The digital transformation of health care

The arrival of the Internet offers the opportunity to fundamentally reinvent medicine and health care delivery. The "e-health" era is nothing less than the digital transformation of the practice of medicine, as well as the business side of the health industry. Health care is only now arriving in the "Information Economy." The Internet is the next frontier of health care. Health care consumers are flooding into cyberspace, and an Internet-based industry of health information providers is springing up to serve them. Internet technology may rank with antibiotics, genetics, and computers as among the most important changes for medical care delivery. Utilizing e-health strategies will expand exponentially in the next five years, as America's health care executives shift to applying IS/IT (information systems/information technology) to the fundamental business and clinical processes of the health care enterprise. Internet-savvy physician executives will provide a bridge between medicine and management in the adoption of e-health technology.     

Health care costs: saving in the private sector

Robeson offers a number of options to employers to help reduce the impact of increasing health care costs. He points out that large organizations which employ hundreds of people have considerable market power which can be exerted to contain costs. It is suggested that the risk management departments assume the responsibility for managing the effort to reduce the costs of medical care and of the health insurance programs of these organizations since that staff is experienced at evaluating premiums and negotiating with third-party payors. The article examines a number of short-run strategies for firms to pursue to contain health care costs: (1) use alternative delivery systems such as health maintenance organizations (HMOs) which have cost-cutting potential but require marketing efforts to persuade employees of their desirability; (2) contracts with third-party payors which require a second opinion (peer review), a practice which saved one labor union over $2 million from 1972 to 1976; (3) implementation of insurance coverage for less expensive outpatient care; and (4) the use of claims review. These strategies are compared in terms of four criteria: supply of demand for health services; management effort; cost; and time necessary for realized savings. Robeson concludes that development of a management plan for containing health care costs requires an extensive analysis of alternatives, organizational objectives, existing policies, and resources, and offers a table summarizing the cost-containment strategies that a firm should consider.     

Haunts on the Web for physician executives

Listed here are some medical management and health care related Web sites on the Internet worth visiting, as well as favorite search engines and how to use them. From health care systems and hospitals, to health plans and insurers, the industry is using Web technology to promote programs and outcomes, and to provide information on health and wellness.     

The new health care civilization: integration of physician land and manageria

Changes occurring in health care demand that physicians expand their professional knowledge and skills beyond the medical and behavioral sciences. Subjects absent from traditional medical education curricula, such as the economics and politics of health care, practice management, and leadership of professional organizations, will become important competencies, particularly for physicians who serve in management roles. Because physicians occupy a central role in planning and allocating medical care services and other health care resources, they must be better prepared to work with other health care professionals to create a new civilization, even if this means leaving the cloistered domain of "physician land" to serve as interface professionals between the delivery of medical services and the management of health care. Our research findings and conclusions strongly suggest that economic, management, and leadership competencies need to be incorporated into the professional development of physicians, especially in postgraduate and continuing education curricula.     

Get real: what will draw physicians to the Web?

What are physicians waiting for? What will it take to stimulate widespread adoption of Internet medical systems? How can health care leaders and physicians help the technology innovators and the executives of technology firms understand the components necessary to assure physician acceptance and utilization of new tools? (1) Don't underestimate the personal nature of a physician's practice. It really isn't a "business." (2) Most physicians are not Luddites; they are just extremely pragmatic and practical. (3) For the majority of physicians to adopt a new technology in their private office practice, it must address three major issues: money, hassle, and patient care. There are many obstacles to adopting the new technologies that are the result of physician training and expectations and the current models of payment and revenue generation. Some technological innovations are presented to physicians without sufficient respect for their knowledge of how medical practices really work. The benefits promised often don't match with the needs structure of the physicians. As a consequence, the cycle of diffusion of these new systems is extended and delayed.     

Ascendancy of primary care will create role intensification for physician executives

The need for physicians in management roles in the health care system has never been greater. And the years ahead will see that need broadened and intensified. To maintain their leadership role in medical affairs in hospitals and other types of health care delivery organizations, physician executives will have to envision provider organizations and systems that have not yet been conceived, let alone developed and implemented. They have to become totally open-minded and futuristic in their thinking. And they will have to help other physicians accommodate this new way of thinking if the medical profession is to continue in a leading role in health care matters. Although numerous factors will have to be anticipated and analyzed by these new physician leaders, the ascendancy of primary care in a managed health care world long dominated by the technical and technological superiority of hospital care will present a particular challenge to the physician executive.     

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.     

Health care futures, Part 1. The emergence of the new health care consumer. Panel discussion

In Part 1 of this second annual panel discussion, six experts examine the new health care consumer. The whole concept of the patient as consumer still makes people uneasy when it's applied to health care. Whether you prefer consumer, customer, purchaser, end-user, ultimate buyer, or beneficiary, one thing's for sure: Many of us are as different from the bygone patient as an HMO is from the general practitioner who made house calls. One of the reasons for many Americans' new interest, knowledge, attitudes, and expectations about health and health care is the Internet, the second topic in this discussion. In Part 2, physician executives from the three leading physician practice management companies (PPMCs) join Jeff Goldsmith, Barbara LeTourneau, and Uwe Reinhardt for a spirited exchange about this burgeoning new industry in the American health care sector. They will tackle questions such as: Are PPMCs delivering what they promise? What will separate successful PPMCs from the rest? Can PPMCs meet Wall Street's earnings expectations and also help physicians deliver better care? When PPMCs win, who loses? And, what roles will physician executives play in PPMCs?     

Clinical reengineering. Integrating medical and operational management

In the continuing push for cost containment in health care, many organizations have turned to cost reduction methods that fundamentally change the way care is delivered. As health care organizations continue to make financially-driven staffing changes that impact patient care, medical leadership must take on greater responsibility for operational management. Physician executives are uniquely qualified to take on leadership roles in work redesign, and must do so to ensure excellent and fiscally-responsible patient care. This article presents a proven methodology for work redesign that helps physician executives apply their clinical skills to operational management in designing new health care delivery models.     

Developing an in-house physician advisor program

The rapid rise in health care costs during the 1980s has led to a growing demand for utilization management companies, supported by teams of physician advisors. The increasing involvement of physician advisors in day-to-day case review has also led to a growing necessity for their being hired on an in-house basis. This article attempts to show a basic process for developing a functional and efficient in-house physician advisor program.     

Health care applications of complexity science. Life at the edge of chaos

The authors explore complexity science, a relatively new field of inquiry, which holds for both clinicians and health care leaders the real possibility of stimulating fresh insights and approaches to health and medical care-both its provision and its organization. Two case studies are presented to illustrate how complexity theory can provide health care leaders with a new perspective on how to address the myriad challenges they confront daily: (1) a patient with dissociative identity disorder; and (2) a physician task group charged to advise on hospital medical staff reorganization and governance. These case studies help clinicians and leaders of health care organizations understand how complexity: (1) may be relevant, even helpful, as they consider difficult challenges in both patient and organizational management; and (2) might emerge as a synthesizing force as they face the extraordinarily complicated task of jointly creating integrated health care systems. A resource section is provided for those who may wish to further pursue the topic.     

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.     

Where does informatics fit in health care organizations?

Why is medical informatics important to health care leaders? As an emerging science, informatics focuses on applying computing and communication technology to decision making for clinicians and managers. It enhances the understanding of how information and communication systems can impact the work health care managers must accomplish. As the cost of technology for digital information management continues to decline, organizations and individuals will look for ways to offset the human costs of managing and conveying information. The way of the paper medical record is being replaced by the less expensive and more efficient digital information systems. Leaders of health care organizations need to look for every opportunity to deploy networks and computers to reduce the labor costs of data collection, storage, retrieval, and analysis.     

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.     

The Informatics Institute: why do we need it?

Why should physician executives care about medical informatics? For that matter, what is medical informatics anyway? Broadly defined, medical informatics is the study of the collection, storage, retrieval, and analysis of data and information in health care to support clinical and administrative decision making. Informatics is important because, in the past 10 years, powerful computer, software, and information technologies have been developed to enable health care organizations to automate some of the work of decision making, for improved quality of care and cost control, and for successful managed care contracting. This new emphasis on informatics in health care was the impetus for the founding by ACPE earlier this year of The Informatics Institute, which will be involved in educational and research activities in the growing area of medical informatics. In this new column in Physician Executive, Dr. Marshall Ruffin, President and CEO of the Institute, will discuss the role of medical informatics in health care delivery and financing and its relation to physician executives.     

Getting the third degree.

The main finding of the just released results of the 1987 Physician Executive Compensation Report is that compensation increases in 1987 for physician executives continued to outpace inflation by considerable margins. There were variations by type of health care organization and by geographic region, of course, and bonuses seem to have fallen out of favor in most cases. A side result of the survey deals with the degree to which physician executives have opted for formal management education to improve their management skills and their chances of success in medical management. These survey educational findings are described in the following article.     

Making a match: inexperienced physician executives and the job market

Hospitals and other health care organizations are adding physician executives at such a rate that demand is outstripping supply-there are more opportunities for seasoned physician executives than there are physicians with track records as medical managers. It is possible that hiring management will have to consider the employment of a physician who wants to be in management but has no track record as a physician executive. In some cases, it may even be preferable to employ a neophyte physician executive, especially when the physician is a respected clinician already on the organization's medical staff. In selecting such a physician, however, an evaluation must be made of the probability that the physician will be successful in the new role. The author points to 10 criteria that the hiring organization should observe in hiring inexperienced managers.     

Why become a certified physician executive?

What is the CPE Tutorial and how can it help advance the careers of physician executives? This five-day program teaches executive skills that make physician executives more valued in the marketplace. When candidates successfully pass an evaluation judged by a panel of health care CEOs, recruiters, and Fellows of the College, they become Certified Physician Executives (CPEs). This certification provides recognition to potential employers that CPEs have: stature as a physician; been successfully tested in all disciplines of medical management; demonstrated management experience; and successfully completed the Tutorial with a five minute presentation describing skills and competencies on the last day. As CPEs become widely known in the marketplace, the designation will be a valued credential that helps physician executives get and keep desirable positions, as well as advance to the next level in their careers.     

Quality management remains top medical manager responsibility

Earlier this year, the Physician Executive Management Center conducted a survey of physician executives in management positions in hospitals, group practices, managed care organizations, and industry. Information was obtained for physician executives in both full-time and part-time roles. In addition to gathering compensation information, the survey sought to define the scope and intensity of the responsibilities of physician CEOs and senior medical managers (medical directors or the equivalent) in these organizations. In this article, the authors summarize the findings on responsibilities for senior medical managers in hospitals, group practices, and managed care organizations.