19616 THE MICHIGAN DAILY


Urge New Medical School;
Suggest Grand Rapids Site

The expansion of the Wayne
State University medical school
and the construction of a third
medical school in the state are
among the major recommenda-
tions of a report issued June 17 by
Prof. Walter J. McNearney of the
business administration school.
Financed by grants from the W.
K. Kellogg Foundation, the study
is the second of three reports to
the Governor's Commission on
Pre-Paid Hospital Care.
The report called Michigan's
shortage of physicians "especially
serious" and said that expansion
of WSt's medical school to ac-
commodate 200 entering students
and the building of a third such!
institution are necessary to relievej
the situation.'
Budgetary problems have beenf
the main difficulty preventing the
expansion of medical training fa-
cilities, the report noted.
"Operating budgets requested by
(f>ichigan) colleges and universi-
ties have not been met in the last
five years. The regressive effects
are cumulating," the report wa
ed,
Present Budget Inadequate
With the present budget inade-
quate for the operations of WSU
medical school, expansion is out of
the question.-,
A new medical school would cost
$50 million, the report estimated.
"The state must be prepared to
meet these requirements as well as
those of existing institutions," it
stated.
In spite of these difficulties, the
report recommended that the Uni-
versity and WSU medical schools
start a study to determine the or-
ganizational context and the geo-
graphic area in which a new in-
stitution would be built.
The possibility of establishing a
second unit within the framework
of the present institutions, the
feasibility of starting the new
school as a two year basic science
program, the relationship of the
school to nearby hospital facilities,
and the probable impact on the
distribution of the state's medical
resources should be considered, the
report suggested. '
Grand Rapids Desirable
"Grand Rapids is the farthest
point from the present medical
schools with the necessary popula-
tion and hospital beds. This makes
Grand Rapids a highly desirable
choice," it stated.,
Detroit, Dearborn, Flint and
Lansing are possible alternate sites
for such an institution, but Lans-
ing with a lack of an adequate
number of hospital beds is a
doubtful possibility.
The McNearney report is the
fourth study to recommend a third
medical school in the state. The
President's Committee on Needs of
Medical Education in Michigan,
headed by Dr. A. C. Furstenberg,
then dean of the University's med-
ical school, made this suggestion
in 1957 and 1958.
Also, the United States Public
Health Service in a report, "Physi-
cians for a Growing America" urg-
ed another medical school in 1959.
Ranks Low
Michigan ranks 27th among the
states in doctors per 100,000 per-
sons. It is below the 1959 national
average of 140.7 doctors per 100,-
000 with a ratio of 132.1 physicians
and osteopaths.
The gap is even greater for
physicians in active private prac-
tice. Nationally the ratio is 96.7
per 100;000 persons, but in Michi-
gan the ratio is 80.3.
When considering physicians
and osteopaths together, the state
has eight counties with a ratio
above the national average. If
those in active practice only are
counted, 10 counties fall above the
national average.
Wayne County has the largest
number of physicians an'd osteo-
paths and Keweenaw (in the Up-
per Peninsula) with none, the
least. Washtenaw County with a

physician per person ratio of 488.5,
three times the national ratio of
physicians to population, is first
among the state's counties on this
basis.
Both in numbers and distribu-
tion, doctors of osteopathy are im-
portant providers of health care to
Michigan residents, the report
stated.
Fourteen Per Cent
Osteopaths supply 14 per cent
of the state's doctors. Michigan is
second nationally in the total
number of osteopaths, fifth in the

WALTER J. McNEARNEY
... hospital repott
number of osteopathic hospitals
and second in the number of beds
provided.
Dentists, nurses, and members
of other medical professions are
also in short supply, the report
noted.
To help overcome existing short-
ages and make better use of avail-
able personnel, the study recom-
mended five major steps:
1) More government subsidies
for medical students and related
educational and research facilities,
2) Intensified efforts by all pro-
fessional groups to achieve better
distribution of health care per-
sonnel within the state,
3) Greater development and use
of paramedical personnel-medical
technologists, for example-to in-
crease the productivity of physi-
cians,
4) Long range, co-operative
study of the relationships between
various professional organizations,
including the eventual merger of
the state medical and osteopathic
societies,
5) Creation of a state-wide com-
mission on health manpower to
provide up-to-date information
and studies in this area.
Study Management
The report also studied hospital
financial management and made a
number of suggestions for its im-
provement.
It said that Blue Cross should
stimulate hospitals to develop more
precise accounting and cost analy-
sis systems and to refine its reim-
bursement formula to identify
costs in areas where approxima-
tions are now being used.
Within the next two or three
years, Blue Cross and its partici-
pating hospitals should develop'
payments based on precise cost
determinations for services rend-
ered.
The report recommended that
all hospitals adopt uniform ac-
counting and statistical techniques
recommended by the American
Hospital Association. Individually
or collectively, hospitals should in-
crease in-service training in ac-
counting.
All hospitals should adopt cur-
rent and capital budgets and
should use accelerated deprecia-
tion in writing off the cost of new
capital investments, the report
urged.

Another suggestion was the en-
actment of a lien law to permit
hospitals to obtain liens on hospi-
tal and liability insurance bene-
fits patients are eligible to receive.
"Hospitals and allied institu-
tions should employ accounting
and statistical methods more ag-
gressively as indispensable tools of
sound management," the report
stated.
It urged hospitals to use the re-
sults of detailed' cost analyses "as
the basis of an organized attempt
to obtain higher payments from
government agencies for care sup-
plied patients they sponsor."
Programs, similar to the one
recommended, in Connecticut and
Rhode Island were cited as exam-
ples of feasibility of cost account-
ing in hospitals. "The availability
of properly prepared accounting
information and costs have en-
abled hospitals in these states to
improve significantly the financial
aspects of their operations."
Study Blue Cross
In a related study of Blue Cross
financial operations the report
made several recommendations for
changes. It urged the placing the
responsibility for verifying hospi-
tal cost reports in the financial
division, the providing of a "cush-
ion" of eight to 10 per cent in esti-
mating its liability to hospitals for
care of subscribers, and the in-
creasing of capital until it equals
three times the monthly earnings
from premiums.
Other recommendations in-
clude: more timely financial state-
ments for top management, a
complete investigation of Blue
Cross risk policy since 1956, and a
review of daily service reports
from hospitals to investigate un-
explainable variations in practice.
In its survey of hospitals, the
report noted that the state needs
53,000 new hospital and nursing
home beds to meet minimum
standards of health care.
Replace Facilities
To meet the standards of the
Hill-urton Act, many substand-
ard facilities would have to be re-
placed, the report noted.
It made five suggestions to meet
this problem in future hospital de-
velopment:
1) Long term integration c gen-
eral and special hospitals,
2) Development of intensive psy-
chiatric care units within general
hospitals,
3) Integration of tuberculosis
hospitals with general hospitals
using freed beds for long-term or
post-acute patient care,
4) Attempt to ally chronic, re-
habilitative, nusing home and
medical facility care with general
hospitals to raise their standards
and bring them to the "main
stream" of medical practice,
5) Greater strength in supple-
mental facilities would be derived
from a close association with a
general hospital.
Inc-ease in Costs
The report also noted that
three-fourths of the increase in
short-term hospital costs between
1950 and 1958 can be traced to
inflation, population growth and
increased individual use of hos-
pital services.
The high costs are generally
associated with greater depth and
scope of patient services, staff,
and physical plant, it stated.
"Hospitals should make every
effort to document the relation-
ship between higher costs and bet-
ter services more conclusively to
combat the dangerous tendency on
the part of some purchasers to
associate low cost with efficiency
of operation," the report empha-
sized.
Aiding Prof. McNearney in the
study were Thomas B. Fitzpatrick,
William R. Foyle, and Charles G.
Skinner of the Bureau of Hos-
pital Economics.

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