The health care system should produce health

Reform of the U.S. health care system along the lines to be proposed by the Clinton Administration will not be an easy task, and it will not be accomplished quickly. A fundamental objective of the changes should be a health system whose purpose is improvement in the health of U.S. citizens, and not just the provision of services to all. This column is jointly edited by Kevin M. Fickenscher, MD, and David A. Kindig, MD, PhD, chair and member, respectively, of the College's Forum on National Health Policy. Dr. Fickenscher is participating in various advisory capacities on health care in the Clinton Administration, and Dr. Kindig is Senior Advisor to HHS Secretary Donna Shalala.     

The rest of the spectrum: alternatives to managed competition

In the November-December 1993 and January 1994 issues of Physician Executive, Kevin Fickenscher, MD, and David A. Kindig, MD, PhD, described the Clinton health reform plan and the Senate Republican Task Force proposals. At either end of the political spectrum are other proposals that are options to the managed competition model. This entry in the column is the last in a series that outlines the major proposals pending before Congress. It and the others are intended to highlight the major elements of the proposals, not their details. "A Matter of Policy" is jointly edited by Drs. Fickenscher and Kindig of the College's Forum on Health Policy.     

Altering specialty balances

In an on again, off again pattern, the numbers and distribution of physicians have been of policy concern since the passage of Medicare and Medicaid in the '60s. After a hiatus in the '80s, these issues are a significant part of the current health reform agenda, appearing in one form or another in many of the proposals already offered. If the solutions found this time are to have lasting effects, however, it is critical that the issues are carefully shaped and that those making policy are certain that agreement has been achieved on the basic terms that characterize the issues. This column is jointly edited by Keven M. Fickenscher, MD, Chair, and David A. Kindig, of the College's Forum on National Health Policy.     

Service and Price Competition When Customers Are Naive

We consider a system of two service providers each with a separate queue. Customers choose one queue to join upon arrival and can switch between queues in real time before entering service to maximize their spot utility, which is a function of price and queue length. We characterize the steady‐state distribution for queue lengths, and then investigate a two‐stage game in which the two service providers first simultaneously select service rates and then simultaneously charge prices. Our results indicate that neither service provider will have both a faster service and a lower price than its competitor. When price plays a less significant role in customers’ service selection relative to queue length or when the two service providers incur comparable costs for building capacities, they will not engage in price competition. When price plays a significant role and the capacity costs at the service providers sufficiently differ, they will adopt substitutable competition instruments: the lower cost service provider will build a faster service and the higher cost service provider will charge a lower price. Comparing our results to those in the existing literature, we find that the service providers invest in lower service rates, engage in less intense price competition, and earn higher profits, while customers wait in line longer when they are unable to infer service rates and are naive in service selection than when they can infer service rates to make sophisticated choices. The customers’ jockeying behavior further lowers the service providers’ capacity investment and lengthens the customers’ duration of stay.     

The Republican task force health reform proposal: loyal opposition or bipartisan collaboration?

In the November-December issue of Physician Executive, Drs. Fickenscher and Kindig explored the major elements of the Clinton health reform initiative, the Health Security Act of 1993. Although the Clinton proposal represents one of the major health reform proposals presently before Congress, it is by no means the only proposal. Over the next several issues, this column will provide an overview of other major proposals pending before Congress that will receive serious consideration in the coming months.     

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.     

Adoption of Mobile Telephony in Rural India: An Empirical Study

Mobile telephony has become one of the major factors driving the social and economic development of a country. The objective of this article is to identify factors affecting the adoption of mobile telephony in rural India and examine their impact on its adoption. An explanatory empirical methodology with sequential design was used for this purpose, and new factors that affect users’ decisions to adopt mobile telephony in rural India were identified. We extended the technology acceptance model by integrating new factors for a developing nation. This study found that ensuring service transparency and identifying opinion leaders in the local community are key requirements for increasing the speed of adoption in the rural India. The findings of this study will provide insights for service providers and policy makers to develop strategies and policies that will enhance mobile telephony adoption in rural India.     

基于服务化的制造企业与服务提供商的演化博弈分析

制造企业从传统制造向服务型制造转变是其转型升级、提升竞争力的重要路径之一。而企业在转型过程中受自身资源约束,往往需要服务提供商的配合。本文在构建制造企业与服务企业的收益函数基础上,建立两方非对称演化博弈模型,探究制造企业与服务提供商合作实施服务化策略的规律,并运用MATLAB仿真,深入研究相关因素对制造企业与服务提供商合作实施服务化策略的影响作用。研究表明,制造企业对服务提供商所提供服务的依赖度、服务化制造企业与未服务化制造企业间的差异化竞争度、双方合作前后的收益和成本、合作不成功造成的损失、收益的分配等因素是合作意愿的重要影响因素,且差异化竞争度比服务依赖度对合作意愿的影响作用更强烈、与收益相比博弈主体对成本的变化更敏感、服务提供商更易动摇合作的意愿、存在最优的收益分配系数使制造企业与服务提供商采取合作策略的意愿最强。     

What does it cost, and does it help the patient?. Interview by Wesley Curry

At the ACPE National Conference in San Antonio on May 17, 1990, David M. Eddy, MD, PhD, described serious problems with the information infrastructure for medicine, and discussed the implications of these failings for the quality and cost of medical care. Physician Executive discussed the issues raised in Dr. Eddy's presentation and reports his comments in this article. Dr. Eddy is Professor of Health Policy and Management, Duke University, Durham, N.C.     

Net Neutrality,Broadband Market Coverage,and Innovation at the Edge*

Net neutrality (NN) is a widely debated policy issue that has the potential to alter the dynamics of accessing online content. The focal point of the debate lies in whether broadband service providers (BSPs) should be allowed to charge content providers for the preferential delivery of their digital content. This decision will affect broadband market coverage for end consumers as well as the issues of long‐term competition and innovation in the market of digital content. Our research aims to analyze and address these issues. We propose a game theoretical model with three players—the BSP, the content providers, and the consumers—where the BSP, in its capacity as a gatekeeper between the content providers and the consumers, is modeled as a two‐sided market platform. We find that while abandoning the principle of NN might sometimes result in increased consumer surplus and broadband market coverage, it can also hinder the ability of startups to compete against established rivals and thus reduce innovation at the edge. The results should be of great interest to policymakers as they debate on this very crucial issue.     

Present at the creation. Interview by Wesley Curry.

This is the inaugural issue of Physician Executive under the auspices of the new American College of Physician Executives. In this and subsequent issues of the journal, we will feature an interview with a prominent figure in the health care delivery system. We begin with Robert A. Henry, MD, FACPE, President and CEO of SwedishAmerican Corporation, Rockford, III. A Distinguished Fellow of the American College of Physician Executives, Dr. Henry is a Past President of both the American College of Physician Executives and the American Academy of Medical Directors. He currently serves as Chairman of the Board of Directors of the Physician Executive Management Center. Dr. Henry entered medical management in the early days of the profession and is a long-time member of the Academy and College, becoming a member of the former in 1975. He became a member of the College in 1980 and a Fellow in 1981. He became a Distinguished Fellow of the College upon its creation on January 1 of this year. He has followed the growth of the Academy and of the medical management profession for several years and has been an active contributor to the success of both. He is uniquely qualified to discuss both the profession and the professional organization that serves it. The following is a report on a conversation that was conducted with Dr. Henry in early November 1988 while he was in Tampa for a meeting of the Board of Directors of the Physician Executive Management Center.     

The foundation for future health care.

In the March-April issue of Physician Executive, Thomas Ainsworth, MD, provided his view of the current status of health promotion within the health care delivery system. The potential, he wrote, is far greater than the realization to date, and physicians can have a significant role in the development of health promotion programs. In this article, the theory is posited that the prime factor in the failure of health promotion to achieve a more significant position in the health care field is inertia. The forces for the status quo have simply been too great to be overcome. However, consumers, providers, and payers are almost certain to be involved in a health promotion strategy that will revolutionize the health care industry.     

Premium will continue to be on performance. Interview by Wesley Curry.

With a new name for its professional organization (the American College of Physician Executives) and a new certifying organization (the American Board of Medical Management), the profession of medical management is in the throes of significant and far-reaching change. At the College's National Conference in Washington, D.C. in May, we talked to two leaders of the profession, Michael B. Guthrie, MD, MBA, FACPE, and Robert H. Hodge, Jr., MD, FACPE about what the future holds for physician executives and what physician executives can do to position themselves for success. Dr. Guthrie, the Immediate Past President of the College is Vice President for Business Development, Penrose/St. Francis Healthcare System, Colorado Springs, Colo. Dr. Hodge, the new President of the College, is a Program Director, W.K. Kellogg Foundation, Battle Creek, Mich.     

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.     

Pricing,Allocation, and Overbooking in Dynamic Service Network Competition When Demand Is Uncertain

We study the problem of combined pricing, resource allocation, and overbooking by service providers involved in dynamic noncooperative oligopolistic competition on a network that represents the relationships of the providers to one another and to their customers when service demand is uncertain. We propose, analyze, and compute solutions for a model that is more general than other models reported in the revenue management literature to date. In particular, previous models typically consider only three or four of five key revenue management features that we have purposely built into our model: (1) pricing, (2) resource allocation, (3) dynamic competition, (4) an explicit network, and (5) uncertain demand. Illustrative realizations of the abstract problem we study are those of airline revenue management and service provision by companies facing resource constraints. Under fairly general regularity conditions, we prove existence and uniqueness of a pure strategy Nash equilibrium for dynamic oligopolistic service network competition described by our model. We also show, for an appropriate notion of regularity, that competition leads to the underpricing of network services, a finding numerically illustrated by an example of intermediate size. Our proposed algorithm can be implemented using well‐known off‐the‐shelf commercial software.     

Supervision im Kontext gesellschaftlicher Wandlungsprozesse

Supervision in the context of social changes In view of institutional changes in the working areas of supervision, increased competition amongst advisory concepts, cuts in further education budgets and great efforts at laying the theoretical and conceptual foundations for professional supervision, I cannot but raise the following question anew: Which questions, goals and learning processes are involved in supervision and who introduces them in the first place? Depending on how it is envisaged, there can be fundamentally varying standards for evaluating the role or significance of supervision. It cannot be taken for granted that experts, the institutional interests of supervision cost providers and the needs of the supervised follow one and the same guiding principle or action-related maxim. Differences and common points alike have to be elicited and utilized for a well-founded, professional understanding of supervision — therein lies the object of my research project on the role of supervision in current working processes.     

Online Intermediary as a Channel for Selling Quality‐Differentiated Services

When deciding whether to utilize an online intermediary in addition to their own distribution channels, quality differentiated service providers face the trade‐off between the benefit of extended reach and the threat of increased competition. Using an analytical framework, we analyze when and how service providers may utilize an online intermediary to their advantage in the presence of advance selling (i.e., selling a service at an early date for future consumption). In general, when an online intermediary is used, the competition effect dominates the reach effect and leads to a falling price trend. Interestingly, we find that the negative effect of increased competition on profits, due to intermediary usage, can be reversed by committing to self‐imposed participation limits (i.e., selling only a predetermined amount of services through the online intermediary). This ensures that the service provider is better off selling through both its own site and the online intermediary, rather than selling exclusively using either channel.      

From austria to the united states and from evaluating therapists to developing cognitive resources theory: An interview with fred fiedler

The following interview represents the start of a series of interviews with researchers who have had a major impact on the field of leadership. Through these interviews we want to obtain a sense of the person behind the researcher, a few comments on the person's research ideas, and some insights on the state of the field. In addition, we have asked some of the people who worked with Dr. Fiedler to comment on what it was like to work with and for him. We will try to do this for other interviewees as well. We believe this interview is timely as Dr. Fiedler is this year's recipient of the James McKeen Cattell Award of the American Psychological Society.     

Public hospitals: an assessment and plan for the future.

We are currently living in very difficult times for most health care providers. Even though we have always known it, the fact that resources for health care are limited is now abundantly apparent to consumers, health care providers, fiscal intermediaries, government (local, state, and federal), health care planners, and policy makers. Hospitals, especially, are being severely pressured to reduce resource consumption and costs. Conditions that are difficult for nonpublic hospitals are critical for public hospitals in general and nearly fatal for rural public hospitals. Fortunately, nonpublic hospitals are beginning to realize for the first time that their future depends, to a significant degree, on a strong and financially healthy public hospital system. If the public hospital, the hospital of last resort, closes, medically indigent patients will have to be treated in nonpublic hospitals, with the resultant medical, financial, economic, political, and social consequences. Therefore, the importance of public hospitals has to be even better recognized and appreciated and these institutions actively supported in order for the private and total health care systems to be successful.     

The medical director as educator: an interview with Elizabeth M. Gallup, MD, JD, MBA. Interview by Richard L. Reece

Richard L. Reece, MD, interviewed Elizabeth M. Gallup, MD, JD, MBA, on July 9, 1999, to talk about the evolving role of the physician executive. Dr. Gallup discusses how medical directors have evolved from a purely clinical role to participating in the business side of medicine as well. The traditional medical director, a Dr. No who denies treatment and watches clinical performance, is now becoming an educator helping physicians to manage their behavior and change their practices based on comparative data. Her book, How Physicians Can Avoid Surrender and Lead Change: Gaining Real Influence in Your Own Health Care Organization Before It's Too Late, (American College of Physician Executives, 1996) promotes acting together as a group if physicians want to stay independent and not become employed. Independent physicians can form IPAs and act together as a group, avoiding some antitrust laws. Unless physicians get together and act as a group, she says, they are doomed to further and further erosion of their economic interests as well as their clinical autonomy.