The physician executive as a guiding force in health care. (Essay: Careers).

I'm fairly convinced that most physician executives will not become CEOs--nor are they particularly suited for this role. This observation was made abundantly clear in a series of articles recently published in The Physician Executive (Vol. 28, Issue 5, September-October, 2002).

Physicians often lack a "fire in the belly" considered a prerequisite to becoming CEO. They may possess inadequate leadership skills and demonstrate personality traits ill suited for management. Possibly, physicians are not given sufficient opportunity for line management responsibility early in their careers. Whatever the reason, it must be disconcerting to be blocked from CEO posts, especially when many physicians have made what appear to be the necessary adjustments and sacrifices to get there.

Given this fate, how can physicians best serve the interests of the organizations they work in and still feel gratified in a position other than CEO? What is the primary purpose of a physician executive if he or she is doomed to a subordinate role?

My belief is that physician executives should view themselves as a guiding force to CEOs and the executive management team. They should relish this role and champion their clinical talents in the service of strategic management.

To amplify this point, let me cite a few examples where the main impact of physician executives has been to influence or potentially influence the strategic direction of an organization without being in command.

Mergers and acquisitions

Hospital mergers and acquisitions spun out of control in the 1990s. I update my resume yearly to rename the ghosts that were once vibrant organizations yet no longer exist. Among them I include the infamous Allegheny Health Education and Research Foundation (AHERF), the largest bankruptcy in the history of health care.

The trials and tribulations of AHERF are well chronicled. (1) The essential flaw was their belief that bigger is better. AHERF, a Pittsburgh, Pa.-based organization, gobbled up two medical schools and about a dozen hospitals across the state in Philadelphia, including hundreds of physicians' practices.

They made the mistake of believing that owning physicians would produce loyalty and generate revenue through patient referrals to AHERF-owned hospitals. In reality, physicians' salaries became a huge drain on the system's cash flow and physicians' productivity decreased by about 20 percent once they became salaried employees.

An imperial CEO (a former purchasing director) and a weak board of directors ran AHERF. The organization's auditing firm provided inadequate oversight of activities. Many physicians worked for AHERF and considered themselves "executives," but apparently none was strong enough to derail the CEO's grand expansion plans. The executive management team--the CEO, CFO and chief counsel--really didn't understand physicians, at least not as physician executives understand physicians. Essentially, there was no physician executive to serve as a guiding force and make AHERF reconsider its overall strategy.

Poet Stanslaw Jerzy Lec observed, "No snowflake in an avalanche ever feels responsible." Is it not possible for physician executives to provide expert direction and prevent the avalanche of destruction wrought by misguided CEOs?

Managed care

Medical directors left managed care companies in droves. I include myself among them. (2) Arguably, managed care's single greatest mistake was restricting access to treatment through utilization review, which simply infuriated everyone and was not even cost-effective.

I think those of us who once worked in managed care organizations came to that realization early, before war was officially declared on the managed care. (3)

Why did it take managed care CEOs so long to get out of the business of saying "no?" And why have other executives persisted in this fruitless approach, attempting to control bed days and length of stay? I'm sure the reasons are varied, but I believe that strong physician leadership has changed the strategy of some managed care companies.

Most companies now realize that a pure accounting approach to rectifying their problems won't work. There are a finite number of Medicare markets to exit and a maximum increase in premium that employers will tolerate.

Physician executives are being counted on to devise clinical strategies to replace ineffective efforts to micromanage providers. Indeed, a whole new emphasis on population management has created roles for physician executives that previously did not exist. The position of the chief medical officer in my former organization was renamed chief clinical strategy and innovation officer.

Disease management

The Academy of Managed Care Pharmacy (www.amcp.org) defines disease management as "a continuous, coordinated, evolutionary process that seeks to manage and improve the health status of a carefully defined patient population over the entire course of the disease." The term "disease management" is also used to refer to an industry consisting of about 160 to 170 companies that provide disease management programs and services.

Disease management has been touted as the savior of managed care. Like managed care, disease management promises to lower health care costs and improve quality. (4) It's no wonder physician executives are seeking clinical leadership opportunities in disease management firms. Such opportunities rarely materialized within managed care organizations.

A former colleague of mine is now president and CEO of one of the preeminent disease management companies in the U.S. After arriving at the company as COO, he rapidly displaced the top executive, who was not a physician. Needless to say, my friend proved to be more than a guiding force!

Outcomes management

An axiom of management is: If you can't measure it, you can't manage it. Outcomes management involves devising measurement parameters for a broad range of clinical activities and achieving predetermined goals, for example, in safety, utilization and quality.

In order for CEOs to receive a truly comprehensive picture of the health of their organizations, clinical outcomes must be scrutinized at the same level of intensity as financial, operational and service outcomes. In many respects, keeping an eye on outcomes is like reading the instruments on the dashboard of a car or cockpit of an airplane. You can't steer unless you know where you've been and where you're going.

Developing clinical metrics is one area where input from physician executives is indispensable. Physician executives are uniquely qualified to take the clinical pulse of their organization and make necessary changes to restore the vital signs. Managing outcomes is also important to organizations for regulatory and accreditation purposes. Increasingly, physician executives live or die by the numbers, just as their non-physician executive counterparts.

The field of outcomes management is increasingly important in the pharmaceutical industry. Quality-of-life and cost-benefit analyses are being built into the design of phase II and III clinical trials. Previously, the focus was on phase IV (post-marketing) studies.

Pharmaceutical physician executives work on a multidisciplinary team responsible for research into the value of medical treatments to society, providers and patients, as measured by clinical, economic and humanistic parameters. They certainly are a guiding light in this endeavor.

Evidence-based medicine 

There is a lot of confusion surrounding the term "evidence-based medicine." Basically, it refers to a type of practice that integrates individual clinical expertise with the best available data from systematic research.

* By grading the strength of the scientific evidence, clinicians may have greater (or less) confidence about diagnoses, therapy and disease prevention, as reflected in best practices, practice guidelines and algorithms. Evidence-based medicine is not cookbook cost cutting, or restricted to randomized trials and meta-analyses.

Evidence-based medicine remains a relatively young discipline and positive impacts are just beginning to be validated. (5) Evidence-based journals are currently published in the fields of internal medicine, psychiatry, oncology, obstetrics and gynecology. The field will undoubtedly evolve under the guidance of physician executives working in disparate fields.

Health policy

Ultimately, evidence-based medicine will shape health care policy along with patient and societal values. Although policy makers typically are not physicians, physician executives may exert significant influence in this sphere of action.

The Office of Health Policy and Clinical Outcomes at the Thomas Jefferson Health System in Philadelphia is one of about two-dozen such offices in the U.S. The office is led by a physician executive and has three main goals:

* Educate trainees and physicians about quality measurement and improvement

* Conduct research in managed care, pharmacoeconomics, practice guidelines and related areas

* Provide operational advice to both the hospital and the medical school about quality improvement initiatives. (6)

The importance of having a well-rounded, influential physician executive head this department cannot be overstated.

Medical ethics 

Long before Enron, Adelphia and WorldCom became trade words for corporate misdeeds, virtually all health care organizations were plagued by ethical dilemmas. Only egregious offenses, it seemed, received attention in the news.

Fortunately, ethics has become a routine part of medical training. That wasn't necessarily the case 10 years ago-and certainly not 20 or 30 years ago-when many physician executives graduated medical school. In fact, my only formal course in ethics occurred in business school, in 1994, not in medical school (I graduated in 1980). How ironic that, in light of accounting scandals that rocked American corporations, business schools are teaching ethics to physician executives.

If there had been an ethically trained physician executive at AHERF, one who was really assertive, would it have been possible to prevent the raiding of hundreds of charitable endowments to prop up the system in its final days? What about physician executives at the American Medical Association? Where were they when Sunbeam entered into negotiations with high ranking AMA officials to promote Sunbeam products, striking a deal that was clearly a conflict of interest for the AMA?

One can only wonder whether tomorrow's physician executives will be able to pave the way for ethical decision-making in complex health care systems potentially compromised by major business concerns.

What's next?

With health costs on the rise again, and utilization management played out, how will we find efficiencies in health care? Where will health plans find the next generation of savings? Who will develop predictive models that hold promise for the earlier identification and treatment of the chronically ill? Who will translate scientific evidence into appropriate clinical policies? And who will be the guiding force behind reasoned clinical decisions?

Physician executives, isn't this the future for you?

References

(1.) Burns, LR., cacciamani, J., Clement, J., Aquino, W. 'The Fall of the House of AHERF: The Allegheny Bankruptcy." Health Affairs, 2000, 19(1):7-41.

(2.) Lazarus, A. "Medical Director Musical chairs: A Reaffirmation of My career in Medical Management." The Physician Executive. 2001, 27(4):22-25.

(3.) Robinson, JC. "The End of Managed care." JAMA, 2001, 285:2622-2628.

(4.) Lazarus, A. "The Promise of Disease Management." Psychiatric Services, 2001, 52:169-171.

(5.) Sackett, DL., Rosenberg, WMC., Gray, JAM., Haynes, RB., Richardson, WS, "Evidence-Based Medicine: What It Is and What It Isn't." British Medical Journal, 1996, 312:71-72.

(6.) Nash, DB. "Outcomes and Health Policy Researcher." In: Lazarus, A (ed). MD/MBA: Physicians on the New Frontier of Medical Management. Tampa, Fla., American college of Physician Executives, 1998: 71-81.

Arthur Lazarus, MD, MBA, CPE, FACPE, is a neuroscience director and regional medical research specialist for Pfizer, Inc, based in Prospect, Kent. He is a frequent contributor to The Physician Executive and editor of MD/MBA: Physicians on the New Frontier of Medical Management (American College of Physician Executives, 1998). He can he reached by phone at (S02) 228-2480 or by e-mail at arthur, lazarus@pfizer,com. His opinions are not necessarily those of Pfizer, its management or employees.