The implications of practice guidelines for physician medical malpractice liability

Medical practice guidelines are increasingly coming into use, and as more and more physicians are presented with guidelines to follow in the delivery of health care, the question arises of whether these guidelines will become instruments for imposing greater medical malpractice liability on physicians. This column will briefly describe what guidelines are, how they are developed, and how they have been and may be used in litigation against physicians, hospitals, and other health care institutions. As hospitals and managed care organizations continue to implement guidelines, the role these guidelines play in malpractice cases can be expected to increase. It appears, however, that, although guidelines will contribute to the establishment of the standard of care by which a physician's actions will be measured, they are not likely to become the standard that all physician treatment decisions must meet.     

Ascendancy of primary care will create role intensification for physician executives

The need for physicians in management roles in the health care system has never been greater. And the years ahead will see that need broadened and intensified. To maintain their leadership role in medical affairs in hospitals and other types of health care delivery organizations, physician executives will have to envision provider organizations and systems that have not yet been conceived, let alone developed and implemented. They have to become totally open-minded and futuristic in their thinking. And they will have to help other physicians accommodate this new way of thinking if the medical profession is to continue in a leading role in health care matters. Although numerous factors will have to be anticipated and analyzed by these new physician leaders, the ascendancy of primary care in a managed health care world long dominated by the technical and technological superiority of hospital care will present a particular challenge to the physician executive.     

Linking Process Quality and Resource Usage: An Empirical Analysis

Motivated by an increasing adoption of evidence‐based medical guidelines in the delivery of medical care, we examine whether increased adherence to such guidelines (typically referred to as higher process quality) is associated with reduced resource usage in the course of patient treatment. In this study, we develop a sample of US hospitals and use cardiac care as our context to empirically examine our questions. To measure a patient's resource usage, we use the total length of stay, which includes any additional inpatient stay necessitated by unplanned readmissions within thirty days after initial hospitalization. We find evidence that higher process quality, and more specifically its clinical (as opposed to its administrative) dimensions, are associated with a reduction in resource usage. Moreover, the standardization of care that is achieved via the implementation of medical guidelines, makes this effect more pronounced in less focused environments: higher process quality is more beneficial when the cardiac department's patient population is distributed across a wider range of medical conditions. We explore the implications of these findings for process‐oriented pay‐for‐performance programs, which tie the reimbursement of hospitals to their adherence to evidence‐based medical guidelines.     

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.     

Strategically integrating hospital/home care services for improved profitability

Because hospitals and home health agencies have been predominantly separate organizations, coordination of their efforts has not been optimized. However, with the recent proliferation of hospital-based home health agencies, opportunities to integrate these health care service delivery systems have increased. Bethesda Memorial Hospital, Boynton Beach, Fla., is a 362-bed not-for-profit community hospital with a Medicare-certified home health agency organized as a department of the hospital. Until recently, the home health agency was generally perceived as a separate entity whose services were distinct from hospital services. Progress toward integration of hospital and home care services was given impetus through collaboration of the home health agency administrator and a newly appointed director of medical affairs who was given the responsibility as medical director of the home health agency. A prime responsibility of the director of medical affairs was to reduce length of stay and hospital costs through appropriate resource management.     

Clinical guidelines: a defense in medical malpractice suits

Clinical pathways, or practice guidelines, have been gaining wider acceptance from physicians and hospitals seeking to constrain increasing operating costs for inpatient care. The authors believe that properly developed and agreed upon guidelines can also be used in certain cases as appropriate standards of care in determining if medical malpractice has occurred. Adherence to the guidelines could then be asserted by defendants as an affirmative defense in a medical malpractice suit.     

The physician executive "arrives"--a new generation prepares for the future

The recent rise in the number of physician executives in the health care industry vividly demonstrates that a genuinely new generation of physician executives is seeking to combine the sensitivity of their clinical skills with the business acumen that today's health care organizations need to prosper and grow. But physicians who are preparing themselves to be selected one day as chief executive officers by hospitals, integrated systems, and managed care organizations should understand that the CEO role is radically different from that of the CEO of a physician practice. The corporate CEO role requires the management of managers and responsiveness to the organization's board. Those who imagine that the corporate CEO role bears any resemblance to the autonomous, independent existence of the practitioner are certain to have a rough time.     

Physician executives straddle the digital divide

e-Health is here to stay and experts predict that the Internet will become the hub of health care. Rapid advancements in biotechnology and medical research, increasingly curious patients who surf the Internet for medical information, and pressures from managed care companies to contain costs and speed treatments are the central components driving e-health. Despite physician reluctance to embrace the e-revolution, many hospitals and medical groups are employing the Internet and information technology to improve their customer interface, as well as to reduce business costs. This article offers seven e-strategies for health care performance improvement: (1) Supply chain management; (2) e-transactions; (3) care management; (4) improving quality; (5) boosting revenues; (6) outsourcing; and (7) provider networks (Intranets). By helping to incorporate these key e-solutions, physician executives can position their organizations for success in the new millennium.     

Wanted--seasoned veterans. Diamonds in the rough need not apply

Health care organizations looking for physician executives prefer seasoned veterans--doctors who have already done the job. They want job-specific experience. Most organizations do not provide training grounds and orderly career ladders for aspiring physician executives. The Permanente Medical Groups, Family Health Plans, and some very large group practices are exceptions, but, for the most part, rising medical directors in these organizations stay with them. Most hospitals are not large enough to have associate or assistant medical directors or an environment that could provide a training ground for rising physician executives. On the other hand, hospitals, larger group practices, health insurance companies, and managed care organizations provide ample opportunities for nonphysician managers to train, gain experience, and climb the ladders. How can the novice physician executive break into the world of management and begin establishing management credentials? The author provides some key steps that can lead to success.     

Health care costs: saving in the private sector

Robeson offers a number of options to employers to help reduce the impact of increasing health care costs. He points out that large organizations which employ hundreds of people have considerable market power which can be exerted to contain costs. It is suggested that the risk management departments assume the responsibility for managing the effort to reduce the costs of medical care and of the health insurance programs of these organizations since that staff is experienced at evaluating premiums and negotiating with third-party payors. The article examines a number of short-run strategies for firms to pursue to contain health care costs: (1) use alternative delivery systems such as health maintenance organizations (HMOs) which have cost-cutting potential but require marketing efforts to persuade employees of their desirability; (2) contracts with third-party payors which require a second opinion (peer review), a practice which saved one labor union over $2 million from 1972 to 1976; (3) implementation of insurance coverage for less expensive outpatient care; and (4) the use of claims review. These strategies are compared in terms of four criteria: supply of demand for health services; management effort; cost; and time necessary for realized savings. Robeson concludes that development of a management plan for containing health care costs requires an extensive analysis of alternatives, organizational objectives, existing policies, and resources, and offers a table summarizing the cost-containment strategies that a firm should consider.     

Management education for medical students.

There is little doubt that the economics, management, and delivery of health care in the United States are currently in an unprecedented state of flux. Prospective payment, cost containment, and corporatization of health care delivery are rapidly replacing retrospective fee-for-service reimbursement and unmanaged provider practice patterns. Though ultimately certain to affect significantly physicians now in training, these changes have been afforded little attention in the undergraduate medical curriculum. At Hahnemann University, this is no longer the case. "Management Education for Medical Students" is an elective, intensive, eight-week experience for senior medical students. Following a thorough orientation to the workings of organizations through which health care is delivered, medical students receive both didactic and project-oriented instruction in university hospital administration during the first four weeks. During the course's second half, students are offered specialized training in the part of medical management that links the clinical and the financial aspects of health care management.     

Credentialing in managed care

Through the use of managed care techniques in recent years, the insurance industry has tried to bring the runaway costs of medical care under control. The result of this control effort is system access limitations, compared to the full choice indemnity plans of the past. This limited system access has now clearly moved HMOs and other managed care organizations into the category of "potentially liable health care entities," based on patient steerage, economic disincentives, and limited choices of the plan's participating providers and facilities. Just as hospitals have had to exercise rigorous care in the credentialing of members of their medical staffs, managed care organizations will have to ensure that the providers they use meet acceptable standards of competence.     

Preparing for managed competition

Without the demands of managed competition or economic incentives to control costs, providers have little reason to invest in systematic data analysis about their patients. Information technologies in the hands of health care managers and physician executives primarily are tools for cost control, and, if cost control is not an important issue for them, they do not learn how to do it. The rules of the game have already changed for providers where managed care dominates the medical community and will change for the entire nation under managed competition. Managed competition gives providers strong incentives to identify the costs of care and unnecessary variations in those costs, to introduce new processes of care to reduce unnecessary administrative and clinical costs, to implement practice guidelines to reduce variations in outcomes of care, and to document statistics indicating excellent quality.     

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.     

The Informatics Institute: why do we need it?

Why should physician executives care about medical informatics? For that matter, what is medical informatics anyway? Broadly defined, medical informatics is the study of the collection, storage, retrieval, and analysis of data and information in health care to support clinical and administrative decision making. Informatics is important because, in the past 10 years, powerful computer, software, and information technologies have been developed to enable health care organizations to automate some of the work of decision making, for improved quality of care and cost control, and for successful managed care contracting. This new emphasis on informatics in health care was the impetus for the founding by ACPE earlier this year of The Informatics Institute, which will be involved in educational and research activities in the growing area of medical informatics. In this new column in Physician Executive, Dr. Marshall Ruffin, President and CEO of the Institute, will discuss the role of medical informatics in health care delivery and financing and its relation to physician executives.     

New challenges for medical directors

Much of the future success of managed care organizations will depend on the quality of the direction provided by medical directors. The increasing complexity of the health care industry, manifested by intense competition for patients and reduced levels of reimbursement, will necessitate that HMOs, PPOs, IPAs, and utilization review firms begin to differentiate their services according to clinical protocols and outcome measures.     

Veteran's health care: time for a change?

The Department of Veterans Affairs' mission is "to care for him who are shall have borne the battle for his widow and orphan." The Veterans Health Administration comprises 172 hospitals that are the hub of the health care delivery system. It is the largest provider of graduate medical education, and one of the major research organizations in the United States. The medical care budget exceeds $17 billion annually. Most of the persons cared for are not legally entitled to this health care based on service connected disability. The utilization of acute care hospital beds appears excessive when compared to that obtainable with managed care for Medicare or commercial insurance beneficiaries--the cost per member per month is three times higher. There may also be exploitation of the Veterans Administration hospitals by university medical schools. The Veterans Health Administration is a very expensive way to deliver care to entitled service connected veterans. Therefore, it is suggested that privatization be considered as an alternative vehicle for delivering health care.     

The coming medical apocalypse.

Is there a medical apocalypse in our future? Will it happen soon? No one can say for sure, but five ominous trends suggest that a medical meltdown could occur at any time. These trends are: (1) The practice of providing medical care becoming too complex from both a business and a legal perspective; (2) Less money being spent on medical care without any corresponding reduction in services provided, creating long-term operating deficits; (3) Investor-owned, for-profit corporations changing the focus of medicine by putting shareholder concerns ahead of patient care; (4) Employment-linked health care insurance creating a growing uninsured population, adding extra financial stress to our hospitals; and, (5) Providers losing faith in their future and becoming increasingly demoralized about practicing the healing arts. These dangerous trends are considered, along with some suggestions that physician executives and organizations might take to protect themselves.     

Hospital management's linchpin: the medical director.

The practice of medicine has become increasingly complex in this era of diagnosis-related groups (DRGs) and other direct government involvement in health care; complex and seemingly inappropriate legal decisions; liability chaos; and increasing competition from peers, entrepreneurs, and other health care organizations. In this new environment, an old player, the medical director (vice president of medical affairs) has been given new visibility and increased responsibilities to help physicians live with and overcome these environmental factors. In showing how the medical director can be of assistance in putting these factors into perspective, it is helpful to take a look at some aspects of the history of medicine, analyze the education process for physicians, point out where the profession began to be driven off course, and identify some of the overall problems of the profession and of the health care field. It is my intent here to project the position of medical director as a vital, frequently missing, link in the attempt to maximize communications, understanding, and achievement in health care organizations.     

Meet the mandate to measure clinical quality

The mandate for health care organizations to be accountable for quality, as well as price, is now unavoidable. The Joint Commission's ORYX project is requiring every hospital to measure clinical outcomes of a majority of its patients within the next three years. This mandate can be met best with systems of clinical outcomes measurement that provide valid, reliable risk adjustment; yield meaningful information about many different diseases and procedures; and measure more than mortality or cost--all using primarily billing data. New outcomes measurement tools with all of these capabilities are available and have already enabled quality improvement in dozens of hospitals across the U.S.