Strategic issues requiring public accountability: food for thought

Although the exact outline of U.S. health reform has become fuzzy because of political events, it seems clear that major changes in the manner in which health care is delivered and financed are under way. The initiative for the most part has been assumed by state government and by the health care field itself, as managed care becomes ever more entrenched and the health care system becomes ever more integrated. An expected outcome of these changes will be demands for greater public accountability on the part of health care providers and organizations. In this article, the author discusses some of the issues--professional compensation, documenting community service, ensuring public input into planning efforts, economic credentialing and quality of care, and managing ethics under managed competition--that will have to be addressed at the local level as these shifts take place.     

Trends in managed care organizations: implications for the physician executive.

The rapid change in the managed health care industry is placing substantial demands on the managerial and leadership skills of physician executives. These changes are forcing a reevaluation of the fundamental principles of managed care organizations, specifically in terms of patient satisfaction, cost containment, and quality health care. Additionally, the physician executive will be confronted with substantial issues concerning future staffing needs. This article assesses the health care industry's environment to suggest where managed care is going and how physician executives should position themselves to optimize their position in the marketplace.     

Purchasers and the impact of managed care on physicians

In much the same way that demands by managed care organizations are shaping the way physicians practice, health care purchasers impact how managed care organizations operate. Corporations purchase managed health care through their employee benefits programs, and understanding the language, objectives, and limitations of these purchasers is essential to grasping the forces influencing managed care organizations and the modern practice of medicine. The emergence of value-based purchasing as a strategic corporate approach to health benefits programs will dictate the forces on physicians, hospitals, and managed care organizations for years to come. These forces have already led to price reductions, health plan accreditation, employee-directed report cards, outcomes management, and organized systems of care, and they will determine the broad outlines of the emerging U.S. health care system.     

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.     

Designing a Decision-Making Process for a Network Administrative Organization: A Case Study of the National Quality Forum’s Consensus Development Process

In 1999 the health care industry created the National Quality Forum—a network administrative organization—to address issues of health care quality in a new way by bringing together organizations from the public and private sectors and providing them with a forum to discuss and debate measures of quality, and ultimately, to effect change. Little, however, is known about the decision making processes of network administrative organizations despite the fact that their decisions may have far-reaching impacts on public policy. Using a grounded theory approach, this paper examines the creation and development of the NQF’s Consensus Development Process and identifies and discusses five key principles that underlie the process. This paper argues that in order to create a decision-making process for a network administrative organization that is balanced and inclusive of diverse interests a leader must consider and incorporate principles that are representative of the larger environment.     

Dealing with the demands of change

If evidence of the changes occurring in and confronting the health care field were needed, it was provided in abundance at the College's Perspectives in Medical Management meeting in Chicago in May. The presentations and the discussions among members buttressed the feeling that the health care field is proceeding through a period of transformation. The evolving system will be anchored on managed care, with special emphasis on the word "managed." The accoutrements of managed care--case management, demand management, utilization management, clinical guidelines and protocols, capitation budgeting, and the like--dominated discussion. The "business" of health care is proceeding apace. Maintaining a balance between the financial and quality elements of health care delivery has never been more important. And the definition of that balance will be determined at the local and regional levels. Federal initiatives are temporarily in abeyance. The challenge for physician executives is to assume leadership in moving their organizations, and thus the health care system, toward a new design that corrects present deficiencies and positions both to respond more effectively to the health care market. While it is not possible to cover all of the more than 60 speakers who addressed the meeting, this report, through presentation of the ideas of some key presenters, is aimed at measuring at least the boundaries of the challenges that lie ahead.     

Important points in managed care contracts

Health care is increasingly managed through some contractual relationship. Such contracts vary and the contracting entities may be clinics, universities, health maintenance organizations, individual practitioner organizations, preferred provider organizations, corporate health plans, or other structures. It is estimated that within 10 years more than 70 percent of all health care will be provided through some type of managed care plan.     

Israel--a health system in transition

Israeli health reform, implemented after many failed attempts throughout the years, represents an attempt to solve problems of politicization, dissatisfaction, unclear roles of government and public organizations, and lack of financial accountability, while maintaining a high quality and universally accessible health system. Despite many favorable aspects, including high quality medical care, near universal insurance coverage, and high availability of services, the health system has attracted criticism since its earliest days. Israel's experience with health reform, based on a version of managed competition, is of interest to other countries considering similar policy decisions.     

Partnerships in health care: creating a strong value chain

The health care climate is one of stormy relations between various entities. Employers, managed care organizations, hospitals, and physicians battle over premiums, inpatient rates, fee schedules, and percent of premium dollars. Patients are angry at health plans over problems with access, choice, and quality of care. Employers dicker with managed care organizations over prices, benefits, and access. Hospitals struggle to maintain operations, as occupancy rates decline and the shift to ambulatory care continues. Physicians strive to assure their patients get quality care while they try to maintain stable incomes. Businesses, faced with similar challenges in the competitive marketplace, have formed partnerships for mutual benefit. Successful partnerships are based upon trust and the concept of "win-win." Communication, ongoing evaluation, long-term relations, and shared values are also essential. In Japan, the keiretsu contains the elements of a bonafide partnership. Examples in U.S. businesses abound. In health care, partnerships will improve quality and access. When health care purchasers and providers link together, these partnerships create a new value chain that has patients as the focal point.     

Strategic positioning. Part 1: The sources of value under managed care

Part 1 of this series organizes and discusses the sources of value against a background of an evolving managed care market. Part 2 will present, in more detail, the marketing and financial challenges to organizational positioning and performance across the four stages of managed care. What are the basic principles or tenets of value and how do they apply to the health care industry? Why is strategic positioning so important to health care organizations struggling in a managed care environment and what are the sources of value? Service motivated employees and the systems that educate them represent a stronger competitive advantage than having assets and technology that are available to anyone. As the health care marketplace evolves, organizations must develop a strategic position that will provide such value and for which the customer will be willing to pay.     

Primary care: the driver in health care reform

The changes occurring in the health care industry have resulted in a cost-quality competition that has not been present in the past. Because of this competition, managed care is a growing way of financing and providing health care to the people of the United States. Managed care depends heavily on competent primary care physicians. Because primary care physicians are in short supply, the status and financial rewards of primary care practice are increasing. The primary care physician will be the dominant force in medical practice in the immediate future. He or she is capable in a managed setting of resolving the perceived problems of the health care industry in responding to the drivers of health care reform. Costs are reduced while quality is maintained. Access to health care is improved, and fragmentation of health care is significantly lessened.     

Legal implications of managed care arrangements

Prior to the 1980s, managed care was virtually nonexistent as a force in health care. Presently, 64 percent of employees in America are covered by managed care plans, including health maintenance organizations (20 percent) and preferred provider organizations (44 percent). In contrast, only 29 percent of employees were enrolled in managed care plans in 1988 and only 47 percent in 1991. To date, the primary reason for this incredible growth in managed care has been economic-market pressure to reduce health care costs. For the foreseeable future, political pressures are likely to fuel this growth, as managed care is at the center of President Clinton's national health care plan. Although there are numerous legal issues surrounding managed care, this article focuses primarily on antitrust implications when forming managed care entities. In addition, the corporate practice of medicine doctrine, certain tax issues, and the fraud and abuse laws are discussed.     

In-house recruiters: on the inside looking out

Few smaller hospitals or managed care companies have in-house physician recruiting departments. Their low hiring volume simply doesn't support such an operation. But most health systems and large managed care organizations say they literally couldn't afford to be without an internal system for the recruitment of physician executives and other health care professionals. They also claim they can find a better candidate faster than their counterparts on the outside. A number of them explain why.     

Quality. A tightrope for the '90s

How accurately can you measure quality of care in health care? Recently, HMOs and other types of managed care organizations have been in the process of defining quality in quantitative terms. Physicians who utilize fewer resources and who care for more patients per-unit-of-time are valued as providing better care than colleagues who may work at a slower (more expensive?) pace. The pressure to evaluate or treat greater numbers of patients in shorter periods of time can produce adverse consequences. And numbers do not necessarily take into account the quality of the care delivered. There is clearly a middle road. Physicians must take care of a sufficient number of patients with a given problem to gain and maintain expertise and mastery. But they must also guard against the insidious pressure for the procedure to become the end in itself.     

Sustainability as the lynch pin of public policy and industry initiatives

Does managed care have a sustainable future? So far, managed care has not lived up to its promises and potential. Admittedly, the health care system prior to managed care was a non-system. But its features included committed health care professionals, caring local institutions, freedom of choice, and laws reflecting public confidence. And it was based on the assumption that needed health care services are a customary, moral, and implied legal right of U.S. citizens. In contrast, today's version of managed care is characterized by financial and legal manipulation, "choice" constricted by provider selection of physician panels, and laws reflecting lack of public trust. Managed care can survive its initial foolish years, if it heeds the voices of those urging that two priorities be reflected in public policy, legislative efforts, and business practices. One of these priorities is accountability for today's actions. The other is preserving this country's health care resources. This article explored the concept of sustainability--the need to strike a balance between seeking immediate profit and preserving available resources.     

How should managed care physicians be paid?

When paying a physician for medical or surgical services, most patients expect the traditional bill or charge for that encounter or visit. While most people also pay health insurance premiums, few patients expect to prepay for their health care. But that is the foundation of most managed health care systems-prepaid medicine. PPOs, IPAs, and HMOs are typically health care providers linked together to provide services to a set population for a specific prepaid fee or "capitation" payment. Other providers contract with these managed care insurers to receive a predetermined and often "discounted" professional fee for services. These managed care organizations have already gone through a number of stages in determining how physicians are to be compensated for their services, and further changes loom on the horizon.     

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.     

Developing criteria for healthy organizational change

The objective of this study was to identify criteria for healthy change in organizations and to develop practical guidelines for intended change. We aimed to explore how change processes at the shop floor level can be better informed by consultants and labour inspectors. A total of 180 interviews were conducted with managers and employees in 90 units of public and private organizations in Norway. The interviews were analysed through four steps representing an expansion of grounded theory, and converted to qualitative analysis using QSR and N6 software. We found that organizational change processes were better managed by more attention to awareness of the local norms and diversity among employees in the perception and reactions to change efforts. An inspector or consultant should be aware of these phenomena in any change effort and tell the organization how to deal with them. The other three factors identified were early role clarification, manager availability, and using constructive conflicts to deal with change. They are all important coping mechanisms at the organizational level that will bring change processes onto a more optimal track if correctly managed. A healthy process empowers individuals instead of making them insecure and defensive in times of change. This will help them restore perceived control and promote job security, which benefits both them and the organization.     

Developing criteria for healthy organizational change

Abstract

The objective of this study was to identify criteria for healthy change in organizations and to develop practical guidelines for intended change. We aimed to explore how change processes at the shop floor level can be better informed by consultants and labour inspectors. A total of 180 interviews were conducted with managers and employees in 90 units of public and private organizations in Norway. The interviews were analysed through four steps representing an expansion of grounded theory, and converted to qualitative analysis using QSR and N6 software. We found that organizational change processes were better managed by more attention to awareness of the local norms and diversity among employees in the perception and reactions to change efforts. An inspector or consultant should be aware of these phenomena in any change effort and tell the organization how to deal with them. The other three factors identified were early role clarification, manager availability, and using constructive conflicts to deal with change. They are all important coping mechanisms at the organizational level that will bring change processes onto a more optimal track if correctly managed. A healthy process empowers individuals instead of making them insecure and defensive in times of change. This will help them restore perceived control and promote job security, which benefits both them and the organization.     

Why will physicians in this new environment replace MHAs?

The competitive forces of managed care, capitated payment, cost constraints, and the formation of health networks are among the major precipitating factors leading to the employment of additional executives and middle managers with clinical backgrounds. These factors will require our health leaders to know how to cut costs without seriously impinging on the accessibility and quality of patient care. Physicians with leadership and management skills, and with prior hands-on patient care expertise, will continue to be sought after in the foreseeable future by various types of health organizations. With this scenario, health services management generalists are predicted to experience increasing difficulties to secure senior positions in the health industry,