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.     

Dealing with the demands of change

If evidence of the changes occurring in and confronting the health care field were needed, it was provided in abundance at the College's Perspectives in Medical Management meeting in Chicago in May. The presentations and the discussions among members buttressed the feeling that the health care field is proceeding through a period of transformation. The evolving system will be anchored on managed care, with special emphasis on the word "managed." The accoutrements of managed care--case management, demand management, utilization management, clinical guidelines and protocols, capitation budgeting, and the like--dominated discussion. The "business" of health care is proceeding apace. Maintaining a balance between the financial and quality elements of health care delivery has never been more important. And the definition of that balance will be determined at the local and regional levels. Federal initiatives are temporarily in abeyance. The challenge for physician executives is to assume leadership in moving their organizations, and thus the health care system, toward a new design that corrects present deficiencies and positions both to respond more effectively to the health care market. While it is not possible to cover all of the more than 60 speakers who addressed the meeting, this report, through presentation of the ideas of some key presenters, is aimed at measuring at least the boundaries of the challenges that lie ahead.     

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.     

Cost pressures will force sharper definition of quality.

Much of the turmoil in the health care field is a direct result of pressures for reductions in health care costs. Many, particularly physicians, are concerned about the impact of cost-driven changes on the quality of care. The author of this article proposes five criteria that can serve as a structure on which to build a consensus for defining quality.     

A conversation on the future of health care

An extensive amount has been written, reported, and spoken on health care reform. It is a time of turmoil and uncertainty in the health care field. There is a great deal of talk at the federal level on reform, but efforts there seem to be at least temporarily stymied. Much is happening at the local and regional level, however, as the health care field itself wrestles with the changes that have already occurred and with the promise of changes that lie ahead. In the following conversation between two fictional physician executives, one with many years experience, the other his junior, some of the issues surrounding health care reform are discussed. Although the specific environment for the conversation is managed care, most physician executives will find themselves somewhere in the conversation. let's eavesdrop as they speak, in the late summer of 1994.     

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.     

Improving patient and community well-being

There are great gaps in the well-being of patients and communities. But there are numerous practice and community tools and opportunities that can successfully close these gaps. The health care professional is an often overlooked and underutilized resource and leader to positively influence the health of the community and patient. Physicians and health care professionals are in the health care field to maintain and increase the well-being of their patients and communities through disease prevention and health promotion at the practice level. This article argues that combining a community-level public health approach with the traditional practice level approach is more likely to achieve well-being for both individual patients and the community.     

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.     

The theory of S-curve discontinuity in the medical care field

Confusion reigns supreme in the health are field today. In a previous paper, I described my thoughts about the reasons for this chaos. This article reviews the gradual escalation of health care costs and many of the unsuccessful methods to control them, reiterates the theory of S-Curve discontinuity in health care and develops a "tool" that will enable physician executives to determine whether or not a product or process in health care will succeed in the near and distant future. This new tool can be of value to all health care providers, investors, health planners, politicians involved in evolving health care legislation, and any others who have an investment in the future of health care.     

Leading health care into the 21st century.

If there is a consistency in the professional lives of those who manage in the health care field, surely it is characterized by inconsistency. Change. For more nearly two decades now, since the full impact of the Medicare/Medicaid legislation hit, the health care industry has undergone profound, continual, and lasting change. Success can be measured largely in terms of how well a professional or an organization accommodates and manages these changes, making sure that they work for the organization and the career and not against them. The 1990s can be expected to be just as full of change and turmoil as have the past two decades. "What's past is prologue," Shakespeare wrote. The health care field is not apt to see the murderous machinations of The Tempest, but clearly exciting and challenging times lie ahead, and perhaps the outcome will be as positive as Shakespeare's. The scenario that follows provides a glimpse at the issues of change that will occupy the time and energy of physician executives for the coming decade.     

Strategies in health care cost reduction.

Both macro and micro approaches have been used to bring the costs of health care down. The technique currently in vogue relies heavily on market forces to accomplish this goal. Maintaining quality in the face of financial pressures is a major issue confronting the health care field. The need to begin a process by which workable criteria for defining quality in health care systems through consensus of constituencies serving and being served by the system--consumer, payer, and provider--is crucial.     

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.     

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.     

Strategic issues requiring public accountability: food for thought

Although the exact outline of U.S. health reform has become fuzzy because of political events, it seems clear that major changes in the manner in which health care is delivered and financed are under way. The initiative for the most part has been assumed by state government and by the health care field itself, as managed care becomes ever more entrenched and the health care system becomes ever more integrated. An expected outcome of these changes will be demands for greater public accountability on the part of health care providers and organizations. In this article, the author discusses some of the issues--professional compensation, documenting community service, ensuring public input into planning efforts, economic credentialing and quality of care, and managing ethics under managed competition--that will have to be addressed at the local level as these shifts take place.     

The new production theory for health care through clinical reengineering: a study of clinical guidelines--Part II

In Part I of this two-part article, in the December 1994 issue of the journal, the author discussed the manufacturing theories of Peter Drucker in terms of their applicability for the health care field. He concluded that Drucker's four principles and practices of manufacturing--statistical quality control, manufacturing accounting, modular organization, and systems approach--do have application to the health care system. Clinical guidelines, a variation on the Drucker theory, are a specific example of the manufacturing process in health. The performance to date of some guidelines and their implications for the health care reform debate are discussed in Part II of the article.     

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.     

Effects of role variables on job satisfaction

This study examines the effects of role variables on job satisfaction among physician and non-physician executives in hospital settings. Positive relationships were found for both groups between role variables and job satisfaction. The results indicate that role variables have a significant effect on stress, job satisfaction, and organizational commitment in the physician executive and the non-physician health care executive. On a theoretical level, this research allowed for an extended test of role theory, specifically as it applies to the management of health care. The implications of these findings for role theory and the physician executive are discussed. Since this study is of an exploratory nature, it offers new insights into the field of health care management, and the physician's role as the executive.     

Physician financial relationships in the new regulatory environment

In recent months, physicians have been under scrutiny by the federal government with respect to their financial relationships with both drug manufacturers and home care companies. This heightened scrutiny can be attributed, in part, to the attention that has been placed on health care fraud and abuse in this country as a major cause of rising health care costs. Federal investigators currently are examining physician financial relationships in light of the Medicare/Medicaid antikickback statute to determine whether certain payments made to physicians are intended as inducements to refer patients or to prescribe certain products. "Health Law" is a regular feature of Physician Executive contributed by Epstein Becker & Green. Mark Lutes of the law firm's Washington, D.C., offices serves as column editor.     

Advantages of local UR (utilization review)

Physicians recognize that there is a certain amount of waste and inefficiency in the current health care delivery system. They also realize that everyone stands to gain if the areas of waste can be identified and eliminated. Statistics consistently reveal that a small percentage of providers and patients are responsible for a very large percentage of inappropriate care. A properly structured utilization review program is a reasonable way to rid the delivery system of this waste.     

Legal implications of managed care arrangements

Prior to the 1980s, managed care was virtually nonexistent as a force in health care. Presently, 64 percent of employees in America are covered by managed care plans, including health maintenance organizations (20 percent) and preferred provider organizations (44 percent). In contrast, only 29 percent of employees were enrolled in managed care plans in 1988 and only 47 percent in 1991. To date, the primary reason for this incredible growth in managed care has been economic-market pressure to reduce health care costs. For the foreseeable future, political pressures are likely to fuel this growth, as managed care is at the center of President Clinton's national health care plan. Although there are numerous legal issues surrounding managed care, this article focuses primarily on antitrust implications when forming managed care entities. In addition, the corporate practice of medicine doctrine, certain tax issues, and the fraud and abuse laws are discussed.