Primary care physicians: increasing demand, shrinking supply

Any serious proposal for reforming the U.S. health care system must include a consistent, coherent national policy for increasing the supply of primary care physicians.     

Torts, expertise, and authority: liability of physicians and managed care organizations

We examine optimal individual and entity-level liability for negligence when expected accident costs depend on both the agent's level of expertise and the principal's level of authority. We consider these issues in the context of physician and managed care organization (MCO) liability for medical malpractice. Under current law, physicians generally are considered independent contractors and hence MCOs are not liable for negligent acts by physicians. We find that the practice of reviewing the medical decisions of physicians affects their incentives to take care, which in turn implies that it is efficient for MCOs to be held liable for the torts committed by their physicians.     

The health care market: can hospitals survive?

Does it sound familiar? Resources are scarce, competition is tough, and government regulations and a balanced budget are increasingly hard to meet at the same time. This is not the automobile or oil industry but the health care industry, and hospital managers are facing the same problems. And, maintains the author of this article, they must borrow some proven marketing techniques from business to survive in the new health care market. He first describes the features of the new market (the increasing economic power of physicians, new forms of health care delivery, prepaid health plans, and the changing regulatory environment) and then the possible marketing strategies for dealing with them (competing hard for physicians who control the patient flow and diversifying and promoting the mix of services). He also describes various planning solutions that make the most of a community's hospital facilities and affiliations.     

Evolve and integrate: a new imperative for ambulatory care

A highly evolved ambulatory care delivery system possesses four key attributes: high-quality care, exceptional levels of access, outstanding patient and staff satisfaction, and cost-effective delivery of care. Such a system seeks to ease management of the patient care continuum by delivering as many services as possible under one umbrella. High-quality, cost-effective care is achieved through improved care coordination and cost management, resulting from a tight connection between physicians and hospitals and between inpatient and outpatient settings. Improved access is an important means to improving patient satisfaction.     

Gauging the financial impact of physicians on hospitals

A study evaluated the impact of physicians on hospital finances in four basic areas of physician care: primary care, medical specialties, surgical specialties, and other specialties. The study highlighted inherent differences in the activity and revenue-generating patterns of physicians to provide insight into the financial implications of the clinical enterprise. The findings offer a useful perspective on hospitalist programs, particularly regarding the point at which a hospitalist program is likely to be financially self-sustaining. Such data could be used to determine the number of physicians needed to support a new or expanded clinical service.     

Leaving an unethical managed care plan: an exploratory look at doctors' intentions

To address the problems of unnecessary care and limited resources, managed care health insurance programs have become commonplace. With managed care programs, however, physicians are facing increasing pressures. This article briefly considers four ethical situations that doctors face under managed care systems. The article surveys a national random sample of general practitioners and surgeons to determine how doctors would respond to these dilemmas and the extent to which exposure to such situations influences them to leave a managed care plan.     

The drive to survive: independent medical practice

The "hospital of choice" for independent physicians will have the following characteristics: Adequate capital for investment in human resources, technology, and facilities. A strong and sustainable market position based on affiliated primary care practices. The ability to engage physicians as business partners. The availability of performance management information.     

Incentives and cost containment in primary care physician reimbursement

The goal of capitation is to place gatekeepers at financial risk for the services the deliver. However, third party payers should provide gatekeepers with some type of protection against random and systematic risk transfer. Gatekeeper physicians' other alternative is to reduce this risk on their own by actively marketing services to healthier individuals and creating barriers to care for their sicker patients. Thus, the proper balance of risk transfer will result in the most cost-efficient, quality gatekeeper networks. However, even with the right balance of risk transfer, capitation may provide incentive for some physicians to withhold necessary services to further increase their profit margins-making quality of care a key concern. Thus, practice guidelines should be developed to ensure quality is not affected. These guidelines afford explicit criteria on how gatekeepers should respond in specific clinical situations.     

Redefining competition in health care

The U.S. health care system is in bad shape. Medical services are restricted or rationed, many patients receive poor care, and high rates of preventable medical error persist. There are wide and inexplicable differences in costs and quality among providers and across geographic areas. In well-functioning competitive markets--think computers, mobile communications, and banking--these outcomes would be inconceivable. In health care, these results are intolerable, with life and quality of life at stake. Competition in health care needs to change, say the authors. It currently operates at the wrong level. Payers, health plans, providers, physicians, and others in the system wrangle over the wrong things, in the wrong locations, and at the wrong times. System participants divide value instead of creating it. (And in some instances, they destroy it.) They shift costs onto one another, restrict access to care, stifle innovation, and hoard information--all without truly benefiting patients. This form of zero-sum competition must end, the authors argue, and must be replaced by competition at the level of preventing, diagnosing, and treating individual conditions and diseases. Among the authors' well-researched recommendations for reform: Standardized information about individual diseases and treatments should be collected and disseminated widely so patients can make informed choices about their care. Payers, providers, and health plans should establish transparent billing and pricing mechanisms to reduce cost shifting, confusion, pricing discrimination, and other inefficiencies in the system. And health care providers should be experts in certain conditions and treatments rather than try to be all things to all people. U.S. employers can also play a big role in reform by changing how they manage their health benefits.     

The financial implications of ACOs for providers

To prepare for a future in which more and more patients will receive care in ambulatory settings, and acute care service capacity will likely need to be considerably downsized, hospitals should pursue five near-term strategies: Convert primary care practices to medical homes, Develop the IT capabilities required to manage and report on clinical and financial processes and outcomes, Integrate the clinical and financial interests with those of their physicians in improving value, Reduce cost per episode of care through bundled payment initiatives, Nurture key relationships with other providers.     

Finding a lasting cure for U.S. health care

In "Making Competition in Health Care Work" (July-August 1994), Elizabeth Olmsted Teisberg, Michael E. Porter, and Gregory B. Brown ask a question that has been absent from the national debate on health care reform: How can the United States achieve sustained cost reductions while at the same time maintaining quality of care? The authors argue that innovation driven by rigorous competition is the key to successful reform. A lasting cure for health care in the United States should include four basic elements: corrected incentives to spur productive competition, universal insurance to secure economic efficiency, relevant information to ensure meaningful choice, and innovation to guarantee dynamic improvement. In this issue's Perspectives section, eleven experts examine the current state of the health care system and offer their views on the shape that reform should take. Some excerpts: "On the road to innovation, let us not forget to develop the tools that allow physicians, payers, and patients to make better decisions." I. Steven Udvarhelyi; "Health care is not a product or service that can be standardized, packaged, marketed, or adequately judged by consumers according to quality and price." Arnold S. Relman; "Just as antitrust laws are the wise restraints that make competition free in other sectors of the economy, so the right kind of managed competition can work well in health care." Edward M. Kennedy "Biomedical research should be considered primarily an investment in the national economic well-being with additional humanitarian benefits." Elizabeth Marincola.     

Managed care: the strategic future for education in quality

This paper discusses the needs for future education in quality assurance, assessment and improvement, particularly in relation to managed care. The pressures for increased education about quality are derived from different components of the health care system; e.g., regulatory and governmental agencies, purchasers of care, and competitors of health institutions. The content of future education in health care quality is defined in six areas: (1) organization and management; (2) health systems; (3) quality theory and methods; (4) management information systems and research; (5) governmental policy; and (6) economics and finance. Education in health care quality in these content areas is delivered at both the primary and continuing education levels by universities, professional associations and private training and development corporations. Future oriented, strategic thinking education in health care quality is needed. The pressures for education about quality, including traditional concepts of quality assurance, methodologies for quality assessment and the newer approaches to continuing quality improvement, are clearly growing stronger. This article discusses the need for education in health care quality, the content areas and levels of education and the delivery system.     

Making competition in health care work

Health care reform in the United States is on a collision course with economic reality. Most proposals focus on measures that will produce one-time cost savings by eliminating waste and inefficiency. But the right question to ask is how to achieve dramatic and sustained cost reductions over time. What will it take to foster entirely new approaches to disease prevention and treatment, whole new ways to deliver services, and more cost-effective facilities? The answer lies in the powerful lessons business has learned over the past two decades about the imperatives of competition. In industry after industry, the underlying dynamic is the same: competition compels companies to deliver constantly increasing value to customers. The fundamental driver of this continuous quality improvement and cost reduction is innovation. Without incentives to sustain innovation in health care, short-term cost savings will soon be overwhelmed by the desire to widen access, the growing health needs of an aging population, and the unwillingness of Americans to settle for anything less than the best treatments available. The misguided assumption underlying much of the debate about health care is that technology is the enemy. By assuming that technology drives up costs, reformers neglect the central importance of innovation or, worse yet, attempt to slow its pace. In fact, innovation, driven by rigorous competition, is the key to successful reform.     

What can Canada teach us about health care financing?

Canada now spends proportionally more on health care than any other country except the U.S., Sweden and the Netherlands - about 7.2% of its GNP or about $500 per capita. Almost all Canadians (99%) are insured against the cost of all hospital and physician expenses through government health insurance programs administered by the provinces. Hospitals are reimbursed by the government 26 times per year and must work within annual budgets formulated by the Ministry of Health. The fiscal restraints imposed upon hospitals have caused them to look at expansion of shared services, regionalization and a slowed rate of growth. As in the U.S., hospital administrators complain about government regulation on the grounds that individual physicians have a much greater influence over utilization than do hospital administrators. Further hospital cutbacks will have the effect of reducing services and therefore, costs. However, there is concern that these kinds of modifications will result in services among communities which would affect the very principle of universal health insurance for Canadians.     

Redesigning nurse staffing plans for acute care hospitals

Johnson City Medical Center's approach to maximizing staffing in nursing units, particularly in acute care settings, had four primary goals: Identify opportunities to maximize the effectiveness of nurse staffing based on a review of core staffing schedules. Reduce cost duplication and improve workflow. Decrease the use of contract labor (with the goal of eliminating the use of contract labor). Develop financial dashboards for staffing that could be used by nursing managers.     

DOES ORGANIZATION MATTER? A STUDY OF PHYSICIANS' IDEAL ORGANIZATION

It is a known phenomenon that it is difficult to make organizational changes within professional organizations. One recurring observation and experience from health care studies is that it is difficult to discuss the last organizational change with professionals because the most recent change is always perceived as the worst. In order to avoid this routine response, the authors of this article asked 56 senior physicians from the Swedish health care sector what their ideal organization looks like. The authors note that there is a strong institutionalized idea among the physicians of how health care should be organized. The image is not particularly complicated: the organization should be based on the meeting between doctor and patient. One conclusion in the article is that professionals dislike change, but nevertheless, they still want it. Actual change is not the problem – only changes that are not in compliance with the professionals' opinions of organization and management.     

Planning and managing primary care services: lessons from the NHS in England

High-quality primary care services are an essential part of a successful health service. However, the planning and management of such services is complex. Using evidence from a study of recent extensive changes in the English NHS, the authors highlight the need for local service oversight by managers who understand local conditions and needs. The recent English experience supports an incremental policy adjustment approach, rather than wholesale organizational change.     

Managed care,technology adoption,and health care: the adoption of neonatal intensive care

Managed care may influence technology diffusion in health care. This article empirically examines the relationship between HMO market share and the diffusion of neonatal intensive care units. Higher HMO market share is associated with slower adoption of mid-level units, but not with adoption of the most advanced high-level units. Opposite the common supposition that slowing technology growth will harm patients, results suggest that health outcomes for seriously ill newborns are better in higher-level units and that reduced availability of mid-level units may increase their chance of receiving care in a high-level center, so that slower mid-level growth could have benefitted patients.     

Single-payer health care systems: the roles and responsibilities of the public and private sectors

Health care systems all over the world are experiencing some change as they look for a new balance between supply and demand. This article provides context for the U.S. health care financing debate by examining the health care systems of five other countries: Canada, the United Kingdom, Australia, China and India. The authors show that, with few exceptions, countries around the world have seen an increase in both government and private health care spending between 1998 and 2002. The authors also demonstrate that employers throughout most of the world are becoming more, rather than less, involved in the funding and delivery of health care to employees and their dependents-even among nations with so-called single-payer health systems.