Will Business Management Save US Health Care?
Summing Up: Problems confronting the US health care system are much larger and broader than those that can be solved by management in the absence of other remedies, readers tell Jim Heskett.
What Role Will Management Play in Saving US Health Care?
The verdict is in, according to respondents of this month's column: Problems confronting health care in the US are much larger and broader than those that can be solved by management in the absence of other remedies.
As David Wittenberg put it, "… management will never fix the health care system… (it) can promote standardization and mass production … (but) the actions of individual managers will have no effect on the overall system," one that as Barry Shere pointed out, "attempts to override the laws of supply and demand." John Van Slyke commented that "business people have the leadership skills and command over the kind of technology that is needed, (but) … the record of business, particularly the financiers, has been to distort health care organizations." Phil Clark said, "Unfortunately, health care is about life, quality of life, and death. Start trying to manage, control and put a dollar figure on that and you will instantly run into … walls at all levels of society."
On the other hand, David Giammittorio described how the introduction of good management practices in his for-profit health care organization led to better patient outcomes at the same time that "provider engagement and feeling of satisfaction have increased, our costs have fallen and our net profit has increased."
One of the basic problems confronting management is a lack of alignment of needs and goals. For example, as Joanna pointed out, "… we have a 'disease management' system, (not) a 'health care' system… Insurers profit from healthy individuals, but they do not actually contribute to our health." Another problem is a lack of definition of just what the system should accomplish. In this regard, Donald Shaw commented that "We are nowhere close to concerning ourselves with controlling healthcare when we have not defined adequately what it should accomplish and can accomplish for those who are asked to pay for it."
In proposing remedies, Walter Blass emphasized the need to achieve "a cooperative effort on the part of physicians, hospitals, and yes, even patients." Milton Recht provided a list of responses: "Increase competition, allow medical business failures, remove guaranteed sources of revenue, relax government regulatory and licensing of doctors and hospitals to remove the cartel and guild aspects of medicine and put more of the purse strings directly into the consumers' hands …" Addressing incentives, Tom Dolembo suggested that "We should pay doctors well who cure patients, award hospitals who are empty, and stop evaluating our system as if sickness is a necessity."
There was little enthusiasm for requiring joint degrees in medicine and management. Kapil Kumar Sopory said that "… some important aspects of good business management … need to be practiced. These can be emphasized during the medical professional training." Doug Garr proposed that "Medical schools should require a month of 'learning' where students become patients and actually get checked into hospitals." As Cheri Thomas put it, "… I do not see the cost-benefit of having … managers also be MDs… Docs are going to have to get over themselves and learn to respect non-docs who are competent managers."
If management cannot lead the charge in saving the US health care system, from where will the leadership come? What role will management play? What do you think?
Judging from the recent writing of physicians like Atul Gawande, US health care may be in the process of discovering management. Of course, hospital administration has been with us as long as hospitals. But the administrator has always been a second class citizen in the workplace, a facilitator of both the best and worst practices of those actually providing health care. There are signs that this is changing.
Gawande, in a recent article in The New Yorker, describes what health care can learn from The Cheescake Factory, a chain of 160 full-serve restaurants. Almost in a tone of amazement, he marvels at the way standards are enforced, new techniques and menu items introduced, and practitioners learn from each other across the chain.
Gawande conveys the impression that the biggest single obstacle to the adoption of these practices may be the practitioners themselves∼those unwilling to listen, adopt new techniques, and communicate with others, and unwilling to think of themselves as members of teams rather than the stars and specialists they were taught to be. Twenty years ago, when I was invited to address a group of doctors, I was nearly laughed out of the room when I suggested that the best service providers in a variety of industries hire for attitude and train for skills. Regardless of whether it worked elsewhere, they were sure that it didn't apply to health care, where people want the best in skills whether as providers, recipients, or hospital administrators who have to pay for mistakes. (I wish I had known then of research by Harvard colleagues claiming that the majority of malpractice lawsuits result primarily from poor attitude and failed personal relationships rather than medical mistakes.)
Perhaps hiring for attitude and then training for skills is too simplistic. But there is reason to believe that the era of a medical star system is about over. Outstanding medical institutions like Mayo Clinic and Cleveland Clinic have long avoided it. They opt instead for hiring practitioners as employees who are paid incentives for providing better care at lower cost. Practitioners work in teams that believe that the patient, not the practitioner, comes first. In these organizations, management is not a dirty word. In fact, managers and doctors are recognized for exhibiting mutual respect and aiding the transfer and adoption of good ideas across a network. They may foster some stars, but that is not the primary objective.
Forces are at work that make it possible to see a day when better care is delivered at a fraction of current costs in the US, regardless of regulatory approach. Insurance companies now are instituting incentives for quality care at lower cost that will require better management of hospitals. Hospitals are responding by consolidating and signing up doctors as employees rather than entrepreneurs with their own businesses. Companies, on behalf of their employees, are contracting with hospitals to deliver care along with wellness programs designed to avoid hospital treatment, especially for emergencies. A byproduct will also be the transfer of best practice among larger groups of practitioners working in teams. These forces may elevate the role of management.
This sounds good. Do you agree with it? Whether or not you agree, a number of other questions are raised. From where will the necessary management skills come? Medical schools? Business schools? Will joint degrees in medicine and business be necessary? If so, just how many students will be willing to engage in a long and arduous course of training to qualify for a job that in many hospitals is still relegated to the background? How will change be achieved? What could go wrong? Will management save US health care? What do you think?
To read more:
Atul Gawande, Big Med, The New Yorker, August 13 & 20, 2012, pp. 52-63.
Paul C. Weiler, Howard W. Hiatt, Joseph P. Newhouse, William G. Johnson, Toryen A. Brennan, and Lucien L. Leape, A Measure of Malpractice (Cambridge, MA: Harvard University Press, 1993)