The foundation for future health care.

In the March-April issue of Physician Executive, Thomas Ainsworth, MD, provided his view of the current status of health promotion within the health care delivery system. The potential, he wrote, is far greater than the realization to date, and physicians can have a significant role in the development of health promotion programs. In this article, the theory is posited that the prime factor in the failure of health promotion to achieve a more significant position in the health care field is inertia. The forces for the status quo have simply been too great to be overcome. However, consumers, providers, and payers are almost certain to be involved in a health promotion strategy that will revolutionize the health care industry.     

The consumer and provider: pillars of the new health care system

Managed care has suffered a public backlash, with complaints increasing across the nation from unhappy patients. The physician community despises the current system and is wrestling for control of clinical decision-making. A health care system that is disliked by the public and is despised by the physician community can never succeed. No health care system or reform is possible without willing or even enthusiastic physician participation because only they can control costs, quality of care, and consumer satisfaction. A successful health care system recognizes that only providers can control quality of care and costs--and will create appropriate incentives that allow physicians to do so without losing the public's trust. The author advocates a new system, where consumers choose provider organizations based on disease expertise and purchase insurance through Internet accessible brokers. Provider organizations assume economic risk and have the detailed know-how to treat a specific disease spectrum better and cheaper. Consumers purchase this new "product" in a competitive market and are the principal benefactors of this market-driven, unmanaged care system.     

Health care reform. Pan American Uni-Care Health Insurance Plan

Something is definitely wrong with the American health care system. Too many citizens are denied health care, and health care costs continue to rise at an uncomfortable and intolerable rate. Ensuring care for all is a paramount goal. There is no way to simultaneously cover everyone; leave the reimbursement of physicians unrestrained; ensure instantaneous access to every imaginable high-technology service; subsidize the world's costliest and least efficient health bureaucracy; and contain costs. Widespread dissatisfaction in all quarters--physicians, hospitals, third-party payers, regulators and consumers--has led to an avalanche of reform proposals. Rapidly changing social, political, and economic environments; rising fiscal pressure; and an evolving understanding of the major determinants of health have also created pressure for changes. There are some new and hopeful signs that America is facing up to the need for changes in the health care delivery system. The Pan American Uni-Care Health Plan that is described in this article may serve as a reasonable balance among these competing priorities.     

Health care futures, Part 1. The emergence of the new health care consumer. Panel discussion

In Part 1 of this second annual panel discussion, six experts examine the new health care consumer. The whole concept of the patient as consumer still makes people uneasy when it's applied to health care. Whether you prefer consumer, customer, purchaser, end-user, ultimate buyer, or beneficiary, one thing's for sure: Many of us are as different from the bygone patient as an HMO is from the general practitioner who made house calls. One of the reasons for many Americans' new interest, knowledge, attitudes, and expectations about health and health care is the Internet, the second topic in this discussion. In Part 2, physician executives from the three leading physician practice management companies (PPMCs) join Jeff Goldsmith, Barbara LeTourneau, and Uwe Reinhardt for a spirited exchange about this burgeoning new industry in the American health care sector. They will tackle questions such as: Are PPMCs delivering what they promise? What will separate successful PPMCs from the rest? Can PPMCs meet Wall Street's earnings expectations and also help physicians deliver better care? When PPMCs win, who loses? And, what roles will physician executives play in PPMCs?     

Hospital-physician relations: overcoming barriers to cooperation.

In the September-October 1986 issue of Physician Executive, we discussed the application of strategic business units (SBUs) to health care. SBUs are those corporate entities that market similar products to one or more target populations with similar characteristics. Examples of SBUs in health care are obstetrics, cardiology, orthopedics, etc. When the services within each SBU are linked together, they might resemble a vertically integrated health care system. In the case of obstetrics, a woman may have contact with physicians, a hospital, home care nurses, house-cleaning services, birthing teachers, and maternity clothing boutiques. Each of these are products/services within the SBU of obstetrics. Strategy development by SBU implies an external focus on the marketplace in terms of the specific mission of the SBU (clinical specialty). It also implies responding to the needs of consumers for whom the historical and present divisiveness between hospitals and physicians is immaterial and irrelevant. In this article, we will focus on ways to stabilize the relationship between hospitals and physicians within an SBU context in order to compete more successfully as a team in today's health care environment.     

The rudiments of an Internet-based health plan for consumers: an interview with John Danaher, MD, MBA. Interview by Richard L. Reece

Richard L. Reece, MD, interviewed John Danaher, MD, MBA, on August 16, 2000, to discuss how his new company is preparing for the perfect storm--the looming convergence of demanding consumers, defined contributions, and Internet-based health plans. He describes how his firm is putting financial and clinical tools in the hands of consumers and physicians, so consumers can be more enlightened in their health care choices. Danaher says, "We're not about buying goods and services online. We are transforming the way consumers buy health care and seek insurance. We're trying to be a 401 k where people get on, knowing their risk profile and return horizons. We aim to motivate consumers to be proactive in making health care choices. How do we make consumers responsible and motivated enough to take control of managing their health care costs? How well we articulate this call to consumer action will be the key to our success."     

The managed care world order. The revolution is here

What are the belief clashes caused by the shift from a fee-for-service medical setting to a managed care environment? Right now, most physicians are enculturated in the old world order that emphasizes physician autonomy, control, security, and specialness. Physicians feel squeezed--by third-party payers wanting to be involved in the decision-making process of care delivery and by a new focus on teams versus the captain of the ship role. When traditional expectations clash with a changing reality, most people feel stressed. Physicians are no exception. If physicians have clear and realistic expectations, they can better cope with the uncertainties they face. And, the only realistic expectation in the medical profession is increasing uncertainty. Here are 10 predictions of what is happening in the health care industry--a list of the belief clashes that are so unsettling to those practicing medicine.     

Defined contribution health care: future direction or fantasy?

Will payers embrace defined contribution plans as an alternative to traditional health insurance or is this new approach a pipe dream? Are consumers truly ready to make informed decisions on purchasing their own health care? This article explores barriers to defined contribution health plans, including consumer reluctance to take ownership of buying insurance and a preference for the cost predictability of liberal coverage in employer-sponsored programs versus MSAs or higher co-payment arrangements. For the ultimate form of defined contribution health care to work, several tax and insurance barriers must be overcome. As a practical matter, the author argues that the current employer-sponsored approach is the most efficient system for large employers.     

The role of the coordinator of care

Regardless of the specific outcome of the current health reform debate in Washington, it is likely that major changes to the health care system are in the offering. These changes, many of which are already in place or imminent in some locations, will have a major impact on the evolving relationships between physicians and hospitals. Most expect that these changes will accelerate the development of integrated health care delivery systems that will compete in the marketplace for a mixture of public and private health insurance dollars. In this system of "managed competition," health care dollars will flow to those systems that can ensure the best clinical outcomes while using the least economic resources. In this scenario, competing collaborative health networks that can manage the continuum of care will be central to the health care delivery system. The economic and political ties between physicians and hospitals will become more closely linked as government and private payers of health care services foster the development of these integrated, value-based health care delivery systems.     

Managing provider networks through expert systems: use of patterns of treatment to address overutilization

Among the most important contributors to rising health care costs is excess utilization of services. Sophisticated clinical criteria, encoded as an expert system in software, allow identification of probable excess utilization in large claims data sets. These systems can be used to adjudicate claims, resulting in direct cost savings, or to profile physicians and other providers, facilitating creation and maintenance of networks. These systems are used by traditional payers to promote quality, control costs, and enhance competitiveness and are beginning to be used by nontraditional payers, such as physician groups and hospital-based networks.     

Benefits and barriers to consumer choice

Any successful health care reform effort must increase the market power of individual consumers. If consumers act in the medical marketplace as they do in other segments of the economy they will make sensible decisions about the allocation of resources (rationing) without the intrusion of third parties and will select providers and medical interventions that meet their needs. This article asserts the importance of consumer influence, focuses on the barriers that prevent consumers from exerting the same muscle in health care that they manifest in other areas of the economy, and suggests ways to remove these barriers.     

Can doctors and administrators work together?

The working relationship between physicians and health care organizations has dramatically changed since the introduction of competitive factors. Fifer suggests that future doctors may have as many as five or six economic relationships with their associated health care system, in contrast to the singular role as admitting physician of the past. The physician will continue to admit patients, but may also belong to an HMO or some other joint venture (freestanding ambulatory care center, outpatient laboratory, etc.), be salaried part time for leadership roles, be a leader in some other parallel economic venture, etc. Physicians are already assuming multiple roles as health care providers, private entrepreneurs, and joint venture partners with hospitals. Hospitals and health care systems also continue to change through vertical and horizontal integration. Traditional clinical departments are becoming blended into product line entities, and a sophisticated executive team of market-oriented specialists now augments the traditional administrative leadership. So, from a tradition of predictable roles, relationships, and authority structures, we are now attempting to thrive and prosper with many new partners in an integrated, complex, and conflict-ridden set of interrelationships.     

The new health care civilization: integration of physician land and manageria

Changes occurring in health care demand that physicians expand their professional knowledge and skills beyond the medical and behavioral sciences. Subjects absent from traditional medical education curricula, such as the economics and politics of health care, practice management, and leadership of professional organizations, will become important competencies, particularly for physicians who serve in management roles. Because physicians occupy a central role in planning and allocating medical care services and other health care resources, they must be better prepared to work with other health care professionals to create a new civilization, even if this means leaving the cloistered domain of "physician land" to serve as interface professionals between the delivery of medical services and the management of health care. Our research findings and conclusions strongly suggest that economic, management, and leadership competencies need to be incorporated into the professional development of physicians, especially in postgraduate and continuing education curricula.     

Physician leadership. The time is now

During the past 30 years, third party payers have imposed virtually every imaginable form of external cost controls on the traditional health care system. All have failed. And now those paying the bills--the large-scale health care purchasers--have finally seized control. They are fomenting fundamental structural change in the health care system. In order to continue doing business with these purchasers, health care providers are finding that they must form alliances to present a comprehensive "package" of health services for the constituents of these purchasers. In short, they must form integrated delivery systems. Current developments have created a unique opportunity for physician leaders to take a commanding role in shaping the emerging American health care system.     

From managing access to managing care: the impact of primary care on health care delivery organizations.

Professional "revenge of the nerds" is currently taking place, as managed care evolves generalist physicians into new professional prominence. Primary care physicians are finding themselves at the center of health care market reform as health plans, insurers, and other financing organizations turn to them as the key to cost control. In short supply, they are prospering financially from the demand. As the source of patients, they are gaining in prestige from specialists and hospitals who once demeaned them. But these newfound roles are only the initial steps in the transformation of the primary care practitioner. The change that the generalists are experiencing is essentially managing access to care, not truly managing care itself. There are large and crucial differences between managing access to care and actually managing care. These differences are, in many ways, a higher calling for primary care practitioners as they refocus attention on patient outcomes, which will in itself result in a lower resource utilization above and beyond the crude controlling of access. What those differences are, what new roles they require, and what impact they will have on organizations that either house or contract with primary care physicians will be the focus of this article.     

Physician self-referral on the fast track

One of the most hotly debated areas of health care fraud and abuse has been the prohibition on physician self-referral. Now, this prohibition is limited to physicians referring patients to clinical laboratories in which they have an ownership interest and for which the services are reimbursed under the Medicare program. However, this law may be expanded to include other health care services to which physicians cannot refer, as well as to other federal programs and private payers. While Congress works toward this end, many state governments have already taken the lead in expanding the prohibition beyond clinical laboratories and the Medicare program. "Health Law" is a regular feature of Physician Executive contributed by Epstein, Becker, and Green. Mark Lutes of the firm's Washington, D.C., offices serves as editor of the column.     

Study tour examines health care systems in Germany, Holland--Part I: A comparison of three health care systems

In October 1992, the American College of Physician Executives sponsored a study tour to Berlin, Germany, and Amsterdam, Holland. Meetings were held with government officials, third-party payers, and providers, and onsite visits were made at hospitals, clinics, and academic centers. The purpose was to study the health care delivery system in those countries and to share some insights with the countries' hosts on the U.S. system. Beginning in this issue of the journal, 5 of the 10 study tour participants describe their impressions of the tour and of the health care systems in the countries that were visited. This first report compares the health care delivery systems of the United States, Germany, and Holland. In subsequent reports, the German and Dutch health care systems will be described in greater detail and the ability of the United States to adopt European health care systems will be assessed.     

The quality debate: Consumer Bill of Rights

Inherent in any discussion on quality for a delivered service is understanding what outcomes you want to achieve and assuring that your consumer agrees. The Presidential Commission's Consumer Bill of Rights supports this principle. Its' goals include: strengthening consumer confidence by providing them with a system responsive to their needs and with a credible mechanism to address their concerns; reaffirming the importance of a strong relationship between patients and their health care providers; and, reaffirming the role consumers play in safeguarding their own health. Striking the balance between cost and quality requires all the stakeholders of the health care system to focus on the true issues that impact quality: outcomes, accountability, and consumer satisfaction, however defined.     

RBRVS: old concepts, bad press

As health care finance has changed from a system of cash from patients to third-party reimbursement, a variety of mechanisms have been devised to bring equity to the payment process. The latest payment mechanism for this purpose is the resource-based relative value scale system implemented by Medicare, which is now being adopted by other third-party payers. However, too many payers are pushing for discounts from providers at the point of adoption of the system, thus foiling the equity aspect of the system.     

Specialist versus primary care: not an easy question

The central focus in the debate to reform our nation's health care system is on cost, quality, and access. There is general agreement that there are too many specialists in the wrong places, which is said to contribute to the rising cost of health care. Physician profiling has supported the concept that some specialists are more costly than primary care physicians, although the severity of illness in patients treated by specialists may often be greater. Increasing the number of primary care providers may be a solution to reduce costs and will clearly improve access. The study reported in this article was carried out to examine the efficiency of primary care physicians and endocrinologists, a specialty that has been cited as one in which resource utilization is high, in caring for hospital inpatients with diabetic ketoacidosis.