working-age adults and one in seven children— is the most visible and troubling sign of the nation’s failure to assure access to health care. Yet the public and many elected officials seem almost willfully ignorant of the magnitude, persistence, and implications of this problem. Surveys conducted over the past two decades show a consistent underestimation of the number of uninsured and of trends in insurance coverage over time (Blendon et al., 2001). The facts about uninsurance in America are sobering (see Box 5–1). By almost any metric, uninsured adults suffer worse health status and live shorter lives than insured adults (IOM, 2002a). Because insurance status affects access to secure and continuous care, it also affects health, leading to an estimated 18,000 premature deaths annually (IOM, 2002a). Having a regular source of care improves chances of receiving personal preventive care and screening services and improves the management of chronic disease. When risk factors, such as high blood pressure, can be identified and treated, the chances of developing conditions such as heart disease can be reduced. Similarly, if diseases can be detected and treated when they are still in their early stages, subsequent rates of morbidity and mortality can often be reduced. Without insurance, the chances of early detection and treatment of risk factors or disease are low.

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The Future of the Public’s Health in the 21st Century BOX 5–1 Findings from Coverage Matters In its report Coverage Matters, the IOM Committee on the Consequences of Uninsurance (IOM, 2001a) found the following: Forty-two million people in the United States lacked health insurance coverage in 1999 (Mills, 2000). This number represented about 15 percent of the total population of 274 million persons at that time and 17 percent of the population younger than 65 years of age; 10 million of the uninsured are children under the age of 18 (about 14 percent of all children), and about 32 million are adults between the ages of 18 and 65 (about 19 percent of all adults in this age group). Nearly 3 out of every 10 Americans, more than 70 million people, lacked health insurance for at least a month over a 36-month period. These numbers are greater than the combined populations of Texas, California, and Connecticut. More than 80 percent of uninsured children and adults under the age of 65 lived in working families. Contrary to popular belief, recent immigrants accounted for a relatively small proportion of the uninsured (less than one in five). Insurance status is a powerful determinant of access to care: people without insurance generally have reduced access. Research consistently finds that persons without insurance are less likely to have any physician visits within a year, have fewer visits annually, and are less likely to have a regular source of care. Children without insurance are three times more likely than children with Medicaid coverage to have no regular source of care. The uninsured were less likely to receive health care services, even for serious conditions. Research consistently finds that persons without insurance are less likely to have any physician visits within a year, have fewer visits annually, and are less likely to have a regular source of care (15 percent of uninsured children do not have a regular provider, whereas just 5 percent of children with Medicaid do not have a regular provider), and uninsured adults are more than three times as likely to lack a regular source of care. However, even when the uninsured receive care, they fare less well than the insured. The IOM Committee on the Consequences of Uninsurance found that “[u]ninsured adults receive health services that are less adequate and appropriate than those received by patients who have either public or private health insurance, and they have poorer clinical outcomes and poorer overall health than do adults with private health insurance” (IOM, 2002a: 87). For example, Hadley and colleagues (1991) found that uninsured adult hospital inpatients had a significantly higher risk of dying in the hospital than their privately insured counterparts. Emergency and trauma care were also found to vary for insured and uninsured patients. Uninsured persons with traumatic injuries were less likely to be admitted to the hospital,

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The Future of the Public’s Health in the 21st Century received fewer services when admitted, and were more likely to die than insured trauma victims (Hadley et al., 1991). For children, too, being uninsured tends to reduce access to health care and is associated with poorer health. The 1998 IOM report America’s Children: Health Insurance and Access to Care found that uninsured children “are more likely to be sick as newborns, less likely to be immunized as preschoolers, less likely to receive medical treatment when they are injured, and less likely to receive treatment for illness such as acute or recurrent ear infections, asthma and tooth decay” (IOM, 1998:3). That report emphasized that untreated health problems can affect children’s physical and emotional growth, development, and overall health and well-being. Untreated ear infections, for example, can have permanent consequences of hearing loss or deafness. Even when insured, limitations on coverage may still impede people’s access to care. Many people who are counted as insured have very limited benefits and are exposed to high out-of-pocket expenses or service restrictions. Three areas in which benefits are frequently circumscribed under both public and private insurance plans are preventive services, behavioral health care (treatment of mental illness and addictive disorders), and oral health care. When offered, coverage for these services often carries limits that are unrelated to treatment needs and are stricter than those for other types of care (King, 2000). Cost-sharing requirements for these services may also be higher than those for other commonly covered services. (Additional discussion of these and other “neglected” forms of care appears later in this chapter.) Access to care for the insured can also be affected by requirements for cost sharing and copayments. Cost sharing is an effective means to reduce the use of health care for trivial or self-limited conditions. Numerous studies, starting with the RAND Health Insurance Experiment, show that copayments also reduce the use of preventive and primary care services by the poor, although not by higher-income groups (Solanki et al., 2000). The same effects have been shown for the use of behavioral health care services (Wells et al., 2000). As a result of the nation’s increased awareness of bioterrorist threats, there are concerns about the implications of copayments and other financial barriers to health care. Cost sharing may discourage early care seeking, impeding infectious disease surveillance, delaying timely diagnosis and treatment, and posing a threat to the health of the public. The committee encourages health care policy makers in the public and private sectors to reexamine these issues in light of the concerns about bioterrorism. This committee was not constituted to make specific recommendations about health insurance. The issues are complex, and the failures of health

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The Future of the Public’s Health in the 21st Century care reform efforts over the past 30 years testify to the difficulty of crafting a solution. However, the committee finds that both the scale of the problem and the strong evidence of adverse health effects from being uninsured or underinsured make a compelling case that the health of the American people as a whole is compromised by the absence of insurance coverage for so many. Assuring the health of the population in the twenty-first century requires finding a means to guarantee insurance coverage for every person living in this country. Adequate population health cannot be achieved without making comprehensive and affordable health care available to every person residing in the United States. It is the responsibility of the federal government to lead a national effort to examine the options available to achieve stable health care coverage of individuals and families and to assure the implementation of plans to achieve that result. Safety-Net Providers Absent the availability of health insurance, the role of the safety-net provider is critically important. Increasing their numbers and assuring their viability can, to some degree, improve the availability of care. The IOM Committee on the Changing Market, Managed Care and the Future Viability of Safety Net Providers defined safety-net providers as “[t]hose providers that organize and deliver a significant level of health care and other health-related services to uninsured, Medicaid, and other vulnerable patients” (IOM, 2000a: 21). That committee further identified core safety-net providers as having two distinguishing characteristics: “(1) by legal mandate or explicitly adopted mission they maintain an ‘open door,’ offering access to services to patients regardless of their ability to pay; and (2) a substantial share of their patient mix is uninsured, Medicaid, and other vulnerable patients” (IOM, 2000a: 3). The organization and delivery of safety-net services vary widely from state to state and community to community (Baxter and Mechanic, 1997). The safety net consists of public hospital systems; academic health centers; community health centers or clinics funded by federal, state, and local governmental public health agencies (see Chapter 3); and local health departments themselves (although systematic data on the extent of health department services are lacking) (IOM, 2000a). A recent study of changes in the capacities and roles of local health departments as safety-net providers found, however, that more than a quarter of the health departments surveyed were the sole safety-net providers in their jurisdictions and that this was more likely to be the case in smaller jurisdictions (Keane et al., 2001). Safety-net service providers, which include local and state governmen

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The Future of the Public’s Health in the 21st Century tal agencies, contribute to the public health system in multiple ways. Services provided by state and local governments often include mental health hospitals and outpatient clinics, substance abuse treatment programs, maternal and child health services, and clinics for the homeless. In addition, an estimated 1,300 public hospitals nationwide (Legnini et al., 1999) provide free care to those without insurance or resources to pay. A survey of 69 hospitals belonging to the National Association of Public Hospitals indicated that in 1997, public hospitals provided more than 23 percent of the nation’s uncompensated hospital care (measured as the sum of bad debt and charity care) (IOM, 2000a). These demands can overwhelm the traditional population-oriented mission of the governmental public health agencies. Furthermore, changes in the funding streams or reimbursement policies for any of these programs or increases in demand for free or subsidized care that inevitably occur in periods of economic downturn create crises for safety-net providers, including those operated by state and local governments (see the section Collaboration with Governmental Public Health Agencies later in this chapter for additional discussion). The IOM committee that produced the report America’s Health Care Safety Net: Intact but Endangered (IOM, 2000a: 205–206) had the following findings: Despite today’s robust economy, safety net providers—especially core safety net providers—are being buffeted by the cumulative and concurrent effects of major health policy and market changes. The convergence and potentially adverse consequences of these new and powerful dynamics lead the committee to be highly concerned about the future viability of the safety net. Although safety net providers have proven to be both resilient and resourceful, the committee believes that many providers may be unable to survive the current environment. Taken alone, the growth in Medicaid managed care enrollment; the retrenchment or elimination of key direct and indirect subsidies that providers have relied upon to help finance uncompensated care; and the continued growth in the number of uninsured people would make it difficult for many safety net providers to survive. Taken together, these trends are beginning to place unparalleled strain on the health care safety net in many parts of the country. . . . The committee believes that the effects of these combined forces and dynamics demand the immediate attention of public policy officials. (IOM, 2000a: 206) The committee fully endorses the recommendations from America’s Health Care Safety Net: Intact but Endangered (IOM, 2000a), aimed at ensuring the continued viability of the health care safety net (see Box 5–2).

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The Future of the Public’s Health in the 21st Century BOX 5–2 Recommendations Concerning Safety-Net Services Federal and state policy makers should explicitly take into account and address the full impact (both intended and unintended) of changes in Medicaid policies on the viability of safety-net providers and the populations they serve. All federal programs and policies targeted to support the safety net and the populations it serves should be reviewed for their effectiveness in meeting the needs of the uninsured. Concerted efforts should be directed to improving this nation’s capacity and ability to monitor the changing structure, capacity, and financial stability of the safety net to meet the health care needs of the uninsured and other vulnerable populations. Given the growing number of uninsured people, the adverse effects of Medicaid managed care on safety-net provider revenues, and the absence of concerted public policies directed at increasing the rate of insurance coverage, the committee believes that a new targeted federal initiative should be established to help support core safety-net providers that care for a disproportionate number of uninsured and other vulnerable people. SOURCE: IOM (2000a). NEGLECTED CARE The committee is concerned that the specific types of care that are important for population health—clinical preventive services, mental health care, treatment for substance abuse, and oral health care—are less available because of the current organization and financing of health care services. Many forms of publicly or privately purchased health insurance provide limited coverage, and sometimes no coverage, for these services. Clinical Preventive Services The evidence that insurance makes a difference in health outcomes is well documented for preventive, screening, and chronic disease care (IOM, 2002b). Clinical preventive services are the “medical procedures, tests or counseling that health professionals deliver in a clinical setting to prevent disease and promote health, as opposed to interventions that respond to patient symptoms or complaints” (Partnership for Prevention, 1999:3). Such services include immunizations and screening tests, as well as counseling aimed at changing the personal health behaviors of patients long before

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The Future of the Public’s Health in the 21st Century clinical disease develops. The importance of counseling and behavioral interventions is evident, given the influence on health of factors such as tobacco, alcohol, and illicit drug use; unsafe sexual behavior; and lack of exercise and poor diets. These risk behaviors are estimated to account for more than half of all premature deaths; smoking alone contributes to one out of five deaths (McGinnis and Foege, 1993). Coverage of clinical preventive services has increased steadily over the past decade. In 1988, about three-quarters of adults with employment-based health insurance had a benefit package that included adult physical examinations. Two years later, the proportion had risen to 90 percent (Rice et al., 1998; Kaiser Family Foundation and Health Research and Educational Trust, 2000). The type of health plan is the most important predictor of coverage (RWJF, 2001). The use of financial incentives and data-driven performance measurement strategies to improve physicians’ delivery of services such as immunizations (IOM, 2002c) may account for the fact that managed care plans tend to offer the most comprehensive coverage of clinical preventive services and traditional indemnity plans tend to offer the least comprehensive coverage. Although the trend toward inclusion of clinical preventive services is positive, such benefits are still limited in scope and are not well correlated with evidence regarding the effectiveness of individual services. The U.S. Preventive Services Task Force (USPSTF), a panel of experts convened by the U.S. Public Health Service, has endorsed a core set of clinical preventive services for asymptomatic individuals with no known risk factors. In the committee’s view, this guidance to clinicians on the services that should be offered to specific patients should also inform the design of insurance plans for coverage of age-appropriate services. However, the USPSTF recommendations have had relatively little influence on the design of insurance benefits, and recommended counseling and screening services are often not covered and, consequently, not used (Partnership for Prevention, 2001) (see Box 5–3). As might be expected, though, adults without health insurance are the least likely to receive recommended preventive and screening services or to receive them at the recommended frequencies (Ayanian et al., 2000). Having any health insurance, even without coverage for any preventive services, increases the probability that an individual will receive appropriate preventive care (Hayward et al., 1988; Woolhandler and Himmelstein, 1988; Hsia et al., 2000). Studies of the use of preventive services by Hispanics and African Americans find that health insurance is strongly associated with the increased receipt of preventive services (Solis et al., 1990; Mandelblatt et al., 1999; Zambrana et al., 1999; Wagner and Guendelman, 2000; Breen et al., 2001; O’Malley et al., 2001). However, the higher rates of uninsurance among racial and ethnic minorities contribute significantly

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The Future of the Public’s Health in the 21st Century the necessary public- and private-sector resources that will be needed for new activities. The committee recommends that bold, large-scale demonstrations be funded by the federal government and other major investors in health care to test radical new approaches to increase the efficiency and effectiveness of health care financing and delivery systems. The experiments should effectively link delivery systems with other components of the public health system and focus on improving population health while eliminating disparities. The demonstrations should be supported by adequate resources to enable innovative ideas to be fairly tested. CONCLUDING OBSERVATIONS This chapter has outlined the main areas in which the health care delivery system and the governmental public health agencies interface. These areas include the regulatory and quality monitoring functions performed by governmental agencies, disease surveillance and reporting by health care providers, and the provision of safety-net services. Although assurance is a core function of public health, governmental public health agencies often do more than assure that people can access health care services; public health departments may become providers of last resort in areas where no other services are available for low-income, uninsured populations and when managed care services to Medicaid and uninsured populations are discontinued. These circumstances force public health departments to provide personal health care services instead of using their resources and population-level approaches to guide and support community efforts to change the conditions for health. Closer collaboration and integration between governmental public health agencies and the health care delivery system may enhance the capacities of both to improve population health and may support the efforts of other public health system actors. REFERENCES AAMC (Association of American Medical Colleges). 2000. Minority Graduates of US Medical Schools: Trends, 1950–1998. Washington, DC: Association of American Medical Colleges. AHA (American Hospital Association). 2001a. Emergency departments—an essential access point to care. AHA TrendWatch 3(1). AHA. 2001b. The health care workforce shortage and its implication for America’s hospitals. AHA Workforce Survey Results. Available online at www.aha.org/workforce/resources. Accessed April 9, 2002. AHA. 2002. Nova Award Winners 1994–200. Available online at www.hospitalconnect.com/aha/awards-events/awards/novaaward.html. Accessed October 7, 2002.

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