Elephants under the table.

In this article ...

Lack of management knowledge and oversupply of physicians are two of the "elephants" that hospitals and group practices must confront.

There are aspects of the challenges to health care that have been only superficially addressed, or completely ignored, by the recurring health care reform debate made so visible during an election year. Everyone knows the issues are there, but they are not fully acknowledged. They are "elephants under the table."

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Two of these elephants are so fundamental to securing improvement that they can no longer be ignored, and these two are completely, or nearly so, under the control of hospitals and/or physician groups to address.

The knowledge elephant

Hospitals cannot make the quality and efficiency improvements that will be required to bring grater value to the U.S. health care system without informed participation by physicians. The successful models of high-value delivery in this country have one characteristic common to them all--informed and engaged physicians.

But most physicians in this country are uninformed about health care finance, accounting, quality improvement methods, general management or leadership theories, and more. Yet these participants are highly educated (in their fields) and intelligent people, unlikely to subjugate their own perspectives to others.

Where they are not brought into the decision process, they predictably "... either balk at the decisions made or have to be dragooned by organized misinformation backed by brute force." (1) There are efforts to engage physicians, improve communication with practicing physicians, and seek engagement in decision making, but all too often without providing basic education.

The danger of this path is that a physician on a physician-administrative council, or similar body, without basic management knowledge actually participates in decision making. Without preparation for the task, physicians are destined to a perspective dominated by their particular clinical specialty, patient population, and perceived unmet needs within that silo.

The dilemma of needing to communicate with an uninformed group was probably first described by Plato in the allegory referred to as "Plato's Cave." Plato posited the question, "How do you relate to a group the importance of a particular set of information, when they have no basis for understanding the information or even a basis for understanding why the information should be considered?"

This lack of knowledge or education, skills, and perspective--the unawareness of something, often of something important--has a treatment, and the therapy of choice is education. The condition is not the fault of physicians anymore than breast cancer is the fault of the woman.

The majority of physicians in the United States were educated during a period when there was considered no time, space, or reason to include business topics in the curriculum of pre-medical or medical students. The changing environment of modern practice has been noted, and there are many educational offerings to meet the emerging needs of the modern physician who chooses to be more than "just a physician," words I first heard from Lee Kaiser in the late 1980s.

There are now 50 combined MD-MBA programs in the United States. (2) We can expect, at some point in the future, the availability of informed physicians to be greatly increased. But the dual degree is not the best path for all physicians, and it would certainly not be very efficient for the majority of physicians already in practice to return to business school.

The doctor/king elephant

There is a time-honored mantra of provider systems administrations: "No administrator ever admitted a patient. We need doctors and their good will to survive. Don't do anything to upset the doctors."

But most large hospitals in the U.S., and some large groups, have more physicians than they now need. Without criteria to close a specialty or department of the medical staff to new applicants, many large metropolitan hospitals have two to five times more physicians "on staff" than actually admit or consult on a regular basis, and they accept more every month.

Try this simple test. Compare how many physicians admitted 80 percent of the patients in your hospital last year to how many are on your medical staff. Try to include outpatient procedures in your "admits." If the disparity is large, the difference is not solely because of consultants.

Some of the excess will be physicians starting a practice and as yet not capturing inpatient services. We may need to give them some time and assistance. Some of the physicians who admit irregularly believe they must have privileges in multiple hospitals in order to capture patients with preferences, or whose insurance coverage requires certain facilities for maximum benefits of insurance coverage, unwittingly empowering the insurance companies. We might consider giving them another strategy for dealing with that challenge.

Some of the "extra" physicians may be weekend coverage people from a large group. What better way to promote inefficiency and error than allowing a physician to work one weekend a year covering a large admitted population? Some of those physicians apparently not utilizing your facility and yet "on-staff" will be hospital shoppers, happy to play one hospital off the other, shuffling admissions to the hospital that is most "doctor friendly" this week.

The last two groups are great formulas for destroying caregiver-team trust and mutual understanding of system limitations. And they make it impossible to establish protocols and policies with an expectation of adherence.

While there are a minimum number of physicians in most specialties needed for continuity of services and prevention of burn-out, beyond that number all the predictable problems of inter-group dynamics, politics, inefficiencies of scale, and other organizational behavior complexities over-shadow any advantage from additional physicians.

Yet few large hospitals have a medical staff development plan document that addresses oversupply. If we assume any improvement in efficiency from a shift to best practice, then most medium-to-large hospitals and many practices would function better with far fewer physicians in most service lines.

The other face of this elephant is seen in hospitals more than one hour from a large city, some on the fringes of major metropolitan areas, and within some groups. In these organizations, there is a significant problem accessing enough high-quality doctors. In many, recruitment and retention of physicians is a primary financial concern of administration and their governing boards. (3)

While sometimes not consciously, these hospitals and physician groups are in conflict between a requirement to advance quality and efficiency, and the need to maintain service line availability to their population. This conflict is even more challenging to manage when existing compensation methodologies often emphasize procedurally based interventions over those services of a purely cognitive nature.

Indeed the financial survival of some institutions depends on the continuation of perhaps three service lines that fund the negative margins of all remaining services of the institution. The payment system in the United States heavily favors the specialties with procedural services. The purely cognitive services of the family practice, pediatric, and internal medicine physicians remain as severely under-valued as when first demonstrated by Dr. Hsiao in 1979. (4)

There is a reason that physician-owned hospitals are dominated by the surgical specialties, and no accident that there is no plethora of new physician-owned psychiatric or pediatric hospitals. Lacking criteria for finding the best fit for an open slot, or financially pressured to take the first warm body that applies, small hospitals and groups can't seem to get off the merry-go-round of recruiting the wrong person and then wringing their hands over how to handle the inefficient, disruptive, uninformed physician.

Both circumstances result from the lack of criteria, beyond specialty type, for selection of new physicians that would best meet their communities and facility needs. They are tangible manifestations of the underlying attitude toward the needed physician--"If only we could get another 'X'."

These are but two faces of the elephant. We often treat physicians as the "rate-limiting-step" of a successful service line, ignoring the destruction possible when we recruit the wrong person. We assume that the physician is the key position in short supply, not realizing how the poor fit can dramatically decrease the supply of other key team members willing to work with the new recruit.

Elephant handling

Strategies for handling both elephants have already been formulated and inculcated into the strategy of many of the high-performing systems in the country. It manifests itself in organizational policies toward new physician recruitment and selection, orientation of new arrivals, physician leadership development, and de-selection of existing physicians when necessary.

Moving away from the current culture to one of mutual selectivity, mutual understanding, and high mutual expectations is not as difficult as it may sound. It requires sharing knowledge and sharing respect among the entire team (i.e., no "kings.")

To effect the culture change, the first step is recognizing and providing that body of material not included in the education of most physicians, yet critical for a physician to practice efficiently within a system. Implied in such knowledge is an awareness of the importance of the information for which the physician recognizes that he or she is not an expert.

Further educational opportunities are provided later in the cultural transition for those physicians that choose to become more "expert-like" within any of the sub-topics of the material. These concepts are nothing more than current human resources management practices in better performing organizations from all industries.

Compare those practices, often consuming three to 10 days of paid time in classrooms, to the typical one or two hours of orientation offered in most hospitals with voluntary medical staffs.

Secondly, and more difficult for many systems, is to recognize that it is necessary for systems to pay physicians to acquire the knowledge that they don't know they need. Because of the transactional basis of physician services, there is a real opportunity cost for them to attend educational programs.

This combination of factors constructs a huge barrier to physician education--not knowing why they should go (how important the information is to them and their patients), and the cost of going. After such an orientation program, pay them to use that knowledge within the system.

For those unaccustomed to such an approach, be assured that many systems have found methods both legal and with positive net-present values. But "what if you spend the time and money to educate physicians and they leave?" is an oft-heard and valid concern.

The response has two parts: First, you may have less irrational competitors in the marketplace if they leave; and second, always consider the alternative, what if you don't educate them and they stay?!

The third step is implemented slowly and later in the cultural transformation--be more selective of who is allowed into your ranks, and who is allowed to stay. The right specialty to fill the slot is no longer enough to deliver high-value care. Hospitals must commit to working with a sub-group of individuals currently on staff.

If dealing with the knowledge elephant requires hospitals (and groups) to provide more significant orientation for new members, and support for attendance and use of the knowledge gained, then this is probably an insurmountable task if you would not first select who you want to work with.

Dealing with both of the elephants requires mutual selectivity. Many physician groups already do this after hiring, but selection criteria often lack a consideration of attitudes toward standardized policy and procedure, or other elements of organizational fit.

Leave for last the de-selection process. Those who refuse education, or refuse to use that education, will be easily identified as inefficient, non-compliant with policy and procedure, disruptive in demands for services the system does not have, or lacking in quality performance.

At first, let the advantages of education separate the "way we've always done it" from the professionals committed to a lifetime of learning. Eventually, the lifetime learners will demand new standards for admission into, and retention by, the organization. That will be the time to consider new criteria such as: attitudes toward teams, required completion of orientation, new requirements for leadership eligibility, and a holistic approach to performance evaluation incorporated into retention decisions.

The other half of the mutual selectivity concept in hospitals is physician commitment to a single system in exchange for "closed" service lines or medical staffs. Some hospital-based readers may question why a physician group would relinquish privileges at another hospital, but it is physicians who more readily embrace single-hospital allegiance as natural and necessary for them to be engaged with hospital operational improvements, where only they have certain privileges.

They understandably insist on being paid for their efforts, and perhaps not so predictably, embrace education on topics they realize they need, to do well in their new roles.

Changing culture

As I and others have argued for well over a decade, there are many causes of rising health care costs. Some are not in the control of the health care systems, but some are. Those of us within the health care system must refocus our attention on those elements we can control and cease the recriminations of others. (5)

This strategy is in our best interest and in the best interest of our patient-customers. The alternative is to wait until "they" do what "they" can or should do to make changes in access, insurability, violent crime, drug addiction, disparities in the payment system, etc, etc. But what will be accomplished if all parties wait until "they" have done what "they" need to do?

No, the answer to our problems will not come only from others. We must all address the issues within our sphere of influence as best we can. Addressing all the issues at once with monumental change is rare when so many of the losers in any significant change (e.g., payment reform) are politically and financially well-positioned to fight the change.

A distinction between "fiddling around the edges" vs. incremental change is an important one. If you are considering how to constrain your most inefficient orthopedic surgeon, you're probably fiddling.

If you are developing policy to identify best value delivery (quality and cost), incorporating those practices into a comprehensive care-delivery plan, and mandating adherence by a select group of orthopedists who are informed and participating in the construction of the plan, then you may be involved in a strategy to accomplish ongoing, reproducible, and recurrent incremental change.

Many organizations have already adopted these concepts so that patients and insurance companies will prefer, because of documented better and more efficient care, a particular combination of hospital and physician. Many more are realizing that the health care landscape is changing around them.

Pay-for-performance, quality reporting, ongoing and focused professional reviews by The Joint Commission, and new disruptive physician policy standards are but a few of the environmental shocks changing the health care industry and the professions within it.

Careful selection accompanied by required acquisition of knowledge needed to achieve high performance, with thoughtful de-selection where necessary, of individuals who enjoy "closed staffs," are two strategies we within health care can and should address. These strategies are not quick fixes, but they work.

References

(1.) Cleveland H. The Knowledge Executive-Leadership in an Information Society, E.P. Dutton, New York, 1985.

(2.) AAMC data; See http://services. aamc.org/currdir/section3/degree2.cfm?data=yes&program=mdmba (Last accessed 1/16/2009.)

(3.) Several studies in recent years center around $1M as the contribution to revenue of each recruited physician. One such report appeared in Modern Healthcare, June 2, 2008; p30-3l.

(4.) Hsiao WC, Stason WB. "Toward developing a relative value scale for medical and surgical services." Health Care Financing Revue. 1979 Fall; 1(2): 23-38.

(5.) Lauve, RM. "Primer on Healthcare Economics and Finance," in A Survival Guide for Physician Executives, Tampa, Fla., American College of Physician Executives, 1994.

By Richard M. Lauve, MD, MBA, CPE, FACPE

Richard Lauve

MD, MBA, CPE, FACPE

Health care consultant based in Baton Rouge, La.

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