Models for medical practice integration

Decreased physician income, increased administrative burdens, and interference with the compassionate delivery of high-quality medical care are threatening the independent practice of medicine in solo and small group practices. Many established physicians, and the hospitals with which they relate, are searching for organizational models that, by integrating some or all aspects of their practices, will preserve incomes and reduce regulatory and administrative burdens. This article will describe several "practice integration models," pointing out advantages and disadvantages to physicians in established practices. (Many of the same arguments could be made for physicians new to practice, with different emphasis). The continuum of integration models is shown in figure 1, page 19. The group practice without walls and its two submodels, the independent group practice without walls (IGWW) and the affiliated medical practice corporation (AMPC) are more recent and more effective models and will be covered in depth in the article.     

Serf or citizen: physician status and organizational structure

For more than a decade, dynamic changes in the health care industry have created new organizations for physicians. The major change for physicians has not been the organization itself, but the principles by which it is governed. This fundamental shift is studied with its impact on physicians, by analogy, becoming more like serfs or more like citizens. A review of the general organizational direction and results of non-physician health care organizations is made followed by the statistical trends of physician groups. Historical comparisons of non-health care industries are made with current organizational choices of physicians and physician groups. Observations of physician decisions are made identifying the direction they send physician status along the continuum from serf to citizen. Physicians are unknowingly making decisions regarding the principles by which they will be governed in new organizations. The choices they are making give them less autonomy and less opportunity to make future choices. The seductive invitation to spend less time in administrative matters and more time practicing medicine is a siren's call that will diminish the status of physicians and the autonomy by which medicine is practiced.     

The Piñata syndrome

The Pi?ata Syndrome is manifested by physician lounge grumbling and griping; sniping at medical and administrative leadership; resistance to examining best practices; refusal to hold colleagues responsible for their behavior, and general melancholy. This disease is characterized by grousing physicians who do not enjoy the practice of medicine and if self treated will leave medicine. It is accompanied by patients who receive inappropriate care and caring. The treatment, which can result in an excellent prognosis, is self-administered and must be vigorously pursued to avoid chronic Pi?ata Syndrome, a professional death.     

Lonely at the top and loving it: physicians as CEOs

As little as five years ago, most hospital board members scoffed at the idea of hiring physicians as chief executive officers or chief operating officers. Physicians, they maintained, belonged at the bedside, not in the board room. For the most part, physicians didn't take issue with this thinking. Profit and loss statements, strategic planning, and other CEO duties were alien. Besides, being a "suit" was unconscionable, a total fall from the true grace of medicine: patient care. Dramatic changes in health care have wrought dramatic changes in the mindsets of both board members and physicians. Today, both sides have developed a new perspective on physicians in top hospital administrative positions. In this article, the author reports on the experiences of physician executives who have made the trip to the top.     

MSO (medical services organizations)--the new new kid on the block?

In response to pressures on the practice of medicine, new practice management styles and organizations are being created to meet market demands. Managed care environments have encouraged the development of IPAs, closed panel HMOs, and other corporate structures to provide care for their patients. Early resistance of physicians to joining in administrative arrangements has now melted. Providers are beginning to adopt the philosophy of joining resources for survival and to improve market penetration. Physician executives must keep their minds open to the possibility that these provider-based organizations will occur even in the most unlikely places.     

Breaking the glass ceiling

The glass ceiling is a form of organizational bias and discrimination that prevents qualified professionals from achieving positions of top governance and leadership. This article examines glass ceiling barriers that keep physicians from the upper reaches of management. While these factors apply mainly to women and minority physicians in academia, and are attributable to sexual harassment and discrimination, physicians as a class are frequently denied executive management positions. Such denial results from inadequate preparation for a career in health care administration. Important issues in the professional development of physician executives include mentoring, training and education, administrative experience, and cultural and personality factors. All of those must be considered when making the transition from medicine to management.     

If patients are now "customers," what does that make physicians?

As patients become "members" and "customers," as physicians become "practitioners" and "providers," the practice of medicine becomes more complex and more demanding. The changes that have affected the daily lives of physicians across America will continue and will likely become even more dramatic in the future. There is much to mourn in the passing of the medical practice of the recent past, but there is every reason to celebrate the ongoing triumphs of medicine and its successes in improving the human condition. The job of being a physician is not becoming any less important. The job has just gotten tougher. Successful physicians will cope with the multitude of changes in which the health care field is engaged and make themselves effective agents of change within their organizations.     

Administrative knowledge and skills needed by physician executives

A survey was mailed to 100 physician executives identified through the 1991 American College of Physicians Executives directory. The subjects were asked to rate 17 managerial areas on their value to the subjects' current work, on the subjects' preparation in the areas, and on the need for training in the areas. In addition, the subjects were asked how best to accomplish training in the areas and for a list of areas of greatest importance in the future for physician executives. The subjects rated communication skills, quality assurance, utilization review, and personnel management as being of primary value in their current roles. Preparation was most adequate in communication skills and most inadequate in the areas of finance and organizational management. Training was deemed desirable in all areas, but was thought to be most necessary in communication skills, negotiations, strategic planning, and organizational management. There was least desire for training in the areas of labor law and employment law. The most popular means of training were doing a fellowship in administrative medicine, receiving continuing education through seminars or workshops, or getting a degree in management.     

Breaking away

While life as hospital employees was comfortable, the lure of independence won out for these two emergency department physicians. Breaking away to develop a new company was not easy, but it's paid off for the entrepreneurs of the Capital Region Emergency Medicine, P.C. Developing an emergency medicine business meant learning all aspects of business: billing services, evaluating legal services, raising capital, and becoming employers. The advantage has been an ability to use profits to improve the moral of staff, an increase in salary, and an overall sense of satisfaction.     

Changes in physician and non-physician relationships

At the end of World War II, one-third of the nation's hospital administrators were physicians. During the 1950's through the mid-1980's a new breed of masters'level administrator, with well-honed coordinating skills, orchestrated a major expansion of new programs, services, and facilities. With the advent of the Medicare prospective payment system (PPS), more governing boards restructured their administrative staffs with corporate titles. Meanwhile, physicians sensed that trustees were becoming far more concerned with bottom line performance to repay a mounting debt that hospitals had incurred to remain technologically competitive. Since mergers and integrated health systems by themselves will be unable to generate significant operating efficiencies, governing boards will be forced to change direction and shift back to recruiting physicians as their CEOs or in other senior positions to assure themselves of the clinical leadership required to implement the managed care concepts of reducing utilization and cost, and simultaneously enhancing quality of patient care.     

Health care trends, Part I. The promise and perils of evidence-based medicine ... panel discussion.

Numerous studies have demonstrated that there are wide variations in the way physicians manage similar patients. This suggests that an evidence-based approach could lead to better outcomes with less cost. But practicing evidence-based medicine requires new skills, such as using computerized databases and applying the rules of evidence to primary and integrative studies in the medical literature. The progress of evidence-based medicine will depend in large measure on how quickly these new skills can be developed and integrated into the practice environment. Here's how six experts see the promise and the perils of evidence-based medicine, now and in the new millennium. Part 2 of the panel discussion will explore the new provider team, which includes nurses and, more recently, pharmacists, who are collaborating with physicians to provide disease management and drugs therapy management services.     

Focus on the fundamentals

What business are we in? Who are our customers? as health care evolves, the answers to these questions become increasingly complex. And as physicians become more involved in the business side of medicine and the business side of medicine becomes more sophisticated itself, we must not forget the fundamentals. Successful business people do not lose touch with the essential concerns of their industry. Future success in the medical marketplace will require physicians and physician leaders to keep in mind what business we are in and who our customers are. This article offers a set of answers to these questions.     

The times, they are a changin'

Significant changes are taking place and will continue to take place in U.S. health care and medicine. Many of these changes are not, and will not be, to the benefit of physicians. Reduced personal autonomy, probably lower compensation than expected, fewer and less adequate resources, and overall significantly reduced power are some of the likely outcomes of the changes underway. Perhaps of greatest personal interest is the high likelihood of lack of employment in medicine for upwards of 200,000 physicians over the next 20 years.     

A revolution in genetics: changing medicine, changing lives

The sequencing of the human genome is only the tip of the iceberg. It is the beginning of a revolution that many predict will transform medicine. How will genetics research affect physicians and patients and the practice of medicine? When investigators identify the function and association of human genes with common chronic diseases, diagnosis, treatment, and classification of human diseases will be changed forever. Genetic susceptibility testing allows patients to know their predisposition to disease long before symptoms appear. Physicians can intervene with customized advice so that the patient can prevent, modify, or avoid the predisposed condition by better understanding both his or her genetic and environmental risk for disease. The promise of a genetic approach to drug therapy involves moving from one size fits all to personalized medicine tailored to the individual patient. Physicians will become mentors and counselors, advising patients on the best treatment path given their unique genetic predisposition--even in this sophisticated, high tech field, the physician-patient relationship is likely to improve, highlighted by individualized therapies and personal attention.     

Physicians in transition

The study of physicians as managed care executives has been relatively recent. Much of what was written in the past focused primarily on doctors who had taken hospital-based administrative positions, especially as medical directors or vice presidents of medical affairs.1 But the '80s brought rising health care costs and the emergence of the "O's"--HMOs, PPOs, UROs, EPOs, PHOs, H2Os, and Uh-Ohs--in response. It also brought a growing number of physicians who traded their white coats and their particular "ologies" for the blue suits of executive management. I am convinced that it is important now, and will be increasingly important in the future, to better understand that transition. That belief led me to undertake, with the help and support of ACPE, the survey that is reported in this article. A questionnaire was sent in 1994 to a random sample of 300 managed care physician executive members of ACPE. Responses were returned by 225 members, a response rate of better than 80 percent. Twenty-five of the responses were not applicable, having been returned by physicians who had never made a transition from clinical careers. The remaining 230 responses form the basis for this report.     

The physician glut: a different view. Interview by Donna Vavala

An interview with nationally known futurist Leland Kaiser, PhD, on the changes physician executives are likely to face as a result of the coming dislocation in the health professions. Or will there be a shrinking career pie at all? The real question is: What new mental models are we going to use and as a result of the new models, what new jobs are going to be created that will ameliorate some of the surplus we've created in the old model? Dr. Kaiser predicts a model will soon emerge that will open a myriad of new career opportunities for physicians. The new model he foresees is community-based medicine.     

Legal issues in accepting capitation

The effort to reduce the cost of medical, hospital, and ancillary services increasingly focuses on shifting the financial risk for the cost of these services to those who provide them. Shifting arrangements include capitation for physicians classified as "primary care" physicians; capitation arrangements that include primary and specialty services; risk shifting to medical groups, IPAs, and other physician organizations; as well as the packaging of physician and hospital services on a "full risk," "per case," or other basis. Accepting financial risk for the cost of medical and other health care services, as well as the responsibility for managing the provision of services, may very well be the only remaining opportunity for providers to maximize reimbursement and maintain administrative and clinical self-direction. However, physicians must work with managed care organizations (MCOs) through negotiation of contracts and throughout the relationship to make sure: Unnecessary financial and legal risks to the MCO and physicians are eliminated. Risks that cannot be eliminated are apportioned between the MCO and physicians. All risks are managed in a coordinated fashion between the MCO and physicians.     

The physician executive in a changing world.

Physicians are losing their historic franchise as sole and primary providers of medical care. In addition to eroding moral and scientific authority, physicians are also losing income and status. It is no wonder that physicians are retrenching--confused and angry about the increasing marginalization of their profession and about society's changing expectations. Physicians are caught in a transition zone between the world that was and the one that will soon be. This is destabilizing and causes great anxiety. Rather than being buffeted by changing social and cultural definitions of health care, physicians must become proactively involved in the future of their profession. Physicians can only do this by offering a better mental model of health, medicine, and the community. This cannot be a defensive retreat from engagement. Rather, it must be an imaginative vision, vigorously set forth--a vision that will enlist the support of all constituencies involved in the effort to improve the health and well-being of all members of our society. The physician executive needs to work with physicians to orchestrate this effort to create a new vision of health in the 21st century.     

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 value circle. A profile of J. Richard Gaintner, MD.

This article describes how the arrival of CEO J. Richard Gaintner, MD, at Shands HealthCare signaled a time for refocusing the organization's direction and helping physicians to cope with the changes buffeting the industry. He saw angst and disenfranchisement, sentiments that characterized not only Shands and the University of Florida Health Science Center, but also the entire establishment of American scientific medicine. Gaintner believes--and continually preaches--that practicing medicine in a cost-effective manner will improve, not harm, the quality of care. His willingness to face reality objectively is perhaps his greatest asset in helping physicians deal with managed care. He conveys heartfelt empathy with the day-to-day conflicts they face. But he does not allow himself the temporary luxury of cynicism, and he refuses to accept negativity and pessimism in others. Rather, he asks that physicians and managers understand the system and develop the capacity to work within it and take responsibility for improving it. Beyond exhorting physicians to be accountable for the success of the enterprise, Gaintner creates mechanisms for meaningful physician participation in enterprise management.