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Ambulatory care accounts for approximately one-quarter to one-third of healthcare spending in the United States.1 Ambulatory care includes physician offices, hospital outpatient departments, hospital emergency departments (EDs), and other sites. According to the Centers for Disease Control and Prevention (CDC), the number of ambulatory visits has been growing steadily in the new millennium, rising from 1 billion to 1.25 billion between 2000 and 2011. The volume of such visits going to physician offices may be declining, however. CDC data suggest that physician office visits declined from 1 billion (2009-2010) to 884 million (2016). During the same period, visits to hospital EDs remained relatively stable, rising slightly from 133 million (2009-2010) to 145 million (2016). The remainder of the increase occurred in hospital outpatient departments (see Chapter 11) and a wide array of newer, “organized ambulatory care” settings.2 These settings are profiled in the following sections.


One of the earliest examples of organized ambulatory care were the consumer-sponsored group practices and “medical cooperatives”—forerunners of the health maintenance organizations (HMOs). Early developers sought a system of family-oriented care in which the interests of the patient and the physician were parallel and directed to the goals of good care, health maintenance, and prevention and that was supported by monthly (capitated) payments by enrollees. Care was to be “comprehensive,” combining the primary care physician (PCP), the specialist, and any consultants needed. This meant the provision of care in groups of physicians and other needed practitioners. A number of such cooperatives were established in the late 1920s (Elk City, Oklahoma), 1930s (Group Health Association, Washington, DC), and 1940s (Health Insurance Plan of Greater New York; Group Health Cooperative of Puget Sound).

The movement received a huge lift with the Kaiser Foundation Medical Care Program. During the 1930s and 1940s, Kaiser was engaged in the construction of a rural aqueduct in the southern California desert, the Boulder Dam, the Grand Coulee Dam in the state of Washington, and then ship construction in San Francisco and Portland. Kaiser partnered with Dr. Sidney Garfield in establishing the first Kaiser prepaid plans and clinics for its workers on these projects. Kaiser Foundation Plans were later opened to the public following World War II. The “Kaiser model” came to include an organized group practice of physicians (Kaiser Permanente Medical Group), prepayment of care using an in-house health plan (Kaiser Foundation Health Plan), integration with Kaiser Foundation Hospitals, and an emphasis on prevention.

With a handful of exceptions (eg, Mayo Clinic, Cleveland Clinic), physician group practices were quite rare before 1930. The Committee on the Costs of Medical Care recommended in its 1933 report that medicine be practiced in groups rather than in solo practice. The committee’s recommendations were not warmly received by the American Medical Association (AMA), which viewed group practice, salaried medical practice, and prepayment as “unethical” (and ...

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