'90s may be decade for physician payment reform

The '80s in health care were characterized by reform of Medicare payment for hospital services. The '90s are likely to be characterized by reforms in the manner in which physicians are paid for services to Medicare beneficiaries. In this article, the authors examine the steps that are already under way or proposed for reforms in the payment for physician services under Medicare.     

Self-directed health plans: alternatives to managed care enabled by new technologies

Few people believed the Internet would have much impact on the delivery of health care services. However, combined with technological advances in how computer systems are structured and implemented and knowing what doesn't work in managed care from bitter experience, the Internet is being used to create a new paradigm of alternative health insurance products. These products hold the potential to change for the better the face of health care as we know it. Self-directed health plans will be less expensive than managed care programs and offer greater predictability in health care spending. For health care providers, SDHPs' reliance upon episode allowances will create a new market for packaged or bundled services. Providers will be paid to provide solutions, not just treatment. This could represent a new model in which physicians accept a risk-adjusted payment and provide a warranty that they will do whatever necessary until the patient has reached the reasonably expected health status. This is a radical departure from the fee-for-service or capitation system.     

Health care enters the real world.

The U.S. health care system is undergoing restructuring as a result of a complex interplay of social, political, and economic forces. Where once the medical profession had a monopoly position in the health care system, its position has been challenged by the Federal Trade Commission under the Sherman Antitrust Act. More and more, the health care field is characterized by entrepreneurialism, a concept that is at odds with the traditional tenets of the medical profession. The restructuring of health care in the U.S. has the potential to allow the entrepreneur to function to the benefit of patients, despite the fact that this is a change resisted by those providing health care services.     

Re-forming the traditional organization medical staff

The traditional, two-bylaws-model organized medical staff was created in another age (1919) to serve a simple health care system, controlled by physicians, in which the only players were patients, doctors, nurses, and small hospitals. This medical staff model does not meet the needs of the U.S. health care system of the 1990s. The purpose of this article is to provide the physician executive with a resource to use when he or she is called on to help determine what, if any, changes are needed in his or her organization to make the role of physician leaders more effective. Finding the right answer to this question is part of discovering ways to reduce health care costs without reducing the funds available to pay for direct delivery of health care services. Maintaining traditional, bureaucratic, legalistic organized medical staff activities is a very expensive game that we can no longer afford to play.     

Hospitals' newest challenge: designing in quality

The job of producing high-quality products is even more difficult for health care providers than it is for those in manufacturing, where the quality movement began. As a part of the service industry, health care providers are in the position of producing products and delivering services at the moment of sale. Our task is to improve the quality of all of these simultaneous and interrelated processes. Traditionally, health care providers have made efforts to improve their products and services without realizing the impact that could be made by also improving resources, processes, and outcomes. This article is an overview of the new direction we have been taking: Retrospective review. Critical pathways. Building quality into all areas (resources, processes, products and services, and outcomes). Focused study of outcomes). We foresee a further evolution that will lead to exciting new methods for understanding and delivering high-quality care.     

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.     

Medicare and Medicaid: the first successful effort to increase access to health care

The passage of Lyndon Johnson's health care legacy, Medicare and Medicaid, in 1965 represents the last time that health reform legislation expanding access to care was successfully proposed and implemented in the United States. Access, of course, represents only half the pie in health reform, the other part being the organization of the health care system. There has never been any major legislation passed through both houses of Congress and signed by a President that changed the organization and delivery of health services. It seems certain that President Clinton will propose legislation dealing with both access to and organization of our health care system. Though it may not have seemed so at the time, President Johnson had it easy compared to the challenges confronting President Clinton.     

Can good health be just a fad?

A number of studies have identified health education and promotion as important contributors to health improvement. Still, a number of factors, not the least of which is the dominance of the health care system by a disease orientation, have kept the health promotion movement from making even more significant contributions to the nation's health. The knowledge and technology to make health promotion a key part of the health care system are clearly in place. What is needed is greater involvement in the movement by physicians. Physician managers can play a leading role in bringing physicians into the mainstream of health promotion activities.     

I get paid fast; what about you?

The process of billing an insurance company for health care services has changed radically. In the past few years, the emphasis has been on automation. The change is fueled by the opinion of cost containment experts who claim that automation will help reduce costs in the U.S. health care delivery system. Key to success for the provider in adapting to this change will be understanding the coding used in the billing process and following standards of accuracy and fairness. This article is not intended to represent the adjudication rules of any particular insurance company. It is the result of experience as a practicing surgeon and as a consultant in the health care field.     

Population health--a new discipline

A new discipline--population health--has emerged with the potential to profoundly impact the U.S. health care system. Multiple forces stimulating the new population health concept include: (1) the increasing dominance of managed care and critical scrutiny of its development; (2) the continued refinement of clinical effectiveness and outcomes assessment research; (3) increasing public policy emphasis on cost-effectiveness accountability for health care services; and (4) a new focus on the importance of collaboration between the medicine and public health enterprises in this country. The need for sophisticated analysis of population health determinants has never been greater in history. New programs, like the University of Wisconsin-Madison's interdisciplinary Graduate Program in Population Health, address the need for analysis, dissemination, and application of information about the many factors affecting the health of populations.     

Elements of the American Health Security Act of 1993

Over the past several decades, there has been a plethora of proposals that were developed in response to the ongoing debate on how best to solve the problems of the American health care delivery system. In the past decade, calls for modification of our health system have become even more resonant, as measures to control rising costs were unsuccessful and access to basic services was diminished for many Americans. The most recent addition to the list of proposals for modifying the health care system is the American Health Security Act of 1993, introduced by President Clinton in September 1993. This article will examine the position of the Clinton Administration on health reform and the core elements of the reform package.     

Why we cannot agree on the direction of health reform: an exploration of American values

Most of the articles in this series examine historical forces that have shaped American health care policy. This article will ask the reader to step back from the swirl of events that have led to a health care system that provides excellent care to many and minimal services to a substantial minority. The purpose of this article is to place often contradictory health policies within their philosophical context. Such an analysis can lead to an understanding of the reasons for the simultaneous appearance of both competitive and regulatory features in the American 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.     

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.     

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.     

Managed care in the pediatric subspecialty of neonatology. The challenges, impact, and consequences

As our health care system moves toward a more managed competition model, the delivery of pediatric and pediatric specialists' services, especially the intensive and procedural services of neonatology, will be impacted. Pediatricians and pediatric subspecialists cannot avoid being buffeted from the powerful market forces that are now driving revolutionary changes in our health care system; they, like nonpediatric physicians, are often concerned and bewildered about the new realities of the day.     

Reporting quality of health care to the board

The reporting of quality of health care to the governing board has long been an enigma. Now we are in the midst of a revolution in health care, as we shift our focus from solely the clinical performance of individuals to a broader scope of assessing and improving all activities around patient services and patient care--i.e., management outcomes integrated with clinical outcomes to help identify opportunities to improve patient care. In addition, apprised of corporate liability for the quality of care provided in health care organizations, governing boards are raising questions and demanding more information. To maintain this high degree of interest in quality of health care, information should be restricted to what the board needs to know. This article will be confined to the hospital's organizationwide quality system of monitoring and evaluating. While medical staff credentialing and privileging are also board responsibilities and quality management activities should be used in the privileging and credentialing process, they will not be addressed in this article.     

Payment for drug therapy

This regular column of Physician Executive deals with the issues surrounding expanding technology in the delivery of health care services. Although technology is most commonly viewed in terms of equipment and procedures, the growing cost and complexity of drug therapy has made even this technology the target of assessment. The following report details the positions taken by the buyers of health care services on payment for drug therapy.     

How much administration is today's physician doing?

The substantial changes in the organization and financing of health care services that have occurred in the United States over the past decade have helped to facilitate a growing role for physicians in health care management. These administrative roles for physicians are becoming increasingly important within many health care institutions with regard to such issues as cost containment and cost effectiveness, quality assurance and professional standards, and access to care. The growing complexity and diversity of the delivery system have created the need for more physicians to become involved in "orchestrat(ing)" the management of the medical-industrial complex."     

Planning ambulatory health care delivery systems

This paper develops an optimal ambulatory health care delivery system for a community, by determining the optimal number, size and location of health centers. The demand for ambulatory health care services is given. The objective is to maximize the difference between the benefits of the patients receiving treatment and the total cost of the system. Utilization of facilities, which is a function of distance, is expressed in terms of benefits and incorporated into the cost-benefit analysis. The model is illustrated by a numerical example.