Strategic issues requiring public accountability: food for thought.

The U.S sociopolitical fabric relative to health care currently involves a significant shift along a number of critical dimensions. A new paradigm is forming to which health care providers must respond. Regardless of the structure that health care reform imposes, health care providers at the local level will be confronted with several strategic planning areas that will require greater public accountability in the next five years. These planning considerations will involve responding to various publics in the areas of professional compensation, documenting community service, ensuring public input into planning efforts, economic credentialing and quality of care, and managing ethics under managed competition.

Professional Compensation

Recent articles in newspapers, trade magazines, and professional journals have openly revealed the executive compensation paid to senior managers, as well as professional fees paid to physician specialists. In fact, physician compensation (income) has received increased scrutiny under the Medicare and Medicaid programs. Attempts by providers and physicians to justify salary and benefit structures have not been accepted by the general public. In spite of the discomfort expressed by the public, physicians and senior executives in health care organizations have been unable to provide a satisfactory explanation of the level of compensation received for professional services. Of equal importance, community boards will be asked to explain to the public the increasing turnover rate that is being experienced in health care management circles. This lack of stability raises the discomfort level for individual consumers and for the community at large.

A third area of professional compensation involves professional fees to executive and physician search firms as they attempt to successfully recruit and place physicians and senior managers in responsible community health care positions. The cost associated with executive compensation, benefits, succession planning, and search fees eventually require consumers to pay more for health care. The strategic question is whether local health care providers are in a position to explain to the community why there are high executive turnover rates, large fees paid to search firms, and executives who are receiving large salary and benefit packages. Community health care organizations will also be asked to justify to the public why physicians are paid high fees for professional services. The real question is how not-for-profit boards are going to respond to the general public when information is made available at the local level.

Documenting Community Service

A major issue faced by health care organizations is providing documentation to the public to demonstrate that valuable services are being provided in the community at no cost and that uncompensated care is being provided to the poor that requires subsidization through other sources. Although health care reimbursement is a very complex issue, health care providers have failed, in a strategic sense, to convince the public that they are entitled to significant profits at the expense of the community. It would seem logical that health care providers would want to devote time and effort educating the public to ensure a thorough understanding of uncompensated care, financial "write-offs," free care, and services that receive no reimbursement from third-party payers.

Public Planning Efforts

The public needs to be part of strategic decision-making processes in the community as they relate to health care facilities and health care delivery systems. More important, executive planning decisions that receive the stamp of approval from governing boards should have input from the community at large via some type of open planning process. As health care cost containment efforts continue, the consumer will no longer stand by and allow unilateral decision making with respect to services and technology. Trying to convince the public that economic models of sustained competition will eventually lead to fewer providers as a way of controlling rising health care costs has minimal utility and validity. The new paradigm requires significant modifications to strategic planning efforts by providers via public input into the type and quality of services provided at the local level.

For years, consumers have relied on the health care industry and/or government to appropriately plan for health care expenditures and to design a delivery system that is affordable and accessible to the vast majority of citizens. It is quite evident that allowing health care providers to make the decisions for the customer has resulted in higher costs, a proliferation of technology, and minimal consumer input into key decisions and designs of the delivery system in this country. If providers do not involve the consumer, the government will impose another regulated planning process to monitor future expansion of physical plant, acquisition of equipment, and utilization of services.

Economic Credentialing and Quality of

Care

Managed care, using integrated delivery systems, will ideally result in management of quality and cost effectiveness. If consumers are to be asked to pay more out of their pockets for health care, there will be an increased demand for accountability of health care expenditures at the national, state, and local levels. Providers who are unable to provide high-quality care, meeting whatever minimum standards are established governmentally, will receive high exposure in the media. This will evoke a consumer response to a larger degree than has been experienced in the past. Such scrutiny will be minimized if quality indicators are positive. However, if outcomes are not as positive according to national norms, providers will experience a reduction in consumer support for their efforts in total cost management. Consumers will demand greater involvement in labor and nonlabor cost containment activities.

An extension of total cost management will involve economic credentialing, wherein quality and utilization will be examined in conjunction with cost parameters. This means that health care providers will need to carefully scrutinize members of the professional staff not only in terms of high-quality outcomes but also in terms of the costs associated with generating the positive outcomes. Eventually, there will be a "shakeout" in the industry, and certain providers will be eliminated, not only because of poor quality but because of excessive costs. As this information becomes public, health care providers and institutions will have strategic problems trying to appropriately respond to the public for the cost and quality outcomes generated by their facilities.

Managing Ethics

As managed care arrangements are developed at the local level, and as incentives to provide managed care are made public, the intent of providers will receive increased public scrutiny. Concerns will be generated over rationing of care, the denial of access to certain types of care, or decreased ability to choose physicians of choice. If health care professionals are unable to provide a satisfactory explanation for these activities to the public, they will place themselves in a high-risk situation when it comes to the media and to public accountability. Lack of free choice does provide an ethical problem for health care providers.

Economic performance will generate increased public scrutiny. However, the changing of long-standing physician-patient relationships or of relationships with health care provider organizations will force a high level of public scrutiny of health care providers. Increased attention will be given to consumer choice and to being able to make wiser purchasing decisions using data on health care plans and providers. The inability of integrated plans to accommodate true competition and consumer choice in rural areas will surely generate negative reactions if people feel there are major inequalities in the health care system. Beneath managed competition are ethical underpinnings that are, or will be, the most troublesome areas for national leaders to explain and resolve as the debate on health care reform proceeds.

A Decade of Change

Changes in the U.S. health care delivery system have always been incremental. As public and government scrutiny increases, providers will have major marketing and strategic planning problems to consider when interfacing with the community. The new paradigm will entail an open public planning process, generation of data to examine quality of care, disclosure of low-quality providers, and close scrutiny of all health care expenditures. New services will be approved and accepted by the public only if gaps in existing services are eliminated. Poor quality will no longer be tolerated. Excessive costs associated with professional compensation and recruitment will receive increased attention not only by governing boards but also by the entire community via media exposure. Greater public accountability is a necessary evil and a cornerstone to all future planning efforts in the United States. Such scrutiny will require strategic discussions on the part of all health care providers to ensure that the values and principles of health care reform are maintained and preserved from the consumer perspective.