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Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
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Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
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Page 2
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 3
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 4
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 5
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 6
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 7
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 8
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 9
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 10
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 11
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
×
Page 12
Suggested Citation:"INTRODUCTION AND SUMMARY." National Research Council and Institute of Medicine. 1979. Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology. Washington, DC: The National Academies Press. doi: 10.17226/18439.
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Page 13

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1 INTRODUCTION AND SUMMARY Medical technology has unquestionably advanced at a prodigious pace in the past 20 years, changing both the capability of Amer- ican medicine to detect and treat disease and the public's expec- tations of medical care. The continued rapid growth in biomedical and related scientific knowledge is likely to stimulate further significant advances. Some new technology has reduced the cost of providing health care, some has increased access to health care services, and some has measurably improved the outcome of medical care. In fact, in the recent past, several panels and committees, not unlike our own, were actively deliberating on how the vast potential of the new medical technology could be tapped most effectively. For example, in l967 the National Academy of Engineering's Committee on the In- terplay of Engineering with Biology and Medicine was established to "investigate how technology can contribute to the achievement of health care goals."83 In l972, a conference sponsored by the National Institutes of Health explored factors underlying and particularly inhibiting the spread of new medical technology, and the National Center for Health Services Research and Develop- ment held a conference to consider priorities for development of health care technology for the l980"s. More recently, the Pres- ident's Biomedical Research Panel, as part of its major inquiry, investigated how the movement of research findings into practical use could be enhanced.131 The problem of how to facilitate the transfer of new technology to the practice of medicine remains a major concern today. In the past 5 years more skeptical voices have been heard. Those who shape and influence national health policy have shown increasing concern over the way in which new technology is

developed and introduced into the health care system. New equip- ment, procedures, or systems appear to some to be introduced by hospitals and physicians without knowledge of, or concern for, their relative effectiveness or efficiency. Technology purport- edly follows its own imperative, eluding effective control by reg- ulatory or financing agencies.96 Most important, new technology is accused of raising the cost of providing health care. Gaus,35 for one, has observed that: the long-term cumulative effect of adopting new health care technologies is a major cause of the large yearly increases in national health expenditures and in total Medicare and Medicaid benefit levels. Medical technology has clearly acquired a bad name in some cir- cles. Whereas just 5 years ago it was held out as a major oppor- tunity for improvement in the cost and quality of, and access to, health care, today it represents to many a major cause of prob- lems in these areas. Increasingly, policies to assess, evalu- ate, or control the introduction of new technology on the federal and state levels have been suggested as cost-containment strate- gies. 36 , 96 , 1 03 , 1 37 Debates have occurred over the nation's con- 7Q tinued ability to pay for new technology as it has in the past.' These charges and recommendations merit further investigation. They were the starting point for the study reported here. But, upon reflection, it is clear that the source of the "technology problem," if there is one, is not technology itself, but the be- havior of those who make decisions about how, when, and where new health care technology will be introduced. This is, then, a re- port on the behavior of the health care system with respect to new equipment-embodied technology. As a guiding principle, new technology should be introduced into the practice of health care when its benefits to society out- weigh its costs. We are aware, however, that early knowledge of the benefits or costs of a new technology is often impossible to obtain at the time that decisions regarding its dissemination and use are first made. Such decisions are always made in the face of great uncertainty, and hindsight inevitably reveals mistakes. Our goal has been not to recommend ways to stamp out all such errors. That would be impossible. Rather, the committee has con- sidered the systematic forces that foster appropriate or inappro- priate decisions and has assessed the extent to which additional investment in information about the usefulness of new technology is warranted. Equipment-embodied health care technology can be classified ac- cording to the function it performs. In this study we have found it. useful to distinguish three major kinds of health care technology:

• Clinical technology—that used in the provision of direct patient care, including surgical and medical services. • Ancillary technology—that used directly to support clin- ical services, such as diagnostic radiology, radiation therapy, clinical laboratory, anesthesiology, and respiratory therapy. • Coordinative technology—that used to facilitate and sup- port the provision of health care services but not directly associated with patient care, including administration, trans- portation, and communication both within and among health care facilities. Other health care technology, including educational and research technology, have important functions, but they are not central to our study. These three major kinds of technology can be applied at any stage in the medical care process—prevention, diagnosis, treat- ment, or rehabilitation—and in any setting—hospitals, physi- cians' offices, clinics, or combinations of these. Figure l presents a typology of equipment-embodied technology categorized by function and stage in the medical care process. It includes examples of particular technology for each category. Such examples illustrate the broad range of equipment and equipment-embodied techniques, procedures, and systems that con- cern the committee. Moreover, the typology serves as a useful tool for analyzing problems in the process of technological change. Technologies in particular categories are likely to be subject to similar problems associated with their development and diffusion. For example, surgical technologies delivered in hos- pitals are likely to follow paths of development and diffusion that are quite different from diagnostic ancillary services pro- vided in the physician's office. The motivations and objectives of decision makers along the way are likely to be quite different from one another, as are the organizational, financial, and reg- ulatory environments affecting technologies in these categories. Thus, it may be possible to determine which forms of technology require particular policy solutions. THE PROCESS OF TECHNICAL CHANGE Technical change is a dynamic process for developing and adopting new methods in health care services. The process of technical change involves decisions that result in the application of new medical technology or new combinations of existing technology. Such decisions are made by many individuals and institutions. De- cisions at any point in the process influence the resulting pat- tern of technical change not only for a particular technology but also for related technologies.

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Although the process of technological change is complicated and iterative, two general stages can be considered separately— development and diffusion. Development refers to activities directly or indirectly intended to produce new capabilities or alter the characteristics of an existing technology. Diffusion is the application of a new technology in the provision of health services. Figure 2 presents a simplified model of development and diffusion as if they occurred in chronological sequence, when in fact the process of diffusion often reveals that a technology needs further development, and diffusion may sometimes parallel the development of a new technology. The two stages in the pro- cess are described more fully below. Development of Equipment-Embodied Technology The development of equipment-embodied technology refers to cre- ative activities culminating in new technical capabilities. The development of such technology requires a unique blending of clin- ical, biomedical, and engineering talent in varied proportions, de- pending upon the particular application. Accordingly, development takes place in a number of settings, including university medical centers, physicians' offices, independent research and development laboratories, and commercial manufacturing firms. It is impossible to generalize, therefore, about who develops new technology and where the ideas come from. Following the typology of such tech- nology presented in Figure l, the development of clinical technol- ogy would follow quite different pathways from the development of ancillary diagnostic technology. For instance, surgical technol- ogies are often developed within the medical care system, most commonly in the academic medical centers. By contrast, new lab- oratory tests are probably developed more frequently in indepen- dent research laboratories, where the need to combine the research and development with direct patient care is not so apparent. Little is known about the magnitude of R&D efforts in the various settings in which development takes place or about the relative contributions of the government and the private sector to development. Although data are available on government and private funding of research and development as a whole, it is im- possible to separate work on equipment-embodied technology from other scientific or biomedical technology. There is also a dearth of information on how much equipment-embodied medical technology emerges from the upgrading or reworking of existing technology that has been developed in other industries. Certainly, the use of digital computers and nuclear medicine, which have wrought a revolution in health care, came in large part from developments wholly outside the field of medicine.

8 All types of equipment-embodied technology require the develop- ment of a prototype at some point to demonstrate the technical feasibility of the concept. Even systems combining existing equipment, such as special care units and computer-based medical information systems, require a field demonstration to determine if certain objectives will be met when the components are brought together in a specific configuration. Once medical equipment moves beyond this experimental stage into more general use, dif- fusion begins. The difficulty of tracing the general pattern of development of technology through its several stages is nowhere better illus- trated than by the history of automated drug infusion, the use of a computer to administer medications to patients in appropriate doses. The application of this technology has followed a complex and intricate set of events that have been as much influenced by individuals as by forces of the marketplace. In fact, it is dif- ficult to identify any innovative breakthrough as a clear begin- ning of the use of the technique. No clinical trials to test the value of automated drug infusion have been conducted, and, indeed, the technique has not yet been firmly established in health care delivery. The concept of automated drug infusion emerged from efforts to deliver cancer chemotherapy at decentralized facilities. Pumps appropriate for this purpose were adapted from science laboratories. Simultaneously, wide interest in the adaptation of digital com- puters to physiological monitoring and record keeping in intensive care was being fostered by Dr. Homer Warner and his colleagues. In l969, the National Center for Health Services Research and De- velopment, which had supported Warner's early work, provided funds for four demonstration projects for the application of computer- ized principles in intensive care. The projects, called "Medlab" demonstrations, were eventually phased out as a result of an un- favorable evaluation. But in one of the demonstrations, at the University of Alabama, the computer aspects of the system had been applied in cardiac surgery. One component of the Alabama system was the use of fluids infusion under closed-loop control. As a result of this experience, the University of North Carolina and the University of Pennsylvania, where similar clinical components had been developed, sought the commercial manufacture of computer- driven infusion systems for postsurgical patients. Roche Bioelec- tronics undertook to produce such units with the expectation that a much larger market existed for other uses. The technical concept of the closed-loop control of medication has appeared in other contexts as well, such as automated anesthe- siology. The starts have all been fitful, due largely to tech- nical problems, but it seems a durable idea that may someday form the basis of a line of commercial products. Microprocessors may

9 be the missing element that will provide the standardization and reliability that allow insertion or substitution of one subsys- tem for another. In any event, prior to the actual marketing of a developed technology, a long period of custom design sometimes takes place. This period is often influenced by the individuals who work with the technology along the way. Alabama's success with fluids in- fusion is as much a result of the lead surgeon's ability to as- sociate with cardiologists and to inspire his staff to dedicated performance as it is to the technology itself. The transition from development to diffusion depends largely upon the successful commercialization of an equipment-embodied technology. Commercialization begins with an organization or individual willing to manufacture and market the equipment. The closer an idea is to the market, and the more certain the market for the technology, the more likely that successful commercial- ization will take place. As the case of automated drug infusion illustrates, commercial manufacturing firms may enter very late, often after a successful prototype has been developed. By contrast, there are many other instances of technology developed from scratch by commercial firms. Diffusion of New Equipment-Embodied Technology The diffusion process for new medical equipment is often expressed as the number of health care providers adopting a new technology as a function of the time or distance from its first availability on the market. Studies of the diffusion of technology usually attempt to explain it on the basis of characteristics of the tech- nology, the adopters, or the environment or conditions facing the adopters. The decision to adopt a new technology is closely related, but not identical to, the actual use of the new technology. Indeed, for much equipment-embodied technology, the two actions may be in- dependent. Because the adoption of such technology requires capi- tal expenditures, the determination of whether and when a provider has adopted a new technology is generally figured from the time that money has been committed to the acquisition of the equipment. Still, the act of adopting each new piece of equipment does not guarantee its use. The decision to use such technology is made most frequently by health care practitioners. Thus, the acquisi- tion, or adoption, of an automated clinical chemistry analyzer by a hospital laboratory may be the decision of the hospital adminis- trator, but the use is determined by the ordering physicians. In some instances adoption and use are synonymous, as with med- ical information or communications systems. Here the installation

l0 implies utilization. The services provided by such technologies cannot be broken down into discrete units of utilization. The process of diffusion of new medical technology lies at the heart of the process of technological change. The potential adopters of any technology represent its "market." The speed and ultimate level of diffusion among providers of health care dic- tate the rewards to developers and marketers of the technology. Although developers and marketers can and do influence individual adoption decisions, the ultimate success or failure of a technol- ogy to diffuse rapidly and thoroughly to the user community is a function of the health care community's characteristics, includ- ing the payment system. The Management of Technical Change The development and diffusion of new equipment-embodied technol- ogy are everywhere influenced and shaped by public and quasi- public policies, some expressly designed to facilitate or control the process and others with unintended consequences. Taken to- gether, the policies help to form the environment within which development and diffusion occur. The environment provides the setting for the management of technical change. Although the term "management" connotes active intervention in the process of technical change, public management policy also can imply an ab- sence of control. The management environment in which technical change occurs has an enormous influence on the efficiency of the process. Pub- lic management policies that are intended to directly affect the process fall into three general categories: (a) funding policies designed to promote or subsidize particular activities, such as development projects or purchase of new equipment by providers; (b) control policies that are intended to directly intervene or regulate'decisions regarding development or diffusion; and (c) facilitating policies that are intended to enhance the efficiency of decisions by providing information relevant to development or diffusion or protective policies such as patents. Other policies may indirectly and unintentionally affect the process of technical change. These are also part of the manage- ment environment. Thus, health care reimbursement policies and facility licensure programs have been developed for reasons wholly unrelated to technical change. Yet they each may have a powerful influence on patterns of development and diffusion.

ll The term "technology transfer" has been defined and inter- preted in various ways.* Within the context of the management of technical change, technology transfer refers to a particular sub- set of management policies that are intended to facilitate the transition of good ideas and technologies from development stage to diffusion. Technology transfer encompasses the dissemination of information to physicians about promising innovations and patent policies. In later chapters, public management policies that fit within this definition of technology transfer will be evaluated, although the policies will not be identified as such, because technology transfer is a special case within the array of management alternatives that are available to influence the process of technical change. SUMMARY OF FINDINGS AND RECOMMENDATIONS Recommendations for additional research are included in the body of the report and are italicized throughout the report for each reference. This section summarizes our major policy findings and recommendations. Finding In general, equipment-embodied technology used in hospital, clin- ical, and ancillary services is subject to strong pressures for adoption and use, whereas coordinative technology, such as medi- cal information systems or emergency medical communications sys- tems, faces pressures against adoption and use. In fact, all equipment-embodied technology that must be applied across insti- tutions suffers from barriers to adoption and use. In addition, *Some definitions of technology transfer include: l. "The process of collection, documentation, and successful dissemination of scientific and technical information to a re- ceiver through a number of mechanisms, both formal and informal, passive and active."84 2. "The process through which government research and technol- ogy is transformed into processes, products, or services that can be applied to actual or potential public or private needs."l29 3. "The movement of new product and process ideas from seller (usually an inventor, university, or research institute) to buyer n -) (an industrial organization or company)."''

l2 preventive technology, particularly mass screening, whose ben- efits can be fully realized only when prevention is integrated with treatment and follow-up, is also subject to barriers to adop- tion and use. A major factor affecting the adoption and use of new equipment- embodied technology is the prevailing methods of reimbursing pro- viders for health services. The current provider reimbursement methods create improper incentives for the adoption of new tech- nology. Clinical and ancillary technology, particularly that ap- plied in hospitals, is encouraged by the reimbursement system. Coordinative and preventive technology is discouraged. l. Recommendation The prevailing methods of reimbursing pro- viders for health care services should be revised to promote ap- propriate incentives with respect to the adoption and use of equipment-embodied technology. Because reimbursement policy is central to all aspects of containing health care costs and directly affects the redistribution of wealth and income, the precise avenues of reimbursement reform must be chosen in a larger context. Prospective reimbursement of hospitals and the capitation method of payment are especially promising in alter- ing incentives to adopt and use new equipment-embodied tech- nology. 2. Recommendation Public subsidy may well be warranted for the development of coordinative technology, such as medical in- formation systems and emergency medical technology, as well as for preventive technology. If these recommendations are implemented, health care organ- izations will have to consider the benefits and costs of adopting new technology and using existing technology in the presence of limited resources. This will undoubtedly result in more effec- tive institutional and regional planning of service delivery. In addition, the support of development efforts will encourage the further development of coordinative and preventive technology and bring them closer to a point of market viability. Finding Current methods for evaluating new equipment-embodied technol- ogy are inadequate because they are neither timely nor coordinated. Moreover, they do not consider economic criteria. 3. .Recommendation A mechanism for evaluating and reporting on the performance, costs, and benefits of equipment-embodied

l3 (and perhaps other) technology should be developed. A national coordinating body should be established to: • Identify the need for evaluative information on equipment- embodied (and perhaps other) technology. • Fund planning and evaluation studies where existing fund- ing programs are not adequate. • Collect and disseminate available information regarding new and existing technology to users. • Encourage and foster national and international efforts to standardize equipment-embodied technology to achieve economy of equipment design, safety, and comparability of data. • Conduct and sponsor research into methodologies for evalu- ating medical technology. • Coordinate evaluative programs of federal agencies. If this recommendation is accepted, decisions regarding the adoption and use of new equipment-embodied technology will be based on better information, regardless of the management policies adopted. Finding The process by which new equipment-embodied technology is de- veloped and introduced into the health care system is already greatly affected by myriad regulatory programs at federal, state, and local levels. These regulations are costly, administratively burdensome, duplicative, and often conflicting. They affect every point in the process of technical change. 4. Recommendation Solutions to the problems of adoption and use of new equipment-embodied technology should be evaluated in terms of their regulatory burden. In the committee's view, poli- cies that alter incentives without the need for detailed regula- tion are preferable to policies based on new or additional regulation. In addition, the existing regulatory structure could be improved at all levels of government. Regulatory programs in- fluencing the introduction of new medical technology should be reexamined closely with the goal of relieving the system of unco- ordinated, duplicative, or conflicting regulatory processes.

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Medical technology has unquestionably advanced at a prodigious pace in the past 20 years, changing both the capability of American medicine to detect and treat disease and the public’s expectations of medical care. The continued rapid growth in biomedical and related scientific knowledge is likely to stimulate further significant advances.

Medical Technology and the Health Care System: A Study of the Diffusion of Equipment-Embodied Technology examines the policy and research issues basic to the relationship between new medical technology and the efficiency and effectiveness of the health care system. This report assesses the process by which technology finds its way into the health care system and indentifies and analyzes successes and failures in the process of technological change. Ideally, the more effective and efficient technologies should be introduced quickly; others should not. This report considers the extent to which the ideal results actually do occur and when they don’t, why not.

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