Primary care networks: choose your physicians wisely

As hospitals and health care systems maneuver for a position in the integrated health care delivery system, no initiative is more important than building an effective and competitive primary care network. Yet this critical initiative is fraught with potential pitfalls. In their haste to develop primary care networks, hospitals and health care systems may fail to thoroughly evaluate network participants and in turn create large, inclusive, and inefficient primary care networks that don't come close to breaking even, much less repay practice acquisition costs. In an effort to become more efficient, practitioners often find themselves in the unenviable position of "de-selecting" peers retrospectively. The author presents criteria for evaluating and selecting network physicians.     

Health care's power brokers in the 21st Century. Interview by Donna Vavala

Health care has undergone turbulent change in the 20th Century. In addition to dramatic pharmaceutical and technological advances, the entire health care delivery system has been significantly improved. Through all the turmoil, hospitals have been at the center of the health care universe. But, as the 21st Century approaches, that may change, too. What will become of hospitals, which for most of this century have played a commanding role? Will managed care organizations and group practices come out on top? And, once the new power broker takes over, what will be the impact on providers, insurers, and the government, and how will their relationships to each other change? Jeff Goldsmith, PhD, President of Health Futures, Inc., Bannockburn, Ill., and health care futurist, examines tomorrow's health care delivery system and makes some eye-opening predictions.     

The remote practice network: new concept in health care delivery.

It is widely acknowledged that a trend toward greater competition is creating dramatic changes in the way that health care is provided in the United States. Physicians and hospitals, in particular, face a difficult period of adjustment as the nation's health care system increasingly turns toward the competitive model. Physicians, particularly those in leadership positions, must meet the challenge of competition by developing and implementing effective coping strategies. Medical directors and other physicians in key leadership and decision-making positions have a responsibility to their institutions, their patients, and indeed their own careers to recognize and understand the implications of current trends in health care delivery. This article discusses an innovative approach to competition in today's challenging health care marketplace.     

Cost and quality outcomes of comprehensive epilepsy monitoring review of referrals in a managed Medicaid program

The proceedings of the National Institute of Health's "Consensus Development Conference on Epilepsy Surgery" was published in March 1990. In it, the conclusion was made that, while surgery for intractable epilepsy can stop or decrease documented seizures, "effects in overall health status and quality of life have not been adequately studied." Recommendations for standardized data collection for surgery in qualified, technologically-equipped centers included the need for follow-up studies of outcomes for at least five years. The University of Arizona's Epilepsy Center was established in 1984, and the Arizona Comprehensive Epilepsy Monitoring Program started at the University of Arizona Health Sciences Center in 1990. Patients from various payer sources have been managed, and many surgeries have been performed. This report focuses on patients covered under the state's managed Medicaid program for patients under a full-risk, capitated managed care contract with University Physicians. The Arizona Health Care Cost Containment System (AHCCCS) contracted with University Physicians, Inc., of the University of Arizona Health Sciences Center, for comprehensive health care services under a capitated payment mechanism from 1982 to 1992. Thereafter, University Physicians has provided services through subcontracts with other managed care organizations. This report focuses on this Medicaid population.     

Physician-hospital organizations and PHO executives. What lies ahead for the PHO?

The 1996/97 Profile of Physician-Hospital Organizations and PHO Executives, jointly conducted by the American Association of Physician-Hospital Organizations/Integrated Delivery Systems (AAPHO/IDS) and Tyler & Company, takes a closer look at the PHO and trends within the health care system. In examining contracting, enrollees, staff size and experience, compensation, incentives, and projected salary increase for CEOs, the survey found that the PHO is in the midst of transformation into an integrated delivery system. As physicians and hospitals form a team to deliver more efficient and cost-effective health care to patients, they are paving the way to the integrated delivery system. The survey also focuses on the details of the PHO and PHO executives, including an in-depth look at all aspects of compensation for the CEO.     

The role of organizational ethics committees

Health care services are increasingly provided in an atmosphere that is fractured by conflicting ethical concerns. This trend had been most noticeable in institutional settings. In response, hospitals have for many years had ethics committees. Their purpose has been to guide providers, patients, and families when decisions with ethical implications have to be made. The shift in focus within the health care delivery system away from hospitals and more to managed care systems and to domination of decision making by primary care providers suggests that expansion of the ethics committee concept may be advisable.     

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.     

Strategic approach to the development of a superior product.

This article describes an innovative approach to the design and delivery of health care services; a brief summary of the underlying rationale of the approach; a comparison of the traditional health care delivery system with the new, extended product line (EPL) approach; and an evaluation of the extended product line process. Information regarding the extended product line will be presented as a case study, describing one hospital's experience with the development of a cardiac extended product line.     

The two-edged sword: how technology shapes medical practice

Technology is assuming an increasingly important role in medical practice and health care delivery, fueled by forces such as uncertainty, variability, error, and quality problems. While the benefits of technology are obvious, there are insidious costs that are harder to discern. Technology has a significant, but less appreciated, role in imposing standards and constraints upon medicine. These ancillary effects account for some of the physician reluctance to embrace technological innovations perceived as controlling. This article explores technology's wide-ranging effects in shaping medical care delivery. Technology is not a passive servant of the health care delivery system, but rather acts as a catalyst and shaper of that system. In the process of becoming more technological, medicine has been transformed from a profession with unmatched sovereignty into an industry shaped by technology amidst a context of social and political forces.     

Certification: goals set, goals met.

When the American Board of Medical Management was founded by the American College of Physician Executives on January 1, 1989, it was understood that the process for formal recognition of medical management as a specialty of medicine would be rigorous. Understandably, particularly at a time when the medical profession and the health care delivery system are under increasing scrutiny by all third-party payers, the decision to expand medical specialization is made with great caution. But the process of recognition for medical management is now well under way. In an interview with Frank A. Riddick Jr., MD, FACPE, Chairman of the Board of Directors of ABMM, Physician Executive learned more about the specific goals of ABMM and about the degree to which those goals have been achieved.     

Integrated planning for health care organizations, especially hospitals

Planning in health care organizations is of considerable current interest in this country. Furthermore, effective planning processes require, as a necessary condition for that effectiveness, development within a framework which considers the organizational, managerial and service delivery environment.This paper examines the concept of planning in relation to health care organizations. Through an examination of the effects which proper planning can have upon industrial organizations the authors analyze the possible impacts of planning procedures upon health care institutions. Their analysis leads to certain tentative conclusions as to appropriate organizational structure which could support effective planning. Whilst the authors have yet to test their hypothesis the conclusion they draw from their initial analysis are worthy of further investigation.     

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.     

Cost shifting: the final straw in federalization of health care

While cost controls applied by Medicare and indemnity insurance programs initially helped curtail abusive medical billing practices, creative billing techniques have since resulted in runaway medical costs and rising insurance premiums. Employers have been forced to increase employee's contributions to health care by increasing deductibles, copayments, and coinsurance or by simply dropping health care benefits. If National Health Insurance comes to pass, and that is a cry now coming from major employers, it will be followed in time by federalization of all health care delivery systems, including Workers' Compensation. It is the providers who shift their fees into Workers' Compensation, which pays from the first dollar, who will cause the business community to petition Washington for relief. It will claim the need for cost controls in Workers' Compensation to keep American business competitive in world markets.     

National health insurance--to be or not to be

It has been pointed out by advocates of change in the U.S. health care delivery system that, with the exception of the Republic of South Africa, the United States is the only industrialized nation without a system of national health care. Rising costs and an increasing percentage of Americans without insurance and with limited access to health care services has heightened interest in the development of a mechanism for payment for health care services in this country.     

Computer-based patient records: a building block for health care reform

The fundamental need for better information management capabilities in health care is at risk of being overlooked in the proposals for major national changes aimed at providing health security, controlling costs, enhancing quality, and expanding access for citizens. In addition to these proposed macro changes (e.g., universal access, guaranteed benefit package, national health board, regional health alliances), successful reform will require transformation of health care delivery at the micro level. We must overcome provider-dependent variations in clinical practice patterns, in quality of performance, and in costs of services. We must ensure movement toward appropriate care rather than simple rationing. Individual health care professionals and institutions must acquire and use tools that will enable them to provide their services cost-effectively with consistent results. We must be able to assess and ensure value--i.e., appropriateness, effectiveness, and cost--of health services, apply that knowledge in each and every patient encounter, and track the impact of clinical decisions through an analysis of aggregated databases.     

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.     

Getting the most for your consulting dollars

Major changes in the health care financing and delivery system have usually been accompanied by an increase in demand within the health care field for consulting services. The passage of Medicare/Medicaid in 1965 is one example. The passage of the DRG-based prospective pricing system in 1983 is another. Both spawned a substantial amount of work, and income, for consulting firms. Now the health care field is engaged in nearly total transformation as the forces of health care reform at the national level are met with myriad adjustments at the local and regional levels. Managed care, already a byword, is being strengthened by a multitude of so-called integrated system initiatives. It is not easy to survive, and the call is out to consultants to save the day, or at least stave off disaster. In the following four articles, Marilyn Kennedy, a member of the ACPE faculty and a consultant herself, gives some advice on how to make the consulting arrangement successful; three physician executives provide a glimpse at consults that have worked, and some that did not work.     

Study tour examines health care systems in Germany, Holland--Part II: The German system

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 on-site 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. In a series of reports that began in the July 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. In the first report, the health care delivery systems of the United States, Germany, and Holland were compared. In this report, the German system is analyzed in greater detail.     

Strategic Purchases of Bundled Products in a Health Care Supply Chain Environment*

Recent articles in the Wall Street Journal summarize the state of business practice in American hospitals by shedding light on the state of supply chain management practices and foci in today's health care supply chains. In health care, the single largest cost after labor is materials, and it has been documented that health care facilities can reduce the environmental impacts of the products and services they consume before regulatory problems arise or waste disposal costs increase by focusing on their upstream activities. Health care systems around the country consume significant quantities and varieties of products within the health delivery processes. Solving these environmental problems requires a much broader view involving collaborative efforts of professionals from different areas of health care to meet these challenges. The purchasing function bridges the gaps by providing a healthy dialogue on key environmental attributes within the health care supply chain. The concept of bundling new with refurbished products is gaining a lot of attention in the health care supply chain. This research describes a health care purchasing problem for bundling new and refurbished products of the type facing a growing number of large health care providers, and then proposes a methodology for evaluating the complex tradeoffs involved in bundling decisions for refurbished health care products. By exploiting some useful properties of the problem structure, our results provide buyers with useful insights for examining and selecting suppliers who are willing to offer bundles of new and refurbished products.     

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.